Remy!

It takes a talking ass.  Jim Carrey suffers from an enlarged sense of entitlement.  Well, and a talking ass.

David Stockman wants to pee in your cornflakes

Wow. David Stockman confuses cause and effect, goes all gold-buggy, slanders Milton Friedman, and just generally comes unhinged in a massive hissy fit in today's NYT.

Let's break down a little bit of it, shall we?


Since the S&P 500 first reached its current level, in March 2000, the mad money printers at the Federal Reserve have expanded their balance sheet sixfold (to $3.2 trillion from $500 billion). Yet during that stretch, economic output has grown by an average of 1.7 percent a year (the slowest since the Civil War); real business investment has crawled forward at only 0.8 percent per year; and the payroll job count has crept up at a negligible 0.1 percent annually.

 This is a great analysis except that the timing is wrong and the causation is wrong. Here's the Fed's balance sheet since 1990:


 

As you can see, there's nothing special about 2000. There's a tiny blip, but the balance sheet stays on its path from 1900 to 2008, when it explodes.

And of course, that is/was the Fed's RESPONSE to the great recession. The terrible numbers Stockman gives for GDP growth and job growth are a direct result of the great recession. Real GDP grew strongly from 2000 to 2007, then collapsed.

A continually expanding Fed balance sheet didn't produce consistently bad economic numbers; the great recession happened and the Fed responded.

Sure, the Fed responded in an unconventional way, with asset purchases, because its policy rate was already pegged at zero. And sure, the unemployment rate hasn't fallen rapidly in response to quantitative easing. But the Fed has a dual mandate of stable prices and maximum employment, and their attempts to raise economic activity have not in the almost 4 years of unconventional policy aggravated inflation.

Here's that chart:

You can see how the Fed's unconventional policy responses have been geared to fears of deflation. Both the initial burst of asset purchases and the second rise came in response to falling inflation rates that threatened to go or stay negative.

This is probably the least shared view in America, given the Fed's many critics on both the Left and the Right, but Bernanke has actually done a very good job during this crisis and slow recovery.

Now let's consider Stockman's weird attack on Friedman:

This explosion of borrowing was the stepchild of the floating-money contraption deposited in the Nixon White House by Milton Friedman, the supposed hero of free-market economics who in fact sowed the seed for a never-ending expansion of the money supply. The Fed, which celebrates its centenary this year, fueled a roaring inflation in goods and commodities during the 1970s that was brought under control only by the iron resolve of Paul A. Volcker, its chairman from 1979 to 1987. Under his successor, the lapsed hero Alan Greenspan, the Fed dropped Friedman’s penurious rules for monetary expansion, keeping interest rates too low for too long and flooding Wall Street with freshly minted cash.

So Arthur Burns was a Friedmanite? So Paul Volcker who conquered inflation with his "iron resolve" didn't use a policy of targeting monetary aggregates a la Friedman? So the "Friedman Rule" which states that the price level should fall at the rate of time preference is fuel for the fire of "roaring inflation"?

Is Stockman trying to get a date with Naomi Klein?

I'll leave deconstructing the rest of this dreck as an exercise to the reader.

It's really been a banner week for wingnuts.

Happy Easter!

NSFW: An Honest Cable Ad

Remember, NSFW.  But a pretty good description of the most likely result of trying to "regulate" monopoly.  It's....monopoly.



Nod to Angry Alex

That's nacho cheese!

People can you imagine the pure adrenaline rush, the unmitigated joy, of cruising down the highway with 20 tons of stolen cheese in the back of your truck?

Meet Veniamin Konstantinovich Balika, who was apprehended in New Jersey with a load of hot Wisconsin Muenster.

Now, I personally believe that ALL Muenster cheese should be illegal, but that's a story for another day.

It certainly is no coincided that this malefactor of great cheese was arrested at the Vince Lombardi rest stop.

Maybe Mr. Balika should hook up with this guy.

Via Kottke.org, but the hat tip goes to loyal KPC reader Gerardo.


*****************UPDATE********************

According to NPR: this is what the arrest of Mr. Konstantinovich Balika at a New Jersey Turnpike rest stop looked like:

(clic the pic for an even less realistic-looking image)

The update hat tip goes to MK, another loyal KPC reader.

Diana Hsieh: Express Advocate?

This May, a [case] will be heard by the Colorado Supreme Court in Coalition for Secular Government v. Gessler. This case centers around a small nonprofit, run by Diana Hsieh, a doctor of philosophy, who wanted to discuss a secular understanding of the principles of life, liberty, and property. To do this, Dr. Hsieh formed a nonprofit corporation, which she named the Coalition for Secular Government (CSG). CSG commissioned a paper discussing its philosophy regarding human personhood, written by Dr. Hsieh and her friend Ari Armstrong. On behalf of CSG, Dr. Hsieh and Mr. Armstrong raised money from their friends to help pay for the costs of writing and publishing the paper. They also ran some Facebook ads and made flyers to let people know about the paper.

The paper is 32 pages long, with 176 endnotes. It makes philosophical arguments concerning the complex public policy debate surrounding the definition of personhood. The paper used a proposed Colorado ballot measure as a backdrop for its discussion on the issue. The paper concludes with a single sentence of express advocacy: “If you believe that ‘human life has value,’ the only moral choice is to vote against Amendment 62.”

This one sentence of express advocacy meant that CSG may be forced to register as a issue committee with the state of Colorado.  

Amendment 62, for non-Coloradans.

To summarize:  A philosopher argues, in an academic-style paper, for why calling a week old "fetus" a full legal person a bad idea.  Then she draws the conclusion that if you accept this argument then Amendment 62 should be voted down.  And for that she is forced to register, report all her donors and support, and pay significant regulatory costs.

Before "Citizens United," this case would have been a slam dunk for the nannies.  Now...interesting.  Thank goodness the Supreme Court decided Citizens United correctly!  Blog post.   

Phone call for Alex Rosenberg...

It's Hard....It's a Hard...It's a Hard Rain, That's Gonna Fall

Like our benighted Prez, France's Hollande honestly believed that all you had to do to "solve" the unemployment crisis was to have everyone work for the government.

But if everyone works for the government, or otherwise gets more money from the government than they pay to the government in taxes....well, SOMEBODY has to pay.  There is no way to add up a bunch of expenditures and call it "revenue."

I don't blame Obama, or Hollande, for believing that nonsense.  I blame voters for believing Obama and Hollande.  They ain't never lied:  They SAID they were going to do what in fact they are doing.

Ooooh!  Wait!  Hollande DOES have a plan, after all.  You just have to put a 75% tax on the few people who DO have jobs.  Of course, they will all leave the country.  And then you blame THEM for being greedy.  And Germany bails you out.  France is occupying its impregnable "ImaginIknow" line.

"Right" out of their minds

People, this morning I have to write about right wingers who have totally lost their minds.

Let's start with the trivially mean and stupid. Yes, Rep. King, I'm talking about you. Complaining publicly that the Obama girls shouldn't be going on vacation while the country is struggling. Nice job nimrod.

Now to the New York Post, and the inimitable Thomas Sowell, who stumbles his way to the innuendo that quantitative easing in the US is the same as Cyprus' haircut on bank depositors. There's only one problem with his argument: THERE IS NO INFLATION TOM!!!!  When when when will these inflationistas learn how to read a chart:

Finally to the dumbest of the dumb for the day at least. Art Laffer and Stephen Moore in the WSJ on "The Red State Path to Prosperity". Hey guys, repeat after me: THE RED STATES ARE THE POOR STATES! Please please please, learn how to read a chart before you make fools of yourselves.

Here are the 10 richest states: Maryland, New Jersey, Connecticut, Alaska, Hawaii, Massachusetts, New Hampshire, Virginia, California, Delaware.

Here are the rankings for the no income tax Southern states Laffer & Moore are so proud of: Texas (25th), Florida (38th), Tennessee (44). They also brag on Louisiana (41), North Carolina (39), Oklahoma (45th) and Kansas (28th).

Illiterate and angry is no way to go through life, guys.

Jerry Littlemars Deals With It; Can YOU?

A very nice video.  Mr. Littlemars says you'd best RECOGNIZE.



Here is the video Mr. Littlemars is referring to...




"HE JUST EXPLAINED IT!"  Yes, indeed. 

Krugman Finally Jumps the Shark

I have for some time offered a defense of P-kroog. 

A tepid defense, to be sure.  But the defense has been that he had not sacrificed his intellect to his ideology in the area of international trade.  Sure, he sold out and lied about domestic macro policy, but okay:  he was still sensible on his open economy macro claims.  In fact, really impressive.  (For an example, read this.   That's great stuff.  P-kroog vintage 1993).  P-kroog, on trade, still had some sense of being required to use actual logic and evidence.

Until....now.  P-kroog has decided that the reason that investors are trying to get their money out of Greece, Cyprus, and etc. is that (wait for it) the INVESTORS are bad people, and need to be controlled.  Here it is.

There is a reason why capital mobility is one of the Mundell-Fleming "unholy trinity," along with a currency peg and an independent monetary policy.  That reason is simple:  if a country wants to impose capital controls, it can only be because they want to do something appallingly stupid to their exchange rate or their monetary policy.  Some commentary from FEE.

(I should note that the "Krugman thinks he is Pharaoh" comparison makes sense.  He won't let the capital go, he thinks he is a living god, and he lives in a city near denial, or the Nile, or something like that)

Online course on the Mexican economy

LeBron von Strauss has already announced this, but Mrs. Angus has done a course of around 50 short videos on Mexico for Marginal Revolution University.

Of course you know this is self-recommending, right?

Here's the first one:





The rest are available here.


  

Is "Tolerance" Condescending?

Tolerance is by definition accepting something you don't like or disagree with.  If you don't care, it's not tolerance, it's indifference or apathy.

Penn Gillette points out that tolerance is condescending.  Dutch Boy has been telling me this for years:  the "tolerance" of the Netherlanders toward Islam (for example) is really just accepting of primitive superstition, not a genuine mutual respect.


(UPDATE: Fixed link)

Nod to Angry Alex, who never tolerates anybody.  At least not quietly.

lRS Video: Outrageous

Folks tried to become indignant about this training video made for the IRS.  They spent $60,000 on this. 




How?  How did they spend so LITTLE?  And since the video was made in 2010, what kind of an idiot would try to link this to the sequester?  Finally, you have to realize that IRS is a huge organization.  They spend a LOT on training, and they should.  $60,000 for a cheesy little  morale boost is pretty cheap beside what is spent every day on less effective training work.

Set the controls for the heart of the sun!

High School Football and Property Values

Winning Pays: High School Football Championships and Property Values 

Andrew Friedson & Alexander Bogin Journal of Housing Economics, forthcoming 

 Abstract: A large literature explores the effect of schooling characteristics on property values, but touches little on non-academic attributes of schools. This study demonstrates the capitalization of high school football championships into school district property values using a model that controls for a series of fixed effects. Winning a state football championship increases property values by 1.65% in the year following the championship, exerting its strongest effect immediately after the championship is won. The effect is biggest in the AA division, the largest and most competitive division. 

Nod to Kevin Lewis

What happens when you try to give away money?

I did a short video on the costs of trying to give away money.  Some people were critical of the flippancy of the example.  But remember, I had only four minutes, and I was trying to address college students, so I was looking for something they had experience with.



But, okay, if you want examples, for class or conversation, of the grave damage that can be done if we try to give away money, here you go.  I am willing to admit, for the sake of argument, that these programs might be well intentioned, rather than just cheesy vote-buying schemes.  That makes them WORSE, if anything.  The government simply cannot give away money.

1.  Food stamps kill.  Rhode Island town shows futility of trying to "help" people by giving away money. Here is the WaPo story

2.  Amazingly honest NPR story about supplemental disability Social Security.  From now on, if anyone asks about the costs of rent-seeking, THIS is your go-to example.

But, even if one concedes that the intentions are good, the bad effects should be enough to make people realize, as Bill Clinton did, that the program is a bad one.  The problem is that Nancy Pelosi and Co. sincerely believe that the effects are POSITIVE.

Nod to WH.

Monday's Child is Full of Links

1.  Some people jabber about food deserts.  Turns out they live in brain desert.  Grocery store access does not cause people to eat more healthily.  (Healthily?)

2.  You won a Dem primary and you don't drive a hybrid?

3.  Angus (rightly) made fun of people who say, "If raising the minimum wage is good, why not raise it more?"  A problem is that there are some people who advocate the minimum who actually do make EXACTLY this argument.  Elizabeth Warren, for example, who presumably knows better.

4.  And just when we were worried that there might not be enough self-absorbed idiots on the Republican side of the US House....Mark Sanford comes to the rescue!

5.  Icarus flew too close to the sun, and got burned.   The nations of the world are trying to fly too close to the solar panels, and taxpayers are getting burned.  Let me guess:  the answer is more regulation, and possibly even government production.

6.  Solar power is a net loss of resources.  It takes more energy to make the panels, in the form of various subsidies, than the panels can return from the sun.  That's okay, it's not the panels' fault.  The problem is the government subsidies.  We are investing in solar not because it helps the environment, but because we can get paid subsidies.  When the subsidies stop, solar turns out to be a big waste of money. 

7.  My kind of environmentalist, from Top Gear.  The whole packaging thing does bother me.  I'd rather buy less packaging.  And drive old cars much too fast.

8.  The sell-off in muni bonds, from the always interesting Sober Look.

9.  Peak oil was peak idiocy.  And always will be.

10.  So many of our young entrepreneurs are in jail.  There are many things with our society, but that's a big one.

11.  Secret, and actually illegal, internet census.  Very cool.  

12.  Not the Onion.  Who could possibly have thought this was a good idea?

Macro-Consensus

No End to the Consensus in Macroeconomic Theory? A Methodological Inquiry 
 (Published version)
 John McCombie & Maureen Pike 
American Journal of Economics and Sociology, April 2013, Pages 497–528 

Abstract: After the acrimonious debates between the New Classical and New Keynesian economists in the 1980s and 1990s, a consensus developed, namely, the New Neoclassical Synthesis. However, the 2007 credit crunch exposed the severe limitations of this approach. This article presents a methodological analysis of the New Neoclassical Synthesis and how the paradigmatic heuristic of the representative agent, namely, market clearing subject to sticky prices, excluded the Keynesian notion of involuntary unemployment arising from lack of effective demand. It shows these models may be modified to produce Keynesian results, but are ruled out of consideration by proponents of the New Neoclassical approach by weak incommensurability. It concludes that because of this the New Neoclassical Synthesis, in spite of its failure to explain the sub-prime crisis, is likely to resist successfully the resurgence in Keynesian economics. 

Nod to Kevin Lewis

If Someone Asks If S/He Should Go Into Academic Econ....

Nine Facts about Top Journals in Economics 

David Card & Stefano DellaVigna
NBER Working Paper, January 2013

Abstract: How has publishing in top economics journals changed since 1970? Using a data set that combines information on all articles published in the top-5 journals from 1970 to 2012 with their Google Scholar citations, we identify nine key trends. First, annual submissions to the top-5 journals nearly doubled from 1990 to 2012. Second, the total number of articles published in these journals actually declined from 400 per year in the late 1970s to 300 per year most recently. As a result, the acceptance rate has fallen from 15% to 6%, with potential implications for the career progression of young scholars. Third, one journal, the American Economic Review, now accounts for 40% of top-5 publications, up from 25% in the 1970s. Fourth, recently published papers are on average 3 times longer than they were in the 1970s, contributing to the relative shortage of journal space. Fifth, the number of authors per paper has increased from 1.3 in 1970 to 2.3 in 2012, partly offsetting the fall in the number of articles per year. Sixth, citations for top-5 publications are high: among papers published in the late 1990s, the median number of Google Scholar citations is 200. Seventh, the ranking of journals by citations has remained relatively stable, with the notable exception of the Quarterly Journal of Economics, which climbed from fourth place to first place over the past three decades. Eighth, citation counts are significantly higher for longer papers and those written by more co-authors. Ninth, although the fraction of articles from different fields published in the top-5 has remained relatively stable, there are important cohort trends in the citations received by papers from different fields, with rising citations to more recent papers in Development and International, and declining citations to recent papers in Econometrics and Theory. 

Nod to Kevin Lewis

Rituals

Rituals Alleviate Grieving for Loved Ones, Lovers, and Lotteries 

Michael Norton & Francesca Gino

Journal of Experimental Psychology: General, forthcoming

Abstract: Three experiments explored the impact of mourning rituals — after losses of loved ones, lovers, and lotteries — on mitigating grief. Participants who were directed to reflect on past rituals or who were assigned to complete novel rituals after experiencing losses reported lower levels of grief. Increased feelings of control after rituals mediated the link between use of rituals and reduced grief after losses, and the benefits of rituals accrued not only to individuals who professed a belief in rituals' effectiveness but also to those who did not. Although the specific rituals in which people engage after losses vary widely by culture and religion — and among our participants — our results suggest a common psychological mechanism underlying their effectiveness: regained feelings of control.

Bastiat...the SOCIALIST?

So sayeth my good friend Sheldon Richman.


That … veil which is spread before the eyes of the ordinary man, which even the attentive observer does not always succeed in casting aside, prevents us from seeing the most marvelous of all social phenomena: real wealth constantly passing from the domain of private property into the communal domain. 

"Wealth marvelously passing from the private to the communal domain? It sounds like a socialist’s redistributionist fantasy! 

But wait — Frédéric Bastiat, the great laissez-faire radical, wrote those words in his book Economic Harmonies, chapter 8, provocatively titled “Private Property and Common Wealth.” 

 ATSRTWT

I Learn My Place in the House Pack

I'm in my office at home, working on a paper, trying to finish it before I go to a conference.  The phone rings.  On the caller ID I see it is the LMM, calling from HER office...which is upstairs.  In the same house.  What the heck? "Hello, dear.  Is everything okay?"

She answers, in a low voice:  "Yes, it's fine.  Can you get me some more tea?"

"Um...all right, sure."  I go to the kitchen, which is downstairs, and get her a fresh cup of tea.  I take it up and put it on her desk..

She smiles, and says, "Thanks!  I would have gotten it, but I didn't want to wake the dog." Our new dog, Skip, was sleeping at her feet, and he follows her everywhere if she gets up.

I imagine that this was his reaction when he learned that he is above me in the dominance hierarchy of our house pack.  "Ha, ha, fat man!  I win!  Now make me some bacon!"

Click for an even more triumphant image.

Westboro Baptist Meet Rainbow House!

Battleship Cathy: SMBC Theater

Tunapanda Update From Jay Larson

This is really important.  Take a second, read the whole thing, and consider contributing.

*************

Dear Friends & Family,  Since launching our Indiegogo campaign on Monday at 8pm Nairobi time (noon EST), Tunapanda has received an enormous amount of support and encouragement. We are very grateful, and are about to break $2000 in donations. If you haven't seen our video yet, check it out: http://www.indiegogo.com/projects/tunapanda-free-education-for-all/x/2693369

However, we will have to wait to manifest the impact of your donations until... tomorrow morning. Yes, we know, that's a long time to wait. We can hardly stand it. Time has slowed down, and it feels like the night before Christmas. Just kidding, we're pumped at the awesomeness and speed of technology and the internet. Tomorrow morning we're headed a few hundred kilometers from Nairobi to rural Elburgon, to spend all the donations we'll have received by then and deliver all sorts of stuff to our partner school, TIIT, including new computers, courses and open source software - we haven't actually been given the donations by Indiegogo yet, but our Kenyan self-taught-computer-entrepreneur friend in Nakuru, Solomon Gachugu, is a fan of Tunapanda's work and has offered us a 0%-interest loan until the funds arrive, as well as discounted prices, free setup and installation assistance - and an extra bonus if this 16-hour push is successful (link to more info below). Thanks Solomon!(more after the jump...)

A New Institution

Standing in line involves lots of deadweight losses, especially when the bureaucrat behind the window is doing something that takes a while.

So, human ingenuity comes up with a solution!

With thanks to WH

Paul Craig Roberts: The Failure of Laissez Faire

Paul Craig Roberts on his new book.  What do you think?  Was the financial crisis of 2008 caused by deregulation?  Or STUPID regulation?  I vote for B.  PCR votes for A.

The Fokken Twins Retire

In Amsterdam, the 70 year old Fokken twins, Louise and Martine, decide to hang up the garter after 50 years each as prostitutes.  Yes, those Fokken twins.  "People like twins."

A very cute interview with them also.  They enjoyed all the new people they got to meet, 350,000 people in fact.  "Hallooo!  It's far away!"  Sounds like Gumby Theater.

Nod to M.K.

Just in time for summer!

People, if KPC is linking to a piece called, "How to get the body you've always wanted", you KNOW it's gotta be self-recommending.

10 easy steps, no dieting, and very little exercise.

Rent seeking explained...

Do click for an even more dissipative image. The source for the cartoon is here, btw.

Oh, and the "movie" being referenced is "War Games," if you were not a nerd child of the 1980s.  The relevant scene is here.




MAD is not exactly the same as rent-seeking, of course.  If you want to learn more about rent-seeking you can go here.....or if you want something visual, that's not TOO abysmal, here.

UPDATE:  Thanks to Kyle Regan, a nice video from David Zetland on all-pay auctions and political lobbying.  Terrific.

 

Ownership and Physical Currency

Money is essential: Ownership intuitions are linked to physical currency 

 Eric Luis Uhlmann & Luke (Lei) Zhu Cognition, May 2013, Pages 220–229

Abstract: Due to basic processes of psychological essentialism and contagion, one particular token of monetary currency is not always interchangeable with another piece of currency of equal economic value. When money loses its physical form it is perceived as “not quite the same” money (i.e., to have partly lost the original essence that distinguished it from other monetary tokens), diminishing its intuitive link with its original owner. Participants were less likely to recommend stolen or lost money be returned when it had been subsequently deposited in an electronic bank account, as opposed to retaining its original physical form (Studies 1a and 1b). Conversely, an intuitive sense of ownership is enhanced through physical contact with a piece of hard currency. Participants felt the piece of currency a person had originally lost should be returned to him rather than another piece of currency of equivalent value, even when they did not believe he would be able to tell the difference and considered distinguishing it from other money illogical. This effect was reduced when the currency had been sterilized, wiping it clean of all physical traces of its previous owner (Studies 2a, 2b, and 3).

Nod to Kevin Lewis

Turn Off the Power? You Can't HANDLE Turning Off the Power

I'm embarrassed to admit I had not heard of "Earth Hour."  It would be funny, if it weren't so sad. 

But...it is sad.  As Bjorn Lonborg puts it:

On the evening of March 23, 1.3 billion people will go without light at 8:30—and at 9:30, and at 10:30, and for the rest of the night—just like every other night of the year. With no access to electricity, darkness after sunset is a constant reality for these people.


At the same time, another 1 billion people will participate in “Earth Hour” by turning off their lights from 8:30-9:30.

The organizers say that they are providing a way to demonstrate one’s desire to “do something” about global warming. But the reality is that Earth Hour teaches all the wrong lessens, and it actually increases CO2 emissions. Its vain symbolism reveals exactly what is wrong with today’s feel-good environmentalism. 

Earth Hour teaches us that tackling global warming is easy. Yet, by switching off the lights, all we are doing is making it harder to see.

Notice that you have not been asked to switch off anything really inconvenient, like your heating or air-conditioning, television, computer, mobile phone, or any of the myriad technologies that depend on affordable, plentiful energy electricity and make modern life possible. 

If you want to turn 

Tunapanda!

My friend Jay Larson has a new project, with his brother, to try to reduce the "digital divide."  Pretty interesting.  Give it a watch!

To get more people on the web, we need to go off the web and onto DVD. 

Dutch-booked by the Fuzz

The Mexico City police department is no longer satisfied with their normal routine of stopping motorists on the street hoping to hook un pez gordo for a hefty mordida. Now they are inviting you to be an active participant in your own shakedown by asking you to send them your GPS coordinates from your smartphone!

I am not making this up.


Please don't think, yeah yeah, ha ha, it is actually a good idea. As an ex-Chilango, I can assure you that letting the cops know (a) that you have a smartphone, and (b) where you got your shoes, is a very bad idea indeed.

Guaranteed Income Scheme By Morgan Warstler

Each of us can do our part to provide guaranteed income to the less fortunate.

Auction the unemployed.

Truthers: Death Star Was an "Inside Job"

Just implausible that a few single-man fighters could destroy an armored moon-sized battle star.  On the other hand, since this guy mispronounces "Alderaan," he may be part of the conspiracy.



With a nod to Dan Drezner.

Transcript of Pope's first audience with the Cardinals

Monday's Child is Full of Links

1.  ACA will tax medical devices....for dogs.  Yes, really.  Some medical devices COULD be used for either humans or dogs.  But even if it is provably being used for a dog, it will be taxed.

2.  Too ridiculous to be believed.  Unless the French are somehow involved.  And of course they are.

 3.  A lot of Senators aren't too bright.  And to be fair even the bright ones may simply ignore facts and go for ideology.  But NC's Kay Hagan establishes a new level of "She's either dumb or she just doesn't care." 

4.  "When you are done, just get up and leave."  Nope, not talking (just) about one night stands.  This new app for restaurants cuts down on waiting around to pay.

5.  My guy Salsman, in Forbes, on the Sequester.  Taking the KPC line, not surprisingly.

6.  It's like they WANT to be the paunch line of some joke.  Of all the things that Mississippi restricts, including morality, marriage, and Sunday alcohol, now they want credit for being libertarian?  Please...

7.  Stop using paper, Emma!

8.  The world hates the US like the US hates Duke in late March.

9.  Anthony Wiener spends more than $50,000 on getting his poll out.

Everything that's wrong with College Sports in one simple Slidehow

It's right here and it's from the NY Times.

Old dudes in suits making bank screaming at kids in shorts who get no paycheck.

Makes my skin crawl.

The real "madness" in March Madness is how excited everyone gets about this insidious arrangement.

Skip!

The new mighty wonderdog in our house is Skip.  He's a rescue pup, five years old, ridiculously sweet.  But he's also a 70 pound lab/bull terrier mix, so it's a good thing he's sweet.  I think he could bite a basketball; his head is enormous, and it's full of teeth.

He's already hanging out with Tanzi, who looks skinny and frail beside him.  Fortunately, Skip recognizes that the girl is the boss, which is the general custom in our house.  One problem is that if you sit on the floor he imagines that this means you are a toy, or at least someone whose lap might now be occupied.  He's pretty serious about getting into your lap.

Is this Naomi Klein's Kickstarter?

Wow. Tyler von Strauss points us to a super-creepy kickstarter project:

(clic the pic for an even more inappropriate image).

I thought maybe it was just me and my weird ways, so I showed it to Mrs. Angus, who was horrified.

So, so, so wrong.

Timur Kuran on Sharia Law

My friend and Duke colleague Timur Kuran on Sharia law.  Interesting, and clear.

The link.

I love the way you ball!

Wow!  NC State football recruitment gets called out for sending out cheesy, creepy form letters that are just handwritten and then color-coded with highlighter.

Nod to the Dutch Boy.

Fake talk from your new Pope

Second Update:

I'm now pretty sure that this "quote" is actually a hoax. Sorry for any distress seeing it may have engendered.

"Women are naturally helpless to exercise political positions. The natural order and the facts show us that man is the being for politics by excellence; the Scriptures show us that the woman is always the support of the thoughtful man and doer, but nothing more than that.”

~Jorge Mario Bergoglio

source is here.

Like I say, got to keep a strong Pope hand.

Update: the above source link, which I cut and pasted the quote from has been changed and the quote is removed. Not sure what that means.

Here is another source, (obviously not a neutral one) giving the quote in English and Spanish. Please let me know if you see anything about this being bogus and I'll take it down. I'd like to believe it's not accurate.

Hat tip to the LMM for informing me about the original link.

The TBTF Subsidy

How Much Did Banks Pay to Become Too-Big-To-Fail and to Become Systemically Important?

 Elijah Brewer III,DePaul University, and Julapa Jagtiani,Federal Reserve Bank of Philadelphia

September 2, 2011

Forthcoming in Journal of Financial Services Research

 
This paper estimates the value of the too-big-to-fail (TBTF) subsidy. Using data from the merger boom of 1991–2004, we find that banking organizations were willing to pay an added premium for mergers that would put them over the asset sizes that are commonly viewed as the thresholds for being TBTF. We estimate at least 15 billion in added premiums for the eight merger deals that brought the organizations to over 100 billion in assets. In addition, we find that both the stock and bond markets reacted positively to these TBTF merger deals. Our estimated TBTF subsidy is large enough to create serious concern, particularly since the recently assisted mergers have effectively allowed for TBTF banking organizations to become even bigger and for nonbanks to become part of TBTF banking organizations, thus extending the TBTF subsidy beyond banking.

China as Solar Icon

Lots of  Yewessers have been saying we should pattern our solar industry after that of China.  Of course, we pretty much bought the farm on Solyndra, etc.  What is China doing differently?

The answer, it turns out, is NOTHING.  Their heavily subsidized companies are failing also, on an even larger scale.  The reason is not a difference in policy, but rather a similarity in physics:  Solar power is simply not a viable energy source at this point.  It takes $120 to generate $100 worth of electricity, and at some point the subsidies run out.  The story from the NYT.

The collapse of Suntech is a milestone in the precipitous decline of China’s green energy industry in the last four years. 

More than any other country, China had bet heavily on renewable energy as the answer to its related problems of severe air pollution and heavy dependence on energy imports from politically unstable countries in the Middle East and Africa. 

China is also exposed to global warming on its low-lying, densely populated coastline, which the Energy Department in Washington has estimated to have more people vulnerable to displacement from rising sea levels than anywhere else on earth. 

But China’s approach to renewable energy has proved ruinous, financially and in terms of trade relations with the United States and the European Union. State-owned banks have provided $18 billion in loans on easy terms to Chinese solar panel manufacturers, financing an increase of more than tenfold in production capacity from 2008 to 2012. This set off a 75 percent drop in panel prices during that period, which resulted in losses to Chinese companies of as much as $1 for every $3 in sales last year. 

Now, Max will likely comment and say something about how Germany's decision to end subsidies was somehow different.  It must be fun to live in your own world, Max, free from the restraints of logic and evidence!

Minimum Wage

Interesting piece in the FREEMAN on minimum wage.

Still, I have to admit I have been converted to Angus's position.  Minimum wage is probably a bad policy, and it should be indexed.  But if you want to make a list of the really awful things the state does to regulate prices or kill people, minimum wage is not really worth your time.

In 2006 I wrote this.

But now I think this is right.

Blame it on Hugo?

Venezuela's Acting President is crediting Hugo Chavez for the selection of Latin America's first Pope.

Really.

No, really.

"We know that our commander ascended to the heights and is face-to-face with Christ," Maduro said at a Caracas book fair. "Something influenced the choice of a South American pope, someone new arrived at Christ's side and said to him: 'Well, it seems to us South America's time has come.'"

I'm surprised that instead of Lenin-izing Chavez's corpse, they didn't claim that his tomb was empty and he must have been resurrected.

People, do you think this BS will continue after the election next month?

What would you like Chavez to get Jesus to do? Tell me in the comments.

When Engineers Have Dogs

This is ridiculous.  And I want one, right away.



Nod to WH

Grand Game: Harvard Privacy Edition

Harvard searched the private email accounts of nearly its entire administration.  And lots of faculty.

Really, it did.

This quote is remarkable:  Harvard’s president, Drew Gilpin Faust, said that  “I feel very comfortable that great care was taken to safeguard the privacy of all concerned.”

If you search private emails, that is a prima facie invasion of privacy.  If your defense is that you did not publish them verbatim on the internet, that's pretty lame.  Just looking at the emails is pretty bad. 

I understand that work emails are not your property.  I understand that if there is some specific legal proceeding or probable cause that your emails might be examined.  Having had this experience myself, I switched to GMAIL in 2006*; it's not THAT different, but they would have to have an actual legal reason to look, instead of just searching randomly.  But in this case it appears they just did  a blanket search of all email accounts.  Ick.

*Think back.  Something happened at Duke back then.  Something that involved lawsuits, and email accounts being subpeonaed. 

Nod to Anonyman

The wisdom of Jeff Ely

Behold:

All we can hope now is that the current Congress looks at this sequester “debacle” and concludes that in order to make it work as intended the next time the threatened cuts have to be even bigger.

the full & self-recommending post is here.

The Art of Democracy

Democracy and economic outcomes: Evidence from the superstars of modern art 

Christiane Hellmanzik,  European Journal of Political Economy,
June 2013, Pages 58–69

Abstract: This paper analyses the impact of the political environment on the value of artistic outcomes as measured by the price of paintings produced over the period from 1820 to 2007. The analysis is based on a unique dataset encompassing a global sample of 273 superstars of modern art born between 1800 and 1945, auction results of their paintings, and data on the political environment in the respective production countries. Controlling for a variety of economic and hedonic variables, there is a statistically significant, positive link between the level of democracy and the value of artistic output. Moreover, we find that democracy has a significant positive impact both on the density of superstar painters and the collective artistic human capital in a country.

Nod to Kevin Lewis

Butler April 10: Throwdown!

Richard Epstein, Jamie Galbraith, Russ Roberts, Robert Sidelski in a giant cage match.  Oh, and me, too.  Butler U, Indianapolis, April 10.  Bios of the panelistas here....
 

Actual invite, with working links, here....

It was terms of trade, in the 1890s, with volatility

Nice review of J. Williamson's book "Trade and Poverty" in the new issue of the EJ.

While not exactly a ringing endorsement, the review made me want to read the book (which I probably should have already done.

Here's an excerpt:

Williamson's conclusions can be summarised as follows. First, the link between falling behind and globalisation is causal (p. 231). Second, changes in the external terms of trade matter much more for growth outcomes than most people recognise (p. 199) while the role of changing domestic fundamentals and, in particular, institutions has been exaggerated (p. 213). Third, if the goal was industrialisation and growth, the periphery needed smart tariff policies to foster skill-intensive sectors; in some countries, especially in Latin America, the politically driven policy response was, unfortunately, the wrong sort of protection (p. 229).

The rest of the review spells out why Williamson may be shortchanging the importance of institutions.

Hat tip to Justin S.

Monday's Child is Full of Links

1. How far could a drug cannon shoot? Or, how much drugs could a punkin chunker chunk, if a punkin chunker could chunk drugs?

2. We're all welfare queens now.

3.   Townhall article on "Politics of Need" by Simmons and Yonk

4.  Economic freedom tastes like pineapples, and black pepper, though not necessarily combined.

5.  Washington, PA tests its emergency gaydar system.  Or not.

6.  Selling "Al Gore's Here!  Ah!" to "Al Jazeera" (see what I did there?) was kind of creepy.  But apparently the idea was also stolen.  I'm not sure why anyone would be surprised.  Al-Go is all about sitzzackin' that pizzaper.

7.  Nutella thievery is RAMPANT at Columbia U.  And there are dark rumors that ketchup, and even slices of bread, have also been stolen.

8.  Harrisburg, PA:  What governments try to help.

9.  Spain joins Germany in recognizing renewable energy is fake, and subsidies are wasteful.  Rent-seekers sue.  Hilarity ensues.

10.  9th Circuit Court briefly pulls it head out of its robes, and serves up two decisions that seem consistent with basic constitutional principles.  Cool.

Lagniappe:  This has to be fake.  But....wow.

 

Anthony Gregory on Rand Paul Filibuster

magical surrealism

Yesterday, Paul Krugman put up a strong challenger for the Dali-o-nomics surrealistic graph of the year.

For you aspiring magical realists of graphics, the best way to do this is to combine variables where there's no consensus on how to measure the concept being discussed.

Paul does this in spades by graphing the "adjusted deficit" as a percentage of "potential GDP" He get serious bonus point for mangling the axis labels and just generally producing an ugly graph.

Feast your eyes people:































A bit of googling will reveal that both the cyclically adjusted deficit AND potential GDP are
hotly contested concepts with no straightforward way to measure them.

Now, PK didn't need this magically surreal graph to prove his point, which is that we don't have a serious deficit problem through 2015.

Agreed.

However, as Jeff Sachs noted, we are in this happy state of affairs only because NO ONE LISTENED TO KRUGMAN and we produced almost $4 trillion in "deficit reduction" over the next decade.

That's $1.5 trillion from the first debt ceiling crisis, $1 trillion from the sequester, $600 billion from the part of the Bush tax cuts that were not continued on high earners and $600 billion from "interest savings".

So no, we don't need more short term deficit reduction, because we've already, in a piecemeal, disjointed, ugly and almost counterproductive way, dealt with the problem.

I say "almost counterproductive" because we have not done much of anything to address the main long term drivers of our budget problems: Medicare, Medicaid, (to a lesser extent) Social Security, and just health care costs in general.

Health Care Tax

"Low-wage, temporary jobs have become so widespread that they threaten to become the norm...Many argue that it was the inevitable result of macroeconomic forces — globalization, deindustrialization and technological change — beyond our political control. Yet employers had (and have) choices. Rather than squeezing workers, they could have invested in workers and boosted product quality, taking what economists call the high road toward more advanced manufacturing and skilled service work. But this hasn’t happened. Instead, American employers have generally taken the low road: lowering wages and cutting benefits, converting permanent employees into part-time and contingent workers, busting unions and subcontracting and outsourcing jobs. They have done so, in part, because of the extraordinary evangelizing of the temp industry, which rose from humble origins to become a global behemoth." Erin Hatton, NYT

Nod to Kevin Lewis

Okay...no. The truth is that we have temp jobs because of the enormous burden our ridiculous health care system imposes on hiring full time workers. Until we move to single payer, used in Germany, Chile, Singapore--in short, in the countries we trade with--we will not get new and better jobs.

Visuals on Being an Academic

This is long, and takes forever to load, and it hangs.

BUT....it's genuinely hilarious.  With thanks to the Ward Boss.

Frampton Comes Unglued

As the continuing story of Prof. Frampton, UNC physics professor and babe magnet...well, as it continues.  The latest.  A nice summary of the whole thing.

Prof. Frampton says he has "a large ego."  Now, folks, Angus and I have large egos.  Large egos are friends of ours.  Prof. Frampton....you are no large ego.  You are something else.

Jobs!

The jobs report for February is out and the news is decent. 236,000 net new non-farm jobs and the unemployment rate is down to 7.7%.

While we've still never had the really big job numbers that historically occur in recoveries, this was a good number in terms of beating expectations.

About the only bad news in the report is that last month's job number was revised downward from 157,000 to 119,000, a 24% downward adjustment.

Given that the confidence interval on these initial numbers is something over  + / - 50,000, we shouldn't get too excited or too upset at any single initial job number.

Pipeline Follies

Did somebody hack the NYTimes?

If the Times starts using actual logic and evidence again, there are going to have to be some changes made. They'll have to fire Paul Krugman, for example.

But, for now, it appears that someone made a mistake and published something that attacks liberal orthodoxy. Amazing.

Nod to Anonyman

Hand down, man down

People. I got an email from David Boren yesterday afternoon telling me that "shots were fired" in Central Normatopia.

Would you like to know why?

Massive stupidity.

Dude #1 puts a microphone up for sale on Craigslist.

Dude #2 stops by to check out the merchandise. Asks if he can take it outside and show it to his girlfriend.

Dude #1 laughs in his face agrees and lets him go outside with the mic without following him.

Dude #2 prepares to make tracks.

Dude #1 runs outside with a handgun and starts shooting at the rapidly retreating car of Dude #2, then gets in his own idiot-mobile and starts chasing after his beloved microphone.

I like to think Dude #1 was screaming, "Momma there goes that man" as he gave hot and lethally intended pursuit to the miscreant.

Hat tip to D. Boren and RK Gaddie.

Leigh Stein

Leigh Steinberg on sports, agents, and athletes, on EconTalk.

Leigh Steinberg, legendary sports agent, talks with EconTalk host Russ Roberts about his career as a sports agent. He discusses the challenges of building a clientele, how sports agents spend their time, strategies for building a brand as an athlete, and safety issues currently affecting the National Football League.  

Nick Gillespie on 5 Things You Should Know

Five Things You Should Know About Sequestration

 

Speedometers: Immoral?

It appears that people like to have speedometers that, like the amps for Spinal Tap, go all the way to 11.   The story.

Okay, in this case it's a little different, because Spinal Tap really could turn up the amp all the way.  But there is NO way that a Corolla is going to do 160.

This may be silly.  Fine, in fact it is silly.  But should the government regulate it?  And is this the reason government should regulate it?  It's IMMORAL?

The rising speedometer numbers aren't surprising to Joan Claybrook, the top federal auto safety regulator under President Jimmy Carter. She's been fighting the escalation for years and says it encourages drivers _ especially younger ones _ to drive too fast. During her tenure, she briefly got speedometer numbers lowered.

"They think that speed sells," she said of automakers. "People buy these cars because they want to go fast." ...For years, most speedometers topped out at 120 _ even though that was 50 mph over the limit in most states. Then, in 1980, Claybrook, who ran the National Highway Traffic Safety Administration, limited speedometers to 85 mph, even though cars could go much faster.

The move, designed to end the temptation to push cars to their limits, drew outrage from gearheads nationwide. Some automakers got around the rule by ending the numbers at 85 but leaving lines beyond that to show higher speeds. The government also forced automakers to highlight 55 mph, which at the time was the fuel-saving national speed limit.

The limit was short-lived, overturned two years later by President Ronald Reagan, who campaigned on a pledge to end onerous government regulations. Cars with 85 mph speedometers lingered for several years until they were redesigned and the maximum speeds for most returned to 120.

By the 2000s, however, the speedometer speeds crept higher. Even compact cars showed 130 or 140 mph. The 2014 Chevrolet Corvette speedometer and some Jaguar models now peak at 200.

Claybrook concedes there's no data to show the 85 mph limit saved lives, but she believes it did. She calls the ever-higher speedometer numbers "immoral."

 Lagniappe:  "The fuel-saving national speed limit"?  The fuel-saving limit would be zero.  Further, there is only one resource we can't get more off:  time.  Fuel we can work around, get more of, etc.  The 55 speed limit was a "time-wasting national speed limit."

The Dark Enlightenment

A 10-part series, by Nick Land:  On "Dark Enlightenment."  (I've linked to Matt Leslie's presentation of it, which is where I found it, and also because the original links don't work, it seems.)

Long, complicated, interesting.  Basic question:  Is democracy simply incompatible with individual liberty?  Not in tension with, mind you.  Incompatible.  You may know "Dark Enlightenment" from Mencius Moldbug, of course. See also "Left Singularity."

with thanks to Jeremy B.

So was it a $10 million Contribution, Then?

So, everybody was all excited that the Dems were going to have their convention in Charlotte.  NC is a key state and all (though the Dems ended up losing the state, in every way possible).

And there was some "formality" about guaranteeing a small loan, just $10 million (gulp!).  As we were told in the Democrat-owned press (i.e., McClatchy, the company tasked with writing ads for the Democratic party, thinly disguised as editorials or news stories):


Duke Energy Corp., whose CEO is leading the fundraising for the Democratic National Convention, is guaranteeing a $10 million line of credit for the event. 

The credit line from Fifth Third Bank is apparently the first time such an arrangement has been used by any Democratic convention organizers. A Duke spokesman said stockholders, not rate-payers, would be on the line if the convention's host committee defaults. 

But the head of the committee said it may never have to draw on the money. "It is just security in the event of a cash shortfall," Will Miller, acting executive director of the Charlotte organizing committee, said Friday. "The host committee is obligated to pay it back, and the host committee will pay it back." 

Some suggest the arrangement is tantamount to a large corporate contribution at a time when the party is touting new rules that bar corporate cash and individual contributions over $100,000. Democrats have pledged "a people's convention" and say the line of credit doesn't violate the new rules.

More after the jump... 

The culture that is India: Luxury living edition

Fascinating article in the NYT about booming property values in desirable areas of New Delhi, where teardown properties can allegedly go for over $10 million.

There are some specific points in the piece that do not bode well for India's chances develop.

First, the best areas of New Delhi seem to be government owned and given out to politicians as perks:


Few properties come available in the leafiest, most prestigious section of the capital, known as Lutyens’ Delhi, because the area is mostly dedicated to government housing. Powerful government ministers live in British-era bungalows with stately lawns of several acres, while lesser officials are eligible for different categories of government housing in an oasis largely separated from the rest of the chaotic capital, where many people live crowded into slums or shanties. “This is the best part of Delhi, the core of Delhi,” said Munish Kumar Garg, who oversees the allocation of government housing. “If these properties in Lutyens’ Delhi were put on sale, there would be a queue two kilometers long.” Mr. Garg, the director of the government’s Directorate of Estates, controls one of the more valuable residential real estate portfolios in the world. Asked how many New Delhi properties fell under his agency, he shrugged. “It would be difficult to know,” he said. “Maybe 10,000.”

Yes, in 2013, the Indian Government is managing 10,000+ residences for government employees, just in New Delhi.


Second, the process of buying a house is not extremely transparent. There aren't often public real estate listings and purchases frequently require large amount of unreported cash payments that avoid tax issues:

Though India’s economy has cooled, the demand for property in elite areas remains so strong that even finding a house for sale is tricky: formal listings do not exist; prices usually circulate by word of mouth. Transactions often require some “black” money, or stacks of cash paid under the table to avoid taxes. The buyers are often Indian industrialists looking for a trophy property, a real estate Rolex. Or, real estate agents and sellers say, they can be politicians or their proxies, who often pay with trunks of cash.

Almost cut my hair

People, we almost lost the semi-sacred KPC monthly tradition of Christina Romer writing an Economic View column in the NY Times and then me mocking it here.

Almost but not quite.

Almost,  because 90 percent of the column about the minimum wage makes total sense.

Not quite because of the following two passages:

1.  some minimum-wage workers are middle-class teenagers or secondary earners in fairly well-off households. But the available data suggest that roughly half the workers likely to be affected by the $9-an-hour level proposed by the president are in families earning less than $40,000 a year. So while raising the minimum wage from the current $7.25 an hour may not be particularly well targeted as an anti-poverty proposal, it’s not badly targeted, either.

Yikes! What a low bar Romer has for government. A program that under the most charitable of definitions only hits an intended target less than half of the time is "not badly targeted"?

The official "poverty line" for a family of 4 is $23,000. So less than half of the policy effects hit a population defined as almost double the poverty line. Even for our poor blind doddering Uncle Sam, that is shitty targeting.

2. Then there are the last two sentences of the piece:

And pre-kindergarten education, which the president proposes to make universal, has been shown in rigorous studies to strengthen families and reduce poverty and crime. Why settle for half-measures when such truly first-rate policies are well understood and ready to go?

Please note that pre-K had not been mentioned at all in the previous 16 paragraphs of the op-ed. Only in the penultimate sentence does Romer pull the pre-K rabbit out of her hat, informing us that "rigorous studies" show it reduces poverty, among other wondrous things. She links to a review article which does not present any evidence that pre-K reduces poverty!

Yes, the EITC is a much better targeted and effective anti-poverty program than is the minimum wage. Good on Romer for saying so. But throwing in universal pre-K as a "well understood and ready to go" poverty reduction program is what kept our KPC tradition alive for another month at least.

I feel like I owe it so someone.