Tuesday, March 31, 2009

Just when you think they've hit bottom

our friends in the government come up with something even worse.

Here representing the latest in scary cluelessness is Rep Michelle Bachman (R, Minn), who after hearing talk about the dollar being replaced as an international reserve currency by SDR's, has introduced a resolution in the House to "bar the dollar from being replaced by any foreign currency."

I am NOT making this up! It's from her own website:

“Yesterday, during a Financial Services Committee hearing, I asked Secretary Geithner if he would denounce efforts to move towards a global currency and he answered unequivocally that he would," said Bachmann. "And President Obama gave the nation the same assurances. But just a day later, Secretary Geithner has left the option on the table. I want to know which it is. The American people deserve to know."

Asked today about a currency proposal from China at a Council on Foreign Relations event, Secretary Geithner stated he was open to supporting it. Despite attempts to clarify his remarks later in the day, the unguarded initial response calls into question his true intentions.

Thank you Rep. Bachman. I will sleep more soundly tonight knowing you are on the alert to protect America.

Hat tip to Jon Dingel.

Who's your daddy?

This is an awesome song/video. Hat tip to Sepia Mutiny.

Change you can believe in

This morning the White House announced the creation of a new day, Obamaday, slated to fall between Saturday and Sunday. Initially the day will be funded by borrowing the hour between 3:00 and 4:00 am from the other 7 days of the week. President O assured Americans that it will seem like a full 24 hour day because he had instructed all media outlets to exclusively run interviews with, and feature stories about Larry Summers and Timmy Geithner.

Monday, March 30, 2009

Top Gear: Ford Festiva

It just gets better and better. Watch the video until the end, and be rewarded.

If you are male, that is. If you are a woman, you'll likely ask, "WTF is wrong with men?"

(Nod to Anonyman)

Bad news for the environment

I guess it really isn't new news but I just saw the following chart:

What is especially depressing is that Brazil and Peru have a lot more rainforest than do the other three countries.

I am not a climate scientist, but I wonder why doing something about this problem (e.g. paying Brazil and Peru to protect more rainforest) wouldn't be a good idea?

Hat tip to Otto!

World's Greatest Deliberative Body

Chuck Grassley plays the dozens on Kent Conrad:

Mr. Grassley: I’d like to suggest to the chairman that he might want to support this because, you remember, you asked me two years ago not to take a vote on it and you said if we did take a vote on it you might not get your budget resolution adopted. So I did not ask for a vote on it and you said it was a very statesmanlike thing for me to do at that particular time and so I would hope that you would return the favor.

Mr. Conrad: You know, I used to like you. Let me just say: Oh, you are good.

Mr. Grassley: Well, your wife said the same thing.

Note to Grassley: dude, did you have a colonoscopy earlier in the day or what?

Sunday, March 29, 2009

Great 8, Horror of 4: Mungodamus is Mungodumbass

So, I nailed all 8 of the round of 8.

And got gerschnockled in the final four.

My only surviving Final Fourist is UNC, who I have picked
to win against 'Nova, and then to beat the winner of the other side
of the bracket.

If UNC wins out, I do have a chance for glory.

Problem is that the Duke pool has LOTS of folks who picked UNC to go all the way (money more important than spirit) (not that we bet anything. That would be wrong).

Props to Aaron King. He believed in Michigan State all this time, and they came through. Aaaron is at 99.9 percentile. Wow.

Which reminds me, how do you keep a Michigan State cheerleader from drinking too much at the celebration for the final four? It's easy, just close the toilet seat.

Rug Burns in the Oval Office

No, this is not a Clinton joke.

An artist (Justine Lai) did a series of painting depicting her being filibustered by various U.S. Presidents. If you click on this link, you will see her explanation, NOT the work. If you want to click on the works from there....well, as Tofe says, what is seen on the internet cannot easily be unseen.

I'm not sure what this is about. On the other, she made me look, and wonder, and so that is likely a win for her.

Choctaw Poker

Oklahoma is known for (besides me and Mrs. Angus) oil & gas, pig farming, self-storage, churches, and Indian Casinos. The one closest to our house is called Riverwind. It's actually Chickasaw, not Choctaw, but....

Anyway, they run two "big" poker tournaments a year. The "Big Slick" was last November. I won a seat into that tourney by winning a single table satellite and then finished 11th out of 186 entrants for a decent payday.

The other big tourney is called the "Storm". I just won a seat into that this afternoon via placing in the top 20% of a mega-satellite (where the buy in is 20% of the buy in to the big tourney and last 20% of the field left standing wins a seat). The Storm is May 9th. Come by and sweat me if you feel like it!

How many non sequiturs does it take to make an NY Times op-ed?

This many!

Shiller's piece is a masterwork of phone-it-in non sequiturs.

He start with 3 paragraphs about a guy who wrote a book "predicting" the second world war. Then comes a short paragraph that allegedly explains social psychology:

Rather than depending exclusively on quantitative analysis, this method relies on a “theory of mind” — defined by cognitive scientists as humans’ innate ability, evolved over millions of years, to judge others’ changing thinking, their understandings, their intentions, their pretenses. It is a judgment faculty, quite different from our quantitative faculties.

Got that? Good.

Then we are treated to 8 paragraphs about how Larry Summers wrote a paper in 1989 that predicted our current financial calamities.

Then comes the all important link up:

How did he write a story 20 years ago that sounds so much like what we are experiencing now? It seems that he was looking at factors of human psychology, much as Mr. Steel did.

LOL to the Z, people. Well played Bob. Except that nothing Shiller says in 8 paragraphs about Summers' paper mentions psychology. I guess Bob did notice this problem because he provides the link himself in the next paragraph:

Ultimately, the record bubbles in the stock market after 1994 and the housing market after 2000 were responsible for the crisis we are in now. And these bubbles were in turn driven by a view of the world born of complacency about crises, driven by views about the real source of economic wealth, the efficiency of markets and the importance of speculation in our lives. It was these mental processes that pushed the economy beyond its limits, and that had to be understood to see the reasons for the crisis.

Then after proving that social (or is it human?) psychology is an awesome predictive tool comes the obligatory rapid backpedaling away from your conclusion:

Of course, forecasts based on a theory of mind are subject to egregious error. They cannot accurately predict the future. But the uncomfortable truth has to be that such forecasts need to be respected alongside econometric forecasts, which cannot reliably predict the future, either.

And the take home lesson of this piece?

The greatest risk is that appropriate stimulus will be derailed by doubters who still do not appreciate the true condition of our economy.

Wow! Where did THAT come from? Kudos, sir.

Saturday, March 28, 2009

Have pity on Ben Bernanke

He's just not getting paid, people. His salary is $191,000. By way of contrast, J. C. Trichet, head of the European Central Bank makes almost $500,000. The head of the Swiss Central Bank makes over $700,000 for pete's sake.

But the most amazing case is that of Hong Kong. The head of their "Central Bank" is Joseph Yam and he makes $1.3 million, about 7 times as much as Helicopter Ben.

People, Hong Kong IS PEGGED TO THE U.S. DOLLAR!!!

Bernanke is literally doing Yam's job while Yam rakes in a cool million plus per annum. I bet he doesn't even give Ben a taste.

Talk about outsourcing!

I got these figures here. Hat tip to Mark Perry.

Saturday poetry corner

I recently became aware of a song that gives a real slice of life view of living in Oklahoma. It's called "Choctaw Bingo" and it's written by James McMurtry:

lyrics are here. You can hear it here.

Hat tip to Norman M.

Let it never be said

In the comments of the previous post, I was accused of being less than forthcoming with photos from our trip to Madagascar last summer. So, I have put up four (count 'em, four!) public galleries on Picassa (247 total photos) of the trip.

They are available here, and here is a teaser:

Yes, we saw a Yeti!!! (actually it's a Decken's sifaka)


ps. if anyone is interested, I can do the same for our 2007 trip to Rwanda and Tanzania.

Friday, March 27, 2009

Nature; WTF edition

People, some kangaroos live in trees! and they are freakin' cute!

here's another shot:

when I showed these to Mrs. Angus she said "we have GOT to go to New Guinea!"

My Bracket vs. that of Baracket Obama

I have now risen to the 95%. The Duke loss, and the Missouri win, have me in pretty
good shape.

I would like to point out the comment from my previous post:

Anonymous said...

I wish I could imagine a universe where Mizzou can beat Memphis.

3:29 PM

It's not that hard to imagine, actually. Suppose that Mizzou scores 102,
and Memphis scores 91. Suppose Mizzou, a pressing team, has an easy time with the Memphis press. Suppose that this happened.

Mizzou over Memphis was actually quite a common pick. To say that you can't imagine a #3 winning over a #2 is a sign that you are bona fide moron. The game wasn't close. The match-ups were such that MANY people thought Mizzou was a good upset pick.

{Inappropriate screed, by me, deleted. My wife assures me I was irrational, and still on aneshesia from my early morning (8-9 am) medical procedure (yes, colonoscopy). So my apologies. The commenter was atually expressing HOPE that Mizzou would win, and I was too stupid to recognize that. Aaargh. How embarrassing.}

My bracket.

Bracket o' the Prez.

Lost in a sea of scarves

Check it out people: twin sons of different mothers:

Thursday, March 26, 2009

My hometown gets reamed on the interwebs

Around here, people like to brag about how CNN/Money listed Norman as America's 6th best small city.

Judging from this post, though the folks at "Gridskipper: The Worldwide Travel Blog" were not consulted when forming those rankings.

Also you can check the extremely un-family friendly comments to see the friendly laid back spirit for which Oklahoma is so justly reknown.

Mr. Hazlitt....He right

Wow. Was Henry Hazlitt blessed with the gift of foresight? Nope. Just economic logic. This from 1946 (from KPC friend and ubermensch Mark Perry)

Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment. (my emphasis)

~From Chapter VI "Credit Diverts Production" in Henry Hazlitt's "Economics in One Lesson," first published in 1946

(That would be 1946. 63 years ago. Not bad. Now go out and vote for those CDBG Down Payment Assistance Programs, you do gooders! You are harming the very people you seem to believe you are helping!)

Helicopter Ben is doing the job

At least compared to the response of the Bank of Japan after their housing bubble burst. Check out this recent article on the subject which contains the following:

"The following graph compares the cumulative growth in the broad money supply of both Japan and the US for the first 14 months after the starts of their respective post-credit crash recessions (April 1992 for Japan and December 2007 for the US):

The difference is quite dramatic. 14 months after Japan's recession began, the Japanese money supply had cumulatively grown by less than 1%. Here in the US, 14 months after the start of our recession, the money supply has already increase by almost 11%."

Go Ben...get busy... pump it up...it's your birthday.....grow M2 like it's your birthday.....

Hat tip to Tim Iacono.

Wednesday, March 25, 2009

Jake deSantis quits on the NYT Op Ed Page

Pretty impressive resignation letter.

Duke Chautauqua Series


Hat tip to Mark Thoma's daughter.

The button down mind of BHO

Q: Mr. President, are you — thank you. Thank you, Mr. President. Are you reconsidering your plan to cut the interest rate deduction for mortgages and for charities? And do you regret having proposed that in the first place?

OBAMA: No, I think it's — I think it's the right thing to do, where we've got to make some difficult choices. Here's what we did with respect to tax policy.

What we said was that, over the last decade, the average worker, the average family have seen their wages and incomes flat. Even in times where supposedly we were in the middle of an economic boom, as a practical matter, their incomes didn't go up. And so, well, we said, Let's give them a tax cut. Let's give them some relief, some help, 95 percent of American families.

Now, for the top 5 percent, they're the ones who typically saw huge gains in their income. I, I fall in that category. And what we've said is, for those folks, let's not renew the Bush tax cuts, so let's go back to the rates that existed back in, during the Clinton era, when wealthy people were still wealthy and doing just fine, and let's look at the, the level at which people can itemize their deductions.

And what we've said is: Let's go back to the rate that existed under Ronald Reagan. People are still going to be able to make charitable contributions. It just means, if you give $100 and you're in this tax bracket, at a certain point, instead of being able to write off 36 percent or 39 percent, you're writing off 28 percent.

Now, if it's really a charitable contribution, I'm assuming that that shouldn't be the determining factor as to whether you're giving that $100 to the homeless shelter down the street.

And so this provision would affect about 1 percent of the American people. They would still get deductions. It's just that they wouldn't be able to write off 39 percent.

In that sense, what it would do is it would equalize. When I give $100, I'd get the same amount of deduction as when some, a bus driver who's making $50,000 a year, or $40,000 a year, gives that same $100. Right now, he gets 28 percent, he gets to write off 28 percent. I get to write off 39 percent. I don't think that's fair.

So I think this was a good idea. I think it is a realistic way for us to raise some revenue from people who've benefited enormously over the last several years.

It's not going to cripple them. They'll still be well-to-do. And, you know, ultimately, if we're going to tackle the serious problems that we've got, then, in some cases, those who are more fortunate are going to have to pay a little bit more.

My favorite parts? First, I love the extremely high bar BHO has set for his policies: "It's not going to cripple them", so what in the world could the fuss be about?

I also like his command of economics: "If it's really a charitable contribution", then the tax treatment really isn't important to the process.

Finally I really like the asymmetric application of fairness. He compares a rich guy to a bus driver making $50,000 and says it's not fair that the rich guy gets a bigger deduction for the same contribution. He seems however to have no problem with the fact that the bus driver is paying less in taxes both overall and as a percentage of his income.

Look people, I know politicians will pretty much say anything to justify what they want to do, I am just a bit surprised at how much of a hack our beloved Obama has become in such a short time.

The availability heuristic....

Psychology Today:

We use the availability heuristic to estimate the frequency of specific events. For example, how often are people killed by mass murderers? Because higher frequency events are more likely to occur at any given moment, we also use the availability heuristic to estimate the probability that events will occur. For example, what is the probability that I will be killed by a mass murderer tomorrow?

We are especially reliant upon the availability heuristic when we do not have solid evidence from which to base our estimates. For example, what is the probability that the next plane you fly on will crash? The true probability of any particular plane crashing depends on a huge number of factors, most of which you're not aware of and/or don't have reliable data on. What type of plane is it? What time of day is the flight? What is the weather like? What is the safety history of this particular plane? When was the last time the plane was examined for problems? Who did the examination and how thorough was it? Who is flying the plane? How much sleep did they get last night? How old are they? Are they taking any medications? You get the idea.

The chances are excellent that you do not have access to all or even most of the information needed to make accurate estimates for just about anything. Indeed, you probably have little or no data from which to base your estimate. Well, that's not exactly true. In fact, there is one piece that evidence that you always have access to: your memory. Specifically, how easily can you recall previous incidents of the event in question? The easier time we have recalling prior incidents, the greater probability the event has of occurring -- at least as far as our minds are concerned. In a nutshell, this is the availability heuristic.


Although there are many problems associated with the availability heuristic, perhaps the most concerning one is that it often leads people to lose sight of life's real dangers. Psychologist Gerd Gigerenzer, for example, conducted a fascinating study that showed in the months following September 11, 2001, Americans were less likely to travel by air and more likely to instead travel by car. While it is understandable why Americans would have been fearful of air travel following the incredibly high profile attacks on New York and Washington, the unfortunate result is that Americans died on the highways at alarming rates following 9/11. This is because highway travel is far more dangerous than air travel. More than 40,000 Americans are killed every year on America's roads. Fewer than 1,000 people die in airplane accidents, and even fewer people are killed aboard commercial airlines.


Consider, for example, that the 2009 budget for homeland security (the folks that protect us from terrorists) will likely be about $50 billion. Don't get us wrong, we like the fact that people are trying to prevent terrorism, but even at its absolute worst, terrorists killed about 3,000 Americans in a single year. And less than 100 Americans are killed by terrorists in most years. By contrast, the budget for the National Highway Traffic Safety Administration (the folks who protect us on the road) is about $1 billion, even though more than 40,000 people will die this year on the nation's roads. In terms of dollars spent per fatality, we fund terrorism prevention at about $17,000,000/fatality (i.e., $50 billion/3,000 fatalities) and accident prevention at about $25,000/fatality (i.e., $1 billion/40,000 fatalities).

(Nod to MAG, with thanks)

Tuesday, March 24, 2009

Allen Craig Watch

The Allen Craig watch, in spring training for El Birdos.

Before........... AB: 20 SO: 3 BB: 4 OBP .583 SLG .750 AVG.500

One Week Later: AB: 27 SO: 4 BB: 5 OBP .531 SLG .667 AVG .444

Allen has by FAR the bast stats for anyone with at least 15 at bats.

But he got assigned to AA Springfield, where he played last year.

We could sure use another lefthanded pitcher. Jaime Garcia has an ERA approaching 6, and NOT as a starter (As Angus is fond of saying, very slowly: "OTHER....PEOPLE's..... RUNS!"). Trever Miller is nearly 36 years old. Royce Ring has given up 16 earned runs, in 6 total innings pitched. That's an ERA well over 20. The only real lefty we've got is Dennis Reyes, who is 32 years old and looks rounder than the 250 he's listed at in the stats. Still, Reyes is a veteran, a solid guy, with a WHIP of 1.5 in nearly 650 total innings pitched. His ERA last year was 2.33; glad to have you, Dennis! Stats, and a video of the chubby one in action.

Anyway, we sure could use another lefthander. A spot starter guy, but mostly to come in and shut down one lefthanded batter in a tough inning. Right now, we have a bunch of guys who just spray gas on the fire.

IF you are a political scientist....

A little dust-up over zoning over in Chapel Hill.

Mayor Kenneth Foy is on the record as opposing any development on land owned by a person who didn't contribute to his campaign.

During the dust-up at Chapel Hill City Council Meeting (just stop and think what a cluster f**k that meeting has to be...magnificent!), the following was observed by the Raleigh News and Observer reporter:

Georg Vanberg, a political science professor at UNC-Chapel Hill, called out council member Bill Strom for "looking down" and "not paying attention" as he spoke.

Vanberg accused the council of "procedural shenanigans" because Foy required speakers to wait until Ayden Court came up on the meeting agenda rather than allowing them to speak about the development during a public hearing on expanding uses of the high-density zone.

"By your vote, you made anything they said irrelevant," Vanberg said. "People are upset about [taxes], and you guys are doing your best to ruin the fiscal health of this community."

The mayor angrily countered Vanberg's "shenanigans" statement, saying the zoning change was a separate issue.

"If you're a political scientist," said Foy, "maybe you ought to inform yourself if you're going to start saying things like that."

IF? IF? Golly, Mayor Foy. I guess I was hoping you had some better rhetorical tactic than questioning someone's professional credentials. Like...a counterargument, something that addressed the claims being made.

But, since you decided to make that play, let's go to the "tale o'the tape" on "iffy" Political Scientist Georg Vanberg:

hmmm....doesn't really LOOK like a political scientist. Handsome, in good physical shape, has most of his hair....Maybe Mayor Foy is on to something!

But, no.

Dr. Georg Vanberg "is an Associate Professor and Co-Director of the Undergraduate Honors Program in the Department of Political Science at the University of North Carolina at Chapel Hill. My research focuses on comparative political institutions. I am particularly interested in constitutional and judicial politics as well as in coalition theory. I teach courses on judicial and constitutional politics, formal modeling, and research design."

That is, he got a PhD at U of Rochester, one of the foremost graduate programs in political science. He is tenured at UNC, again one of the foremost programs in political science. And his c.v. shows broad and deep interests in elections and political economy. Me, I think he is qualified to offer some judgments about a city council meeting and its procedures.

Yup, he's a political scientist all right. If it hadn't been for those meddling kids, and their darned blog, the Mayor would have gotten away with it!

Damned Voters!

Literally, according to a new NBER working paper by Robinson and Torvik (ungated version here), entitled "The Real Swing Voter's Curse".

"A central idea in political economy is that voters who are not ideologically attached to a political party, so-called ‘swing voters,’ attract policy favors and redistribution because they become the focus of electoral competition. In many parts of the world, however, politicians do not just use carrots to win elections, they also use sticks - coercion and violence. In this paper we show that expanding the ‘policy space’ to incorporate this can completely overturn the predictions of the standard model. The reason for this is simple. With all groups of voters at play, political competition does indeed lead to a chase for the support of swing voters. In equilibrium this enables such voters to extract a large amount of rent from politicians. Anticipating this, politicians have an incentive to use violence to effectively disenfranchise swing voters. Indeed, and surprisingly, we show that it can be more attractive for an incumbent to disenfranchise the swing voters than the core supporters of the opposition. Swing voters are not blessed but cursed."

After developing a model, they go on to argue that something very much like this has been going on in Zimbabwe.

To Our Health


Income and Health Spending: Evidence from Oil Price Shocks

Daron Acemoglu, Amy Finkelstein & Matthew Notowidigdo
NBER Working Paper, February 2009

Health expenditures as a share of GDP have more than tripled over the last half century. A common conjecture is that this is primarily a consequence of rising real per capita income, which more than doubled over the same period. We investigate this hypothesis empirically by instrumenting for local area income with time-series variation in global oil prices between 1970 and 1990 interacted with cross-sectional variation in the oil reserves across different areas of the Southern United States. This strategy enables us to capture both the partial equilibrium and the local general equilibrium effects of an increase in income on health expenditures. Our central estimate is an income elasticity of 0.7, with an elasticity of 1.1 as the upper end of the 95 percent confidence interval. Point estimates from alternative specifications fall on both sides of our central estimate, but are almost always less than 1. We also present evidence suggesting that there are unlikely to be substantial national or global general equilibrium effects of rising income on health spending, for example through induced innovation. Our overall reading of the evidence is that rising income is unlikely to be a major driver of the rising health share of GDP.


Take Two Aspirin And Tweet Me In The Morning: How Twitter, Facebook, And
Other Social Media Are Reshaping Health Care

Carleen Hawn
Health Affairs, March/April 2009, Pages 361-368

If you want a glimpse of what health care could look like a few years from now, consider "Hello Health," the Brooklyn-based primary care practice that is fast becoming an emblem of modern medicine. A paperless, concierge practice that eschews the limitations of insurance-based medicine, Hello Health is popular and successful, largely because of the powerful and cost-effective communication tools it employs: Web-based social media. Indeed, across the health care industry, from large hospital networks to patient support groups, new media tools like weblogs, instant messaging platforms, video chat, and social networks are reengineering the way doctors and patients interact.

Monday, March 23, 2009

UPDATE: Obama v. Munger

Well, the EPA called.

They want to declare my bracket a SUPERFUND site. Something about buying up toxic ass. (My bracket)

I take some solace in the fact that I am still beating out the Prez. (His bracket)

To his credit, he nailed 14 of the Sweet 16, which got him back some level of respectability.

And, since Baracket Obama and I have the same final four, with the exception of him picking Memphis and me picking Mizzou in the West, this could be close. I have a narrow lead, because he had such a disastrous first round.

It will come down to these games:

Memphis v. Mizzou:
If Mizzou wins, I am golden. This is the single biggest factor,
since I have los tigres in the Final Four
Duke v. Villanova: If Villanova can pull this out, it will help me a bit. (No, I did not pick 'Nova to beat Duke. I picked Texas to beat Duke. I would pick the Sisters of Mercy Convent School to beat Duke, this year. I don't see them winning much. I was, I should point out, quite wrong.)

Both of us have MichStU over Kansas, that's a push.

A horse is a horse, of course, of course

Here at KPC we've been using the saga of the old lady who swallowed the fly as a parable for the government's actions in this our hour of crisis (as have some of our more tawdry imitators).

When, in the context of the AIG bonus sideshow, a commenter asked me "what the horse would be", I hazarded a guess of government pay scales for everyone.

So this has to to at least be a Shetland pony:

"The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said."


Markets in everything: piscine edition

Turns out you cant pay to have fish eat the dead skin on your feet, at least in some states (sorry Texas and Florida).


Full story is here.

Sunday, March 22, 2009

Economists gone Wild!

Check out the once serious Robert Frank in todays NY Times.

Here is the summary:

Bush deficits bad (because private citizens spent money on stuff they wanted).

Obama deficits good ('cause the government will spend the money for us).

(You may think I am distorting the article. I think this is a fair summary. Please read it and make up your own mind)

In fact, speaking of the Obama deficit Frank says "If anything, it may need to be even larger"

And here's Bob on how to pay off the accumulated debt:

"there are many ways to pay down debt without requiring painful sacrifices. A $2 tax on each gallon of gasoline, for example, would generate more than $100 billion in additional revenue a year. Europeans, who pay more than $2 a gallon in gasoline taxes, have adapted by choosing more efficient cars — and they appear no less satisfied with them."


Careful with that axe, Eugene

People, I post this Sunday morning in praise of an overlooked Scotsman, one Eugene Kelly.

I am a big fan, starting with the Vaselines (and his contributions to the Pastels), going through Captain America and right on to Eugenius.

Here is a short list of essential Eugene:

Pastels: Sittin' Pretty

Vaselines: The Way of the Vaselines

Captain America: Flame On

Eugenius: Oomalama

Here is what the Allmusic Guide has to say about Eugene Kelly.

Feast your ears, people.

Saturday, March 21, 2009

Email from a new friend.....

Hello Mr. Munger,

I hear you every now and then on 680 AM and usually just turn it off after a few seconds. Why Bill has you on I have no idea.

Each time I hear news of the nation and of the state it is bad. Every since the election it gets worse and worse. Obama is dead set to ruin all this nation is
about. As for NC, we would have had a chance with McCory. NC really had a chance at getting a conservative in as govenor. Who did we GET. In my opinion we got Perdue because you were so vain as to run when you knew you would never get enough votes to WIN. So we all have to suffer because you took the votes away from McCory that would have made the outcome different. All people like you are about is themselves. This election it was so close and conservatives were so close to make a difference from all the deceit we had with Easley. The lottery money that was to be JUST FOR EDUCATION and now 88 million in going into the general fund. There is no point in listing everything. You are just like Ross Perot. Maybe that is mis. spelled. Just because you think you have the qualifications and ability doesn't mean it should override the risk that you caused us all by running for the office. Maybe you were really out to support Perdue and that's why you ruined it for the conservatives and our state. I really think you just wanted to hear yourself talk and you know because you could run for the office you did. Knowing you would not win and knowing it would cost McCory and the tax payers, but you did it anyway. Hope it cost you in some way that none of us will ever know, because you cost us all the next four years.

Laura Tucker

Dear Laura, my new BFF:

FIRST: Exit polls show that I took LOTS more votes from Perdue than Mccrory. As PPP puts it:

One other interesting finding from our analysis. We pointed out several times last fall that our data showed Michael Munger was pulling more votes from Perdue than McCrory, contrary to the conventional wisdom that Libertarians take from Republican candidates. The county where he ended up doing best? Deep blue Orange, where he pulled 5% of the vote.

I have actually talked to Pat McCrory about this, and he agrees it's true. Had I not run, Bev would have won by more. (Notice that ALL of those words were one syllable; I'm hoping you can actually understand them...). The reason is all the straight party ticket Dem voters. Pat actually won on election day, by quite a bit. But Bev won the early voters, the ones who just showed up to vote for Obama.

SECOND: Bev beat Pat by more than the TOTAL votes that I got, as you can see here.

Bev beat pat by 145,000 votes. I only got a total of 121,000 votes.

That is, if every one (EVERY. ONE.) of the people who voted for me had instead voted for Pat, he still would have lost. And the fact is that MOST of votes came from Perdue. There is no way you can seriously believe I cost Pat the election. It's not even close. No question: most of my votes came from Dems. More than 60% of my voters also voted for Obama.

I'm afraid you are overestimating my impact. To the extent that that is a compliment, I do thank you. But I'm afraid the compliment is undeserved. Still, I do appreciate your kindness in seeking me out this way. Let's talk again soon!


weekend roundup

People, I do not enjoy college basketball (mostly because the level of play is so incredibly bad), but I am mesmerized by the Mungowitz - Obama Bracket Shootout described in the post below this one.

Go Mungo!!!

While we wait to see what happens in round two, I suggest checking out a couple websites.

1. the blog of the TOTUS (teleprompter of the United States). Yes Obama's ubiquitous teleprompter now has it's own blog (hat tip to Peggy Noonan's WSJ column this morning).

2. F my life. English language spinoff of the French Vie de Merde. Sample entry:

Today, my boyfriend told me he couldn't hang out with me because he felt really sick. I went to his house anyway to surprise him with homemade soup. I walk in to his room only to find him hooking up with my sister. She can't drive, our mom drove her there.

F my life indeed.

Friday, March 20, 2009

Giant Sucking Sound

If you go over to your window....

...and open it just a little.....

...you'll hear a giant sucking sound outside.

That's my bracket.

West Virginia, Ohio State, Wake Forest, Boston College, and Clemson: I hate you all.

UPDATE: Overall, I went 22-10 in the first round. Apocalyptic, but better than Pres. "Baracket" Obama's 19-13. (The Prez's actual updated Baracket is here).

And, the damage is not bad so far. 14 of my Sweet 16 are still alive, and everyone in my Elite 8 is still good to go. (My bracket, if you want to see it)


CBO throws BHO under BUS

From the AP wire:

WASHINGTON – Despite new estimates that say President Barack Obama's budget would generate unsustainable large deficits averaging almost $1 trillion a year, the White House insisted Friday that the flood of red ink won't swamp its costly agenda.

The Congressional Budget Office figures released Friday predict Obama's budget will produce $9.3 trillion worth of red ink over 2010-2019. That's $2.3 trillion worse than the administration predicted in its budget just last month.

Worst of all, CBO says the deficit under Obama's policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.

The latest figures throw a major monkey wrench into efforts to enact Obama's budget, which promises universal health care for all and higher spending for domestic programs like education and research into renewable energy.

People, I am rooting for the money wrench.

Remembering William Mitchell

The Mayor sends an email, from an old student of William Mitchell.

He didn't like dumb questions in class. He expected you to know the basics and more of economic theory and such.

For the PS457 mentioned above, the grade that arrived on the report card just had to be wrong, so I wrote a letter to Prof. Mitchell and asked him to review it. Very shortly after I received the reply which I saved and include with the following email (scanned). It was high praise to get a B+ in his class!

I received an A- in "Interest Groups" (PS476) but a C+ in "Inequality and Public Policy" (PS472).

Many years later I worked in Hollywood at Imaginary Forces. IF did the titles for the "Band of Brothers" HBO series. I was part of that design team and wrote Prof. Mitchell and asked him for some creative consulting. He was very pleased to chime in with information on WWII troops, uniforms, gear, etc, and he sent some very cool historical items for us to work with. He said he was very sorry to say that he couldn't send his original WWII uniform to us, it was just too precious to him! It blew us all away when we realized he'd kept it all those years.

Lastly, I recall a local newspaper ad that featured Dr. Mitchell in a Mercedes-Benz ad (for a local MB dealer). It quoted him as saying he loved the best things in life, like a Mercedes--and also how women liked HIM in his Benz! The ad literally quoted him on that and it was sheer brilliance! There he was, standing tall and proud like the paratrooper he was, next to a silver Benz, saying how he loved his fast German cars and lady admirers. He may have fought the Germans, but he had no problem with their cars after the war!

What a guy--there weren't many like him and damned if students who avoided his classes didn't miss out on a helluva unique brand of political science education at U of Oregon.

Yes, that's right. If you are interested in the problem of training elite troops, take a look at a book that Bill Mitchell edited: The Making of A Paratrooper


Very nice. First cutting across conventions, and then jumping outside the conventions.

Nod to ML

Bread and Circuses

So the House has passed its 90% surtax bill and the "world's greatest deliberative body" will now take up its 70% surtax bill. No one seems too concerned about any consequences.

Like losing a constitutional challenge, or (hard as it may be to fathom) losing their last vestiges of seriousness and credibility, or actually undermining the original bailouts that they authorized.

From the WSJ (front page, not editorial page):

"In both the House and Senate bills, companies could escape the tax by repaying enough government aid. Some Wall Street firms have formally applied to repay the government ahead of schedule, and the new tax is spurring talk among others. But regulators have been leery of allowing firms to repay, in part because it could complicate efforts to promote stability in the financial system."

This post has further discussion of the counter-productivity of what is going on.

Congress had an opportunity to block pre-existing bonus payments when they passed the stimulus bill. Apparently the adminstration asked them not to and the conference committee (specifically Chis Dodd) took the language out.

Are they really going to now pass a crazy tax law like this? Wasn't the Senate created to stop legislation being enacted in response to the whims/passions of the people? And the best they can do is cut the rate to 70%? Oh, yeah and make weird pseudo death threats?

It seems like we have stopped walking and started jogging towards banana republic status.

Thursday, March 19, 2009

This is just too good to be true

From the FT:

"Fannie Mae, the US mortgage financier taken over by the government in September, is planning to pay executive retention bonuses of as much as $611,000 (£428,000) this year in spite of multi-billion dollar losses at the company.

Freddie Mac also has a retention bonus scheme for its executives, but has not yet provided the details of its plans. Freddie is due to disclose the amounts to be paid to its top executives by the end of April, according to a spokesperson for the company."

So, are Fan and Fred just 100% tone deaf and askin' for a beatdown? Or are retention bonuses for employees in money losing companies that take gubmint $$ ok as long as they are the right kind of employees?

Is this a great country or what?

Perhaps I was intemperate....

The Duke Chronicle is running a series of articles this week on grade inflation.

Day 1 Day 2 Day 3 An excerpt:

Dr. Nancy Major, associate professor of radiology and evolutionary anthropology, agrees that if there are many students who merit high marks, they should be rewarded accordingly. Major, who has been teaching undergraduates since 2004, said she gives mostly A's, an occasional B and does not recall ever having given a C.

"I teach a very different kind of class," she said. "On the first day I tell everyone what's expected of them to tell them how to get a decent grade in the class. And for me a decent grade in the class is an A."

Well, I got all hepped up, and wrote a letter to the Editor of the Chronicle. Here it is:

Dear Editor:

The news is filled with outrage about AIG, and other Wall Street companies. Seems that they paid out large bonuses, to everyone. Think about it: even though these people did terrible work, and lost billions, they still get bonuses, because they worked hard, or at least they came to work.

I bet a lot of faculty tut-tutted about AIG over their morning New York Times, Starbucks, and double-fiber bran muffin. Then you went to your office and graded a midterm where the low overall grade was an A-. You poor little students. It doesn't matter that your work was appalling. You tried hard. You should still get a high grade.

On the first day of class this semester, I had a waiting list of ten for a large class. I announced in class that I would be giving real grades. "At least ten percent of you will get Cs; maybe more," I told the assembled throng. The next day, the waiting list was 11, and no one had dropped.

The fact is that if you teach a real course, with real content, you can give real grades. If you don't, then you can't. And if you don't give real grades, then you are the cause behind the new AIG mindset: I showed up. Give me my bonus.

In retrospect, I could have been more circumspect.

From the Mouths of Babes....

Kevin L sends a little note his daughter wrote, after receiving a crisp new dollar under her pillow, from the tooth fairy. An excellent question. Now let's pose the same question to Tim Geithner.

Wednesday, March 18, 2009

Never underestimate our government

its capacity for hypocrisy and bogosity is simply unparalleled. After all the bitching and whining and soapboxing about the outrage of the AIG bonuses, it turns out that Senator Chris Dodd (D -Conn and friend of Angelo) wrote language in the stimulus bill that specifically allows the AIG bonuses to be paid out. Here, let Politico tell it:

Sen. Chris Dodd (D-Conn.) looks like he may be facing a fresh political firestorm.

Dodd just admitted on CNN that he inserted a loophole in the stimulus legislation that allowed million-dollar bonuses to insurance giant AIG to go forward – after previously denying any involvement in writing the controversial provision. .

“We wrote the language in the bill, the deal with bonuses, golden parachutes, excessive executive compensation that was adopted unanimously by the United States Senate in the stimulus bill,” Dodd told CNN’s Wolf Blitzer this afternoon.

“But for that language, there would have been no language to deal with this at all.”

Dodd had previously said that he played no role in writing the controversial language, and was not a part of the conference committee that inserted the language in the bill. As late as today, Dodd’s spokeswoman denied the senator’s involvement.

Oh yeah, he lied about it for days before coming clean. Of course the AIG employees who served their time in order to collect their contracted payments will continue to get pilloried, while this bum will probably survive unscathed just like he did the mortgage fiasco.

People, I think we are getting close to the horse here.

misdirected outrage

I am enjoying the torrent of outrage and vituperation over the AIG bonuses. Yes there should be outrage, but not at AIG. Like Chris Rock said about Manticore: "that tiger didn't go crazy, that tiger went TIGER".

Same here. Roy got mauled because an idiot got in a cage with a tiger. We are in the situation we are in because incompetent government bureaucrats got into a deal with a tiger.

They (said bureaucrats) either didn't think to ask, "hey are you planning any inconvenient bonus payments?" or they didn't care. Geithner must go.

Many people have said if the Gov. can force the UAW to renegotiate contracts, why not the same for the AIG bonuses? Well it seems like the difference is ex-ante vs. ex-post. Ex-ante, sure, you can put any conditions you want on aid and the other party can take it or leave it. Ex-post, not so much.

Of course, in true "lady who swallowed a fly" fashion, we are going to follow this government screw up with more hasty ill-conceived government actions to "fix" the problem. Wake me up when the get to the horse.

Wednesday poetry corner (ironic edition)

The way our government (pre and post elections) is handling the current economic situation put me in mind of a song we used to sing on the long hellish bus ride to church camp in the cursed summers of my youth:

There was an old lady who swallowed a fly.
I dunno why she swallowed that fly,
Perhaps she'll die.

There was an old lady who swallowed a spider,
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly -
Perhaps she'll die.

There was an old lady who swallowed a bird;
How absurd, to swallow a bird!
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly -
Perhaps she'll die

There was an old lady who swallowed a cat.
Imagine that, she swallowed a cat.
She swallowed the cat to catch the bird ...
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly
Perhaps she'll die

There was an old lady who swallowed a dog.
What a hog! To swallow a dog!
She swallowed the dog to catch the cat...
She swallowed the cat to catch the bird ...
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly
Perhaps she'll die.

There was an old lady who swallowed a goat.
Just opened her throat and swallowed a goat!
She swallowed the goat to catch the dog ...
She swallowed the dog to catch the cat.
She swallowed the cat to catch the bird ...
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly
Perhaps she'll die.

There was an old lady who swallowed a cow.
I don't know how she swallowed a cow!
She swallowed the cow to catch the goat...
She swallowed the goat to catch the dog...
She swallowed the dog to catch the cat...
She swallowed the cat to catch the bird ...
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly
Perhaps she'll die.

There was an old lady who swallowed a horse -
She's dead, of course.

Tuesday, March 17, 2009

F**K the Pope

With all due apologies to NWA, I have been yelling this around the house most of the day and decided to get it off my chest.

The pontiff, setting off to Cameroon, says that rather than helping fight AIDS, condom use actually "increases the problem".

What else can you say to such mind boggling arrogance and stupidity?

Sound and Strong are not synonyms

Obama White House: Sound and Strong are not synonyms. That does make some sense, I suppose. But the press secretary wants us to believe they are ANTONYMS. That's a little harder to swallow.

Yes, that is really their position. Pretty remarkable. From Weekly Standard Blog.

(Nod to DM)

Reactions and Commentary from the Rifleman

Old KPC friend the Rifleman reacts to media coverage:

"I have CNN on in the background--Anderson Cooper is doing a financial crisis episode (big surprise). THe guest? Dr.Phil. WTF?"

WTF, indeed. Larry Summers has decided that he wants to be Dr. Phil, so you might as well invite the real deal.

Monday, March 16, 2009

Location Theory

Click on image for a larger version. More here.

C'mon Frenchie, get it straight

So I'm reading this post in the FT and it says:

"An example from football, provided by James Montier of Société Générale, tells the story. When a goalkeeper tries to save a penalty, he almost invariably dives either to the right or the left. He will stay in the centre only 6.3 per cent of the time.

However, the penalty taker is just as likely (28.7 per cent of the time) to blast the ball straight in front of him as to hit it to the right or left. Thus goalkeepers, to play the percentages, should stay where they are about a third of the time. They would make more saves. Why don’t they? Because it is more embarrassing to stand there and watch the ball hit the back of the net than to do something (such as dive to the right) and watch the ball hit the back of the net. The results are the same but those who tried to be active feel happier. "

So I say to myself, "I remember that my boys Levitt and Groseclose have a paper on this and that's not how I remember the story". Then I google them and find this:

"There is one big deviation that we see between what players actually do and what the theory predicts: kickers kick the ball right down the middle much less than they should. Or put another way, in practice, kicking it down the middle scores at a higher rate than kicking it either to the left or right (at least in our data set).

Why? If you kick it right down the middle and you don’t score, it is damn embarrassing. So even though the middle is a great play statistically, kickers don’t choose it very often. There are some things that are even more important than winning, like not looking like a fool."

So my question is this: is it plagiarism if you get the story wrong??

Sunday, March 15, 2009

Pat Rafter and CGI perfectly summarize Lleyton Hewitt

Pillow Talk

Mrs. A: What's the name of that show again?

Me: Eastbound & Down

Mrs. A: That's a weird name, hard to remember

Me: Not if you've seen Smoky & the Bandit, "Eastbound & Down, loaded up and trucking, we're gonna do what they say can't be done" (yes I was singing this part. Pluto got up and went to lay down in the hallway).

Mrs. A: I never saw that movie. Wasn't the Bandit a chimp or something?

Me: uh, well, the Bandit was Burt Reynolds.

Mrs. A: So yes, then!

Which made me remember exactly why I'd married her lo these 14 years ago!

I offered that she might be thinking of "Every which way but loose" where Clint Eastwood drove around with Clyde the orangutan, but she said she was thinking of a TV show, then I came up with "BJ and the Bear" but I couldn't remember whether it had an ape or a monkey or even which title character was the simian.

Just Plain Strange

This is just plain strange. That's all I've got. No commentary.

Saturday, March 14, 2009

N. Gregory breaks it down for us

Mankiw in the NY Times gives 4 things he learned from reading Team Obama's budget proposal. Here they are in brief:

1. "They are economic optimists."

2. "They like to spend."

3. "They are serious about climate change."

4. "They are deficit doves."

It's actually #3 that scares me.

Separated at Birth: Hoops edition

Check it out right here!!

KPC's choice for NEA head

I Guess I'm Not a Republican

I guess I am (still) not a Republican.

The surprising thing is that Michael Steele may not be a Republican. Who knew?


"I think we in government have great capacity, but we are constrained, as your questions suggests, by the Second Law of Thermodynamics when it comes to entropy." [Larry Summers, in response today to a question from a representative of the LaRouche Youth Movement]


Economic Profitability Versus Ecological Entropy

Martin Weitzman
Quarterly Journal of Economics, February 2000, Pages 237-263

There is a long-standing trade-off in bioculture between concentrating on high-yield varieties and maintaining sufficient diversity to lower the risks of catastrophic infection. The paper uses a simple ecology-based model of endogenous disease to indicate how a local decision to plant more of a widely grown crop creates negative externalities by increasing the probability that new pathogens will evolve to attack the crop globally. Society's basic issue concerns where to locate on an efficiency frontier between economic profitability and a standard formula for ecological entropy-proved here to be a rigorous measure of "generalized resistance" to crop-ecosystem failure.


The Changing Relationship between Theory and Experiment in Economics

Robert Sugden
Philosophy of Science, December 2008, Pages 621-632

Until recently, economics was generally understood to be a nonexperimental science with a hypothetico-deductive methodology. This article considers how the methodology of economics has changed with the spread of experimental methods. Initially, most experimental economists saw their work as testing pre-existing theories. However, a method of systematic inductive enquiry in which theory plays a less central role is now evolving. This method is structured around the discovery and progressive refinement of regularities. "Exhibits" - experimental designs that generate significant regularities - are taking over some of the functions formerly performed by theoretical models.

(nod to Kevin L)

Friday, March 13, 2009

It Sucks to Be Allen Craig....

My Cardinals invited 20 guys as non-roster invitees this spring. One of them is Allen Craig, a 25 year old who has banged around the low minors for nearly five years.

This spring, here is his line: AB: 20 SO: 3 BB: 4 OBP .583 SLG .750 AVG.500

So....he's 10 for 20, slugging .750, with 2 doubles, a homer, and 8 RBIs.

Oh, and they are showcasing him....at first freakin' base. The kid is having as a good a spring as anyone could ever have, and as a reward they are putting him at first behind...who is that guy? The first baseman for the Cards? A Latino name..... I'll think of it.

Anyway, it sucks to be Allen Craig. He has to hope that somebody notices, and they can trade him.

You know who is having an amazingly good spring? Our new shortstop, Khalil Greene.

You know who is really, really sucking? Ryan Ludwick. Yikes.
OBP .267 SLG .160 AVG .120

The "Mungowitz line*": If your slugging average is less than the weight of Mungowitz, you are not going to be playing in the majors for very long. I just went and weighed myself: 262. Careful, Ryan. Get your SLG back above the Mungowitz line before the end of spring training. And I'm only about two barbecue dinners away from catching your OBP. Sad, really.

And if your batting average is below the "Angus line" (I think Angus weighs in at about 135, but that's a guess)....well, you should follow the advice in the old Uranium Savages song: kill yourself, before someone does it for you. Poor Ludwick is below the Angus line.

*Yes, yes, like the Mendoza line. Exactly. What did you think I meant? Jeez...

From the department of... WTF?

I got the following email from the Dean's office yesterday:

I want to make you aware of two recent classroom disruptions. On Wednesday afternoon, two groups of men entered two large adjacent lecture rooms in Dale Hall during classes. Seven to eight men entered each room, walked in a uniform manner and sat down in unison in seats, and two men stood at the back doors to the classrooms. They refused to leave when requested to do so by the instructor and eventually left the room in the same manner as they entered it. OUPD is investigating this matter.

For the curious, OUPD is the University of Oklahoma Police Department (yes we abbreviate the University of Oklahoma as OU 'round here!).

Christy Romer kicks it old school

Check out her "Lessons from the Great Depression" here.

Here are the bullet points:

"One crucial lesson from the 1930s is that a small fiscal expansion has only small effects."

"A second key lesson from the 1930s is that monetary expansion can help to heal an economy even when interest rates are near zero."

"This discussion of fiscal and monetary policy in the 1930s leads me to a third lesson from the Great Depression: beware of cutting back on stimulus too soon."

"The fourth lesson we can draw from the recovery of the 1930s is that financial recovery and real recovery go together."

"The fifth lesson from the Great Depression is that worldwide expansionary policy shares the burdens and the benefits of recovery."

"The final lesson that I want to draw from the 1930s is perhaps the most crucial. A key feature of the Great Depression is that it did eventually end."

The whole thing is worth reading, interesting and well documented, but what ultimately stayed with me is how politicized it is, essentially trying to justify all the Administration's moves as being drawn from "the lessons of history". Also, I am not sure how the final lesson is supposed to be any sort of actual lesson or even source of comfort.

Thursday, March 12, 2009

Lou Dobbs Likes "Indoctrinate U"

Not sure how to take this.

Lou Dobbs likes "Indoctrinate U"

In fact, Lou says so.

I do have some small part in this movie. Have achieved minor cult status, as the review of a showing at the Kennedy Center reveals:

The left-wing “academics” portrayed in "Indoctrinate U" have an almost comic-book-like rigidity, and yet they take themselves with the utmost seriousness.

The absurdity of campus life was summed up by conservative professor Michael Munger in a line that had the entire Kennedy Center audience hooting and cheering.

After describing how most university classes — whether it be English, science, or government — tend to begin with a long political harangue by the teachers to condemn the war in Iraq or ridicule George W. Bush, he concluded, “What most faculty want is for students to validate their pathetic life experiences.”

Let natural selection work

Don't do things like this.

"A man has survived despite plunging 180ft (55m) over Niagara Falls and spending 45 minutes in freezing waters resisting his rescuers.

The unnamed man was seen by tourists to scale a wall and leap into the rapids above the falls.

Shortly afterwards he was spotted in the water near the base of the falls clinging to a log.....

A specially trained falls rescue team had rushed to the man's aid after receiving reports of him going over the Horseshoe Falls, one of Niagara's three waterfalls.

However, the man - who was naked - swam away from them toward the middle of the river, police said.

A private helicopter was called in and used the force of its rotor blades to blow him closer to shore.

Firefighter Todd Brunning and another rescue worker then swam about 60 yards, grabbed the man and pulled him to safety, officials said.....

Local resident Phil Richmond, who witnessed the rescue, told The Toronto Star that the man clearly didn't want to be saved.

"It appeared he didn't want to come into shore. I thought he was an idiot to be honest with you," he said. "

My favorite part has to be the helicopter turning itself sideways and blowing the guy towards shore as he (apparently) tries to swim away from shore.

Quote of the Day

"Fixing one problem at a time may strike Obama as mere gum-chewing. But in modern-day Washington, one is a very high number. The reason so many people were left slack-jawed by the Obama budget was not that they disagreed with his premise that health-care costs are out of control or that energy independence is desirable or that better schools are important to the future of the economy. It was the real-world knowledge that financial calamity has not magically transformed our slow-moving, reform- resistant, cantankerous government into a peaceful, streamlined, problem-tackling machine."

From here, well worth reading the whole thing.

Good News!

People, James. F. Jarmusch has a new movie coming out called "The limits of control". Jarmusch, along with Hal Hartley, Alejandro González Iñárritu and Wong Kar Wai make up the indie director pantheon at Chez Angus. Cast includes Gael Garcia Bernal, Tilda Swinton, and Bill Murray. Here are a couple links (link1, link 2).

I will probably have to drive to Dallas to see this movie when it's released, but that's ok with me!

Some Credit Crisis Conjectures

From Douglas Diamond and Raghuram G. Rajan in their recent NBER working paper (ungated version here). I have been suffering from crisis overload and not posting much about it lately, but this piece is an extremely readable, clear, non-technical and interesting overview of the underlying causes of the crisis and it also contains some interesting ideas about why we continue to have a credit crunch and what the government can do about it.

They address one element of the crisis that I have found very weird. Securitization is a way to package up and sell off risk. Yet tons of banks (originators) held on to mortgage backed securities. Here's their take:

Given that originators would have understood the deterioration of the underlying quality of mortgages, it is surprising that they held on to so many of the mortgage-backed securities (MBS)in their own portfolios. These were not just the low-rated equity portions that would have signaled their faith in the packages, but also the high-rated tranches that found a ready market
around the world. The amounts of MBS held seemed too high to be purely inventory. Some holdings could have been portions of the package they could not sell, but then this would not explain why banks held on to AAA-rated securities, which seemed to be the most highly demanded of mortgage
backed securities. The real answer seems to be that bankers thought these securities were worthwhile investments, despite their risk. Investment in MBS seemed to be part of a culture of excessive risk taking that had overtaken banks (see Raghuram G. Rajan, 2005; and Anil K. Kashyap, Raghuram G. Rajan, and Jeremy C. Stein, 2008). A key factor contributing to this culture is that, over short periods of time, it is very hard, especially in the case of new products, to tell whether a financial manager is generating true excess returns adjusting for risk, or whether the current returns are simply compensation for a
risk that has not yet shown itself but that will eventually materialize.

Wednesday, March 11, 2009

My Dinner With Rush

Okay, it wasn't dinner, it was a 45 minute phone interview.

But....I really did get to talk to himself today, for 45 minutes. The results, or some of the results, will come out in the Limbaugh Letter.

And, I have to admit, he is a terrific interviewer. Really, really prepared, interested in the response, happy with long answers. I realize it would be different if I were a guest on the radio show. But he doesn't DO guests on the radio show, because he doesn't need to. He can do it himself, regardless of whether you might agree with the content.

The point is, it was not a Chris Matthews style interview, where the guest is really just a mute prop. We talked about a lot of stuff. Rush appeared particularly interested in how American history is taught, and what is going to happen in Cuba.

A blast, in other words. Regardless of whether anything gets used (and that is entirely up to the EIB; that is an entertainment business, first and foremost), it was quite an experience, talking to the man that the Obama administration considers to be the intellectual leader of the conservative movement.

Right to Work and Unemployment

The January state level unemployment figures came out today. The rates range from 3.7% in Wyoming to 11.6% in Michigan.

Over at Carpe Diem, my friend Mark Perry correctly points out that the 8 states with the lowest unemployment rates are all "right to work" states.

But that's not really the whole story. There are data for 50 states plus DC and there are 22 right to work states. We'd want, at a minimum to know, if right to work states have significantly lower unemployment rates than the others.

A couple minutes of slaving over EVIEWS produced the following simple regression

State Unemployment = 7.631 - 0.990*Right to work State

While this says that right to work states have about 1% point less unemployment on average, the t-statistic testing the null hypothesis that the coefficient on the right to work state variable is actually zero is computed to be -1.935. Thus we cannot reject that there is no difference between right to work and non right to work states at the traditional 5% significance level (though we could at the 10% significance level). If we adjust the standard errors for heteroskedasticity the t-statistic falls to -1.87 but the inference remains the same.

If we add an additional dummy variable for the 4 states hit hardest by the foreclosure crisis (California, Arizona, Nevada, and Florida (three of which are right to work states)) we get this:

State Unemployment = 7.47 - 1.183*Right to work State + 1.557*Foreclosure crisis State

In this case both the right to work coefficient and the foreclosure crisis coefficient are significantly different from zero at the 5% level.

So at the simple level of differences between means, there is no significant difference in current unemployment rates between right to work and non right to work states. Multiple regression may reveal a different picture. Of course in all these cases, without a theoretical model behind it, the results are only correlations and can't really be taken as anything causal.

Rockin' Like a Hurricane

Tonight....tonight......I'll watch hockEEEE tonight.

'Canes have actually pulled their sorry butts back into contention for an NHL playoff spot. If you want to argue that this is only because the Panthers, Rangers, and Sabres suck so bad, I won't disagree, but still.

I've had a hard few years. 'Canes won Lord Stanley's giant protective Cup in 2006, which was pretty fun. Hockey season lasted well into June here in Carolina.

Then, the last two years, hockey season ended in April, when the 'Canes didn't even make the playoffs. Last year, they had to take what looked like a Shaq on His Back Intentional Dive Attack to avoid the playoffs. They were four points ahead of the Washington Capitals with four games left in April 2008, but failed to hold the lead. Now THAT is sucking.

'Canes play the Blackhawks (36-19-9) tonight. They are playing in Atlanta (Make that CHICAGO; thanks DD, in comments!). The Blackhawks are quite good. We need to win this, but it will be tough....

And, with the help of "Anna Banana," we just might!

Sympathy From the Devil

"Influenced by Adam Smith, Darwin believed that a sense of sympathy is essential for the existence of a workable society. That accounts for having a concern for the welfare of others, but not for why one organism within a society will come to the aid of another when to do so is risky or expensive. There are various possible ways of explaining such behavior, some of which Darwin considered...he invoked group selection, with the tribe the unit that gets selected. This may seem odd at first, but consider Darwin's experience during the Beagle voyage. He repeatedly saw evidence of one tribe exterminating another, and found native peoples in decline when thrown into competition with the more economically advanced." [Ghiselin, Journal of Economic Behavior & Organization, forthcoming]

"We suggest that in fact social Darwinists came to regard sympathy, the social glue of small groups, as an impediment to racial perfection because it allowed the 'unfit' to survive...The loss of sympathy is tied up with the question of how ideas of race entered into 19th century economics. A critical step occurred when Darwin's Descent of Man proposed that concern for the 'greatest happiness' be replaced with concern for the 'greatest good,' which is defined as racial perfection effected through 'natural selection'...The question is how did economics move from universalism to a form of particularism? Our answer is that The Economist served as a network for late 19th century racial theorizing in British economics...When Spencer's reciprocity norm was replaced by 'natural selection' in which the killer has higher rank than the killed, economics changed. We have conjectured (Peart and Levy 2005) that the coming of 'natural selection' into economics meant the end of sympathy as an analytical construction. Sympathy was an impediment to the law of the strong." [Levy & Peart, Journal of Economic Behavior & Organization, forthcoming]

(Nod to Kevin L)

Greenie: "IT WASN'T ME!!!"

In today's WSJ, Alan Greenspan says blame the Chinese, not him, for the low interest rates that fueled the housing bubble. Yes the Fed funds rate was low and far lower than the Taylor rule would have set it, but mortgage rates and monetary policy had become "decoupled". Mortgage rates were not low because of easy monetary policy, they were low because of the Chinese savings glut!

People, I am not making this up. You can read it from the great equivocator's own word processor right here.

He basically says that even if the Fed had tried to tighten policy it wouldn't have affected any investment relevant interest rate. Hmmmm, so Alan, should we just get rid of the Fed then??

This is a new low, even for Greenspan. Yes, he says, monetary policy was too loose by any traditional standard but it didn't have anything to do with the bubble because monetary policy also happened to be completely irrelevant at the time. The former "second most powerful person in the world" now is claiming that he was actually powerless.