Thursday, January 31, 2008

Munger appointed to "Truth Squad;" Mayor Ness is an Idiot!

So, a gleeful reader sends this eclipping:

Sen. Barack Obama’s Minnesota campaign Tuesday announced the creation of a Minnesota Truth Squad, whose purpose will be to combat misleading information about the Democratic presidential candidate in the lead-up to next week’s “Super Tuesday” caucus night.

Duluth Mayor Don Ness and Sally Munger, daughter-in-law to the late state legislator Willard Munger, were announced as members of the state’s squad.

Ness took some criticism when it was announced that he was the co-chairman of Obama’s Minnesota campaign, with some questioning whether it would divert too much attention from his new role as mayor. He said Tuesday that he has worked 12- to 16-hour days as mayor while spending “maybe a grand total of an hour to an hour and a half” on the Obama campaign, and being a member of the truth squad should take only a few minutes out of the week.

“It’s my understanding that if a situation arose where we had an issue come up that I would have a perspective to share, that it would be a call to make,” he said.

Now, that is kind of funny: A Munger on Obama's "truth squad."
But the real bonus is the statement of the mayor there at the end. Let's parse it:
"It’s my understanding that if a situation arose where we had an issue come up that I would have a perspective to share, that it would be a call to make."

That is nearly perfect iambic pentameter, folks!

It's MY underSTANDing that
IF a SITuAtion aROSE
where WE had an ISsue come UP
that *I* would HAVE a perSPECTive to SHARE
that it WOULD be a CALL to MAKE.

(okay, needs more feet to be pentameter. But he was going for it, by golly!)

It just sings. It doesn't mean a damned thing, but it sings. Mayor Ness, you are my hero. You exhibit glibNESS, smoothNESS, and poeticNESS. The very epitome of mayorNESS, I would say!

I Kid Thee Not....

An actual letter, from the actual Deadly Toxin, at the actual UT-Austin, where I used to teach. If you don't believe it, check it.

An inconvenience to inattentive students

In the midst of all the political drama, entertainment tragedy and sports triumphs that permeate our senses, I have a small yet important request: Please place the crossword puzzle next to the Sudoku again! I find it difficult to slyly switch back and forth between them during the occasional class when my professor just can't keep my attention. This isn't to disrespect the professor. I enjoy my classes, but sometimes I just need a little break so I can focus my attention even more. I understand the demands of advertising can hinder proper placement of such puzzles, but I think I speak for much of the student body who enjoys such puzzles when I say, "Please, please bring it back." Thank you, Daily Texan, for keeping our distracted minds occupied.

Alyssa Hudson
English and government senior

A government major! Oh, the memories.

(Nod to the lovely and talented Ms. Barthelemy, who knows what she is talking about!)

Law Suit Coolness!

Wow! I'm surprised.

We won, or at least didn't lose. I was an expert witness in a case, where the ACLU and the Libs and the Greens are suing the state of NC to get the ballot access law changed. for yourself!

I have just been doing some research myself, and have supervised a dissertation, that shows that:

A. Easing ballot access makes the state-sponsored parties more accountable, and more responsive, to the citizens of the state. In particular, the Democrats are more liberal in states with better ballot access. It doesn't matter if a party actually enters on the left (Greens, for example). Just the THREAT of entry is enough to make the Dem candidates move left.

B. Better ballot access also seems to reduce corruption. Number of arrests, amount of money stolen, etc., all down if it is easier to get on the ballot.

(Nod to Anonyman, who was worried I might need a hug)

If Hugo Chavez was on Facebook it might look something like....


"Look on my works, ye Mighty, and despair!" (or Pretty in Pink)

Tiger Woods beware: Its the dawning of the age of.... well, this guy!

(and, no we didn't photoshop that photo)

Britain's Ian Poulter has, despite no PGA tour victories ever, announced that this year "Only I can challenge Tiger's supremacy"

Go on sir!

"Don't get me wrong, I really respect every professional golfer, but I know I haven't played to my full potential and when that happens, it will be just me and Tiger."

The Englishman, asked by the magazine to predict the winner of the first major of the season at the U.S. Masters in April, replied: "Put Tiger down for that one".

For the year's second major at the U.S. Open, he said: "You can put me down for that one".

Besides dissing all other pro golfers including the 21 others with higher world rankings than himself, Ian took a special shot at Ole Lefty (Phil Mickelson):

"Tiger is one in 10 million. "He is extraordinary. If you look at the rankings he is almost two and a half times better than the guy in second place."

Nicely done sir, Kudos to you.

UPDATE: Now, probably after seeing this blogpost, Mr. Poulter is (like Charles Barkely in his "autobiography"), claiming that he's been misunderstood, "The whole answer to the question has been taken out of context," he said.

Kudos hereby retracted sir for not having the onions to stick with what you said and take the heat.

Wednesday, January 30, 2008

Them Hornets are for Real!!

From our seats in the Ford center last season you could kind of see this coming. The OKC/NOLA Hornets were a good young team on the rise that got decimated by their big 4 missing a collective 126 games between them (Chris Paul (missed 18 games), David West (missed 30 games), Peja Stojakovic missed (69 games), Tyson Chandler (missed 9 games)). Even so they almost made the playoffs despite putting a pretty offensively challenged team on the court down the stretch. Chris Paul was GOOD and Tyson Chandler was scoring as well as rebounding.

Now, sadly for us, the Hornets are gone, but they are healthy and kicking butt in the NBA's tough Western Conference. Just a bit past the halfway point of the season, they are the biggest positive story in the Association, leading the West with a 32-12 record.

CP3 is averaging 20.6 points, 10.7 assists, 2.7 steals and only 2.6 turnovers per game. These are phenomenal numbers. For comparison, two time MVP Steve Nash's stats are 17.4 points, 11.9 assists, 0.7 steals and 3.7 turnovers.

David West puts up 19.5 points and 9.3 boards per game which is about the same as Kevin Garnett's numbers with the Celtics. Chandler is averaging 12 points and 12 boards per game and Peja is shooting over 45% from the three point line.

I know it's just the regular season, their bench is an issue, and the road to the finals goes through San Antonio and all that crap, but man the Hornets are doing great. I miss them a lot.

American Art

One of our (me and Mrs. Angus) favorite artists is Joe Ramiro Garcia. It's hard to describe exactly why I love his stuff so much. The appropriated images, the color combos, it's like Warhol mashed up with Hodgkin (with a lil bit of early Jasper Johns tossed in). Anyway, here is one of his pieces that currently hangs on the walls of Chez Angus:

And here is one that currently resides in the Pan American Gallery in Dallas that has been seductively calling to me for a spell now. Maybe when we get our stimulus!

Another Fed Cut??

I am fairly stunned by the prospect of another Fed rate cut only a week after the 75 basis point bombshell Ben already dropped between meetings.

As I've said here before, the situation still seems more like a crisis of confidence in financial markets than a down on the ground real economic recession. That is to say, the Fed should be focussed on its lender of last resort role for banks (which it has been doing with its auctions of reserves) and not its recession fighter role.

It's not just foaming at the mouth nut-jobs who feel the Fed is now more or less targeting the stock market, Here's Willem Buiter from the LSE writing in the FT:

It is now clear beyond a reasonable doubt that the Fed wants to prevent sudden sharp drops in the stock market. It has not, however, drawn the logical conclusion from this endogenous widening of its mandate. So instead of pussyfooting around with 75 basis point cuts in the target for the Federal Funds rate, I propose that the Fed put its money where its heart is by engaging in outright open market purchases of US stocks and shares.


Even though the initial estimate of 4th quarter GDP growth is a puny 0.6%, December durable goods orders were robustly up, Unemployment is still under control, new jobless claims are still under control. I continue to believe that inflation is a potentially serious problem that the Fed is exacerbating. Since August of 2007 the Fed Funds rate has been lowered from 5.25 to 3.5 and allegedly will go to 3.00 later today. At the same time CPI inflation has risen from around 2.5% to over 4%.

Even the Fed's own weird PCE (personal consumption expenditures) inflation minus everything that's going up measure is rising and it's being reported that the Fed may deliberately set real interest rates negative using even that measure of inflation. Just to be clear, this has already happened using regular data, the point is that soon the Fed will have to admit that they have pushed real rates negative even using their contrived "preferred" inflation measure.

Many people believe a major contributing cause to the financial problems we face was the Fed under Greenspan keeping rates too low for too long. Now we are going to fix or limit the effect of those problems by again creating negative real interest rates. Hmmmmmmm......

Tuesday, January 29, 2008

One man's nightmare is another man's Dream

Well not exactly dream per se, but in US politics I root for gridlock, and given the likely continuation of Democratic party majorities in the Congress, that means I need a Republican party candidate to win the White House. My wallet fears an all Democratic government and I have gotten a good whiff of the stink produced by our recent all Republican government. Bad ideas abound on both sides, so give me the status quo please!!

Now, Frank Rich of the NYTimes outlines how just such an appalling (to him) scenario could occurr: Hillary vs. McCain, or as Frank so charmingly puts it "Billary" vs. McCain.

The Republicans need to nominate a candidate that non-core Republicans might also vote for. McCain is that guy I think. Plus, any blah feelings about him from the base would be more than overcome by its rabid Clinton hatred. The risk would be some sort of third party run by Huckabee or Paul that would be the right's equivalent of Ralph Nadar's electoral adventures.

I'm not sure which part of this nightmare/dream scenario is less likely, each leg seems about 50/50 to me at this point. Hillary still leads in a lot of Supertuesday states (though pollsters have not been kicking butt so far this cycle) but the Clintons are getting eviscerated in the press (See Chris Hitchens' eloquent piece here, E.J. Dionne's here) and Obama got Teddy now!

If I can't have Kucinich - Paul, give me Billary - McCain and please universe, let McCain win!

Are there lessons for free banking in the Second Life Fiasco?

In the virtual world Second Life, they had a version of free banking. People could open banks, take deposits and pay interest and compete for deposits with other virtual banks. Linden Labs, the "game's" creator, took a Laissez-Faire no regulation attitude.

Apparently many of these banks collapsed after offering extremely high interest rates (over a 40% annual rate) to attract deposits, using the funds for speculative virtual investments and going broke leaving depositors holding the proverbial bag. In other words, fraud!

Some stories are here, here, and here.

Supposedly one bank's collapse produced over $500,000 in real money losses to its depositors.

Now I don't know much about virtual worlds or free banking theory, but this can't be good, right? Maybe at least it would make a good test question on Bryan Caplan's monetary theory midterm? Can these virtual worlds help us learn anything about real economies?

Monday, January 28, 2008

Duke Performance Art

I had a big day, on the pompous ass prof. front. A play, in two acts.

ACT I: Young female grad student comes into the Perk (coffee shop), announces she has had the hiccups for 90 minutes and can't shake them. I am sitting with a group of five or six other poli sci grad students.

Me: "Have you heard about the new political theory requirement? Every political science grad student has to take a course on the philosophy of Immanuel Kant."

Hiccup Student: "WAH! WHAAAAAAAH!?"

Me: "Just kidding. But it cured your hiccups, right?"

Student: "....omigod....that was terrifying. But yes, it did! My hiccups are gone. Thanks!"

ACT II: I am lecturing in the course John Aldrich and I are co-teaching. Student in front row (in FRONT ROW!) is holding up newspaper in front of his face. People behind him crane around to try to see. This is not the first five minutes of class. THis is 45 minutes in. The kid just got bored.

Me: "You know, I have to give credit where it is due. Most people, if they are going to disrespect the prof, and read the paper, would do it in the back. I guess I should be impressed, though: This gentleman cares so little what I think that he opens the paper up right here in front. Let's give him a hand, folks!"

(The class gives an enthusiastic hand for this show of juevos. But juevos boy himself turns a deep purple - red, for about 30 seconds).

Battle of the Recession Graphs!

According to my former student, friend and co-author Mark Perry (and endorsed by N. Gregory Mankiw), The job market is strongly signaling that we are not yet close to a recession.

Here's Mark's graph:

On the side of gloom and doom comes Floyd Norris of the NY Times arguing that the job market shows we are likely already in a recession.

Here's his graph:

Looking at the NY Times graph, it's pretty clear the prediction rests on joblessness continuing to rise strongly. The implication seems to be that hitting 13% means the rise to 30% and above is pretty much inevitable. Looking at Mark's, it's pretty clear that the prediction rests on January's new jobless claims being a good predictor of Feburary's March's and April's. I'd hate to think we were one bad month away from a recession!

Which graph do you like best? and why?

Everybody is finally equal

Somewhere (perhaps on Titan?) Kurt Vonnegut is looking down on the Democratic Presidential nomination race and smiling. Given all the problems Hillary's been having with a dodgy, white haired, scandal plagued, ladies man at the front of her campaign, the universe has acted to even up the score by giving the surging Barack Obama pretty much the exact same handicap.

Sorry Barack, but fair is fair.

No-no, Wojo!

I am gonna go a little FJM here. Yahoo sports columnist Adrian Wojnarowski sez Kobe Bryant is the choice so far for this year's NBA MVP, basically because it's his turn:

"Most Valuable Player: Kobe Bryant, Los Angeles Lakers

Sometimes, there are superstars due to win the Most Valuable Player Award. It is the year owed them. No one wants to hear this, but it’s true. Once Shaquille O’Neal left, Bryant was considered an unworthy candidate because the Lakers were still losing.

Well, they’re winning again now. Until Andrew Bynum went down, they were on the brink of the Western Conference’s best record.

Sorry, but just because the Boston Celtics have the NBA’s best record, it doesn’t make them its best team. They play in the Eastern Conference. What KG has done with Boston has been impressive – even inspirational – but it isn’t on a level plane with Bryant transforming the Lakers back into Western Conference contenders. Early in the season, it looked like LeBron James. Before he’s done, James will win four or five MVPs. But unless the Lakers collapse, I’ll make the Cleveland Cavaliers star wait a little longer.

To think that Garnett could have two MVP trophies before Bryant gets his first is unfair. To become an MVP, people told Kobe to win without Shaq. He’s doing it. This time, it’s his trophy."

People this is whack. Lebron James has NO ONE ELSE ON HIS TEAM. NO ONE!! When Lebron hurt his hand and sat out 5 games, the Cavs lost all 5. After a very slow start, they've won 10 of 12 so far in January.

Plus LeBron has beaten the Lakers twice this year already (including yesterday on national TV) outdueling Kobe both times (and the Cavs have won 5 straight against the Lakers over the last 2+ years).

Overall, LeBron is averaging 29.7 points on 48.2% shooting with 7.6 boards and 7.4 assists per game while Kobe is averaging 27.7 on 44.9% shooting with 6.1 boards and 5.1 assists per game.

No one is more valuable to their team that Lebron is to his, so if that's the definition, he's the mvp. His stats are better than Kobe's and he's outplayed Kobe twice head to head in games his team also won, so if it's who's having the best season, the answer is still Lebron.

The argument that someone is "owed" an MVP is ludicrous.

By the way, KG is averaging 19 points (on 55% shooting) and 9.9 boards. I don't see him in the MVP conversation. I don't even expect to see him in the NBA finals.

Sunday, January 27, 2008

Hair Yesterday, Gone To Raleigh

Bayou Jack and Dutch Boy visited the Mungowitz homestead, and high school stories were told. Dutch Boy is actually considering moving, with his wife and fam, from the Nederlands to the Triangle! That would be great.

We had a great time. And, this picture was shared:

Wow. Nice haircuts, guys. I believe the year was 1976, if you hadn't guessed.

"Gangstaas! What's up?"

As you probably can tell from the title of this post, I took Mungowitz's advice and finally saw Superbad. I didn't like "The 40 Year Old Virgin" at all (just wasn't funny), so I'd been boycotting Judd Apatow films, but man, Mungo was so right on this one.

Mrs. Angus and I laughed pretty much continually through the movie.

I am seriously considering changing my blog name from Angus to McLovin, but I don't think I'm good lookin' enough to pull it off.

That guy totally made the movie.

Butt Whoopings

1. Obama 55, Clinton 27. Truly an epic butt-whooping.

2. After three rounds of the Buick Open, Tiger is 18 under (and 8 strokes in the lead), while his nemesis Rory is 14 shots behind.

3. Heat 98 - Pacers 96 (to snap a 15 game losing streak by what has suddenly become the worst team in the Association).

4. Unseeded Jo-Wilfried Tsonga over world #2 Rafa Nadal 6-2, 6-3, 6-2, in the semis of the Australian Open.

5. Related to #1, Edwards pulled in around 18% in SC. What do you call someone who gets their butt whipped by someone who got their butt whipped? KPC friend Steven Taylor suggests toast as the appropriate signifier!

Saturday, January 26, 2008

Undercover Economist

It is fun to write essays on economics.

It is even more fun to read someone else's comments on your essays, when it is clear (as here) that the reader understands it even better than I did.

In fact, let me reproduce Tim's last paragraph, because it is better than anything I said:

There's a balancing act: too little outsourcing and a firm becomes a socialist state, denied incentives or price signals; too much and the problem of coordinating all the contracts becomes impossible.
It's worth thinking about how changing technology may alter this balancing act. The answer is not obvious. Some outsourcing decisions are made much easier to coordinate thanks to the internet and all the rest. At the same time, inter-firm communications also improve. And if the world is full of firms making more complex, intangible products, that may favour more implicit contracts and therefore larger firms. I simply don't know the answer and I'm not sure anyone else does either.

Yep, yep, yepper. No one knows, no way to know. But firms that figure it out make money, and get bigger.

Governments could never solve this problem, because (1) no price info, at any level, to make judgments ex ante, and (2) no profit feedback, to let you know if got it right, ex post.

Is optimal firm size increasing, decreasing, or staying about the same? I'll be able to tell the answer for about 2010!

UPDATE: A reader notes I had botched the second link above. Fixed, now. Thanks!

leather hotpants yes, immigrants no!

From Spiegel comes word that Germany is not a multi-ethnic paradise.

here is one lovely anecdote from the piece:

"I recently interviewed an asylum seeker from Cameroon who was living in Potsdam, just west of Berlin. He said he was so used to people calling him "n****r" or making ape sounds at him that he no longer paid attention. The thing that really got to him, though, was being followed around shops or the local library by staff expecting him to steal something. Or seeing how guests in a cafe would remove their clothing from the coat stand he had just put his jacket on."

As for the title of this post, well feast your eyes people and don't forget to tip your server!

Our Favorite Commercials

John Thacker notes, in comments, he prefers the rap-inspired
commercial stylings of Sammy Stephens of Flea Market Montgomery.

"It's just like a Mini-mall!"

Sometimes, you just have to go old school. John, you win: that's
the finest commercial I have ever seen.


Simon likes it.


I'm sorry. I can't stop. It only gets better. "Two Weeks
in the Hole."


Not surprisingly, the "copyright violation" videos got taken down. Sorry. The one with Randy and Simon was extremely good.

U Can't Touch this!

Thursday, January 24, 2008

It's All Good

Longtime KPC friend Chris notes that "It's All Good!" motors
has commercials that will give "Mo Money" a run for

Now, THIS is messed up....

An article sent to me by an overjoyed reader.

Lenny Sapozhnikov, AFL-CIO deputy state director for Pennsylvania, recently talked with Michael Munger, president of United Steelworkers (USW) Local 1660, which represents workers at the Wheatland Tube Co., in Wheatland, Pa. Munger recently was elected vice president of the Mercer County Central Labor Council, and last week, he led a rally outside the office of Rep. Phil English (R) as part of the USW’s Protect Our Kids—Stop Toxic Imports campaign.

Q: You just wrapped up the Toxic Trade Day of Action on Jan. 16. Tell us more about the goals of this campaign and your own involvement.

Munger: The goal of the campaign is getting tougher trade laws and more stringent safety tests for imports coming into the country. We all heard about the unsafe products coming into the country. Kids are having contact with toxic chemicals in those products and getting sick. We have good safety measures in this country but no one is testing the imports. We want tougher trade laws enacted.

Mike, Mike, Mike: All we need to do is make final retailers responsible for the safety of the products, and open them to private lawsuits if the products they sell are toxic or dangerous. Common law doctrine of "last best chance," in a statute.

We don't want bureaucrats at the borders opening up container boxes, breaking pallets, opening shrink wrap, opening cardboard boxes, and then opening the plastic wrappers that protect toys. That will never work.

Just make the retailer responsible, privately, for products they sell. And the problem will be solved.

The "problem," in fact, is that we rely on the state in the first place. This is an easy problem to solve.

We do NOT want "tougher trade laws enacted," Mike!

Salt at the Chippy Shoppe: Stop the Madness!

You can't make this stuff up.

In time for National Salt Awareness Week starting next Monday, 13 chip shops in one town have been given shakers with only five holes instead of the usual 17 or 18.

The six-week trial run is going ahead in Rochdale, which has the UK’s third-highest death rate from heart disease and strokes.

Councillor Wera Hobhouse claimed the new shakers would mean “everybody was a winner”.

And I didn't. Make it up, that is.

Neither did Junksmith, just reported it.

Wera Hobhouse? Reminds of Ima Hogg. (And, no, she did not have a sister named "Ura").

Your Bill Clinton Roundup

Bill Grieder lambastes the Clintons

Eugene Robinson in the WAPO sizes up the many faces of Bill

Here the AP weighs in on Clinton's recent remarks on race and gender

Here's my money quote from the Grieder piece:

"The recent roughing-up of Barack Obama was in the trademark style of the Clinton years in the White House. High-minded and self-important on the surface, smarmily duplicitous underneath, meanwhile jabbing hard to the groin area. They are a slippery pair and come as a package. The nation is at fair risk of getting them back in the White House for four more years. The thought makes me queasy."

Ya, me too.

More Good news for Calderon!

The last two Mexican Presidents (i.e. the first two truly democratically elected ones) have had trouble advancing their policies because the old ruling party, the PRI, retains a large bloc of seats in the legislature and is their cooperation is crucial for the President's party (the PAN) to pass laws. This stalemate has so far blocked any sort of opening of Mexico's oil industry to foreign investment, despite the fact that PEMEX's reserves are falling and the domestic industry badly needs new investment.

However, over the last week, the PRI is signalling a willingness to allow some limited foreign investment in new explorations and to negotiate over further opening the energy sector. This is potentially a big victory for President Calderon as energy reform was/is one of his key issues. I wasn't wild about the fiscal reform "victory" he recently achieved, but this one looks promising.

Here is a Bloomberg story and here is a more recent piece from Reuters.

Nicely done Mr. President.

hat tip to Boz

Wednesday, January 23, 2008

One thing leads to another:

The Smugbone's connected to the Migrainebone!
Now hear the word of the Lord!!

"I can't call her sugar 'cause sugar never was so sweet"**

Sugar has enjoyed a massively protected status in the USA since 1937 (with the exception of a couple years in the mid 1970s). Tariffs, Quotas, Price Supports, Loans, and Restrictions on Domestic Production have all kept the US price of sugar well above the world price (I don't have exact numbers but I'm pretty sure it has generally been over double the world price). Here is a summary of US sugar policy over time.

Now Sugar has finally met NAFTA and it looks like Sugar will continue its winning streak.

NAFTA had a lot of its provisions phased in, with the more controversial ones pushed back. In the case of sugar, it was 15 years, i.e. now.

As of January 1, Mexican (and Canadian!!) sugar can freely enter the US market. However, the government is still committed to controlling the price of sugar! The new idea is that the Feds will buy up the Mexican exports and (wait for it, 'cause it's freakin' awesome) convert it to ethanol.

That's right folks, it's a perfect storm of stupidity that could get pretty expensive.

And it gets better: According to the WSJ (hat tip to John Thacker):

"Even sugar growers can see the fuss this might create unless Mexican exports are restrained. So they are now circulating still
another set of recommendations in Congress that would explicitly control the amount of sugar Mexico is allowed to ship to the U.S., and vice-versa. No new competition would enter either market. To supervise this cartel, the sugar lobby wants Congress to establish a new binational commission. The proposal would also ban the re-exporting of foods (notably candy) that use sugar imported from a third country, and would sharply limit how much sugar could come from third countries. In other words, sugar would be renegotiated right out of Nafta only weeks after it finally took effect."

The articles concludes as follows:

"So Congress and the Bush Administration have to choose: Either defend the economic benefits from an integrated North American market, or bow to one of the world's richest and most destructive special interests.

Anyone wanna bet on the outcome? My money's on the "destructive special interests".

** Muddy Waters y'all!!

Tuesday, January 22, 2008

Assorted Links

1. Econ Journal Watch Watch!! The new issue is here. It's a good'n people.

2. Christopher Hitchens doesn't like Huckabee too much either.

3. What goes on during sabbaticals: the inside scoop.

4. The Australian Open is heating up. Seriously, it's a great tourney this year.

5. DO NOT mess with Ringo!

We Still Got It!

Fears that the world economy has uncoupled from the US and that we aren't the biggest game in town anymore may prove to be unfounded, says the NY Times:

Stocks Plunge Worldwide on Fears of a U.S. Recession

some highlights:

"The sell-off was evenly distributed from East to West, with indexes plunging in London, Paris, Frankfurt, Tokyo, Hong Kong, Seoul and Bombay. The Frankfurt Stock Exchange’s Dax index plummeted 7.2 percent, its steepest one-day decline since Sept. 11, 2001. The 7.4 percent drop in Bombay’s Sensex index was the second-worst single-day tumble in its history.

Stocks followed suit when markets opened in the Western Hemisphere. Canadian stocks closed down 4.75 percent, and a key market index in Brazil was off 6.6 percent.

In Japan, which may be facing a new recession of its own, most indexes were off by more than 3 percent on Monday and were down another 4 percent in early trading on Tuesday.

Those jitters extended to fast-growing markets, like China, and those, like India, that are thought to be relatively insulated from the United States. Shanghai’s Composite Index closed down 5.1 percent, while Hong Kong’s Hang Seng fell 5.5 percent, also the most since Sept. 11, 2001."

Some thoughts:

(1) there goes the REST of my portfolio

(2) so much for de-coupling

(3) will the ECB be able to stick to their "no rate cuts" policy? will we get a natural experiment between accomodation (Bernanke) and toughness (Trichet)?

Monday, January 21, 2008

Watch your back Donald Owings!**

**for some context on the title look here

Sock it to me Baby!

Thank goodness that the Shrub is not too busy waterboarding that he can't stop and save us all from the scourge of cheap Honduran cotton socks!

What's that you say? Honduras is in CAFTA? Surely we can't unilaterally stop exports from a country with which we have a free trade agreement? Of course we can! The deal allows us to put tariffs on apparel items (I believe at the pre-CAFTA levels) "temporarily" if the domestic industry is harmed or threatened. We just have to give them 60 days notice and then announce our final decision.

Supposedly this is all because of one Congressman, Robby Aderholt, who represents Ft. Payne Alabama the erstwhile (and future??) sock capital of the world. He was the swing vote on CAFTA and his price was sock protectionism.

"Why in the world would President Bush go along with reinstating the tariff?

(Ed: Because he's a spineless moron?)

There's only one reason: a deal President Bush struck late one night in July 2005.

The Deal

That July night, Bush met with Fort Payne's congressman, Robert Aderholt, to talk about tariffs and the sock business.

That meeting was, most likely, the moment Aderholt had more power than at any other time in his life. The House was voting on CAFTA, the Central America Free Trade Agreement. The vote was an exact tie. Aderholt was the holdout. And President Bush very much wanted CAFTA to pass. So, Aderholt offered the president a deal: He could get his big free-trade deal only if he rolled back free trade on one industry, the sock industry.

"I told him this was what I needed," Aderholt said. "This was the one thing I had great concerns about."

That night, President Bush agreed to Aderholt's deal. CAFTA passed. And the White House gave itself a self-imposed deadline of Dec.19, 2007, to put back tariffs on sock exports from Honduras.

There is a further bizarre twist to this story. According to NPR, Ft. Payne isn't really hurting from the decline of the local sockmakers:

"Jimmy Durham, the county economic development officer, shows just how grim things have been for the sock business here.

On street after street, he points to buildings that used to house sock mills, most of which are now gone. With all these businesses shuttered, you might think Durham is in despair about the future of Fort Payne. He isn't.

Those closed sock factories are reopening as new businesses.

He points to Steadfast, which makes bridges; Ferguson, a major plumbing supply company; a distribution center for Children's Place; two new metal tube manufacturers; a high-tech label maker. For a town of only 13,000 people, this is a lot of new, good-paying employment. These jobs pay more than sock-making jobs.

In fact, most of 4,000 recently laid-off sock workers quickly found new jobs. It's an irony that reversing this tariff — fought for so hard by some in Fort Payne — will likely have its biggest impact thousands of miles away in Honduras."

Ya, but the bridgemaker and the plumber and the label maker aren't going to be beholden to Rep. Aderholt, now are they? And them damn Hondurans sure aren't going to put money in his coffers either.

So here it is people, in order to save free trade, Shrub was forced to destroy it.

Bonus fun fact: Speaking of Vietnam, did you know that William Westmoreland was the son of a textile manufacturer?

Mungowitz Goes to the Movies

My own attempt, three categories for the past year (yes, January to January, not 2007):

Best Movies:

Hot Fuzz
No Country for Old Men

Movies That Weren't Really That Good That I Loved Anyway:

Amazing Grace
American Gangster
The Bourne Ultimatum
The Bucket List
Knocked Up
Live Free or Die Hard
PS: I Love You

Movies That Were Awful, Just Awful:

Heartbreak Kid

(I should note: I didn't see Norbit, Sicko, or The Number 23. I'm not THAT stupid.)

Angus goes to the Movies

Mrs. Angus and I weekended in Dallas. Caught a Mavs game and saw a few movies. Against my inclination, but on the strength of its Golden Globe for best picture, one of them was "Atonement".

Holy Crap people. What a stinker! I was going all mystery science theatre on it, embarrassing Mrs. Angus. Let me be specific. The plot makes no sense, driven as it is by a string of impossibly unlikely coincidences and everything is melodramatically signaled well in advance of it's actual occurrence. Apparently torn between a happy or sad ending the filmmakers delivered both!! The movie is best viewed as a Monty Python-esque send up of British people. Everyone is a cliche. The foppish rich lads, the genius and perfect servant's son, the evil little girl, the hospital matron, the cockney soldier.

The half hearted attempts to show the horrors of war are basically laugh out loud funny for their surrealistic pomposity. No one seems real and there is nothing that makes you care or emotionally invest in any outcome, whether it be happy or sad.

Happy MLK (that's MLK NOT LBJ, Hillary!) Day

Mo' Money

For some reason, I have never seen these commercials. Fine work. (Here's one...a classic)

And, it is worth reading the comments on the YouTube entries. Some
folks take themselves VERY seriously. Check this exchange:

These commercials tickle me. Especially the white guy who try to act black using the latest rap slogan. But based on the nature of the commercials I know these locations are in run down neighborhoods. Not a place to be with refund money
JimmyShoe5 (2 weeks ago) Show Hide Marked as spam 0 Reply | Spam

I like these dudes swagga! I dont think some of y'all white folks understand black humor! This is great work...SUPPORT BLACK BUSINESS!!!
MOCHAFETISH1 (2 weeks ago) Show Hide Marked as spam 0 Reply | Spam

I just get the impression to sigh and say *ugh everytime I see these commercials. I've seen these commercials a lot since I've been in college (and the 1st time I saw it, I thought my eyes... and ears were playing games). I was a little shocked that something like this was a commercial.

This place has been doing business since 1995, so either something is being done right or there isnt anywhere else to go. Whatever the case, lately the majority of tv is going down hill!
michbearhunter (2 weeks ago) Show Hide Marked as spam +1 Reply | Spam

This s**t is airing around Detroit too. I'z gonna run right out and gets my taxes did by a bunch of gangstas. Yeah right!
Defender4all (2 weeks ago) Show Hide Marked as spam -2 Reply | Spam

AMERICA !!Welcome to Memphis.When Obama gets to be our next president there will be a MoMoney taxes on one side and a hot wings shack on the other side on every corner in this great nation.Thats the big change Obama keeps talking about.Oh gee whiz ,I can't wait.
JimmyShoe5 (2 weeks ago) Show Hide Marked as spam +1 Reply | Spam

This is a dumb comment. Must be a fan of Lil' Bush, the dumbest man on earth!!!
aloha0099 (3 weeks ago) Show Hide Marked as spam 0 Reply | Spam

10 year anniversery?! When was this commercial aired? how old is mo money taxes???
MOCHAFETISH1 (2 weeks ago) Show Hide Marked as spam 0 Reply | Spam

(Nod to J-DeB)

Neanderbill Writes From Doha

Neanderbill has been detailed to Doha, Qatar. His first email back:

It has now been about ten days since I arrived, and I have completed a full week of classes (out of 14). I was picked up at the airport by XX, whom I knew from YY. He brought me to my luxury apartment on the 14th floor of West Bay Towers, which overlooks a marina and the Bay. The apartment, which is supplied for me by ZZU, is bigger than the first house we owned. It was fully stocked with food and supplies. It has a washer/dryer, ironing board and iron. I still haven’t had to buy groceries, but will do so today.


Campus (Education City) is on the outskirts of Doha, about 8 miles due west of the Bay. I caught rides to work from people who live in the Towers, until my rental car became available – the day before the first day of my classes, Monday January 14. I left early for campus that day, but there was a detour that threw me off, and I got so hopelessly lost that they had to come and get me. It was a little embarrassing because I pride myself on having a pretty good sense of direction, but I wound up due north instead of due west. It made me glad (just that one time) that they insist I carry a cell phone, which ZZU also pays for.


Why couldn’t I check the sun for directions? Because it did not appear for nearly a week. I was expecting weather that varied between warm and hot, but it has been cold and rainy. Not as cold as YY or even Raleigh, but colder than I expected (lowest since I got here was 46 F at night). The apartment has no heat, for all its luxurious appointments.


What does the city look like? Well I’ll show you when I get a camera. (My old one died, and they laughed at Best Buy when I tried to replace the 64 MB cartridge.)


There is construction all over the place. The architecture is mostly modern, often interesting, and I like the way they often work symbolic Islamic features into new buildings. The Bay has lots of high rise buildings (say 20 stories or more), but after I get beyond that going to work, it’s usually one or two stories max.

Beyond the green of the beautiful Corniche, a walk along the bay, almost everything is beige or tan. And construction is everywhere, to repeat myself. One wonders what this would look like if it were “finished.”

Is it safe in this part of the Middle East? There has been only one terrorist incident: a suicide bombing in 2005 that killed two, including the perpetrator. You are much more likely to die in a traffic accident. There are few traffic lights and many roundabouts, though they are installing more traffic lights. They are also cracking down with fines, which they tell me are in the thousands of dollars. I’ll try not to find out how much.

I’d say the drivers are moderately aggressive, and it takes a little learning to negotiate the roundabouts, because people turn right from middle lanes, and are expected to, and you need to coordinate your expectations with theirs. BTW, gas is cheap. Three fourths of a tank of my little Chevy Optra LS cost about $7. Lots of people drive SUVs.

(Part of a continuing series!!

Friday, January 18, 2008

Reproduced in full from one of my favorite Blogs: "Long or Short Capital"

Five Simple Steps to Becoming a Billionaire: The Greenspan Method

by Johnny Debacle
  1. Become Fed Chairman
  2. Lower interest rates until you create an asset bubble. Hold them low until stagflation is in the air and a real estate bubble is floating
  3. Stop being Fed Chairman and release a book on how you didn’t do anything wrong and have no regrets. If possible, time it perfectly with the worst real estate market in generations
  4. Join the hedge fund which has profited more in % and dollar terms than anyone else has from your mess (which you didn’t create)
  5. Build a platinum statue of your muse, Ayn Rand, and sleep with it every night

It also helps if you are mostly unethical.

The Elder Younger Munger Should be a Musician!

In an earlier post, Mungowitz pointed out how his oldest looked like Robyn Hitchcock. Today, I discovered that he actually also looks a lot like Will Sheff of Okkervil River. Check it out!

Excuse me sir, Can I interest you in a nice fiscal stimulus??

Apparently everyone has decided that one is in order, we are now just arguing over whether to use Viagra or Cialis and what dosage to impart. Shrub has decided to go back to the rebate well.

Our bedrock economic theory says that rebates shouldn't work, right? Permanent income theory says we consume a fraction of our permanent, or lifetime income each period. So a one time rebate will largely be saved and consumed slowly over time. If we want a big increase in consumption, we'd need a permanent tax cut, right? But unless that was accompanied by spending cuts (or perhaps if it was money financed), simply deferring a tax liability doesn't raise permanent income either, right?

Shapiro and Slemrod claim that the theory is right, that rebates don't spark spending on anything remotely close to 1 to 1.

So, I gotta ask WTF, even though I know the answer. It's the same old shinola. Who cares if it works, let's just be sure we do something!

I guess this is why some economists are arguing that the cuts need to be targeted to people who will definitely spend it right away. Liquidity constrained people or Mankiw's "rule of thumb" agents.

Let me make this offer to Bush right here and now: Give it all to me, the whole stimulus package. I will spend every single penny within a month. I hate to do it, but hey I'm a patriot!

Baby 'tude

I have these friends. Can't identify them, but I do. And they have this baby.
Here is a representative photo.

Now, the mom is one of the nicest, smartest people I have ever met. But, if you cross her, if you go back on your word or if you are a rude jerk....well, that little apple didn't fall far from mother tree. That's what I'm sayin' here.

Great picture. Captures a certain something.

Thursday, January 17, 2008

Truly we live in the best of all possible worlds

The wind beneath my wings!

People let me try to explain, why I'm enamored with Johnny McCain
He told Iowans (in a shopping mall?) that he opposed subsidized ethanol
The Michiganders too he cut no slack, "Them manufacturing jobs ain't coming back"
In South Carolina he put on a show, saying "that confederate flag has got to go"
I am no longer a callow youth, but Mr. McCain, he speaks the truth
In the past I've always chosen to abstain, now I'm thinkin' bout votin' and votin' McCain!

Wednesday, January 16, 2008

No Lurking

If you won't do it for me, or for Angus, do it for Amber: don't lurk.


(nod to Chris, though he lurks sometimes)

What the heck else was he supposed to do???

Published: January 16, 2008

Richard Gunn, 52, was driving a lawn mower down a street in Dargaville late Monday evening when the police stopped him and accused him of driving the mower while drunk, a police spokeswoman said. He had already lost his driver’s license and said he had since been using the lawn mower — top speed 5 miles an hour — to get around. The police impounded the mower for 28 days.

Does this remind anyone else of this? I like this movie.

And the truth shall set you free??

John McCain told the truth in Michigan, Mitt Romney did not. Now Mitt has won Michigan and John McCain has not.

"I've got to give you some straight talk: Some of the jobs that have left the state of Michigan are not coming back," McCain said Wednesday in Grand Rapids. "They are not. And I am sorry to tell you that."

McCain is largely bereft of economic nostalgia, saying in Livonia that it "wasn't government's job to protect buggy factories and haberdashers when cars replaced carriages and men stopped wearing hats. But it is government's job to help workers get the education and training they need for the new jobs that will be created by new businesses in this new century."

For those displaced by job loss, McCain has proposed new worker-retraining and short-term unemployment programs and suggested subsidies that would offset a disparity in salary for those moving to lower-paying work.

Meanwhile Romney, whose dad was once president of American Motors (the worst car company ever and yes I'm familiar with the Trabant) says he won't accept that "defeatist" attitude.

In Michigan, Romney's campaign has portrayed McCain's attitude as a gesture of abandonment toward the state, which Romney has identified as a "canary in the mine shaft" of the national economy. "It tells you he doesn't understand this internationally competitive world we live in today," Ron Kaufman, a Romney adviser, said of McCain. "You can not give away any job for any reason."

Now, Mitt is actually a smart guy, he knows he's full of it and he has no plans to deliver on anything he said. It's just noise, like all the other politicians, except for my boy John McCain. For all McCain's faults I love how he lays the smack down even when it's not in his best short term interests.

Tuesday, January 15, 2008


Over the past weeks the FARC has released 4 hostages. However, there are new reports today that they have since kidnapped an additional 6 people. They reportedly continue to hold around 700 hostages. We've noted Hugo Chavez's claim that:

"These are not terrorist groups, they are real armies, real armies that occupy territory in Colombia, that occupy a position," said President Chavez in an address to the Venezuelan National Assembly.

"One must give recognition to the Farc and the ELN, they are insurgent forces that have a political project, that have a Bolivarian project that is respected here."

Now it turns out there is at least one American who agrees with him, the noted diplomat Oliver Stone:

"Farc is fighting back as best it can and grabbing hostages is the fashion in which they can finance themselves and try to achieve their goals, which are difficult. They're a peasant army; I see them as a Zapata-like army. I think they are heroic to fight for what they believe in and die for it, as was Castro in the hills of Cuba."

Unbelieveable. From our pal Wikipedia:

The FARC-EP has employed vehicle bombings, gas cylinder bombs, killings, landmines, kidnapping, extortion, hijacking, as well as guerrilla and conventional military action against Colombian political, military, and economic targets, to attack those it considers a threat to its movement. It has not been uncommon for civilians to die or suffer forced displacement, directly or indirectly, due to many of these actions. The FARC-EPs April 16 and April 18, 2005 gas cylinder attacks on the town of Toribió, Cauca led to the displacement of more than two thousand indigenous inhabitants and the destruction of two dozen civilian houses. A February 2005 report from the United Nations' High Commissioner for Human Rights mentioned that, during 2004, "FARC-EP continued to commit grave breaches [of human rights] such as murders of protected persons, torture and hostage-taking, which affected many civilians, including women, returnees, boys and girls, and ethnic groups."[29]

Krugman Forecasting Update

Greg Mankiw now weighs in, first saying that "his favorite forecasting services" are still predicting we will avoid an actual recession, and then pointing out that back in 2001, when we had our last actual recession, Krugman wrote that a recession was unlikely and any recession talk was political scaremongering by the Bushies.


The Onion Is The Source of Reality, Again

Have you seen my little "Sorry I'm Late!" essay?

This, from the Onion...a perfect dessert course.

(Nod to Mr. Reasonable)

From my Italian Wife....

From an email from my dear Italian wife, this story.
(If you don't think this could actually happen, you don't
have an Italian wife. And, she does make these anisette
cookies, and they are very good).


This is for all the Italians out there, and those who are lucky enough to be married to an Italian, and even to all the friends of Italians.

An elderly Italian man lay dying in his bed. While suffering the agonies of impending death, he suddenly smelled the aroma of his favorite Italian anisette sprinkle cookies wafting up the stairs. Gathering his remaining strength, he lifted himself from the bed.

Leaning against the wall, he slowly made his way out of the bedroom, and with even greater effort, gripping the railing with both hands he crawled downstairs. With labored breath, he leaned against the door frame, gazing into the kitchen. Were if not for death's agony, he would have thought himself already in heaven. For there, spread out upon waxed paper on the kitchen table were literally hundreds of his favorite anisette sprinkled cookies.

Was it heaven? Or was it one final act of heroic love from his devoted Italian wife of sixty years, seeing to it that he left this world a happy man?

Mustering one great final effort, he threw himself towards the table, landing on his knees in a crumpled posture. His parched lips parted, the wondrous taste of the cookie was already in his mouth, seemingly bringing him back to life.

The aged and withered hand trembled on its way to a cookie at the edge of the table, when it was suddenly smacked with a spatula by his wife............

"Get out of here!" she shouted, "They're for the funeral."

Monday, January 14, 2008

Pole Tax

The Texas Pole Tax, from the Economist.

You just can't make this stuff up.

Still....why such a strange tax?

(Nod to the AVP; Thanks!)

A Free Lunch!

David Malpass is the "chief economist at Bear Sterns" who specializes in semi-incomprehensible editorials in the WSJ. Today's is a dandy. He is proposing that the way to both fight inflation and combat an economic slowdown is to simply raise the value of the dollar!

Before our free meal though, let's have some appetizers.

Did you know that all floating currencies sink?

"Not known for deep thinking, the currency markets tend to sell currencies issued by countries which make markets responsible for currency values. The euro found this out the hard way in 2000 when Wim Duisenberg, then head of the European Central Bank, invited markets to set the value of the euro based on Europe's economic fundamentals. Look out below. The free fall didn't stop until Jean-Claude Trichet took over and installed policies to preserve the euro's value regardless of the market's view of economic fundamentals."

Dude, when one currency is falling, the other currency in the equation is ipso facto rising. When the floating Euro was sinking the dollar was also floating and it was floating up not down.

Did you know that Chinese inflation is due to its weak currency?

"The relationship between currency values and inflation or deflation is equally strong in other countries. China is suffering high inflation now because the gold-measured value of the yuan is weak (even though the trade-weighted yuan is strong due to dollar and yen weakness)."

OK you say, enough with the smart remarks, where's my free lunch? Well here you go. As noted, the premise of the article is that we can lower inflation and raise growth by appreciating the dollar, and, according to Malpass, we can appreciate the dollar simply by saying that we want it to appreciate:

"By saying they want a stronger dollar, the Fed, the president or the Treasury could make it happen. Government policy makers have almost absolute control over perceptions of the future scarcity of dollars. This controls the demand for dollars almost as much as it does the supply, setting its value as much or more than rates do."

Enjoy the buffet people. Don't forget to tip your server!

Your Hugo Chavez Update.

There was supposed to be a kinder, gentler, Hugo in 2008 takin' care of bidness at home.
You know, fighting inflation and getting the garbage collected.

But people, that's just not how he rolls, as the next two items indicate

Chavez stops exports of asphalt and threatens to nationalize firms that do not comply.

Chavez sez the FARC is not a terrorist organization but rather, he argued, "I say this even though somebody might be bothered by it: the FARC and the ELN are not terrorist groups. They are armies, real armies ... that occupy a space in Colombia." He added that the two groups' " insurgent forces" have a goal, "a project," that is "Bolivarian" and that "we respect."

And then of course there's this: Chavez floats the idea of another referendum in 2010, this time just to allow unlimited re-election. With a grin, he told lawmakers, ambassadors and government ministers in a nationally televised four-hour speech before the National Assembly that he was only “thinking aloud” and that it would be merely a “small amendment.” Lawmakers stood up applauding and chanted “Chávez is here to stay!”

You know it dudes!

Firm Commitments

For you podcastrians out there.

A discussion with Russ about firms.

Embarrassing, in retrospect. We NEVER once acknowledge the unpublished contributions of S. Bainbridge. Don't know what we were thinking. Sometimes, it just gets away from you.

Tax Base Mobility

A paper of interest to some readers, perhaps.

The Effects of Tax Competition When Politicians Create Rents to Buy Political Support

Wolfgang Eggert & Peter Birch Sørensen
Journal of Public Economics, forthcoming

We set up a probabilistic voting model to explore the hypothesis that tax competition improves public sector efficiency and social welfare. In the absence of tax base mobility, distortions in the political process induce vote-maximising politicians to create rents to public sector employees. Allowing tax base mobility may be welfare-enhancing up to a point, because the ensuing tax competition will reduce rents. However, if tax competition is carried too far, it will reduce welfare by causing an underprovision of public goods. Starting from an equilibrium where tax competition has eliminated all rents, a coordinated rise in capital taxation will always be welfare-improving. For plausible parameter values it will even be welfare- enhancing to carry tax coordination beyond the point where rents to public sector workers start to emerge.

Some thoughts:

1. "Allowing" tax base mobility? Like when East Germans couldn't leave? There are lots of reasons for mobility, and emigration.
2. It is clear why a "coordinated rise in capital taxation" improves welfare. Unless you are an owner of capital. Then it is harder to see why this is a Pareto-improvement. I can see why it would be POLITICALLY expedient. But if all owners of capital are ALSO better off....well, I will need to figure out what feature of the model produces this result.

Sunday, January 13, 2008

They call him "Mr. Sunshine"

Here's a compendium of the wit and wisdom of one Paul Krugman:

  • "[R]ight now it looks as if the economy is stalling..." — Paul Krugman, September 2002

  • "We have a sluggish economy, which is, for all practical purposes, in recession..." — Paul Krugman, May 2003

  • "An oil-driven recession does not look at all far-fetched." — Paul Krugman, May 2004

  • "[A] mild form of stagflation - rising inflation in an economy still well short of full employment - has already arrived." — Paul Krugman, April 2005

  • "If housing prices actually started falling, we'd be looking at [an economy pushed] right back into recession. That's why it's so ominous to see signs that America's housing market ... is approaching the final, feverish stages of a speculative bubble." — Paul Krugman, May 2005

  • "In fact, a growing number of economists are using the "R" word [i.e., "recession"] for 2006." - Paul Krugman, August 2005

  • "But based on what we know now, there’s an economic slowdown coming." - Paul Krugman, August 2006

  • "this kind of confusion about what’s going on is what typically happens when the economy is at a turning point, when an economic expansion is about to turn into a recession" - Paul Krugman, December 2006

  • "Right now, statistical models ... give roughly even odds that we’re about to experience a formal recession. ... [T]he odds are very good — maybe 2 to 1 — that 2007 will be a very tough year." - Paul Krugman, December 2006
Thanks to Jon Henke for this list

KPC salutes the Great American Inventors

Here's the roll of honor:

Al Gore: the Internet
Mungowitz: the multiple male 0-gasm
Hillary: crying to get what you want
S. Bainbridge: the theory of the firm
N. Pelosi: the presidential veto
G. Bush: Democracy

Mistaken Identity

Either Tyler has reached new heights of meta-irony that I cannot comprehend, or he is having a premature senior moment! I refer to his essay "If I were Ezra Klein", in which he says:

"If I were Ezra Klein, I would worship at the shrine of Barack Obama. I would send Barack Obama random postcards of love, affection, and yes money. But I am not Ezra Klein."

By this I take Tyler to mean that Klein is not doing what Tyler would if he were him. But ladies and gentleman, I ask you, what is this, if not "worshiping at the shrine" or a "random postcard of love".

Holy Crap people: Tyer IS Ezra Klein! That explains so much, doesn't it?

Saturday, January 12, 2008

Bilious Bainbridge

S. Bainbridge is well-known as (to quote his own website), the author of "one of the most widely read political and legal weblogs on the Internet."

So I suppose I should be flattered. He looks down from his Olympian heights to discuss my little "Boss Doesn't Wear Bunny Slippers" article, a light and airy confection no one could possibly mistake for an academic article.

He dismisses it as containing "nothing new." This is a rather remarkable claim. I can add some other things. It is not written in Russian! It is not a secret code leading to pirate treasure! (Garrr!)

I could go on. But why? No one THOUGHT the piece was written in Russian, or contains a secret code. And no one thought it contained anything new. It is clearly an exposition, and a simplistic one, of Coase's 1937 paper. It is "published," if you can call it that, on a web site that contains a monthly essay that is to be used for (WAIT FOR IT!) teaching basic principles to high school students, and others with no background in economics.

The good Bainbridge suggests that readers should read, instead, a piece written by...the good Bainbridge!

And, he is quite right that his article is earlier, deeper, wider-ranging, and more insightful than mine. But two thing struck me, in this regard.

1. There is nothing new in his paper, either. The theory of the firm, developed
between the 1930s and early 1970s, completely anticipates everything he says. (He is correct, let me emphasize, that his piece is much more interesting in the connections it makes. But it is NOT new.)

2. My article was "published" on a web site dedicated to illustrating basic principles. His article, written in 1997, was published....NOT! What sort of person castigates someone else for failing to cite a ten year old, UNPUBLISHED working paper? Answer: S. Bainbridge!

Now, to be fair, our Bainbridge is clearly reacting with annoyance to the (in his view) overly enthusiastic review from THE ECONOMIST. He is not primarily interested in my piece at all, and it is disingenuous of me to interpret his remarks the way I have above. He just wants FREE EXCHANGE to cite HIM, instead of me.

But why be fair?

The Democrats of January

Dem's Delegate Count, Jan. 12

Clinton 183
Obama 78
Edwards 52
Richardson 19
Kucinich 1
Biden 0
Dodd 0
Gravel 0

Required for Nomination: 2,025

This week: Michigan! 156 delegates. Clinton running "unopposed" in Michigan. But if at least X>=15% of Michigan Dems vote "uncommitted", then the state party must send X % uncommitted delegates to the national convention. So, the question will be whether Hillary can get more than 85% running against no opposition except "not Hillary!". Well, and Kucinich. He's on the ballot, technically. But a vote for Kucinich is, in effect, a vote for Hillary, since that will reduce the "uncommitted" total. Interesting.

IF, that is, IF the Dems choose to seat the Michigan delegation at all. Playing chicken, with high stakes. The Mich Dem party brain trust is sure that the DNC will seat the delegates, in spite of the transgression of party rules. And they may be right. If the Mich Dems are seated, that will be 100 delegates or more for Hillary.

Clinton will win Nevada (Jan 19) easily, in spite of the recent endorsement of the Culinary Workers for Obama. The reason is that Edwards has also locked up a lot of union votes, and the split of the anti-Clinton sentiment will give Hilldo the plurality. Plus, her phone bank machine is just better organized than the others. Nevada is a caucus state, but the machine still matters.

Then, the first actual primary this year (not counting NH, and I don't) will be held in SC, on January 26. 54 delegates. Obama does fine in the polls, but two words: "Bradley Effect." Plus, Breck Girl Edwards shows well in SC, and will cost Obama the victory. Clinton, the telephones, the Bradley Effect: Clinton "surprises" everyone who isn't paying attention by pulling 35% of the vote in SC, and winning a plurality of delegates.

So, by the end of this month Clinton has more than 400 delegates, and all the people who knew she was dead will have the same certainty that she is inevitable. "Eastasia has always been our enemy," CNN will say. Often wrong, never in doubt.

The mechanics of the campaign matter. Polls are nonsense.

Then: Feb 5. Anything can happen. But remember that just because a bunch of media folks saw Obama, and got little tiny woodies just thinking about how cool it is to see a candidate in person, IT DOESN'T MATTER. On Super Tuesday, 22 states will put 1,700 delegates up for grabs. Pretty much NONE of those voters will ever have heard Obama speak in person. A few, but not that many, will have paid much attention to the debates or speeches on TV. Most will have seen the ads on TV. Most of them will get phone calls from the Clinton campaign, and nothing from the Obama campaign, because his campaign exists only in the minds of the media.

And when it comes right down to it, a plurality in most states will vote for Hillary. The media love for Obama will backfire. What most of the folks in the media mean by "democracy" is "Do what I think, because I am WAY smarter than you."

Finally: Sure, this may all be wishful thinking. Because this blog will be SO MUCH FUN if Hilldo is Prez. Hillary.....mmmmm....blogging about Hillary.


Friday, January 11, 2008

Oh Mama, can this really be the end..... get stuck with the Sonics when the Hornets are free again??

As King noted on SCSU, the Hornets have agreed on a ransom amount for their eventual escape from New Orleans. We'd LOVE to have them back, CP3 and Tyson and Peja; heck we'll even take Byron Scott if he promises not to make any more commercials for Cox Communications! Basically the Hornets can go free if they fail to average 14,000+ in attendance over the next two years. They are currently averaging around 11,000. They averaged around 17,000 here in OKC.

However, because Clay Bennett has already filed relocation papers for the Sonics to come to OKC (despite their longish remaining lease in Seattle) we can't get the Hornets back! So sick.

Hornets: 23-12, Sonics: 9-26. Plus, Kevin Durant is learning some bad habits, leading the team by far in minutes and shots while shooting 40% from the field (30% for 3s), only getting 4.4 boards per game and averaging more turnovers than assists (3 to 2). Ouch.

The ultimate bad beat situation is the Sonics come here and then the Hornets relocate to Seattle!! It could happen, people.

LOL, Mrs. Angus looking over my shoulder informs me that the actual ultimate bad beat is that no one comes to OKC. I guess she hasn't factored in us buying Sonic tickets and me driving her crazy complaining about Kevin Durant's shot selection for the forseeable future!!

Thursday, January 10, 2008

Um....Is Their Biggest Model Called "The Bodacious"?

So, there is this Indian car company. It makes Tatas.

In fact, the company is betting that the key to prosperity
is having very small Tatas, because then everybody can get their
hands on ... one.

A game? Come up with ad slogans:

"Get your hands on our Tatas!"

"The Tata Bodacious: Our high beams are ALWAYS on."

Try it. It's fun!

Relax Ben: Gisele Still takes greenbacks!

The Fed breathed a huge sigh of relief today upon finding out that the dollar is much stronger than previously thought. Specifically, that Super-Models still accept it for payment.

Bundchen said: "The story of the euro is a lie," she told the Brazilian newspaper O Globo in comments published Wednesday. "I work with many international companies, I earn salaries in different currencies, that's all."

What's Hot in Economics

The Facebook for Economists, aka REPEC, has released its list of the most cited papers in the last five years (by papers posted at REPEC). And what a lovely list it is. People, it's all Macro and Econometrics!

Look at the top 5:

Christiano Eichenbaum & Evans: A DSGE Macro paper
Im, Peseran & Shin: Applied Econometrics, Panel unit root tests
Obstfeld & Rogoff: Puzzles of International Macro
Bils & Klenow: the importance of Sticky prices
Anderson & Van Winkoop: the gravity model of trade

Throughout the whole list, there's very little theory, very little IO, very little Public.

Tyler says it's because micro is fragmented and macro has a common core.

I think it's because empirical macro is what the great majority of economists are actually interested in and work on. The internet lets economists from non-top schools and developing countries post their work, and once one gets past the sweet icing layer of top-ranked schools, theory is just not very interesting or important to people residing down in the cake.

This dude says the work in the list is not impressive: "Are these the future classics? Are these the papers that will lead to Nobel Prize? I do not see anything that really strikes me. The only marginal candidate I see is Anderson and van Wincoop's "Gravity with Gravitas." Is there really nothing groundbreaking written nowadays?"

I disagree. Christiano et. al is a seminal paper that set the terms of current debate in DSGE macro modelling. Smets and Wouters paper is groundbreaking in using MCMC methods to estimate DSGE models (along with the work of Frank Schorfheide). Reinhart and Rogoff along with Levy-Yeyati and Sturzenegger have changed how we view and measure exchange rate regimes with their distinction between defacto and dejure regimes. Bai and Perron's paper on multiple structural breaks has opened up a whole new way to look at and model macro time series data.

There is some excellent economics being done these days indeed.

Just got this email:

Your shipment Sir/ Madam, Christmas/New year Shipment Bonanza Sir/ Madam Due to the ongoing swift Christmas funfair all charges as regards to the delivering of your ATM/Check have been suspended, which includes any clearance charges and insurance coverage. You have been issued a part payment valued at US$860,000.00 (Eight Hundred and Sixty Thousand United States Dollars). All you are required to do now is to pay for the delivery of your parcel to one of office local offices in West African Countries (Nigeria) via Courier Services which is just $175. You are advised to contact - Mr. Patrick Sullivan at email: "" for the courier fee payment and delivery update. This is organized by British Government in support of US and Nigerian Government. Thanks Mr. John William Adams British International Monetary Regulations London

Now, when I was young, the Nigerian email scammers had a little class, made a little effort. People took pride in their work. A good Nigerian spam scam was worth reading.

This thing, this piece of crap, this quatsch...what the hell? These kids today.

Fairy Tales

Wednesday, January 09, 2008

The Best Sentences I've Read Today

From an unlikely source, Maureen Dowd at the NYT:

"Her argument against Obama now boils down to an argument against idealism, which is probably the lowest and most unlikely point to which any Clinton could sink. The people from Hope are arguing against hope."

She's Ba-ack!

Wow, sorry for the premature obituary. Hillary made up an alleged 10 point deficit by decisively winning the votes of women (by 13 percentage points, which she failed to do in Iowa), and by McCain's siphoning off some of the independent vote from Obama. In retrospect, this second phenomenon should have been predictable, sorry I got carried away. It does seem like curtains now for John Edwards though, doesn't it?

Tuesday, January 08, 2008

Another Dookie Steps in it

Golf Channel anchor says young golfers should 'lynch Tiger Woods'

Should I mention that she was a political science major? Probably not.

For Fiscal Stimulus

My friend and colleague Alex argues against a "fiscal stimulus" for the economy. I respectfully conditionally disagree on starve the beast grounds. I am hoping for tax cuts or at least the permanentization of existing "cuts". Not temporary or targeted cuts, just cuts. Not sayin' they'll have their intended short run business cycle effects, just sayin' I like cuts whatever the reason.