Two Party System

The Daily Show Correspondents explain the two party system.

The Daily Show - The Correspondents Explain - Political Parties - The Two-Party System
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(Nod to Neanderbill)

My Dinner with Tyler

Sure, I'm riffing on the movie title.

But this was very, very interesting: dinner at Chutny, breaking the Ramadan fast, along with Chug R.

And, while I can't speak for Tyler formally, I can quote from MR: "There are plenty of good arguments that taxes have to go up." We agree on that, completely. At dinner, we came to the conclusion that the actual solutions we expect, which do NOT involve taxes going up in a sensible way, are probably worse than other solutions we can imagine.

If you are not going to cut spending, you have to raise taxes, because DAFT. And nobody wants to cut spending.

The point is this: the BEST case for something that is actually feasible looks like this:

1. Cut military spending
2. Solve Soc Sec with combination of means testing and delayed retirement age
3. Health care reform, with most preferable outcome being a Singapore-light system. Even a German style system, which preserves considerable competition, and controls cost.
4. Medicare reform. But #3 solves #4, automatically. We can't solve Medicare, we have to finesse it.
5. Mild inflation, 5%, for 5 years
6. Tax increases and cutting deductions

Do I favor the above policies? I do not, in an unconstrained world where I was dictator.* Do I think that the actual package of stupid s**t we are going to pick is substantially WORSE than the above package? I do.

*Non-doughy samosas for everyone!

Tuesday's Child is ALSO Full of Links

Back from DC. Some links, with no theme or coherent order.

1. Philosophy as psychotherapy

2. R. Branson running nekkid from Necker

3. Amusing earthquake tweets (the tweets are funny, not the earthquake). (I particularly like the premature looteration)

4. Explaining charter school effectiveness (Gated, but I have a PDF. Send me an email at munger at duke dot edu)

5. Pronouns: The secret code of power and weakness

6. Jeff Miron: Capitalism--It doesn't suck

(Nod to Chateau, the Blonde, and Kevin Lewis)

This video presented by Tucks Medicated Pads

People, Ken Tremendous directs a music video for a cool new song by Colin Meloy that is based on a section of "Infinite Jest".

Life is good.

Time to make the donuts

Aaargh.

Another semester starts today.

Don't get me wrong, I probably have the best job in the world, but the sudden influx of 23,000+ students and the imposition of a fixed schedule always takes me by surprise somehow, even after 26 years of being a professor.

Last night I dreamed that Mr. 2T got lost on campus and I couldn't find him. I couldn't recognize buildings (the dream campus was a mix of OU, George Mason, Duke and my old K-12 building), and someone had put a snow capped mountain between the front and back halves of the campus.

Tomorrow, I'll be sweaty and nervous when my classes meet for the first time.

I know, there are tons of people in the world with actual, real problems.

Thanks for listening anyway.

Twisted steel & Sachs appeal

In an otherwise well thought out and well written piece, Jeff Sachs joins the list of economists who throw unreasoned, knee-jerk, shout outs to "greenness" into their economic analysis.

Here's the quote:

The path to recovery now lies not in a new housing bubble, but in upgraded skills, increased exports and public investments in infrastructure and low-carbon energy.

This sentence appears in the third graph. There are eight paragraphs afterward that flesh out what Sachs considers to be the path to recovery. Carbon, or green, or alternative energy is not ever mentioned in any of his analysis.

Is it some kind of secret lefty code way to say "hey, you can trust me and my views, I love windmills just like you"?

I really wish economists would either (A) cut it out, or (B) explain why public investment in greenness can help lead to recovery (in a way that would be better than a simple carbon tax).

But I'm not holding my breath.

Wow, it's Hitler week at KPC

This time the venerable Harold Bloom plays the Hitler card wrt the Tea Party:

We have this horrible contemporary phenomenon in the Tea Party – a real menace not only to America but to the world. Because if it goes on like this, they will destroy our economy and they will destroy America. They have no democratic vision, and I don't mean with a capital “D”, I mean with a small “d”. They frighten me. They're like the early followers of Adolf Hitler, and I'm willing to be quoted on that. They are a sickening phenomenon. That is because they have not read deeply and widely enough. But then maybe they’re not to blame, because American education – even in elite universities – has become a scandal in my opinion. It has committed suicide.

Yikes!

I agree that American education has become a scandal, but not because the rise of the Tea Party.

Hat tip to LeBron who really buried the lede on this one.

Hayek Caused Hitler

Wow. Robert Sidelsky is clearly a zealot, someone who puts worship ahead of logical argument. But that's okay. There are plenty of folks I admire who do that also.

Sidelsky has perhaps overstepped, however. It turns out that Hayek's economic policies brought Hitler to powerin Germany. If only the D-Bank had been Keynesian, and had inflated the money supply, and wasted a bunch of money on make-work projects, the Nazis would never have had a chance.

Who knew?

The surprising thing for me is that I would have said that inflating the hell out of the money supply and spending a bunch of money on crony projects was EXACTLY what Weimar did. Thank goodness B-Sid is here to set me straight.

Note that I am not making the Godwin's Law objection. Sidelsky is not making a gratuitous comparison to Hitler. He literally means that Hayekian economic policies are directly responsible for the rise of the Nazis.

(Nod to Herr F, who is helpful)

How The US Crushes Resistance in its Young People (?)

This piece is interesting, but pretty inconsistent. Check it out.

The problem with Soc Sec and Medicare is that the rich are not fairly taxed? It was supposed to be self-financing. To the extent that it takes more from the rich and gives it to the poor, it is a welfare program, not a pension program for workers. Perhaps that is okay, but that is NOT how the program was sold or how it is talked about still. This person is deeply confused.

And...our young people should take to the streets, like those in Egypt did, because our kids have to pay back student loans? Really? Mubarak repression of all free speech and job choice = student loans?

Still, interesting. ATSRTWT.

(Nod to Katie, btw)

Angus at the Opera

Last night, Mrs. Angus and I went to the Santa Fe Opera and saw "The Last Savage" by Gian Carlo Menotti.

It was amazing.

It started out with a gaggle of tattooed Osama Bin Ladens in diapers dancing around, and also insulted women, gays, and pretty much any other group you could think of.

Basically it was like an episode of South Park set to incredible music, where every so often an excellent real musical interlude would hit you between the eyes.

The parts of the greedy servant girl and the loutish prince were sung especially well overall and their two solos were the musical highlights.

Them dancing Bin Ladens were really something though!

Slogans entirely relevant to these troubled times

Stopped Clock-onomics

"[J]ust to be clear, there's nothing wrong with a low cost of living. In particular, there's a good case to be made that zoning policies in many states unnecessarily restrict the supply of housing, and that this is one area where Texas does in fact do something right."

What? WHAT? What alien spaceship stole P-Kroog, and who is this guy?

I think the problem is P-Kroog is actually a first-rate economist, and so sometimes he forgets his self-appointed role as slinger of shinola and actually makes sense briefly.

That article, linked above, does pretty quickly revert to P-Kroogery of the worst sort. But, for just a minute there....

How Much Did an iPad Cost in 1911?

Our guy, that smokin' hot Steve Horowitz, shares some truth about cost of "living."


On a personal front, my very own EYM has struck a blow for informing the squishes of the world. Tired of seeing all the "no farms, no food!" stickers on the MacBook Pros of all his fellow Carrborovians, he got a bumper sticker of his own made.

It's on his computer (it's a used Dell, by the way, at about half the cost of the MacBook Pros that all the sensitive lefties insist on having as a show of their independence from everything but dad's trust fund). (And before you crack wise, EYM has a job, thank you very much).

It's Different if SPACE ALIENS Break the Window

The broken window fallacy is pernicious. John Stossel explains, for those of you who have lived under a rock, or studied economics at Harvard, MIT, or Princeton.

(heh; heh heh; heh: he said, "Fallacious")

Most recently, of course, it was KPC's favorite deep space Keynesian, P-Kroog.

Mary Theroux has some thoughts.


...

extra skin pups

This photo is amazing:




Many more great pics here.

Rent-Seeking is the New Profit Center, and DC is its Festering Capital

In the U.S. there have always been centers for frenzied entrepreneurial activity, creating value, wealth, and employment. It's what we do.

New York and Boston were both important trade, financial, and industrial centers. Then Pittsburgh and the Ohio Valley became engines of growth and industrial might. Detroit made iron machines that covered the world with transportation. Silicon Valley, quite recently, produced enormous amounts of hardware and software, and revolutionized the way we think about information.

In all those cases, American entrepreneurs sought out opportunities to create value and collect profits. That's what profits are, the inducement to redirect resources toward higher valued uses.

What does the U.S. produce now? Government contracts, where money is taken from tax-payers at gunpoint and wasted on "information systems," useless consultants and brutal elective wars on faraway and largely innocent populations. A festering hive of rent-seekers has clustered around Washington, D.C.

Rent-seeking and profit-seeking look the same from the perspective of the seeker. Both produce super-normal returns to investment, and create wealth for the winners. The difference is that profits are a sign of value being created. Rent-seeking is a sign of value being destroyed.

(nod to Anonyman, who eats his rents with fava beans and a nice Chianti)

SCORE!

From Renton: It just gets better. You could NOT make this stuff up.

I did post yesterday about the "cyberstalking" harrassment.

Here is one of the "offensive" videos put up about the Renton PD, and the jail facility.



Turns out the folks who put this video up were....Renton cops!

(Nod to B.E. I'd give names, but this is probably cyberstalking, and I don't want to implicate the innocent!)

Jon Stewart on Ron Paul

I don't always like Jon Stewart. But I have to like this, a lot.

The Daily Show - Indecision 2012 - Corn Polled Edition - Ron Paul & the Top Tier
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It's a legit question: Why ignore Ron Paul? I don't think they are doing it because they are afraid of him.

I also enjoyed JS's line that Huntsman was the only Mormon actively running, and he still came in second among Mormons in the straw poll.

(Nod to John Jay L.)

Gender and Genetics as Sources of Attitudes Toward Science and Politics

Who is in charge of Science: Men view "Time" as more fixed, "Reality" as
less real, and "Order" as less ordered

Ira Trofimova, Cognitive Systems Research, forthcoming

Abstract: There is a controversy about the factors underlying male predominance in mathematics, natural and engineering sciences. Our study of meaning attribution, conducted in Canada, China and Russia showed that men had a consistent tendency to estimate natural phenomena (even time-related) as more fixed and limited, less real (even "Reality") and less complex (even "Complexity") than women. Concepts related to classical mechanics received significantly more positive estimations by men than by women, but phenomena related to development and reality were assessed more positively by women than by men. We argue that the methods and language of science, which historically were developed by men, were affected by a tendency of men to reduce natural phenomena to structures with Lego-like components, and to mechanical aspects of their interaction.

****************

Linking Genetics and Political Attitudes: Reconceptualizing Political Ideology

Kevin Smith et al., Political Psychology, June 2011, Pages 369-397

Abstract: In this paper, we trace the route by which genetics could ultimately connect to issue attitudes and suggest that central to this connection are chronic dispositional preferences for mass-scale social rules, order, and conduct-what we label political ideology. The need to resolve bedrock social dilemmas concerning such matters as leadership style, protection from outgroups, and the degree to which norms of conduct are malleable, is present in any large-scale social unit at any time. This universality is important in that it leaves open the possibility that genetics could influence stances on issues of the day. Here, we measure orientation to these bedrock principles in two ways-a survey of conscious, self-reported positions and an implicit association test (IAT) of latent orientations toward fixed or flexible rules of social conduct. In an initial test, both measures were predictive of stances on issues of the day as well as of ideological self-labeling, thereby suggesting that the heritability of specific issue attitudes could be the result of the heritability of general orientations toward bedrock principles of mass-scale group life.

(Nod to Kevin Lewis)

Railroaded?

JS sends an email, as he sometimes does:

The California High Speed Rail Authority (CHSRA), hired some highly qualified transportation experts to analyze their ridership and revenue projections. From what I can tell the experts determined that the original ridership and revenue model used many state of the art techniques, but did not use all the methods the reviewing experts have heard of so they need to do more projecting. In going through the projections they came up with some interesting points about bias due to using stated preference versus revealed preference and a lot of advice on how to improve the accuracy of the projections. (The Report)

Even though all of the recommendation seem reasonable in making the model more accurate, it seems to me to be much about scientism. The the model projects all modes; however, the most import for determining revenue and ridership is the High Speed Rail (HSR) component. This mode has no possibility of revealed preference data in the US much less California. So the question is for both the CHSRA modelers and model reviewers: "Where is the uncertainty?" I see a presumption that there is an answer, instead of range of possible outcomes.

Many travel models that populate the Metropolitan Planning Organizations across the US show traffic doubling from Today's levels by 2035, but from May 2001 to May 2011 the trend has only shown a 0.8% annual rate of increase. (Travel Trends Report FHWA) A rate approximately one quarter of what was projected. These car and truck models have virtually all the historical data that economtrican could want but still has huge uncertainties. In fact the auto share of the market is an integral part of the HSR model. Shouldn't the uncertainty be as or more paramount than the accuracy. With the higher uncertainty should come the naturally higher return on the $40 to $120 Billion investment. I predict little if any of the uncertainty will be addressed in the next CHSRA business plan.

Renton, WA

This is an excellent little story, told in an excellent way by Ken over at Popehat.

You will enjoy it.

The whole probable cause thing really does come down to two elements:

1. A specific crime has been committed.
2. A specific identifiable person and location to be searched can be named.

You can't search a specific person / location in hopes of finding evidence of SOME crime. And you can't just search any old person you want just because a specific crime has been committed. You need both elements.

The whole things makes me think of the part near the end of LOTR:

...as they came to the east end of the village they met a barrier with a large board saying NO ROAD; and behind it stood a large band of Shirriffs with staves in their hands and feathers in their caps, looking both important and rather scared.
"What's all this?" said Frodo, feeling inclined to laugh.
"This is what it is, Mr. Baggins," said the leader of the Shirriffs, a two-feather hobbit: "You're arrested for Gate-breaking, and Tearing up of Rules, and Assaulting Gate-keepers, and Trespassing, and Sleeping in Shire-buildings without Leave, and Bribing Guards with Food."
And what else?" said Frodo.
"That'll do to go on with," said the Shirriff-leader.
"I can add some more, if you'd like it," said Sam. "Calling your Chief Names, Wishing to punch his Pimply Face, and Thinking you Shirriffs look a lot of Tom-fools".

In this case, as Ken at Popehat puts it:

When the police arrest someone, or search something, the relevant question isn’t whether they can, post hoc, gather evidence to show that there was probable cause. The question is whether the search or arrest was supported by probable cause at the time. Saying “well, we asked for a search warrant and got it, but we haven’t found new evidence since, so we’re not going to try to defend the warrant” is a non-sequitur. In addition, it’s an about-face. Renton’s minions previously claimed that the internet cartoons were self-evidently illegal cyberstalking. So what more evidence did they need to gather to support that proposition — unless the proposition was nonsense from the onset?

Owie. That's going to leave a mark. Of course, Ken may be a cyberstalker himself. With laws that vague, all you need to do is annoy the prosecutor and....Wait, there's someone at the door. You have a warrant for what? For cyberstalking? AAAIEEEE!

"It's not the end of Western civilization"

Me and Mrs. Angus yap with Captain Zach and you can hear it here.

The whole KGOU "World Views" series can be accessed here.

Mungo has always told me that I have a face for radio!

Dutch Resistance

Dutch Boy sends this article from the NYT.

Interesting, but grim, reading.

Dutch Boy, deep down inside, is very nearly a bed-wetting leftie. He believes in extreme stuff like actual rights for everyone, regardless of sexual orientation. He believes in reproductive rights, and thinks capital punishment is barbaric. He would likely treat immigrants more like humans than cattle.

But living in Holland also made him a realist about Muslim immigration in Europe. To be fair, the problem is not so much the immigrants themselves as the bizarre Dutch reaction to it. Also the Danish/Swedish/Norse/French/German/etc. reaction.

From the NYT article: Dutch politicians were promoting economic integration — language training, job training. “They didn’t understand the importance of religious identity among the immigrants,” he said. They dismissed it as backward even as they failed to understand the anger a growing immigrant population was creating.

The problem has two parts:
1. A deep shame the Dutch feel about Western institutions. They are not remotely willing to defend markets, political liberties, or anything. Perversely, since by their birthright as Dutchmen they are entitled to these things, they feel no need whatsoever to protect them. Let someone else do it. I'm tired.
2. A weakness of the spirit, a disease of the soul, so pervasive that they cannot imagine that anyone could really be serious about believing in that primitive religious crap. To be fair, they doubt across the board, from Christian to Jew to Muslim. They just wallow in weltschmerz, and justify their national spiritual laziness as a sign of sophistication.

So, it comes down to this: Christopher Caldwell, REFLECTIONS ON THE REVOLUTION IN EUROPE. I had not read this book until two years ago, when Dutch Boy sent it to me. But if you have not read it, you should. This is not a partisan issue, it's just the facts.

Monday's Child is Full of Links: What Blogs Do

A roundup of some interesting links on what blogs do, may do, and probably don't do.

From the Incidental Economist: Another set of links

TC's post on reputation

A science perspective (and credit for the poster above)

The impact of blogs on literature. (Really? A book? I had not seen this.)

The impact of blogging on the practice of law (pretty old, but thoughtful and quite interesting)

Blogging and public relations

An academic-ish article from the good people at Monkey Cage

Blogging as a way of increasing "assignment engagement" for students

Property Rights and Cooperation Among Greedy People

Young children's understanding of violations of property rights
Federico Rossano, Hannes Rakoczy & Michael Tomasello, Cognition, forthcoming

Abstract: The present work investigated young children's normative understanding of property rights using a novel methodology. Two- and 3-year-old children participated in situations in which an actor (1) took possession of an object for himself, and (2) attempted to throw it away. What varied was who owned the objectt: the actor himself, the child subject, or a third party. We found that while both 2- and 3-year-old children protested frequently when their own object was involved, only 3-year-old children protested more when a third party's object was involved than when the actor was acting on his own object. This suggests that at the latest around 3 years of age young children begin to understand the normative dimensions of property rights.
**********************

Emergence of social cohesion in a model society of greedy, mobile individuals
Carlos Roca & Dirk Helbing, Proceedings of the National Academy of Sciences, 12 July 2011, Pages 11370-11374

Abstract: Human wellbeing in modern societies relies on social cohesion, which can be characterized by high levels of cooperation and a large number of social ties. Both features, however, are frequently challenged by individual self-interest. In fact, the stability of social and economic systems can suddenly break down as the recent financial crisis and outbreaks of civil wars illustrate. To understand the conditions for the emergence and robustness of social cohesion, we simulate the creation of public goods among mobile agents, assuming that behavioral changes are determined by individual satisfaction. Specifically, we study a generalized win-stay-lose-shift learning model, which is only based on previous experience and rules out greenbeard effects that would allow individuals to guess future gains. The most noteworthy aspect of this model is that it promotes cooperation in social dilemma situations despite very low information requirements and without assuming imitation, a shadow of the future, reputation effects, signaling, or punishment. We find that moderate greediness favors social cohesion by a coevolution between cooperation and spatial organization, additionally showing that those cooperation-enforcing levels of greediness can be evolutionarily selected. However, a maladaptive trend of increasing greediness, although enhancing individuals' returns in the beginning, eventually causes cooperation and social relationships to fall apart. Our model is, therefore, expected to shed light on the long-standing problem of the emergence and stability of cooperative behavior.

(nod to Kevin Lewis)

Grand Game: Inflation Edition

Angus points out that advocating good policies that are impossible is bad.

As a balance, I submit that it is also unfortunate when we are told we need to pursue bad policies that are unfortunately all too feasible.

In this article...well, check it out.

My own favorite 'graf:

Had the central bankers of the world understood that inflation in asset prices could be just as bad as, if not worse than, inflation in the prices of consumer goods, this would not be necessary. But they did not. So they did nothing to resist soaring home prices, just as they had seen no reason to worry about the Internet stock bubble.

Golly sakes alive, Jasper; where to start?

1. "Understand"? The asset bubble was largely an intentional consequence of monetary, regulatory, and tax policies of the federal government. It was not a thunderstorm, something that just happened randomly. It was a POLICY.
2. The fact that incorrect asset prices resulting from government policies on money, interest, and taxes cause asset bubbles is one of the central tenets of the Austrian Business Cycle theory. I myself have always been skeptical of that theory, but it accounts for the events of 2001 - 2010 beautifully and quite accurately.

It's not the bust. The problem is the freakin' boom. And the idea that inflation solves the bust is just askin' for another boom.

Why do economists keep advocating impossible policies?

Policy activists on both the fiscal and monetary side are united by one common thread. The policies they propose are impossible to credibly implement.

Start with the fiscal side. Christina Romer in the NY Times again calls for an increase in our debt now for "stimulus" combined with a long term reduction in our debt. Mark Thoma and many others have made similar calls.

Dr. Romer is an excellent economist with a fantastic research record, but her policy proposal is impossible! In our political system, we cannot make any type of future long term commitment to do anything.

We cannot bind future politicians. Long run plans will only come to pass if they are in the interest of the politicians who are in office at each point in time over the course of the plan. In econo-speak, the policy must be time-consistent if it is ever going to be followed.

Amazingly we find the exact same problem on the monetary side. We are told by the Sumnerians that targeting a path for nominal GDP or the price level would help avoid situations like our current one.

But for these policies to work, when shocks hit the economy people have to believe that the Fed will do things in the future that they know the Fed doesn't like to do!

The Fed cannot bind either (A) future Feds, or (B) future politicians, who after all actually created and run the Fed.

The popular economics discussion of policy alternatives seemingly takes place in a world where Finn Kydland never won the Nobel Prize.

I will allow that there are papers that take commitment issues seriously in monetary policy. Many of them are well discussed in this excellent post. But, reading the post will show just how thorny those issues are and just how hard it actually is to implement an "optimal" policy over time.

The Sacrifices We Make For Research

I am sorry; I find this quite funny.

That does not MAKE me a bad person, but it IMPLIES that I am a bad person.

The guy was doing what he knew, so that he knew who he was doing. Here is his dissertation. So when he did the Pres's wife, he had solid research to back him up.

(Nod to Anonyman, who also found it funny. But there is no question Anonyman is going to hell, none)

What a nice pup....

This dog is not really cute, but he is obedient.

And if you are really obedient, people will think you are cute anyway. That approach certainly works for me in MY marriage.

Miller Center Summer Institute

Back home now. Was in NY, at Columbia Law School, for Tikva-Hertog.

And then in Pasadena, for Miller Center. Amazing students, in both cases. Scary smart people, really interesting and accomplished.

There is a tradition (blame the Admiral, I expect) of "toasting" at the Miller Center.

These can get a bit rococo. But, in this case, even more. It was... It was.... well, I have pictures.

I did my usual shy, balanced, fair-minded discussion, in two lectures. Okay, actually, I was pretty tired, and I went full-out teller of ungentle truths, "you maggots need to get to work, nobody likes you anyway, you all suck!" on them.

At the dinner on Thursday night, the toast took the form of a male maenad (if you can be a male maenad; is that a "gonad," perhaps?), a frenzied follower of Bacchus.

He mounted the stage, which was a table. Now, this particular gonad was not a small gonad. So there was some question whether the table would be able to do its job here, adding dramatic tension.

Then, the gonad held forth, in quite an impressive Shakespearean form, about my outrages and errors of the previous day. The list was long (and, I should add, quite accurate).
We, as the British say, fell about. Well played, young gonad.

.
(Thanks for DS for the pix)

Happy Vladirday!

Root-toot-tootin' Vladimir Putin is at it again, this time diving for ancient urns in the black sea.

Here's the video:

Here's a slightly cynical account of his exploits:

"Diving in the Taman gulf, the Russian prime minister immediately found two amphorae that had been waiting for him since the 6th century AD at a depth of two metres," wrote the Novaya Gazeta newspaper in an editorial dripping with sarcasm. "He was lucky: in the same place, over the last two years archaeologists and divers of the Russian Academy of Sciences managed to find only a few pottery shards."

carts, horses, and asses

Why do media outlets publish op-eds by politicians? This piece by Ed Rendell and Scott Smith is perfect for a Mungowitzian "grand game".

Apparently the US used to be "the world leader in infrastructure"! But sadly now we suck in infrastructure. It seems that the Chinese are eating our lunch in infrastructure.

The authors claim that, because we haven't spend enough on infrastructure, "China is now home to six of the world's 10 busiest ports—while the U.S. isn't home to one."

This is where the first two words of my title come in. I hate to break it to you Ed and Scott, but the US could spend trillions on ports and China would still have 6 of the world's 10 busiest ports and we'd probably still have none.

But that's because China has at least 3 times as many people as we do, China is growing at 8 to 10 percent annually, and China is the export king of the world. They don't have busy ports because just because they spent a lot of money on infrastructure!

If the authors really wanted US ports to be busier (as opposed to just wanting the government to spend more money), they should lobby their colleagues to pass the trade deals with Colombia, South Korea, and Panama.

And of course this masterpiece would not be complete without Ed and Scott making the sacred call for a national infrastructure bank. What politician wouldn't want a $500 billion slush fund to dig into come election time?

What the last word of my post's title refers to is left as an exercise to the reader!

Does Blogging "Help"?

LeBron takes up a question: Does blogging improve the professional rep of an economist?

And does blogging change policy?

I can answer the second question: YES. In quite a few instances, people who have read THIS blog have adopted a policy of not reading this blog. Or so I would infer from their comments.

Falling with style

Remarkable. Jet Man.


(Nod to DB, who of course wanted to know (1) if he could have one, and (2) if he could mount .30 cal Brownings on the wings.

So near but yet so far

LeBron points us to Daron Acemoglu writing at the HBR blog, saying that he makes "many good points". Indeed, I'd say of the 7 he makes, 6 are good to very good.

However, that last one is a real doozy:

Focus on green technology, the next area that has the best promise of creating a platform for more innovation. Innovations in information and communication technology starting in the 1960s have had a transformative impact on the world economy by creating a platform upon which myriad other technologies and products could be developed. Green technology has the potential to cut carbon emissions, sure, but we also need to transform the way in which energy is delivered, utilized, and monitored. This necessitates innovation and significant investment not only in power generation but also in the electricity grid, in the transport system, and in homes and factories. The United States is lagging behind other countries in these activities. To regain leadership, we need both more and smarter subsidies to research in green technologies and a carbon tax that naturally encourages the use of cleaner technologies and triggers more research to seek such technologies.

First, what standard are we to judge the statement that green technology "has the best promise"? At least give us some reasons why. To me this is more of an article of faith to people than the product of any kind of cost-benefit analysis.

Second, Why does it matter where an innovation takes place? Ideas are public goods. If the Chinese figure out how to somehow make solar power cost effective, why shouldn't we just be happy and use the invention?

It's not about nationalism and competition between nations; innovation anywhere is good for every place that is able to absorb and implement it. It is the global amount of R&D and innovation that we should care about, not whether the US can "reclaim leadership", especially in an area where no one can make money without continual large subsidies.

About the only part of DA's quoted paragraph I agree with is that we should introduce a Pigouvian carbon tax. I'd like to do so in a way that's revenue neutral, but even if it isn't, a carbon tax is probably the simplest and one of the best things we can do for the environment.

nothing stops the honey badger when it's hungry!

It's not the bombs, but where they're hidden

Apparently Hamid Karzai doesn't have any problems with suicide bombers, he just wants them to not hide the bombs in their turbans:

"Afghan President Hamid Karzai met recently with members of the country’s clerical councils to get their assistance in persuading insurgents not to hide explosives in suicide bombers' turbans or in other religious or cultural symbols.

In the last five weeks, suicide bombers have killed the mayor of Kandahar and a senior cleric in the city with small amounts of explosives hidden in their turbans. In both cases, the bombers grabbed their victims before triggering the explosives.

It is believed to be the first time turbans have been used in suicide attacks.

A man’s turban has important religious and cultural significance and it is considered dishonourable to touch it.

Karzai met with clerics this week and pleaded with them to use their influence on the Taliban and other insurgents to dissuade them from using cultural or religious garments to hide explosives."

I certainly hope the president succeeds in this noble quest to get the bombers to go back to strapping explosives to their chests or putting them on women or in camel humps or whatever, and to convince them that they must always, always honor the turban!

who's punk?

Great Jawbreaker cover by John Darnielle & the Mountain Goats!

Will politicians ever stop lying to the public?

People, maybe we should extend unemployment benefits yet again. The job outlook is bleak, unemployment is high, and lots of people are hurting bad. Maybe it's the civilized thing to do.

But could we please just stop yapping out the bald faced lie that unemployment benefits create jobs?

Please?

Obama and Pelosi were again claiming that yesterday. The closest thing to any analysis of why was Nancy's "it injects demand".

Today, Mark Thoma has found an economist to parrot the company line as well. He offers absolutely no analysis or evidence for the proposition.

You know why there's no analysis or evidence given? Because, even on the crudest of Keynesian grounds, its horse-hockey!

The proposed bill would affect around 1,000,000 workers and we'd be giving them a few hundred bucks a month for what, another year? so thats, say $300 x 12 x 1,000,000 or $3.6 billion passed out in 12 "doses" of $300 million each in a geographically diffuse pattern.

Yeah, I can see entrepreneurs all over the country rushing to hire new workers to handle the massive increase in demand created by this program.

It never seems to enter their heads that at the margin, subsidizing unemployment tends to create more unemployment. There are a lot of studies in economics showing that employment spikes at the time when unemployment benefits run out.

Yes, I know the benefits are small compared to a job. No I am not calling unemployed people lazy. I am perfectly willing to concede that the humanitarian case for extending benefits may trump the marginal incentives they create to postpone taking a job.

What I won't concede, what I'm very very tired of hearing asserted as if it was obvious, is that extending unemployment benefits will create jobs.

Obama and Pelosi remind me of that movie about the bus. It's like if they stop spending money at a certain high rate, they will explode.

Heroin is doing the heavy lifting

From the personals

MBM ISO 270 electoral votes for a 4 year relationship.

Turnons: electric cars, choo-choos, windmills, peas, taxing the rich

Turnoffs: tea, paperwork, take home pay, ratings agencies

GM Volt Fail

Wow. This is pretty devastating.

Look, we have a pretty good way of finding out whether a company is succeeding: stock price. Plenty of folks are saying that the auto bailout was a big success. Well, let's see! Now, sure, there is a recession. But is the recession WORSE than it was a year ago? So that can't be the reason that stock price is falling. The stock price is an evaluation of future profitability. And it does not look good...

And yet, we get idiots like this guy saying what a success it all was. There are plenty of other examples of half-wits saying auto bailout was a success because the administration SAYS it was a succes. (GAO says maybe not, but what do THEY know, bunch of sharp pencil idiots?)

Let's review:

1. MSM says bailout success, because Prez Obama SAYS it was a success, and why would he lie?
2. But no one wants to buy crappy cars now, just like they didn't want to buy crappy cars three years ago, or ten years ago
3. GM is tanking and is going to "need" another bailout.

We'd be MUCH better off directly paying all those workers their full salaries to stay home. The success of the auto bailout is a myth.

Sun, Wind, Sprinkler Heads: No Excuses

Letter from Dutch Boy (Reds fan) on Yonder Alonso.

This is too funny. quote from yonder alonso, reds rookie left fielder, just recently called up. the upshot is that he hits like mother, but can't field worth shit. he's a trade chip. first start in left yesterday, he made an error, as expected. same today against the cubs, one error, and one homer. and then this funny after-game quote:

"I definitely should have caught that ball. Again, you have to live with it. First time in this stadium. I’ve never been here, it’s a little tough to play with the wind and the sun and all that. No excuses, really.”

(first time at wrigley, tough to play with wind. tough to play with sun. earlier in the statement he said he ran over a sprinkler head in the outfield before missing the catch. no excuses. really.) he needs crash davis to sit him down and review what to say in an interview. but boy can he hit.

Of course, since the guy is a terrible fielder, the Reds decided to move him to... third base! I love the Reds, they make me so happy.

Worst fielder in baseball history? According to KPC (and Dutch Boy) friend Jim Bouton, it was Dick "Slip me some steel" Stuart (I believe that is what Jim said, in BALL FOUR. Is that right?)

Noticias

Some links where I said things, and other people wrote them down and put them on the internet.

1. Politico: On the President's 50th birthday.

2. Duke News Tip: WWE Smackdown!

3. Chinese news magazine San Lian Lifeweek: (Specific article here, on the budget deal) Entire mag

4. The Hill, about the debt ceiling vote.

UPDATE: A commenter notes that there have been other such instances in the past, and my poor record as a predictor of future events should impeach the value of future such predictions. An example, here, in Time. I actually said, "BHO is unelectable!"

Good one....and a fair point. No way you should make trades based on my predictions, and in fact you can likely make money by doing the opposite of what I suggest. I'd thank that brave commenter, but s/he showed the courage of her/his convictions by remaining anonymous. Not so brave after all...

Bruno's Idiocy Comes Home to Roost

Bruno Latour (who should have been a porn star, with that name. Far better than the intellectual pornography he sold as scholarship!) is surprised anyone took him seriously.

Okay, he's got a point. No one should have taken him seriously. He claimed that planes don't fly, that color tvs don't really work, and that nothing really is real. It's all socially constructed.

And somehow he got this from misreading Kuhn. (Don't just read on, that link is cool!). Latour wrote drivel like this. (Feel FREE to skip that link).

I have long been amused at how many people whose bizarre minds give them no hope of understanding science use Kuhn as a shield, saying there is no SUCH THING as science. Yeah, I hope that works out for you, pumpkin. Read some more French philosophers, by all means. And get hilariously hoodwinked by Dr. Sokol, of course.

Anyway, having sown the wind, now they can reap the climate change denier whirlwind. Far and away most Americans believe that climate science is fabricated, at least in part. Socially constructed, indeed.

And the response by Bruno Latour? Two parts, both delightful.

1. I never really meant that. Never meant what I said I meant, it was all just an intellectual exercise. Lighten up!
2. Besides, in spite of everything I said about science being socially constructed and unreliable, and measurement being impossible, we ALL KNOW that global warming is real, a fact, an undeniable truth.

Golly, Bruno, and you know that...how?

The answer, as always with the left, is that their feelings, their group-think intuitions, generally anything they happen to believe? THOSE are facts.

Actual facts? Things like prices, scarcity, logic, evidence? THOSE are socially constructed. Nice.

Honey Badger still don't care

Hat tip to Keith G.

Honey Badger don't care

Hat tip to Aaron S.

Euvoluntary Exchange: Kidney Sales

I have been working on the idea of "euvoluntary" (ie, truly voluntary) exchange for some time.

Take five minutes, and watch this video, and read this article.

On the "for" side:
"We are allowing young people to undertake £20,000 to £30,000 of university fee payments. "We allow them to burden themselves with these debts. Why can't we allow them to do a very kind and generous thing but also meet their own needs?"

Against:
However, Robin Parker, president of NUS Scotland, said: "Although the lack of available kidneys for transplant is truly tragic given the need, it's ludicrous to suggest that selling body parts is a viable solution to alleviating student poverty.

"Young people, particularly from disadvantaged backgrounds, are already being asked to take on huge debt to afford an education. They shouldn't be expected to remove a body part as well."

Now, in both of these cases, our outrage is likely due to a sense that people should not have to sell their kidney. But then we skip to a non sequitur: People will not BE ALLOWED to sell their kidney. So, the inexplicable Ms. Parker above says people should not be expected to remove a body part as well. Well...no. But what about remove a body part INSTEAD, ma'am?

I don't know what the right policy is. But I am quite certain that the fact that I should not have to do it does not imply that I should be prevented from doing it. Non sequitur. It does not follow.

Especially since I am allowed to DONATE the kidney. If kidney donation were illegal, then outlawing a black market is at least logically consistent. But allowing donation, but not sale...WTF?

The interesting thing is that this happens a lot. If a man buys a woman a nice dinner, they go to a show, have a drink afterward, AND THE MAN PAYS FOR EVERYTHING, there is no problem if the woman goes home with him and they have sex. She can "donate" without a problem. (As the old joke goes, the woman says, "Well, that was great! Now, the rest of your evening is on me.")

But if she asks for, or the man offers, $500 for the sex, then it is illegal. So, again, we don't mind the act, it is only the sale that creates problems.

Why? We think prostitution is demeaning, a loss of human dignity. No woman should have to sell herself like that.

Okay, but does that mean she is NOT ALLOWED to sell herself?

What about surrogate motherhood? We are renting the same part of the body as a prostitute wants to rent out, but for a longer period. Why is voluntary sex, and also surrogate motherhood, legal but prostitution is not? Who would you ratherhttp://www.blogger.com/img/blank.gif be, the woman who got paid that 3k dollar to make E. Spitzer holler, or the woman who got $7 per hour to clean up the room afterward? Is it THAT obvious that the $1k/hour prostitute should be "protected," but not the chambermaid allowedwho has to hose down the walls of the love nest? (Of course, that was before DSK decided that the chambermaid could just be taken for the not-asking. If you are French, apparently you believe that "voluntary" sex means that the man wants it.)

My answer is that we have the intuition that these transactions, kidney sale or sex for sale, are not "euvoluntary." Voluntary, perhaps, but not euvoluntary. Gated version of the article here. If you want a copy, send me an email: munger at duke dot edu.

(UPDATE: The most worthy Worstall has written on the specific subject of organ sales. Worth looking at, as always. Among other things, Tim points out that in fact, in the UK, prostitution is essentially legal, though with some quirks. Surrogate motherhood, on the other hand, is for all practical purposes NOT legal as a straight up rental transaction, except for the ability to pay for expenses.)

Trust, but Verify Through Disclosure?

An email from Lucian Bebchuk:

...a group of ten corporate and securities law experts submitted a rulemaking petition to the Securities and Exchange Commission. The petition urges the Commission to develop rules to require public companies to disclose to shareholders the use of corporate resources for political activities. The petition was submitted by the Committee on Disclosure of Corporate Political Spending, co-chaired by Robert Jackson Jr. and myself and composed of ten academics whose teaching and research focus on corporate and securities law.

The petition presents data indicating that public investors have become increasingly interested in receiving information about corporate political spending. It observes that many public companies have voluntarily adopted policies requiring disclosure of the company’s spending on politics, and these disclosure practices can provide a useful starting point for the SEC in designing disclosure rules in this area. The petition then suggests that disclosure of information on corporate political spending is important for the operation of corporate accountability mechanisms, including those that the Supreme Court has relied upon in its analysis of corporate political speech. Finally, the petition explains that the design of disclosure rules concerning political spending would involve choices similar to those presented by the disclosure rules previously developed by the Commission, and thus that the Commission has ample experience and expertise to make these choices .

The full petition is available on the SEC’s website here.

Best, Lucian

Interesting. What say you?

Your post is full of fail

Over at "Democracy in America", M.S. appears to be a bit confused about what the words "rival" and "excludable" mean, as well as over whether a picture proves or disproves his point.

He's taking on LeBron over whether the government does or should mainly provide public goods. He has somehow grokked that public goods are non-rival (my consumption doesn't reduce the amount available for you to consume) and non-excludable (you can use the good whether you pay for it or not). As I pointed out earlier, national defense is pretty close to a pure public good.

In the real world, things are not so simple, as some goods may be conditionally rivalrous and excludable (James Buchanan called these "club goods") and some goods are forced to be non-excludable by force of law.

M.S. says the following:

Roads are rival and excludable. Unemployment insurance is rival and excludable. Health insurance for seniors is rival and excludable. Primary education is rival and excludable. Police protection is rival and excludable. Art museums and history museums are rival and excludable. Swimming pools, parks and zoos are rival and excludable.

Well, roads are conditionally rival and generally non-excludable by dint of government policy. That is, the government levies taxes, builds roads and anyone can drive on them without paying a fee (turnpikes and private toll roads are few and far between in this country).

Same goes for primary education. I don't see how one can claim that primary education in the US is excludable. It could be excludable, but government policy has made it non-excludable.

In theory, police protection is close to a pure public good in the area where the police have jursidiction. Now it's true that if a cop is at my house, there's one less cop around to go elsewhere, but the "law and order" brought by a police force is non-rival. And, at least in theory, police don't charge victims of crimes for their services. Anyone can have the police come and fill out an accident report.

Anyone making the statements M.S. made on an exam in an undergrad public econ course would be getting an F.

Then comes the funny fail part of the post. After the rant about how roads, parks, and museums are "rival and excludable", i.e. NOT public goods, MS concludes as follows:

So, then we have the second claim, that with public goods, adding extra people to the mix with no spending boost is compatible with those additional people getting more or less the same services as the previous consumers. I think my objection to this is best illustrated with a few pictures.

And people, can you guess what he shows pictures of? A road, a beach, and a museum!

In other words, the very things he just got done vociferously claiming were NOT public goods!

Yikes!

Grand Game, Part II: We Need Another Bubble!

The problem is that I think this level of economic thinking is quite representative of the administration's brain trust.

Eugene Robinson, a pretty sensible guy (at least by WAPO standards) asserts that the only way out of our mess is for housing prices to go back to 2007 levels.

E-Rob! That was a BUBBLE. Those prices had no relation to scarcity values, production costs, or demand. And here's the thing: production values and demand are the things that determine price (except in a bubble, of course).

So, anyway, GG time, folks. Let's do this in comments.

I'll go first: For 30 years, the limo-left has been whining about affordable housing. But now that housing IS affordable, their main concern is to jack housing prices (of THEIR houses!) back up again. Have you noticed that all the places where housing prices fell MOST (NY, Boston, Northern Cal) are the places where lefties cluster like ticks? When it comes to blind self-interest for erstwhile do-gooders, all that compassion goes out the window. It's time get out the air pump, Jasper, and reinflate that bubble right away! The poor can just go screw themselves, because the left needs to keep stizacking that pizaper!

Grand Game, Part I: Foot Soldiers For Capitalism

Gosh, why would there be a problem if our "educators" actually hasten to reassure an interviewer, who earnestly writes it down, that the job of colleges is NOT to make "foot soldiers for capitalism"?

Plenty of other delightfully idiotic stuff in this article, tho. Have fun.

My own favorite: The conclusion of article appears to that there is a surprise in the world. If you have no education, you may have an income nonetheless. But if you have no job, it will be much harder for you.

Um...yes. The problem is that so many people in academics have never actually worked that they can't imagine anyone wanting to. Having had several jobs where one showers after work, instead of before like our lefty elites live their lives, I can vouch for the fact that working and producing things is not an affront to human dignity.

Innie or Outie test goes to Court

Judging Women

Stephen Choi, Mitu Gulati, Mirya Holman & Eric Posner
Journal of Empirical Legal Studies, September 2011, Pages 504–532

Abstract: Justice Sonia Sotomayor's assertion that female judges might be better than male judges has generated accusations of sexism and potential bias. An equally controversial claim is that male judges are better than female judges because the latter have benefited from affirmative action. These claims are susceptible to empirical analysis. Using a data set of all the state high court judges in 1998–2000, we estimate three measures of judicial output: opinion production, outside state citations, and co-partisan disagreements. For many of our tests, we fail to find significant gender effects on judicial performance. Where we do find significant gender effects for our state high court judges, female judges perform better than male judges. An analysis of data from the U.S. Court of Appeals and the federal district courts produces roughly similar findings.

"Quality"? Number of opinions...maybe. Outside citations? Okay. But "co-partisan disagreements"? That means when the judge disagrees with people with the same philosophy. So, quality is "incoherent and arbitrary judicial philosophy"? Yes, that is what Judge Sotomayor said, I realize, that women were better because they just make stuff up instead of having core beliefs. And they never do that silly stuff like read the law, or refer to actual opinions, segun la senora. Female judges go with what they feel (again, according to Judge Sotomayor; don't hate me). There are examples of this, of course. Judge SD O'Connor was a random number generator.

But some would say that this puts the "quality" label on judges who write different opinions, and have disagreements, depending on what time of the month it is. *I* would never say that, of course.

(Nod to Kevin Lewis. He wouldn't even THINK that)

Amar Bhide Op-Ed, And M-Yg Hails Need for Better Crises

KPC Pal Amar Bhide has an interesting op-ed with Edmund Phelps.

Worth reading.

@mattyglesias tweeted (a double):

1. New political crisis desperately needed to stimulate blog sector during august doldrums.

2. Euro collapse should be crisis enough but US blog audience refuses to follow foreign news.

It's true. Whenever I try to bring up Eurozone, reporters stick fingers in ears and start singing "LALALALALA!"

The Guy's First Name is "Lord"?

The Keynes-Hayek debate was again debated.

George Selgin on the side of the angels. (Really? That's what we've got?) A podcast for background.

And on the other side a guy whose first name is "Lord." Russ Roberts schools "Lord", whose qualifications appear to be a cool accent and a desire to canonize Keynes, in this video.

(Nod to Anonyman)

by the way, FU, we're taking Hong Kong

Here it is people, a hip-hop history of China:

croquet and baked alaskas

Wow. I just got reminded of one of my favorite songs, "Indian Summer". Originally written and performed by Calvin Johnson & Beat Happening, it's been covered by Luna and by Captain America (Eugene Kelly).

Here are all three versions in my order of loving them:







What say you all?

Okies: Behold your Governor

Mary Fallin has a plan for ending Oklahoma's drought:

“I encourage Oklahomans of all faiths to join me this Sunday in offering their prayers for rain,” Fallin said. “For the safety of our firefighters and our communities and the well-being of our crops and livestock, this state needs the current drought to come to an end. The power of prayer is a wonderful thing, and I would ask every Oklahoman to look to a greater power this weekend and ask for rain.”

Wow. Wouldn't you be praying to the same God who SENT THE DROUGHT TO BEGIN WITH? Aren't you asking the Deity to admit his/her mistake and change course? How exactly to you phrase a prayer like that? Do you have to promise to quit doing the bad stuff you did to have the drought come your way? Aren't you just supposed to pray for the strength to deal with the path the Deity in his/her wisdom has put you on? Doesn't Fallin run the risk of getting us all turned into pillars of salt or something for our impudence?

If this doesn't work, what's next, rain dances?

The dog who killed Bin Laden

"The dog has an outstanding record of military service, is almost certainly against cutting defense spending, and could not be trusted to keep from biting Obama? Is it just us or would this dog make a terrific Republican congressional candidate?"

More here.

Are You Kidding?

Ken Rogoff is a very serious man, so I know he is NOT kidding. But what he is proposing is theft, pure and simple.

"...the real problem is that the global economy is badly overleveraged, and there is no quick escape without a scheme to transfer wealth from creditors to debtors, either through defaults, financial repression, or inflation."

So, he proposes that "we" (meaning borrowers; you creditors can go screw!) simply inflate by 4%-6% a year until we have destroyed the value of the outstanding debt.

Remember, there is a huge amount of US sovereign and corporate debt, with fixed coupon rates, in the hands of foreign banks and governments. HUGE. Foreigners "own" nearly $5 trillion in US sovereign debt. I use the scare quotes because if we do the "Full Rogoff" then it turns out they don't own what they thought they owned, after all, which was a promise to pay back the loan.

Let's do an example. Suppose inflation is 2%, the "real cost of funds" is 2% (just say, okay, for simplicity) and has been for a while.

A bond with a par value of $1,000, a coupon rate of 4% (about what US Treasuries are going for) with a maturity 20 years from now, would then be worth its par value of $1,000 (inflation 2% plus cost of funds 2% = 4% current market rate = 4% coupon rate, and again just let me simplify it this way). (A calculator, if you want to try this at home)

Now...we go to 6% inflation, not anticipated but introduced overnight and everyone knows it, it's intentional and it is not going away anytime soon. And say real cost of funds is still 2%.

What is the bond worth now?

That would be $601.49.* $400 of the bondholder's wealth has been destroyed. Well, not destroyed, exactly: stolen. Because the debtors are now paying back in inflated, less valuable dollars.

That is Rogoff's solution? Kill the rich? Abuse the idiots who loaned us money? It's impressive how soon the rule of law dies when the wealthy elites of a nation find it to be in their interest.

To be fair, Dr. Rogoff does recognize the problem: "Of course, inflation is an unfair and arbitrary transfer of income from savers to debtors. But, at the end of the day, such a transfer is the most direct approach to faster recovery. Eventually, it will take place one way or another, anyway, as Europe is painfully learning."

That's a truly remarkable statement. This action, if consciously taken by the monetary authorities, would have the effect of saying that all debtors, ALL DEBTORS regardless of size, are "too big to fail."

Wow. Remember, Dr. Rogoff is the former chief econo-shaman at the IMF. The same IMF that tells poor countries they have to pay back 100% of THEIR debts.

**************************************
*Yes, that's assuming that the 2% cost of funds, 6% inflation are the new steady values. Rogoff wants 6% inflation to be temporary. But it would change expectations in a way that would make it hard to readjust very quickly. When the inflation (QE3? QE7?) ends, it would not work to say, "Okay, now we want to borrow at 4% again! We promise never to do that whole inflation thing again. That was only a one time thing."

Recognize the Author?

Ever seen this?

Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution. In this very minute, a child is being born to an American family and another child, equally valued by God, is being born to a family in India. The resources of all kinds that will be at the disposal of this new American will be on the order of 15 times the resources available to his Indian brother. This seems to us a terrible wrong, justifying direct corrective action, and perhaps some actions of this kind can and should be taken. But of the vast increase in the well-being of hundreds of millions of people that has occurred in the 200-year course of the industrial revolution to date, virtually none of it can be attributed to the direct redistribution of resources from rich to poor. The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production.

That would be Robert Lucas, The Industrial Revolution: Past and Future, 2004. (Nod to Neanderbill for the cite).

I just finished reading Joyce Appleby's The Relentless Revolution, a history of capitalism. After the first 100 pages, I thought it was one of the best books I had ever seen on the subject. After 150 pages, and from then on, I wanted to through it against the wall. Prof. Appleby has some overt Marxist assumptions, with some stubborn libertarianism underneath them. So she firmly believes that capitalism is necessary for wealth to develop. But then she favors statism and powerful labor unions.

She really makes an effort to be "fair" to statist regimes. For example, on p. 267, Prof. Appleby says, "The USSR startled the world [in the Revolution]. During the seventy-two years, of its existence, the USSR repeatedly affronted the Western world with its flaunting of its indifference to property rights and free enterprise."

Um...Ma'am, excuse me, but the USSR also affronted the Western world with its murder of millions of its citizens and the denial of basic human rights and political freedoms to the wretched population of an area that was nearly 1/5 of the entire habitable land surface of the world.

Still, an interesting book. Her discussion of the direction of China and India are both detailed and insightful, though again she shies away from any kind of critique of the repressive anti-labor policies of the Chinese, after having bludgeoned (with some cause, of course) the repressive anti-union thuggery of the US in the first half of the 20th century.

Worth reading.

Lithuanian Mayor Deals With Illegal Parking

Visit msnbc.com for breaking news, world news, and news about the economy

Ya know, if the Bishop had had a big snow sled like this, he might have done the same thing in Providence, UT.

Mr. Gov: Do you mind if I work, please?

Only one in 20 workers needed the government's permission to pursue their chosen occupation in the 1950s, notes University of Minnesota Prof. Morris Kleiner. Today that figure is nearly one in three...To work as a manicurist requires only about 12 hours worth of training in Alaska and 40 in Iowa, but 600 hours in Oregon and 700 in Alabama. Does anyone believe consumers in Oregon and Alabama are in need of that much more protection from unsafe manicurists? Or that there is much difference as far as consumer complaints are concerned? Mr. Kleiner compared consumer complaints between Minnesota and Wisconsin in certain health-care occupations and found no differences in the number of complaints between tightly regulated Wisconsin and less-regulated Minnesota. [Chip Mellor & Dick Carpenter, WSJ op-ed]

Damon Root elaborates...

(Nod to Kevin Lewis)

Uncle Sugar

Sometimes I say that great videos are the reason the interwebs were created.

This video is NOT the reason the interwebs were created. Still, it is so bad it is good.

Uncle Sugar!

Some Thoughts on the Deal

Some Duke profs professed about the deal.

No one is impressed. But they are unimpressed for different reasons than P-kroog and bed-wetters are unimpressed.

Euro?

LeBron on the Euro. Interesting.

Euro has been rising against the dollar, in the "who can be a bigger fiscal idiot?" contest.

Reminds me of the story about the bear.

LAGNIAPPE, courtesy of Amar Bhide: Egypt turns down IMF loans, calling them "tainted." I had an old Econ prof at Davidson who said, at least once a week, that "The only taint in money is the kind t'aint in your pocket." And then he would chuckle, all alone.

Environmental Preferences: An Innie or an Outie?

So, it turns out that your views on the environment depend on whether you have an innie or an outie.

Sex and Environmental Policy in the U.S. House of Representatives; Per Fredriksson & Le Wang, Economics Letters, forthcoming

Abstract: Using LCV score data, we find that female legislators favor stricter environmental policies than do their male counterparts. Moreover, gender- corrected estimates suggest that voters do not push environmental policy towards the middle, but rather select the ideologically closest candidate.

"Gender corrected?" Is that one of those operations they do in Sweden?
----------------------
Cool dudes: The denial of climate change among conservative white males in the United States; Aaron McCright & Riley Dunlap, Global Environmental Change, forthcoming

Abstract: We examine whether conservative white males are more likely than are other
adults in the U.S. general public to endorse climate change denial. We draw theoretical and analytical guidance from the identity-protective cognition thesis explaining the white male effect and from recent political psychology scholarship documenting the heightened system-justification tendencies of political conservatives. We utilize public opinion data from ten Gallup surveys from 2001 to 2010, focusing specifically on five indicators of climate change denial. We find that conservative white males are significantly more likely than are other Americans to endorse denialist views on all five items, and that these differences are even greater for those conservative white males who self-report understanding global warming very well. Furthermore, the results of our multivariate logistic regression models reveal that the conservative white male effect remains significant when controlling for the direct effects of political ideology, race, and gender as well as the effects of nine control variables. We thus conclude that the unique views of conservative white males contribute significantly to the high level of climate change denial in the United States.

In other words, conservatives are more likely to be conservative? Since the only conservatives who are NOT male are presumably female (unless they have been "gender corrected?"), not clear how you separate out the effects of political ideology from gender. These bozos just ran regressions with some fuzzy, general proxies for overall ideology, and then found that a dummy variable for gender (I bet they used 1 for male and 0 for female, to symbolize the outie and the innie, respectively) was still significant. This article is a truly remarkable "magic bullet" study: conservative white males are evil. I know all you lefties THOUGHT that, but is it really worth running fake regressions to "prove" it?

(Nod to Kevin Lewis)

PS: I thought I was going to be able to resist this, but I'm much too juvenile. The second author of the first paper... "Le Wang" ... is that French for the reason half our population is stupid on environmental policy? Parce qu'ils possèdent "le wang"?

Snake on a Car

It's just a snake. I have picked up copperheads in our yard, put them in a bucket, and taken them down the hill to a swamp and let them go. This was just a non-poisonous snake. I would have pulled over, taken it off, and let it go. Why kill the poor thing?

Sure, I'd be startled at first. But it's dangerous to drive if you are that distracted, and the driver behind you would likely swerve.

(Nod to the Blonde, who would probably have been firing her sidearm through the windshield)

Rhetoric vs. Reality

Or, the progressives who cried wolf.

Here's Krugman:

For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

Now DeLong:

Let me reserve judgment until the surrender-and-visit-to-the-cleaners is actually set out, but I suspect that come Tuesday I will be forecasting a double-dip. Horrible for the economy. Horrible for America. Horrible for the world. And horrible for Obama's aspirations for a second term as well.

And then we see exactly what they are getting all worked up about (hat tip to Tyler for posting a re-scaled graph):

That is a graph of discretionary Federal spending after the "cuts". Yes, it's going up (though note that the data are not inflation adjusted). Doesn't seem much like a disaster, does it?

Here's more from the OG (original graphmaker):

The “cuts” in the deal are only cuts from the CBO “baseline,” which is a Washington construct of ever-rising spending. And even these “cuts” from the baseline include $156 billion of interest savings, which are imaginary because the underlying cuts are imaginary.

No program or agency terminations are identified in the deal. None of the vast armada of federal subsidies are targeted for elimination. Old folks will continue to gorge themselves on inflated benefits paid for by young families and future generations. None of Senator Tom Coburn’s or Senator Rand Paul’s specific cuts were included.

The federal government will still run a deficit of $1 trillion next year. This deal will “cut” the 2012 budget of $3.6 trillion by just $22 billion, or less than 1 percent.

Bam! The Tea Party just hit America with a steel garbage can! Sproing! America is bleeding profusly. Zoink! the EMTs are coming to take America out on a stretcher. Oh the humanity.

Somewhere, Killer Grease Mungowitz is smiling.

Was Schumpeter a Marxist?

Was Schumpeter a Marxihttp://www.blogger.com/img/blank.gifst?

Nathan Rosenberg
Industrial and Corporate Change, August 2011, Pages 1215-1222

Abstract: This article explores the degree to which Joseph Schumpeter may be regarded as a follower of Karl Marx. It argues that Schumpeter and Marx shared a common vision, including agreement on the growth in the size of the firm and in industrial concentration, the inherent instability of capitalism and the inevitability of "crises", and the eventual destruction of capitalist institutions and the arrival of a socialist form of economic organization as a result of the working out of the internal logic of capitalist evolution. Schumpeter's main qualification is his insistence upon the importance of temporal lags, i.e., social forms that persist after they have lost their economic rationale, and he suggests that the essence of capitalism lies in the inevitable tendency of that system to depart from equilibrium. The article emphasizes the continuing importance of economic history for economics.

(Nod to Kevin Lewis)

The Hobbesian State of Weddings in Kabul

"The Law on Prevention of Extravagance in Wedding Ceremonies [in Afghanistan] would limit the number of wedding guests to 300 and the amount spent to around $7 per guest...'Why should the government tell people how to spend their money?' said Mohammed Salam Baraki, the owner of Uranuse. 'If they pass this law, it will only facilitate corruption. I’ll have to pay off the inspector to allow more guests in.'" [WaPo]

Interesting prisoner's dilemma. Everyone wants to spend less, AND wants to have the nicest wedding in town.

(Nod to Kevin Lewis)