Sunday, August 07, 2011

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.

Saturday, August 06, 2011

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.)

Friday, August 05, 2011

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.

Thursday, August 04, 2011

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:





Wednesday, August 03, 2011

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."

Tuesday, August 02, 2011

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)

Monday, August 01, 2011

What in the world?

Let's do a visual version of the Grand Game. Write a caption for this photo:
I'll take a shot: "Boca! Mouth! Boca! Now you say it..."

I also very much like the background, with subliminal messages. Unless that's the teleprompter, and it's just turned around.

It's the final countdown!

The fake vote will take place on the fake deal at 6:45 EDT.

For some reason, made me think of this video, which is also pretty fake. Superhair Supergroup Europe lays down some synthetic music.

CFLs and CAFE

PREFACE: COOL! I'M AN IDIOT. HOW HARD IS IT TO READ BY-LINES? I'LL LEAVE THIS AS I WROTE IT, BUT OF COURSE WILL W DID NOT EVEN WRITE THE POST I AM REFERRING TO....

Will Wilkinson is a bit like Andrew Sullivan. No, not THAT way (not that there is anything wrong with that).

What I mean is that if you know Will is writing on an issue, you have to read him to figure out what he thinks is the right answer. His views are complex, and tend to be derived from specific principles rather than broad ideological doctrines.

About 75% of the time, I think he is spot on. And the rest... well, here is an example. (NO! NOT AN EXAMPLE. WILL W DID NOT WRITE THAT POST. I ALWAYS WONDER HOW PEOPLE CAN GET ANGUS AND ME CONFUSED. BUT...ANYWAY, NOT WILL!)

He seems to take the libertarian paternalist line on CFLs. He appears to support "the Energy Independence and Security Act of 2007, which if allowed to go into effect next year would force Americans to pay less for the same amount of illumination, while starving the atmosphere of greenhouse gases. Patriots like Michele Bachmann and Rick Perry have stood up for the same principles."

Um...isn't it true that if CFLs really cost less for the same amount of illumination, no law would be necessary? (Full disclosure: I think CFLs actually DO cost less for the same amount of illumination, taking into account electricity, and buying and changing bulbs frequently. So every bulb in our house is a CFL or LED. The LEDs especially are great, 1.5 watts and cool to the touch, but the same light as a 25 watt incandescent). The point is that people must disagree about this. And to be fair we have NOT solved the CFL disposal problem, with a lot hazardous waste in the form of mercury. So it is not clear to me that adding light bulbs to the list along with crystal meth as banned substances is really in the service of any principle of liberty.

But then Will goes off on CAFE. (Again, full disclosure: I worked on CAFE for the Federal Trade Commission in the Reagan Administration, and have kept track of it since). I just don't see any principled defense of CAFE, on ANY grounds whatsoever. If you want European size cars and fuel efficiency, then you need a big tax on gas, and then let consumers make their own choices. Since the price of petrol is 1.5 Euros / liter in much of Europe, we are talking prices that are $8/gallon or more in US terms, double our current prices. We can agree or disagree that this would be a good thing, but if you want fuel efficiency that is what you would have to do.

Instead, we have CAFE. CAFE requires that each manufacturer calculate the harmonic mean, weighted by sales of different models, for everything it sells.

EXCEPT....except that there is a dispensation for trucks, including "light" trucks. We now call those SUVs. CAFE is their daddy.

So, to oversimplify only slightly, US car companies did not stop producing small cars in spite of CAFE; they did it BECAUSE of CAFE. CAFE, with its bizarre Jesuitical list of requirements and exemptions, made it impossible to sell full sized station wagons, but actually subsidized giant SUVs that got much worse gas mileage. The best selling American "car" has been the Ford F-150 pickup, for a long time.

And if you think that Americans, in 2006, say, actually wanted little tiny cars but were forced by creepy manufacturers to buy big ass urban assault vehicles, you are just wrong. US automakers conceded the small car market to foreign companies, but the reason is that those companies could take advantage of economies of scale in their home markets because of much, much higher fuel prices.

You really only have to know one thing: Toyota (TOYOTA!) makes a truck (originally the T150, a feckless ploy to copy the F150) that has a 282 hp engine, is five inches longer than a Ford F-150 double cab, and gets 18 miles per gallon. This truck is not sold in Europe or Japan, but the Tundra has been very successful in the US. It's huge!

There are two reasons. 1. Our gas prices are 1/2, or less, those of Japan or Europe. 2. CAFE creates a huge benefit to producing large, fuel-inefficient trucks and truck-like vehicles. It is possible that American consumers actually want station wagons or something in between, but CAFE effectively outlaws them.

So, when Will W says:

Mandatory energy-efficiency standards are a bit of a conundrum for a liberal outfit like The Economist. On the one hand, they clearly are an intrusion into the workings of the free market. On the other, they work. No one beyond the libertarian fringe seems to mind very much, they save us money that we would otherwise be too lazy or short-sighted to save for ourselves, and they’re normally designed in such a way that manufacturers manage to meet them without too much grief.


then he is just mistaken. CAFE has not worked. CAFE has made the problem much, much worse, in effect LOWERING the fuel economy of fleet of vehicles on American roads by forcing manufacturers to make heavy, inefficient trucks instead of station wagons and the cars that would have been purchased without CAFE.

Now, Will might well respond, "But you admit it is the EXEMPTION from CAFE that was the problem that distorted toward trucks!"

Isn't that always the way? When you try to restrict private choices, given incentives (in this case, artificially low gas prices), it takes a proliferating series of new, improved regulations because the problem keeps evolving.

We need a $4 per gallon tax on gas. We are paying huge costs, in terms of wars and hamstrung foreign policy, for our dependence on the Middle East. But we are in effect subsidizing the cost of gas to keep it low. As a result, people want cars that are inappropriately large. And then Will wants to use CAFE to solve the problem created by the subsidy. Then Will wants to extend CAFE to solve the problems created by CAFE.

Suck it up, charge the tax, and let people make their own choices. I'm pretty sure we'll see a lot more Ford Fiestas and fewer F-150s. Even in Iowa.

A GREAT New Idea! Get 'Em at Their Wedding!

So....an idea that our own Homerland Securitation folks can use.

Just "receive" (or fabricate) a totally baseless anonymous tip that a wedding is a "sham." You can easily tell a sham wedding, I suppose, because there will be no large gathering of friends and family from around the world; too expensive.

Of course, when it turns out that there IS a large gathering of friends and family from around the world...no biggie! It means you can strip search all the guests and demand "yo papiss, plis!" If there are 100 or so of those nasty, dusky slant-eyed furriners there, surely a few won't have the proper documentation. Hand-cuff 'em, hold them indefinitely, and then deport them! It's fun, and your prison-industrial complex can hire up those surplus unemployed union members as guards. Everybody wins.

And then the police can go back to their nice white guy houses, secure in the knowledge that they have put the hammer down on some brown/yellow/who-knows-what-if- you-don't-strip-search-them, aliens.

(Nod to Anonyman)

Gmail Man

An ad. Not really an ad, but rather an internal Microsoft communication.

Some background...