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!!!