Sunday, August 31, 2008


Just a small problem.

How, in the name of freakin' GPS, could this happen?

Pretty funny they landed at Duke, though, instead of UNC. Hee....

Hamlet 2

Very fine entertainment.

Take the old Kevin Bacon movie, "Footloose."

And have it rewritten by Hunter S. Thompson, in order to adapt it to 2008. Just a little disturbing, yet somehow heartwarming.

Saturday, August 30, 2008

What's he got that I don't got?

Besides Mrs Angus and I, a third important person arrived at OU in 1999: Robert LeRoy Stoops. This week the three of us enter our 10th seasons here in Norman. So far though, the OKC newspaper has only seen fit to run a massive retrospective on one of us.

I've published 16 articles, garnered a few hundred citations and directed some dissertations.

Under Stoops-onomics, "the athletic budget has grown by average of $5.2 million a year and has turned a profit in every year. In 2007-08, the budget was at a record $69.4 million. Football brought in $30.5 million in direct revenues, mostly from ticket sales, while contributing only $15.2 million in expenses..... Since Stoops' arrival, (annual) advertising and sponsorship revenues have increased from $700,000 to $7 million. Licensing and trademark revenues have gone from $300,000 to $3.2 million."

Wow, no wonder he's the one getting the $3,000,000 bonus for staying 10 years.

Hat Tip to Skip Sauer

This Friday on FOX!!

8:00 pm Eastern, 7:00 Central

Friday, August 29, 2008

And then she goes and spoils it all..... taking bags of money from Mugabe.

Kirsty Coventry the Zimbabwean super-swimmer and erstwhile Auburn Tiger showed the true spirit of the Olympics when she appeared in public and on national TV with the country wrecking thug Bobby Mugabe and accepted a briefcase with $100,000 US dollars from him.

That's just about perfect.

McCain passes the ABR test

thats Anybody But Romney!!

Readers will know that I was pulling for Condi, but at least its not Mitt.

The Sabbatical from Hell

Daniel Hamermesh is an eminent scholar and a great guy. But holy crap people he's on the Sabbatical from Hell. He's in Bonn Germany for 5 months. Here's his bathroom/laundry room:

When that arrangement gives him a headache he can buy some aspirin for around $3 APIECE!

Plus he's in Bonn. Got to be the worst city in Europe. Geez, we could fix him up here in Norman with a huge house and cheap pills no problem. Next time Dan!

Thursday, August 28, 2008

Crazy things I told my class today

"Macroeconomists aren't very bright. It took us almost 40 years to realize the Solow model was about income differences rather than growth rate differences and almost the same amount of time to realize that the lack of absolute convergence was not evidence against the model."

Agree? Disagree? Think I should have my tenure stripped and be put out on the street?

Separate Can Never Be Equal

Let us begin with following poll result, just to establish the baseline. This is from Public Policy Polling, January 2008, just before the Debate televised by WRAL here in Raleigh.

Pat McCrory 18
Fred Smith 16
Bill Graham 13
Bob Orr 8
Elbie Powers 2

Did Bob Orr get invited to the Debate, on January 17? Yes, he did. Polling at 8%.

Now, the email that WRAL sends out, generically, to anyone who asks why I am not included in the Debate coming up:
Dear [NAME] -
Thank you for your feedback regarding the candidates participating in our gubernatorial Debate on September 9. At WRAL, we believe that issues are at the heart of our political process and we give careful consideration to all of our election coverage. Our threshold for inclusion in the debate is that a candidate should have 10% support among likely voters in a WRAL News poll or another poll conducted by an independent entity. Currently, Mr. Munger, the Libertarian candidate, does not meet that threshold and therefore, will not participate in the debate.

However, Mr. Munger will be invited to participate in other platforms which will give his views and positions exposure. He currently has a candidate profile on and he will be invited to record an issue-message for voters to view on demand on our website. Other coverage will be afforded as we draw closer to Election Day.
Best regards,
Leesa Moore Craigie

Now, the press release that went out as my response:

RALEIGH (Aug. 28) -- WRAL TV's exclusion of the Libertarian candidate for governor from their September 9 debate amounts to a "separate but equal" policy, said Dr. Mike Munger, Libertarian candidate for governor.

The station has refused to include Dr. Munger in the debate, citing their policy of only including candidates who poll at least 10 percent.

Further, on January 17 the station sponsored a gubernatorial primary debate in which one candidate, Robert Orr, was then polling at less than 10 percent.

"So, the policy is applied arbitrarily and is simply something concocted to restrict voter access to information," charged Dr. Munger.

WRAL did invite Dr. Munger to tape a half-hour interview, which they said might be made available on their web site, as a substitute for full participation in the televised debate.

In reply to the e-mail invitation from Ms. Leesa M. Craigie, WRAL operations manager, Dr. Munger cited a 1950 civil rights case, Sweatt v. Painter. Heman Sweatt, an African-American, applied to the University of Texas Law School, but was told a "separate accommodation" would be made for him.

"This was one room, over a pool hall, with some law books," said Dr. Munger. "The State of Texas cared so much about keeping blacks out of their school that they swore, under oath, that this one-room law school was just as good as the main UT Law School, one of the best in the nation."

Sweatt rejected the alternative. "There is now a gym named after him on the UT campus," Dr. Munger noted.

"You seem to think that you are doing me a favor by offering me the equivalent of one room over a pool hall, when by any standard my application for participation in the debate deserves your full consideration," Munger wrote to Craigie.

As a media company that affects to care about the public good, WRAL should not make decisions that clearly protect the entrenched interests of the political duopoly that controls this state, said Munger. "More than 100,000 North Carolinians signed petitions to ensure that they got to exercise a real choice in November. But you are denying it to them."

Dr. Munger has testified before the U.S. Senate, been the President of an international academic society, and director of the master of public administration program at UNC-Chapel Hill. He has been chair of political science department at Duke University for nearly a decade.

"I'll not be bought off by your insulting 'one-room-over-a-pool hall' offer," he said. "I am a qualified candidate. I should be in the debate."

UPDATE: Apparently one version of this release contained an error, saying that there were THREE candidates below 10%. Mea culpa. There was only one. I don't see how that makes much difference, but that has been the amusingly Jesuitical response from Jesse Helms' old TV home, WRAL.

Whine Economists?

No, the wine economists. Meetings are probably more fun....

Olivier Blanchard on the state of Macro

In a new NBER working paper, after 25 pages of making nice, Olivier gets down to business:

"A macroeconomic article today often follows strict, haiku-like, rules: It
starts from a general equilibrium structure, in which individuals maximize the
expected present value of utility, firms maximize their value, and markets clear.
Then, it introduces a twist, be it an imperfection or the closing of a particular set
of markets, and works out the general equilibrium implications. It then performs
a numerical simulation, based on calibration, showing that the model performs
well. It ends with a welfare assessment."

He suggests three ways to improve:

1. Go back to partial equilibrium models.

2. Have independent validation for any new twist being inserted in the DSGE model

3. I have to quote here because it's pretty weird: "the re-legalization of shortcuts and of simple models. "

I am fully on board with #2 as but #1 and #3 are strange at best.

I would replace his #1 and #3 with "estimate, don't calibrate" and "lay off the welfare stuff because in the real world agent are heterogeneous and welfare evaluations are intractable".

Wednesday, August 27, 2008

Let me guess: An exception will be made in THIS case

Interesting story from national LP....

Barr Only Presidential Candidate on Texas Ballot

Republicans, Democrats miss deadline to file presidential candidates in Texas

Atlanta, GA - Bob Barr is slated to be the only presidential candidate on the ballot in Texas after Republicans and Democrats missed the Aug. 26 deadline to file in the state.

"Unless the state of Texas violates their own election laws, Congressman Barr will be the only presidential candidate on the ballot," says Russell Verney, campaign manager for the Barr Campaign and the former campaign manager for Ross Perot. "Texas law makes no exceptions for missing deadlines."

The Texas Secretary of State Web site shows only Bob Barr as the official candidate for president in Texas.

"We know all about deadlines," says Verney. "We are up against them constantly in our fight to get on the ballot across the nation. When we miss deadlines, we get no second chances. This is a great example of how unreasonable deadlines chill democracy."

"Republicans and Democrats make certain that third party candidates are held to ballot access laws, no matter how absurd or unreasonable," says Verney. "Therefore, Republicans and Democrats should be held to the same standards."

Ezra's Unabated Man Crush

Wow, first there was this and now (via Lebron James) there is this:

"What the GOP realized was that Obama did come across different than the average American, but not so much because he was black as because he was effortless. The very set of supercharged talents and qualities that allowed Obama to levitate past the boundaries of race and class make him different than those who haven't rocketed upward on the strength of their intelligence and charisma and charm."

Holy Crap!!

People like this make it so hard to like Barack. Yea, he's alright, but he's not all that and a bag of chips. He's a freakin' politician. Get over it and grow up.

Classroom Chaos, or Angus at the motor pool

Tuesday was the first day of classes for Mrs. Angus and I. Usually I get assigned one of the two classrooms in our building, and if I don't I just commandeer the conference room for my class. This year though, our conference room is being "renovated" which so far has consisted of taking down the blackboard and white board and removing the chairs, thus rendering the room unusable. Ouch. So when I checked to see where I was scheduled to teach and saw it was the Armory, I was confused and somewhat worried.

When I arrived on the scene, holy crap! It was crazier than I'd expected. It really was an Armory (I'd never seen or heard tell of this building before in my 9 years as a Sooner)!! The double wide doors were wide open, people in fatigues were running around outside, there was a motor pool of Khaki vehicles in the back of the first floor. The classrooms were upstairs and the first thing I noticed was the lack of air conditioning (it was around 93 here yesterday). The second thing I noticed was that it was 11:57 and my room was still in use (the previous class should have ended at 11:45). So I stepped into the room. Immediately some desert storm looking dude behind a lectern barked out "Stand down a minute mister!!".


I cracked up laughing and backed out of the room, and called our department administrator. She got me an alternative room in the library that was closer to my office by around 50%, air conditioned, and empty! When all my students had arrived on the scene and we started to emigrate to the library it was 1:10 and the desert storm dude was still going strong in my erstwhile classroom.

So big ups to Tami K for saving the day and a warning to all terrorists: if you plan to invade OU, we're ready for you!!

Tuesday, August 26, 2008

got to keep a strong Pope hand!

big ups to punditkitchen commentater CGS for this post's title

By George I think he's got it!!

For those of you suffering from Olympic withdrawal pains, noted sportsman Fidel Castro provides us with a probably prescient preview of the 2012 London games:

"There will be European chauvinism, judge corruption, buying of brawn and brains, unpayable costs and a strong dose of racism,"

here is the original text in case you think I'm translating badly:

Allí habrá chovinismo europeo, corrupción arbitral, compra de músculos y cerebros, costo impagable y una fuerte dosis de racismo.

Can I get an Amen?

(an article in English, including Fidel defending the Cuban athlete who kicked a referee in the face is here)

Hat tip to Boz

Monday, August 25, 2008

KPC exclusive: Biden's acceptance speech

As bloggers continue to erode the feeble MSM, KPC is proud to exclusively disclose this advance copy of Joe Biden's speech accepting the VEEP nod:

"Thank you very much. I am so pleased to be on a ticket with the first mainstream African-American who is articulate and bright and clean and a nice-looking guy. But you know I started thinking as I was coming over here, why is it that Joe Biden is the first in his family ever to be nominated as VEEP? Is it because our fathers and mothers were not bright? Is it because I'm the first Biden in a thousand generations to get a college and a graduate degree that I was smarter than the rest? Actually it kind of is, because I am brilliant. In fact, I'd be delighted to sit down and compare my IQ to yours. I think I have a much higher IQ than you do. I'd like to take this opportunity to invite my running mate to come to Delaware and campaign with me. He'll need to be careful though because in Delaware, the largest growth in population is Indian-Americans moving from India. You cannot go to a 7-Eleven or a Dunkin' Donuts unless you have a slight Indian accent. I'm not joking. By the way, what do you guys think about my running mate? Is he ready? I think he can be ready but right now, I don't believe he is. The presidency is not something that lends itself to on-the-job training.
Come to think of it, our opponent is much more ready. You know what? I would be honored to run with or against John McCain, because I think the country would be better off. In conclusion, I promise to leave no judge un-Borked, no policy space un-Czared, and to continue to promote my brilliant idea to partition Iraq. Always remember, Joe's right, Joe's right, Joe's right. After all, I didn't graduate in the top half of my law school class for nothing!

(sources for italicized material here, here, and here)

Sunday, August 24, 2008

They did the job

Fallacies within Fallacies

My former student (he took classes with me, I wasn't his adviser or anything) Steve Horowitz has a post over at The Austrian Economists that says in part:

"What is the fallacy of fact and fallacy of theory that the reasonably well-informed layperson believes about economics that are most in need of correction? That is, which ones do the most damage? Here's are my nominees: For "Fallacy of Fact": that the economic well-being of the average American is on the decline. For "Fallacy of Theory": that consumption (rather than savings/investment) is the source of economic growth. Both of these are utterly wrong"

Well I am basically sympathetic Steve, but I have to say that there is a fallacy in your second fallacy, viz. the fallacy that investment is the key to growth.

The whole point of the neoclassical growth model (NGM) is/was that investment is NOT the key to growth, but rather that technological progress is the key to growth. That's what got Bobby S. his prize. You have to be an AK guy (or gal) to think investment drives growth, and after Chad Jones showed for a number of countries that investment rates have risen a lot while growth rates have not, there aren't many AK folks still around.

Now, Mrs. Angus and I are on record as being extremely skeptical over the overall efficacy of the NGM, but the insight that investment does not drive growth is one thing that I think it does get right.

Saturday, August 23, 2008

All Hail Jamaica!

Last night Mrs. Angus and I were out to dinner at a friend's house. Our lovely hostess (originally from Hong Kong) expressed concern about what country would "win the Olympics". Specifically she was looking for the best metric with which to argue that China had "won".

I immediately nominated Jamaica as the winner based on either total medals or gold medals per capita (hmmm, I may not get invited back there again eh?)!

Turns out that was exactly right as you can see here. Jamaica also "wins" based on gold medals or total medals per $ of GNP as well. I believe that all 11 of Jamaica's medals came in track and field (as bobsledding is a winter olympic sport).

That is truly an incredible achievement.

That's one small misstep for Obama, but one giant leap for gridlock.

He did it. Despite earlier KPC incredulity. BHO picked the airheaded creepy plagiarist. Wow. All I can say is Obama must REALLY REALLY HATE Hillary.

Can you feel the gridlock train a'rolling people?

Now millions of parents can tell their kids, "don't cheat in school honey or you might wind up being vice president!"

Friday, August 22, 2008

Get in line! (and don't forget to pack a lunch)

I got your pathway to citizenship right here!

hat tip to Greg Weeks

Making the Beast with Two Backs....John Edwards and A Duke Girl

Ya gotta love Wonkette:

DID JOHN EDWARDS HAVE MORE SEX WITH LADIES?: Intrepid blog reporter Choire Sicha hears that a New York Times Metro reporter is digging into “a story about John Edwards and a Duke graduate.” We are Ethical and don’t want to spread scurrilous rumors, but maybe John Edwards has been fucking a Duke graduate? Maybe John Edwards has been fucking seven Duke graduates and had like 20 babies with each of them, who knows, there must be more information out there.

On the "Radar":
"NYT Hot On Story Of John Edwards And The Mysterious Duke Graduate: New York Times reporter Serge Kovaleski is on a story. Serge, you'll remember, is the reporter who brought us the tale of Ashley Alexandra Dupré, the young working lady who consorted with former New York governor Eliot Spitzer. What's Serge up to? It looks slightly out of his normal range of Metro and local politics stories (although he does at times go national). All we know is it's a story about John Edwards and a Duke graduate—and right now he's combing the New York Times newsroom for Duke graduates to speak with. (We guess Times employees aren't sortable on Facebook by college group!)
Personal to Serge: There's Stephen Labaton, class of '86—but we think you're looking for perhaps a more recent graduate? Oh gosh, we hope this is a nice story about how John Edwards was kindly to a college student with like tuition and helpful advice and stuff."

Why does the description have to be "a Duke graduate"? Why not, "A woman who would sleep with a lying, effeminate male skank who is cheating on his loyal dying-with-cancer wife"? As Tina Turner might ask, "What's Duke Got Ta Do With It?"

(Nod to KL)

Mayor Pat's Turn

Several readers sent emails saying they thought I shouldn't pick on the LG, after I told a joke.

Well...perhaps I shouldn't ONLY pick on the LG. For the Mayor of Charlotte, with its aggressive corporate subsidies, and astronomically expensive light's to you!

First, from Sir Ernest Benn, who I believe must have had Pat McCrory specifically in mind: 'Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy'. I was just in Charlotte, and this is EXACTLY how people described the mayor.

Then, Alexis de Tocqueville: "On my arrival in the United States I was struck by the degree of ability among the governed and the lack of it among the governing."

It's really true. Charlotte is such a vibrant, exciting place. So many interesting people. But....well, you know.

Markets in Everything: Canadian Style

This one is for Alex T!

"Canadians who may have become tired of being passed over as porn stars will have a new, home-grown outlet to showcase their erotic talents. Federal regulators have granted Alberta-based Real Productions approval to launch a new digital pornography channel, which promises to serve up at least 50 percent domestic content."

and here's the money quote:

"I think as Canadians there is a bit of a tiredness in seeing all American stuff," Shaun Donnelly, president of Real Productions, said during an interview on Friday.

"There is always that thrill for something that is local and you get the sense that these are people you can meet at the supermarket."

Yikes!! I don't know about where y'all live, but there's no one in my supermarket I want to see nekkid!

Thursday, August 21, 2008

Olympics Roundup

1. The IOC finally wakes up to the (pygmy) elephant in the room.

2. Is it the yams? Why are Jamaicans so fast?

3. It's Thursday night and I'm all doped up like a Norwegian show horse.

4. And finally KPC wants to know: Who ya got people, Bolt or Phelps?

Gabriel, it's not too late to re-consider that PhD in Economics!!

Turns out, we are pure evil:

"Here we are, in full planetary emergency, a time when we need new young graduates with a realistic understanding of what is wrong with the world, with skills that will help humanity chart a new course. And what do economics departments aspire to churn out? Individuals trained to not recognize symptoms of impending collapse, trained to ignore appalling inequality, trained to celebrate profligate waste, trained to be closed-minded and unwilling to engage with different disciplines."

hat tip to Lebron James

Happiness is a wet puppy

with apologies to the Beatles (or was it Chairman Mao), here are some of the highlights of Pluto's Santa Fe vacation. These shots are from the Cochiti recreation area right by Tent Rocks.

Wednesday, August 20, 2008

A Joke That Didn't Make Air....

So, I was driving over to do the radio show this morning, the "Shadow Debate," where I got to answer Bev and Pat after the fact, on a radio show that people actually listen to (mp3 of hour long radio show here).

And I came up with a joke. My good friend RT Beckwith claims I am "best known" for my comical send-ups of my hapless opponents. ("Yes, it's true....This man has no no hap."*)

But I chickened out, and didn't use the joke. Seemed a bit abrasive, for a candidate on a radio show. A blog....that's different. It's not serious. Here's the joke:

George Bush claims that he looked into the eyes of Vladdy Putin, and saw his soul.

Now there's a rumor that George Bush looked into Bev Perdue's EAR. You know what he saw?


Major props to Brad and Britt. I hope it was good radio. Neanderbill liked can that be bad?

(*If you said, "Ghostbusters," you win)

Would Obama really pick Biden??

According to Intrade, he's the favorite. Admittedly, no one knows their way around warm spit like Joe, but I just don't see how Obama can pick him. Obama is politics 2.0, Joe is plagiarism 101. Obama is cool, Joe is a creep.

Is Obama so succeptible to flattery (Biden famous called him "the first mainstream African-American who is articulate and bright and clean and a nice-looking guy")?

Wasn't Biden in favor of partitioning Iraq?

I really hope Obama goes this way (gridlock, gridlock, rah, rah, rah), but I don't think so. He's not that dumb.

Immigrants Should be Able to Go to Community Colleges

The article (gated, free registration)


Residents should be citizens

By Michael C. Munger : Guest columnist
The Herald-Sun
Aug 20, 2008

I think immigrants should be able to attend community colleges. But then maybe that's because I myself am an immigrant.

Well, not really. I should say I come from a family of immigrants. My ancestors had the surname "Mancgere," or "merchant" in Anglo-Saxon. They moved from County Surrey, England, and settled in the Guilford Colony, near New Haven, Connecticut. Nicholas Munger apparently owned land there beginning in 1651.

I wonder if Nick had trouble sending his kids to community college. You see, old granddad (times 11) Nick never filled out the paperwork required to become a citizen. It seems that he landed at New Haven, left the ship, and went to visit some friends. He met a girl, they got married, and settled down on a portion of her dad's land. Nicholas was a citizen simply because he was a resident of the state of Connecticut. There was no difference.

Nicholas Munger's children, John and Samuel (I'm from the Samuel side) were both U.S. citizens by virtue of birth. But they didn't fill out any paperwork, either. If they went to school, there's no record of it. I imagine they had some rudimentary schooling, though. Nobody asked to see their green card.

"Citizen" is an arbitrary legal status. It gives me the willies to think of "citizen" as a construct that stands in for real identity. Was Nicholas an American? Once he moved here and started paying taxes, yes he was. And if he had brought a child with him, that child would have been a citizen, too. You didn't have to be born here. You just had to want to live here.

Our immigration policy today could not be more different. We make it nearly impossible for people to become Americans legally. We punish people who try to become residents. And then we deny long-time residents the benefits that we give to citizens for free.

Citizenship is a status given, or withheld, by federal law and regulation. But all of the benefits of state residence, including in-state status for schools from kindergarten through graduate school, are based on being able to establish you live here. I just dropped my son Kevin, a 12 generation American Mancgere, at UNC-Chapel Hill. ... We had to show our residence address, demonstrate that we paid taxes in North Carolina, and show our utility bills. Those things proved our residence in the state. Those things qualified my son, and they should qualify anyone's son or daughter, for the benefits the state provides.

And yet, we are now rushing to deny the benefits of residence to thousands of young people who live in our state. Some have lived here for a decade or more, attending our school system and amassing an academic record that meant they earned a high school diploma. They will be working in jobs all over the state.

The children of immigrants will add, or detract, from the economic life of our state depending on whether they can acquire the skills needed to compete in the 21st century workplace. And new businesses will decide whether to locate in North Carolina, or someplace else, depending on whether we have a workforce with those same skills.

What should the standard be? What status should be required to attend community college, or college, as an in-state student? The same as for everyone else: demonstration of residence. The same as for Nicholas Munger, in 1651: live on the land, work, pay taxes, contribute to the community.

But North Carolina has decided that it will place exclusion first, and focus on arbitrary legal distinctions, rather than the welfare of its residents and the future of our economy. By barring the undocumented from getting an education, we are creating an apartheid system with fertile pickings for gang recruitment and exploitation by unscrupulous employers who thrive on ignorance. And we are telling prospective business recruits: go elsewhere. We prefer illiteracy.

Once I established that I am a resident of North Carolina, no one at Chapel Hill asked for my passport when I dropped my son off at Hinton James dormitory. And that's how it should be. Anyone who lives in North Carolina, who pays taxes here, and who accepts a stake in our economic and civic future deserves a shot at education, at the same rates as anyone else. Discriminating among state taxpayers based on where they used to live is un-American.

Where on God's green earth??


Tuesday, August 19, 2008

We'll be your huckleberries!

FYI, people!

Santa Fe discoveries

One of me and Mrs. Angus's favorite things to do in Santa Fe is stroll through the zillions of art galleries around town. While many are stereotypical and touristy, there are some genuinely interesting artists showing their work and some excellent galleries. One local (by way of Mallorca) artist that we both liked very much is Richard Campiglio. Here is one example:

He puts plaster on panels and then paints on that. Most pieces are small and ornately framed. Kind of Michelangelo meets R. Crumb. Here's another:

What's the number for 911?

In yesterday's WSJ, Ethan Penner ("a pioneer in real estate finance" according to the Journal (wouldn't that make him well over 100 years old??)) says the following:

To understand exactly what is happening, one needs to properly understand what occurred in the late stages of the prior cycle. Interest rates had been driven to historical lows in the U.S. and throughout the world. The cause of this can be debated. However, it is clear that economic globalization, with the migration of jobs to low-wage nations, had a profound impact on inflation, and thus on interest rates.

Uh, earth to Penner! Phone call for Mr. Penner. Irving Fisher on line 3!

Ignoring the issue of how globalization affects inflation, Penner is (here and throughout the article) making the basic error of confusing real and nominal returns:

The flip side of a low-interest rate environment is that it reduces the absolute level of returns that are available to investors. This has significant implications for the massive wave of baby boomers, which holds many billions of dollars in retirement savings, either through direct investment or through managed pension-fund systems.

People, repeat after me: A 10% rate with 15% inflation is not high and a 5% rate with 0% inflation is not low.

If you read the full article, Penner also seems to believe that the shape of the yield curve is time invariant!

Monday, August 18, 2008

Humor and Dreaming

Genetic and Environmental Contributions to Humor Styles: A Replication Study

Philip Vernon, Rod Martin, Julie Aitken Schermer, Lynn Cherkas & Tim Spector
Twin Research and Human Genetics, February 2008, Pages 44-47

One thousand and seventy three pairs of adult monozygotic (MZ) twins and 895 pairs of same sex adult dizygotic (DZ) twins from the United Kingdom (UK) completed the Humor Styles Questionnaire: a 32-item measure which assesses two positive and two negative styles of humor. MZ correlations were approximately twice as large as DZ correlations for all four humor styles, and univariate behavioral genetic model fitting indicated that individual differences in all of them can be accounted for entirely by genetic and nonshared environmental factors, with heritabilities ranging from .34 to .49. These results, while perhaps not surprising, are somewhat at odds with a previous study that we conducted in North America (Vernon et al., in press) in which genetic factors contributed significantly to individual differences in the two positive humor styles, but contributed far less to the two negative styles, variance in which was instead largely due to shared and nonshared environmental factors. We suggest that differences between North American and UK citizens in their appreciation of different kinds of humor may be responsible for the different results obtained in these two


Dreams are more negative than real life: Implications for the function of

Katja Valli, Thea Strandholm, Lauri Sillanmki & Antti Revonsuo
Cognition & Emotion, August 2008, Pages 833-861

Dream content studies have revealed that dream experiences are negatively biased; negative dream contents are more frequent than corresponding positive dream contents. It is unclear, however, whether the bias is real or due to biased sampling, i.e., selective memory for intense negative emotions. The threat simulation theory (TST) claims that the negativity bias is real and reflects the evolved biological function of dreaming. In the present study, we tested the hypothesis of the TST that threatening events are overrepresented in dreams, i.e., more frequent and more severe in dreams than in real life. To control for biased sampling, we used as a baseline the corresponding negative events in real life rather than the corresponding
positive events in dreams. We collected dream reports (N=419) and daily event logs (N=490) from 39 university students during a two-week period, and interviewed them about real threat experiences retrievable from autobiographical memory (N=714). Threat experiences proved to be much more frequent and severe in dreams than in real life, and Current Dream Threats more closely resembled Past than Current Real Threats. We conclude that the TST's predictions hold, and that the negativity bias is real.

(Nod to KL)

0 to 175 in 6 seconds

Tom was in trouble. He forgot his wedding anniversary.

His wife was really angry. She told him "Tomorrow morning, I expect to find a gift in the driveway that goes from 0 to 175 in less then 6 Seconds AND IT BETTER BE THERE!!"

The next morning Tom got up early and left for work. When his wife woke up, she looked out the window and sure enough there was a box gift wrapped in the middle of the driveway.

Confused, the wife put on her robe and ran out to the driveway, brought the box back in the house.

She opened it and found a brand new bathroom scale.

Tom has been missing since Friday.

(Forwarded to me by lovely, slender wife)

Say What?

This morning Tyler links to an RBC article by Martin Uribe and Stephanie Schmitt-Grohe. Let me just say in advance that I know and like Martin and Stephanie and they do awesome work. However, I found the following sentence in their paper quite bewildering:

We find that anticipated shocks are the most important source of uncertainty.

To which I can only reply: ???????? Folks, only a highly trained macroeconomist could hope to parse that humdinger of a sentence.

The paper is indeed a move back toward pure RBC in that there are no nominal ridigities in the model. However, it does simply assume a host of real rigidities, including the dreaded "investment adjustment costs" on the grounds that there is "a large existing literature
showing that these frictions improve the model’s empirical fit."


For those of you who prefer a nominal rigidity approach but like the idea of exploring the distinction between expected and unexpected shocks, there is a related paper by Northwestern grad student Joshua Davis (paper can be downloaded here) that gets different results about what shocks are important than do Uribe & Schmitt.

Solar Power for Africa?

David Wheeler, from the Center for Global Development has been excoriating his old employer, the World Bank, for living in the past and continuing to help fund coal fired energy projects. Here is a graph of the most favorable spots on Earth for solar power generation:

Saturday, August 16, 2008

It must have been moonglow....

So, one debate coach accuses another of racism. The logical response? Moon a roomful of students. The video shows it all, or most of it.

The Provost's reaction?

"We're sure that there's probably some facts and information that's just not available. I mean, you see a lot on the video, but we need to make sure everything is revealed before we take any action," said Gould.

Did he really say that? EVERYTHING revealed? Now, THAT is one aggressive Provost! "Shake for me, boy, I want to be your backdoor man..."

(Nod to KL)

Thursday, August 14, 2008

Just To Make Angus' Head Explode....A Music Review

I'm going to go out on a limb here.

Angus let's me write book and movie reviews, and accepts the results. But music...well, he has to draw the line somewhere.

Still, I'm going to take a shot.

I had to drive to Charlotte, NC (2.5 hours from Durham) for a breakfast gig at Skyland, and then do a Keith Larson radio thing, which was really fun.

On the way over, and on the way back, I listened to several of the CD's my son had left in the car.

And....I have a new favorite band. Vampire Weekend. (I swore I wrote this before I looked up any reviews, or actual info. So this is blind).

Admittedly, a bit too much self-aware northeastern prep school cleverness. And the drummer goes back and forth between doing a version of "More cowbell! I want more cowbell!" with his cymbals, which he apparently just got for xmas and is really excited about, and then veering toward a sound that appears to be playing drums on someones plastic kitchen chair.

All that I concede. cool does it sound? And the lyrics are just smashing, and surprising. Here's "Mansard Roof":

I see a mansard roof through the trees
I see a salty message written in the eaves
The ground beneath my feet
The hot garbage and concrete
And now the tops of buildings, I can see them too

The Argentines collapse in defeat
The admiralty surveys the remnants of the fleet
The ground beneath their feet
Is a nautically-mapped sheet
As thin as paper
While it slips away from view

And I really loved "Blake's Got a New Face," and "Walcott."

Okay, so I promised myself I would finish writing before looking at reviews. Now, I just looked.

And, as you the astute reader already knew, my "new" favorite band is in fact a little old to be called new. In fact, I should probably get my ass kicked before homeroom by the punks who hate pseudo-African emo-wanna-be ripoff artists. But I'll be listening to that album for the next week or so, when I drive.

If you have NOT kept up, you may find this quick historical description informative, and funny.

Nigel Tufnel opens a sweets shop!

More Angus book reviews

1. The Yiddish Policeman's Union by Michael Chabon.

Chabon creates an absorbing counterfactual world with a hard-boiled detective story inside it. Informative and hilarious, big chunks of the book are as good as any fiction I've read. Chabon is a terrific writer. The ending does not do the rest of the book justice, but I flew through this book and really enjoyed it. It's along the lines of "Gun with Occasional Music" by the brilliant Jonathan Lethem and "Hard-Boiled Wonderland & the End of the World by Murikami. Highly recommended.

2. A Case of Exploding Mangoes by Mohammed Hanif.

This is an awesome debut novel. It tells the story of the death of Pakistani dictator Zia and offers several options for how his plane went down. It's by turns sarcastic, poignant, & informative, but always funny. Again the pages flew by for me. The side characters of Baby O and Uncle Starchy will stay with me for a long time. I saw someone describe it as a cross of "Catch-22" and "Libra", which is good, but I'd throw in "A Confederacy of Dunces" into the mix as well.

3. The White Tiger by Aravind Adiga

An even better debut novel. This is a 270 page anti-India screed. It's lovely. It reminds me very much of an extended Thomas Bernhard rant, though there is way more action here than in a Bernhard book. Indian politics, corruption, caste system, and the heinousness of village life all get vigorously rubbed in your face. I read this all in a single afternoon here in Santa Fe. Just wouldn't stop and put it down to go outside. You gotta check this out.

Tuesday, August 12, 2008

Nachas Grande

As has been noted before, I like cheesy nachas.

Thursday night: Younger younger Munger (Brian) played in the city semifinals for Raleigh summer baseball, 16-18 division. We are ahead 2-0, fourth inning. Pitcher having trouble, walks bases loaded. We get a grounder to pitcher, force at home, one out. ball to Brian, who is playing left field. Medium deep. Brian misjudges it a little, comes in, has to go back out. Catches it, and throws it home, weight on his back leg.

And the ball comes in a line to the catcher, chest high, right on the baseline. Runner from third, tagging up and running, is out by two steps. Inning over.

We end up winning, 3-0. On to the city finals.

FINALS: Neanderbill and the lovely Sharon come out to the game. Beautiful sunset, temps in the low 80s, low humidity. Fantastic. Maybe 100 people watching, cheering.

First inning: Runner on second, one out, Brian batting. Strike, ball, foul.
Then foul, foul, foul, all with two strikes. Good battle. Enemy pitcher, big kid, muscles up and fires a hard fastball. Brian takes a nice easy two strike style swing, and lines sharply into center. Run scores on the single.

Brian steal second, takes third on a wild pitch, scores on slow grounder to second. We lead 2-0, with Brian driving in run number one, and scoring run number two.

Third inning, Brian playing third, our pitcher is having trouble, two walks. Runner on second takes off for third. Pitcher steps off, without balking. But throws kind of a sidearm thing to third. Brian, scrambling to cover, reverses direction, scoops up short hop throw, and reaches over to tag the runner. Huge out.

A hit, a strikeout, a hit, another walk. Now, 2-1, bases loaded, two outs. Fast batter. Batter tops one, slow roller to Brian. He charges hard, amazingly (really hard to get kids to do this, for some reason.) Ball takes funny hop, bounces up his arm, but he keeps it in front of him. Picks it up, and of course I can see the future: he is going to throw it 11 feet high, into the foul territory behind third [CORRECTED: FIRST!] base, and three runs are going to score.

Except that he makes a throw like third baseman, gets on top of it, and fires a laser right into the first baseman's glove. Runner out by half a step, takes off his helmet, and kicks it, getting a warning from the ump. We are out of the jam. Still ahead, 2-1.

Top of the fourth inning. Brian leads off. Goes with an outside pitch, and hits it exactly where I was so sure he was going to throw it. Over the first baseman's head, right fielder tries to cut it off. But it is crushed, and skips past him, all the way to the wall. Brian trips going around first, because he knows he has a triple. But the right fielder has a weak arm, and Brian DOES have a triple.

Scores on a wild pitch. We have three runs.

Bottom of fourth inning. High fly foul ball. Hits the arm of unmoving Neanderbill's chair with a loud crack. He is not looking. Pretty scary.

Bottom of the last inning. We are now ahead 3-1. Disaster is in the air. Our pitcher is struggling with the strike zone. Ump calling it tighter and tighter. At one point, our pitcher holds his arms out to the side and yells, "Where was that? WHERE WAS THAT?" after a fine-looking pitch is called a ball.

A walk, a wild pitch, runner goes to third. A strikeout. 1-2 count on next batter, bottom of the order. This kid couldn't hit if he had a boat paddle. Inexplicably, our pitcher throws a loopy curve in the dirt. Gets past catcher, goes to the fence. Run scores. One out, score is 3-2.

ANOTHER walk. Goes to second on wild pitch. Fly ball to short left. Runner takes off, then goes back. Left fielder tries to be hero, throws if over head of second baseman, even though runner is already back. Runner goes to third. First baseman, backing up throw to second, does NOT just run the ball in. Instead, he fires it sort of kind of toward home. Catcher desperately blocks throw in the dirt. Runner stays at third.

So...two out, runner on third, we are ahead 3-2, last inning of city championship. Top of their order now. Cocky kid who thinks is great. He isn't a great player, but he is just fine. Any hit, any error, or a wild pitch ties it. Everyone is screaming. Even Neanderbill is smiling slightly. The lovely Sharon is yelling.

Cocky kid hits a silo shot, just fair, halfway between home and first. First baseman, none too steady on fly balls, is looking up into the lights, the late night sky, and he has a good three seconds to contemplate the implications of failure. I can see the future: It is going to hit off the heel of his glove, and the runner is going to score from third. We are going to lose.

Except that he catches it clean. And I get my nachas. Yum. City champions. Trophies, photos, dancing and yelling. When the nurse first says, "Oh, it's a boy!" this is what you are dreaming of, but hardly dare hope to have.

(nod to Newmark's Door, for turning me onto nachas in the first place)

Sunday, August 10, 2008

Ode to Neil West (The Lord is my Barber)

From the comments on Mungowitz's WITBD post. I am too proud of myself to leave it there.

The lord is my barber, I shall not want.

He maketh me lie down to get shampooed. He restoreth my highlights.

Yea though I have male pattern baldness, I will fear no dandruff. For he is with me. His clippers and combs, they comfort me.

Surely goodness and mercy will follow me all the days of my life, and I will get free haircuts forever.

The NRA loses a couple members

(click directly on story to enlarge for ez reading).

Saturday, August 09, 2008

WITBD? Edwards or Spitzer?

Let's play, "Who is the Bigger Doofus?"

Today's contestants: Elliot Spitzer, Gov. of NY, and user of (illegal) prostitution services.

And he'll be playing John Edwards, ex-Senator and (now ex) candidate for political office.

Arguments for Spitzer being the bigger Doofus:
1. He systematically abused his offices, from prosecutor to Governor, to attack the financial sector of the entire U.S., which happens to be headquartered in NY. He did nothing to prevent actual abuses of the Enron or credit crunch type, but he extorted huge amounts of money, and cost taxpayers and investors billions of dollars with absurd charges and investigations. A dangerous, narcissistic demagogue.

2. He paid a girl to touch his winky. He's married, but he spent tens of thousands of dollars on the winky-touching thing. This is illegal. I don't think it should be, but it is. And since Doofus #1 had made a career of being Mr. Moral, it matters that it was illegal. But he also broke a promise: HE WAS MARRIED. As far as his wife knew, they were "happily" married.

Arguments for Edwards being the bigger Doofus:
1. He systematically abused the legal system, extorting billions of dollars from corporations and small businesses that may or may not have directly harmed individuals. He was an ambulance-chasing trial lawyer who bankrupted dozens of companies. And then he took the majority of the funds that were "won" in these cases, so he could build a $6 million, 40,000 sq ft mansion in Chapel Hill with its own indoor hardwood halfcourt basketball court. He also has several other homes, again from intercepting money that was supposed to pass from bankrupted companies where workers lost jobs to people who had been harmed, possibly in some cases by something the company had done.
Then, Edwards decided he needed to give back. He created a small charity designed to provide college scholarships (just pulled the plug on this), and ran for U.S. Senate. He was, by all accounts of staffers who really know, the very worst Senator since...well, the very worst Senator. Lazy, unprepared, uninterested. (These same staffers, who work for Repubs, claim Hillary Clinton was one of the BEST they ever saw, by the way). Then he ran for Prez, and then he "worked" at the UNC Law School (at least, he had an office!). And then he ran for Prez again. On a platform of giving other people's money to poor people. This was a lot like his law career: use the system take money at gunpoint from people who worked for it and created jobs, and give it to other people. This scam didn't work as well, because (1) voters couldn't pay him as much as plaintiffs, so it wasn't as profitable, and (2) voters are apparently not as gullible as juries.

2. He found a girl who apparently wanted to touch his winky, for free. This makes some sense, because Edwards is MUCH better looking than Spitzer, I have to admit. The downside is that Edwards is MARRIED, to a brave woman who has supported him through two Prez campaigns, even though in the first she was ill with, and now appears to be dying from, breast cancer. Edwards told his wife of the affair in 2006, and she STILL supported him for the Presidency in 2008, never saying a word. But it appears that Edwards did NOT break off the affair, as he had promised, but in fact visited his girlfriend at the Beverly Hills Hilton IN THE PAST MONTH!

Now, folks, it's time to play. In terms of moral character, it's a toss-up, a zero-zero tie. In terms of the moral content of the action, I have to give the nod to Edwards here. Spitzer lied to his wife, but he paid good money for the services. Edwards may well have fathered Rielle Hunter's child, the affair has been going on for years, and apparently continues to go on, and ELIZABETH IS DYING, FERCRISSAKES! Elizabeth tried to support Edwards in his most recent campaign, EVEN AFTER SHE KNEW OF THE AFFAIR, and Edwards still went back to see the other woman.

Not close. Edwards is a MUCH bigger doofus. You have to give Spitzer credit for his damage to the economic system, and his amazing self-promotion, but Edwards wins.

To check my conclusion, I asked my own panel of female experts.

My hairdresser: "Wheech one is worse? Hell, I keel them both." (She is a Puertorriquena, and I don't think she is actually kidding. I think she'd use a knife, and I shudder to think HOW she'd use it).

My wife: "If you even touched another woman, I'd shoot you." (How did this get to be about me? Sweetie? Dear?)

My colleague at Duke: "Edwards is a much bigger &$@$^ing $#&%$#." (She ignored the rules, where "Doofus" is the category, but I'm assuming she MEANT Doofus. This woman is a liberal Dem, but this issue is a little deeper than politics.)

An Improv Moment

Last night, my older son's wonderful girlfriend (and, she IS wonderful) was over after they had watched a movie out.

She was describing the situation of a friend: "It's so sad. My friend has the saddest dog in the world. She's 16 years old, she's blind and deaf, and she has seizures."

ME: "No wonder her dog is sad."

Now, most people would not find this funny. Certainly NO ONE else in the room at the time found it funny.

But I did. It strikes me, as it often does, that I may not be all that easy to be around. Thanks, people, for putting up with....whatever that is.

A Point for Ryan

A point for Ryan, I have to admit.

I was fussin' about being left out of the "nicknames" article, which looked at the evolution of names for my opponents.

In particular, I noted that I was willing to use "Mike" as a way of shortening my name, if it meant that I could be included in even the last line of articles. I don't need equal time, but (as Glenn Close put it in "Fatal Attraction" )"I won't be IGNORED."

Ryan Teague Beckwith responded, in an email, that I was obviously confused. The story was about HOW MANY nicknames candidates had. And, since I had sent him my email from an account that identified the sender as "Mungowitz," it brought me up short. The story would have to be pretty long.

He's right. A partial nickname list for me would include:

To my family: "Mikey"
High school: "Mole" (Dutch Boy and Bayou Jack, can I hear an amen, in comments?)
College: "Mungey"
Grad school: "'I'm Really Good at Putt-Putt' Boy"
Austin, TX (at UT): Grease (The original Killer Grease Mungowitz lives in Austin)
Duke: El Jefe / Killer Grease Mungowitz

Now, sure, I go by "Mike," though my wife calls my "Michael" when she's in a good mood.

If you asked me what I would LIKE to be called? "Governor."

Friday, August 08, 2008

Wow....I Got Chili punkd fo sho!

Quite a bad day at the Munger campaign, and for journalistic consistency.

1. First, the Charlotte Observer runs this story. Notice the total ABSENCE of any mention that I even exist.

Now....I have a PhD in Econ. I have worked as an analyst at the Federal Trade Commission, I have taught energy economics at Dartmouth College. I have published extensively on energy, including work on low level radioactive waste disposal siting and technology.

Oh, and I almost forgot: I'M A CANDIDATE FOR GOVERNOR! As a candidate for Governor, just like the two who WERE mentioned in the story in the Big O, I issued a press release, and wrote up my position on drilling on my campaign blog. If you Google "munger drilling", you get my position in the fourth line. If you Google "munger libertarian drilling", you get it in the FIRST line, and three of the first four entries. Even a reporter, I think, should be able to use advanced research techniques like this. If he WANTED to, that is.

Shame on you, Mark Johnson. If you want to email him, here you go.

2. Then, the News and Observer actually goes out of it's way to deliver the coup de grace. (Ryan, I though we were tight, man....sad, really). Here's Ryan's story.

Mr. Beckwith goes through all the permutations of Bev Basnight's different names, her travels through the many lands of marriage and names she doesn't even use any more. He also talks, at length, about whether Pat McCrory goes by Pat or Patrick.

Ryan...sweetie...what every HAPPENED to us? Nothing about "Mike" or "Michael"? Not one word about the other candidate in the race?

You could at least have said this:

"The other candidate, Mike Munger, Libertarian, uses "Mike" rather than "Michael" because it is shorter. He knows that improves the chances of getting included in the last sentence of stories." Only 25 words. How hard would that be?

I want my nickname included with the others! Then, I'd feel like a REAL boy, just like Pinocchio. (He went by "Woodie," as you might know.)

A final lagniappe: Bev Perdue's nickname in the Senate was, and is, "Dumpling." Yet, Mr. Beckwith, in a clear show of journalistic timidity, left this out of the story.

Sad day for journalism in NC. A sad day.

He Made a B?

This guy took his own courses, to get more credit hours. And he even gave himself a B, so it wouldn't look too obvious. Or, maybe he just sucked in that class. Either way, pretty impressive.
Alabama College Is Told to Reinstate Instructor Who Took His Own Courses

An instructor who was fired for enrolling in his own classes at Bishop State Community College, in Mobile, Ala., should be reinstated and given back pay, an arbitrator has ruled, according to a report in the Press Register, a local newspaper.

Henry Douglas, an instructor in Bishop State's culinary department, was terminated by the college when a state audit revealed that he had enrolled in 10 courses that he himself was teaching, and was listed as taking six other courses at times when he was scheduled to teach. The Press Register reported in 2007 that he received six A grades and one B in seven courses.

Mr. Douglas argued that he had taken the courses at the behest of administrators at the college, who thought that his associate degree needed augmentation. The instructor and his lawyer contended that the courses were taken as independent-study courses, and that Mr. Douglas was not in fact teaching himself.

Herman Packer, the Bishop State employee who had supervised and advised Mr. Douglas, was also fired after the situation came to the attention of state officials. Mr. Packer was also reinstated earlier this summer in a separate arbitration procedure. He will serve a seven-day suspension.

James Odom Jr., the arbitrator in the case, decided that a reprimand issued to Mr. Douglas by the college was sufficient, and that taking any other action against the instructor was unfair. —Richard Byrne

From the Chron of Higher Ed (nod to KH)

Freedom is Slavery; Ignorance is Strength

George Miller and his buds on the Education and Labor Committee should be commended for having read their Orwell. How else to explain that their bill outlawing secret ballots for votes on whether a shop becomes unionized is titled "The Employee Free Choice Act".

Even George F. McGovern understands that the bill actually reduces free choice (and surely that is the actual intent of its sponsors as well, no?). "Under EFCA, workers could lose the freedom to express their will in private, the right to make a decision without anyone peering over their shoulder, free from fear of reprisal".

People, I have worked in a union shop as a union member and have even been a (minor) official in the union (the International Brotherhood of Electrical Workers IBEW). While the Union was, in my judgment, a net plus for us workers, it was heavy handed in demanding that everyone toe the official line.

Bottom line: The secret ballot should be used MORE in union decision making, not less.

Darn tootin'

Thursday, August 07, 2008

Markets choke on bad Hamm

Just like Homer Simpson, the US stock market choked today on the news that the second Hamm twin was also pulling out of the Olympics. With no Hamms remaining on the US men's gymnastics team, the Dow Jones Index fell 150 points in heavy trading. As would be expected, both the Chinese and Hong Kong indexes rose on the devastating news.

The evolution of modern business cycle theory

Modern business cycle theory is built around two strikingly original ideas.

First was the audacious idea that the observed business cycle was not a problem but actually Pareto optimal in the sense that the economy was fully competitive, there were no externalities, and all agents were operating on their supply curves at all points in the cycle. This was the original real business cycle (RBC) theory of Prescott that the cycle was just the result of optimal responses to real shocks.

Second was the insight that the macroeconomics of imperfect competition was fundamentally different than that of perfect competition. Specifically, if firms face a downward sloping demand curve, then deviations from their optimal price are not infinitely costly and perhaps small nominal barriers to changing prices (menu costs) could deter rational profit maximizing firms from always immediately adjusting their price in response to a nominal disturbance. This was the original new Keynesian economics (NKE) of Mankiw and Blanchard & Kiyatoki.

Early RBC theory just didn't work. Even with a low bar for evidence (matching selected raw moments and a lot of free parameters), it didn't fit the data. Early NKE didn't work either. Ball and Romer showed that menu costs alone would not be sufficient to prevent rapid price adjustments and argued that some real rigidities were also needed. But real rigidities can kind of be a hard thing to theoretically justify.

These two initially competing strains of business cycle research then gradually merged over time with the methods of RBC being applied to the models of NKE. The acronym du jour is DSGE (for Dynamic Stochastic General Equilibrium). However, much of the theoretical purity and the goal of having models built from individual optimizing was lost as more and more ad hoc types of constraints and rigidities were built in to try and get the models to better match the data. Also the idea of state dependent price changes that characterize the theoretical models is often "proxied" by the Calvo rule which simply gives a fixed probability that a firm will be allowed to change its price in a period.

I really thought this literature was going to fade away (as the number of ad hoc ad ons to the models was approaching infinity), but there have been some great new advances recently. First is the work estimating the models rather than calibrating them, often using Bayesian computational methods, and testing the models in a more rigorous way. Second is the new attention being paid to regime switches in monetary policy. Third is work that allows for real state dependent pricing in the model. Fourth are new theoretical ideas being applied, like the paper I referenced yesterday that explores the public good aspect of a firm's price change.

It's a great time to be a macroeconomist!

Wednesday, August 06, 2008


You are in for a treat. A weird treat, but a treat.

Warcarting from Zack A on Vimeo.

Warcart web page. Really.

As it says, most of the features are actually illegal. Don't try Warcarting at home, kids. This guy is a trained sociopath; leave it to the professionals.

(Nod to KL)

Why it sucks to be President. Reason #1304850683

Teh interwebs, where this:

turns into this:

Firm-level price adjustments as a positive externality

In what I think is an insightful and potentially important paper, "Endogenous Information, Menu Costs and Inflation Persistence" (nber wp #14184, ungated version here ) Yuriy Gorodnichenko sets up a model where firms make "state dependent decisions on both pricing and acquisition of information". What he is able to do is produce more persistent effects of shocks without having to put some real rigidities in the model. Because here, when a firm changes it's price, it reveals it's information to other firms for free, so information embedded in a price change is a public good and firms postpone making them. As he puts it, "the information externality and menu costs reinforce each other in delaying price adjustment. As a result, the response of inflation to nominal shocks is both sluggish and hump shaped".

Yes! No Calvo model for price changes, no unmotivated quadratic costs of adjusting any or all real quantities (capital and labor), and he still gets the all important delayed hump inflation response!

Kudos sir.

Tuesday, August 05, 2008

Oh what a tangled web we weave.....

So I'm reading Mark Thoma's blog and I see a link to KathyG. Hmmm, I say, I've seen her ripping Megan McArdle, maybe I should check out her blog. So I do and I find a newish post ripping Megan and the Atlantic for only having one female blogger. Kathy says:

How about, say, the brilliant Echidne of the Snakes? The Atlantic's sole female blogger and supposed expert on economics, Megan McArdle, consistently embarrasses The Atlantic and herself by the many rudimentary errors about economics she makes.....

But instead of, or in addition to, McArdle, they could have a real live Ph.D.-wielding economist who actually knows what the f**k she's talking about! Imagine that! In addition to her economic expertise, Echidne is a damned good writer. Even though she grew up in (I believe) Finland and English isn't her first language, Echidne, even on her worst day, writes with wit, verve, and style. In English. Whereas McArdle would be hard-pressed to write her way out of a paper bag. In English.

Wow, I say, this Echidne must be great. So I go check her blog and I find this:

Wouldn't peace be nice right about now? We could then focus on arguing about all the nitty-gritty stuff, such as rebuilding the dangerous infrastructure of this country. Of course Banana Republics require a dangerous infrastructure and as a Banana Republic seems to be on the plank of the Republican Party as the future of this country I guess that we won't see those bridges fixed. Could someone tell me, please, how much work has been done since last summer's bridge collapse? And how much money has been spent in Iraq during the same time frame?

On the other hand of the scales of victory, there is a new Kentucky Fried Chicken store in Fallujah. So the troops can come home now and start fixing the bridges, right? I love being a naive goddess.

WTF?? First some crazy unsubstantiated raving:

America's infrastructure is "dangerous"?

Republicans want America to be a "banana republic"?

Then, though, the laziness:

"Could someone tell me please how much work has been done.... and how much money has been spent in Iraq?"

Wow, isn't that your whole point? Why don't you look it up and tell us. And while you are at it, why don't you unpack for us your implicit argument that every dollar of war spending would instead flow to infrastructure if there was peace, and that the troops would be building bridges here if not fighting there.

Now to be fair, a lot of bloggers are lazy (including me!) so I guess I'm not ripping Echidne, but rather KathyG for suggesting the "naive goddess" as an brilliant economic expert who's being kept from blogging at the Atlantic only by gender bias. I searched a fair amount of the Echidne blog and the post I report is quite representative of the commentary there.

All that said, I agree with Kathy that it is ridiculous that there is only one woman blogger at the Atlantic. I nominate Great Satan's Girlfriend!

Monday, August 04, 2008

Politicians are scum

The WSJ is asking "top political and business leaders" the following question: "How would you spend $10 billion of American resources over the next for years to improve the state of the world"? Two such top dogs gave their views in today's paper:

Here, in a nutshell, is John Boehner's (House minority leader) idea: Give a $10 billion tax rebate and shoot Nancy Pelosi so we can drill, drill, drill.

Here is a succinct summary of Harold Ford's (DLC chairman) answer: Great a vast new bureaucracy, the "National Infrastructure Bank" and convert the money into earmarks. Plus, since this is obviously such a great idea, let said bureaucracy borrow even more funds on private capital markets to "further maximize the public benefit".

So the one guy justs wants to be let alone to drill for oil and the other guy wants to combine Fannie Mae with the World Bank with the apparent goal of converting all GNP into Congressional earmarks. And people wonder why (A) Americans don't like their politicians very much and (B) the world doesn't like America very much??

These guys are either really really stupid or have an incredibly low view of their audience (or both). FWIW let me state the obvious. The world is much bigger and on average a heck of a lot worse off than America. It's unlikely that any of the $$ should be spent here (unless maybe to buy out the farmers and protectionists once and for all).

WWAD you ask?

I would appoint a commission of Tyler Cowen, Mark Thoma, Greg Mankiw, and Gabriel Milhalache. I would have private groups from around the world apply to said commission for funding of educational initiatives and have the commission award the $$ according to the quality of the plan and the underlying conditions in the host country (to help gauge the long run success prospects of the initiative). However, I would also let the commission spend the money another way if they were able to unanimously agree on an alternative.

Angus' summer reading

This is a great era for fiction. Here is at least some of what I've been reading over the summer.

1. Darkmans by Nicola Barker. Flashes of brilliance, with great character studies, dialogue and comic set pieces but on the other hand a few dry spells and neither the conventional mystery nor the supernatural one are very coherent (which is not necessarily a problem in my view). Overall though, I'd recommend it. It's not as good as "Cloud Atlas" though.

2. Then We Came to the End by Joshua Ferris. I started this and put it down, but ran out of stuff on our trip to Madagascar and took it up again. I am very glad I did. The first person plural voice and lack of affect are a bit hard to get used to, but if you can, the book itself is really good. Consistently good throughout.

3. The Brief Wondrous Life of Oscar Wao by Junot Diaz. This is a fantastic book. The way the story of Trujillo is interwoven with the story of Oscar's family is seamless, and to me, enthralling. The tone, the Spanglish, the footnotes. This one is really excellent.

4. A Spot of Bother by Mark Haddon. I liked this book so much I stayed up late finishing it, like Homer Simpson frantically racing to finish the free tainted ham before it killed him. To me this is better than his earlier, more popular, "The Curious Incident of the Dog in the Night-Time". It's more of an old fashioned story than any of the above three but it really struck a chord with me. It reminded me a bit of "The Corrections" by Franzen but it's more kind to the human race than that. Maybe "The Corrections" meets "My big fat Greek wedding"!

More later.

Sunday, August 03, 2008

Scots wa hae!

In the greatest Scottish victory since Robert the Bruce defeated the British at Bannockburn, Andy Murray (the best looking Scot in all of human history) defeated Serbian punk Novak Djokovic 7-6 7-6 to win his first Masters Series event ever.

Scottish eye candy y'all!!

Oh yeah, this almost makes up for the way that Rafa Nadal tanked against Djokovic in the semis. That was a disgraceful case of phoning it in. Rafa had clinched the #1 ranking (as of August 19th) and just totally tanked it.

5th Horseman of the Apocalypse

There's a new chapter in the Book of Revelations and the NY Times is kind enough to print it for us. It turns out that the problem with our government's response to the housing crisis to date is that it has not been nearly generous enough! Really, I am not making this up. I will let the Prophet Peter Bernstein (PPB) tell it in his own words:

"ASSISTANCE to individuals and institutions in trouble always raises concerns about the moral hazards of bailouts, especially when a case can be made that people underrated risks or were blindsided in their decision-making. But we have no choice here. The economy teeters on the edge of not just a recession, but also a more profound decline where trouble in any single sector can spread breakdowns throughout the system, driving unemployment to intolerable levels. To sit back and let nature take its course is to risk the end of a civil society."

In other words, "screw moral hazard, we are at the edge of an unprecedented catastrophe"!!

It's pretty funny that PPB thinks what has been done so far is sitting back and letting "nature take its course". And what a course it would be in his mind. People, we survived the great depression without experiencing the "end of a civil society" for Pete's sake, so I guess PPB is forecasting something worse than that? Without further bailouts we are looking at a Mad Max / Road Warrior situation?

Phone call for the owl of Minerva!!!

Friday, August 01, 2008

Tyler crosses the line

I think he may just be trying to get a rise out of me because I often mock his beloved Beatles, but in his post about Ohio, the Lebron James of bloggers says:

"Popular music: I can't think of much...Boz Scaggs doesn't count nor does Peter Frampton. Lonnie Mack's The Wham of That Memphis Man! is one of the least known great albums. Doris Day is a very good singer and do see Pillow Talk if you don't already know it."

AAAAARRRGH!!! OK T, I'm taking the bait.

Guided. By. Voices.
The Breeders, The Amps (and 1/4th of the Pixies), i.e. the inimitable Deal sisters.

People, that's just from Dayton! Robert Pollard and Kim Deal. You could just listen to their stuff and nothing else all your life and be way way way ahead of the game.

But that's not all. From the Cleveland area: Eric Carmen (the Raspberries), Devo, and Pere Ubu!

And if that wasn't cruel enough, T goes on to opine:

Director: Wes Craven remains underrated; I still like his The Serpent and the Rainbow, among others. I can't think of a notable movie set in Ohio, can you?"

Umm, phone call for Dr. Cowen. Dr. Cowen, call your office!!

People I give you Jim F. Jarmusch!! You know, the guy who directed Stranger than Paradise (set in Ohio too by the way), Mystery Train, Night on Earth, Dead Man, Ghost Dog, and Down by Law.

Holy Crap. He got me real good.

The King is dead, viva el nuevo Rey

Roger Federer has been #1 for 235 weeks. However, since Rafa Nadal beat him on clay in the French and grass at Wimbledon, a lot of people (including me) consider him the "real" #1. Now though Nadal is poised to take over the official top spot as well. Federer lost in the 3rd round of the Master's series event in Cincinnati at the hands of serving machine Ivo Karlovic. If Nadal wins the tournament, he gets the top ranking. In one of the small injustices that plague modern tennis, Federer lost the match without ever having his serve broken (and having broken Karlovic's). Rafa next plays Lapentti (I'm penciling Nadal in for the W) and then the winner of the match between rising start Ernests Gulbis and Serbian punk Novak Djokovic. In the other half of the draw lurks Andy Murray, the best looking Scotsman in all of human history! Have I mentioned that I like tennis?