Pots, Kettles, & Unicorns

People this is awesome. 4 former CEA chairs have written a letter lambasting Bernie Sanders (and all Republicans ever) for their pie in the sky policy projections.

The letter includes the phrase: "the Democratic party has rightfully earned a reputation for responsibly estimating the effects of economic policies."

Gee, guys. Hope you didn't hurt your shoulders patting yourselves on the back so heartily.

So I know what you are thinking, wow, good thing Christina Romer wasn't one of the people who signed the letter.

oooops??

Oh no she didn't!

Oh yes she did!

Here is an example of Prof. C. Romer's responsible estimation of the effects of economic policies.

Meanwhile, Paul Krugman is attacking Bernie and promoting Hillary based on the notion that Hillary's unicorns are less unrealistic than Bernie's unicorns.  For Realz!

It's Mungo's world now. We are just living in it and giving thanks.

Cavalcade of Endogeneity: The Market Monetarist does Micro Edition

So on the Market Monetarist blog, I recently saw one of the worst examples of the correlation implies causality fallacy ever by a supposed professional economist.

There is a graph presented of a raw correlation between an index of property right protection in a country and an index of "environmental performance"

Look for yourself, here's the graph:

and then the hammer drops:

"So there you go. The one graph version of Free Market Environmentalism – if you are concerned about the environment you should really primarily concern yourself about the protection of property rights"

That is just a stunning leap from the graph.

Might we dare to think there is a third factor, I dunno, maybe income, that is causing both of these indices?

Or try it this way, if I presented a graph that showed government spending was positively correlated with environmental performance, would the Market Monetarist then conclude that big government was the way to protect the environment?

If not, why not? Why would my analysis be any worse than this?

This week's sign of the Apocalypse

Let me see if I got this straight, Chicken Flavored Vegetarian Ham?

People, if crap like this can happen, why do we even have a government at all?

Signs

Tommy the Tenured Brit sent in this sign (click for a larger image):

Questions:

1.  Would this be Allen Iversen's favorite golf course, or Michael Jackson's?  Or both?

2.  Why no apostrophe for possesive?  Is "childrens" just the plural of "children" in England?  I think "churrins" would be the correct form of that.

3.  The dog poop sign:  clearly an afterthought.  Perhaps they should allow practise after all.  And maybe learn how to spell "practice."  Allen Iversen could help with that.

The revolution will be pre-announced

So people, it's that time of year again. You know, time for the Taliban spring offensive!

In case you had forgotten to mark your calendars or buy tickets, the group officially announced that the offensive will begin on May 12th!

Now personally I find the Taliban offensive 24/7/365, but you gotta admire their confidence, no?

Hey infidels: we are coming for you next Monday and we don't care if you know it or not!

Funniest part of the article though is this:

The Afghan government and Nato have not yet responded to the Taliban’s announcement.

What are they supposed to say? Thanks for the warning numbnutz? Don't bother, we give up? I know you are but what am I?


I love the phrase, Taliban spring offensive. Like rush week or fashion week. Also a good name for an indie band.

You can't make Chicken Salad out of Chicken Shit

The hopeless pile of hypocrisy that is the Republican party is spinning up a storm on the latest budget deal. Here's one such attempt at alchemy from the National Review.

It's full of LOLZ, but here's the craziest part of all:

"70 percent of the sequester remains in place in those two years, and after those two years the entire sequester remains in place."

This of course is 100% stupid.

They are modifying the sequester right now after it being in place ONE YEAR and this guy is assuring us that it won't get touched again in all the many budget deals that will have to be struck over the next 8 years.

Either he's a dope or he thinks all his readers are dopes.

People, the current deal isn't for 10 years. Once you establish a precedent of going back and undoing the sequester, it will just become easier and easier and easier to undo more and more and more of it.

I would love to wager the author, Yuval Levin, $1000 on whether or not this deal will be the only legislated change to the original sequester over the next 8 years, but I think he is actually smart enough to know that he's full of it.

Hat tip to LeBron.

And you want to be my latex salesman.....?????

between assad and a hard place

I am really confused, so I thought I'd try to work things out in this post and get some help from our always astute commenters.

Months ago BHO said chemical weapons were a red line and warned Assad not to use them.

Recently, according to BHO, Assad did just that.

Now, virtually everyone I know is going nuts, vociferously objecting to a strike against Assad.

I don't get it. To me, if you are against US military retaliation for the use of chemical weapons, the time to go nuts was months ago when BHO said what he said.

Given that he said it, with no take back, what the hell else is he supposed to do but strike Assad?

Now sure, he's making a complete bollox of it, and it is likely to be militarily weak and ineffective, but really, he has no choice but to do it. What's he supposed to do, say, "LOL, I was just kidding. Gas away, my friend."

So I don't understand why people waited until now to go nuts.

Maybe they think BHO is pulling a Bush-Cheney and fibbing about the use of chemical weapons?

God help me, but I think that's unlikely. BHO clearly doesn't really want to do this, so I think the evidence is likely pretty strong (NB: Jeff Sachs disagrees).

Maybe people think that BHO and by extension US foreign policy already has zero credibility, so it doesn't matter if BHO walks this back?

Certainly many people I know are 140 character mocking the argument that US credibility is at stake. But BHO has also told the ayatollah that a nuclear Iran is unacceptable. If he doesn't follow through with respect to Assad, it certainly won't help his efforts to keep the ayatollah out of Club Nuke, will it? And that's a club we don't want the ayatollah in, do we?

So while I would not have ever gone about it the way BHO has, I do think that chemical weapons use deserves a strong sanction (not necessarily military though), and given where BHO has put us (see post title), I think he has no choice but to strike Assad.

BHO should have had a response prepared for this eventuality before he ever talked about the red line.  He was reckless and arrogant to think his words would not be tested. But it is what it is and we are where we are......

What's your solution? Tell me in the comments.

Crisis Management

Bruce Yandle is one of my favorite people.

And he comes up big with this nice essay in Freeman.  Excerpt:

The more serious the crisis, the greater the media outcry; and the tighter the calendar for resolving it, the better the chances that members of Congress could attach special interest promises to a final bill that would be passed at the very last minute. In fact, forcing any resolution to the last minute made it possible to hang even more meat on the hooks, since few critics would have the time or interest to look for it, much less take it out. Remember: At the zero hour, all eyes are focused elsewhere.


So when the fiscal fix train left the station, how much pork stood packed in the last car? According to a Wall Street Journal analysis, there was $12 billion in benefits for producers of windmill energy, $222 million in tax rebates for liquor makers, some $78 million in writeoffs for NASCAR track owners, a special $62 million tax credit that will keep StarKist operating the only meaningful industrial plant in American Samoa, and—best of all—a $410 million special tax treatment gift to Hollywood movie studios. But even as these porcine free riders sat front and center in the fiscal train’s caboose, there was an even bigger political goodie hidden among the bill’s baggage.

According to the New York Times, drug maker Amgen may have won the blue ribbon for rent-seeking. The fiscal cliff legislation contained language that delayed limits on drug prices that had been a part of previous legislation intended to bring down Medicare costs. When politicians regulate prices, all kinds of things can happen. That goodie is worth $500 million over the next 10 years, we are told. Without mentioning the word "Amgen," the last-minute legislation exempted one of the firm’s major products from previously mandated price controls. It is reported that Amgen had 74 lobbyists working on the deal. You read that right. That’s 74 people working the halls of Congress while the fiscal cliff battle was being fought. So, do the math: 74 people produced $500 million in future net revenues. That’s $6.75 million per worker. With gains that big, the Amgen government affairs office must surely be counted as a major profit center along with other Amgen divisions.

Uptalk: I mean, do you KNOW?

Gender in Jeopardy! Intonation Variation on a Television Game Show

Thomas Linneman
Gender & Society, forthcoming

Abstract: Uptalk is the use of a rising, questioning intonation when making a statement, which has become quite prevalent in contemporary American speech. Women tend to use uptalk more frequently than men do, though the reasons behind this difference are contested. I use the popular game show Jeopardy! to study variation in the use of uptalk among the contestants’ responses, and argue that uptalk is a key way in which gender is constructed through interaction. While overall, Jeopardy! contestants use uptalk 37 percent of the time, there is much variation in the use of uptalk. The typical purveyor of uptalk is white, young, and female. Men use uptalk more when surrounded by women contestants, and when correcting a woman contestant after she makes an incorrect response. Success on the show produces different results for men and women. The more successful a man is, the less likely he is to use uptalk; the more successful a woman is, the more likely she is to use uptalk.

Gray Lady Down

The following are actual quotes from the actual Sunday New York Times. The names have not been changed to shame the guilty:


A child care book I read as a new mother encouraged parents not to dread nighttime feedings, but to embrace them as another chance to nurture their babies. We should view the fiscal cliff the same way — not as a disaster to be avoided, but an opportunity to be embraced.

 ~Christina Romer

 A quarter of those who voted in El Monte and a third of those who voted in Richmond would voluntarily impose new taxes on themselves to protect their children and themselves from sugar-sweetened beverages. I find that downright encouraging.

 ~Mark Bitman


 Bears cornerback Charles Tillman, with seven forced fumbles and two interception returns for touchdowns, will troll the backside of Chicago’s defense

 ~Judy Battista

I vote Romer as most tone deaf, Bitman as most delusional, and Battista as most unintentionally hilarious.

"Trolling the backside of Chicago's defense"?

"Hey Erlacher, my grandma has better glutes than that!"

God I hope this paper never folds, what else would I do on a Sunday morning?
 

Stuck in the middle with you?

Duncan Black's median voter theorem is a classic result in voting theory. Anthony Downs extended the results to electoral competition.

In a nutshell, if there are two candidates competing for election in a one dimensional policy space, and voter preferences over the policy space are single peaked, the candidate that is positioned closest to the position of the median voter will win.

Heuristically, we might think that over the course of a campaign, candidates' positions might move toward that of the median voter.

But look at this amazing chart from Henry Farrell John Sides (clic the pic for an even more counterintuitive image):

What is up? Anthony Downs, you got some 'splainin' to do!

Possibilities:

1. Candidates take non median positions to win primary, then are "trapped" at or near that position in the general election.  Perhaps, but these guys appear to be moving AWAY from the mean.

2. Voter preference distribution is not symmetric so average  does not equal median. Maybe, but it's hard to believe the median would be either more conservative than Romney or more liberal than Obama.

3. The policy space is multi-dimensional. This is my cherished view, on which I've written exactly one paper that only got published in a special issue of Public Choice that I edited (though it has been cited a few times at least. I always get bashed over the head with the Poole-Rosenthal work claiming that politics really is one dimensional.

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

4. Negative ads work. Black & Downs never conceived of the modern world of political attack ads.


Other thoughts? Tell me in the comments.

What's your super-power?

Bill Clinton's is the ability to inhabit his wife's body at critical junctures:

They're not even making it up on volume

When I lasted visited the Chevy Volt, January 2012 sales were 603 units (against a 46,000 target for annual sales).

Since then, the company has taken bold action: $199/month leases!

So it's around $5k to lease a Volt, which has a base retail price of $40,000, for two years. This has help to vault sales up to 2800 in August, making 13,500 sold for the year to date. If you include prorated development costs, each Volt is costing Chevy around $75,000!

Know how many Prius Toyota has sold so far this year? Over 160,000.

You may wonder what GM has to say about all this. Well here's Doug Parks, VP of "global product programs":

"It wasn't conceived as a way to make tons of money,"

Maybe Obama could borrow George Bush's banner and hang it on the factory wall?

What's that, the factory is closing next week for a month?

How about $99 / month leases?

Hat tip to the mighty Mark Perry.

The most redonkulus sentence I've read this month

"Doing research is therefore writing software."

Written by Matt Gentzkower and Jesse Shapiro.

More here.

Kraft hates America

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

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

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

ps. better make it gluten-free though

Hard Balls Banned In Toronto

As Jackie Blue notes, "Finally, the kids are safe."

Toronto bans balls of almost all kinds (apparently really soft balls, like Nerf or Harry Reid's, are still okay).

This includes, remarkably, soccer balls. Yes it does.

Carnival Fraud: Really?

So...sheriff's deputies run undercover sting operation to pester people at carnivals.

Because we all want to make sure that no one actually wins any prizes.

Anthony Dewayne Ellis, 32, of Locust Grove, and Kenneth Lea McLeod, 50, of Ashland, Va., agreed to change the rules of a game for undercover Tulsa County sheriff’s deputies, according to an arrest report.

The carnival workers were operating a game involving throwing darts into star-shaped holes when they gave a discounted price to the deputies, who later asked “what it would take to win the big prize,” the report says.

The workers awarded the prize — a stuffed character from the game Angry Birds — after letting the deputies play for $20 regardless of the outcome.

The game’s posted rules required paying $5 to throw darts into the holes for prizes of escalating value, the report says.

State law requires that rules for carnival games be posted at all times. Contradicting the posted rules is a misdemeanor.

(Nod to Jackie Blue, who never cheats)

Massively Multiplayer On-Line Twit

"Heavy users of Twitter, as Weiner used to be (he hasn’t posted since June 1), play a complicated strategy game. Like World of Warcraft and Halo, Twitter is a massively multiplayer online role-playing game, but with higher real-world stakes. It is grounded in the first principles of game theory, including variations on the Prisoner’s Dilemma. You have to give to get; you have to get to give. Managing these ratios — deciding how much of your attention to expend to win attention to yourself, say — is the lion’s share of the Twitter action...Twitter handsomely rewards those with a capacity for risk and an aptitude for the social sciences, especially economics, game theory, psychology and sociology...In the days immediately after the Weiner revelations, according to the statisticians at TweetCongress, posts by Republicans went down 27 percent, while posts from Democrats dropped 29 percent." [Virginia Heffernan, NYT op-ed]

(nod to Kevin Lewis)

you can't hit what you can't see

I am heading to Mungotown to talk about monetary policy. I was researching the question of whether the Fed should target asset bubbles (and by target I mean, prevent / deflate!!). Chairman Ben's point of view is that the Fed should do so only to the extent that the bubble bleeds into overall inflation.

At this point something burbled up in my reptile brain; "housing is about 1/3 of the CPI, how could it have soared so far without bringing inflation along?"

People you probably know this already, but in 1983, the BLS redefined how to measure housing costs to "owner equivalent rent", and this variable didn't much move with housing prices in the last decade.

Here's a graph, courtesy of Dr. Housing Bubble (clic the pic for a more glorious image):

The red line shows the growth rate in the Case-Shiller housing price index, the blue line shows the growth rate of housing component of the CPI.

YIKES!!!

From 1998 to 2006, there was a complete disconnect between housing prices (rising like crazy) and the BLS measure of owner equivalent rent (which never went up more that 4% in any of those years).

Hard for a bubble to bleed into inflation when it's been defined out of the index!