Kids Prefer Cheese
Credibly promising to be irresponsible...since 2004!
Tuesday, September 13, 2011
A foolproof plan to balance the budget and stimulate the economy
As you may know, one of the ideas tossed around for dealing with the debt limit was to have the Treasury mint a trillion $ coin and then have the Fed "buy" it from them.
Hugo Chavez: doin' work
People, Hugo is getting it done down in Venezuela. It's only September (and he's taken some sick leave) but he's already "nationalized" 401 companies this year. Plus he's withdrawing from the World Bank's dispute settlement forum used to deal with claims by foreign investors.
Monday, September 12, 2011
Combo Meal! Not the Onion Meets the Grand Game!
This story is tremendous. It's not the Onion, and yet it could be.
Let's go with the Grand Game thing, though.
1. If there is ANY place that should have really big tables, it is White Castle.
2. "I'm not humongous..." Sir, if you weigh 290 lbs and you cannot wedge your giant ass into a table at a fast food restaurant, you are, in fact, humongous.
3. He is outraged because "the cheese was extra!"
4. He is so mad at White Castle that he is boycotting! By which he means... he sends his wife to go get the burgers! Nice boycott.
There's lots more. Enjoy.
(Nod to David Skarbek, who eats like a freakin' girl)
Congo Election Correction
In my earlier post about politics in the Congo, I may have said that there were 32 presidential candidates. That of course is ridiculous; there are only 12! 11 men, 1 woman, and two of the 11 men are the sons of previous dictators, one of which, incumbent Uncle Joe Kabila, is the likely winner.
Les candidats à l’élection présidentielle 2011:
Jean Andeka Djamba (ANCC)
Etienne Tshisekedi (UDPS)
François Joseph Nzanga Mobutu (Udemo)
Vital Kamerhe (UNC)
Kengo wa dondo (UFC)
Nicephore Kakese (URDC)
Joseph Kabila (Indépendant)
Oscar Kashala (UREC)
Antipas Mbusa Nyamwisi (RCD-K/ML)
Adam Bombole (Indépendant)
Ngoy Mafuta (Indépendant)
Ismaël Kitenge (MRC-PTF)
Don't call me Shirley!
Unbelievable story out of Malaysia that "authorities" had to rescue an Orang from a provincial zoo at least partly because she'd become a heavy smoker.
Government authorities seized the adult ape named Shirley from a state-run zoo in Malaysia's southern Johor state last week after she and several other animals there were deemed to be living in poor conditions.
Shirley is now being quarantined at another zoo in a neighboring state and is expected to be sent to a Malaysian wildlife center on Borneo island within weeks.
Sunday, September 11, 2011
Wrong Day to Go For "Mile High" Club
Police detained three passengers at Detroit's Metropolitan Airport on Sunday after the crew of the Frontier Airlines flight from Denver reported suspicious activity on board and NORAD officials sent F-16 jets to shadow the flight until it landed safely, the airline and federal officials said.
Flight 623, with 116 passengers on board, landed without incident in Detroit after the crew reported that two people were spending an unusual amount of time in a bathroom, Frontier spokesman Peter Kowalchuck said.
So, fine that two adults were in the bathroom at once. They were just there "an unusual amount of time." What is the USUAL amount of time for two people to be in an airplane bathroom that, frankly, barely contains one Mungowitz? Who cares? Why are you bothering these people? Leave them alone!
And, THREE people were arrested? That bathroom must have looked like one of those clown cars in the circus: "All right come out with....aw, Jeez, pull your pants up. And you, too. Okay...WAIT, another one? Ewwww...."
I sure hope this is not the arrest photo.
Apparently Dilbert agrees with me (and not with my lovely wife)
Fixing Social Security: Opposite Day
Had a rather spirited discussion with a friend, with him taking the side that Gov. Perry was out of line calling Soc Sec a "Ponzi scheme." And with me being loudly incredulous that anyone could think Soc Sec is anything OTHER than a Ponzi scheme.
A-Tab is sensible, but confirms the thing is a Ponzi scheme.
Both of the St. Pauls (Samuelson and Krugman), dear to the left, call it a Ponzi scheme.
But, on reflection, I agree with the view here. Soc Sec is not a Ponzi scheme, because it is much, much worse than a Ponzi scheme. Even if you take the Mother Jones view on this (and I rarely quote from Mother Jones, for some reason), it 's pretty clear:
...the real problem with Dalmia's description is the notion that Social Security collects money from new investors and uses it to pay off previous investors. It's easy enough to see why people believe this: it was, basically, the way the program was initially sold. And politicians ever since have found it convenient to continue this fiction. Seniors today are all convinced that the money they paid into the program during their working years was somehow saved up for them and now they're getting it back.
But that's always been a lie. Social Security is actually a much simpler program than that. I'm going to put the rest of this paragraph in bold so you can't possibly miss it. Here's how Social Security works: every month we take in taxes from working people and every month we turn around and distribute those taxes to retirees. That's it. That's how it works, and everyone who actually knows anything about the program knows that's how it works. Taxes come in, benefits go out. (Emphasis in bright blood letters mine, not in original; bold emphasis was in original)
Did you get that? Soc Sec is a lie, a fraud. And that's Mother Jones, well-known branch of Fox News. Not.
Some definitions: A Ponzi scheme
(1) depends on a constantly increasing membership to pay benefits or validate excessive returns to the older member, and
(2) is unsustainable at some point, in the sense that payments exceed revenues by increasing amounts, meaning that new members are needed, and
(3) those new members have to be recruited either through fraud or force, since informed and autonomous new members know that they have little hope of being paid back.
This could be
(A) because the older members get greedy, and take larger and larger amounts out of the system, or
(B) because the number of new members entering the system is not sufficient to pay the benefits already promised.
* Mitchell Zuckoff, quoted here, claims “Ponzi schemes are, by definition, fraud.” He may be wrong about other things, too, but he is clearly wrong about this. First of all, Soc Sec is in fact a fraud, as our Mother Jones correspondent ably exegeted. Second, even if people KNOW that the system is unsustainable, the system is Ponzi, because it is an intentionally created bubble. All that is necessary is conditions (1) and (2), NOT fraud. People trade in bubbles long after they know the underlying assets have no real value, as Charles Plott and Vernon Smith have showed. Third, even if the bubble has burst, fraud is not required as long as force is an option. And force is worse than fraud, unless you are a leftist and think you are just forcing other idiots to be free. I have to ask: Does Mr. Zuckoff seriously believe that young people would voluntarily sign up for Soc Sec, if they had an option? Look, fraud means you get screwed unexpectedly. Force means we all tell you young folks you are going to get screwed, and then we screw you, good and hard. At least it's not fraud, right? (Here, again, Mr. Zuckoff asserts Ponzi schemes have to be fraudulent. My claim is that he's wrong; all they have to be is involuntary. Either fraud or choice under duress, which have equal standing as violation of common law contract agreements, are enough to make a scheme Ponzi.)
* And the "It's not a Ponzi, because it can be fixed" argument? It can only be fixed if we kidnap, and then take more money at gunpoint from, "investors." Charles Ponzi's scheme failed because he didn't have tanks. Our President has tanks, and can force new "investors" to pony up. If THAT is your defense of why Soc Sec is not Ponzi, you need to go rethink some basic assumptions about "investement." Being forced to invest at gunpoint is theft. And that's worse than anything Mr. Ponzi could have done. The only reason that Soc Sec is not fraud is that people have no choice about contributing. If it were voluntary, then fraud would be required to get them to sign up. Sure, we can fix this, but only by using force.
* Finally, my friend told me, "Soc Sec is not a Ponzi scheme, because it has served millions of people with income." Dude! Any successful Ponzi scheme, by definition, serves the people who get in early. In fact, most Ponzi schemes serve the first movers much BETTER than Soc Sec has served retirees. The problem with Ponzis is not what happens to the first in, but rather the raping received by the last in. The only reason Soc Sec is working is that Soc Sec REQUIRES young people to become new investors. Again, if Charles Ponzi had been able to recruit by garnishing wages with "payroll taxes," that first Ponzi scheme might still be running along just fine.
Stepping back: I admit that originally, Soc Sec was not a Ponzi scheme, by my definition. But then Congress realized that there was a huge Baby Boom bubble, and created the Trust Fund. And THEN Congress realized that while one could not get reelected by doing the right thing and leaving the Trust Fund alone, one certainly COULD get reelected by looting the Trust Fund now and giving much larger benefits, especially in the Disability and Supplemental categories. (As Coach Duke said, "The pension fund was just sitting there!")
So, when the Baby Boom bulge in retirements happened, Soc Sec became a Ponzi scheme. The benefits were much too large, the Trust Fund was actually debt, not assets, in a period of large deficits. And we don't have nearly enough new people entering the system to keep you fat ass 'Boomers in scones and lattes.
Now, our President, who seems to think every day is "Opposite Day," proposes to solve the Soc Sec problem and the unemployment problem by... by... (I can't say it)... cutting the taxes that finance Soc Sec. Not, mind you, as part of an overall plan with offsetting cuts to make Soc Sec NOT a Ponzi scheme.
Now it will be a Ponzi scheme on stilts, with gold plating.
Except, as SD at Reason notes, this Ponzi scheme will not collapse. Instead, men with guns will find some way to finance it. Deficits are future taxes.
A photo of our plan to fix Soc Sec (it's a metaphor; a "deep" metaphor)
Social Security is WORSE than a Ponzi scheme
Alex T., in a brilliant smackdown, noted that even Paul Samuelson called SS a Ponzi scheme.
Saturday, September 10, 2011
Things I say that exasperate my lovely wife
Caught between globalization and productivity gains, high paying jobs for low skilled American workers are disappearing. The era of mass employment in the USA is coming to an end. The new equilibrium is going to be an employment ratio of well below 50% and a lot more redistribution. This will happen within the next 20 years. In equilibrium, the marginal American will be indifferent between being a "lucky loser" and being at the bottom of the skilled worker distribution.
Friday, September 09, 2011
In Honor of Football Season
Pelsmin shares the baseball - football bit, from George Carlin.
May I point out that in baseball they play six games a week? In football, those pampered candy-asses get so tired with ONE game a week that they have to have a "bye."
There's a WIlliam Tell Joke Here Somewhere
Now It Gets Interesting
Grand Game: Obama's speech edition
Ok folks the transcript is here, and it's chock full of fun. Get to it!
"Building a world-class transportation system is part of what made us an economic superpower. And now we're going to sit back and watch China build newer airports and faster railroads, at a time when millions of unemployed construction workers could build them right here in America?"
Thursday, September 08, 2011
Conjuring the Congo
The DRC will have a presidential election this November. After 30 plus years of Mobutu, Laurent Kabila overthrew him and, upon his assassination in 2001, his son Joseph Kabila took over.
Joe is in his 10th year of being president and is the front runner in the current election.
Amazingly, Mobutu's son is also a candidate! His political party has the awesomely oxy-moronic title of "Democratic Union of Mobutuists"! (I am not making this up).
I believe there are 32 total presidential candidates running.
The UN is already decrying pre-election violence in the DRC.
People, this is a country of over 70 million people!
Wednesday, September 07, 2011
Cheer up America!
You can lead kids to lunch, but you can't make them eat healthy
This is quite interesting. Two studies say that government subsidies appear to be associated with increased childhood obesity. Of course, one has to be careful of endogeneity, since it is likely that poor kids are more likely to be obese, and poor kids are more likely to receive subsidies. (May I point out that the fact that poverty goes with obesity would have seemed like a bizarre claim just 50 years ago? Things can't be THAT bad if our poor people are fat, right?)
Does the National School Lunch Program Improve Children’s Dietary Outcomes?
Benjamin Campbell et al.
American Journal of Agricultural Economics, July 2011, Pages 1099-1130
Abstract: The National School Lunch Program’s effect on children’s diets has been
extensively studied. Results have tended to be inconclusive regarding the effectiveness of the program. Utilizing more specific treatment groups, we find that participants in the National School Lunch Program do not consume a higher-quality diet at lunch than children choosing not to participate, even though the program is offered — but rather consume a higher quantity of foods while consuming similar amounts at other meals. Furthermore, children attending schools not participating in the National School Lunch Program have dietary outcomes that are not significantly different from program participants.
Child care subsidies and childhood obesity
Chris Herbst & Erdal Tekin
Review of Economics of the Household, September 2011, Pages 349-378
Abstract: In this paper, we study the impact of child care subsidy receipt on low- income children’s weight outcomes in the fall and spring of kindergarten using data from the Early Childhood Longitudinal Study, Kindergarten Cohort. Our results suggest that subsidy receipt is associated with increases in BMI and a greater likelihood of being overweight and obese. Using quantile regression methods, we find substantial variation in subsidy effects across the BMI distribution. Specifically, child care subsidies have no effect on BMI at the lower end of the distribution, inconsistent effects in the middle of the distribution, and large effects at the top of the distribution. Our results point to the use of non-parental child care, particularly center-based services, as the key mechanism through which subsidies influence children’s weight outcomes.
I am going to go out on a limb here, and guess that the answer from P-Kroog is "The program needs to be bigger! Much BIGGER!"
Tuesday, September 06, 2011
A Surgeons Joke
Five surgeons are talking.
The first says: " I like to see accountants on my operating table, because when you open them up, everything inside is
The second responds: " Yeah, but you should try electricians. Everything inside of them is color coded. "
The third says: " No, I really think librarians are the best, everything inside of them is in alphabetical order. "
The fourth chimes in: " You know, I like construction workers.... those guys always understand when you have a few parts left over. "
But, the fifth shut them all up when he observed: " You're all wrong. Politicians are the easiest to operate on. There's no guts, no heart, no balls, no brains, and no spine, -- and the head and the ass are interchangeable."
Separated at Birth: Tennis edition
Headline of the Month
"Nearly 40% of Europeans Suffer Mental Illness"
Monday, September 05, 2011
The problem is not that we spend too little on infrastructure. The problem is that our very large spending on infrastructure gets diverted to pet projects of members of Congress.
Why anyone would think that government wants to do what is right for the average citizen utterly mystifies me.
Sure, a Senator is no more greedy than a financial services CEO. Folks, the problem is that a Senator is NO LESS greedy than a financial services CEO. And the Senator faces none of the checks on behavior. He gets to bribe voters in his state with money taken from people in other states. It's a foolproof system.
And you are the fool. Here's proof, from David Leonhardt.
This is odd.
First, it's odd that there is a movie called, "Munger Road." But there is. Here's the trailer (clearly for folks who live in a trailer park, I might add).
Second, given that I google myself 8-10 times per hour, it's remarkable that I didn't know. It fell to KPC pal (and G*d figure!) Dan Drezner to point out the existence of this offense to reason and cinema. Still, thanks to DD.
UPDATE: Apparently, an actual old fake legend, about a school bus in Illinois. There are even a bunch of YouTube videos, of such high quality as this one, with the car getting "pushed" off the railroad track, uphill.
What's Your PQ?
It turns out MY "pq" is 29, very similar to that of Ron Paul. Doesn't mean all our issue positions are the same, but I would guess that in a 2-dimensional space our issue positions ARE pretty much the same.
Our guy* Tim Groseclose has an interesting web site for his new book. And you can find out what YOUR pq is, though it's a 40 question survey.
*Angus actually owns him. He bought an option, back when it was cheap. At least, he wishes he had.
In Italy, Laziness is NOT a Problem
Does anybody really know what satire is?; does anybody really care?
Abstract: We investigate a phenomenon which we have experienced as common when dealing with an assortment of Italian public and private institutions: people promise to exchange high quality goods and services (H), but then something goes wrong and the quality delivered is lower than promised (L). While this is perceived as ‘cheating’ by outsiders, insiders seem not only to adapt but to rely on this outcome. They do not resent low quality exchanges, in fact they seem to resent high quality ones, and are inclined to ostracise and avoid dealing with agents who deliver high quality. This equilibrium violates the standard preference ranking associated to the prisoner’s dilemma and similar games, whereby self-interested rational agents prefer to dish out low quality in exchange for high quality. While equally ‘lazy’, agents in our L-worlds are nonetheless oddly ‘pro-social’: to the advantage of maximizing their raw self-interest, they prefer to receive low quality provided that they too can in exchange deliver low quality without embarrassment. They develop a set of oblique social norms to sustain their preferred equilibrium when threatened by intrusions of high quality. We argue that cooperation is not always for the better: high quality collective outcomes are not only endangered by self-interested individual defectors, but by ‘cartels’ of mutually satisfied mediocrities.
Either way, fabulous. Really a fine piece of social science. Not least because the phrase "cartels of mutually satisfied mediocrities" sounds a lot like a faculty meeting in the US. Not at Duke, of course. No, really.
(Nod to the Ward Boss, who is never lazy)
Grand Game: So Many Ways
I wish we had never played the Grand Game, and were never to play it again.
Just so we could take it out of its wrapping paper, still crinkly wrapping paper, and play it just one perfect time for this story.
My humble thanks to the lovely and talented @EmilySkarbek for the link.
There is a LOT to love in this story, people. Go!
Do Women Earn Less Than Men?
They Knew This Was Going to Happen
This is just inexplicable.
“Is fortunetelling a crime? Of course, fortunetelling is not a crime,” prosecutor Laurence Bardfeld said in court recently. But promising to return large sums of money, and failing to do so, constitutes fraud, Bardfeld argued.
Yes, I think the prosecutor is right about that.
And, this: Bestselling romance novelist Jude Deveraux has been identified as one of the Marks’ clients, and she alone paid the family nearly $20 million, according to court documents. Deveraux declined to comment to The Miami Herald, citing the pending case, but in the acknowledgements section of her book Scarlet Nights, in which several characters were based on the Markses, she specifically praised retired Fort Lauderdale Police economics crimes detective Charles Stack, calling him a “true hero.”
Well, Mr. Stack may be a true hero. But Ms. Deveraux is a true moron. $20 million? I want to announce my own psychic services: Angus and I will make up a bunch of stupid sh** about the future (we are ECONOMISTS! IT'S EASY for us!), and we will do it for just $5 million. We'll call the service "Kids Prefer Cash."
Please leave a comment with your contact information. Clerks are on call.
(Nod to the Blonde; I think SHE knew this was going to happen. But then she's psychotic.)
Entrepreneurship, Change, and Extreme Events
A recent empirical study. Don't get me wrong, empirical studies are good. Here is the summary (courtesy of new papers superstar Kevin Lewis):
Entrepreneurship: The role of extreme events
Tilman Brück, Fernanda Llussá & José Tavares, European Journal of Political Economy, forthcoming
Abstract: We use aggregate country data as well as individual surveys to uncover, for
the first time, the effect of extreme events such as natural disasters and terrorist attacks on entrepreneurial activity. We find that natural disasters and terrorist attacks influence individual perceptions of the rewards to entrepreneurship and, more surprisingly, extreme events affect entrepreneurship rates positively in a robust and significant way.
"More surprisingly"? Really? Consider what Hayek said about information and change:
If it is fashionable today to minimize the importance of the knowledge of the particular circumstances of time and place, this is closely connected with the smaller importance which is now attached to change as such. Indeed, there are few points on which the assumptions made (usually only implicitly) by the "planners" differ from those of their opponents as much as with regard to the significance and frequency of changes which will make substantial alterations of production plans necessary. Of course, if detailed economic plans could be laid down for fairly long periods in advance and then closely adhered to, so that no further economic decisions of importance would be required, the task of drawing up a comprehensive plan governing all economic activity would be much less formidable.
It is, perhaps, worth stressing that economic problems arise always and only in consequence of change. So long as things continue as before, or at least as they were expected to, there arise no new problems requiring a decision, no need to form a new plan. The belief that changes, or at least day-to-day adjustments, have become less important in modern times implies the contention that economic problems also have become less important. This belief in the decreasing importance of change is, for that reason, usually held by the same people who argue that the importance of economic considerations has been driven into the background by the growing importance of technological knowledge.
"Extreme events," by definition (I think) are unexpected changes. Of COURSE entrepenership increases in the aftermath of extreme events. The "more surprising" bit can only be explained, as Hayek explained it, by the nonsensical insistence that technological knowledge and not entrepreneurship is the driving force of capitalist economies.
Of course, it would be possible to document that the relationship between large unexpected shocks and entrepreneurship is direct and predictable, from many works by Kirzner, or Mises, and others. But Hayek's paper was in the A.E.R. Don't you people read? I recognize that it is easier to claim your theory is novel if you constantly pretend that all previous work doesn't exist. But this is egregious.
Saturday, September 03, 2011
scenes from a marriage
Time to re-think college football
College football is a mess, with Ohio State and The U providing the latest "scandals" and with the pattern of conference jumping we've seen lately.
“I don’t think OU is going to be a wallflower when all is said and done. I don’t know how long it will be before clarity comes to us. My experience is that on these kinds of things, it might be a matter of 72 hours, it might be a matter of two weeks. I don’t really think this is something that is going to linger on beyond two or three weeks at the outside. It’s been consuming my life the last few days, but it’s a fascinating challenge and we’re just in the search for what’s best for the university.”
Boren confirmed that he flew to Missouri, whose chancellor is the chairman of the Big 12 board of directors, and then to College Station last week to try to prevent the Aggies from leaving.
Friday, September 02, 2011
Obama Wins in 2012?
A Strategy for the Left?
Is this going to be the strategy for Team Obama for 2012?
I am no fan of the talking points of either side. And there is some merit to the charge that some Republicans depend on the religious right for support.
But, "the economy sucks so let's talk about scary religious zealots!" is pretty darned cynical.
(Nod to the Blonde)
Markets in everything: earthmover edition
In the shadow of the Vegas strip, you can pay $400, get 10 minutes of instruction, and then get turned loose to operate earth-moving equipment in a vacant lot.
The company is called Dig This. Their website is here. The AP story is here. Sharon Zukin could not be reached for comment.
NASCAR, a racoon, and runnin' round nekkid. The article (there's a video). Another story.
The mug shot:
See, the problem is that among the folks I grew up with, that mugshot and this story would be extremely effective for on-line dating sites. Ocoee women would LOVE this guy. The tat? The quizzical look? The (by Ocoee standards) well-groomed hair? Two words: Chick. Magnet. Plus, he has a racoon.
(Seriously, is that a great mug shot or what? Calling him "unrepentant" doesn't really capture it fully) (Nod to the Blonde)
Not the Onion? (Labor Day/ Sex with Stuff Edition)
Which of the following (if any) are from the Onion?
1. Man has sex with inflatable pool raft.
2. Beach bonking in Blackpool: Your government keeps statistics!
3. Guinness BOWR "world's largest penis" man: It's no picnic.
4. Labor Day party: American caught having sex with picnic table.
5. Man arrested for having sex with street signs; now has to "STOP"
6. I want to ride my bicycle, I want to ride my bike.
7. Man humps steel park bench (the kind with holes in it). And there's a video (so this is NOT the Onion!). You may not want to listen; the guy is not having much fun. "OOOOOOOH! OOOOOOOOOOOOOOH!"
Some details. And a source post.
(And a nod to Dutch Boy)
China Monopolizes the Sun!
Suppose you had a pretty big yard, 2 acres. And your neighbor comes over one day and says, "I have a big lawn mower, a huge expensive one. I just like having a big mower, too big for my own purposes. It really costs a lot, but my dad left me an inheritance and I like the prestige of having the biggest mower in the state. How about if I mow your lawn for my marginal cost, plus a little bit? Say, $35?"
You figure that you would have to buy a mower, plus spend time mowing, plus upkeep. It would cost you at least $100 a week to do the same thing. So, you say, "Sure!"
Can someone explain to me why we are poopin' in our panties about China doing essentially the same thing with solar power technology? And why U.S. government officials are claiming that the answer is that WE, the US, HAVE TO BUY A REALLY BIG MOWER, TOO? For some reason, gigantic world-wide over-capacity, subsidized by tax dollars, is the answer for Obamanoids like this guy:
“There is no question that renewable energy companies in the United States feel pressure from China,” said David B. Sandalow, the assistant secretary for policy and international affairs at the United States Energy Department. “Many of them say it is cheap capital, not cheap labor, that gives Chinese companies the main competitive advantage.”
Is China behaving badly? Yep. And if I were a Chinese taxpayer, I'd be pissed. But why is the US upset? There is no way that the resulting price of solar technology and equipment is going to be more expensive for us. UNLESS, of course, we try to enter the race and buy a really big lawn mower, too.
The "worry" is that China will achieve world dominance and then raise prices. Idiots used to make the same argument about Wal-Mart: once they drive out the competition, they will raise prices. Two problems with that argument. 1. It's not true, empirically. It just never happens. 2. The only possible truth to the argument is with respect to the "correct" price, which in the mind of the subsidizers is the price in the US if we spent billions in subsidies. Friends, subsidies are a COST, not a benefit.
Let the Chinese mow our solar lawn, if they want to. (Angus has tried to make this point before, as have I. Angus may have said it best here. And we'll probably get chances to say it again.)
(Nod to Anonyman, who drives a stinkin' hybrid)
(UPDATE: Meant to say... title of post comes from our guy Alex)
Thursday, September 01, 2011
A little story, in pictures. First, triumphalism of our gov't: thousands of jobs.
The "deal" came under scrutiny, because it appeared that our gubmint had given truly huge amounts of public money without going through the usual procedures.
Most recently, the company went bankruptski. Total collapse.
The delicious part is this: Solyndra is whining that the Chinese subsidize THEIR solar industry. Solyndra was a pure scam, only a front for taking tax dollars. All of their revenues and investment money were public subsidy. And then they have the gall to say that the reason this oinker of a company could not compete is that they needed to be subsidized even more. Some background.
Their "idea"? I promised pictures. Here it was. It didn't work, even with huge public subsidies.
(Nod to J-Don, who knows things)
Wednesday, August 31, 2011
NSFW: Prison Camp Economics
I am teaching Radford's famous "Economics of a POW Camp" article tomorrow. Wondered if there were any good videos about cigarette currencies.
Found this: very very very NSFW. Or class. But PERFECT for KPC!
Also: did find this video about candy as currency, because cigs are contraband.
Which reminds me: that most excellent Skarbek, with whom I am well pleased, just placed this paper in the APSR. yes, forthcoming, beeyotches! Way to go, Skarbek!
Tuesday, August 30, 2011
Tuesday's Child is Full of Links
Nick T. on why indie music is a conservative genre
Tennessee I: Rest in Peace
Tennessee II: Holy Smoking Bull Semen, Batman!
Wow. Will gives an incredibly useful assessment of Texas educational policy and results.
Lemonade Stand Freedom Day!
(Nod to Anonyman; I hope he doesn't get confused between the lemonade and what got spilled on that Tennessee highway...)
"I Do Not LIKE It, Sam I Am, I Do Not Like Las Vegas"-Ma'am
I thought I was going to agree with this. After all, I don't like Las Vegas. I really, really, really don't like Las Vegas.
But this lefto-fascist doesn't think it should be allowed to exist. Because she knows, given her privileged status as a sociologist, what fun really is.
Many people like Las Vegas. This prof and I do NOT like Las Vegas. Why am I unthreatened by this, when she wants to call in tanks? Also, one does have to like the final comparison, where our teacher compares LV to the worst thing in the world: Suburbia!
(Nod to Tommy the Brit)
Sentiments entirely appropriate for these troubled times
"My thing is, I'm never going to cheat, "I'm never going to be unsportsmanlike. I'm gonna beat you — straight, fair, in your face. I don't have to go around the block. I don't have to, like, go underhand. I'm gonna beat you, I'm gonna beat you. That's it, and there's no way around it."
Labels: and that's the name of that tune
Congress CAN Do One Thing
It can suck, scare people, prevent investment, and reduce the value of existing investments. Of course, IF that were true, you could trade on that information.
And perhaps you can. Why do stocks do better when Congress is OUT of session? It could be that the risk is lower, so lower variance (though in that case options should do better when Congress is in session). A more likely explanation is that Congress sees its job as ordering people around and claiming credit for steering the economy. Iceberg! Dead ahead!
A nod to Prof. Newmark, for pointing this out. I like his "exercise for the reader."
Monday, August 29, 2011
Fear Without Function
Sex Offender Registries: Fear without Function?
Amanda Agan, Journal of Law and Economics, February 2011, Pages 207-239
Abstract: I use three separate data sets and designs to determine whether sex offender registries are effective. First, I use state-level panel data to determine whether sex offender registries and public access to them decrease the rate of rape and other sexual abuse. Second, I use a data set that contains information on the subsequent arrests of sex offenders released from prison in 1994 in 15 states to determine whether registries reduce the recidivism rate of offenders required to register compared with the recidivism of those who are not. Finally, I combine data on locations of crimes in Washington, D.C., with data on locations of registered sex offenders to determine whether knowing the locations of sex offenders in a region helps predict the locations of sexual abuse. The results from all three data sets do not support the hypothesis that sex offender registries are effective tools for increasing public safety.
(A-Tab has some details over at MR)
(nod to Kevin Lewis)
You Play, We Pay
An article about how hard the folks out on the sandbar...er ... barrier islands of NC have it.
Best quote: "this is the price you pay for living in paradise." Well, no. This is the price *WE* pay so you can live on a freakin' sandbar.
Look, you loonies are welcome to live out there. But the state subsidized insurance for decades, and pays for new roads, and rebuilds broken roads. That money comes from people who have to pay to visit paradise.
So you can live there at public expense.
I have no problem with people living out there. If they like it, good for them. And emergency services, in cases where the emergency is unpredictable? Okay by me.
But living on a sandbar that never gets higher than 8 feet, in an area where storm surge from a hurricane hits 12 feet or more at least once a decade? Why do I have to pay for that?
(Nod to the Blonde)
The Weather: These Folks DID Something About It
Civil conflicts are associated with the global climate, Solomon Hsiang, Kyle Meng & Mark Cane, Nature, 25 August 2011, Pages 438–441
Abstract: It has been proposed that changes in global climate have been responsible for episodes of widespread violence and even the collapse of civilizations. Yet previous studies have not shown that violence can be attributed to the global climate, only that random weather events might be correlated with conflict in some cases. Here we directly associate planetary- scale climate changes with global patterns of civil conflict by examining the dominant interannual mode of the modern climate, the El Niño/Southern Oscillation (ENSO). Historians have argued that ENSO may have driven global patterns of civil conflict in the distant past, a hypothesis that we extend to the modern era and test quantitatively. Using data from 1950 to 2004, we show that the probability of new civil conflicts arising throughout the tropics doubles during El Niño years relative to La Niña years. This result, which indicates that ENSO may have had a role in 21% of all civil conflicts since 1950, is the first demonstration that the stability of modern societies relates strongly to the global climate.
(Nod to Kevin Lewis)
Sunday, August 28, 2011
All Hail Norm McDonald
I have only watched one episode of the current season of High Stakes Poker, but new host Norm McDonald was brilliant.
Tying one's self to the mast with silly string
Richard Thaler, in today's NY Times has words of wisdom on governments' pervasive inability to commit to painful future courses of action with balanced budget amendments or fiscal rules.
The bottom line is that in matters of governmental self-control there is no real substitute for willpower. If we want to balance the budget over time we are going to have to elect adults to Congress who are prepared to invest now in our country’s future and then, when the economy picks up, take the necessary steps to get spending in line with revenue. The question is whether politicians who act like adults can win elections.
Saturday, August 27, 2011
Krugman's reality problem
the only way for monetary policy to be effective in a liquidity trap was via expectations: the central bank had to convince the public that it would sustain monetary expansion even after the trap was over.
Friday, August 26, 2011
No HCR, No Jobs
I win drinks in bars sometimes by betting on the answers to two questions. First, what nation in the world "lost" the most jobs between 1990 and 2005? Second, what nation in the world leads in the value of manufacturing products? (Yes, I have fussed about this before, it's true)
The answers are the U.S. and China, but not in that order. China lost by far the most manufacturing jobs between 1990 and 2005, and the U.S. still leads the next largest manufacturing economy by a full 25%.
Think about it: in 1990, a "factory" in China was a large shed with 1,200 workers with sewing macihines, sitting beside a pile of patterns, cloth, and scraps. Today that factory is 100 times as productive, but it only has 30 employees tending modern and lightning fast machines.
The same thing has happened in the U.S., in industry after industry. As we increased our output, we "lost" jobs to increased productivity. We didn't ship those jobs to China; China lost even more jobs than we did.
The difference is that China more than replaced its lost jobs with new jobs, in new industries. Until recently, the U.S. has always been able to do that, too. What has changed?
The problem is both obvious and hard to see: it's health care costs. The U.S. has produced quite a few new service sector jobs, jobs at the lower end of the pay scale, jobs that don't usually come with health benefits.
But those "good" jobs, the ones that President is looking for? Health care costs have driven a wedge between what employers pay and what they get in terms of productivity. Wages for workers in many industries has been flat, or nearly flat, in real terms since 1990. But total compensation, especially health care costs on the best jobs, has increased at a rate of more than 3% per year on average. (Census Report in 2008)
Employers paying more, workers seeing no increase in take-home pay: a constantly increasing wedge being driven into job growth. More than all of our productivity growth has been sucked into the voracious maw of health care costs. Until we break the connection between jobs and health care, there is no way for the U.S. to begin to recover job growth.
Unfortunately, the fiasco of HCR in 2009 made this problem worse, not better. Our HCR law created a complex, expensive system with no cost controls. And since insurance cannot cost less than the care it covers, this implicit but very real tax on job creation is hamstringing the recovery.
Thursday, August 25, 2011
If you paid a bribe.... did you pay too much?
I hate it when that happens.
Pretty interesting "corruption quotient" quiz. Fascinating, in fact. It turns out I am a...
Buffalo! Your corruption quotient is down in the dump. Corruption is such an important part of your daily life that you see no difference between corruption and honesty. In our opinion you need to take a step back and review your take on corruption. In a corrupt instance, your philosophy will definitely have you rolling in the muck. You are a BUFFALO
Thanks to Chateau, for the link.
Balancing Budget Should Be Progressive Priority
Oh noes, I'm obsolete!
Apparently Peter Theil & Moore's law are going to kill the species professorus tenuris!
Wednesday, August 24, 2011
Headline of the day
Corporate [ TAXES ] are [ PAID BY ] People
Not sure why the goofy lefties are so gleeful about Romney's "corporations are people" statement (gaffe, they would say).
Here is a NOT goofy lefty, my PhD student Tom Schaller, going ballistic, even planetary orbital, over Romney. Tom is a smart guy. But like most people on the left, almost entirely innocent of economic knowledge. I submit that is the only reason they COULD be on the left, since an understanding of basic economics moves one over to the center right position, almost by definition.
Good lord. Let's do this. Corporations are owned by stockholders. Corporations don't pay taxes, stockholders pay taxes. They pay taxes on income, and they also pay an implicit tax in the form of reduced stock prices when gov't taxes corporate income separately. (Consumers may also pay corporate taxes, if the taxes are on inputs, raise prices of production, etc. I submit, without further discussion, that consumers are people).
Every intro econ book, even Samuelson, noted that the corporate income tax is "double taxation," and therefore inefficient. It restricts investment and reduces employment. Better to have a lower corporate income tax, and much more progressive income tax system.
The US has corporate income tax rates that are 5-10% higher than almost any other country we compete with. If you add fed and state CIT, our rates are 50% or higher; Germany is 30%; France is 33%.
Corporations can move around; stockholders won't move around, at least not as much.
So, Romney meant, "Corporate taxes are paid by people, my friend." And it was absolutely clear that that is what he meant. People misspeak in the heat of the moment. IT. WAS. CLEAR.
Look, I am not a Romney fan. He's an unprincipled gas bag. But this whole "corporations are people" kerfuffle really shows why our center left folks cannot understand even basic economics. The Obama admin, and as far as I can tell the entire Washington press, thinks corporations are just cows to be milked. Instead, they are geese, laying golden eggs. BUT GEESE CAN FLY. Why are "jobs" leaving the U.S.? Because our corporate tax rates are too high, and our regulatory policies too stupid.
And, in any case, corporate taxes are paid by people.
Stupid Economist tricks
Was reading the Economist, the Aug. 13-19 issue and found two very jarring and wrong statements.
Tuesday, August 23, 2011
Two Party System
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)
Monday, August 22, 2011
This video presented by Tucks Medicated Pads
Time to make the donuts
Sunday, August 21, 2011
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.
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.
Saturday, August 20, 2011
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.
Hat tip to LeBron who really buried the lede on this one.
Friday, August 19, 2011
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.
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.
Thursday, August 18, 2011
Slogans entirely relevant to these troubled times
Wednesday, August 17, 2011
"[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
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)
Tuesday, August 16, 2011
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.
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.)
Labels: political theatre
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)
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.