Saturday, October 31, 2009

Your Tax Dollars at Work

(Article, and source credit for video)

I can't wait until the government is also in charge of health care.

(Nod to Anonyman)

(UPDATE: For you relatives of Dan Quayle out there, note the spelling of "Reagan" on the sign. That's the point of the video.)

The Week in PRE-view

The Week in PRE-view

Forget those wimps who talk about the week that WAS. Given our nearly divine prescience here at KPC, we can review the week in advance. Here's what to watch for:

1. The election in New Jersey: Chris Christie loses, in a close race, to the most corrupt incumbent governor in the U.S., Jon Corzine. And the reason that Christie will lose is widespread vote fraud. As the Democrats all know, "In counting, there is strength."

2. The election in Virginia: McDonnell beats Deeds. As Rasmussen puts it, Republican Robert F. McDonnell opened a 13-point lead over Democrat R. Creigh Deeds this week – in a survey taken the evening after the president made a campaign appearance for Deeds in the state. I assume that AFTER the visit by BHO, Deeds spoke even louder, and led by 15%.

3. The announcement by President "Fullness of Time" Obama, who is cravenly waiting until Wednesday to announce that he is, in fact, going to send 20,000 troops to Afghanistan. These troops will be fewer than needed, if you believe we can win. And they will be far more than we should send if you believe (as I do) we can't win. And he is waiting until Wednesday to announce so that he can avoid making the left mad for sending so MANY troops, and the right mad for sending so FEW. And waiting until after the elections (#1 and #2, above) to make the announcement is pretty transparent. Sure, the Repubs would do it, also, but....)

4. Nancy Pelosi kills and eats Jim Matheson (D-Utah), a "blue dog" Democrat who was waffling on voting "yes" in the secret "caucus of death" meetings held by party leaders. Says Pelosi, "The important thing is that we get a health care bill passed. If we have to lose 20 seats to do it, it will still be worth it. And besides, moderates make for excellent sashimi plates." Interestingly, it turns out that after eating a moderate, Pelosi's testosterone level was very high, according to Duke University researchers.

You'll thank me. And remember, you heard it first on KPC, your source for fabricated news stories.

Friday, October 30, 2009

Yeah, it's funky like that

People, I submit that this is an almost perfect metaphor for our Congress, except it should be the blue half that is bigger!

Thursday, October 29, 2009

If you have a job STFU about unemployment??

Is the only valid opinion one that comes from personal experience? Do study and research and human capital mean nothing unless one has personally experienced the phenomenon? I ask because of the following, which appeared on a blog called Econospeak:

Some Questions on Unemployment for Economists

by Tom Walker

1. Over the last decade, in how many months have you a) had no income from employment? and b) were unsure how long it would be before you would again receive a paycheck?

2. How many times in your working life have you had to "change careers" because there were meager prospects in the field of work you had become proficient at?

3. How likely do you believe it is that you will be laid off as a professor in a) the next six months? b) the next year? c) the next five years?

4. How many of your fellow tenured economics professors do you know of who are currently laid off from their positions?

5. What do you think of the Pope's views on birth control?

EconoSpeak readers, please contribute your suggestions to this list of questions for economists on unemployment.

Here are my answers: (1) none, (2) never, (3) a: 0%, b: 10%, c: 20%, (4) If furloughs count as layoffs, hundreds, otherwise very few. (5) I disagree with the Pope's views on birth control, but NOT BECAUSE HE ALLEGEDLY IS CELIBATE!!!!!

If we extend this "logic":

Only the uninsured should have a voice in the health care debate.

Only soldiers should make our military decisions.

I can't tell if the post is supposed to be funny or if the guy thinks he is making some kind of point.

OMG! It's GDP!

So, I was on a radio show, "The Takeaway," this morning at 7 am and 9 am, over at the Duke ISDN studios. (Had to leave home at 6:10 am; kind of groggy).

(Podcast of shows here, or soon will be...)

Anyway, it turns out that GDP is up 3.5%.

It ALSO turns out that that number is almost totally fake, in the sense that it does not reflect real growth. Much of it is the "my cash for your clunker" program. Cash for Clunkers was a pretty dumb program; Edmunds estimated that the program cost taxpayers $24,000 for every car sold, over and above the cars that would have been sold anyway. (Here are the Edmunds numbers....)

And the "First time homebuyers" program? Don't get me started.

GDP is C + I + G. Spelled out, that means that Gross (total, before exports) Domestic (what we do in the US) Product (aggregate economic activity)

equals the sum of: Consumption by consumers (C)
Investment by business (I)
Spending by government (G)

So, the total went up by 3.5%, and that seems like growth.

But all the increase is in G, financed by the increased deficit. It's fake. It's not real growth. It's just shifting money from taxpayers tomorrow into Obama's approval rating today.

Seriously, all we did was blow up G like a giant helium flying saucer, with no balloon boy in it. The 3.5% "growth" is fake. It's all G. Ask yourself: why is this a "jobless recovery?" Why aren't consumers going back to the stores, if this is a real recovery? Answer: it is NOT a real recovery.

Check this quote from Christina Romer:

“Data released today by the Commerce Department show that real GDP grew at an annual rate of 3.5 percent in the third quarter of the year. This is in stark contrast to the decline of 6.4 percent annual rate just two quarters ago. Indeed, the two-quarter swing in the rate of growth of 9.9 percentage points was the largest since 1980. Analysis by both the Council of Economic Advisers and a wide range of private and public-sector forecasters indicates that the American Recovery and Reinvestment Act of 2009 contributed between 3 and 4 percentage points to real GDP growth in the third quarter. This suggests that in the absence of the Recovery Act, real GDP would have risen little, if at all, this past quarter.”

Right. Without the increase in G, there would be no increase. BUT EVERY DOLLAR WE SPEND ON G IS BORROWED FROM OUR CHILDREN!!!! Keynes said that we should pay people to go out and bury jars full of money, so that other people would have "jobs" digging up the jars. No. No, no, no.


Simple answer: this is the Keynesian fallacy.

If I buy a refrigerator, that is a real transaction. And it counts toward C (consumption)

If I own a business, and I buy a new machine tool, or fork lift, that is real, also. It counts toward I (investment).

Real recoveries are led by C + I

The Keynesian fallacy, based on the "multiplier" theory, is that government spending causes growth. And it COULD, if the money is spent on infrastructure, keeping us safe, etc. But then the growth that it causes come from the consequent, LATER increases in C and I. (And, the multiplier is NOT 4; it's more like 0.8 to 1.1, at best. It may be negative!)

THIS growth, this GDP number today, is just an accounting trick: Suppose I borrowed $10,000 on my credit card, and then told my wife, "Look, here's the $10,000, our income has gone up by $10,000!" Then I go out and spend the "income" on a new bass fishing boat.

She would hit me with a chair! Borrowing money and spending it is NOT increased income.

Well, the income of the nation is GDP. But we are borrowing money (the deficit) to finance increased spending in G (government).

So, an accountant might say that C + I + G is going up. But if the increase is all G, and it's borrowed, then that is not real growth.

Meet the new Raj, Same as the old Raj?

In a new NBER working paper (ungated version here) Alfaro and Chari ask the question, "India Transformed?" and their answer goes something like this:

Using firm-level data this paper analyzes the transformation of India’s economic structure following the implementation of economic reforms. The focus of the study is on publicly-listed and unlisted firms in manufacturing and services industries. Detailed balance sheet and ownership information permit an investigation of a range of variables. We analyze firm characteristics shown by industry before and after liberalization and investigate how industrial concentration, number, and size of firms evolved between 1988 and 2005. We find great dynamism displayed by foreign and private firms as reflected in the growth in their numbers, assets, sales and profits. Yet, closer scrutiny reveals no dramatic transformation in the wake of liberalization. The story rather is one of an economy still dominated by the incumbents (state-owned firms) and to a lesser extent, traditional private firms (firms incorporated before 1985). Sectors dominated by state-owned and traditional private firms before 1988-1990, with assets, sales and profits representing shares higher than 50%, generally remained so in 2005. The exception to this broad pattern is the growing importance of new private firms in the services sector. Rates of return also have remained stable over time and show low dispersion across sectors and across ownership groups within sectors.

I think this post's title is a pithier abstract, but then I don't work at the Harvard B-School, do I?

Wednesday, October 28, 2009

LeBron is Le-Gone

Wow! Did any of you catch the season opening Celts - Cavs game last night?

LeBron had 38 points on 22 shots, but the poor guy had to play 45 minutes! Shaq had 10 and 10 in 29 minutes and nobody else did nuttin'!!!!

Boston's bench outscored the Cav's bench by 26-10. All the Celtics reserves were at least +5 in the plus minus stat, all the Cav's reserves were negative.

Cleveland had trouble defending the break (except for Lebron's chase down blocks) and the pick and roll.

The bottom line is this:  

Cleveland ain't winning no title and LeBron is going to greener pastures.


I like very much the original intent of the enterprise we now call DSGE modelling. Build a model from first principles wherein we can identify the deep parameters and do real policy analysis.

Two things though have always bothered me in the actual practice of DSGE modelling.

The first is the use of the "Calvo rule" for modelling how firms change their prices. This method assumes that firms have a constant probability of changing their price and that said probability does not vary with how long it has been since they last changed their price (i.e. it has a constant hazard).  

The second is the increasing number of ad-hoc "real rigidities" that are routinely added to the models to help them fit the data. Things like adjustment costs for capital, labor, and leisure, among others. They are not derived from theory, their correct functional forms are far from obvious, and in my view, they make the claim that we can do real counterfactual policy analysis with the models fairly suspect.

I have been told by practitioners that the Calvo rule is innocuous. They say that is a literally false assumption that is convenient, yet does not play a major role in the models' dynamics.

Two new papers show that, at least in some cases, this is not correct.  In "The cost of tractability and the Calvo pricing assumption" (available here), Fang Yao shows that, in the model he studies, replacing the Calvo rule with a price adjustment rule where the hazard function is increasing, makes the inflation dynamics of the model fit the data better without incorporating real rigidities! He also shows that money shocks have a bigger impact with the increasing hazard price adjustment rule.

In other words, in his model, the Calvo rule is not innocuous and replacing it with a more realistic rule lessens the need for incorporating real rigidities into the model and changes conclusion about the importance of nominal shocks for explaining model dynamics. Two birds with one stone!

Another recent paper, "Heterogeneous price setting behavior and aggregate dynamics" (available here) by Carvalho and Schwartzman not only allows for non-constant hazards but allows more than one type of price adjustment rule to be followed in the economy. They find that allowing such heterogeneity in price adjustments has large effects on model dynamics, specifically that it creates larger amounts of monetary non-neutrality.

Shout it from the rooftops!

Hat tip to Gabriel M

Governor Terminator Sends Message to Legislature

Governor A. Schwarzenegger sends message to Cal Assembly.

(Nod to Tommy the Brit)

Tuesday, October 27, 2009

Cruel but usual punishment

Ah Reuters, you know what I want and you always deliver:

A Sicilian builder transferred from prison to house arrest tried to get himself locked up again to escape arguments with his wife at home, Italian media reported Thursday.

Santo Gambino, 30, did time for dumping hazardous waste before being moved to house arrest in Villabate, outside the Sicilian capital, Palermo, Italian news agencies reported.

Gambino went to the police station and asked to be put away again to avoid arguing with his wife, who accused him of failing to pay for the upkeep of their two children.

Police charged him with violating the conditions of his sentence and made him go home and patch things up with his wife.

Man those cops are brutal! Sending him back to his wife after she knows that he went to them and asked for jail? Better keep your nose clean while visiting Sicily.

Norman loses an icon

No, not Sam Bradford, E.Z. Million.

Yes, Elmer Zen Million passed away last weekend at the age of 68. In the last Mayoral race here, he ran against a political science professor and a real estate developer. In other words, despite his reputation for goofiness, he was the most qualified and best candidate (by the way, the professor won).

One EZ Million fact that I didn't know until his obituary is that he had a great uncle named Tennyson Million who went by Ten Million and signed his name as 10,000,000!

That is one great family.

Hat tip to Mr. Norman, Ben Keen.

Defending China

Some random thoughts about the exchange rate hysteria gripping our country's punditry:

How can China's exchange rate peg be "currency manipulation"? Of course literally it is, as is any peg, because you have to undertake policies to keep your currency at the target value. People, this is exactly how the Bretton Woods system worked for the entire Western world and it is how the Gold Standard worked as well.

Is that what we want to mean by "manipulation"?

China is not out there devaluing their currency. They are just pegged to us and we do the devaluing for them (with respect to the rest of the world).

Many US economists are pleased that we have a lower dollar to promote exports. Why is that not OK for China too? Yes I understand that we are a deficit country and China is surplus country, but I would be way more concerned about getting China to open its markets to a much greater extent than I would be about the nominal exchange rate between the US and China.

As alluded to above, the Chinese peg fixes the nominal exchange rate, but the key price for trade is the real exchange rate, which is not under Chinese control. 

I have not seen any analyses of the bilateral RER between China and the US, but I think Chinese inflation is higher than US inflation so that under the recent peg, there have been RER movements actually making the Chinese currency less competitive.

All this fussin' and feudin' isn't good for the international trading system. We slap anti-dumping on Chinese tires, they react against US nylon, other countries take note and get into the act (I think India has like 30 anti-dumping cases against China), and the whole system suffers.

The Chinese peg to the dollar is not cause of all our problems, nor is the floating Yuan the solution to our problems.

Monday, October 26, 2009

because there ain't no fours!

The title of this post is what Antoine Walker (forever known around chez Angus as "big head") answered when a reporter asked him why he took so many three point shots.

As the NBA season starts up, Antoine has no team, no contract and is barely staying out of jail for unpaid debts. Despite earning $110 million dollars in his career and only being 33 years old,  'Toine is busted and the bills are coming due:

And he faces a host of other claims. This summer J.P. Morgan Chase Bank, Wachovia Bank, and American Express Centurion Bank won decisions against Walker. He was ordered to pay J.P. Morgan Chase $1,571,771.47 and Wachovia $1,540,929.14 - both for failing to pay off sizeable promissory notes. From court documents, the loans appear originally related to Walker’s nonbasketball business endeavors.

A default was entered in the American Express case with $53,321.71 in overdue credit card charges at stake, including some that fit the picture of a free-spending star - an $1,843.45 dinner, with a $350 tip, for instance. Or, two nights at the Mandarin Oriental in Miami for $2,198.04. And Walker, remarkably, appears to have authorized five people to make charges on his card, not a strategy most personal finance professionals would recommend. Many of the charges appear to have been rung up by another individual, but Walker is on the hook.

Additionally, in March, an arbitrator ruled that Walker owed his former agent, Mark Bartelstein, more than $450,000 in unpaid fees. Bartelstein declined to comment about the matter.

Antoine liked to live large:

Walker turned the pavement surrounding his home into a virtual luxury car lot - two Bentleys, two Mercedes, a Range Rover, a Cadillac Escalade, a bright red Hummer. Often, the vehicles were tricked out with custom paint jobs, rims, and sound systems at considerable added expense. He also collected top-line watches - Rolexes and diamond-encrusted Cartiers.

One person who doesn't think Walker has a problem? His Moms:

“Antoine doesn’t owe anybody any explanation,’’ said Diane Walker. “He’s not out here hurting anybody. He’s trying to live his life peacefully. That’s all he’s doing . . . My son is young. Why can’t he just enjoy life, go where he wants to go?’’

“Antoine is doing great,’’ said Diane. “I have my home. He has his home. If he’s doing so bad, then how could we still be here?’’

We at KPC sincerely hope it doesn't come to that, but it's looking like it well might.

LvM Lays Down the Smack

My man, Ludwig von Mises, lays down the smack.

I think. I don't actually understand what all of this means:

"It was a purposeful confusion on the part of the German metaphysicians of statolatry that they clothe all men in the government service with the gloriole of such altruistic self-sacrifice. From the writings of German etatists the civil servant emerges as a saintly being, a sort of monk who forsook all earthly pleasure and all personal happiness in order to serve, to the best of his abilities, God's lieutenant, once the Hohenzollern king and today the Fuehrer. The Staatsbeamte does not work for pay because no salary however large could be considered an adequate reward for the invaluable and priceless benefits that society derives from his self-denying sacrifice. Society owes him no pay but a maintenance adequate to his rank in the official hierarchy. It is a misnomer to call this maintenance a salary" (Ludwig von Mises, 1944, OMNIPOTENT GOVERNMENT)

Der Geist points out that I am an ignoramus for not knowing that "statolatry" is a word. I am afraid Der Geist is correct.

Oral Arguments Today

Oral arguments today in Munger, et al. v. State, et al.

On Monday, October 26th, Bob Orr and Jeanette Doran will present oral arguments before the N.C. Court of Appeals about whether Plaintiffs have standing to challenge, under the Uniformity Clause of the N.C. State Constitution, a special tax break given to Google.

More info.

I have noticed that my gmail account has been really slow lately. Could someone at the big big Googley eye be mad at me?


Wow. Lots of traveling. Drove up to Alexandria, VA for a IHS/Lib Fund conference last Friday, did the discussion leader thing for 48 hours. Great kids, great conference on trade policy. Had a very nice dinner Saturday night at Laporta's, near the hotel. Spent much of dinner reminiscing about that idiot Fred Jameson accepting that hoax paper Sokal wrote about "Quantum Gravity" (one of the other people at my table knew a lot about it, and had us in stitches). It is worth remembering, and laughing about. Here is Sokal's LINGUA FRANCA article. Hee.

Then drove to Newport News, VA to give a talk at the business school. Pretty tired. Nice sunset, out of my hotel window though. Nice hotel, too.

Sunday, October 25, 2009

Wishful thinking in the MSM

Here is a great headline from the BBC:

"Rich Germans demand higher taxes"

Wow, is Germany a great country or what?

and the particulars:

A group of rich Germans has launched a petition calling for the government to make wealthy people pay higher taxes. Germany could raise 100bn euros (£91bn) if the richest people paid a 5% wealth tax for two years, they say.

Then however, we get to the pithy essence: not too bloody many rich Germans are demanding higher taxes!

The petition has 44 signatories so far, and will be presented to newly re-elected Chancellor Angela Merkel.

Signatory Peter Vollmer told AFP news agency he was supporting the proposal because he had inherited "a lot of money I do not need".

He said the tax would be "a viable and socially acceptable way out of the flagrant budget crisis".

The group held a demonstration in Berlin on Wednesday to draw attention to their plans, throwing fake banknotes into the air.

Mr Vollmer said it was "really strange that so few people came".

As my good friend Mark Perry is fond of pointing out, you can always voluntarily pay more taxes. Mr. Vollmer and his 43 BFFs could simply hand over their dough to Angela and be done with it.

What's that you say? maybe 44 isn't such a small number? 


The man behind the petition, Dieter Lehmkuhl, told Berlin's Tagesspiegel that there were 2.2 million people in Germany with a fortune of more than 500,000 euros.

so a more accurate headline would actually have been: 

"0.002 percent of rich Germans demand higher taxes on themselves".

Time to have Roseanne Rosannadanna make a guest appearance on the BBC, no?

Big nite in the OKC

It's pretty amazing that Dinosaur Jr. and Built to Spill have good new albums out. Despite the fancy name, the place is a low -roofed country sh*&$- kicker bar, but Mrs. A and I will be there for the duration.

Another Doha round

This time it is the WTA tour championships, which I think will be about as successful as the Doha round of trade negotiations were!

People, women's tennis is in bad bad shape. The number one player, Dinara Safina, is a head case who has never won a slam.

Venus Williams is toast. She is done.

Somehow Serena Williams wins half of the grand slam events with no training program and no effort in any of the other events the rest of the year.

Things are so bad that Kim Clisters came back from a 3 year layoff and dominated the tour this summer.

The pickings are so easy that even that little rat-faced cheater Justine Henin is going to come back.

American women's tennis is in even worse shape than the the overall sport. Our great hope is Melanie Oudin, a feisty midget with absolutely no weapons and a scumbag coach.

I would hazard a guess that tennis is the most lucrative professional sport available for women.

Where in the world is the talent?

Saturday, October 24, 2009

because it wasn't available on on Edison cylinder

Got the new Mountain Goats! On a double album of purple vinyl. I am an old school, "I LIKE the tape hiss" fan of the Mountain Goats back catalog, but this record is good and sounds great.

Just another brick in the wall?

People: any ideas about WTF is going on here?

Friday, October 23, 2009


A new NBER working paper by Johnson, Larson, Papageorgiou, and Subramanian (ungated version available here, click on working papers and it's the first one) has a few bones to pick with the Penn World Tables:

This paper sheds light on two problems in the Penn World Table (PWT) GDP estimates. First, we show that these estimates vary substantially across different versions of the PWT despite being derived from very similar underlying data and using almost identical methodologies; that this variability is systematic; and that it is intrinsic to the methodology deployed by the PWT to estimate growth rates. Moreover, this variability matters for the cross-country growth literature.

While growth studies that use low frequency data remain robust to data revisions, studies that
use annual data are less robust. Second, the PWT methodology leads to GDP estimates that are not valued at purchasing power parity (PPP) prices. This is surprising because the raison d’être of the PWT is to adjust national estimates of GDP by valuing output at common international (purchasing power parity [PPP]) prices so that the resulting PPP-adjusted estimates of GDP are comparable across countries.

Wow, I hope 5 year averages count as "low frequency data"!

If only I was German, I could blame my parents for everything!

People, this may come as a shock to you, but my legal name isn't Angus; its Kevin.

And in Germany, Kevin apparently is a "non-traditional" name.

And in Germany, kids with non-traditional names are stereotyped as dumb and troublemakers by their schoolteachers!

I especially appreciated this line from the article:

The name Kevin was perceived as being linked to especially poor behaviour and performance, with one study participant even writing that, “Kevin is not a name – it’s a diagnosis!”

Hat tip to Freakonomics via TCap.

Thursday, October 22, 2009

New Promotion at Duke!

sweet concept, no?

Register Independent?

We get letters....

Mr. Munger, Your comments and suggestions would be a great help. I have sent out hundreds of emails and wonder if I am beating a dead horse.

"One thing our founding fathers could not foresee…was a nation governed by professional politicians who had a vested interest in getting reelected. They probably envisioned a fellow serving a couple of hitches and then looking…forward to getting back to the farm.” —Ronald Reagan (1973)

WHY SHOULD YOU REGiSTER INDEPENDENT? short answer: because you can optimize your voting rights

Politicians now enjoy a lifetime job with regular raises and great benefits. The only way we can expect any changes in the economy is to un-elect them! Why not attack their biggest fears? All politicians fear 1. not being re-elected 2. term limits 3. tax revolts and 4. loss of power. The best way to break the Democratic (Dems) party and the Republican (Rep) party stranglehold is to register Independent (Indies). When you register Indie you do not need to change your political views, be they liberal or conservative. Being an Indie gives you more choices to vote for the most qualified person to handle the job. Why not vote for one Dem and one Rep Senator to balance out the Senate and level the playing field? Bi-partisan politics no longer works. It doesn't matter if the Dems have the majority or the Reps. The results are the same. Heads they win, tails we lose...

Ok, so what do we do after registering Indie? Write, call or email your Senators and Representives. Tell them you have registered Indie because you no longer trust the government machine. This may or may not "freak out" the politicians. Politicians keep a very close eye on the number of Dems, Reps or Indies in their district. If they see a huge number of NEW registered Indies, you can be sure we are weakening their stranglehold.

"Democracy is dead ... lobbyists rule America"---THIS IS A MUST READ, YOU WILL BE SHOCKED!

“Of all the reforms the freshmen wanted to bring to Washington, I believed setting term limits was by far the most important. Nothing would change the culture, the policies, more than replacing career politicians with citizen legislators. Political careerism more than anything else had separated Washington from the people. Careerism perpetuated big government and was a constant corrupting force in the system.”
—Oklahoma’s Sen. Dr. Tom Coburn in his book, Breach of Trust

stay well, your comments & suggestions are welcomed--greycloud

I enjoyed many parts of this, of course. But my favorite part has to be the quotation from "Dr. Tom Coburn." Dr. Tom and Dr. Angus are TIGHT, aaight?

Economics Uber Alles

People, what other discipline can produce sterling and insightful analysis like this:

"career government economists within the Department of Health and Human Services dealt a blow to the House bill Wednesday, releasing a report concluding national health care spending would increase because newly insured people would seek care."

Only a highly trained and well seasoned economist could ever have sussed that one out!

Hat Tip to Chateau!

Going Galt? or A great idea!

Over at MR, Alex T. bemoans the government's plan to slash executive wages at the 7 "most bailed out" companies. I respectfully disagree. These are State owned enterprises now and having an expert decide if the public is getting its moneys worth is entirely reasonable.

If fact, I think this is a trend well worth expanding in dealing with pay for people who are publicly funded.

I would be happy to serve as a "special master" to evaluate pay relative to performance at a lot of other publicly funded enterprises like say, Congress, the SEC, the Federal Reserve, Fannie and Freddie, the EPA, the Treasury and (just to be mean spirited) the office of the Vice President.

As to how I would rule in these cases, let's just say that Santa would be able to save on reindeer food because he wouldn't be coming to the DC area this year.

And yes, I do realize that I teach at a State University. Thanks in advance for reminding me.

Wednesday, October 21, 2009

Sustainability Day!

I just got this email, from Duke. Somebody please shoot me.

Celebrate Campus Sustainability Day! Visit our website to read more and get involved.

Duke Plans To Become ‘Climate Neutral’ By 2024--Duke University has released a plan to become climate neutral by 2024, which coincides with the 100th anniversary of James B. Duke signing the indenture of trust that established the institution. The university developed the plan as part of the American College & University Presidents’ Climate Commitment, which President Richard H. Brodhead signed in 2007. Earlier this month, Duke’s Board of Trustees reviewed and endorsed the goal of achieving climate neutrality. read more...

Campus Sustainability Day--October 21, 2009
Sustainable Duke invites students, staff, faculty and the community to celebrate Campus Sustainability Day on October 21st! We have a lot to celebrate as Duke recently released its Climate Action Plan, which will guide the University in achieving climate neutrality by 2024. We challenge you to take action today to lessen your environmental footprint and to help Duke lead the way toward a sustainable future. read more...

Bleed Blue. Live Green. I support a Sustainable Duke!

"We have a lot to celebrate, because Duke just released its climate action plan"? Omigohbees.

Sam Kinison: Immigration Advocate

Obesity: Public Health Problem or Basic Human Right?

We all know about the health issues that come with obesity. Increased risk of diabetes, cardiac issues, some cancers, liver and gall bladder problems among others.

What I did not know until today is that there is a publication called "The International Journal of Obesity", and it publishes articles about things like the problem of weight discrimination (of course it also publishes articles like "Effect of dairy and non-dairy calcium on fecal fat excretion in lactose digester and maldigester obese adults", but that doesn't get picked up by NPR)!

I certainly am not in favor of discrimination, but I guess I have enough Puritan/Calvinist DNA still running through me to worry about a slippery slope here.

On the public health side of things, we want to get out the message that obesity is bad, but we somehow still need to treat obese individuals with respect and fairness.

Tuesday, October 20, 2009


This captures the exact mindset of many people who I actually consider friends: It doesn't actually matter, at all, if what you do actually matters. What matters is that you do something.

How Can We Raise Awareness In Darfur Of How Much We're Doing For Them?

(Nod to Art Carden)

We Get Letters: High Speed Rail in Texas

From a pen pal, on the hearings on High Speed Rail between Dallas and Houston:

Thought you might find this interesting. I could not bear to listen to the complete hearing, but all the pieces focused solely on the pork and only made veiled comments about managing expectations (my translation is that it clearly is a losing economic proposal for the average citizen). I suggest that the economic comments made by Glaeser at Harvard and David Levinson at U of Minnesota will have no affect. Finding the hundreds of billions to put in after the first 8 billion goes up in studies will be the game changer. It is sometimes sad that economics is such a blunt instrument.
House hearing on HSR

Levinson's Nexus research center and
his blog.

Me? I have the same question I had in Germany. Why does anyone think this saves money? It seems inconceivable.

Tyler's thoughts, useful and quirky as always. (I stop at Thai Thai? Lordy)

Ecce Moron

Mort Zuckerman of US News & World Report is sick and tired of the free market as he tells us in his editorial "The free market is not up to the job of creating work".

I will have to get a ruling from Mungowitz, but I am pretty sure that the market creates wealth and not necessarily work.

But more importantly, and related to my post about the massive negativity on display in the MSM. Zuckerman takes the current employment situation and extrapolates it out for the forseeable future, basically claiming we will have "long term double digit unemployment", with no evidence given really except that jobs have been lost and we have high unemployment right now.

Here is the craziest sentence:

"Alas, the prospects for re-employment are diminished by the fact that many jobs may never come back, for example in finance and car manufacturing. This means growth alone will not fully employ America again."

Actually, his conclusion may be even funnier:

"Only massive programmes are equal to the challenge of restoring stable growth to our economy. One such programme would be to establish a National Infrastructure Bank, advocated by prominent Democrat Felix Rohatyn, to which the government would assign the $65bn (£40bn, €45bn) annually allocated to support infrastructure construction nationally. The bank would have the capacity to borrow, with federal guarantees, an additional $200bn. This programme would ensure a rational rather than a political investment in infrastructure, and provide long-term infrastructure development on a major scale with a maximum multiplier effect on the economy."

Of course a government funded bank would not have any political component to allocating the funds. Plus if it is a bank, then it must give loans, right? How would they be repaid? By only building toll roads and bridges?

What a dope!

Why Rent-Seeking is a Problem

Wow. My man, Alexander Hoffelder, shared a quote from Bastiat that I had never seen before. And that quote is the single best indictment of the rent-seeking society that I have ever seen. It's all there....the rent, the seeking, the damage, and the moral decay.

"When under the pretext of fraternity, the legal code imposes mutual sacrifices on the citizens, human nature is not thereby abrogated. Everyone will then direct his efforts toward contributing little to, and taking much from, the common fund of sacrifices. Now, is it the most unfortunate who gains from this struggle? Certainly not, but rather the most influential and calculating." - Bastiat, Justice and Fraternity

Frederic Bastiat: the Robert Tollison of the 1850s.

UPDATE: Another pretty good quote, from Joe Stiglitz, before he went all Krugman on us:

Public actions, however, are also subject to constraints and limitations, so that the essential problem of public regulatory policy is to determine when government action improves market performance and when, in contrast, private action can take better advantage of information and incentives within the marketplace” (Stiglitz, WHITHER SOCIALISM, 1994, 36)

Court finds against us, split decision.

Owie. We lost. We got a split panel of judges, but we lost. Here is the decision...

Mitch Kokai has an article on the decision here, a quick hitter.

Judge Ann Marie Calabria dissented from the majority opinion, writing:

North Carolina’s 2% statewide requirements for both ballot access and ballot retention place too onerous a burden on the fundamental rights of members of third parties under the State Constitution. The State, by permitting ballot access under far less burdensome requirements for unaffiliated candidates, has proven that it can accomplish its compelling interest in ballot regulation in a less restrictive fashion. It is ultimately the role of the Legislature, rather than this Court, to determine a precise method of ballot access and/or retention that is permissible under the State Constitution. ... However, the ballot access statutes must, at the very least, allow both political parties and unaffiliated candidates equal access to the ballot.

It is a difficult problem, for the judges. There is a VERY substantial presumption of deference to legislative will, when it comes to the regulation of "time, place, and manner" of local and state elections. And rightly so, since the US Constitution is perfectly clear about this.

I have not read the majority opinion yet....

Podcast! Vaccines, Transplants, etc.

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We Get Letters

This from R.L., on the recent article in the New Yorker...., by Malcolm Gladwell.

Build a better helmet, reduce the number of concussions? Or do it like rugby and drop the helmet all together?

Excerpt from article: "But if C.T.E. is really about lots of little hits, what can be done about it? Turley says that it’s impossible for an offensive lineman to do his job without “using his head.” The position calls for the player to begin in a crouch and then collide with the opposing lineman when the ball is snapped. Helmet-to-helmet contact is inevitable. Nowinski, who played football for Harvard, says that “proper” tackling technique is supposed to involve a player driving into his opponent with his shoulder. “The problem,” he says, “is that, if you’re a defender and you’re trying to tackle someone and you decide to pick a side, you’re giving the other guy a way to go—and people will start running around you.” Would better helmets help? Perhaps. And there have been better models introduced that absorb more of the shock from a hit. But, Nowinski says, the better helmets have become—and the more invulnerable they have made the player seem—the more athletes have been inclined to play recklessly."

Read on and a UNC researcher Gladwell cites suggests eliminating kickoffs because a disproportionate number of head injuries occur during kickoffs.

Even better is the discussion of "gameness" in fighting dogs... And football players- and the culture of never missing practice.

That does remind me of the "Tullock air bag." Gordon famously suggested that the way to make cars safer was to put a retractable dagger in the steering column. The dagger shoots out and locks in the case of an accident. Same reasoning, with an empirical basis, for Peltzman.
(Bob Lawson found that cartoon, bless him)
Russ Sobel showed it worked for NASCAR; why not for NFL? Get rid of the helmets.

Monday, October 19, 2009

Why so glum, chums?

I have been noticing that bloggers who post anything positive about the economic situation are often bombarded with negative and apocalyptic comments. See here and here for examples. The MSM is not exactly cheery either.

Some things are really truly good. For example, output in general and manufacturing in particular are growing again in a lot of economies. It is true that unemployment is quite high and may well rise even higher, but historically, unemployment is a lagging indicator.

The dollar is falling, but in an orderly manner, and its fall appears to be stimulating exports which is good. Interest rates are low and fears of further rounds of mortgage defaults when ARMS are reset to higher rates appear perhaps to be overblown.

Personal savings rates in the USA have risen appreciably.

We do have a very large and growing deficit and we have some policy proposals floating around that may well increase the problem. As Chairman Ben said today, a fiscal exit strategy is going to be important and in my view, the fiscal exit will be much more problematic than the monetary exit.

So I am not claiming we live in Shangie-La or anything, but we were supposedly standing on the brink staring into the void a few short months ago and in actuality things are turning out much better than many feared. So why all the hyper-negativity?

GARCH: It's not just for Finance anymore

I just found this paper by Jim Hamilton called "Macroeconomics and ARCH". I guess he used ARCH instead of GARCH because the paper was for a festschrift for Rob Engle and not one for Tim Bollerslev!

Anyway, Jim makes two great points in the paper that are not widely appreciated by empirical macro people.

(1) OLS standard errors can be stupendously bad when the error terms are conditionally heteroskedastic, and White or Newey West standard errors are not always "good enough" either.

(2) Even if one only cares about inferences regarding the conditional mean, the efficiency gains from estimating GARCH effects via MLE vs. ignoring them via OLS can be extremely large.

Shout it from the rooftops!


Sunday, October 18, 2009

Ruler of the Waves

Knut the great was just kidding when he commanded the tide not to come in (or maybe he was just quick witted enough to save face?), but Yury Luzhkov apparently did not get the memo that only the man upstairs can control the weather.

Fresh from his ill starred attempt to reverse the flow of a Siberian river for "irrigation purposes", the Mayor of Moscow has guaranteed that it will not snow in Moscow this winter.

His plan is to have the Russian airforce chemically seed the snow clouds causing them to dump their load outside the city limits. All winter long.

Besides the intrinsic gut feeling of not-a-good-idea-ness, there are other objections to the plan:

"So far the main objection to the plan has come from Moscow's suburbs, which will likely be inundated with snow if the plan goes forward."

Maybe the airforce can just open the whole thing up for bids.

Live Blogging Head of Charles Regatta

First, the bad news: 39 degrees F, windy, raining hard and steady. Ick.

Then, the worse news: the YYM is quite sick, fever, very bad headache, dizzy. He is a scratch from the youth Men's 4 race, which is scheduled for 10:12, but won't go off until 10:20 at earliest. In anyt case, though, the YYM is upstairs in his bed, trying to rest but not really succeeding.

But, the coach found a substitute rower, so at least everyone else can still row. After all, we drove a truck, with boats and people, from North Carolina up here to Boston. And 25 people flew up here, also. A shame if we didn't even race.

I extended the hotel for another night. Not sure we can make the flight (6 pm out of Logan) but at least this way the YYM can rest for most of the day.

(Listening to the race on internet as I type. Just heard that one of the teams is called "Distant Objects in Your Mirror." Always good to have a sense of proportion about these things, don't you think?)

UPDATE (10:20 am): You men's quads delayed a bit. Another ten minutes, at least.

UPDATE: If you want to watch live, more or less, click on the webcast...

UPDATE (10:31 am): Youth men's quads going by now. Triangle Rowing is one of 76 different crews in this race. They will have a little trouble without Brian, because they have all trained together, but we we'll see.

UPDATE (10:46 am): And here are the lads! (Lagging badly on internet, so my screen capture is rather fractured. Graphics froze on the stuff on top. Still, there they are!)

UPDATE (11:30 am): Result....
58th Wake Rowing (Karthik Sundaram, c'n)
Splits--Riverside Weld Cambridge
Riverside Bridge 04:40.148
Weld Bridge 11:14.624
Cambridge Bridge 16:33.358
Finish: 19:42.676 (Winning time was 17:19:500, St. Catharine's, Canada)
Start Position: 62

UPDATE (11:42 am): Results for the Raleigh Charter Ladies.....
65th Raleigh Charter High School (Sydney Evans) 22:31.918 (Winning time was 19:35:135, which beat our men)

UPDATE (11:53 am): Wind picking up unbelievably. I'm glad our events were in the morning. This is pretty scary. Even if the YYM is feeling well enough to fly this evening, we are going to have major excitement getting airborne. Logan is one exposed place, and there are supposed to be 40+ mph gusts.

UPDATE (1:53 pm): Son is not well. Shivering. H1N1? Hard to know. for all sorts of reasons, I think we will have to stay here and try to fly back tomorrow. Poor guy. Just laying in bed shivering, with terrible headache. Keeps asking me to turn up the heat in the room, even though it's like a sauna. It had been six hours since he had Alleve, so he took two more. Can't take any more, though. He doesn't like aspirin, for some reason. I have some aspirin, and I will get him to take that. We have to control the fever.

Saturday, October 17, 2009

That just ain't right!

It seems like the "helmet" is designed to prevent the kid from breathing, but I wonder what was the intent?

Is it supposed to protect the lil fella from rain? fumes? from hurting his head in an accident?

epic fail

Friday, October 16, 2009

Head of the Charles

So....heading up to Beantown tomorrow.

The YYM qualified to row in the "Head of the Charles" event with his crew team from Raleigh Charter and Wake Rowing.

So, we are leaving in dawning, to start the freezing and the standing, so he can do some rowing. Very exciting, I have to admit.

Here is some background.

On the other hand, here is the weather report. Martin Kypta, are you smiling? I think it is nicer in Germany right now than in Boston....(HA! No, it isn't. Colder in Germany. Martin, you lose again)

Today's AFLAC Trivia....

Perhaps a hoax. But too good to check.

(Nod to J.E. Walker)

Weekend eye candy

Enjoy, people.

A match made in heaven

Diego Maradona and the psycho-analysts of Buenos Aires!  Argentina just slipped into the world cup, finishing 4th in the South America group with a 1-0 victory over Uruguay. Their volatile coach and uber-cheater, Diego Maradona reacted as one might expect:

To those who did not believe in us - and ladies forgive me - they can suck my ---- and keep on sucking it," he said. "I am black or white; I'll never be grey in my life.
"You lot take it up the a---, if the ladies will pardon the expression. This is for all Argentineans except for the journalists. I would like to thank the team for giving me the privilege to lead Argentina to the World Cup. Thank you to the Argentinean people who had faith.

"This is for those who did not believe in the team and treated me like dirt - but we still qualified with honour. They will now have to accept this.

In Spanish it was, "que la chupen, y sigan chupando"

If Diego gets the American treatment of having to go to counseling, he won't have a shortage of choices. Argentina leads the world in psychoanalysts per capita by a wide margin! Perhaps he could visit with celebrity shrink Gabriel Rolon. Here is a bit of his wit and wisdom:

In Mr. Rolón's diagnosis, Argentina suffers symptoms of bipolar disorder, evidenced in the gap between rich and poor. He also says the country has endured an abusive relationship with the U.S., which he says rigs the global economy in its own favor. Being No.1 in psychoanalysis, Mr. Rolón says, is "one of the few senses in which Argentina is privileged."

God I love South America!

Thursday, October 15, 2009

Breaking Balloon News

Three news bulletins from CNN:

--A 6-year-old climbed into a balloon-like experimental aircraft built by his parents and floated into the Colorado sky. (3 pm)

-- A balloon-like experimental aircraft thought be carrying a 6-year-old Colorado boy has landed. (3:40 pm)

-- KMGH: Police say no one was found inside a balloon that was thought to be carrying a 6-year-old Colorado boy. (3:50 pm)

UPDATE: 3:54 pm--VIDEOIt looks just like a giant hot water bottle. Did the kid fall out/jump out? How awful.

UPDATE: 6:02 pm--Two extremes of possibilities
The good--kid is just scared (no question he untied the balloon and allowed it to escape), and hiding in the neighborhood. Doesn't want dad to be mad at him for letting the balloon get away. Ojala que es verdad!
The bad--the box that WAS on the balloon is not there. It fell off. The kid was in the box. They will find the box sometime soon. They will find the kid's body in the box.

Let's hope for the good.

UPDATE: 6:23 pm--THE GOOD WINS! Boy found alive. He was hiding in a box, in the attic, presumably trying to avoid the butt-whupping he thought he had coming to him.

What a feeling to have children. Wanting to hug them, spank them, kiss them, and yell at them, all at once. Poor little guy. Poor parents.

UPDATE: 7:14 pm--Video

Put your mind at ease, Judge Scalia

Last week, I posted about how Antonin Scalia had gone all Alan Ginsberg on us by lamenting how our "best minds" were being wasted on lawyering. I am not so sure he was right. Consider the following exchanges, all of which supposedly actually occurred in a courtroom:

Q: Now doctor, isn't it true that when a person dies in his sleep, he doesn't know about it until the next morning?

A: Did you actually pass the bar exam?

Q: The youngest son, the twenty-year-old, how old is he?

Q: So the date of conception (of the baby) was August 8th?

A: Yes.

Q: And what were you doing at the time?

Q: She had three children, right?

A: Yes.
Q: How many were boys?

Q: None.

A: Were there any girls?

Q: How was your first marriage terminated?

A: By death.

Q: And by whose death was it terminated?

Q: Doctor, how many autopsies have you performed on dead people?

A: All my autopsies are performed on dead people.

Q: ALL your responses MUST be oral, OK? What school did you go to?

A: Oral.

Q: Do you recall the time that you examined the body?

A: The autopsy started around 8:30 p.m.

Q: And Mr. Dennington was dead at the time?

A: No, he was sitting on the table wondering why I was doing an autopsy.

My View on Angus' "Cheap Dollar" Post

Wow, there is quite a bit here to comment on. Angus said some things about the dollar....

1. There are some things I know more about than Angus. Not many things, and not much more, but some. Social choice theory, Hayek's later books, campaign finance law. But the intersection of monetary theory and trade? Please. Not only does Angus understand this better than I do, he understands it better than almost anyone. So, on the merits, and given that he is making quite a simple point, I would defer to him.

2. Besides, on the merits, I agree with him on the main point, completely. Who gives a crap about the dollar? Why should we care what currency the rest of the world uses? The dollar is big enough, and the U.S. is big enough, that the rest of the world can switch if it wants. Besides, money is by and large a veil, though "when the veil flutters, real output sputters." That just means that you need something stable, limit discretion of the Fed, and then go back to making stuff and selling it. Seignorage is basically theft, anyway. Let it go.

3. I'm not sure the actions of the Fed "helped avert catastrophe," as Angus claims. But in a comparative sense, compared to 1933-1936? You bet: catastrophe then, caused by Fed, no catastrophe now, possibly helped by Fed (though Fed did cause problem in first place; see below). Bernanke did NOT contract the money supply and force everyone with upside down balance sheets to liquidate. So, Angus said, "Unlike the Fed of the 1930s..." and he points out that the weakness of the dollar is at least partly because of "vanishingly low interest rates." I just don't see anything to disagree with there.

4. Now, one could easily criticize Angus for being a big Fed-lover, and wanting to have Greenspan's baby. After all, it was Greenspan who suppressed interest rates artificially, and inflated the housing and asset bubble. Yet Angus has consistently defended Greenspan, right. Oh...wait...that's not right, as even a casual reading of previous posts can show (commenters: Google is your friend. Read before you say stupid stuff). There's this, and then there's this, and (I could go on). Angus has hammered the Federizer Bunnies consistently for years.

5. Finally, BOTH of us have consistenly hammered Porkulus. That canard ("You support the stimulus?") is not even worth considering.

Legend or Not....

A "fish story" or not, this is quite amusing....


All at once, Bruce got a big run on his line. This thing went all around the boat and took more than twenty minutes to bring up to the surface. When they got it up to the surface, they could not tell what it was. It looked prehistoric.

Steve Jr. put a gaff in it and the two men dragged it aboard the 33 foot boat. As soon the big creature hit the deck, it went crazy, attacking them. It was an eel over 6 feet long, weighing close to 100 pounds. It had a mouth full of sharp teeth and was extremely pissed off...In the midst of thrashing around, the creature fell down below onto the floor between the two sleeping men, Erik and Ken. When they heard the thud and turned on the light, the eel raised its head right above Ken’s face. Erik rolled over and grabbed his 9 mm pistol. Steve Jr. started yelling. “Don’t shoot the gun in the boat! We’re 120 miles from land!” Next thing you know, all four fishermen were on the deck and the gigantic eel had sole possession of the bottom of the boat.

[snip, involving beer and squealing and running around] Then they hatched a new battle plan. Steve Jr. went out on the deck to get the beast’s attention. The eel attacked and Steve Jr. climbed up on top of the captain’s chair. Ken threw a blanket on top of the giant eel while Erik and Bruce beat the hell out of it with a steel gaff and a large ice chest lid. After the creature was finally subdued, they put it into a large ice chest, and closed the lid on it.

The four brave sailors all got themselves a beer and were laughing at the situation when the lid of the ice chest was suddenly knocked off and the eel sprang out onto the deck and resumed his attack.. Bruce stated that the eel was clearly out for vengeance. The four men each picked up something and the fight was on. After beating the creature with gaffs, ice chest lids and fire extinguishers again, they once more subdued the massive carnivore and put it back into the ice chest. This time, they tied the lid down and put another ice chest on top of that one. Eighteen hours later they returned to the dock and started unloading the boat. None of them was anxious to open the lid to the ice chest, in fact, they did “rock, paper, scissors” to determine who would pop the lid!

(Nod to GameBill)

Russ Roberts--Rapper?

It can't be true; it must be true; it can't be true.

(Nod to Mr. Reasonable)

Wednesday, October 14, 2009

He liked it so much he expropriated the company!

Remember the old ad for electric razors, where the geezer exclaims, "I liked it so much I bought the company"?

Well something similar just happened in Venezuela. Hugo Chavez attended the Africa- South America conference on Margarita Island (where Mrs. Angus and I honeymooned) and apparently had a great time at the conference hotel, because he has decided to have his government expropriate it!!

I am not making this up. Here is coverage in Spanish from Argentina and here from the Associated Press.

Here is a tidbit from the AP story:

"Chavez issued a decree last week ordering the "forced acquisition" of the Margarita Hilton & Suites and its marina. The president's order was reported by Venezuelan media Tuesday, after being published in the Official Gazette on Friday.

The decree clears the way for Chavez's government to expropriate the hotel. It's unclear how much Venezuela will pay or how soon.

Chavez last month hosted a summit at the hotel with leaders including Libya's Moammar Gadhafi, and suggested the hotel could become the headquarters of a new bloc of African and South American nations."

God I love South America. Anything can happen there.

The global savings glut re-visited

A new NBER working paper by Jagannathan, Kapoor and Schaumburg (ungated version here), argues that global imbalances + institutional failures caused the great recession and that the financial crisis was "just" a symptom.

The failures are:

"The inability of emerging economies to absorb savings through domestic investment and consumption due to inadequate national financial markets and difficulties in enforcing financial contracts through the legal system;

the currency controls motivated by immediate national objectives;

and the inability of the US economy to adjust to the perverse incentives caused by huge money inflows leading to a breakdown of checks and balances at various financial institutions.

The financial crisis in the US was but the first acute symptom that had to be treated. A sustainable recovery will only occur when the natural flow of capital from developed to developing nations is restored."

Interesting paper, not very technical. There is certainly something to the argument, but I am not sure this is anything like the major root cause of our current problems.

Who gives a crap about the dollar?

Abstract: Not me!

People, the dollar is "weak". The dollar has fallen from around 1.32 to the Euro in March to around 1.48 today and from around 100 Yen to the dollar in April to around 89 Yen to the dollar today. In some quarters, this is cause for hand wringing and hysteria.

You know what? I don't care. In fact, I am kind of happy. We dealing with the end of a huge recession, with unemployment still rising. A cheaper dollar will encourage exports and help GDP growth. Plus, there are extremely liquid and thick forward and futures markets for the dollar. If fluctuations threaten your business, you can easily insure against them.

We were faced with a financial crisis and potential meltdown that many thought would rival the Great Depression. Unlike the Fed of the 1930s, the Bernanke Fed (eventually) responded with a battery of unprecedented policy actions that, to my mind, actually helped avert catastrophe. With vanishingly low interest rates here in the States, it is not really a surprise that the dollar is weak.

To those who lament the potential loss of status as an international reserve currency, I say "who cares"?  Suppose the world's governments decided to hold Euros as reserves instead of dollars. The dollar would fall further in the short run and we would lose some seignorage revenues, but the world as we know it would not come to an end. 

There are certainly reasons to be concerned about our growing national debt and what it might do to inflation down the road, especially given that the Bernanke Fed actually crossed into third world territory with its purchases of government debt during the crisis, but "what will it do the special international standing of the dollar" is not one of the reasons for concern in my book at least.

Tuesday, October 13, 2009

The lion in winter

Here he is people, Pluto Lee Grier, aka Mr. Tootie. He's pushing 11 now but still going strong.

Lin Ostrom Lecture

Fun to watch her. She is a badass.

(Nod to Art Carden, World's Whitest Man)

He's not talking about Kareem!

Very nice piece by Paul Romer about the Ostrom Nobel.

Here is the pithy essence:

Economists who have become addicted to skyhooks, who think that they are doing deep theory but are really just assuming their conclusions, find it hard to even understand what it would mean to make the rules that humans follow the object of scientific inquiry. If we fail to explore rules in greater depth, economists will have little to say about the most pressing issues facing humans today – how to improve the quality of bad rules that cause needless waste, harm, and suffering.

Cheers to the Nobel committee for recognizing work on one of the deepest issues in economics. Bravo to the political scientist who showed that she was a better economist than the economic imperialists who can’t tell the difference between assuming and understanding

Cost Benefit Analysis

Interesting "greatest good for the greatest number" problem, in the Philippines.

Several feet of rain. Dams about to burst. Authorities have to release very substantial amounts of water, even though it means villages downstream will likely be washed away. Because if they DON'T release the water, the dams will break and even more people will be lost.

"The release of water from the San Roque Dam flooded the Agno River, flooding at least 30 towns and dozens of villages downstream...'There was really heavy rain, so water had to be released from the dam, otherwise it would have been more dangerous,’ Nathaniel Cruz, the government’s chief forecaster, told The Associated Press." (article)

This happened in NC during Hurricane Floyd, in 1999. Authorities were blamed for "killing" people, but in fact the release of water almost certainly saved lives and reduced the total damage. You lose the dams, the floods are MUCH bigger, and then you have to rebuild the dams.

The problem is that the same thing is true about opportunity costs of a monetary nature. Dams are physical, but so are school buidlings and teaching resources. If we decide we are going to save everyone, with programs such as an unlimited focus on special needs children, or people with handicaps, then another generation of children are going to get swept away when the dams burst.

You can't save everyone. As I always tell my students, an economist is someone who believes, sincerely believes as a matter of moral justice, that the infant mortality rate should be positive.

Monday, October 12, 2009

Rated R Articles on Sex and Choosing

Arbitrary Social Norms Influence Sex Differences in Romantic Selectivity, Eli Finkel & Paul Eastwick
Psychological Science, October 2009, Pages 1290-1295

Men tend to be less selective than women when evaluating and pursuing potential romantic partners. The present experiment employed speed-dating procedures to test a novel explanation for this sex difference: The mere act of physically approaching a potential romantic partner (vs. being approached), a behavior that is more characteristic of men than of women, increases one's attraction to that partner. This hypothesis was supported in a sample of speed daters (N= 350) who attended a heterosexual event where either men (eight events) or women (seven events) rotated from one partner to the next while members of the other sex remained seated. Rotators were significantly less selective than were sitters, which meant that the tendency for men to be less selective than women at events where men rotated disappeared at events where women rotated. These effects were mediated by increased self-confidence among rotators relative to sitters.
“Anything From Making Out to Having Sex”: Men's Negotiations of Hooking Up and Friends With Benefits Scripts

Marina Epstein, Jerel Calzo, Andrew Smiler & Monique Ward
Journal of Sex Research, September 2009, Pages 414-424

Popular media and academic literature often portray men as happy beneficiaries of nonrelational or casual sex — a view that is consistent with traditional notions of masculinity. This study examined the validity of this notion, using semistructured interviews to explore ways that 19 college-age men defined and enacted “hooking up” and “friends with benefits” scripts. Men's definitions reflected both standard and alternate conceptions of these scripts, and their experiences indicated variability in intentions and outcomes. Whereas a few men embraced the no-strings-attached nonrelational scripts, most rejected the script or enacted an amended version that allowed for greater relational connection. Further, their experiences were not all positive and were not all devoid of emotional connection. These alternative enactments challenge the pro-masculine, universally positive conceptualization of nonrelational sex portrayed in the media and in some empirical research.


Marriage and the City: Search Frictions and Sorting of Singles

Pieter Gautier, Michael Svarer & Coen Teulings
Journal of Urban Economics, forthcoming

This paper develops and tests a model where cities play an important role as marriage markets. The idea is simple. Cities are dense areas where singles can meet more potential partners than in rural areas. To enjoy those benefits, they are willing to pay a premium in terms of higher housing prices. Once married, the benefits from meeting more potential partners vanish and married couples move out of the city. Attractive singles benefit most from a dense market and are therefore more likely to move to the city. Those predictions are tested and confirmed with a unique Danish dataset.


The Sexual Double Standard and Adolescent Peer Acceptance

Derek Kreager & Jeremy Staff
Social Psychology Quarterly, June 2009, Pages 143-164

The belief that women and men are held to different standards of sexual conduct is pervasive in contemporary American society. According to the sexual double standard, boys and men are rewarded and praised for heterosexual sexual contacts, whereas girls and women are derogated and stigmatized for similar behaviors. Although widely held by the general public, research findings on the sexual double standard remain equivocal, with qualitative studies and early attitudinal surveys generally finding evidence of the double standard and more recent experimental vignette designs often failing to find similar results. In this study, we extend prior research by directly measuring the social status of sexually permissive youth. We use data collected from the National Longitudinal Study of Adolescent Health to relate adolescents' self-reported numbers of sexual partners to a network measure of peer acceptance. Results suggest that the association between lifetime sexual partnerships and peer status varies significantly by gender, such that greater numbers of sexual partners are positively correlated with boys' peer acceptance, but negatively correlated with girls' peer acceptance. Moreover, the relationship between boys' sexual behaviors and peer acceptance is moderated by socioeconomic origins; sexually permissive boys from disadvantaged backgrounds are predicted to have more friendships than permissive boys from more advantaged backgrounds. Our results thus support the existence of an adolescent sexual double standard and suggest that sexual norms vary by both gender and socioeconomic origins.


How Willing Are You to Accept Sexual Requests from Slightly Unattractive to Exceptionally Attractive Imagined Requestors?

Achim Schützwohl, Amrei Fuchs, William McKibbin & Todd Shackelford
Human Nature, September 2009, Pages 282-293

In their classic study of differences in mating strategies, Clark and Hatfield (1989, Journal of Psychology and Human Sexuality, 2, 39–54) found that men and women demonstrated a striking difference in interest in casual sex. The current study examined the role of an imagined requestor’s physical attractiveness (slightly unattractive, moderately attractive, and exceptionally attractive) on men’s and women’s willingness to accept three different requests (go out, come to apartment, go to bed) as reflected in answers to a questionnaire. We tested two hypotheses with a sample of 427 men and 443 women from three countries. Hypothesis 1 states that men, relative to women, will demonstrate a greater willingness to accept the “come to apartment” and “go to bed” requests but not the “go out” request for all three levels of requestor attractiveness. This hypothesis reflects Clark and Hatfield’s main findings. Hypothesis 2 states that the physical attractiveness of a potential partner will have a greater effect on women’s than on men’s willingness to accept all three requests, and particularly for the explicit request for casual sex. The results partially supported Hypothesis 1 and fully supported Hypothesis 2. The discussion highlights limitations of the current research and presents directions for future research.

(Nod to Kevin L, whom EVERYONE finds attractive)

I think they were off by two

According to Money Magazine, I have the 3rd best job in America: College Professor.

They kind of jumble up two very different kinds of jobs into one entry though:

3. College Professor

Median salary (experienced): $70,400
Top pay: $115,000
Job growth (10-year forecast): 23%
Sector: Education

What they do: Teach and grade papers, of course. But profs also spend about half their time doing research and writing articles and books about their field.

Why it's great: For starters, major scheduling freedom. "Besides teaching and office hours, I get to decide where, when, and how I get my work done," says Daniel Beckman, a biology professor at Missouri State University. And that doesn't even take into account ample time off for holidays and a reduced workload in the summer. Competition for tenure track positions at four-year institutions is intense, but you'll find lots of available positions at community colleges and professional programs, where you can enter the professoriate as an adjunct faculty member or non-tenure track instructor without a doctorate degree. That's particularly true during economic downturns, when laid-off workers often head back to school for additional training. More valuable perks: reduced or free tuition for family members and free access to college gyms and libraries.

Drawbacks: Low starting pay and a big 50% salary gap between faculty at universities and community colleges. If the position is at a four-year university, you'll probably have to relocate, and you'll be under pressure to constantly publish new work to sustain career momentum.

How to get it: For a tenure track position, you'll need a Ph.D. But all colleges want at least a master's degree and prefer plenty of teaching experience.

People, I would wax so bold as to assert that tenured professor at a research university is actually the greatest job in the world!