This is really, really good

This is interesting, and useful.

Totally nails the problem with the "production v. distribution" mistake that JS Mill made and that so many have repeated since.

And, doesn't it matter that the poorest are much better off? That, unless you want to elevate the sin of envy to the status of virtue ("let's call it 'social justice!', and then it will sound like a good thing!"), should be the main concern.

Update on "Wanker v. Tosser"

A response from a native speaker of the Queen's English, R the Royal, on the earlier "Wanker v. Tosser" question:

This is the kind of question I like having a go at. My views:

Basically, your man Munger is spot on that 'wanker' is stronger. While almost everyone would agree that 'wanker' is full-on swearing, I think some people would place 'tosser' into that grey area (alongside words like 'nob' and 'dickhead' that seem somehow gentler and more like slang even if their sexual connotations are, shall we say, unambiguous). But, although 'tosser' may not be as strong, I think it's almost equally harsh. That is, while it may be more acceptable to use it in company (whatever that means), I'd be careful who I used it about. I'd be readier to use terms like 'twat' or 'cock' to rebuke a friend who was being, well, a twat or a cock. To hiss 'tosser' at him would really sound like I'd lost my rag. Which underlines the key point for me, viz. that it's not what you say but the way you say it, and I think there are few words into which you can inject as much cold contempt as you can into 'tosser'. As such, if anything the Lansley-Bieber example works the other way round for me. While I don't have much complaint about AL, people who do would feel more strongly about him and prefer 'wanker', whereas JB deserves only the disdainful dismissal for which 'tosser' is tailor-made. (Though even that's giving him too much credit. I would favour the description "f*cking non-event".)

And thanks to Tommie the Brit, for the assist.

For Those of Us Gearing Up for Deer Season

Don’t Mind Meat? The Denial of Mind to Animals Used for Human Consumption

Brock Bastian et al., Personality and Social Psychology Bulletin, forthcoming

Abstract: Many people like eating meat, but most are reluctant to harm things that have minds. The current three studies show that this dissonance motivates people to deny minds to animals. Study 1 demonstrates that animals considered appropriate for human consumption are ascribed diminished mental capacities. Study 2 shows that meat eaters are motivated to deny minds to food animals when they are reminded of the link between meat and animal suffering. Finally, Study 3 provides direct support for our dissonance hypothesis, showing that expectations regarding the immediate consumption of meat increase mind denial. Moreover, this mind denial in turn reduces negative affect associated with dissonance. The findings highlight the role of dissonance reduction in facilitating the practice of meat eating and protecting cultural commitments.

They should probably have controlled for people who were hunters. We don't really think deer are stupid, or have diminished mental capacity. They are, however, delicious. That's why we shoot them, cut them up, cook them, and eat them.

The lead author is Brock Bastian, who has also discovered that violent video games cause violent behavior. (Though, as this article notes, the specifics of the study framework were not "revealed," presumably because they were too disturbing for peer review). I'm not sure we should attribute "mind" Brock Bastian.

Best Abstract Ever

Raoul sends "the best abstract ever..."

How not to write!

Dutch Boy sends a link, and a viewpoint.

The link....

The viewpoint: This 'piece' should be plastered on every school room wall with 'How not to write' written above it. Amazing. She's a PhD candidate at, not surprisingly, Harvard. I thought it might be a satirical piece,

But it's not I'm afraid. Pretty bloated and pretentious stuff, from top to bottom. See if you can read it all the way through. Go ahead, try.

Well, Dutch Boy: I did try. And I sort of did read it, all the way through. But I have no idea what it was trying to say. The impressive thing is that this is likely the third or fourth draft, at least. So it has been cleaned up and clarified considerably.

Fat People are Impatient and Time-Inconsistent

Impatience, Incentives, and Obesity

Charles Courtemanche, Garth Heutel & Patrick McAlvanah, NBER Working Paper, October 2011

Abstract: This paper explores the relationship between time preferences, economic incentives, and body mass index (BMI). Using data from the 2006 National Longitudinal Survey of Youth, we first show that greater impatience increases BMI and the likelihood of obesity even after controlling for demographic, human capital, occupational, and financial characteristics as well as risk preference. Next, we provide evidence of an interaction effect between time preference and food prices, with cheaper food leading to the largest weight gains among those exhibiting the most impatience. The interaction of changing economic incentives with heterogeneous discounting may help explain why increases in BMI have been concentrated amongst the right tail of the distribution, where the health consequences are especially severe. Lastly, we model time-inconsistent preferences by computing individuals' quasi-hyperbolic discounting parameters (beta and delta). Both long-run patience (delta) and present-bias (beta) predict BMI, suggesting obesity is partly attributable to rational intertemporal tradeoffs but also partly to time inconsistency.

Nod to Kevin Lewis

It was 1979

Dutch Boy sends this video. It was 1979. Pretty impressive.

Tosser v. Wanker

Okay, so the above sounds like a legal case, perhaps where a sociologist is suing an English prof.

But it is a serious question of "dicktion." (Apologies; couldn't help meself)

Both names are insults, clearly, and both refer to Onanism. (I assume that women are never called tossers / wankers, yes?* I mean, they can technically do the analogous thing, but it's just not the same. Brits, or Tommy the Brit, feel free to join in here...)

My impression is that calling someone a wanker implies total dismissal, not just an insult but saying the person wanking is beneath contempt.

Tosser is in relative terms more jovial, less insulting. The tosser is perhaps a pompous and useless idiot, but a wanker is not serious, someone who is just fooling around. In short, then, Andrew Lansley is arguably a tosser, but Justin Bieber is clearly a wanker.

Of course, I probably have this wrong. Since I am going to London soon to visit Tommy the Brit, I need advice.

Wanker, or Tosser, for the well informed visitor looking for just that right holiday insult? Some other possibilities...

*I found some references that would claim that a female tosser is a "strummer." But that misses the point. The goal is not to find a word for a woman pleasing herself (as the '80s Franklin-Lennox anthem said, "Sisters are doing it for themselves!"). Rather, the question is what is the analogous INSULT. I also found "bean flicker." I wish I hadn't found that, but I did.

D-Boo Deals

I think D-Boo pretty much p'wns this guy. But to be fair the other guy appears to be an idiot.

Still, give credit where credit is due: Donald Boudreaux, we salute you! Grow on, you crazy China! I would like for all of us to be rich, NOT for the US to be dominant.

Main Dog Faces Difficult Choice

As many of you know, our main dog is Hobo (aka "The Wonder Dog.")  He'll also answer to Ho-dizzle, of course, if it's done respectfully.  (Tanzie, our safety back-up dog, is kept around in case the main dog goes down, as often happens.)

Yesterday Hobo faced the kind of difficult choice that only a Wonder Dog could hope to solve successfully.  It was quite cold, so I built a nice fire.  But the sun coming in the picture window has reached the angle where it is very warm also.  Well, you see the problem.

Not even a Wonder Dog can be in two places at once.  So Hobo divided his forces. He scooted his butt as close as he could get it to the fire, and then kept his front half in the sun.  This optimization problem was so tiring that he needed a nap.

Women Drivers: A Political Test

Women drivers make me nuts.  They are (as a central tendency, obviously with variance) timid and unwilling to drive effectively.  I have spent far too much of my life waiting behind a woman waiting to turn left.  As long as there is a car VISIBLE coming the other way, the lady waits.  If I blow my horn, nothing happens except she totally freezes up.  She may flip me off.  But she won't ever pull out.  (This is safer, in a sense, but it causes accidents all around this island of timid female tranquility)

The LMM agrees that all driving, from taxis to bus driving to personal driving, should be done by men.  We'd all be safer, and less frustrated.

PROVIDED that in exchange we agree that all political offices above, say, state Senate are held by only women.  And in particular those offices where decisions about going to war would be held by women.  Again, we'd all be safer.  The same impulse that makes men better drivers makes them worse decision makers on the whole war thing.

And Condi Rice and Maggie Thatcher don't count.  Give them a driving test.  Unless they DRIVE like women, they don't get to make war decisions.  

(And, yes, of course we jest.  When one controls for other factors, especially for whether the aggressive act is "prosocial," as in the case of war, women are experimentally indistinguishable from men.  And they are better drivers.  Still it was fun.)

Adam Kokesh

There is in fact a danger in supporting the Iraq War, either as a Krugmaniac growth strategy or as good foreign policy.  Not only will you be wrong, you will also sound like a moron.



Full disclosure:  I know Adam Kokesh pretty well.  It's quite true that he's an extremist.  In the sense that he says stuff that is clearly correct that most people have no idea how to respond to.

Paul Krugman: meet a libertarian

One thing that amazed me in Mungo's Krugmanectomy below is Paul saying, "Spend money on some useful goal, like the promotion of new energy sources, and people start screaming, 'Solyndra! Waste!' Spend money on a weapons system we don’t need, and those voices are silent, because nobody expects F-22s to be a good business proposition."

Let's ignore the loaded phrases like "useful goal" and "we don't need" as those are purely statement of preferences (i.e. unproven and unprovable), and concentrate on the claim that people who object to the Solyndra Subsidy are silent on big Pentagon programs.

Paul, meet me and my ilk. We are libertarians.

We are against out of control military spending and bogus business subsidies. Not just to "green" firms like Solyndra but to big corporations and big agriculture. We rail against Solyndra, perpetual wars, ethanol subsidies, $700 billion dollar defense budgets and all manner of policies that distort incentives and cause people to act in sub-optimal ways.

walking through a doorway increases chances of forgetting

Walking through a doorway increases the chances of forgetting what you were doing, or why you went into the room.

Okay, I went to the kitchen and got some coffee. Wait... why was I writing this?

(Nod to the Blonde)

P-Kroog's new prescription for growth: Whimsy-Cal!

Military spending does create jobs when the economy is depressed. Indeed, much of the evidence that Keynesian economics works comes from tracking the effects of past military buildups. Some liberals dislike this conclusion, but economics isn’t a morality play: spending on things you don’t like is still spending, and more spending would create more jobs. But why would anyone prefer spending on destruction to spending on construction, prefer building weapons to building bridges? John Maynard Keynes himself offered a partial answer 75 years ago, when he noted a curious 'preference for wholly ‘wasteful’ forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict ‘business’ principles.' Indeed. Spend money on some useful goal, like the promotion of new energy sources, and people start screaming, 'Solyndra! Waste!' Spend money on a weapons system we don’t need, and those voices are silent, because nobody expects F-22s to be a good business proposition. To deal with this preference, Keynes whimsically suggested burying bottles full of cash in disused mines and letting the private sector dig them back up. In the same vein, I recently suggested that a fake threat of alien invasion, requiring vast anti-alien spending, might be just the thing to get the economy moving again. NYTimes

So, all you lefty bedwetters who wanted to defend Krugman as being "not serious" about the alien invasion thing...what now? I guess you have a new answer: Krugman was NOT serious, but he had overdosed on that new Keynesian diet supplement: "Whimsy-Cal!"

The alternative is that we need GW Bush back in office. Right? Elective wars are good for the U.S. and good for the digestive system. Or was that madcap P-Kroog just being "Whimsy-Cal" again?

UPDATE: Some pretty good reasons why this "Whimsy-Cal" thing is pretty dangerous.

Stephen Fry on Speech and Being Offended

Since I am all excited about V for Vendetta, let me share some thoughts from Stephen Fry, who played the doomed talk show host.

Do be sure and click for a much more gloriously offensive image.

End of Abundance

KPC friend and water economics uber-mensch David Zetland has a newversion of his book out. Very cool and refreshing, if you can get it. Like clean water, actually.

ODC Food Tent

Anonyman sends this photo with the caption "food tent" from the Self-Obsessed DC protest.

Several of you have asked, "Who is Anonyman?" I can only answer by quoting from V for Vendetta: "I'm merely remarking upon the paradox of asking a masked man who he is..." But, okay, here is a picture of Anonyman, hanging with his peeps in the street at Occupy DC.

The entire V speech, if you want it. And you KNOW you want it.

Hot Chicks of OWS

Hot Chicks of Occupy Wall Street from Steven Greenstreet on Vimeo.

Thanks to the Bishop, whose interests are of course entirely anthropological.

First they came for the puppeteers.....

Man oh man oh man. Liberals are so funny. Check out this article from The Nation.

Here's the awesome beginning:

"A few years ago, Joe Therrien, a graduate of the NYC Teaching Fellows program, was working as a full-time drama teacher at a public elementary school in New York City. Frustrated by huge class sizes, sparse resources and a disorganized bureaucracy, he set off to the University of Connecticut to get an MFA in his passion—puppetry. Three years and $35,000 in student loans later, he emerged with degree in hand, and because puppeteers aren’t exactly in high demand, he went looking for work at his old school. The intervening years had been brutal to the city’s school budgets—down about 14 percent on average since 2007. A virtual hiring freeze has been in place since 2009 in most subject areas, arts included, and spending on art supplies in elementary schools crashed by 73 percent between 2006 and 2009. So even though Joe’s old principal was excited to have him back, she just couldn’t afford to hire a new full-time teacher. Instead, he’s working at his old school as a full-time “substitute”; he writes his own curriculum, holds regular classes and does everything a normal teacher does. “But sub pay is about 50 percent of a full-time salaried position,” he says, “so I’m working for half as much as I did four years ago, before grad school, and I don’t have health insurance…. It’s the best-paying job I could find.”Like a lot of the young protesters who have flocked to Occupy Wall Street, Joe had thought that hard work and education would bring, if not class mobility, at least a measure of security (indeed, a master’s degree can boost a New York City teacher’s salary by $10,000 or more). But the past decade of stagnant wages for the 99 percent and million-dollar bonuses for the 1 percent has awakened the kids of the middle class to a national nightmare: the dream that coaxed their parents to meet the demands of work, school, mortgage payments and tuition bills is shattered. Down is the new up."

Yikes! Where to begin. First of all, Joe started the story as "a full time drama teacher" in an NYC elementary school. How can that be a job that taxpayers are paying for? Jeebus help us all. Then Joe, or as I like to call him, the luckiest man in the world, turned into Joe the stupidest man in the world by SPENDING 3 YEARS AND BORROWING $35,0000 TO GET A MASTERS DEGREE IN $%#$$ PUPPETRY!!!!

Now he seems stunned to find out that he has a much much worse job than before.

And the magazine is using his case as it's opening wedge to indict the American economic system.

People, I say the system was failing when this guy was an elementary school drama teacher. Right now the system is working exactly as it should. You take 3 years out of your career path to get an MFA in puppets, you become basically unemployable.

Obviously there are real people with real problems unemployed and struggling due to no fault or error of their own. A 9% unemployment rate with our current social safety net is just not acceptable.

But I have no sympathy for the folks who borrowed a lot of money to go and earn a dumb-ass graduate degree and now find they can't make big money.

If you decide to "pursue your passion" in an un-economic area, don't be surprised when the economic system doesn't value you highly, and don't think that the problem is the system; the problem is you.

A little knowledge is....the BBC!

This is one of the best stats teachable moments I think I have seen in a long time.

An article was published, listing cancer rates of an admittedly dangerous disease.

The BooBC weighs in, noting that the variation is three times as large for some parts of this nationwide sample.

Dr. Goldacre, perhaps a trifle gleefully, points out that these are SEPARATE local samples, and they have associated variance that comes from the sample size. He writes a nice piece, with a fine funnel graph, and notes that the internet is a groovy, groovy thing, because it enables people like this to check things stated as fact by experts like the BooBC.

The BBC "stands by its story." They failed, utterly, to understand the very basic mistake they had made in looking at the information. (Of course, in journalism indoctrination school, they never had to learn any of those nasty stats stuff!)

As Dr. Goldacre put it in a tweet: "Dear sir, I have completely failed to understand a simple criticism of our work, please tell everyone, yours, BBCnews"

My own favorite bit is that in the BBC rebuttal, there are two parts:
1. We did not make a mistake.
2. Why are you picking on us? Lots of people made the same mistake!

Fantastic stuff. A Lagniappe: they are holding a "Bowel Cancer Comedy Night." No way even the Onion could get away with that.

Best Political Ads in Bizarro Terms

Which one would Angus prefer? Close call, but the content of the bald son of Nippon would win, I think....

Most humble thanks to Erik V at Monkey Cage

Grand Game: Madison Wisconsin ID Edition

I actually can't believe this is true. Which calls out for the Grand Game.

Bars are not allowed to demand valid ID in deciding whether you are of drinking age in Madision, WI.

This is not like voting rights. Even there, I'm not sure that asking for ID is wrong. But at least that is some kind of fundamental right.

There is NOT a fundamental right to drink in a private bar. And the idea that bars would try to discriminate to keep paying customers out, in WISCONSIN, is pretty nuts.

Nod to the Blonde, who at this point is desperately hoping someone will card her...

Election--Calc U Later!

Interesting little calculator. You make assumptions, it predicts results.

It may not predict results very well, but these models are surprisingly accurate.

Nod to Anonyman, who is enjoying this circus way too much.

More on the NBA lockout

After Tyler linked to our inaugural Grantland piece, many of the commenters at Tyler's site were complaining that the situation regarding losses is symmetric for each side, and thus the owners have just as much to lose as the players.

But people, it is NOT symmetric.

First, the owners are losing net revenues, the players their gross revenues. Do we really think operating profits are >= labor costs?

Second and more important, owners are sacrificing short run net revenues for long run benefits. If they can shift the cost curve, then the present value of the long run savings should get capitalized into their franchise values. The current owners can capture the long run benefits from "winning".

By contrast, the current players have no capture-able long run economic gains to motivate short run pain. They only gain what ever revenue increases they get over their playing days. They don't have a long run claim on the revenue stream they are sacrificing to try and protect.

It doesn't get much more asymmetric than that.

You're Gonna Have to Face It, You're Addicted to Coke

Coca Cola, that is.

This boy named "Sue" is suing to claim that the evil capitalist conspirators intentionally caused him to become addicted to a sugary drink.

Hey, I Know You!

Somebody versus nobody: An exploration of the role of celebrity status in an election

Lara Zwarun & Angela Torrey, Social Science Journal, forthcoming

Abstract: This study examines the role celebrity status may play in potential voters’ evaluation of a political candidate presented in a newspaper article. Participants indicated greater intention to vote for a candidate who was a recognizable Hollywood actor than an unknown candidate in a political race, regardless of how substantive the political information provided about the candidate was. This suggests that familiarity with a celebrity can act as a heuristic in peripheral processing. Younger people were more likely to vote for a celebrity candidate than older voters, but how liberal or conservative participants are was not a significant factor in the decision to vote for the celebrity. Nor did participants’ need for cognition or level of political involvement predict intention to vote for the celebrity, suggesting that celebrity status is meaningful to motivated and thoughtful voters as well as those who are less motivated and informed. The possibility is raised that this could be an indication of celebrity status being used as a component of deliberate political decision-making, and future research in this direction is suggested.

Two Words: MORAL. HAZARD.

RL in Toronto sends this article, and notes that someone should explain moral hazard to the researchers.

As KPC hero Gordon Tullock suggested, if you wanted to increase auto safety, you might do this:  

In other words, if players were safer, they would play more aggressively, and the net effect (that's a hockey goal joke!) would be close to zero. People choose their own level of risk. Safer equipment, more risk = no change injuries.

(pic credit to EconoBonus, even though he attributes the idea to Peltzman. EconoBonus's "Fact 2" is not a fact at all, I should say: deaths and injuries per mile have fallen, not risen. It's just an example, though. It's true Peltzman did good research on the subject...)



To be fair, both death rates and injury rates have actually fallen sharply for cars. The effect on pedestrians is ambiguous. I think the most you can say about the Peltzman effect is that the improvements in health that result from improvements in safety may be less than you expect. They do NOT appear to wash out completely. Safer cars and safer roads really do appear to have reduced injuries, by quite a bit.

Your Eurozone deathwatch update

1. The Greek government has replaced all the heads of their military branches with officers considered more friendly to the regime.

Wow! Given Greece's history, that is a stunner. The left fears a coup? This might get even uglier that I had imagined.

2. Italian bond yields are up to 6.4% and Berlusconi is coming to the G-20 Summit empty handed.

Italy's public debt is on the cusp of explosive dynamics, where the higher interest rate on new debt combined with a low economic growth rate causes the debt to GDP ratio to continually rise even if the Italian budget is in primary balance (spending net of interest payments = revenues).

People, the Euro as we know it is over. I say it's a coin flip to last until Christmas and maybe 15% to last until spring break.

Germany and France are asking Greece, "do you want to stay in or not?" and Greece is saying "what, are you guys deaf?".

I am not sure what Germany and France are up to. If Greece goes, Italy definitely goes and that's game, set & match.

If they want to keep the Euro together they need to take on Greek debt as their own and settle in for a long hard slog dealing with Italy.

"They are hoping that China will want to buy Europe"

I'd do anything for love but I won't do that

KPC friend David Tufte reports that his university (Southern Utah) is looking for faculty members willing to let students stay at their house for the rest of the semester!

I am not making this up.

Are there no navigable bodies of water nearby where the kids could stay on cruise ships for the semester like they are doing at St. Mary's college in Maryland?

I am not making that one up either.

Academics out there: what's the weirdest thing your university has asked you to do?

Marriage Proposal

Note the size of the rock on the ring at the end.  The LMM's reaction:  "If you had given me a ring like that, you could jumped off the roof, too."

Cheap Sex as a Collective Action Failure

I had Laura Sessions Step, author of UNHOOKED, in at Duke to give a talk a few years ago.  Her question, simplifying a bit, is why do young women make themselves so available, unmarried, to young men in hopes of making themselves, the young women happy?  (This clearly makes the young men happy, but that's beside the point).

Pileus has a simpler and cleaner explanation.

Excerpt:
This downward spiral that women have been caught in—the dwindling supply of available men induces women to make themselves even more sexually available than the next women in order to compete, thereby further dampening the supply of potential mates—seems impossible to break out of. At the heart of the problem is a classic, Olsonian collective action failure. All women would benefit if, collectively, women were to require more of men they had sex with. But every woman knows that her behavior, by itself, will not cause market prices to change, so she cheats—and by “cheats” I mean she cheats the female collective. The problem with this free riding behavior is that everyone faces the same incentives and there is not an effective punishment for cheating. The result: men get more sex and women can’t find mates. Such are the fruits of feminism.
Maybe the old (some would say sexist) adage that “good girls don’t” had something going for it after all.

Los Repartimientos

The EYM writes an interesting piece on "los repartimientos" over at EE.  Check it out.

Did Media Frenzy Contribute to Stock Collapse of Fiancial Institutions?

The Role of Media in the Credit Crunch: The Case of the Banking Sector

Tomasz Piotr Wisniewski & Brendan Lambe, Journal of Economic Behavior & Organization, forthcoming

Abstract: Using a Vector Autoregression framework, this paper investigates the dynamic relationship between the intensity of negative media speculation and the market performance of financial institutions. Evidence is provided that over the sub-prime crisis period pessimistic coverage Granger-caused the returns on banking indices, while causality in the opposite direction proved weaker. These findings may imply that journalists not only report on the state of economic reality, but also play an active role in creating it. Investors acting upon sentiment implicit in media reports would have been able to improve their investment performance, as measured by Sharpe ratios and Jensen's alphas.

.
(Nod to Kevin Lewis)

The Golden Rule

Tyler and I wrote a piece for Grantland.com on the NBA labor situation. The link is here.

Bill Simmons approached Tyler and he magnanimously cut me in on the deal.

Simmons also asked us to write an introductory paragraph about ourselves and our connection to basketball. This is what we wrote:

Tyler and Kevin are academic economists who share a love of basketball. For years they held Washington Bullets season tickets, trekking from suburban Virginia to the Cap Centre. Their all-time favorite Bullet is Rex Chapman. Now cruelly separated by geography, Kevin is an OKC Thunder ticket-holder, while Tyler anxiously awaits the return of a professional basketball franchise to the DC area.

Sadly, what ended up appearing in the article was this:

Tyler Cowen and Kevin Grier are both economists. They are also both basketball fans. Here's their take on the NBA lockout.


Sorry Rex!!!!

World Series Thoughts

A video I took before the game started, in Dallas. Back when Texas had a team in the world series. Before they lost to the Cardinals, I mean. My team. We won.

The trip back last Monday was a little tough. (I had to give, and grade, 180 midterms for two different classes. Just now getting caught up...) Fine to Atlanta. Upgraded to first class, on time. Had a scotch, finished reading BOOMERANG. Nice.

But Flight ATL to RDU delayed, after boarding, because of mechanical difficulties involving wing. No complaints, I want the wings to work. But we sat for 55 mins at gate. I was in middle seat in coach (let me say again: MIDDLE seat in COACH). Guy on my right weighed 450 pounds, at least. His giant ass was almost parted down the middle when he tried to sit down and the armrest was down. Of course he wanted to raise the armrest, which I resisted. If you give a giant fat guy Sudetenland, he always wants the rest of Czechoslovakia.

But the stewardess said we had to raise the armrest. They got him an extender for the seatbelt, a good 12 inches, but the seatbelt still wouldn't buckle. (Seriously, the man was big). They got him an 18 inch extender, and it buckled.

So did I: got to sit under this guy's left butt cheek for 55 mins at the gate, and then for an hour flight. Guy on my left let me scoot over onto his seat a little, but my own ass is none too small (though it does fit between the armrests, and inside a standard seatbelt, without any problem). Pretty miserable.

Lose a house, lose a pet?

This is a sad little consequence of the housing bubble, one I had not considered.

Was pet relinquishment related to foreclosure?: A spatial research note from California during the height of foreclosure

Gregory Morris & Jennifer Steffler, Social Science Journal, forthcoming

Abstract: Media reports asserted that the 2008 foreclosure crisis unleashed a rash of pet relinquishments, especially in California's central valley, an area that had the highest U.S. foreclosure rates that year. However, reports on the foreclosure/ relinquishment association relied on anecdotal evidence provided by animal shelters, which is known to be flawed since many people do not give a reason for relinquishment, or give a false reason. This study compares separate data sources for the central valley city of Turlock, 2008: foreclosure data from the Stanislaus County Recorder's Office (N = 235) and relinquishment data from the Turlock Animal Shelter (N = 248). Contrary to shelter driven data, these separate data sources reported only one shared address. However, spatial analyses show that foreclosures and relinquishments were concentrated in similar areas. Analyses also show that unaltered (non-spayed/neutered) dogs are more likely to be concentrated in lower socioeconomic (SES) areas. While our initial finding contradicts recent media reports, spatial analyses verify other research on the social problems associated with concentrated foreclosures, and lend support for policies designed to reduce breeding during heighted periods of foreclosure and other economic crises.

Are Markets Better Than Altruism?

One of the cool parts of the Radford's 1945 article, "The Economics of a POW Camp," is this observation:

Our supplies consisted of rations provided by the detaining power and (principally) the contents of Red Cross food parcels – tinned milk, jam, butter, biscuits, bully, chocolate, sugar, etc., and cigarettes. So far the supplies to each person were equal and regular. Private parcels of clothing, toilet requisites and cigarettes were also received, and here equality ceased owing to the different numbers despatched and the vagaries of the post. All these articles were the subject of trade and exchange.

Very soon after capture people realised that it was both undesirable and unnecessary, in view of the limited size and the equality of supplies, to give away or to accept gifts of cigarettes or food. “Goodwill” developed into trading as a more equitable means of maximising individual satisfaction.

Trading is more equitable than goodwill? Think about it. I notice you don't eat your beef ration, and I ask for it. You give it to me, because it will be wasted else. But then next month, and the next, and... at some point, the fact that the beef has value means that I should pay you something. YOU may not value the beef, but it has value in the market. I am taking value, and you get nothing. Altruism, if systematized and made permanent, is inequitable. If the state FORCES us to act as if we were altruistic, then it isn't altruism at all.

SMBC illustrates the same problem: Altruism is at best an emergency solution, because it quickly devastates those it is intended to help. If you love something, set it free to find a way to support itself by producing something someone else wants to buy.

(A nod to David D)

UPDATE: From the intrepid Pels-min: PJ O'Rourke nailed it in 1994, "All the Trouble in the World," when he was baffled by Somalia's fields filled with (unharvested) crops. "Somalia was being flooded with food aid… Rice was selling for ten cents a pound in Somalia, the cheapest rice in the world. But what, we thought, did that mean to the people with the fields of corn and sorghum and the herds of goats and cattle? Are those now worth nothing, too? Had we come to a Somalia where some people some- times starved only to leave a Somalia where everybody always would?"

Housing Prices, Gay/Lesbian Homeowners, and Political Views

The Influence of Gay and Lesbian Coupled Households on House Prices in Conservative and Liberal Neighborhoods

David Christafore & Susane Leguizamon, Journal of Urban Economics, forthcoming

Abstract: Gays and lesbians perceive themselves to be targets of discrimination in the housing market. Previous research has found that the presence of gays and lesbians is associated with increased  ousing values. We reconcile the perceived discrimination and research results by classifying neighborhoods as more conservative or liberal according to voting outcomes of the ”Defense of Marriage Act”. Using a data set comprised of over 20,000 house sale observations, we show that an increase in the number of same-sex coupled households is associated with an increase in house prices in more liberal neighborhoods and a decrease in house prices in more conservative neighborhoods. This suggests that gay and lesbian coupled households do experience prejudice in conservative neighborhoods. 

Nod to Kevin Lewis

Private investment is irrelevant for growth....who knew?

Grand Game time, folks! James Livingston, "economic historian" at Rutgers, goes off in the Obama Admin Daily Newsletter:

As an economic historian who has been studying American capitalism for 35 years, I'm going to let you in on the best-kept secret of the last century: private investment - that is, using business profits to increase productivity and output - doesn't actually drive economic growth. Consumer debt and government spending do. Private investment isn't even necessary to promote growth...A big part of the problem is that we doubt the moral worth of consumer culture...Consumer spending is not only the key to economic recovery in the short term; it's also necessary for balanced growth in the long term. If our goal is to repair our damaged economy, we should bank on consumer culture - and that entails a redistribution of income away from profits toward wages, enabled by tax policy and enforced by government spending.

I wonder if he wrote that on his government-invented iPad? F*****g idiot. He apparently thinks that if you write about stuff you don't understand, that makes you an "economic" historian. Yes, sure, I'm a snob. But the guy has a PhD in History from Northern Illinois U. A two-time loser.*

Please do share your thoughts....

(Nod to Kevin Lewis, who as always is in no way complicit with my surly "analysis"; he just sent the link)

*A clarification:  Northern Illinois has a number of quite good departments, including econ.  But the history department is a doctrinaire marxist ideological chop shop.

Phone call for Dr. Bernanke

In the 1970s, in response to a real shock (the oil crisis), the Fed poured money into the economy.

What did we get? Stagflation. No growth and high inflation.

Paul Volcker (with support from President Reagan and the newly Republican controlled Senate) dramatically reduced money growth, ratcheting interest rates skyward, and creating a sharp recession.

But inflation fell and has stayed under control ever since.

Now, in response to a real shock, the Fed has been pouring money into the economy and we are not getting any growth. At least this time we are not getting inflation either.

What is Christina Romer's takeaway from the historical episode I describe above? That Bernanke needs to "steal a page from the Volcker playbook" and ....... pour even more money into the economy!

WTF??

People, I am not making this up.

Look, the Fed did a great job as lender of last resort in the 2008 crisis. Without their actions, I believe things would have been very much worse.

But beyond the financial panic, we have had a very adverse real shock to the economy (housing price collapse). People are not as wealthy as they thought they were by a long shot. Households are trying to de-leverage and rebuild their balance sheets. The Federal government is making it hard for them to do that by taking on ever more debt on their behalf. This isn't a nominal shock, it's a real shock.

We have no evidence that monetary policy can or should be used to attempt to offset real shocks. The Fed absolutely did their job in the crisis. They should stand ready to guard against potential deflation. But the Fed simply does not have a magic wand to "heal the economy". It's not a patient, Bernanke is not a doctor, and monetary expansion is not medicine.

Carpe Diem: Carpenter Siezes the Day

Look at our F-ing Cardinals

Congrats to St. Louis and their Cardinals. 11th WS title (3rd in the Mungowitz-Angus era).

What a strong performance by Carpenter!

Your Euro Death Watch update

1. Yields on Italian sovereign debt are RISING today!

2. Euro officials are going hat in hand to Beijing. Rumor is that China wants their loan to the EU to be DENOMINATED IN RENMINBI!

YIKES and double YIKES!

Age-Based Taxes--Age Discrimination?

The Surprising Power of Age-Dependent Taxes

Matthew Weinzierl
Review of Economic Studies, October 2011, Pages 1490-1518

Abstract: This paper provides a new, empirically driven application of the dynamic Mirrleesian framework by studying a feasible and potentially powerful tax reform: age-dependent labour income taxation. I show analytically how age dependence improves policy on both the intratemporal and intertemporal margins. I use detailed numerical simulations, calibrated with data from the U.S. Panel Study of Income Dynamics, to generate robust policy implications: age dependence (1) lowers marginal taxes on average and especially on high-income young workers and (2) lowers average taxes on all young workers relative to older workers when private saving and borrowing are restricted. Finally, I calculate and characterize the welfare gains from age dependence. Despite its simplicity, age dependence generates a welfare gain equal to between 0.6% and 1.5% of aggregate annual consumption, and it captures more than 60% of the gain from reform to the dynamic optimal policy. The gains are due to substantial increases in both efficiency and equity. When age dependence is restricted to be Pareto improving, the welfare gain is nearly as large.

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

Do Stronger Age Discrimination Laws Make Social Security Reforms More Effective?

David Neumark & Joanne Song, NBER Working Paper, September 2011

Abstract: Supply-side Social Security reforms to increase employment and delay benefit claiming among older individuals may be frustrated by age discrimination. We test for policy complementarities between supply-side Social Security reforms and demand-side efforts to deter age discrimination, specifically studying whether stronger state-level age discrimination protections enhanced the impact of the increases in the Social Security Full Retirement Age (FRA) that occurred in the past decade. The evidence indicates that, for older individuals who were "caught" by the increase in the FRA, benefit claiming reductions and employment increases were sharper in states with stronger age discrimination protections.

(nod to Kevin Lewis)

Help! I need a CDS for my CDS

To me, one of the strangest parts of the latest EU bailout-rescue fund saga is Brussels' seeming determination to kill off the sovereign CDS market. I wrote about it back in July, but in this current round, the issue is much more stark.

Private investors are supposed to take a "voluntary" 50% haircut on Greek sovereign debt. The reason why EU negotiators worked so hard to get it called voluntary is that they don't want the default to trigger payment clauses in CDS contracts.

Why they so strenuously object to this is not fully clear (at least to me). Maybe they feel like if the CDS don't pay out, it's not really a default? Maybe they think they are being clever and "punishing evil speculators"?

But it's not really that simple.

First, the ability to buy insurance puts more people into the Greek (and Italian and Spanish) sovereign debt markets than would otherwise be there. At the margin, invalidating these insurance policies will drive people out of the very markets the EU is begging people to enter.

Second, if I ran a bank that held Greek debt that was hedged via CDS, I would fight like hell against accepting the haircut. After all it's voluntary, right? I'd wait around until a haircut that would trigger my insurance payment came on the horizon. And, if I somehow got strong-armed into taking the "voluntary" 50% reduction, I'd litigate and fight like hell to force the insurance to be paid to me anyway.

However, I guess I wouldn't worry too much about the CDS not triggering yet though. This deal, as a best case scenario (i.e. everyone accepts the voluntary haircut and Greece hits all its promised revenue and deficit targets for the next decade) reduces the Greek Debt/GDP ratio from 180% to 120% in 10 years! Why doesn't a 50% haircut cut the debt ratio by at least 50% (more if you think the Greek economy will expand at all in the next 10 years)? Because at this point a lot of the debt is payable to the ECB, IMF and other "official" creditors who are not taking a seat in the barber's chair.

It's all in the (sow) genes

Idaho pig farmer (and James Carville look-alike) Lindy Hinkelman has won over $300,000 in the last 3 years playing fantasy baseball.

Lindy says pig-farming is good training for baseball management:

"Raising pigs and this baseball thing really go together," he told the Times. "There are certain things in farming -- keeping track of productivity, indexes for your sows, the genetic lines there."

Time for an Angus breakdown:

This is just one of many reasons why the internet is so great. Isolated, useless, genius can emerge and be rewarded.

I think pig farming would help real world baseball executives by getting them accustomed to how players behave.

The accomplishment seems remarkable, but given the innumerable number of fantasy leagues and players, wouldn't we expect something like this to happen at some point? Is it really pig-inspired baseball genius or is it more like a guy winning the lottery twice in a row (see Kahneman on the illusion of skill)?

Not the Onion?

Man throws Molotov cocktail at Taco Bell because Chalupa has too little meat.  But he made the Molotov cocktail with a plastic bottle.  So of course it didn't break, just burned slowly

The folks at "Occupy George" want to use dollar bills as...I'm not really sure. But they really feel sincere about it.

How do you make a business go bankrupt? Have Prez Obama praise it, and then give it a subsidy! If that is not the cause, the Prez O is not spending our money very wisely...

Wiener still standing tall! And spending his campaign funds on.... stuff he wants.

12 "Eye-opening" TED talks for political scientologists.


(Nod to Dave S., the Blonde, and Anonyman)

My Economics Haiku

Please consider voting for my economics Haiku:

Those kids blame the banks

Is Wall Street pre-occupied?

Next: capital strike

Or vote for one of the others...

(VOTE BY MIDNIGHT WEDNESDAY...)

OWS: They are the government now...

Email from Chris S, this little gem of an article...

Money quote:

"The other day, I took in $2,000. I kept $650 for my group, and gave the rest to Finance," he told the Post. "Then I went to them with a request -- so many people need things, and they should not be going without basic comfort items -- and I was told to fill out paperwork. Paperwork! Are they the government now?"

To be fair, that kind of bureaucracy is also characteristic of a group that OWS fears FAR more than government. And that is....corporations!

William Niskanen's classic BUREAUCRACY AND REPRESENTATIVE GOVERNMENT, in fact, was written after he worked at Ford Motor Company.

Look, governments MUST have bureaucracy. Large corporations, too. They deal with government, they have to use forms and fill out reports.

If you don't like bureaucracy, then my friends at OWS, you must want that thing we call "capitalism," with its emphasis on new, dynamic firms and innovation. What you are getting a taste of is corporatism, where the line between government and large corporations simply disappears.

"Bye, Kids! Have fun storming the castle!" ("Do you think it will woik?" "It would take a miracle...")

Obama's Books: Good Enough to Buy, But Not to Read?

A strange juxtaposition of two stories.

1. U.S. taxpayers pay for more than 7,000 copies of Pres O's books. Mostly "Dreams from My Father," apparently.

2. Those same books have been banned as subversive and objectionable, containing material "potentially detrimental to national security"

Now, I should say two things. I thought "Audacity of Hope" was more like "The Mendacity of a Dope," a load of ideological pap. But "Dreams From My Father" is terrific book, very moving, honest. (Well, maybe not honest, exactly, but coming across as honest). I read DFMF twice, and really liked it.

Second, the fact that Prez O's books were banned as "detrimental" doesn't mean much. In the supermax setting, newspapers and books that contain any passages that even refer to foreign policy are banned.

Still, it does seem odd that these two things are happening together. Our embassies are handing out the book to foreigners as inspirational, UNLESS those foreigners happen to be in jail.

(Nod to the Blonde)

It's 1986 again in America....

Dutch Boy sends this interesting TIME story from 1986.

The US bombed Libya, even back when Libya had airplanes.

The answer to the question is "nothing"

Tyler asks, What happens in the Super Committee Fails?

I answer, Nothing of any significance.

Less than $1 trillion in actual cumulative total spending cuts ($167 billion is "interest savings") starting in Fiscal 2013 and going on for the next 8 years after that.

Pretty much nothing happens to entitlements. Defense is cut an average of $50 billion per year (from a base level of around $900 billion +).

Look, we are spending $3.6 trillion + every year! Knocking $95 billion/year off for 9 years is really less than chump change.

Of course the Super Committee will fail; failure is basically costless.

Nero and Caligula are a' feudin'!

Well, OK, it's actually Sarkozy and Berlusconi, but that's more than close enough. Sarky is really worked up about the ECB, which is good, except what he's worked up about is that there might be two Italians and (gasp) no Frenchmen on its board come November.

Really.

Yeah, Nicky, that's really the problem that you should be focussed on. Well done. At least you are proving that you play a mean fiddle.

At the latest rescue summit, these two giants of statecraft managed to feud over the future of one, Lorenzo Bini Smagi (aka the Lusitania?):

Sarkozy has made clear that France wouldn't accept a situation under which Italy would have two of its nationals on the board and France none, when Frenchman Jean-Claude Trichet is replaced at the helm of the Frankfurt-based bank by Draghi in November.

After repeating in piqued diplomatic language Friday that it expected Bini to quit the ECB board to honor a commitment he made this summer to step down by year-end and clear the way for a French official to join the ECB board, the French government appeared to be losing its patience.

But Berlusconi argued it was none of its responsibility. "We offered him prestigious posts, but Bini Smaghi declined them all," Berlusconi said, adding that he bore no responsibility in the spat. "At a certain point, I asked [ Sarkozy]: What should I do? Kill him?"

KPC Dallas summit

Mungo and I converged on Dallas yesterday to take in game 4 of the WS. We warmed up by eating a pile of pupusas (the official food of KPC by the way) and then headed to the game early, to see STL take BP (which was pretty much the only time they hit the whole game). While the outcome was disappointing, the experience was tremendous.

The Rangers have a great ballpark, super fans and a fun team. Their only real drawback is GEORGE F. BUSH, who threw out the first pitch to a standing O!

Some foties:

Do We Remember Bad Things More? Not in Baseball...

Effects of Event Valence on Long-Term Memory for Two Baseball Championship Games

Carolyn Breslin & Martin Safer, Psychological Science, forthcoming

Abstract: We investigated how event valence affected accuracy and vividness of
long-term memory for two comparable public events. In 2008, 1,563 fans answered questions about objective details concerning two decisive baseball championship games between the Yankees (2003 winners) and the Red Sox (2004 winners). Both between- and within-groups analyses indicated that fans remembered the game their team won significantly more accurately than the game their team lost. Fans also reported more vividness and more rehearsal for the game their team won. We conclude that individuals rehearse positive events more than comparable negative events, and that this additional rehearsal increases both vividness and accuracy of memories about positive events. Our results differ from those of prior studies involving memories for negative events that may have been unavoidably rehearsed; such rehearsal may have kept those memories from fading. Long-term memory for an event is
determined not only by the valence of the event, but also by experiences after the event.

(Nod to Kevin Lewis)

LAGNIAPPE: Along those lines...

They see me rollin'. They hatin'

Despite last minute hysterics from the usual suspects, the first Mexican truck rolled across the border on Friday. Mexico has now cancelled the $2 billion in tariffs they put on American products in retaliation for Obama's 2009 cancellation of an earlier Mexican trucking pilot program.

According to the NAFTA agreement of 1994, Mexican trucks were supposed to have full access to border states by 1995 and access to all of the USA by 2000 (Canadian trucks enjoy this same full access)!

The current "program" for letting Mexican trucks in is so protectionist that only 11 companies are going through the certification process. There are electronic monitors to measure how long the trucks are running. There are drug tests and English tests for the drivers. All things we do not mandate for drivers of American trucks. If it really is a safety issue, then these measures should be applied in a non-discriminatory manner.

The mix of protectionism and racism on display here is unseemly to say the least.

Deliverance Economics

Yoo sher got a pretty multiplier....

Early Human Fossil

Scientists have found what may be the first elected official.

Subversive

Turns out that the TSA considers the US Bill of Rights to be subversive. You can be arrested for reading it.

Just stand in line and keep quiet, and hope they don't notice you.

Liberty Book Club?

Anybody up for a virtual Liberty Book Club?

KPC fan Brandon Capitalism writes, "Would you be willing to ask on your blog, if any students would be interested in starting a Students for Liberty / IHS Book Club?

They would read the books listed on your blog. And they could, if they wanted, have debates about the books on our Capitalism Facebook page (up to 40k members). I would love that and help them as an Leadership Institute field rep... The vision is for students to organize themselves to study the ideas that Universities don't. "

Sounds good to me. Contact Brandon Capitalism if you want more info...

Giving Stimulus a bad name since 2009

President O's $447 billion stimulus, er, I mean jobs bill has been rejected by Congress. Now the pieces are coming up in the Senate, one at a time.

The first was a proposal to give $35 billion to State and Local governments to support salaries for teachers, cops & firefighters. It's paid for by a surtax on people earning more than $1 million a year.

People, when did stimulus come to mean shoveling money to public employee union members only? when did stimulus come to mean tax increases?

According to WAPO, $30 billion of the money would "Support almost 400,000 education jobs for one year".

Notice that the word "support" in there means they are not claiming almost 400,000 new jobs; this is the old "create or preserve" rhetoric.

Suppose the bill really could deliver 400,000 new teaching jobs for one year. At $75,000 per job/year that would be a marvel of government efficiency. But why teachers? why not $37,500 for 800,000 construction workers? Or cut a check for $18,750 to 1.6 million unemployed people selected by lottery? or $9,375 to 3.2 million unemployed people?

This isn't stimulus; this is simple redistribution from a likely pro GOP group to a likely pro Democratic Party group. No wonder the Republicans are against it.

(Yes I know that one can argue schoolteachers have a higher MPC than do "millionaires", but that would be at best a second order effect, and this effect would be bigger if the money went straight to more unemployed people)

Our Correspondent, Anonyman

Anonyman, in the field for a KPC exclusive, sends this report:

"Apparently, they have agreed on a sign!"

Someone needs to give orders....

They were Rousseauvians. But now Hobbes is starting to sound more right. Time someone was in charge; too many liberties.

From the OWS folks in the stinky park....

From today’s battles, it’s not yet clear who will win the day: the organizers or the organized. But the month-long protest has clearly grown and evolved to a point where a truly leaderless movement will risk eviction — or, worse, insurrection.

As the communal sleeping bag argument between Lauren Digion and Sage Roberts threatened to get out of hand, a facilitator in a red hat walked by, brow furrowed. “Remember? You’re not allowed to do any more interviews,” he said to Digion. She nodded and went back to work. But when Roberts shouted, “Don’t tell me what to do!” Digion couldn't hold back.

“Someone has to be told what to do," she said. "Someone needs to give orders. There’s no sense of order in this fucking place.”

Not even anarchists believe in anarchy. Someone needs to give orders. Hee hee!

This is actually a reason that I do support the OWS thing, nationwide. It's time kids found out that "spontaneous politics" is dangerous nonsense. In markets nobody has to give orders, because someone would OWN that spot. In this communal arrangement where some are just more equal than others, someone has to give orders, and eventually will have to bring in guns to back up those orders.

A nice WSJ article on the proceedings. Catatonic? Heh.

(Nod to Anonyman, whose wife gives HIM orders)

Apologies and Social Capital

Apologies as Signals: With Evidence from a Trust Game, Benjamin Ho, Management Science, forthcoming

Abstract: Apologies are part of a social institution designed to restore frayed relationships not only in daily life but also in the domains of corporate governance, medical malpractice litigation, political reputation, organizational culture, etc. The theory shows that in a general class of moral hazard games with imperfect information about agents with two-dimensional type, apologies exhibit regular properties — e.g., apologies are more frequent in long relationships, early in relationships, and between better-matched partners. A variant of the trust game demonstrates that communication matters in a manner consistent with economic theory; specifically, the words “I am sorry” appear to select equilibrium behavior consistent with the theory's main predictions.

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

Does Social Capital Promote Safety on the Roads?, Matthew Nagler, Economic Inquiry, forthcoming

Abstract: I present evidence that social capital reduces traffic accidents and related death and injury, using data from a 10-year panel of 48 U.S. states. The econometric challenge is to distinguish the causal effects of social capital from bias resulting from its correlation with unobservable characteristics by state that influence road risks. I accomplish this by employing snow depth as an instrument, and by restricting attention to summertime accidents. My results show that social capital has a statistically significant and sizable negative effect on crashes, traffic fatalities, serious traffic injuries, and pedestrian fatalities that holds up across a range of specifications.

(Nod to Kevin Lewis)

Ron Paul loses his Sh*t in the WSJ

Really!

Here is the money quote: "The Fed's quantitative easing programs increased the national debt by trillions of dollars."

Good luck 'splainin' that one away. The article is here.

People, Ron Paul is a gynecologist, not an economist (and it shows).

To crib a phrase from Mungowitz, he's "straight up loony tunes".

Which is why he fits in so well with the rest of the Republican presidential candidates.

Joe Biden Loses His Sh*t in Philadelphia

VP Biden sells jobs bill to 4th graders. Really.

That man J-Bide is a loony tune, straight up. This is pretty amazing. Howard Dean just said "yeaaaah!"

Nod to the Blonde

UPDATE: Jason Mattera asks an obvious question: How many of the rapes that Prof. Biden is upset about could have been prevented with the half billion US dollars poured down the Solyndra rathole? Those Solyndra jobs were pretty "temporary," weren't they, J-Bide?

Cards Rap

Nod to the Blonde

Big Foot, but not THAT Big!

Man orders size 14.5 slipper, gets size 1450.

Not convinced that this is real. A little too pat, at the expense of those "wacky Chinese." Still, a good picture. "Real" slipper at lower left.

(Nod to the Blonde)

UPDATE: More and more questions. "His oversized foot..." FOOT? He only has one? Apparently, because he even says, "I am going to sell it on Ebay." Not them, it. Wouldn't it be a little strange to get an order for one slipper? I mean, even separately from the size 1450 thing, which is probably pretty common, if Art Carden buys shoes. Overall, I cry bullish.

An observation entirely appropriate for the Euro debt summiteers

“After one strips out all the window dressing there is no way to make $6 billion in liquidity worth more than $6 billion in liquidity. But there are several creative ways to make it less.”

~Ken Rogoff [quoted by Paul Blustein in his wonderful book "And the Money Kept Rolling In (and Out)]

You have been E-mooned!

Assicons: The new cool emoticons for people over 30 who never do anything cool, so that this isn't actually cool, either. Nonetheless... assicons:

(_!_) a regular ass

(__!__) a fat ass

(!) a tight ass

(_*_) an ass hole

{_!_} a ass out on the floor shakin'

(_o_) an ass that's been around

(_x_) kiss my ass

(_X_) leave my ass alone

(_zzz_) a tired ass

(_E=mc2_) a smart ass

(_$_) Money coming out of his ass

(_?_) Blonde Ass

.

Irony is Dead. Up is Down. Through the looking glass....

"Our" solar producers are mad because their subsidies (which are more than 100% of their total revenues!!!) are not as big as the Chinese subsidies.

Pot, I want you to meet Kettle. Hey! Which is which? You subsidized government activities all look the same.

Nod to Anonyman.

Caption Contest

So, please put in the best caption, in comments. (This picture is from the SFL conference at Salem College; pic taken by Mark Benfield).

Feel free to click for an even more ridciulous image...


.

you make the call

Whattya think people? Is this an endorsement of vegetarianism or nymphomania?

Some Facts on Green Jobs

Now, I understand that no sensible person actually believes that "green jobs" are going to save the economy.

Saying that we need green jobs is just a way of justifying increased government payments to corrupt shell corporations like Solyndra. I bet the perpetrators of this fraud are actually pretty amused that it worked.

But here are some facts: even if the maximum good things happen, the impact will be negligible. And it is not likely that anything good will happen.

(A nod to @mfbellemare , who is not complicit in my interpretation)

Links

VdR on the stimulus. Nice resource.

Jeff Miron on consequentialist and deontological libertarianism. Since no more than 2% of the US population knows what either of these words mean, it is an illustration of why libertarianisms' cultivated irrelevance is like to survive.

The "Battle for Brooklyn." Very cool, very interesting.

The Mitt-tator calls China out for being a currency manipulator. After we have implmented the Rogoff-Krugman plan and have 6% inflation, presumably the Mitt-tator will call out the U.S. for being a currency manipulator.

Bail-out? Fannie and the Fred have PLENTY of cash, thank you very much. And the Ben Bernank says there is more where that came from.

.

My kingdom for a counter-factual

Popular Macro debates are getting so tiresome, strident and pointless. The standard of what counts as evidence has fallen to ludicrous levels, even for people who should know better.

For example, consider this common line of reasoning: Tax cuts don't work. After all, taxes were higher under Clinton than under Shrub and the economy performed better under Clinton.

Or this one: Stimulus doesn't work. After all, we spend $800 billion and unemployment just kept going up.

Both of these arguments are non-germane and virtually worthless because no reasonable counterfactual is being offered.

We are not told what would have happened under Clinton if taxes had been cut, or what would have happened under Shrub if taxes had not been lowered. The comparison offered holds no water because it is unreasonable to assume that the only factor that varied between the two time periods relevant for explaining economic outcome is the Federal Tax Schedule. We know that is not true.

The stimulus argument is even weaker. To evaluate its effect, we need to know what would have happened without its application. It is unreasonable to assume that the only factor that varied which was relevant for unemployment was the stimulus.

People, anytime you see a strong empirical claim being made and the supporting evidence is a graph or an anecdote or simple comparison of A vs. B, ask yourself: what is the counterfactual being offered? Is it reasonable?

To my mind, it is precisely because Macro is a non-experimental field (meaning convincing counterfactuals are difficult to find) that it has become so politicized. People can look at the same events and draw diametrically opposing conclusions.

Macro has all the interesting questions, but Lord is it hard to find good answers!

She Blinded Greece with Science

Benford's Law, applied to Greece.

Thanks to the ward boss...

Oh, and that's "Benford," not Binford.

Props to P-Kroog

Interesting, thoughtful article.

By Paul Krugman, lest we forget that he is actually a very smart man.

Blackberries Cause Traffic Accidents

The effect, 40%, seems implausible. Still, interesting.

The original article in the UAE paper, THE NATIONAL.

Nod to the Blonde.

Looks like Intraders have discovered Hibbs

On Intrade this morning, Obama's re-election probability is 47.9%, which is the low point for this contract:

This low-ish probability of re-election is now in line with what my main man Doug Hibbs has been predicting via his "Bread & Peace" model, namely Obama loses (Hibbs is predicting 46.2% of the vote for Obama):

(clic the pics for a more Romnian view)

Hibbs has been predicting an Obama loss since May, which is when the Intrade Obama contract peaked at 70% (due to his RIP OBL bounce).

All hail the Stormin' Mormon?

The View of the Fed, 1912

(Click for a dramatically more paranoid image)

And a shout out nod to Plasmaquatic Technolithic Mist

Euvoluntary Exchange In NRO

Interesting NRO piece by Reihan Salam on Euvoluntary Exchange. Nice examples. And the question at the end is the right one. I just don't know the answer.

What are the sources of the disparities we care, or rather that we should care, about?

Occupy Wall Street--Carter Administration Edition

When you have an inept President who blames employers for not hiring people, you get this. From 1979, but quite fresh and timely. No jazz hands, though, which is a shame.



Nod to the Blonde...

G'accuse!

Where seldom is heard, a missing G word, and judges do strip searches all day!

At the World Scrabble Finals in Warsaw, one competitor accused another having hidden the "G" tile. He demanded that the miscreant be strip searched to find the missing tile.

In the US this would have been done, as long as the guy spoke Spanish and had committed a traffic offense. But not in Poland.

(Yes, the title is intentionally misspelled)

Nod to the Blonde

Jazz Hands

Wow, these OWS guys are even more self-congratulatory than this blog! And we are (mostly) kidding when we self-congratulate.

I do like the jazz hands.

Finally, Angus, in spite of his protests, would last about 90 seconds in this crowd before he got into a fight with one of them. Their diagnosis, I will admit, is in some important ways correct. Their prescription for cure? Not so much. Angus's claim that he could be in that crowd and not make fun of it.... that made ME laugh. Good one.

we going to Sizzler!

One of the few good things about going to Wash U was Cardinals baseball. Me and Mungo were there for some pretty good years (1980-84). We would sit in the LF bleachers (I want to say that tickets were $1.50 but that can't be right can it?), smoke cheap cigars, chant obscenities at the people in the RF bleachers and hate the Cubs. A couple times we even took the train to Chicago and caught a Cards-Cubs game at Wrigley. Jeez, no wonder we almost didn't make it through the program!

I'm down with OWS!

I, Angus, just want to tell you all that, contrary to my good friend and co-blogger Mungowitz, I am totally down with and supportive of the OWS movement.

The ever stronger link between big finance and big government is really hurting this country, and who knows, maybe OWS will start the ball rolling somehow to improve things.

Even if it doesn't, who are they really hurting?

I say let 'em protest in peace with a minimum of mockery.

Heck, if there was an Occupy Norman, I might check it out. Maybe find some elevators where we could push all the buttons at once....

Special Bagels or Something

Actual Egyptians near the park of OWS in New York are scornful of the "pain" of rich kids whining about hardship.  An interesting bit...

As Anonyman summarizes it:

But although she said the destitution in the square reminded her of the Third World, the occupation didn’t strike her as another Tahrir. “We were fighting for a big, big thing: for life, to eat, against a giant snake that would kill us.” Unsurprisingly, she employs a smart breakfast metaphor: “Here, they’re not fighting to eat, say, regular bread, but … special bagels or something.”

The Grand Game: Farmer Bob Edition

In the contest for worst analogy ever, "The economy is like a farm" has GOT to be a serious contender. In today's NY Times, Bob Shiller trots it out for a spin.

Let's start at the beginning. I grew up in a rural setting and have worked on farms. Farmers don't wait until winter to fix their fences. If there is a break in the fence and the cows are loose, you fix the damn fence then and there. Same with your barn. If there's a hole in the barn roof in June, you don't wait until January to patch it.

Then there's what I think is the weirdest part of the analogy:

The farm needn’t go into debt to do this. All able-bodied people on the farm are expected to contribute their labor, an imposition we can view as an informal tax.

In my experience, farmers laid off many of their seasonal workers after the harvest. Those that were kept on, to deal with animals or to do projects were paid hourly wages. They weren't "expected to contribute their labor".

The farmer had to save part of the farm's income to pay for what workers were needed in periods when the farm wasn't making a lot of income.

(A lot of the kids I knew that lived on farms were expected to make this "contribution" year round and they really really hated it. Winter was their favorite time of year because they didn't have to work nearly as hard)

I acknowledge that in some areas of the country and for some types of farms, business is seasonal. However, farmers mostly deal with that seasonality by laying off workers!

P.S.

The funniest thing of all about this is probably the title of the HTML link for the article which I reproduce here for your enjoyment (I am NOT making this up):

http://www.nytimes.com/2011/10/16/business/a-proven-principle-behind-obamas-jobs-plan.html