Penguin hunt

La Penguina has started the process of nationalizing YPF, a Spanish owned energy company operating in Argentina and Spain is pissed! Its Industry Minister says there will be "consequences"!

People, you just know that Argentina will lowball the Spaniards on the price like they were some kind of foreign bond holders.

Perhaps after his surgery, they can send old Juan Carlos over there with his blunderbuss.

Maybe JC and Maggie Thatcher's ghost can tag-team to take down Kirchnerismo.

Wild, Wild Life

Strange things in the campo. You see Chinese tractors:

Do click for a more fruitful image. (That's el Patron, standing and facing the camera. A very fine gentleman, who moves with the pace of the land. Not fast, but sure.)








Then, the beautiful (but not very dangerous) Chilean rose tarantula.

Vacas!

Driving back from Chillan to the airport at Concepcion, we encountered a stampede: a LOT of cows, running hard, straight at us. They were hemmed in by the fences on both sides. Eugenio came pretty close, then backed up, and then backed up hard. Those cows would come up on the hood, because there was no room.

By the time I got the camera out, the vaquero had appeared, a big pissed off guy on a big pissed off horse. One vaquero for a LOT of vacas. He managed to get the gate open.

The vacas, who prefer grass and familiar surroundings, were very happy to go through the gate, except for one calf that simply would not go.  We left without knowing how that story ended.  Mr. Vaquero was almost ready to make some veal, I think, because the calf was not cooperating.   Note the big, flat Chilean vaquero hat (chupalla), straight flat brim, very wide.

A travesty of justice

Separated at Birth?

I had never noticed this before.

Of course, that's unfair, because Brendan Nyhan worries. Still, a striking resemblance.

The dignity of work

Oklahoma authorities have arrested Darlene Mayes, alleging that she is the criminal mastermind behind an organization that supplies almost half of the marijuana in Kansas, Oklahoma, Arkansas & Missouri.

Now maybe 40% of the grass in those 4 states isn't very much (Mrs. Angus and I live out here and it's more meth and oxy country than anything else), because all the cops seized was 4 pounds of weed and $276,000 in cash which Ms. Mayes refereed to (probably correctly) as her retirement fund.

Behold the biggest druglord in Oklahoma:

The question foremost in my mind? Is there a prison anywhere that can hold her?

Vino de Fundo Santa Ana

Went down to Chillan, after flying to Concepcion, toward the south of Chile. You can't say "in the south," because the country is so tall. But Chillan is quite a bit south from Santiago.

Got to stay at the winery/home of the in-laws of Eugenio. All the estates there are "Fundo BLANK BLANK," where the blanks are the names of the wife of the estate owner; in the case of Fundo Santa Ana, that was Ana. Amazing to watch the grapes being taken in, and the wine being made. There are VERY few concessions to the 20th century here, except for the use of gasoline powered engines on the tractors and the grinders. Everything else is escuela vieja.

The view of the big house from the vineyard:

The field, with the wagon and boxes of grapes:

A short video of the delivery of the grapes to the grinder. A centrifuge separates the stems, which still have a lot of sugar in them. These are used for compost and animal feed. The noise is the grinder.

The press. This could have been from 1600. Absolutely no mechanization of any kind. Here they are removing the pressed skins, which still have quite a bit of sugar in them, to use for one more pressing and fermentation.

The sunrise, looking out over the vineyards from the big house.  Fire on the mountain.  Amazing.

Politics and RCTs

Justin Sandefur and longtime KPC friend Mwangi Kimenyi along with Tessa Bold, Germano Mwabu & Alice Ng’ang’a  have written a remarkable paper about the non-uniform results of an educational intervention in Kenya. The paper is well-deserving of discussion, but so is the story of its evolution.

The paper studies an intervention that adds "contract teachers" to schools. Contract teachers are meant to be teachers outside of the main educational bureaucracy who in some way have close ties and more accountability to the local community than the "regular" teachers. In the study, some of the intervention was run by the government, and some was run by an NGO (Worldvision). Test scores in math and reading went up by 0.2 standard deviations compared to the control schools when the intervention was run by the NGO and this increase was statistically significant. However, the intervention had no effect on test scores when it was administered by the government.

This result alone points out the difficulties involved in scaling up education intervention that have been tested by RCTs run by NGOs. Size means government and government might not work.

But people, there is so much more to the story!

The concept of contract teachers initially involved remedial teaching. Banerjee, Cole, Duflo and Linden (QJE 2007) study an NGO-run program in India where the contract teachers tutored remedial students (which raised test scores 0.28 standard deviations). Duflo, Duplass, & Kremer study a contract teacher RCT in Kenya that included the concept of "tracking" where contract teachers were added to a specific class. In some cases the class was randomly split into two groups; in others it was split into low and high scorers on an initial test. This split into more homogeneous classes produced the biggest positive results in the trial.

In an email exchange, Justin told me that while Duflo encouraged him to include a tracking component in his study, she said that it was very unpopular and hard to administer. It is also hard to imagine a government run program that would allow such a component. Think about the USA. What would parents do if they found that classes were being segregated by test scores and their kid was in the "dumb" group?

Because they were explicitly interested in the idea of scaling up a program that could be run by the government, Sandefur et. al. did not include any idea of tracking in their study. In other words, they judged a key element of the success of contract teachers in previous RCTs to be politically unviable ex-ante.

But there's more!

The Sandefur study was part of a pilot program in Kenya. However, things didn't go according to plan:

the Ministry opted to scale-up the contract teacher program before the pilot was completed. Thus the randomized pilot program analyzed here was launched in June 2010, and in October 2010 the Ministry hired 18,000 contract teachers nationwide, nearly equivalent to one per school. These 18,000 teachers were initially hired on two-year, non-renewable contracts, at salary levels of roughly $135 per month, somewhat higher than the highest tier for the pilot phase. In 2011 the Ministry succumbed to political pressure and agreed to allow the contract teachers to unionize and subsequently to hire all 18,000 contract teachers into the civil service at the end of their contracts.

In other words, 18,000 supposed "intervention" teachers became "control" teachers! In plainer terms, they switched from being part of the solution to being part of the problem. Although maybe not, because as Sandefur et. al showed, the government administered contract teachers had no positive impact on outcomes.

In sum, the Sandefur et. al paper shows that while small scale contract teacher RCTs produced modest but positive results, it is not likely those results will survive scaling and government administration.

So what to do? Well Justin & Mwangi along with Tessa Bold and Germano Mwabu have another paper that points to what I believe is the solution at least in the short and medium term. They show that in Kenya, being in a private school raises test scores by one full standard deviation relative to public schools, other relevant factors held constant (this is not an RCT but rather uses "observational" data).

So on the one hand we have these interventions in public schools that raise outcomes by a couple tenths of a standard deviation when implemented on a small scale by NGOs and that may will have no effect when scaled up and implemented by governments.

On the other hand we have an institution (private schools) that raises test scores dramatically more by effectively solving the teacher accountability problems that seem to be behind the outcome problems in public schools in Kenya and other developing countries.

Let me channel Milton Friedman and James Tooley and suggest expanded private schooling with a public voucher program as potentially the greatest pay-off educational intervention available in such situations.

The economics of labor and capital

Recently, the Economist argued that China's astoundingly high investment rate makes some sense because China is a capital scarce country with a very low level of capital per worker compared to the US.

This may well be true. It is certainly the case that it makes sense that China's investment rate is higher than that of a very capital abundant country like the US.

However, the article concludes with some amazing errors, both factual and economic:

the evidence suggests that China has not seriously overinvested. That does not mean rebalancing is unnecessary. Under China’s capital-heavy model of growth, owners of capital have been getting much richer than workers. The main reason for shifting from capital-intensive production to the more labour-intensive, consumer-friendly sort is not to sustain economic growth, but to reduce inequality. Workers could then enjoy more of the rewards of China’s past investment.

Where to begin?

First, as the graph in the article showed, relative to rich countries China is NOT engaged in "capital- intensive production" because they have very little capital per worker. I thought that was the whole point of the first part of the article.  They are decidedly engaged as a simple matter of fact in labor intensive production compared to countries like the US.

Second, if China stops accumulating capital, the owners of capital will continue to make a lot of money and worker salaries will continue to lag. Owners of capital are getting rich because its relative scarcity makes its rental rate high. If capital is paid its marginal product and marginal product diminishes, capital owners make a greater return when the capital stock is relatively small.

In order to raise worker salaries, workers need to become more productive. Part of this can come from workers' own investments in human capital, but a big part comes from the amount of capital per worker in the economy.

If China wants to reduce inequality between the earnings of capital owners and laborers, then they decidedly should NOT "re-balance" away from investment. Of course they should try and make sure that the investments undertaken actually raise worker productivity and are not state led vanity projects or boondoggles.

The greater amount of capital per worker, the higher is worker productivity, the higher will be wages and the lower will be the return to capital. That is the way to diminish the gap.

Raising China's capital per worker is crucial to raising the living standards of Chinese workers.

What do Anthony Davis and I have in common?

A unibrow?

No, not yet at least.

A desire to get as far away from Coach Cal as possible?

Hmmm, maybe

That we serve as unpaid labor for a cartel that makes many millions every year?

Ding ding ding! We have a winner.

Anthony of course was a prisoner of the NBA rule that players cannot enter the League until a year after their high school class graduates. He spent the last year making millions for the University of Kentucky, ESPN, and the NCAA in return for room & board.

I of course am an idiot! As the Economist points out:

In 2011 Elsevier, the biggest academic-journal publisher, made a profit of £768m ($1.2 billion) on revenues of £2.1 billion. Such margins (37%, up from 36% in 2010) are possible because the journals’ content is largely provided free by researchers, and the academics who peer-review their papers are usually unpaid volunteers.

I have published in several Elsevier journals (Journal of Monetary Economics, Journal of Development Economics, Journal of Economic Behavior & Organization, Journal of International Money & Finance, European Journal of Political Economy) and referee frequently for them and many other Elsevier outlets.

In my defense, I do macro and development. the JME and the JDE are the top outlets for my work.

At least Elsevier could hold some kind of tournament and let the winning researchers wear giant t-shirts and cut down the nets!

Que Pasa article on primaries

Chile is considering moving to primaries. I wrote a piece for Que Pasa, a weekly here in Santiago, saying that may not be such a good idea.

If you want the Spanish (edited down to a very short version), it's here.  The slightly longer, English version is here:

Primary elections: Who Needs Them? Michael Munger, Duke University

There are debates in Chile about reforming the process by which parties choose candidates. As a political science professor, frequent expert witness in court, and former candidate myself, I can report on a century of US experience. The short answer is that primaries are little more than poorly designed lotteries. Primaries reward extremism, reduce the accountability of parties, and devalue the brand name that parties depend on to represent the voting public.

For most of US history, the parties were entirely responsible for choosing their own candidates. Since these candidates then had to face each other, and the electorate, in the general election, the parties were obliged to try to balance their own ideological goals with genuine leadership ability and experience in administration. The result was true competition among the party's best, a system that gave us great Presidents such as Andrew Jackson, Abraham Lincoln and Theodore Roosevelt. Of course, the system also often chose weaker leaders, but the point is that the party organization, those who cared about the party, chose the party's standard bearer for the election.

In a primary system, all power is taken out of the hands of the party leadership, and placed into the hands of a fragmented, disorganized group called "the party in the electorate." In most primary elections, turnout is 15% or less, with some votes seeing less than 10% of the eligible electorate. These tend to be the most extreme, most ideological voters, because centrist voters are not interested in primaries. Furthermore, because primary votes often choose between 3, or 5 or even 7 candidates, the results simply reflect random chance. The candidate who happens to be more extreme, or by himself ideologically, will win because all the centrist candidates split the centrist vote. The US system has become increasingly polarized, as extremist voters with ideological motivations have come to dominate the party professionals who are also concerned about electability and leadership.

In one famous example, American Nazi Party leader David Duke decided to run as a Republican in Lousiana. In order to run as a Republican, Mr. Duke needed only to sign a piece of paper. He did not need the permission of "his" party, and in fact the Republicans had no way of stopping him from soiling their party's reputation. Mr. Duke, who routinely wore a full Nazi SS uniform and celebrated the birthday of Adolph Hitler, "won" the 1988 primary for a Louisiana House seat with just 33% of the vote. Many Republicans were forced to work against him supporting other candidates, because they had no control over their own party's candidate.

In a perfect world, a primary system would seem to bring candidate selection and the political process closer to the people. What could be wrong with that? The problem is that, in politics, there are two things that economists call "public good." The first is information: voters don't know much about candidates. The job of parties is to recruit, train, and then put forward the best candidates, the most BLANK leaders. In a primary system, a candidate who is excellent but unknown will never be selected.

The second public good is collective action: the ability to excite voters about the coherent message, and legislative program, of the party. But if the party cannot choose its own candidates, then it cannot possibly present a coherent, attractive program to voters. The party will not even be able to agree among itself, because its own members will represent a confused and incoherent random sample of opinions.

In my work in federal courts in California, Washington, Texas, and Florida, I have written and argued for the position that parties must be able to present a candidate of their choice, and to pursue a legislative program of their choice. Some political scientists go so far as to say that, without responsible parties, democracy itself is impossible. If that is right, and I believe that it is, then a primary system that weakens parties also weakens democracy.

Debt Reckoning: Euro Problems are symptoms, not causes

KPC BFF Amar Bhide has an op ed that raises some important questions about the real problem in Europe.

And, of course, if we have the real problem wrong, we are unlikely to be working on a real solution.

The Grand Game: Inequality Division

The gap between the way I would characterize the events of the last five decades, and how this person characterizes the events of the last five decades.... amazing.

He oscillates between making up facts, misinterpreting facts, and simply ignoring facts altogether. Enjoy.

"A Short History of NeoLiberalism"

Fear....the FROG!

IRB should have turned this down; it involves deception.

So, froggy took a hand.


(Nod to the Blonde)

Mortgage market facts and theories of the financial crisis

A fascinating new paper on the causes (and non causes) of the financial crisis lays out 12 "facts about the mortgage market" that its authors consider crucial for determining the causes of the crisis.

The paper is not overly technical and I highly recommend reading it. It presents a strong case both against the "Inside Job" and the "the government did it" views of the crisis.

It also points out how little we know about the causes of asset price bubbles.

Hat tip to Mark Thoma.

Big Day

Great day here yesterday. Got some good work done with JP, had a great lunch at an asian restaurant, cold spicy noodles. Worked some more.

Then JP thought we might go out for coffee. So, we did. Except he took me to a kind of place that is uniquely Chilean. A little video for you (NSFW):

The video cafe is more glamorous than the one we went to. Instead of "Cafe Con Piernas," the one we dropped in on was more "Cafe con culos como camiones." What makes a 75 kilo young woman decide, "I'd like to be a stripper in a place that serves nothing but terrible coffee!" The poor things, they were a whole lot bigger than their skimpy outfits could possible contain. But, there, now I have been to a "Cafe con piernas" place, and that will be plenty.

Went to dinner with Eugenio, Carlos, and Ricardo. Comida Peruana place called "Puerto Peru." Much more reasonable on price, but still just fine food. I had the anticuchos de corazon again, and a papas with sauce dish. Also "causa," which I had not seen before. Corazones were completely different, but once again very good. Really fun dinner, laughed so much we couldn't breath. Stories about coauthors. (I'll say no more, except to admit I did have some stories of my own).

Then, it was midnight. Of course, not even leaving to go to dinner until 9:15, and then getting lost, does tend to make it late. Still, Ricardo had enough energy to hit a truly amzing high note when Eugenio turned the wrong way down a one way street and came a hair's breadth from ramming a police car with lights flashing. Since the police car was PARKED, this would have been quite embarrassing. Eugenio managed to extricate the car from this predicament, without a ticket or a scratch.

Tomorrow: I fly to Concepcion, and then we head out into the campo. We'll be verdadera campesinos surenas.

Santiago Street Dogs

Very common for dogs, even packs of dogs, to roam the streets of Santiago.

Sometimes they get hit by cars, and someone will just toss them over against the wall on the sidewalk. I took a picture of this poor guy.

Poor thing, legs all up in the air, just tossed like garbage. Except I noticed he was breathing. So I rubbed his belly. Dog was momentarily startled, but then stretched out his front legs and did that loud "mmmmmmmm" that dogs to do react to belly rubs, and he went back to sleep. Not a very comfy position, but then he's a dog. Living the dog's life, not hit at all, just laying around.

For Those Cold UNC Football Games...

For those extra supplies you'll need at that late season UNC football game.


The police will just think that you are drinking your own urine in the stands, which is not a problem if you wait until after half-time. This will look a little strange for people who appear to be women, but those UNC fans are VERY inclusive.

Lengua vacuna

Went to Fuente Chilena, right by the apartment, for dinner last night. Not much of a web site...

But, a very fine cow tongue, lengua vacuna. Fortunately, it did not look like this. Doubt if I could have eaten that.

I got the chacarero platter version, which came with tomatoes, sliced chilis, and a big helping of green beans. Tongue was thin sliced, and both tender and nicely spiced. Aji sauce on top of the green beans....yum.

And, of course, Kross. Lots more Kross.

Quite inexpensive, and a nice setting. Fuente Chilena is a win.

Moonface!

It's a tough call, but I'm going to say my favorite musician is Spencer Krug and, as Moonface, he's putting out a new record with some Finnish folks. You can stream the whole album here, and here's a video for one of the songs:



Spencer is coming to Dallas in June, and I'll be there!

Mugabe, the gift that keeps on giving

I thought this awesome "Zanu PF" twitter feed was a satire, but now I'm not so sure, as government ministers are denying Mugabe's illness in more traditional news outlets.

Word is that the 88 year old is finally on his way out, but has a poison pill in place to ensure that he can continue to torment Zimbabweans from beyond the grave.

Yes, he's hand-picked a successor,  and it's "The Crocodile"; aka Emmerson Mnangagwa.

Allegedly, the plan is to keep Mugabe alive for one more election later this year. Then after he wins, he hands power over to the Croc, who is widely credited with orchestrating the violence and chaos that let Mugabe hang on to power after the debacle of the 2008 elections (Mnangagwa has a long and distinguished resume of violence and intimidation, read the article).

In related news, it seems like Bobby M is a Florida State fan:

Ari Kohen: Well-meaning but naive apologist for state brutality

So, my good friend A. Kohen concedes there is a problem.

But the problem is not with the state (because how could there be a problem with the secular God you worship?). The problem has to be with the acolytes, who are confused and not in touch with the true spirit of the loving God-state that, really, deep down, cherishes us all. Dr. Kohen is opposed to capital punishment, which majorities love. But that's just a mistake. Dr. Kohen is opposed to amendments against gay marriage, which majorities love. But that's just a mistake, too. All the rest of the time we should be forced to obey the majority, at gunpoint*. At least, when the majority agrees with Dr. Kohen (because, being a political theorist with absolutely no political experience, he has a special connection to the truth.)

[*"Gunpoint" means the guns held by the state. Dr. Kohen does not believe the rest of us are smart or responsible enough to have guns. Fortunately, as soon as you take a job with the state, Dr. Kohen believes that you become much, much smarter!]

So, let's try it again. It's not like the random strip search of innocent citizens is rare, or anything. The events I have in mind:

1. Little girl draws picture of her dad with a gun. Not shooting the gun. Not a picture of a child with a gun. A picture of an adult man with a gun, drawn in crayon.

2. Teacher goes nuts. Calls the police. Police interrogate 4 year old girl. Police say, "Kid seemed scared." They conclude that the home was unsafe. Alternative proposed explanation: 4 year old girl being interrogated by strange, scary men with uniforms would be enough to explain "Kid seemed scared." That would certainly explain, "Mungowitz seemed scared."

3. Because child was able to describe gun (meaning, presumably, she had seen it?), police arrest father when he comes to pick up daughter. Police STRIP SEARCH the father, arrest him, and jail him. Their "probable cause"? Daughter had drawn a picture of the gun, and could describe it in detail.

4. Police break into house, search house, find gun. It is a clear plastic toy. TRANSPARENTLY fake, if you will. Not remotely resembling a real gun.

5. Even if it were a real gun, there is no reason to believe that it was loaded or handled unsafely. Again, the picture was of the DAD holding the gun. The little girl admired her dad, so she drew a picture of him. Said that her daddy was going to shoot the "bad guys and monsters."

Now, the point. You state lovers will, as always, say that you fall out only with the abuses. And you will likely point to the fact that guns are in fact misused.

But the more constant misuse, the daily, immanent misuse, is the state's misuse of power over its citizens. Dr. Kohen wants to argue that the problems are minor compared to the many advantages of the state forcing everyone to do what Dr. Kohen and his "liberal theory" has decided is good for us.

That separation is an illusion. It is intrinsic to the state to be abusive. And it is the nature of the majority to sanction that abuse, to abet it, even to foment it. I was a little surprised (no, that's a lie, I'm not at all surprised) to learn that school officials defended the arrest/strip search/home invasion without probable cause on the grounds that "you can't be too careful."

No, in fact, you must be too careful. The 4th amendment used to tell us so. Canada, where the events above transpired, doesn't have a 4th amendment, of course. But neither does the US, because we have come to worship the state and its infallibility.

When the dad was released, the little girl was crying and crying. "Are you mad at me, Daddy? What did I do wrong?"

Nothing, child. You just had the misfortune to be born in a modern democracy. I'd say "police state," but that would be redundant.

UPDATE: A lot of the comments here are amazing. Interesting to see how Dr. Kohen's peeps think.

"You can't cook rice with just big talk"

Amazingly, "Jiro Dreams of Sushi" played OKC last weekend and Mrs. Angus and I took it in. LeBron has already written about the film (of course), but something struck me that LeBron failed to mention:

Jiro gets special treatment!

One reason why his diner gets 3 Michelin stars might be because suppliers both save special quality fish and shrimp for him (actually his benighted son). Another might be that his rice supplier refuses to sell the kind of rice he sells Jiro to "outsiders" because "they don't know how to cook it"!

I recommend the movie. It's 1/3 food porn, 1/3 very funny, and 1/3 an exploration of the culture that is Japan.

Sangucheria Fresia en Bella Vista

Sandwiches are very BIG in Chile. Both in terms of size and popularity.

Yesterday it was 31, unbelievably bright sunshine, the kind of light and blue sky that makes everything just sparkle. My cell phone camera can't really capture it, but here is a view I noticed walking down the street (I was walking; the view was stationary).

Bright red flowers, bright red chimney, bright blue sky. And warm, warm, warm, with no humidity.

JP and I worked on the problem of entrepreneurship and mistakes from 11 until 1 pm, drinking espresso and eating torta chocolate (remarkable torta, chocolate cake with chocolate frosting, though JP, who in this regard could be an honorary female, kept whining, "It could use more chocolate...")

So, exhausted from our labor, we went in search of sanguches. (Sandwich and sanguche are used interchangeably, sometimes on the same menu.) Went to three different places, but all were closed because of Easter weekend.

Then, JP had a brilliant idea: Bella Vista! Lots of tourists there, so all will be open. And, he was right. Bella Vista is an odd comuna/barrio, old houses and awful things like "Hollywood Hamburger" and souvenir shops that sell t-shirts with pictures of Allende, Subcomandante Marcos, Che, and other evil half-wits so lefty Americans can get their tacky souvenir lefty t-shirt and brag back home that they sampled local culture.

But the restaurants, outside of the tourist kennels, are just fine. We went to Fresia, a sangucheria Chilena. The way you order sandwiches is to pick a bread, a meat, and a style of preparation. (Here's the menu, click on the sandwich)

I had had the good sense not to blunt the edge of a noble hunger on torta, and of course it was lunchtime in Chile which means 2:30. Asi, tuve HAMBRE. I ordered the "frica" bread (panes, at the bottom of the menu), and the "mechada" meat (carnes, at the top center of the menu). Frica is a huge, plate-size split roll, and mechada is grandma-style roast beef, the kind she cooked for six hours with carrots and onions in the oven or crock pot.

So, that left style of presentation to choose. Solo (why?), completo, Italiano... but for me the only choice was "a lo pobre." Sandwich with a little mayo, meat, onions... a fried egg and a pile of french fries. Chilean health food, squirted liberally with fiery aji rojo.

A meal that size clearly cries out for cerveza, so I had three. A very nice Kross 500 ml each time, schop (on tap). Kross is one of my new favorite beers. Astonishing. I had no idea. (Side note: In Chile, if you order pale ale, which Kross is NOT, but I'm just saying, ask for "pah-lay ah-lay," and then be amused for an hour, just quietly and by yourself).

Inside, the Colo-Colos were getting hammered, 4-2, by JP's favorite team, Union Espanola. The screams of the Colo-Colinos were very musical, and entertaining. The reason I enjoy the screams of Colo-Colinos is that they are exactly like Yankee fans, except that....actually, that's it. They are exactly like Yankee fans. That's enough. Last time, we had to listen to their horrible songs. This was better.

Had to have a nap at 4 pm. An exhausting Saturday in the southern hemisphere. But I do recommend Sangucheria Fresia, in Bella Vista, as a very fine afternoon outing. You might try the "plateada" as an alternative for the carne. Plateada is a slow-cooked "rib cap," a cut of meat that doesn't exist in the US (it's the part of rib eye steak furthest from the bone, but cut with the grain rather than across it). Plateada and mechada appear, to me anyway, to have very similar preparations, but are different cuts of beef.

I bean you, he beans him, we'll call it baseball

Revenge without responsibility? Judgments about collective punishment in baseball

Fiery Cushman, A.J. Durwin & Chaz Lively
Journal of Experimental Social Psychology, forthcoming

Abstract: Many cultures practice collective punishment; that is, they will punish one person for another's transgression, based solely on shared group membership. This practice is difficult to reconcile with the theories of moral responsibility that dominate in contemporary Western psychology, philosophy and law. Yet, we demonstrate a context in which many American participants do endorse collective punishment: retaliatory “beaning” in baseball. Notably, individuals who endorse this form of collective punishment tend not to hold the target of retaliation to be morally responsible. In other words, the psychological mechanisms underlying such “vicarious” forms of collective punishment appear to be distinct from the evaluation of moral responsibility. Consequently, the observation of collective punishment in non-Western cultures may not indicate the operation of fundamentally different conceptions of moral responsibility.

(Nod to Kevin Lewis)

Weinersmith Hour

Very cool conversation with Zach Weiner (of SMBC note) and partner Kelly, together the "Weinersmiths." Had an hour of talk and discussion of economics. Zach sounded like he had terminal pneumonia, but it was fun nonetheless.

A great headline

Here's the headline (sent in by Angry Alex):

Gravy-wrestling model suffers horrific facial injuries after being hit with monkey wrench when she interrupted a friend having sex!

There is a story, too. But after you read the headline, there's not really much more to tell...

Tartaro

So, Eugenio took JP and me out to the Tip Y Tap, a distinctly Chilean place. (Okay, a distinctly Chilean place that specializes in hamburgers, hot dogs, and french fries, but...well, trust me, it's distinctly Chilean. Paltas on EVERYTHING).

We were food explorers in search of "crudo." The particular version of crudo I sought was "tartaro": .75 kilos of raw ground beef, with a big raw egg on top. Just so you get the idea:

You add a lot of lemon juice, aji, cebollas, and perejil, and stir (plus, you stir in the egg). Then you eat, with beer. It's pretty darned good. The EYM had it, last time we were here (2010). Once you get used to the idea that you are eating totally raw meat, and lots of it, it tastes great!

The employment situation

The March jobs report is out from BLS and it's not good.  After job growth averaged over 225,000 per month the last three months, the current number is 120,000. "Expectations" were for 205,000.

We are not out of the woods yet, people.

Bhagwati dishes:

Dr. B. is not a fan of the Obama administration's pick of Jim Kim for World Bank President.

He's also not a fan of an exclusively micro approach to development:

But perhaps the most compelling factor in Obama’s choice seems to have been a fundamental misunderstanding of what “development” requires. Micro-level policies such as health care, which the Obama administration seems to believe is what “development” policy ought to be, can only go so far. But macro-level policies, such as liberalization of trade and investment, privatization, and so forth, are powerful engines of poverty reduction; indeed, they are among the key components of the reforms that countries like India and China embraced in the mid-1980’s and early 1990’s. Such reforms turned these countries from stagnation to stellar growth. 


The anti-reform lobbies reacted by arguing that poverty and inequality had worsened. But new empirical studies show otherwise: growing economies benefit the poor not because wealth “trickles down,” but because growth “pulls up” those at the bottom. In fact, it is the rapid acceleration of economic growth in the major emerging countries that has reduced poverty, not only directly, through jobs and higher incomes, but also by generating the revenues governments need to undertake the public-health, education, and other programs that sustain poverty reduction – and growth – in the long term. India followed this path...


The problem with Kim, and presumably with the Obama administration’s development experts, is that they do not understand that successful development requires big-payoff pro-reform, pro-growth policies, not just small-payoff micro-level policies. Bangladesh has gone down that road, substituting such policies for macro-level reforms, and is developing at a far slower pace than India, where macro-level reforms came first.

I have to say that while I don't think it really matters who becomes president of the WB, I am quite sympathetic to Bhagwati's point of view about what really matters for development.

Coming Back Like a Bad Penny

Actually, maybe ALL pennies are bad.

Canada has decided to get rid of them.

US is considering same. What do you think, folks?

Grantland!

My latest piece with LeBron is up at Grantland.com.

In it we tackle the problem of asymmetric information when purchasing sports experiences. The idea for the piece came from a very nice paper by J. Zinman and E. Zitzewitz at Dartmouth, for which we thank them.

Here's a lovely bit:

The biggest issue is that our own desire for thrills often works against our better judgment. As a species, we derive pleasure from thinking about what will come — how nice that powdery snow on the slopes is going to be. So we turn off our critical faculties at the worst possible moment in hopes of maximizing the value of the anticipation and getting a bigger buzz. This is particularly bad when it comes to sports experiences, which are rife with "asymmetric information" — when the seller knows something you don't. Your best defense, of course, is to be aware of your vulnerability and maximize your information, as any smart shopper does when in the market for a used car. But when it comes to shopping for experiences, emotions all too often rule. 

 

Lucky, sure, but....

So, hitting from sharply downhill lie on lip of water, he skips the ball across the water, and then.... well, you'll see.

Someone Else's Money on A Service for Someone Else

Milton Friedman famously noted that we should think about care in spending cash as a two-by-two box (all important theories are two-by-two boxes, in fact, so why would this be different?)

Here is my version of Uncle Milty's theory:

So, if you spend your money on yourself, you will spend what you think it is worth, but check to see if you get high quality.

If you spend someone else's money on yourself, you don't care much about price, but you will check to make sure the quality is good.

If you spend your money on someone else (not a family member, someone you don't know and will never meet, call them a "welfare recipient") you will underpay and care little about quality, so the service will be terrible.

Finally, if you spend someone else's money on a service for someone else, you will pay more than $700 million in unauthorized overtime for crappy, abusive service.

EVERYTHING the state does, by definition, is spending someone else's money on a service for someone you don't care about. What could possibly go wrong with THAT brilliant scheme?

Oh to be in England?

People, everything is relative I guess.  Check this awesome twitter stream: #samanthabrickfacts and then check out the cause of the commotion.

A little more of the interview....

The interview with El Merc reporter C. Alvarez was too long, so I cut part of it.

But, @donaldtaylorjr rightly points out that the omission is important. So, here is another snippet:

—With Romney as the clear favorite of the competition: Is this the confirmation of a more centrist GOP?

I think it is more an indication of the weakness of the field. Santorum is a very weak candidate, and Perry and Gingrich are very close to being clowns. I know Santorum personally, and my experience in talking to him is not very impressive. He just does not strike you as being a leader. So, Romney is a weak leader of an even weaker field. In many ways, Romney is the Republican version of John Kerry, who lost to President Bush in 2004. Kerry was a fine man, with accomplishments. But there was nothing about him that made you trust him, or want to go out to work for him. Romney is like that. His campaign slogan should be "Romney: He's not so bad."

So....yes. The big difference is that Clinton and Obama were better candidates, MUCH better candidates.

Interview con la bonita Carolina del Mercurio

My friend Carolina Alvarez sent an email asking about the Republican primary follies in the US. I replied that, since I was in Santiago, we should meet for coffee. But no time today, and her deadline for El Mercurio is tomorrow. So, today the "interview" and tomorrow the coffee. Here were her questions, and my answers, a KPC "Read it before you can buy it on the street!" special!

—Even though Romney still needs almost the double of delegates he now has, last night primaries allowed him to sustain a momentum he is carrying since March. Do you think this was check-mate, or a turning point?

The US primary system for choosing presidents is a war of attrition, not a battle. It is a war of logistics, and planning ahead.

It is important to remember that in 2008 the Democratic race between Barack Obama and Hilary Clinton was not decided until May. Romney is in a better position now, April 5th, 2012, than Obama was on April 5, 2008. I did an analysis of the delegate counts, based on this information. For the Democratic candidates in 2008. On April 5, 2008:

Obama--52% of delegates up to that point
Clinton--47%

Same date, 2012

Romney--58% of delegates up to this point
Santorum--25%

It's not even close! Romney is FAR ahead of Obama at the same date. One difference is the super delegates, and timing. By this time, Obama had 70% of the delegates he needed for the nomination, while Romney has only 56% of the delegates he needs. That's because the Republican primaries have decided only about half the delegate totals, while by this time the Democrats had held more primaries, and so had determined 70% of the total.

Let's put it in futbol terms. On April 5 2008, Obama led Clinton by a score of 3-2 with ten minutes left in regulation time.

On April 5 2012, Romney leads Santorum 3-1, at halftime. So, Romney has a bigger lead, but there is more game left. Still, a 3-1 lead is a very big lead. Romney can just hang back and play defense at this point, and can continue to run out the clock. All he needs to do is split the remaining primaries 50-50, and he will win.

—Rick Santorum vows to stay in the race. How important is for him to compete in his home state (next 24th), and what does he win staying longer in the race?

Santorum is not popular in Pennsylvania. It is not assured he will win. The polls say he is ahead, but Romney will spend money on ads in Pennsyslvania. And Santorum lost his own Senate seat there. If Santorum loses in Pennsylvania, it will hurt him, but it will not kill him. Santorum will in any case stay on until Texas, May 29,whether he wins or loses in Pennsylvania. The Texas primary has LOTS of delegates, and Texas is very conservative, a good place for Santorum. If Santorum wins Texas, he can claim that he is still viable. If Santorum loses Pennsylvania AND Texas, then he might think about quitting.

—Finally: Republicans changed the rules to have longer primaries, in part to excite voters —thinking perhaps in a contest like the one Democrats had in ’08. But many have pointed out that in the end this prolonged competition did more damage than good to the party, since President Obama is already campaigning. How much is the damage caused to the potential Republican nominee by “friendly fire” and how much has the President won?

Wait, "prolonged competition"? As I noted above, Obama was not selected until the end of May, six full weeks from now. Romney is FAR ahead of Obama, in terms of competition. The Democratic Party actually benefitted from the excitement and interest generated by the contested primary. It helped the Democrats to have a race that ran through the end of May.

So, this will likely help the Republicans, too. One difference, which was a product of the court system, is the very late Texas primary. The federal court system forced Texas to move its primary to the end of May, because the court rejected the Texas redistricting plan. That is a problem, because Texas has so many delegates (155, more than 13% of the TOTAL required to win) and it's so late. The Republican choice may not be made until June, for that reason. But that's only a week or so later than the Democrats in 2008, and the long competition helped the Democrats, so it may help the Republicans.

If the long competition does NOT help the Republicans, I think that will be because the candidates are weak, not because the competition was strong. As Clinton-Obama showed in 2008, a strong competition between good candidates is actually helpful.

Hit me with your memory stick

In a meeting with parents in a Catholic school in Northern Ireland held to prep them on what happens with their kids during their first communion, Father Martin McVeigh stuck his memory stick into the school's computer and out popped 16 "indecent images" of men.

The Father yanked his memory stick out of the computer and fled the room, only to return 20 minutes later and ask that the children consider giving some of their first communion loot to the Church.

The parents were unhappy and complained, but McVeigh's Bishop said everything was fine because the police told him "no crime had been committed".

Indeed, I would think that was a fairly accurate briefing on what kids can expect in their interactions with the Church!

He'd save children (but not the British children)

In the ultimate test of Bryan Caplan's theory, Paul McCartney's son wants to get a kid from each of the other Beatles and.....put on a rock show!

What could possibly go wrong?

So far, the only thing standing between us and musical armageddon is... Zak Starr?

God bless you sir.

Strip-Search

Okay, so I'm reading about the Florence strip-search and jail case. And I'm thinking, "Please let the guy be white, so this isn't just police racism." No such luck. Mr. Florence is black. In a BMW. Has a BMW dealership, in fact. So, cops stop black people in a BMW, for "speeding." No citation given to wife, who was driving. (WHY WERE THEY STOPPED IN THE FIRST PLACE?). Cop does check on the car. Finds old unpaid ticket, after what is basically a fishing expedition.

Mr. Florence is handcuffed, strip-searched TWICE, jailed for a week with no bail (HE'S A FLIGHT RISK! NO BAIL, BECAUSE HE ALREADY SKIPPED ON A TICKET!). Finally sees judge. Is able to prove that in fact HE PAID THE TICKET! On time. Police just failed to record the payment. Whoopsie daisy, sorry, fella. Have a good day.

Exactly the same thing happened to me, Dec. 2010, except no arrest and strip search. Got notice of failure to pay ticket that had, in fact, been paid. Had to send copy of cancelled check, had to get notarized statement, all because the state is too busy to recognize when citizens do what the state forces them to do. It happens all the time. The state is remarkably incompetent, and indifferent to the consequences of that incompetence, given that if YOU make a mistake the consequences are enormous.

You'll want to watch this excerpt from one of best movies of all time, Brazil. Four mins, watch it through, please.


Now, the Supreme Court case is about the strip-searching. I'm afraid, on that narrow question, the court got it right. If (IF!) you are going to put the guy in jail, for a week, for a nonviolent traffic ticket (which he had actually already paid, but never mind for a minute, suppose he hadn't), then you HAVE to strip search him. It's the logic of domination and humiliation in the prison system. The strip search is a consequence of the dangerous security situation in the jail where the state is choosing to hold this person. In jail, you lose the presumption of innocence.

The real questions didn't come up in the court case. Why did police stop a black couple just because they had a BMW, and then searched for something, anything, to nail the guy. Then why send him to jail, with no way out, for a week. And why not keep better records, if the stakes are really this high? If failing to pay a ticket is worth a week in jail, away from work and family, what should be the punishment for failing to record a valid and timely payment for a ticket? Shouldn't it be symmetric?

The REAL question, then, is why all our sensitive leftist friends put so much faith in a state that routinely does the sorts of things described above. I bet (paraphrasing Edmund Burke) it's because you fall out only with the abuses, and think that the thing itself is good. The THING! The thing itself is the abuse!

Why do you people love the state so much? It doesn't love you.

Links...

Some links....

Justin Wolfer's "Academic Manifesto"

To understand voting, follow the sacredness.

Markets in too MANY things?

Saying and doing: GM *says* that the Volt is doing great, set a record. But what did they *do*? They closed the factory for an additional week, extending layoffs.

Is Your Chld About to Throw Up?

Got this from Nanny News. Not sure whether they think our readers are childish, or that this site makes readers vomit. But, in any case, here you are:

10 signs your child is about to throw up. (Some Synonyms, from Oz)

But it seems to me this just scratches the surface. Our own experience was the EYM would stand up in his bed and scream for hours, until he vomited on his own feet. Then, satisfied, he would happily lie down and go to sleep in same. Anyone else want to share?

Hatin' On the Econ Game

New York Times has been running a series; more to come.

Here is the good N. N. Taleb, on models. Not sure he has this right.

And also in the Times (though not in the same series) Clarke and Primo on physics envy.

Minimalist Economics Posters

Some minimalist economics posters.

And, some more. New and improved: Now, with REAL econ!

Thanks to John-O!

Thank you note from Mexican drug cartels

Thanks, Prez O, for taking care of keeping drugs illegal!

Thanks to Angry Alex

Stand Your Ground

Okay, here's the thing: I'm a big fan of rights to gun ownership, and concealed carry laws. I have myself qualified for a concealed carry permit in NC. Those laws should be "shall issue," and not up to the discretion of local authorities. Full stop. But..."stand your ground" laws, as they may be applied (NOTE: EDITED) in Florida, are nuts. If you are carrying a gun, you have it only to use as a last resort, and you are required, both morally and as a matter of law, to forebear from doing certain things you might otherwise do. If you are carrying a gun with CC permit, you cannot:

1. Drink alcohol. At all, not any.
2. Intentionally put yourself in a situation where you need to use the gun.
3. Get into a fight.

If for some reason you do get into a fight, you have to walk away. If walking away does not work, you have to run.

Only if you have made a serious reasonable effort to escape, or are prevented by circumstances from doing so (eg, other person has a deadly weapon) can you use your weapon, or for that matter any other kind of deadly force, in response. Someone pulls a knife on you, you don't have to run. Someone talks bad about your mama, walk away.

Now, a test case. Consider the following: "Citing the Florida [stand-your-ground] law, a judge dismissed a murder charge against Greyston Garcia, who had chased and stabbed to death a suspected burglar who had stolen his car radio. The judge ruled that a bag of radios swung by the suspect, Pedro Roteta, at Mr. Garcia amounted to a lethal threat." [WSJ story]

So, a quiz: Did Mr. Garcia satisfy the conditions for using a concealed weapon? (Assume the knife was large and concealed.) No. Not even close. You cannot use deadly force to defend property, unless there is also a threat to YOU. The robber (assume he was in fact *A* robber, who stole stuff, and *THE* robber, who stole in particular Mr. Garcia's stuff. He might not be, and it's not for Mr. Garcia to decide. But suppose). The robber ran away. You can run after him, but if you do you forfeit the right to use deadly force. Now, you might still use deadly force if your life was threatened (a bag of radios? really?). But if you do, you are guilty of manslaughter, just like anytime A kills B in a fight A started.

Now, the actual point. Re the Trayvon Martin / George Zimmerman thing. The question is, did Zimmerman try to walk away/run away? He did not. Mr. Zimmerman, in fact, followed Mr. Martin. That means Mr. Zimmerman cannot use his weapon. If he does, and kills Mr. Martin, then Mr. Zimmerman is guilty of manslaughter, even if the only account of events we credit is that given by Mr. Zimmerman. ZIMMERMAN FOLLOWED MARTIN. (Plus, the police definitely told him not to, just in case Zimmerman was confused). If after that Zimmerman shot Martin, even if it was self-defense in the particular circumstances of that moment, Zimmerman is guilty of manslaughter. A kills B in a fight A started. A following B is starting a fight, seeking out a fight. It's not walking away.

"Stand your ground" laws are fine inside your home. Someone breaks into your home, empty the clip at them, no questions asked. But invoking "Stand your ground" when YOU chased THEM? That's just an excuse to commit murder and get away with it.

UPDATE: Jake Syma sends this link to a HuffPo piece by JM Granholm. Nice piece.

UPDATE II: It may be that the FLA SYG law will NOT apply in this case. That is certainly the view of the law's primary author, as here. If SYG is disallowed as a defense here, then I stand corrected and SYG is okay as written. If not, I've got beef. And I still find the application in the Garcia case above to be incomprehensible.

(Nod to Kevin Lewis and Jake Syma for links)

Big Dunk

Yes, I know there was no Derrick Rose, but the Thunder beat down the Bulls this afternoon in OKC. Mrs. Angus and I were there and had a great time.

Westbrook made one of the strongest dunks I've ever seen live. It didn't seem like he could make it to the rim from where he took off but he surely did. In the video below, the view shown at the 14 second mark is how it looked to us live, like he just somehow kept going and going.

Enjoy!

Sustainable development?

The indefatigable Michael Clemens reports that a new Millennium Village project in Ghana plans to spend a minimum of $12,000 per household lifted out of poverty in the project. This is something north of 30 times higher than average annual household income in the region where the project is going.

I have no doubt that many of these households will be "lifted out of poverty" during the years when these expenditures are made.

But, I don't think it can be called development.

Clemens proposes an interesting cost -benefit hurdle for the MVP by noting that if the money was placed in a trust that earned 5%, each household would receive $600 / year FOREVER (which would be triple the average annual household income in the region). He asks if the MVP method of spending the money will permanently triple the average incomes of these households.

UPDATE: THE FIRST SENTENCE OF THIS POST WAS REVISED TO BE ACCURATE. SORRY FOR THE MISTAKE!!

El Chalan

Eugenio insisted we try another comida peruana place last night, and who am I to argue. Went to El Chalan. Interestingly, somewhat mixed reviews, though the problem seems mainly to be the prices (which were a little high, I agree).

My food experience was NOT mixed. Started with some cebiche pulpo (octopus). Really, really, really good.

Then, to the disgust of Juan Pablo and Eugenio, I ordered the "Anticuchos de Corazon," or grilled skewered beef heart. Came with a nice vinegary onion salad on the side, and I ordered yuccas fritas for guarniciones. Major victory, on los corazones. Truly, truly excellent. I even convinced both JP and Eugenio to try it, and they admitted it was just fine. Spicy, not too tough: muy rico. I'm not sure I can explain how much of a win it was to get JP to taste a cow's heart. He's not all that adventurous.

A recipe for Anticuchos de Corazon, if you feel like trying it. I think I will.

Heading over to Eugenio's house today, for an asado. Going to try grilling pulpo. A long shot, frankly. More likely to get octopus chewing gum than something edible.

Econ Blogger Conference MVTs

MVTs = Most Valuable Talkers:

Lots of smart people with a lot to say. Was great to see some old friends and meet some people face to face for the first time.

The panelists I got the most from though were Alex Tabarrok and Michael Mandel speaking about intellectual property and innovation.

Based on his remarks, I highly recommend Alex's new book on the same subject.

Thanks to the Kauffman Foundation for (A) putting on such a cool event, and (B) inviting me to attend.

Kansas City Que-Off

I'm relaxing in the concierge lounge of the KC Intercontinental hotel getting ready for the econ blogger conference sessions tomorrow (Friday) at the Kauffman Foundation. Some of the sessions will be live streamed at growthology.org, and I'm really looking forward to it.

But on to more important things. I've eaten barbeque extensively in Lexington NC (with LeBron) and once in Lockhart TX (with Mrs. Angus) and now in the third 'que capital of America, Kansas City.

The Kauffman dinner was co-catered by Oklahoma Joe's and Jack Stack.

People you know I'm going to pick a winner here.

I'd have to say the single best item was the Oklahoma Joe's pork ribs. They were amazing! I'm not sure if they weren't better than the beef in Lockhart (I'll need to do more research). The second best item of the dinner was the beef burnt ends from Jack Stack. So I'd say Joe's for pork and Jack's for beef.

I ate two huge plates of nothin' but meat and can't thank the folks at Kauffman enough for such an enjoyable dinner.

Stand-up Economist: NSFW

This is NSFW, and it's also pretty insidery. But I laughed.

Nod to Angry Alex.

That's Not the Problem Here

Performance Support Bias and the Gender Pay Gap Among Stockbrokers

Janice Fanning Madden, Gender & Society, forthcoming

Abstract: This article analyzes organizational mechanisms, and their contexts, leading to gender inequality among stockbrokers in two large brokerages. Inequality is the result of gender differences in sales, as both firms use performance-based pay, paying entirely by commissions. This article develops and tests whether performance-support bias, whereby women receive inferior sales support and sales assignments, causes the commissions gap. Newly available data on the brokerages’ internal transfers of accounts among brokers allows measurement of performance-support bias. Gender differences in the quality and quantity of transferred accounts provide a way to measure gender differences in the assignment of sales opportunities and support. Sales generated from internally transferred accounts, controlling for the accounts’ sales histories, provide a “natural experiment” testing for gender differences in sales capacities. The evidence for performance-support bias is (1) women are assigned inferior accounts and (2) women produce sales equivalent to men when given accounts with equivalent prior sales histories.

Um.... fail. The fact that there is bias in stockbroker pay is not very interesting, because there is no objective standard to apply. The fact that stockbrokers get paid at ALL is astonishing. There is no basis for stockbrokers getting paid, except fraud.

Nod to Kevin Lewis.

Bad to the bone

Wow. Some enterprising fellow in Austria, (allegedly named Hans Url, so this may be a hoax) faced with the heinous prospect of having to get off the dole and go to work, cut his foot off with a power saw, tossed it into a fire so that it could not be re-attached, and then called emergency services.

Unfortunately for him, missing a foot does not automatically keep you on the dole, even in Austria!

Let's break it down:

(1) People, they can't pay the guy benefits after that, right? Jeebus, the whole country would go cut their feet off then!

(2) The linked article refers to the miscreant as "footless". Is this just a slip of the pen, or has the guy actually DONE THIS BEFORE?

(3) The gentleman is from a town in the Austrian state of Styria, which if you are a fan of Thomas Bernhard, should be making you nod your head knowingly and murmuring "it figures".

"The Kicker..."

So, a guy cuts off his own foot so he doesn't have to work.

You would REALLY have to hate working to do that.

The guy planned ahead: not only cut off his foot, but then barbecued his foot to make sure it could not be reattached.

What I like is that the article mentions "the kicker" (!): being footless won't mean the guy will be disabled.

Nod to the Blonde, who always adds some foot notes to my day.

La Mar

Okay, so I said no more sunrises. But this is a sunset:

Dined last night at La Mar, with Juan Pablo and new shining star Congressman Ernesto Silva. Very interesting talking with Ernesto. I learned a lot.

La Mar, as before, was remarkable. The cebiche...astonishing. By far the best I have ever had. Erizos....mmmmmmm....erizos.

I have a question

Is it really true that the Fed is buying upwards of half of all new net Treasury issues? That is to say, are they "funding" over half of the deficit?

I ask rather than assert because the evidence that I've found is not exactly authoritative. You can check my sources here,  here,  and here.

If this is so, how can serious people be saying that we should expand borrowing to finance more stimulus because markets are telling us there is a huge demand for more safe assets like Treasuries?

The last link above claims the Fed's share of new issues is rising and consequently private markets' share is falling.

If that is true, is it accurate to say that the low interest rate on Treasuries reflects high demand and justifies further expansion of debt?

Inchworms: Gore and Frass

I didn't even know what "frass" was. Until now.

Baseball Cards--Mr. Mint is Sad

Tommy the Tenured Brit writes, "I weep for the loss of my 1980s childhood. Still, it was quite commonsense to me at 12 that any baseball card produced after 1985 or so would not be very valuable long term..."

The story: Baseball's House of Cards

Sentences

Pithiest sentence I read this week:

"They import nothing into their overseas dominions except damaged officials and they export nothing from them except the same officials, worse damaged"

~ Albert Guerard, describing France's adventures in colonialism as quoted by John Gimlette in his amazing book, "Wild Coast".

To me, the best books both inform and entertain. Wild Coast knocks it out of the park in both dimensions.

Scariest sentence I read this week:


"The world needs more effective global economic governance more than ever."

~ Owen Barder on why the WB presidency matters.

Obviously I disagree. I don't think we need ANY "global economic governance".

Italian Spelling Bee

This video is just in time. What a life-saver. Thanks to the LMM.

The Italian-American spelling bee.

The reason this is helpful is that for dinner here in Chile on Sunday, I ate with the family of Juan Pablo. I tried to explain to them how the American Italians I knew all called eggplant, "Moolen-john," which is nothing like the Italian word, "Me-lahn-zahn-ay," which is the ACTUAL Italian word for eggplant (melanzane). Here is an Italian pronouncing the word. It has four syllables, and sounds NOTHING like "Moolen-john."

JP's family would not believe me. All the Italians they knew were from Italy, and said "Me-lahn-zahn-ay."

But, now, I have video proof. Frankie Orlando, this is for you.

Another Santiago Sunrise

I'll stop, now. But it's REALLY pretty in the morning.

Come on, Vogue!

Greta Garbo, and Monroe
Deitrich and DiMaggio
Marlon Brando, Jimmy Dean
On the cover of a magazine

Grace Kelly; Harlow, Jean
Picture of a beauty queen
Gene Kelly, Fred Astaire
Ginger Rodgers, dance on air

They had style, they had grace
Rita Hayworth gave good face
Lauren, Katherine, Lana too
Tyler Cowen, we love you

Vogue

(In honor of LeBron making Italian Vogue)

Jim Kim's complicated relationship with economic growth

Bill Easterly's shop at NYU gives some amazing quotes from Jim Yong Kim.

 Here's lo mas contundente:

 Conclusion: Pessimism of the Intellect, Optimism of the Will, By Joyce V. Millen, Alec Irwin, and Jim Yong Kim


 “Through a series of specific cases, we have demonstrated how growth – the market-led economic growth sought by governments, the growth in profits celebrated by businesses, and the growth in power and influence of transnational financial and corporate interests – often comes at the expense of the disenfranchised and vulnerable… As the imperatives of growth at any cost increasingly determine economic and social policy and the behavior of global corporations, more people join the ranks of the poor and greater numbers suffer and die.” (p. 363)

So the presumptive new head of the WB believes that market led economic growth is causing MORE people to become poor and MORE people to die!

 YIKES!!

 So North Korea  >> South Korea?

 Mao  >>  Deng?

Houston, we have a problem.

Twisted steel & Sachs appeal

When someone I follow re-tweeted Jeff Sachs' message to Jim Kim last week, I was impressed and surprised at its gracious tone:

Jim Kim is a superb nominee for WB. I support him 100%. I thank all who supported me and know they'll be very pleased with today's news

So surprised that I went to Sachs' twitter feed to see what was up. And found these gems, all on March 21:

I've been given no consideration, and won't be. The US Government doesn't seem to care about global poverty. 


Did you know that Larry Summers actually knew BEFOREHAND what Shleifer was doing while HIID did not? 


In 1999 Polish President gave me one of nation's highest medals for my historic contribution. 


You should know that in an emergency room there are "short-term disruptions." Don't blame the doc.

Sadly, the feed has gone quiet since he congratulated Kim.

Do faculty work hard enough?

David Levy (no, not that one) thinks the answer is "not nearly."

Robert Farley offers an alternative viewpoint.

Greg Weeks took notice.

Discuss.

Intellingence Opennign

Here is a post, verbatim, from the federal gov's job listing service:

Intellingence Operations Specialist
Bureau of Alcohol, Tobacco, Firearms, and Explosives
Duty Locations: Many vacancy(s) - Multiple Locations
Salary: $89,033.00 to $115,742.00 / Per Year
Series and Grade: GS-0132-13
Open Period: Wednesday, March 21, 2012 to Wednesday, March 28, 2012
Position Information: Permanent - Full-Time
Who May Be Considered: Status Candidates (Merit Promotion and VEOA Eligibles)

The misspelling appears twice, and has not been corrected in five days (as of morning of March 26). They can't spell the name of their own job, but they are qualified to listen in on your phone conversations.

Thanks to S.W. I'd tell you his name, but then I'd have to misspell him.

Sunday morning at the woodshed

Wow. Lant Pritchett absolutely eviscerates the Obama administration over their pick for World Bank President.

Here are some of the salty bits:

“It’s an embarrassment to the U.S. You cannot with a straight face say this person is the most qualified to lead the World Bank.”

and:

Adds Pritchett, nominating Kim “is like picking the short stop for the New York Yankees out of the scrub leagues.”

Finally:

“there’s no question that Kim has done terrific things, but I wouldn’t nominate Mother Teresa to head the World Bank if she were still alive.”

I personally think that the World Bank's composite scorecard is way over par (during its existence, on balance, it's done more harm than good) and favor abolition.

But I don't think the main problem has been choice of leadership.

As Mallaby's superb book "The World's Banker" makes clear, WB Presidents cannot make the behemoth bank bureaucracy march to their own tune.

The problem is institutional, the problem is conceptual, the problem is philosophical. The WB is one of the last bastions of central planning, and it functions about as well as other such bastions have functioned.

Amanecer sobre Santiago

What would YOU do?

Armored truck driving on highway, back door unlatched.

Money spills out, swirling around in the air.

What would YOU do?

A lot of people stopped, dropped, and grabbed.

I would have driven on, but I'm not sure my reason is morally admirable. I would have assumed that the amount of money I might expect to grab was not worth the twin risks of (a) getting hit by a speeding car and (b) getting arrested for stealing cash.

Nod to the LMM.

Mungowitz drops the ball

Perhaps due to his Pisco intake, or his fear of being caught up in an similar situation in South America, my esteemed co-blogger really buried the lede yesterday in his short note about UNC professor Paul Frampton.

I rise this morning to revise and extend my colleague's remarks.

This January, Frampton was arrested in Buenos Aires for boarding a plane with a suitcase containing a fair amount of Bolivian marching powder. He claims innocence and I believe him because, judging by his statements in this article, his drug of choice is LSD (that is to say, homie be trippin').

First off, he appears to believe he is working somewhere other than where he is working:

“The university has done nothing, absolutely nothing, to help me,” he said. “You would expect a university of that caliber would do everything possible to get me out of prison.”

He also has a theory of why mighty UNC is not helping; the provost is too jealous to do his duty!

Carney had long been jealous, he said, because Frampton had earned tenure much more quickly and because Carney’s academic accomplishments were paltry compared to his own.


 “I am one of the most published physicists, and really he hasn’t done much that is of interest,” Frampton said, Carney had taken advantage of Frampton’s helpless position to stop his pay and hinder any notion of the university helping him.

The university has put him on a leave of absence and stopped paying him because he's not teaching his class.

 But Frampton says that this is unfair because the class was already being cancelled due to low enrollment (1 student signed up and 5 is the minimum class size)!

 Wow!

There is one part of the story that does make me thing Frampton may be guilty (remember he's been in jail since January 23rd:


Frampton said he was actually working more than 40 hours a week in prison, and had already written four scholarly papers this year.