Context, Context, Context

Wow. Some folks over at Daily Kos have themselves all upset. They quote me, from a debate in 2009.

“The United States is not a democracy and shouldn’t be,” said Michael Munger, Duke University’s Political Science Department chairman and a 2008 Libertarian gubernatorial candidate attacking it at a League of Women Voters forum. “There is NO moral force in the majority. It is just what most people happen to think.”
The Corporatists/Christianists/CU have NOW spoken what and why many of us 99% are fighting against. They said that we, the 99% Have NO MORAL (christian values???) force. We don't know how to pick and choose between good and bad LEADERS?

Um....some context, folks.

1. It was a DEBATE. The League of Women Voters wanted a debate, with one side arguing FOR the Electoral College and one arguing AGAINST. I drew "for" the EC, and argued it. I could just as easily have argued "against." I am actually agnostic on the question of the Electoral College. But for the sake of a debate, I was willing to argue the case for the Electoral College. That's not a policy paper I did, it's a DEBATE. Quoting those claims and attributing them to me is pretty dumb, even by the standards of Daily Kos.  It would be just as wrong to have attributed to me the claims I would have made if I had drawn the "against" position.  IT. WAS. A. DEBATE.

2. I do stand by the "majority does not define morality" point. Two examples:

• First Amendment to the US Constitution. Just because the majority happens to be Christian doesn't mean that the majority gets to impose Christian prayers in schools. Morality has to stay separate from Majority.
• Second example: Roe v. Wade. Suppose a state has a majority that wants to outlaw abortion. Roe v. Wade says they don't get to. Roe v. Wade says, "No democracy on this question. It is an individual rights question."  There are lots of other examples.  But presumably the Daily Kosoids actually agree in those two instances that majorities should be prevented from forcing their will on the rest of us.  That's the American system.  We are NOT a democracy, because of the Bill of Rights.  Majorities cannot trample the rights of individuals.

So....it was a DEBATE.  I don't care much one way or the other about Electoral College, but as an intellectual assigned to a debate position I am capable of arguing either side, to help the audience make up their own minds.  That's the tradition of debate.  And the idea that majorities are not always right is enshrined in the 1st Amendment, and in the Roe v. Wade decision.

Let's just assume this was a simple misunderstanding....

Why Are Our Prisons Overcrowded?

Why are our prisons overcrowded?

a. Too many criminals
b. Too many laws
c. Not enough prisons

If you answered "b", you are CORRECT, sir!

Lots of background and graphics.

burying the lede

People, I don't care if it has over 1,000 calories or 54 grams of fat.

The only thing you really need to know about Jack-in-the-Box's "bacon" milkshake is this:

IT DOESN'T HAVE ANY BACON IN IT!!!!

Come on, regulatory leviathan. Do your damn job.

People, if you want a real bacon dessert, for now you'll have to go to Denny's:

Praise the Lord & pass the ammunition!

Gisele made the switch from prayer to carpet-bombing pretty smoothly:


You [have] to catch the ball when you're supposed to catch the ball," she snapped back. "My husband cannot [expletive] throw the ball and catch the ball at the same time. I can't believe they dropped the ball so many times."

Court Gives Half a Loaf: NC Primary Still On

I have no idea what is going to happen in May.

There was supposed to be a set of primaries.

But the Repubs did what good partisan piggies do (and Democ partisan piggies did, and did again this year in Maryland), and redrew the district boundaries.

Here's the hilarious part. The contention of the Democs, and apparently with a straight face, is that the districts are (gasp!) racially gerrymandered! The court decisions let the primaries go forward, but allow the litigation that would invalidate the primaries to go forward, also. Really?

Here is a picture of the NC 12th District. It was explicitly created to draw a fence around all the black people in sight, to ensure a majority minority district. Some places it is no wider than I-85 (hint: no one lives in I-85, so this is just to achieve technical contiguity, without adding any actual people).

That's not a picture of a river, folks. That's a congressional district. Drawn by the Democs in the NCGA, and endorsed by your Dept of Justiciability.

Okay, fair enough: racial gerrymandering is clearly okay. That "map" is drawn to pick up every African-American neighborhood from Durham to Charlotte, a distance of more than 100 miles.

But then why is it okay for the Democs to do egregious racial gerrymandering, and not okay for Repubs to do some political gerrymandering? The reason the Repubs did this is not racial, it's just good ol' partisanship. Blacks tend to vote Democ. If you are going to create Democ districts, it will likely look like racial gerrymandering.

And if you think that racial gerrymandering is bad, you have to start by breaking up the 12th district. If you don't break up the 12th, you are just a partisan demagogue, and you should STFU.

End game for Greece?

The "Troika" (EC, ECB, IMF) is laying the smackdown on poor little Greece with demands of immediate public sector wage cuts, the closing of unprofitable publicly owned firms, and other spending cuts in exchange for the next "bailout" payment.

Supposedly, the "technocratic" (meaning unelected and troika-friendly) Greek PM can't get political buy-in, and without the "bailout" Greece could default quite soon.

While all this may just be weird Euro-posturing, I think that Germany and the EU is trying to show Greece the door.

I guess they think that the ECB's massive lending to banks has put them in a position to survive the default, but if I were them I'd be a bit more worried about what will happen in Portugal if Greece defaults and what might happen in Spain or Italy when Portugal defaults.

I think that if the Troika wants to keep the Eurozone intact, they should be putting much fewer conditions and burdens on Greece, not adding them.

Property and Disputes Over Property

Trial by Battle

Peter Leeson
Journal of Legal Analysis, Spring 2011, Pages 341-375

Abstract: For over a century England's judicial system decided land disputes by ordering disputants' legal representatives to bludgeon one another before an arena of spectating citizens. The victor won the property right for his principal. The vanquished lost his cause and, if he were unlucky, his life. People called these combats trials by battle. This paper investigates the law and economics of trial by battle. In a feudal world where high transaction costs confounded the Coase theorem, I argue that trial by battle allocated disputed property rights efficiently. It did this by allocating contested property to the higher bidder in an all-pay auction. Trial by battle's "auctions" permitted rent seeking. But they encouraged less rent
seeking than the obvious alternative: a first-price ascending-bid auction.

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

The Ecological and Civil Mainsprings of Property: An Experimental Economic
History of Whalers' Rules of Capture

Bart Wilson et al.
Journal of Law, Economics, & Organization, forthcoming

Abstract: This article uses a laboratory experiment to probe the proposition that property emerges anarchically out of social custom. We test the hypothesis that whalers in the 18th and 19th centuries developed rules of conduct that minimized the sum of the transaction and production costs of capturing their prey, the primary implication being that different ecological conditions led to different rules of capture. Ceteris paribus, we find that simply imposing two different types of prey is insufficient to observe two different rules of capture. Another factor is essential, namely, as Samuel Pufendorf theorized over 300 years ago, that the members of the community are civil minded.

(Nod to Kevin Lewis)

The Fixie Index: The Hipsterest Places in America

The Fixie Index. Is YOUR town hip?

I can't imagine riding a bike like that. Literally cannot imagine doing it, or wanting to. I mean, just read this. Or this, a fixie in action (though, if he didn't see her, not sure why the lack of brakes is a problem...)

Not for me. Proving (as if proof were required) that I am NOT a hipster. This is not exactly a "stop the presses" announcement, I realize.

Of Course Economists Cannot Predict. Why Would You Think They Could?

Ha, ha, the funny stupid economists, can't predict anything.

But one of the conclusions of economics is that prediction is literally impossible.  At least public prediction.  If I publicly announce a policy of inflation, to increase growth, and people believe me, then the inflation is anticipated and the real growth effects are just about zero. Note that it doesn't matter whether the "announcement" is made by the Fed-o'-the-One-Bullet (as Angus has pointed out repeatedly) or by an economist who "knows" what the Fed is going to do.

Economic forecasts would only be made, or listened to, by people who don't know any economics.  So, sure, this sort of study confirms that.  But the conclusion is not that economists are bad at predicting.  It's that prediction is literally impossible, because of strategic reaction.

Suppose I publicly predict you are going to throw "rock" in an RPS game, and your opponent believes me. If you WERE going to throw rock, you would know that your opponent would be throwing paper. So you would switch to scissors.

It's worse than Heisenberg.  It's worse than Hawthorne.  In terms of the observer/predictor affecting the phenomenon being studied.  It's economics!  You can't possibly predict things.  Now, if someone pays me, I'll come up with a "prediction."  But I won't believe it.

Who should you be laughing at?  The morons who pay economists to come up with predictions.  You might as well hire meteorologists.

It's just me and Christy, me and Christy, me, me, me & Christy!

Last week, I begged to differ with a guy claiming that manufacturing was indeed special because people earned a wage premium simply by entering the sector, or as he put it, that there were "labor market rents" associated with getting a manufacturing job.

Turns out Christina Romer has my back!

She points out that (a) on the low skill end, manufacturing pay premia have shrunk and likely will continue to shrink, and (b) increased technical sophistication in manufacturing has created more jobs that require higher skills. She points out that the number of manufacturing workers with some college education has more than doubled.  Thus, subsidizing manufacturing is NOT likely to reduce income inequality in the US.

Romer attributes the shrinking premium to low skill workers to increased international competition, while I attributed it to both that factor and the decline of union strength. She doesn't point out that there is an upside to increased international competition, namely lower priced goods for American consumers.

The culture that is Japan

or, high art in low places.

People, we have a long way to go to catch up with the Japanese. Feast your eyes:

many more great ones here.

It's Hilarious to be an Idiot

It's an anti-intellectual wave, sweeping America.


Urope.  I liked that one.

Big

Kevin Durant was amazing last night. His line, 36 points (on 24 shots), 10 boards, 3 assists, 3 blocks, 2 steals, was impressive. But his repeated clutch plays at the end of the game were eye-popping. A three to give the Thunder the lead for good. A leaning jumper as the shot clock expired to extend the lead. Clutch free throws. A shot block and a key rebound.

He did all of this despite being exhausted (he logged 44 minutes and playing the entire second half).

Durant and James Harden owned the 4th quarter and the Thunder won a game in which they were clearly outplayed in the first 36 minutes.

Not sure what KD will have in the tank for tonight's game in San Antonio, but Mrs. Angus and I really enjoyed watching him play last night.

By the way, have you seen Durant's latest commercial?

Whatever you do, don't be yourself!

Great essay in Inside Higher Ed on how "just be yourself" is horrible advice for academics going out on the job market.

Immortal line: "Sorry Academics; you suck at interviewing".

Mrs. Angus and I very very much emphasize to our students that they absolutely should NOT be themselves and spend a month or two before the job market working with them to project a professional persona. We run them through multiple rounds of practice interviews and practice job talks.

We were lucky this year to each have an excellent student on the market, each of whom had a full dance card at the AEAs and now have multiple campus visits. In fact, both are out on campus interviews right now.

Hat tip to RKG.

poco a poco

243,000 net new jobs in January (including 50,000 in manufacturing), November & December of 2011 figures revised up by 60,000, unemployment rate down to 8.3%. Details are here.

Not too shabby.

Net new jobs in the private sector were 257,000 so not only is employment rising but its composition is slowly shifting away from government and toward the private sector. In the last 12 months there has been a net job loss in the government sector of around 275,000 jobs

The net jobs figures for the last three months, after revisions, stand at 157,000 203,000 and now 243,000.

It will be interesting to see how the "austerity is killing us" people will spin this.

If Public, ALWAYS Public?

Once something is public domain, is it always public domain?

Not if the Supreme Court says it's not.

Argument for decision:  reciprocity.  Presumably, easier to get other countries to recognize our copyrights if we recognize theirs.

Argument against:  WTF?  The only reason to grant a monopoly is to encourage new works.  These are all old works, by definition.

(Nod to BC, who has sharp eyes for a cool issue)

Romeo was restless

"Romeo was restless, he was ready to kill. He jumped out the window cause he couldn't sit still. Juliet was waiting with a safety net. He said "Don't bury me cause I'm not dead yet"."

Replace "Romeo" with "Cassanova", "the window" with "of Clemson University", "sit still" with "eat Chiklfil-a", "Juliet", with "Auburn University" and suddenly Elvis Costello becomes relevant again!

You know, now that I think about it, "Mystery Dance" is a pretty apt title for the recruiting process in college athletics.

Hat tip to Mrs. Angus.
  

Mac McCorkle has a little fun with Chronicle Reporter

My good friend Pope “Mac” McCorkle is having a little fun with the reporter from the Chronicle.  Here are the money quotes, from me and then his “refutation.”

“They don’t want a candidate who is going to hold [President Barack Obama] back,” Munger said. “Bev Perdue is a clown—she should have never been governor. The only reason she won was the tsunami of Obama’s campaign in North Carolina.”
But the unpopularity of an incumbent governor would not likely affect an incumbent president, said Pope McCorkle, visiting lecturer at the Sanford School of Public Policy, who worked as a consultant with Perdue’s 2008 campaign.  “[Perdue] had a better shot of winning than is commonly assumed,” McCorkle said. “She got more votes than Obama in 2008. The idea that her victory is solely attributable to Obama doesn’t hold water.”

Now, Mac is a smart guy, and knows full well that that is nonsense.  I laughed out loud when I read what he said.  There is just no necessary relationship, none at all, between the vote totals and whether Perdue would have won without Obama’s coattails.  The reason is straight ticket voting.  At least 2% of the folks who went to vote for Obama ended up voting for Perdue straight ticket, but did not vote for Obama at all because of the quirky NC rules.

Here are thestraight ticket totals for 2008:

• Democrats: 46 % of all registered voters, but 58.76% of the straight ticket votes cast went to the Dems (1,283,486 total straight ticket votes) 
• Republicans:  32% percent of registered voters,  40.4%  of straight-party votes (881,856) 

Democrats from the national party (not the Perdue campaign) organized the straight ticket get out the vote campaign.  They handed out cards, and told people (as they were getting off busses paid for by George Soros and his Wall Street pals, Obama fans all) how to vote straight ticket Democrat. (In NC, it takes two votes to vote straight ticket. If you just vote straight ticket, you cast a vote for Gov, but not for Prez.  That's not what you meant, but that's what you did).

I watched this happen, dozens of times, at different polling sites.  Those folks getting off the bus had NEVER HEARD of Bev Perdue.  They were there to vote for Obama, and when some Dem functionary handed them a card explaining how they should vote, straight ticket D, they did it.

Those numbers, 58% of straight ticket votes, and 1.28 million straight ticket votes cast, are by far the largest ever in NC history.

Now, consider just how lame Mac’s “refutation” is.  If I’m right, and the straight ticket votes from the Obama turnout machine were the difference in the race, then it would be IMPOSSIBLE for Bev to get fewer votes than Obama.  Make it simple:  suppose every Obama voter voted straight ticket.  And a few others voted for Bev.  Then Bev got all those straight ticket votes, and a few more.

That’s basically what happened.  Bev “beat” Obama by four thousand votes.  Statistically a tie.  But without Obama and the straight ticket votes, Bev would have gotten wiped out by Pat McCrory.  On election day, when far fewer people voted straight ticket, Pat “won” easily.  On election day, the votes looked like this:

• McCrory 952,000
• Perdue 783,000

But on the early, mostly straight ticket voting, with all those busses paid for by Goldman Sachs, JP Morgan, and Citigroup pulling up to the early polling places, here is how it came out:

• McCrory 1,038,000
• Perdue 1,351,000

In other words, Perdue built up an early lead of 300,000 because of all that straight ticket turnout for Obama.  In a normal year, with average turnout and average straight ticket voting rates, Bev would only have gotten 1,000,000 early votes, and would have lost the election by 250,000 votes or more.

The only way for me to be wrong is if the reason for all that historic straight ticket voting, and higher turnout, had NOTHING to do with Obama.  And that doesn’t pass the laugh test.  Consider this headline in the HuffPo:  "EarlyVoting Numbers Climb in NC, Mostly the Work of ObamaVolunteers."  That darned right wing HuffPo...

Obama volunteers. Not Perdue volunteers.  And Perdue only won because of early voting.  Perdue couldn't possibly have gotten fewer votes than Obama, because all those early votes were for BOTH.  Perdue loses, without Obama.  And my friend Mac is laughing at that reporter, for not asking better questions.  Good one, Mac.

Low voltage

Obama motors is having trouble with their signature product.  Chevy sold 603 Volts in January. Their sales target for 2012 (45,000) has been dropped. Last year they sold around 8,000 Volts.

More info is here, and the hat tip goes to Mark P.

Has the $7,500 tax credit for buying one of these bad boys expired? Or has America run out of Volt-less rich people?

Or maybe people don't want their cars to double as fireplaces?

We Get Letters: Campaign Finance

Chateau writes:

Here's something to chew on:  When Obama set a precedent for campaign funding by breaking his promise in 2008 to accept public funding for the general election he may have done more than Congress or “reformers” ever could to reduce the impact of SuperPACs in the 2012 general elections. 

The public funding option in 2012 would constrain a campaign to roughly $90 million in total spending, a tiny fraction of the $1 billion the president hopes to raise privately for his campaign.  If the Obama campaign could only spend $90 million we can only imagine how much money would flow into SuperPACs to make up the difference.  Don’t for a minute think that there will be no SuperPACs supporting Obama, but it is the case that we will hear relatively far more directly from the campaign than from 3rd parties this fall (a good thing for our democracy, I believe, to hear more from candidates directly).  The same goes for the GOP, whose candidate I cannot imagine agreeing to public  funding. 

Bottom line:  If you don't like what SuperPACs are doing to election messaging then (have yet one more reason to) be happy that the public funding system has collapsed…

Great Little Economics Story for Class

From Tommy the Tenured Brit, an example.  I have adapted it for teachers of Econ 101: This is a fine little problem to give in class, complete with video. The essentials:

• Bridge revenue is tax-free, by law
• Bridge toll is 80 pence, for multiple passages per day
• Bridge revenue is 2,000 pounds per week in the busy summer, less in winter. About 80,000 pounds per year
• Owner is responsible for upkeep and repairs on bridge and toll machinery, cost 15,000 pounds per year
• Bridge "comes with" cottage, land, and fishing rights
• The bridge just traded hands at a price of 400,000 pounds.  

1.  What is the implied discount rate (assuming that the bridge (with repairs), the tolls, and the tax break are all perpetual)
2.  Now assume that tax break is eliminated, the discount rate is the same as for #1, and that the effective average tax rate on the owners is 40%.  What would be the predicted change in price, or the capital loss the owners would be stuck with?
3.  Are the owners making a supernormal return because of the tax break?

Unless I have got me sums wrong, the answers are:

1.  16.25%
2.  New price would be 243,750 pounds.  So the tax break is worth 156,250 pounds
3.  Of course not!  The tax break is the reason that the bridge was worth 400k instead of 243k pounds.  But the implied rate of return is the same, because the tax rate is capitalized into the value.

Now, then, let's talk about capital gains taxes on investments in new plant and equipment, SHALL we?

Alejandro & the Idea Machine

Check out this amazing video of one of my favorite artists (Souther Salazar) setting up one of his pieces for a show:





more work from Souther can be seen here.

D-Bood Deals

Don Boudreaux gives some useful counterpoints to Robert Reich's class war screed.


D-Bood clearly has this right. To review:

1. By most measures, real wages are up slightly since 1976. If anything, these measures understate the actual increase in consumption by a lot. How much did your hipster OWS kid's MacBook Pro cost in 1976? How about his iPad? How about his MP3 player? (Hint: infinity, infinity, infinity). Stuff has gotten WAY better, and cheaper at the same time. Attempts to control for hedonics, quality change, and innovation are notoriously difficult. How would you build Moore's Law into a CPI adjustment, when it implies prices of computer power are constantly falling at a rate of more than 25% per year? But these clearly lead toward understating the effective real wage increase. Even if I only have a minimum wage job, I can save up and buy an iPod. In 1976, I could not.

So, for example, here is the cost of a 1-gig hard drive (picture for RAM same dynamic):

(The vertical scale is not linear, so the fall is even more dramatic. This stuff is nearly free. Enjoy your capitalism!)

Check this RAM chart out. It even freaked me out a little bit, and I'm an optimist already. Wow, does RAM ever get cheap!

2. Health care benefits have soaked up real annual gains of 4% or more, on average. If you include total compensation, not just wages, workers have gotten huge gains. (Of course, this is a problem, but it is a DIFFERENT problem than the one pointed out by Dr. Reich.)

3. It really is absurd that people think wages have not gone up, for John Smith the worker, hired in 1976. He makes a LOT more now (though he may have lost his job, which is a DIFFERENT problem than the one pointed out by Dr. Reich). Wages rise with job tenure, they just do. John Smith makes pretty good money now. The new guy just being hired, sure, he doesn't make much more than John Smith did in 1976, adjusted for inflation. Not sure why that is surprising, or even bad.

(UPDATES:  a.  Joe Thacker is right.  Immigration and women entering the work force are huge factors.  b.  On the video on YouTube, a commenter said something so true and funny I peed myself:  "I agree with this guy but it looks like he took 3 hits of acid before doing the vid."  Yes, friends, it is true that D-Bood is likely to be cast as the psycho-murderer, not the RCMP hero.

Theories of Voting

Jim Bob notes that if other people vote, it makes little sense to vote. But what if everyone thought that way? (1) They don't. (2) If they did, then I'd vote. But then so would they.


Corporate Avenger's view: Voting doesn't work.
NSFW!

Brits Eat Some Weird Stuff

So, visited Tommy the Tenured Brit. Ate kidneys, venison, baked-tomatoes-for-breakfast, and had a whole lot of pints of room temperature flat beer in little places the getting to which involved driving like hell in the dark on roads just wide enough for oxcarts, on the wrong side of the freakin' road.

But the oddest thing? The oddest thing was clearly the zombie shrimp dish at the Horse and Groom.

Okay, technically that's a zombie langostino, rising from beneath the pie crust to langost the whole earth. And, they didn't call it "zombie shrimp." They called it "Rabbit and Langostino pie." But wouldn't that shrimp give most little kids nightmares?

I liked it, a lot, however. Rabbit was pretty darned tasty, too.

thou pickle-herring in the puppet-show of nonsense

When Robert Burns got mad, he got even:


Ellisland, 1791.


 Dear Sir:


 Thou eunuch of language; thou Englishman, who never was south the Tweed; thou servile echo of fashionable barbarisms; thou quack, vending the nostrums of empirical elocution; thou marriage-maker between vowels and consonants, on the Gretna-green of caprice; thou cobler, botching the flimsy socks of bombast oratory; thou blacksmith, hammering the rivets of absurdity; thou butcher, embruing thy hands in the bowels of orthography; thou arch-heretic in pronunciation; thou pitch-pipe of affected emphasis; thou carpenter, mortising the awkward joints of jarring sentences; thou squeaking dissonance of cadence; thou pimp of gender; thou Lyon Herald to silly etymology; thou antipode of grammar; thou executioner of construction; thou brood of the speech-distracting builders of the Tower of Babel; thou lingual confusion worse confounded; thou scape-gallows from the land of syntax; thou scavenger of mood and tense; thou murderous accoucheur of infant learning; thou ignis fatuus, misleading the steps of benighted ignorance; thou pickle-herring in the puppet-show of nonsense; thou faithful recorder of barbarous idiom; thou persecutor of syllabication; thou baleful meteor, foretelling and facilitating the rapid approach of Nox and Erebus.


R.B.

Source is here. Hat tip to Mrs. Angus

prophets of the marginal revolution!

"Whatever you say about the euro, it's a great insulator." ~Frank Buckley.

 He should know, he lives Dublin in a house made of over $1 billion of shredded Euro notes.

 Story is here.

 Hat tip to the OPMR.

Is this what austerity looks like?

The graph above shows Federal spending (in blue) and State and Local spending (in red). The gray shaded area is the NBER's dating of the last recession. The numbers are NOT adjusted for inflation

Federal spending is still than 30% higher than it was in January of 2007. State and Local spending is still around 12% higher than it was in January 2007.

Is this really austerity?

Can government spending really never come down? Isn't it over 2 years since the end of the recession?

Aren't all the people talking about fiscal drag and government spending cuts slowing down the recovery just arguing from accounting identities like they yell at the right wingers for doing?

Can we really run a trillion dollar deficit and bemoan austerity simultaneously?

They're not your father's manufacturing jobs

Here's an awesome anti-Yglesias screed where the author states the following:

I support high employment in manufacturing. The reason is that I believe that people are paid more if they work in manufacturing than if they work in other sectors.

And the following:

 People get something for nothing if they switch from employment in services to employment in manufacturing -- well the data show they lose big if they move the other way. 

 This guy is saying that there are, in his words, "labor market rents" in the manufacturing sector.

I think what the recent evidence shows though is that there WERE labor market rents in the manufacturing sector.

These rents came from the power of unions. But (1) they weren't a free lunch, as they were partly paid for by higher prices to consumers. (2) These rents are, to a large extent, gone. Virtually every story I've seen about new manufacturing jobs talks about the two-tiered wage schemes where the incumbent workers earn the higher wages and better benefits and the new workers get significantly lower hourly wages and weaker benefits.

 Globalization is bringing this about and it's not going to go away. "Labor market rents" to unskilled (and indeed many skilled workers) are not sustainable as more and more countries join the global system.

I see little benefit in glamorizing and subsidizing manufacturing jobs in a specific way, as they are more and more $15/hour positions with limited upsides.

Of course, I don't even agree with the general notion that the government should be actively planning where its citizens will work.

I do see a role for subsidizing basic research. I have views about subsidizing the acquiring of skills, but my position in academia probably makes them suspect so I'll just leave that alone.

Kraft hates America

Did you know there were green tea Oreos? Mango & orange Oreos? Hollow, straw shaped Oreos you can use to drink milk?

Well there are, but they are not sold in the USA. They were developed in China (by Kraft) and have spread throughout Asia, even into Canada.

Look here dammit. I want a mango & orange Oreo and I want it now!

ps. better make it gluten-free though

Das boot

is exactly what Germany wants to give to what's left of the Greek government. Apparently installing an unelected "technocratic" government hasn't moved Greece very close to where Germany wants them to be so now they want to appoint a "budget commissioner" with veto power over Greek fiscal decisions. And they want Greece to pass a law saying that "first and foremost" all state revenues will go to debt reduction.

Read all about it here.

To me, this is Germany saying, "don't let the door hit you in the butt on the way out" to their southern vassals.

In my opinion Greece should take them up on the offer and generously offer investors including the ECB, German & French banks, and the IMF a 100% haircut on their holdings of Greek debt.

Greece has more leverage in this situation than Germany seems to want to believe or at least admit.

Ok, now vinyl is no longer cool

Why?

Because Target now sells turntables!

Really.

Ouch.

But I bet they won't carry this turntable:

More info is here, and no I don't own a piece of the company nor was I solicited to write about them, nor given any inducement to write about them. At KPC, we KIR (keep it real).

Not good

The advance estimate of real GDP growth for last quarter (2011 q4) is in at 2.8%. This is not so good in a number of ways.

First, "expectations" were for 3%.

Second, over half of the growth came from increased "inventory investment", i.e. the accumulation of unsold goods. 

Third, this number is subject to revision and the direction of revision is frequently downward.

Fourth, real GDP growth in 2011 was substantially lower than it was is 2010! 1.7% vs. 3.0%

Epic Fail!

Fifth, even if we discount points 1-4, 2.8% is a pitiful growth rate for a country coming out of a deep recession with a high unemployment rate and a depressed level of labor force participation.

President Obama should be thanking his deity every day for Mitt and Newt. They are the only reasons he's likely to win re-election with an economy this weak.

Ewwwww! He Said "Lance the Boil"

Perhaps not the most felicitous metaphor...but it was heartfelt.

Re Beverly "Govnah Dumplin" Perdue deciding not to seek reelection: the very smart and comely Laura Leslie came over to the house for a bit. We got to talk politics on the back porch, with Hobo the Wonder Dog sniffing the camera.

War on Drugs

New and deeply weird video for the War on Drugs' song "Brothers":

The War on Drugs - Brothers from Secretly Jag on Vimeo.

"I was just so relieved and so happy he didn't write a song about giraffes"!

News Tip on Bev Perdue

My thoughts on Bev Perdue's announcement today....

Three possibilities here. One is that this is engineered to make way for Dan Blue, the African-American state senator from Wake County. Perdue waited until now to make it harder for anyone else to enter the race. The fact that the primary is on the same day as the Constitutional Amendment on gay marriage assures a large black turnout. This could be the difference to get Dan Blue the nomination.

The second possibility--Interesting that Brad Miller pulled out of the District 4 fight with David Price yesterday. Could that timing mean something?

The final possibility, and the most likely, is this: just typical chaos and confusion in politics, and no one should read too much into the timing. Dr. Perdue was just too much of a liability in an important swing state, and the national party sent some senior folks to tell her to spend more time with her grandchildren.

The Fed is a bear

I read the Fed's latest announcements as a sign that they are very bearish on the US economy. They are saying two things. (1) The Fed funds rate will stay near zero at least through most of 2014, and (2) their inflation target is 2%.

The only ways I can see those two points being consistent with each other is if we have another recession or a sustained but pitiful "expansion" for the next 10-12 quarters.

I wouldn't want to be an incumbent from the President's party running for re-election in the 2014 midterms if the Fed "achieves" both of their announced objectives.

Mexican electoral politics is getting interesting

It seemed like back to the future. The PRI looked like they had the presidential election locked up without even having to resort to unplugging the vote-counting computers and improvising some results. The PAN is very weak partly due to their failing drug war and the PRD has somehow again nominated El Peje, who has slipped into the twilight zone.

But now word comes that the PRI is losing part of its electoral alliance. The party of the Mexican teachers union (i.e. Panal) is pulling its considerable support.


Why?

Because of a grass-roots revolt inside the PRI over plans to put the union head's daughter and son-in-law up as Senate candidates.

When informed that this was no longer on the table,  Elba Esther Gordillo pulled her party out of the alliance (from her home in San Diego) and showed why Mexican Spanish is the greatest language on the planet by saying:

"Pues entonces, que se vaya todo a la chingada"

Hat tip to Aguachile via Greg Weeks!

Why must the Captain go down with the ship?

Poor Francesco Schettino. He tripped and fell into a lifeboat and now he's globally vilified and most likely headed to jail.

Do you question why it's the "law of the sea" that the Captain must be the last person off the ship in an evacuation situation?

This guy says the practice evolved as a way for Brits to show their superiority over "Latin people".

Chivalry at sea became an essential British ideal, and proof of the superiority of Anglo-Saxons (a category that included North Americans and most northern Europeans) over more panicky peoples from the south and east.

In truth, there is a strong economic reason for such a norm. It should encourage both (a) better accident avoidance and (b) a well thought out and well practiced evacuation plan.

After all, if I'm gonna be the last guy off, I have a big incentive to make sure that everyone gets off quickly and efficiently.

Phone call for Peter Leeson!

Still Sick From Return

Had hoped to be back up to speed by now. Spent four nights in England, in London and then visiting Tommy the Brit.

But got badly sick on plane back. That may be as (temporarily) miserable as you can get, outside of prison: nine hours with a bad fever, shivering, in coach, getting up every 20 minutes to puke (or pretend to puke, because your stomach insists). And then getting to &^$%*ing Atlanta and being greeted by the friendly staff of America's "Welcome home! Now bend over" customs.

Then four hours on the floor in Atlanta waiting for the flight that is (of course) delayed. Coach again, middle seat. Stewardess actually wakes me, incredulous that I don't want peanuts. No, ma'am, thanks very much.

Was in a near coma yesterday. Finally kept something solid down around 2 pm.

Today, I was feeling so bad I actually played Angry Birds. Had never played it before. Nice, because you can shoot a bird at those bad pigs and then take a little nap before your next shot. A nice quiet little game. I will never, ever play it again.

It would be good if my head stopped hurting. But the whole not puking thing is an improvement.

Tomorrow: England, Tommy the Brit, Harold. And, of course, the Cock.

Don't call me Shirley

Have you heard about New Mexico?

It's getting bigger!

Land of Enchantment indeed.

One day me and Mrs. Angus' dirt pile may be a whole ranch!

Lagarde vs. Lagarde

Chrissie, you got some 'splainin' to do!

 The head of the International Monetary Fund warned that in addition to cutting yawning budget deficits Europe needs to do more to promote growth and stop the crisis from spreading to the world economy. "It is about avoiding a 1930s moment, in which inaction, insularity, and rigid ideology combine to cause a collapse in global demand," IMF Managing Director Christine Lagarde said before the German Council on Foreign Relations. "A moment, ultimately, leading to a downward spiral that could engulf the entire world," she said. 

 People, one of the most effective remedies for the "1930s problem" was for countries to exit the gold standard and devalue their currencies (you are allowed to agree with this even if you favor a gold standard by simply believing that they'd chosen the wrong parities). The situation in Europe is eerily similar. The PIIGS need to exit the Euro-zone and devalue their currencies! As far as I can see, the IMF is dead set AGAINST this proven remedy to "1930s problems"

 Instead, the IMF is actually a big part of the forced austerity movement! The IMF is part of the group threatening further payouts to Greece unless they do what? INCREASE AUSTERITY!!

The IMF is making Greek negotiations with private creditors much harder by refusing to take any haircuts on their own loans to Greece (the IMF's insistence on being paid in full makes the required private haircut to hit the IMF's 120% debt in 2020 target even harder).

 In other words, as is usually the case in a financial crisis, THE IMF IS PART OF THE PROBLEM.

The only viable alternative to self defeating austerity is exit and devaluation. I believe that IMF economists know this, but the leaders of the organization are more concerned about French and German banks than they are about economic performance and living standards in Greece and Portugal, so we get these ridiculous & hypocritical lectures.

 

Economists at Sea

Economists at sea...

Fourth, we must acknowledge the intimate, inseparable relationship between politics and economics. Modern debates about who caused the financial crisis—­government or the private financial sector—are almost ­nonsensical. We are living in an era of money politics and large powerful interests that influence the laws and regulations and their enforcement. In order to catalyze the evolution of economics, research teams would benefit from multidisciplinary interaction with politics, psychology, anthropology, sociology and history.

This makes sense to me. But then I was never a good enough economist to get a job as an economist...

The culture that is Spain / Another one bites the dust

What the hell is up with Spain? Light bulls' horns on fire and enjoy watching them run around going nuts? To honor some "Saint"?

Well, one bull has done his level best to even up the score:


A flaming-horned bull trampled and fatally gored a man early Saturday during a festival in eastern Spain, an official said. Large balls of flaming wax are traditionally affixed to the beasts' heads before they are let loose to rampage through squares and narrow streets in such festivals. 


 the bull charged the man, gored him and then stamped on his head, causing him "irreversible injuries." 


Many towns in east and northeastern Spain celebrate feasts with "toros embolados," or "flaming bulls," which feature the animals racing around and shaking their heads as a reaction to flames or fireworks attached to or close to their horns. At these regional festivals, flaming-horned bulls are taunted and teased by rowdy crowds in bullrings, town squares or down streets.

C'mon bulls, you got a lot of work left to do!

Early to bed, never to rise?

"And yet while young men's failures in life are not penalizing them in the bedroom, their sexual success may, ironically, be hindering their drive to achieve in life."

 More here.

 Discuss?

Bait & Switch

Here's some early footage of Lebron in action:


 


Hat tip to Mrs. Lebron.

What do you get the jaguar who has everything?

Indoor plumbing, of course!!

Hat tip to Karl de la O

One size fits all

In this excellent interview, Werner Herzog allows that all of his movies could have been appropriately given the same title: "Gazing Into The Abyss".

Austerity & Growth

There is a lot of discussion on the question of whether austerity is growth enhancing or not. While it's an entertaining debate, I get the feeling that the subtext is that European austerity only makes sense if it's growth enhancing, and I don't think that's true.

To my mind, Greece has two choices, default and devalue or continue on a path of ever greater austerity. Why they seem to be choosing option "b" is beyond my comprehension, but given they don't exit the system, what other option do they really have? Obviously they have no monetary levers. Obviously, they cannot borrow to finance further spending "stimulus". Obviously they cannot compel Germany to just pay up or the ECB to apply the monetary level system wide.  Obviously, they are not going to export their way to prosperity in the near term. So it's pretty much austerity uber alles for them.

Italy is in largely the same boat, except their borrowing rates have not hit Grecian heights due to ECB interventions. Their only options are austerity or exit.

As for the US of A, the idea that we are practicing fiscal austerity is risible. You can't even see austerity from where we are currently standing.

Alan Blinder channels St. Augustine

 You know, "Lord, grant me chastity, but not just yet"!

In today's WSJ, Alan writes, "it would be smart to borrow, say, another $500 billion this year and then pay for it, say, 10 times over, with $5 trillion in deficit reduction spread over 10 years—starting, say, in 2014."

People say this all the time, Blinder, Christina Romer, Mark Thoma, but it doesn't make sense. All Congress can commit to doing is what they actually do in the present. Does anyone really think the coming "draconian sequesters" on defense will actually happen?

The "cuts are coming around the corner" language is just boilerplate, designed to inoculate the writer from the charge of fiscal irresponsibility when they advocate increasing current federal spending.

Current Congresses cannot bind future Congresses. If they really want to cut spending, the only way to do it is to (sorry in advance) JUST DO IT in the here and now.

Don't hold your breath.

Hey big mouth!

We Just Kept Looking and Looking for a Connection That was NOT There

Interesting.  No systematic connection between junk food and obesity.

These researchers sat on the result for two years, trying to torture the data to make it come out "right."

Nod to the Blonde.

Best athlete out of Russia since Maria Sharapova!

This crow is the absolute bizzle:

Tumblr of the Day

Pizza Fractals!

Look, This is Not Complicated

Let's spell it out.

If you are invited to go on the Jon Stewart Show, you should go. It will be fun, Jon asks softball questions, it will be great, you will get to talk about your book

If, on the other hand, John Oliver, or Asif Mandvi, or Jason Jones, want to talk to you, just laugh at loud and hang up the phone. Do NOT talk to them. Do not do an interview. Do not even answer questions in writing. They already have an angle. They are smarter than you are, or at least they will seem smarter after they finish editing the interview.

Why do otherwise smart people convince themselves that they are going to be anything other than reamed? Froma Harrop is revealed here to be an unbelievable hypocrite and a self-important fool.

The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

She just couldn't believe anyone could disagree with her, and be anything but a "terrorist." She even goes so far as to say that that was NOT a metaphor. She meant it literally: disagree with me, and you are a terrorist. Didn't we all make fun of George Bush when he tried that same stupid line?

Now, I have always just thought Froma Harrop was another economically illiterate lefty journalista. Given that she never took any actual courses in college, it's not her fault.

But.... it turns out she is actually a really, really scary lady. Thanks, Jon Stewart, and thanks to John Oliver! Don't ever call me, by the way. I won't answer, John O.

Lagniappe: From Wikipedia.... Harrop is the President of the National Conference of Editorial Writers. One project of the NCEW is the Civility Project, aimed at restoring civility to America's public discourse. Her position was criticized by the Wall Street Journal, which noted the contrast between this role and her comparison of the Tea Party to terrorist groups such as al-Qaida. In her response to the criticism, Harrop stated, "I see incivility as not letting other people speak their piece." She subsequently deleted all the comments from the post and shut down the commenting feature of her blog.

On Computers / WiFi in Class

It is so important to this professor that people only pay attention to him in all his narcissistic glory that he forced the class into a smaller room....

JUST so there is no wifi.

Wouldn't it have been easier to stay in the large class and ban laptops? Or make it possible to jam wifi somehow? It can't be hard.

Or, you could just let the students decide. As I argued before.

Lee Siegel Is An Idiot

You don't have to be an idiot to write for the NY Times.

But it helps. P-Krrog, for example, is certainly not an idiot. But he has to act like one to publish in the Times.

Being an idiot is the only qualification I can see for Lee Siegel writing a column.

Some analysis, from NO MORE MISTER NICE BLOG.

A lagniappe: Here is Mr. Siegel being an idiot on the Daily Show. Now that "Kim Jong Il Looking at Things" won't have any new entries, perhaps someone can have a blog entitled "Lee Siegel Being An Idiot." It would have daily entries.

9 ball, corner pocket!

Hashtag of the day

OccupyNigeria

Darned Tricky Numbers

Sometimes people wonder what kind of people want to write for the lefty bed-wetting press. Why would such a talented person want to "give" so much of themselves, taking a low salary just so they can speak truth to power? Those guys must be VERY good people....

Or perhaps they are just another idiot who got some fraudulent "______ Studies" major. And so they never learned how to calculate percentages or hold a real job. Now they blame the system for how much their little lefty lives suck.

An example:

Survey: Illegal Corporate Campaign Contributions Up 400%

By Alex Seitz-Wald on Jan 12, 2012 at 6:41 pm

In 2009, just 1 percent of respondents to National Business Ethics Survey — a large industry study funded by major corporations like Walmart — said they had witnessed illegal corporate political donations. This year, that number quadrupled to 4 percent. Management-level employees at large, publicly traded companies were most likely to see the illegal activity, with seven percent of senior managers saying they had witnessed it.

If this guy had not majored in International Relations (at Brown, no less, the home of "Studies Studies"), he would know that this is:

(4-1)/1= 3

3 n.e. 4

But of course the actual numbers don't matter. It's the truthiness of the scare tactic that's important.

A complicating factor is that the Dems got FAR more corporate money than the Repubs in 2008. The problem for the left is not that corporations can give money. The problem is that corporations can give money to Republicans. THAT cannot be allowed.

Nod to Chateau

Fair Trade Frolics

This is just remarkable. Mr. Overwater did convince me of the importance people on the left attach to good intentions, regardless of whether the consequences are actually good. I think that is a big explanation of the popularity of "fair trade": I am paying more for this, an act of sacrifice and therefore of virtue. The fact that essentially none of the money actually makes it to the farmers is beside the point. I sacrificed, and therefore I am a good person.

But it's bizarre that people actually think the fair trade scam makes food healthier, or that it has fewer calories. Wow. You bedwetters believe that whatever lame secular god you worship will bless you with thinness, because you performed the good work of paying more for regular old coffee that happens to have a "fair trade" label on it.

The “Fair Trade” Effect: Health Halos From Social Ethics Claims

Jonathon Schuldt, Dominique Muller & Norbert Schwarz
Social Psychological and Personality Science, forthcoming

Abstract: The authors provide evidence that social ethics claims on food packaging (e.g., fair trade) can promote the misperception that foods are lower-calorie and therefore appropriate for greater consumption. In Study 1, participants evaluating chocolate provided lower calorie judgments when it was described as fair trade — a claim silent on calorie content but signifying that trading partners received just compensation for their work. Further establishing this effect, Study 2 revealed that chocolate was perceived as lower-calorie when a company was simply described as treating its workers ethically (e.g., providing excellent wages and health care) as opposed to unethically (e.g., providing poor wages and no health care) among perceivers with strong ethical food values, consistent with halo logic. Moreover, calorie judgments mediated the same interaction pattern on recommendations of consumption frequency, suggesting that amid the ongoing obesity crisis, social ethics claims might nudge some perceivers to overindulge. Theoretical and applied implications are discussed.

Nod to Kevin Lewis

Romance is Costly?

Does the number of sex partners affect educational attainment? Evidence from female respondents to the Add Health (older version, ungated)

Joseph Sabia & Daniel Rees, Journal of Population Economics, December 2011, Pages 89-118

Abstract: We use data on young women from the National Longitudinal Study of Adolescent Health to explore the relationship between number of sex partners and educational attainment. Using the average physical development of male schoolmates to generate plausibly exogenous variation in number of sex partners, instrumental variables estimates suggest that number of sex partners is negatively related to educational attainment. This result is consistent with the argument that romantic involvements are time consuming and can impose substantial emotional costs on young women.

Not sure this is right. Not directly a "cost," as much a correlate. Wasting time on promiscuity is dangerous and a sign of poor judgment, maybe also an artificially short time horizon. People with good decision making skills and a longer time horizon just aren't tempted to be promiscuous. This isn't sex, this is NUMBER of sex partners.

So, it's not, "Ya know, I could go to a bar, pick up a guy I've never met, and then do the bouncy-bouncy until daylight. But that would cost me too much time that I should spend studying for my PhD in physical chemistry. I would prefer to go out, of course, but I'll stay home." Rather, someone with ambition would just never consider doing those things. It's not appealing.

What I am trying to say is that the level of appeal of random hook-ups is the same for every woman, not that great. What differs is access to something else, an ambition for a career, which may come from having role models or parental encouragement from a young age. The hook-ups thing is just not that much fun.

Blogoverse needs Pritchett

Lant Pritchett is guestblogging up a storm about conditional cash transfers.

Check out these two excellent (albeit perhaps slightly contradictory) posts here and here.

Self-recommending.

A NOTY problem

Name of the Year. You can vote, America.

WARNING: NSFW. NSF anything, really. Utterly pointless. But if you read this blog, that must be attractive to you.

As our correspondent M-Ka notes, "I know from following your blogs every day, and listening to you on EconTalk, that you and Dr. Grier disdain both frivolity and low culture. But I do think you might like to promote this on KPC:

I voted for La'Peaches (check out the link to her), and Monsterville Horton IV (because of his obvious aristocratic status). And Vernon Lee Bad Marriage Jr. won his round!"

Thanks, M-Ka!

White Girl Problems

Okay, I'm not proud of this.

But if I need a pick me up, no more than twice a day or so (no, really), I just crank up Twitter and watch #whitegirlproblems . It's extremely rewarding. Some are likely serious, some are certainly not. But rewarding.

In five minutes, you will laugh out loud at least five or six times.

Things like:

I prayed for your forehead last night.

Pulled up to a stop light, blaring Lil' Wayne, & 2 black guys just broke up laughing.

If only I could unf**k you

So pale.... so pale

Kindle wouldn't connect to wi-fi, so I had to buy an actual book

Too busy to work on job applications

It's art, actually.

David Theroux: Secular Theocracy II

"Secular Theocracy: The Foundations and Folly of Modern Tyranny”

As a reminder, here again is Part 1...


The full article with footnotes is here

Krueger on Inequality

This would be Alan ("Nominal") Krueger, not Anne ("Real") Krueger. The problem is that Alan is not adjusted for infliction (of nonsense).

His screed on inequality and its causes.

The slides for the speech.

The topic is an important one. Dr. K's presentation of the problem are interesting. Not sure why he decided to go all simplistic on the "causes," tho. This is complicated.

(Nod to E-Chris)

There is no great stagnation II (DJ style)

Check out these amazing turntable decks made from LEGOS! This one came from Germany and has a construction manual available here along with more pics:

This one is from the good old USA (more info here):

There is no great stagnation

Every single day of my life I thank the universe with Tebow-ish fervor that I was not doomed to live in an age when THIS was considered entertainment:

Let us now praise famous men

My main man, co-blogger, and friend of over 30 years, Mungowitz really outdid himself by sending me this *awesome*, nearly life-sized, David Freese world series bobblehead. 

Feast your eyes, people. Feast your eyes.

(clic the pic for an even more glorious image)

Che says, "Down with capitalist pigs! Buy my merchandise!"

umm....this kind of stuff happens all the time

Headline on Yahoo this morning condemning "human zoo" where indigenous people danced for tourists in exchange for food.

People, to different degrees, this happens all the time all over the world. Mrs. A and I have seen it advertised in Africa, Asia & Latin America. Heck it happens in Hawaii quite a bit!

I don't like it. We avoid such suggested outings, and have at times simply left our hotel when groups were brought in to perform. I feel like the people must hate doing it and that makes me embarrassed to watch/listen. (I have enjoyed gamalan concerts in Bali and traditional dance performances in Bali though (at places where you went and bought a ticket) so maybe I am a hypocrite here?) It is usually very hard to convince local people that you don't want to go to the "show".

But, food is good. Money is good. If the "performers" aren't slaves and choose to do their thing in exchange for the offered remuneration, how is it like a zoo? By my refusal to attend, am I sending people home to be hungry?

Every day, all over the world, millions of people voluntarily do things we generally consider unseemly or unsafe or undignified. This is one reason why, to me at least, global economic growth is still imperative.

Penn Jillette, Atheist

I don't think you are TRYING hard enough

Fuel companies fined for their petty refusal to an additive in gasoline.

Look, the law says they have to do it. Stop fooling around, guys.

Of course, their lame excuse is that the additive does not actually exist.

The answer is that if your government is smart enough to imagine what it wants, the least you can do is actually make the stuff.

(Nod to Anonyman)

Hashtag of the day

People, check out the tweets at #ronpaultroofs

Here's one I especially liked:

"Ron Paul gave George Washington Carver his first peanut." 

and another:

"If you smoke like Ron Paul smokes, then you're high, like, every day."

Why Is This So Difficult?

Three suggestions about things you never say, or always say, or should say, to a potential mentor.

This week...THIS WEEK... I have gotten messages or had phone conversations that violated all three.

In particular, I suggested we meet at 10 am. Two different people wanting advice said, "No, that's too early for me. Can we do it some other time?"

Sure, we can do it during that time when I otherwise would have been writing you a pretty good letter of recommendation. Because now it is NOT going to be a good letter of recommendation.

Just read this. The guy has it right. And hopefully you are angling for being mentored by somebody WAY better than I am anyway, so it will actually matter!

Get your money out of PIMCO....

....because its CEO, the ubiquitous Mohamed El-Erian is a nincompoop!

Check out this gibberish in today's WSJ:

"Fat tails"—the technical term for the extremes of an outcome distribution—are risks for any global system that loses its anchors. Economies and markets function differently, companies and households feel unsettled, and policy measures become less effective.

Oh my. Where to begin.

First, "fat tails" is not a "technical term". The technical term is excess kurtosis. Fat tails is the colloquial, layman's term.

Second, fat tails is decidedly NOT a term for "the extremes of an outcome distribution"! The normal distribution is an outcome distribution. It does not have "fat tails". In fact it is the lack of fat tails in the normal distribution that lead so many models to go astray

How can this dude spew nonsense like this and get away with it? He's failing Stats 101.  It must be the 'stache.

Finally, the second sentence is even weirder than the first. I cannot make out what he is saying. Is he trying to say that recent events have changed the shape of the "outcome distribution"? Or that when we realized the outcome distribution had fatter tails than was previously thought, people changed their behaviors? The second interpretation at least makes some sense.

My Guy Tom Ferguson Analyzes Rick Santorum

From Alternet.... Tom makes a lot of sense.

Blind mole rat.... heh. Heh heh.