Saturday, September 08, 2007

Lets get rrrready to rrrrumble!!!

In this corner, Dani Rodrik, Harvard University:

"call me naive, but I also think that Mugabe would not have pursued his policies for this long if he had a better grasp of debt dynamics."

His opponent tonight, Anil Hira: Simon Fraser University:

"This article examines more carefully the oft-made hypotheses that (1) "technocrats" or politicians with an economics background are increasingly common and (2) that this "improvement" in qualifications will lead to improvements in economic policy....Using statistical analysis, the article finds that we cannot conclude that leadership training in economics leads to better economic outcomes."

So I ask you ladies and gentlemen, who ya got??

The best sentence I read today:

"The Fed will cushion the slowdown once weaker growth numbers appear, but there isn't much is can or should do to prevent the permanent unwinding of securities tied to undocumented-income, negative-amortization, 100%-loan-to-value mortgages rated triple-A by irresponsible rating agencies and sold to unsuspecting investors."

That was John Makin in today's WSJ.

That was so good I think I'll let John provide the punchline too:

"Perhaps the price we pay for that kind of collective stupidity is a recession."

Okies gotz Libarries too!

Today is International Literacy Day , according to UNESCO, and this year's slogan is: “Literacy, key to good health and well-being” (pretty snappy, although basically wrong, no?)

And over at MR, Tyler has declared it "Library Appreciation Day"

Here in Norman, it's "beat the 'canes day" but OU's original library building does have some very pretty parts:

Friday, September 07, 2007

Enforcement and Law-Breaking

An article of recent vintage:

"Investigating the impact of extended bar closing times on police stops for
", Leana Allen Bouffard, Lindsey Ellen Bergeron & Jeffrey Bouffard
Journal of Criminal Justice (forthcoming)

Researchers have often studied whether changes in the availability of
alcohol impact associated problem behaviors like drunk driving. In July of
2003, the state of Minnesota approved legislation to extend by one hour the
closing time for eating and social establishments that serve alcohol. This
study utilized a time-series model to examine the impact of the extended
closing time on the number of police stops for DUI in one jurisdiction in
Minnesota. While results of the time-series indicated that there was a
significant increase in the number of police stops for DUI following this
legislative change, incident-specific analyses suggested that this increase
might have been largely a result of increased proactive responses by local
police. Implications and suggestions for future research are discussed.

Reminds of "Crime on the Court." Should adding another referee in basketball cause more, or fewer, fouls to be called?

Catching up is hard to do

Or so say Blonigen and Ma (NBER paper, access restricted) in a very interesting new paper:

Recent literature has documented the high level of sophistication of Chinese exports for a country at its general level of development. An important question is whether this is simply driven by the foreign firms in China of whether Chinese firms are also gaining greater sophistication from this foreign presence. The answer to this question has significant implications for China's long-term growth potential.

We explore the extent to which Chinese firms are gaining sophistication relative to foreign firms present in China using detailed Chinese export data that separatelyl reports exports from foreign and Chinese enterprises. The general patterns over our time period, 1997-2005 run exactly counter to what one would expect if Chinese firms were catching up - foreign firms' share of exports by product category and foreign unit values relative to Chinese unit values are increasing over time, not decreasing. We see these patterns despite the fact the FDI into China as a percent of GDP has not increased since before our sample.

Say it ain't So!

This story hit me like pee in the old cornflakes. The Duke Lacrosse story almost has a kinda sorta happy ending. Nifong is disbarred, doing time (ok, one day a la Paris and Nicole) and the players pretty much did get their reputations back. They are widely seen as innocent victims; heroes of a cautionary tale of political correctness and jumping to conclusions.

But then they go and spoil it all by saying something stupid like "I want 30 million" (my apologies to C. Carson Parks, please don't sue me).

Yes after settling Nifong's hash, our heroes turn to slightly deeper pockets, the City of Durham, demanding the creation of an ombudsman's office (sounds good), other "reforms", (ok) oh yeah and $10 million each (DOH!). If they don't get it directly, they are going to sue for it.

Maybe the city can bring back Iron Mike and prosecute the boys for extortion!

Thursday, September 06, 2007

Does the Government really own everything?

Is my net income just a "tax expenditure" that a forbearant omnipotent government allows me to foolishly waste on my own tawdry desires?

It seems that many people would answer that question with a resounding yes!

In a long article on the costs of philanthropy Stephanie Strom writes:

The rich are giving more to charity than ever, but people like Mr. Broad are not the only ones footing the bill for such generosity. For every three dollars they give away, the federal government typically gives up a dollar or more in tax revenue, because of the charitable tax deduction and by not collecting estate taxes.

Strom says there is a growing debate over what philanthropy is achieving at a time when the wealthiest Americans control a rising share of the national income and, because of sharp cuts in personal taxes, give up less to government.

Then there is this pretty amazing statement:

A common perception of philanthropy is that one of its central purposes is to alleviate the suffering of society’s least fortunate and therefore promote greater equality, taking some of the burden off government. In exchange, the United States is one of a handful of countries to allow givers a tax deduction. In essence, the public is letting private individuals decide how to allocate money on their behalf.

So to summarize so far: (a) Philanthropy = lowering inequality, (b) too many rich people don't do the kind of philanthropy other people would like to force them to do, (c) all money belongs to the government, (d) rich people don't pay much in taxes, and (e) if we changed the tax system people would act exactly the same way, estates would continue to be the same size and the government would get a ton of new money that it would use effectively to reduce inequality so lets get a move on!

Is this a great country or what?

Goldbug Variations

Megan McArdle and Tyler Cowen play some chin music for the gold bugs here and here.

I remember discussing with Tyler back in the day the idea that if money was only needed for a few "loose change" type of transactions (everything else being digital), would the velocity of money rise so high that the quarters would burn your hand when you grabbed them. I'm pretty sure they would.

It always surprises me that people attack so vehemently one of the very very few things our government has done reasonably well.

Wednesday, September 05, 2007

Development: Yer doin' it Wrong!

The Congo is BIG, and not known for its highway system, so many rely on the railways set up by the Belgians to extract resources in the colonial era.

But there are problems as documented here.

During an eight-day, 530-mile train journey across southeastern Congo, there were two derailments, several dozen delays, one electricity failure and an ever increasing number of people and goods packed into crammed, stinking hallways, compartments and bathrooms.

The problems are legion. Of 80 locomotives, only 15 are operational. Only 2,262 miles of railway are being used, while 9,358 need repairs. Some tracks are 80 years old, so warped and bent that the trains literally bounce along, losing and loosening parts that must be fixed or remade at each stop.

and then there's this:

The railway employs over 13,000 people, but the last time paychecks were sent out was in May, and that was payment for the spring of 2005. So many employees do not go to work, and bribes are widespread.

“Sometimes it’s difficult to resist temptations,” said Agustín, the police chief at the Kamina station, who gave only his first name. “I do bad things.”

“I haven’t been paid in 29 months,” he added. “How am I supposed to send my children to school?”

What about the IFIs, you ask?

The World Bank has begun a program to manage the trains in a public-private partnership, but it hinges on a new, and unlikely, transparency from S.N.C.C.

“It is very difficult to get things going,” said a World Bank official prohibited from speaking on the record.

Oh. Well don't strain yourselves or anything.

Paitence really IS a virtue...

The origins of monetary income inequality: Patience, human capital, and
division of labor

Victoria Reyes-García, Ricardo Godoy, Tomas Huanca, William Leonard, Thomas
McDade, Susan Tanner & Vincent Vadez
Evolution and Human Behavior, January 2007, Pages 37-47

We present an explanation about the origins of monetary income inequality
when an economically self-sufficient society opens to a market economy. The
chain of associations runs from patience, to the accumulation of different
forms of human capital, to self-selection into different occupations, and to
the division of labor, which contributes to monetary income inequality. In a
self-sufficient society, patience is exogenously determined and people rely
on folk knowledge as the only form of human capital. With the establishment
of schools, patient and impatient people sort themselves out by the type of
human capital they begin to accumulate. Impatient people do not acquire folk
knowledge because return to schooling takes many years to bear fruit.
Schooling opens opportunities in occupations outside the village, whereas
folk knowledge enhances employment opportunities that draw on farming or
foraging. Self-selection into different occupations with different earnings
potential spawns monetary income inequality. To test the explanation, we
draw on data from a foraging–farming society in the Bolivian Amazon, the
Tsimane'. We collected data during four consecutive quarters in 1999–2000
and a follow-up interview (2004). Data came from 151 adults (age, 16 years
or more) from all households (n=48) in two villages with different levels of
market exposure. During 1999–2000, impatience was associated with (a)
greater folk knowledge and fewer years of schooling, (b) lower likelihood of
working in wage labor, and (c) greater likelihood of working in rural
subsistence occupations. People who had been patient in 1999–2000 had
greater wage earnings and more modern physical assets in 2004.

Is patience a virtue? Or is it just luck of the draw in preferences, a low discount rate, so you value future consumption?

And, interesting that they invoke division of labor. Adam Smith pointed out how little, in fact, people differ at the outset. It is the development of specialized skills, through division of labor, that create the big difference. As Smith says:

The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause, as the effect of the division of labour.*46 The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education.

46: [This is apparently directed against Harris, Money and Coins, pt. i., § 11, and is in accordance with the view of Hume, who asks readers to 'consider how nearly equal all men are in their bodily force, and even in their mental powers and faculties, ere cultivated by education'.—'Of the Original Contract,' in Essays, Moral and Political, 1748, p. 291.]
(WoN, I.2.4)

(Nod to KL, who isn't patient at ALL)

Bill Murray Explains: Golf Cart, and 7-11 in Stockholm

Bill spills.

Migration Policy: A Good SWF Kick?

Optimal Migration: A World Perspective

Jess Benhabib & Boyan Jovanovic
NBER Working Paper, January 2007

We ask what level of migration would maximize world welfare. We find that skill-neutral policies are never optimal. An egalitarian welfare function induces a policy that entails moving mainly unskilled immigrants into the rich countries, whereas a welfare function skewed highly towards the rich countries induces an optimal policy that entails a brain-drain from the poor countries. For intermediate welfare functions that moderately favor the rich however, it is optimal to have no migration at all.

I am always interested in the perspective in these sorts of hive-mentality collectivist metrics of "optimality." They don't care about what individuals want, and they would prefer to control people and move them around like chess pieces. Or, in this case, make people stay in the little squares where they happened to be born.

(Nod to KL, who wonders, "Why We Can't All Just Get Along?")

Tuesday, September 04, 2007

Three Suitcases, Zero Dresses: Guest Blogger Ms. Mungowitz

A guest post....from my wife. Yes, this really happened.

I added some editing, and obiter dicta. But this is her story, so I'll let her tell it.

Went to Fundman's wedding in Chicago. (Editor's note: For my view, see here) Nice big Italian-style wedding with open bar. (Editor's note: It's also Irish style; my wife is from Rhode Island...EVERYBODY's Italian) So we decided to fly up and back overnight and leave boys alone for first time. We were a little worried about what the older younger Munger would do, given that he had done this the week before.

So, plan was flight to leave at 9:20 a.m NC time, gets in 10:20 am Chicago time. Direct flight. Rent a car. Go to hotel, about 20 min away. Get dressed up, refresh... wedding is at 2:00 and about 30 min from hotel. Should be no problem. Easy in fact. Well, pride goeth before a train wreck.

Since you can't carry on liquids, such as shampoo, toothpaste, perfume, etc. Have to check a bag. But even though direct flight, I wanted to make sure I had the necessary things to change into, dress, hairpiece (updo, thank God for that) shoes, purse, wrap. (Editor's note: It is terrifying to witness the full array of feminine battle equipment, laid out for packing. I ran screaming from the room)

What actually happened? We wake up Sat. am early. Get call from airlines, flight delayed 40 min. Go back to bed for 20 min. Get up, have tea, shower, finish packing. Had most done night before. (Ed: Three suitcases! One night, three suitcases!)

A friend of Michael's (Ed: Neanderbill!) is traveling with us. Get to airport. No problems. On the runway getting ready to take off, I start to doze off and all of a sudden I get this image in my head. My dress still hanging on closet door. I told Michael, I think I forgot my dress. He said, no you didn’t. (Ed: she forgets NOTHING. She never forgets). Get to Chicago, check luggage, no dress. That's right, I had forgotten my dress!!!! I didn't even have a nice pair of pants to wear, brought jeans. (Ed: It was only one night. Makes sense not to bring other clothes. Still hard to know what was in the three suitcases, though)

Figured I'd stay at hotel. Michael and Neanderbill could go to wedding, and maybe I could find something in between wedding and reception, which didn't start until 5:00.

Get to Chicago. Called hotel, they told me there was a big mall 10 minutes from hotel. Sounds good. Michael is Hertz Gold member, car rental should be ready, no paperwork.

Nope, not ready. Person in front of us taking sweet time deciding whether to upgrade or not. (Ed: she exaggerates not. The guy was actually saying out loud, "Do I want the SUV, or the minivan? $20....SUV...minivan?" I wanted to beat him). Another 20 precious minutes lost.

On way to hotel. Railroad crossing. Longest and slowest train ever. Another 10-15 minutes lost. (If car had been ready, would not have hit the train crossing). (Ed: Neanderbill pointed out this nonlinearity: "Gosh, if we hadn't gotten held up at Hertz, we would have missed this train, too!" The train was going slow enough you could safely have crawled under it, between the wheels, without getting hit. I suggested Neanderbill might want to try that, just to see).

Get to hotel. It's about 12:15 now. (Ed: Remember, wedding is at 2 pm, and we don't know exactly where it is). Nice receptionist wrote out directions to mall while we went up and got freshened up. Had jeans on, sneakers, pearl necklace and earrings (pearl bracelet broke when getting dressed) and my hairpiece, again so thankful I had that (and I had originally thought I would have time to hair done at the hotel, huh) Michael all dressed up in suit. Carried empty backpack so I could put in clothes and took the shoes, purse, wrap.

Get to mall. Have about 30 min to find a dress. Mall is huge. Tried Lord & Taylor. Ran in, told clerk situation. Showed me all kinds of dresses, just not me. Some awful ugly, can't believe people wear them. Did find one I kind of liked, black lace like. Clerk was nice enough to point out price, $585.00. I didn't pay that much for my wedding dress (although that was 21 years ago!) (Ed: JEEZE! I didn't even know this. Dodged a bullet there...)

Decided to try another store. Nordstrom. Again told clerk story. Found a couple to try on. Had been looking for something in a solid color, simple, but shapely. Most good colors gone, they have out fall colors, boring. Found a sleeveless dress, black and I didn't really want to wear black to a wedding. But it had taffeta and the bottom was like a ballerina dress. Shirred waist, very flattering. At first, did not go with the bra I had. Did not have time to find new bra. Took bra off. (Ed: !!)

Thankfully, everything fit ok, nothing showing. Through clothes in my bag (still had on old white sneakers, with tall white socks), walked out of dressing room, asked clerk if I could pay for it and walk out in it. She snipped off price tag. Couple of women looking, complimented the dress and my hair (told them it was piece). One of them said I looked like a ballerina. But they asked about my shoes, told them I had them in the car. Then ran to jewelry section and bought faux pearl bracelet. Again, snipped off tag and wore out.

Running out in mall in black dress and sneakers, trying to find way out. Michael and friend were at a restaurant having a drink (non alcoholic so far). Finally found them. Have about 45 min. Church is supposed to be about 30 min. Missed exit. (Ed: we were using wrong directions. My fault. But I blame Neanderbill). Went out of way and had to do U turn. Get to the church 5 minutes before wedding.

Very nice ceremony. Go back to hotel and nap. To reception. Many compliments on dress. Told story.

Interesting, gender-specific reactions to story. Nearly all men thought I had deliberately left dress behind so I could buy a new one.

They are crazy. No one wants to have to find a dress in 30 min. No women thought that.

But dress was great for the swing dances. We danced the night away. Had floor to ourselves sometimes. Now I have new favorite store. Nordstroms. Been looking on line at all kinds of pretty dresses, may get out to South Point next weekend. (Ed: AAAAARGH! SHOOT ME! Though, I have to admit, an outstanding dress. She looked incredible.)

She Blinded me with Science!

Jessica Alba that is. Or did she?

According to the Telegraph, a survey decided and then Cambridge scientists proved that Jessica has the most sexy walk

Its apparently all about the .7 waist/hip ratio which lets her shake it in a way more elfin stars cannot!! Hmmm..... ok.

However, not so fast says Ben Goldacre at Bad Science: apparently the survey was done internally at the PR firm pushing the story and Jessica actually finished 7th out of 10! Plus the Cambridge professor (who was paid around $1000) claims the following:

I suggested that as a bit of fun and nonsense, but no
more, that they could say something like the following:

“I have studied how 10 celebrities have ranked for “sexiness of walk” in
relation to their bust-waist-hip measurements. (Angelina) Jolie’s measurements at 36-27-36 mean she has the biggest waist surveyed, and a waist-hip ratio
(WHR) of 0.75. Scientists have repeatedly discovered that WHR is a
significant factor in judging female attractiveness. See, for example,

Women with a WHR near 0.7 are invariably rated as most attractive.
However, it’s probably ‘the way she moves’ which attracts, not just shape.
Angelina’s slightly larger waist may give her the torso strength with
which to produce a better angular swing and bounce to the hips than
minuscule stars such as Eva Longoria and Kylie Minogue can achieve with
32-21-33 and a WHR of only 0.64.”

He mentions Angelina Jolie because she actually came in first in the survey.

Man oh man, how do you get on the list for gigs like this?

This just in from the department of Doh!!

Rock stars more likely to die prematurely

Yes, the Centre for Public Health at Liverpool John Moores University has been busy pushing back the frontiers of science.

The paper clearly describes a population of rock and pop stars who are at a disproportionate risk of alcohol and drug related deaths," said Mark Bellis, lead author of the study.

Which leads us to ask: How in the world is Keith Richards still walking around soiling our planet?

Look Ma, no batteries

The electric car of the future may well not have batteries but instead a super-duper ultra version of the humble capacitor. Austin Texas based EEStor has patented ''technologies for replacement of electrochemical batteries,'' meaning a motorist could plug in a car for five minutes and drive 500 miles...without gasoline.

In the vacuum tube audio world I frequent, people argue about the sound of different types of capacitors (which tends to drive engineers crazy). Hmmm...... I wonder what one of these babies would do in my homemade amp.

We'll probably never know because GM will buy the technology and bury it, right?

Monday, September 03, 2007

dubya's gettin' 'er done!

or "Look out Iran!"

In 2002 Dubya told us about the axis of evil. Iraq, Iran, and North Korea. Iraq is now off the list (things may not be any less evil there, but I'm sure they are off), and the big news this weekend is that North Korea has agreed to provide a full declaration of all of their nuclear programs and will disable their nuclear programs by the end of this year, 2007.

For their part the North Koreans say the US has agreed to take them off the list. Now maybe this is a "wily Filipino" situation, but it does seem that they lived up (finally) to their promise to shut down the Yongbyon reactor and maybe they are really pulling a Libya here.

That just leaves the Islamic Republic of Iran and 16 more months of Dubya. Who can bet against him?

Sunday, September 02, 2007

Viva Le Bron!!

It's "mission accomplished" for USA basketball in Vegas. All opponents smoked, the Olympic berth secured and only a meaningless rematch with already trounced Argentina left tonight.

The big three, LeBron, Kobe, and Carmelo did the job, but LeBron was first among equals.

From the stats department:

LeBron shot 76.5% from the field, 57.7 on his treys (15 for 26), while averaging 16.7 points in 21 minutes per game. He also led the team in assists (with 44 to JKidd's 42) and was second in steals (with 15 to Kobe's 16).

Kidd only took 10 shots but did have the 42 assists (to only five turnovers).
Kobe shot well (56%) and was the steals leader, 'Melo shot well (62.8%) and did nuttin' else (as his is custom).

KPC favorite from his turnaround year with the late lamented OKC Hornets Tyson Chandler made the most of his limited playing time (rebounding and blocking shots). I think he may well make the Olympic roster.

Weekend Roundup

As we head into that most ironic of American holidays (Thanksgiving being #2), KPC presents for your perusal the weekend roundup:

1. Tyler Cowen takes off his rose colored glasses and comes to his senses.

In his own words: "What does it really mean if some part of your brain lights up? Who really knows?" The idea that seeing what parts of your brain react to stimulii somehow explains what is actually going on is one of the dumbest ideas ever and economics has not proven immune to this so far useless practice. Kudos, Tyler for seeing the light.

2. Lee Kuan Yew explains the resource curse.

In his own words: “Supposing we had oil and gas, do you think I could get the people to do this?” Mr. Lee said. “No. If I had oil and gas, I’d have a different people, with different motivations and expectations.

“It’s because we don’t have oil and gas and they know that we don’t have, and they know that this progress comes from their efforts,” he said. “So please do it and do it well.”

3. Zambia loves chess!

25 year old Amon Simutowe, who learned to play from reading magazines and became national champ at 14 and international master at 16, is poised to become the first black grandmaster from Sub-Saharan africa. Amon went to UT-Dallas on a chess scholarship and is said to win by "grinding his opponents down". Is there any other way to win?

4. Who needs Raymond Carver when you have the Chadron Record Police Beat?

Examples: Caller from the 100 block of North Morehead Street requested to speak to animal control because caller felt that someone was coming into his yard and cutting the hair on his dogs. Dispatch advised caller to set up video surveillance on his house. Caller said he planned on it.

Caller on the 900 block of Parry Drive advised a squirrel has climbed down her chimney and is now in the fireplace looking at her through the glass door, chirping at her. (hat tip to Dan Barry at the NYT)