Wednesday, March 31, 2010

When Robert met Edmond

Newish NBER working paper by Aghion, Howitt, & Murtin (ungated version here) is titled: "The Relationship Between Health and Growth: When Lucas Meets Nelson-Phelps."

They argue that Lucas, who modeled an effect of improving health on growth and Nelson and Phelps who modeled an effect of the level of health on growth are both correct.

Their evidence comes mainly from a 96 country cross sectional average growth regression where both the initial level of life expectancy and the growth of life expectancy over the sample have positive and significant coefficients, both in LS and IV models.

Of the two results, they claim the effect of initial life expectancy is more robust.

I like the piece because they take a very reduced form approach. It's health and health improvements on growth, with basically nothing else in the model.

I dislike the piece because they, as do so many others, abuse the Hansen test of over-identifying restrictions to justify their instruments.

First, failing to reject the null, or "passing" the Hansen test, does not validate your identification, the test is on over-identifying instruments. Consider that in an exactly identified equation the test cannot be performed.

Second, failing to reject the null doesn't mean you don't have an instrument problem. A p level of .13 on a Hansen test means you don't reject the null at conventional levels, but it also means (more or less, I am speaking imprecisely here), there is an 87% chance that the null is false and your instruments are suspect. Another way to say this is we are rarely given any information about the power of the test, which is crucial when failing to reject the null is what guides our modeling choices.

Police Car Chew Toy

(Nod to Angry Alex, who called this "the darnedest thing")

New RNC Symbol

(Nod to the Bishop, who cites I found it at Blue Gal)

Hello Lakers?

The Thunder routed the 76ers last night to push their record to 45-28

Thunder have games remaining @Boston, @Dallas, Minnesota, @Utah, Denver, Phoenix, @Golden State, @Portland, Memphis.

Going on form they will win 3 more games and finish 48-34. The number 9 team, Memphis, already has 35 losses, so the Thunder appear to at least be in the playoffs. I am assuming that the positioning race between Utah, Denver, Dallas, and Phoenix will be ongoing so that those teams will be, in the words of Sheedy, "playing hard, my man" down the stretch.

However, it's hard to see how they can hold on to the 6th or 7th seed given their schedule vs. that of the Spurs and the Blazers. Each of them has one more loss that OKC right now, but both have a bit easier schedule remaining and both hold the tiebreaker against OKC.

San Antonio has Houston, Orlando, @Lakers, @Sacramento, @Phoenix, Memphis, @Denver, Minnesota, @Dallas. So put them down for 4 wins, tying OKC at 48 - 34. However, as noted above, the Spurs hold the tiebreaker over the Thunder.

Portland has the Knicks, @Denver, @Sacramento, @Clippers, Dallas, @ Lakers, OKC, Golden State. So put them down for 5 wins (yes beating the Thunder in Portland).

That gives Portland in 6th, Spurs in 7th, and OKC in 8th.

The critical game for the Thunder will I guess be the Portland game. Winning that could keep them in the 6th spot if all three teams perform as expected otherwise. Beating Denver or Phoenix at home would be huge too. Who knows, maybe they can steal another one from the Nuggets.

Tuesday, March 30, 2010

All Hail Greg Weeks

Greg puts a hammering on Chuck Schumer on Immigration reform.

Here's Schumer on meet the press:

MR. GREGORY: Senator Schumer, is immigration reform dead then?

SEN. SCHUMER: I don't think so. First, let's look at how desperately we need it. Fifteen thousand people cross our border illegally every day. Most of them take jobs from Americans. And yet, at the same time, there are certain people we need in this economy to help us grow, and we can't get them--engineers, doctors, farm workers. So the system is broken--it lets the wrong people in, excludes the wrong people--and so we need to fix it.

Now here's Greg on Schumer:

This is both inaccurate and unhelpful. "Most" illegal crossers do not take jobs away from Americans. But if Schumer believes they do, then it is not useful to say we "desperately" need them to take away those jobs. Overall, he seems to think the U.S. economy needs only a tiny fraction of the workforce that is attracted to it, which ignores demography and common sense. Which "wrong people" does he think are being let in?

In short, if Schumer is the point man for immigration reform, then it is in trouble.

Kudos, Sir!

Not Fiction, but a Cartoon Videotape

I believe that this cartoon captures the essence of going to dinner with the Lovely Ms. Mungowitz. It captures the scene so accurately that I think the artist (Mr. Piraro) must have seen us in a restaurant recently.

The link is kind of hinky, so let me just give the dialogue.

Man and woman in restaurant, ordering, waiter is writing down orders.

Man: "I'll have number 7."

Woman: "I'll have a wide assortment of ingredients from your menu, in different combinations than you offer them, but first, this series of probing questions."

But, GOSH, I do love her anyway. Even though in restaurants I generally want to hide.

Monday, March 29, 2010

Whale-y boy

I wasn't going to touch the whales. I told myself, look, these are wild animals and deserve respect. If they come close to the boat, observe and enjoy, but don't touch.

As a point of reference, there were people on the trip announcing their goal of hugging and kissing a whale!

So the first couple times a baby came close to the boat, I didn't try to touch. On the last afternoon though, a particularly playful baby was romping back and forth between our boat and another while his mom rested nearby. He came up to the front of the boat where I was and tilted his body so he was looking right at me! At that point the thought hit me that the little dude WANTED me to touch him.

So, the next time he came by, I did. Here are some photos taken by someone in the other boat:

In the picture above, that's Mrs. Angus's arm in the red reaching out to touch the calf.

I wouldn't call it a spiritual experience, but it amazed me how these creatures seem to want to interact with humans. Even some adults approached our little boats to be seen and touched. It's even more amazing when you consider that within the lifespan of some living gray whales, there still was whaling going on in this exact spot!

The NY Times Magazine recently had a great story on whales including a description of a trip to Laguna San Ignacio, where Mrs. Angus and I were.

Open Marriage

B PhD has a nice piece on "open marriage."

Best line: If you have slept with n people, then anyone who has slept with n+1 people is a slut. Our own experiences form the outer boundary of what is morally acceptable.

Amazingly perceptive remark. And it transfers to other areas. We are all immigrants, in the U.S. Even the "native Americans came here just 8 or 10 thousand years ago. But somehow, the arrival of one's own particular ancestors seems to have perfected the U.S. Before my people came: America sucked. After they came: America was perfect, and all additional immigration should be outlawed.

The KPC view--on marriage, let people do what they want. Rules=tyranny.

On immigration--let people live where they want. More people=better country.

What if the Coen brothers had written the Old Testament?

****Spoiler Alert*********

We all know the story of Job, right? God brags on him to Satan, and Satan says, "yeah sure Job's your boy, but he's got it made, so why shouldn't he be. I bet he's just a fair weather friend". Then God said, "Let's find out", and proceeded to hammer Job with all sorts of travails and afflictions. Job's friends (comforters) said "Job: curse God and die" but Job said something like, "even if he kills me, I will still love him".

I finally saw the Coen brothers movie, "A Serious Man", which to my mind is a modern retelling of the story of Job with one crucial twist: when it comes to onion time, the Coens' protagonist flinches and sins.

And in the movie, an instant after the sin, it appears like the protagonist and his son are both going to die.

Probably pretty accurate?

Oh, I guess if you haven't read the Old Testament (or seen the movie), I have got some serious spoilers in this post!

Game Theory

Game Theory: A Practitioner's Approach

Thomas Schelling
Economics and Philosophy, March 2010, Pages 27-46

Abstract: To a practitioner in the social sciences, game theory primarily helps to identify situations in which interdependent decisions are somehow problematic; solutions often require venturing into the social sciences. Game theory is usually about anticipating each other's choices; it can also cope with influencing other's choices. To a social scientist the great contribution of game theory is probably the payoff matrix, an accounting device comparable to the equals sign in algebra.

Sunday, March 28, 2010

A Libertarian Protests McCain-Palin, Gets Roughed Up

I can see the point. "Freedom of speech" does NOT mean you get to make an unscheduled presentation at someone else's rally. Video Here. So, holding a sheaf of papers and shrieking "freedom of speech!" doesn't make much sense, when you are on private property reserved and contracted for by someone else.

Still, every time I think of John McCain, I do want to go do something that might get me arrested for saying bad words in public. So I don't blame the "libertarian," either. We don't think much of John McCain.

Oh Hi! Got any Fish?

Mrs. Angus and I were amazed and enchanted by the variety of colors and shapes of the harbor seals along the Monterey coastline.

Congressman Rangel Goes From Avuncular to Homoncular

Look, Angus and I don't hate Democrats. We hate incumbents. So don't hate us.

Good Samaritan arrested in Pennsylvania

Can anybody 'splain me exactly why poor Donald Wolfe is being persecuted by the "man"?

Here's the AP story, in its entirety:

Police say they charged a Pennsylvania man with public drunkenness after he was seen trying to resuscitate a long-dead opossum along a highway. State police Trooper Jamie Levier says several witnesses saw 55-year-old Donald Wolfe, of Brookville, near the animal Thursday along Route 36 in Oliver Township, about 65 miles northeast of Pittsburgh.

The trooper says one person saw Wolfe kneeling before the animal and gesturing as though he were conducting a seance. He says another saw Wolfe attempting to give mouth-to-mouth resuscitation.

Levier says the animal already had been dead a while.

The Associated Press could not locate a home telephone number for Wolfe.

So is trying to help a fellow creature on the side of the road prima facie evidence of being drunk?

Or is it only when the creature you are trying to help is stone dead that you get busted for public drunkenness?

If it is the latter, let me point out two things in Mr. Wolfe's favor. (1) It was a POSSUM. One of the hallmarks of possum-ness is faking being dead. Wolfe's confusion is thus understandable. (2) Maybe Mr. Wolfe fully knew the critter was deceased. After all, one witness said Wolfe appeared to be conducting a seance!

People, whatever you do, don't attempt to make a miracle in Punxsutawney PA. You'll get tossed in the drunk tank for your troubles! Especially if you don't have a home phone number.

Saturday, March 27, 2010

From the Onion: Suicide Prevention on Frozen Dinners

Stouffers To Include Suicide Prevention Tips On Single Serve Microwavable Meals

I do like the Kashi tip, at the end.

We Get Letters: The Divorce....

From a friend who has been married three times....

After being married for 44 years, I took a careful look at my wife one day and said, "Darling, 44 years ago we had a cheap apartment, a cheap car, slept on a sofa bed and watched a 10-inch black and white TV, but I got to sleep every night with a hot 25-year-old girl. Now I have a $500,000.00 home, a $45,000.00 car, nice big bed and plasma screen TV, but I'm sleeping with a 65-year-old woman. It seems to me that you're not holding up your side of things."

My wife is a very reasonable woman. She told me to go out and find a hot 25-year-old gal, and she would make sure that I would once again be living in a cheap apartment, driving a cheap car, sleeping on a sofa bed and watching a 10-inch black and white TV.

Aren't older women great? They really know how to solve your mid-life crisis

Why Did They have to shoot the POPULAR Teacher

This is messed up.

My questions:

1. It was a "science lesson"? What in the world was the lesson?
2. Why the obsession with school shootings? These are actually extremely rare, even in the U.S. School shootings in the UK are almost unheard of.
3. This did make me want to listen to "I don't like Mondays," by the Boomtown Rats, written by Bob Geldoff before he became a total goofball. So I did.
4. As Anonyman points out, the best part is the claim that the students were only upset because they "shot" one of the popular teachers.

(Nod to Anonyman)

UPDATE: Read Ross's comment. EXCELLENT links.

Commandeering the State Legislatures

A number of states are considering suing to enjoin, or otherwise block enforcement, of the health care reform bill. The basis of the legal claims are constitutional. Let me review the issues briefly.

SUITS AGAINST: All of the suits I have heard would have to be based on the 10th Amendment. Here it is (since you have probably never heard of it, unless you are a lawyer)...

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Is the power to force individuals to purchase insurance, and to have that power enforced by state police and state courts, expressly delegated to the federal government by the Constitution?

On its face, no, but not so fast. Most of the expansions of federal power have been justified by invoking the "commerce clause" and the "elastic clause" of Article I, Section 8 of the Constitution.

Congress shall have the power....

Commerce clause: To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;

Elastic clause: To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.

So, medical insurance is private commerce, many companies operate in multiple see where this is going. The fact that the Constitution does not specifically mention health insurance means nothing, bubkes. There is plenty of commerce clause and 10th amendment jurisprudence that would make the health care reform bill seem like a slam dunk for being clearly constitutional.

But...once again, not so fast.

There is one line of cases that would suggest that some aspects of the legislation are in fact unconstitutional. And they are recent. The Rehnquist Court did a LOT of work in 10th amendment stuff, and there might be a chance here.

Sandra Day O'Connor wrote a really important decision in the case of New York v. US. ( MORE BACKGROUND, AND THE DECISION). I used to study radioactive waste disposal, and so I know more than I should about this case, and this issue. (Yes, I know, SDO? But, yes. She was clear on 10th amendment issues, with a bias toward protecting the states. She wasn't clear on much else, but on this....clear).

From the decision SDO wrote:

As an initial matter, Congress may not simply "commandee[r] the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program." Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U.S. 264, 288 (1981). In Hodel, the Court upheld the Surface Mining Control and Reclamation Act of 1977 precisely because it did not "commandeer" the States into regulating mining. The Court found that "the States are not compelled to enforce the steep-slope standards, to expend any state funds, or to participate in the federal regulatory program in any manner whatsoever. If a State does not wish to submit a proposed permanent program that complies with the Act and implementing regulations, the full regulatory burden will be borne by the Federal Government.

So, does the health care reform bill "commandeer" the state legislatures? That is the direction petitioner / plaintiffs will have to go.

DEFENSE: On its face, since the court now seems more conservative than in 1996, given the recent Heller and Citizens United decisions, won't the suits win, and won't HCR be struck down.


Two things. First, Sandra Day O'Connor was against the 2nd Amendment interpretation in Heller, and against the 1st Amendment interpretation in Citizens United. Her departure made way for the new, more conservative, court. But she was VERY conservative on 10th Amendment grounds. Both Alito and Chief Roberts are NATIONALISTS, much weaker on 10th amendment issues than O'Connor. (Imagine that you had taken Patrick Henry off the court, and put on Alexander Hamilton. That's an exaggeration, but you get the idea.) The point is that this new court is actually MORE likely to side with the national government.

It may come down to whether the Alito - Roberts bloc votes its real principles or not.

Sure, OTHER People Can Get Fired, but Not ME!

Academic entitlement, from our friends at LvMI.

(A friendly nod to LS, who finds good stuff)

President Obama is Correct on DADT

Here at KPC, we have been a bit hard on Prez BHO. Not as hard as we were on GWB, who we pretty much agreed was the worst. president. ever.

But, anyway, let's give a shout out: Don't Ask, Don't Tell is a dumb policy. President Obama is quite right to work toward ending it.

Next, we need to government out of the cupid business, deciding who gets to marry whom. But that is on down the road, I suppose.

Friday, March 26, 2010

It's fun to do bad things

Can I get a Amen?

Strong Arm Tactics

Apparently the "strong arm tactics" of the conservative whackos have unhinged some of our friend in the media.

Consider this story in the Seattle Times:

Protesters have been demonstrating at Driehaus' Ohio home, said Tim Mulvey, a spokesman for the anti-abortion Democrat who joined Stupak in voting for the health bill. A rock was thrown through the window of Driehaus' Cincinnati office Sunday, and a death threat was phoned in to his Washington office a day later, Mulvey said.

"It's getting out of hand," Mulvey said.

Then, read this comment from Prof. Reynolds.... The problem is that the "office window" of Rep. Driehaus is on the 30th floor of the Carew Tower.

That's at least 290 feet. Some people can throw 290 feet in the air.... but horizontally. Nobody can throw 290 feet UP, and have the rock still have sufficient kinetic energy at the top of that trajectory to break a window.

My suspicions:

1. Glenn Reynolds has his facts wrong. But he seems right sure.

2. Seattle Times has THEIR facts wrong. And they seem LEFT sure.

(Nod to the NCM)

UPDATE: Turns out a rock was thrown through the county Dem Party office. An understandable mistake, if you think that "truthiness" is the job of the media, and not paying attention to the actual facts....

UPDATE II: Here is the first paragraph of an editorial.

I know how the "tea party" people feel, the anger, venom and bile that many of them showed during the recent House vote on health-care reform. I know because I want to spit on them, take one of their "Obama Plan White Slavery" signs and knock every racist and homophobic tooth out of their Cro-Magnon heads.

That's not from some crazed lefty nut job. That is actually printed as an editorial in the Washington Post. In that piece, Courtland Milloy praises the courage and forbearance of Rep. Emmanuel Cleaver. But Mr. Milloy really doesn't help, by making physical threats of his own.

"Are You Done"

Thursday, March 25, 2010

Wow, we really have our work cut out for us

The big news in Norman is that Tommy Mason-Griffin Esq. a 5' 9" freshman basketball player who was named 3rd team all big 12 is quitting school to go pro.


He announced it on his facebook page as follows:

"on a mission...its a official dat i am leavin skool and enterin draft so if yue see me and ask me y i aint doin anotha yr yue mite get ignored."

People, can I get an LOL?

Here is a further analysis, and here is another.

After a promising start, Jeff Capel's program appears to be in total free-fall, and we educators appear to be badly failing at our jobs (don't blame me, I only teach grad classes).

Wednesday, March 24, 2010

Jessica, the Happy Hippo

I got nothing to add. This just made me happy. When the hippo stepped on the poor dog's foot... it just seemed like something that would happen to a family... of dogs and hippos.

RPG Heroes are Jerks

(A nod to Popehat)

I just have one question about HCR

And the question is: When in the world did Gary Coleman get elected to Congress?

Sometimes you have to do what you are told....

Thomas Hobbes: " have no pleasure (but on the contrary a great deal of grief) in keeping company where there is no power able to overawe them all. For every man looketh that his companion should value him at the same rate he sets upon himself, and upon all signs of contempt or undervaluing naturally endeavours, as far as he dares (which amongst them that have no common power to keep them in quiet is far enough to make them destroy each other), to extort a greater value from his contemners, by damage; and from others, by the example.

So that in the nature of man, we find three principal causes of quarrel. First, competition; secondly, diffidence; thirdly, glory."

When the cops come, and you say, "I'm not going anywhere..." well, you are in fact going somewhere. And for the people who think that it was unecessary to send three policemen...the whole POINT of the state is to overawe the citizens, to make resistance futile, impossible.

The video above is not an abuse of state power, but rather its essence. This is what the state does, and it is ALL that the state is capable of: raw violence, overwhelming force, and putting a knee in your back while you are being handcuffed.

For my own view:

1. The instructor is partly, maybe mostly, at fault. You have to control the classroom by directing the subject away personal attacks. The student actually has a good point: the only reason this escalated was that the instructor insisted on having a whiny public argument, in class. Sure, the student was out of control. But this didn't have to happen. I have to admit some sympathy for the student here.

2. On the other hand, the student obviously thinks that rules don't apply to her. Look, folks, you should be afraid of the state, terrified in fact. The power of the state is limitless, and the first concern of the state is preserving the power of the state. No one is particularly concerned about you, except you.

The HuffingPuffintonPost has a thought....

Viva, Killer Amendment.

An attempted killer amendment? By that master of tactics from the great state of OK?

Jeff Jenkins wrote a great paper (and put my name on it, too) about killer amendments, in the JOP in 2003. We laid out some conditions under which an amendment might be "killer," and those conditions are pretty restrictive.

On the other hand, my friend Gerry Mackie is skeptical.

(Nod to Mr. Overwater)

Tuesday, March 23, 2010

Mystery book revealed!

Thanks for your suggestions via email and the comments about what my mystery book about Native Americans might be. While looking up the suggestions on Amazon, I ran across what I believe to be the book in question (give me a break, I read it in 1978 or so!).

It's called "Custer Died for your Sins" and the author is Vine Deloria Jr.

I feel so much better now.

India strikes again

People, you know I love India. It is, in my opinion, the funniest country in the world. (Here are some more gems)

Now they are claiming to be "militarizing" chili peppers!

The Indian military has a new weapon against terrorism: the world's hottest chili. After conducting tests, the military has decided to use the thumb-sized "bhut jolokia," or "ghost chili," to make tear gas-like hand grenades to immobilize suspects, defense officials said Tuesday.

The bhut jolokia was accepted by Guinness World Records in 2007 as the world's spiciest chili. It is grown and eaten in India's northeast for its taste, as a cure for stomach troubles and a way to fight the crippling summer heat. It has more than 1,000,000 Scoville units, the scientific measurement of a chili's spiciness. Classic Tabasco sauce ranges from 2,500 to 5,000 Scoville units, while jalapeno peppers measure anywhere from 2,500 to 8,000.

"The chili grenade has been found fit for use after trials in Indian defense laboratories, a fact confirmed by scientists at the Defense Research and Development Organization," Col. R. Kalia, a defense spokesman in the northeastern state of Assam, told The Associated Press.

"This is definitely going to be an effective nontoxic weapon because its pungent smell can choke terrorists and force them out of their hide-outs," R. B. Srivastava, the director of the Life Sciences Department at the New Delhi headquarters of the DRDO said.

Srivastava, who led a defense research laboratory in Assam, said trials are also on to produce bhut jolokia-based aerosol sprays to be used by women against attackers and for the police to control and disperse mobs.

There is so much good stuff here that I hardly know where to start. Let's toss a few out randomly.

1. How 'bout the name of that pepper?

2. Umm, guys, you do know that pepper spray has been around for decades already, right?

3. How can something both be a food and so smelly that it will force hardened terrorists out of hiding due to its smell?

4. Will Indonesia now make a Durian Bomb?

5. Will India ban exports of this pepper due to national security?


Monday, March 22, 2010

OOOOOO! You're not good enough for me!

Okay, so this is a little hokey. A LOT hokey. Still.... heh.

(Nod to the good Dr. Karlson)

Books which have influenced me most

1. Answer to Job, Carl Jung
2. The Blind Watchmaker, Richard Dawkins

These two books somehow liberated me and let me feel much more comfortable in my own skin.

3. The Incredible Bread Machine

Just as with Tyler, this was the first book about economics I read and it got me very interested. Then I took principles of micro and didn't come back to economics again for 3 years.

4. An Economic Interpretation of the Constitution of the United States, Charles Beard.

This got me thinking about how economics could be applied broadly to other fields.

5. Economics in One Lesson, Henry Hazlitt

People, here is where I learned about the broken window fallacy. This was the second economics book I read.

6. A book whose title and author I cannot remember about the history of the relations between the US Government and Native Americans. This mystery book really shook my faith in government ***UPDATE*** The book in question has been determined to be Custer Died for your Sins, Vine Deloria Jr.

7. The Logic of Collective Action, Mancur Olson
8. The Calculus of Consent, Buchanan & Tullock
9. An Economic Theory of Democracy, Anthony Downs

Something in these books made me change my mind in grad school and decide to become an academic (my original plan was to be a macro forecaster!) and to focus on political economy.

10. Hard Boiled Wonderland & The End of the World, Haruki Murakami

This novel changed the type of fiction that I read and opened up a lot of pleasure for me going down a new (to me) literary path.

This post updated to correct the spelling of Hazlitt!


I don't favor the bill that was passed and endorse Mungowitz's and Holtz-Eakin's concerns voiced in the previous post about the cost of the bill, but wow, I have to give it up for Nancy P.! She was relentless and got the job done. She is much better at her job than I gave her credit for being.

So, kudos to you Madame Speaker. That was an impressive political accomplishment.


Health Care Costs

I have a number of colleagues who think that anyone who worries about the increased cost of health care under the new bill is either an idiot, or an ideologue.

Many of them believe, however, that anything the CBO says, or that is printed in the NYTimes, has credibility.

So, here is a past head of the CBO, writing in the NYTimes.


ON Thursday, the Congressional Budget Office reported that, if enacted, the latest health care reform legislation would, over the next 10 years, cost about $950 billion, but because it would raise some revenues and lower some costs, it would also lower federal deficits by $138 billion. In other words, a bill that would set up two new entitlement spending programs — health insurance subsidies and long-term health care benefits — would actually improve the nation’s bottom line.

Could this really be true? How can the budget office give a green light to a bill that commits the federal government to spending nearly $1 trillion more over the next 10 years?

The answer, unfortunately, is that the budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.

In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion.

You can argue, if you want, about quality, and the advantages of more complete coverage. I may not agree, but at least those points are arguable. But you can't seriously believe that this health care bill is anything but a giant cost boondoggle, creating deficits that will affect us for the rest of our lives. This is not the sort of legacy I wanted to leave my children. "We couldn't solve the problem, and so we just charged it all on credit cards!"

UPDATE: Some interesting numbers (thanks to Angry Alex)

The 100 days

100 days of chairmanship left.

2400 hours.

Just under 8.7 million seconds.

Not that I'm counting....

Sunday, March 21, 2010

that's the facts, jacks!

Don't Worry, Be Happy, Smile Longer

Smile Intensity in Photographs Predicts Longevity

Ernest Abel & Michael Kruger
Psychological Science, forthcoming

"Photographs were taken from the Baseball Register for 1952 (Spink, Rickart, & Abramovich, 1952). We restricted our analysis to players who debuted prior to 1950, and we included only photographs in which the player appeared to be looking at the viewer...Players with Duchenne smiles were half as likely to die in any year compared with nonsmilers, HR = 0.50, p = .006...In this model, smile intensity accounted for 35% of the explained variability in survival"

(Nod to Kevin L)

Spring break is great for meeting new friends


Above is a shot of a gray whale breaching in Laguna San Ignacio. The whale is 40+ feet long, and Mrs. Angus and I are close by in a 20 foot long open fishing boat the locals call a panga! We were about 30 feet away when she busted this move. San Ignacio is reputed to have so called "friendly" whales who will swim right up to a boat and interact with the human occupants. These stories are true as I will show later on with further pictures.

Profits = Bombs, According to German Government

"Germany’s Finance Minister Wolfgang Schaeuble told the Bundestag on March
16 that the country may have to consider ordering 'intelligence agencies to
set up surveillance of who is getting together with whom for which kinds of
speculative processes, and where' to protect the euro...Intelligence
agencies could use techniques honed in the fight against money laundering
and terrorist funding if they wanted, said Vanessa Rossi, a senior research
fellow in the international economics program at London’s Chatham House.
'Within continental Europe there are those that do think that financial
speculators are sort of terrorists,' said Rossi. 'In their lexicon it is
economic terrorism, so they may view this as more serious than the U.S. or
“I find it sinister and silly, it is a complete overreaction,” said Philip Whyte of the Centre for European Reform, a pro-European Union research institute in London. “There is a certain school of thought in continental Europe that everything is always the fault of hedge funds.” Schaeuble’s comments reflected “a longstanding paranoia about the Anglo-Saxon model of capitalism.”
" [Bloomberg]

I guess the mistake was having the East come over to the West. Apparently, the German gov is now going to restore the glory days of the Deutsche Demokratische Republik. Now THOSE folks knew how to prevent terrorist acts like free speech, travel, and profits. "Erich Honecker, table for 1! Herr Honecker, your table is ready!"

Of course, this view of profits is hardly new. There was that Schicklgruber guy*, who said, "Gold is not neccesary. I have no interest in gold. We will build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That's the bastion of money."

*Okay, his name was Hitler, never Schicklgruber. That's an urban legend, it appears.

Saturday, March 20, 2010

Price Adjustment to Compensate for Quality Differences in Prostitution

Interesting. Network analysis in the study of markets for sex-for-sale.

I was puzzled by this passage, though:

Another discovery is that a high rating for a particular sex worker is a good predictor of high ratings in the future. That's the kind of rich get richer effect that is seen in many internet phenomena (also known as the Matthew effect). However, average or poor ratings don't seem to affect future ratings either way.

Naturally, buyers tend to use more highly rated sex-workers more often. And over short timescales this can be seen in the data. However, look at longer timescales and the effect drops away. That's probably because sex-workers do not stay in their work for long periods of time, say Rocha and co.

Well, I would have thought that the differences would disappear as prices adjusted to offset quality differences. In fact, I would have predicted that price differentials would would have increased until the marginal consumer of the service is nearly indifferent (holding income effects constant) among different providers. Sure, high quality service is likely a luxury good, but I would still expect that price differences (in effect, rents for differences in attractiveness, effort, and talent) would have explained why top-ratings don't necessarily translate into greater quantities of transactions.

On the other side of the argument, of course, there is the old claim attributed to Napoleon: "In war, as in prostitution, an enthusiastic amateur may outstrip a professional."

(Nod to Angry Alex, who never has to pay for it)

Friday, March 19, 2010


Several people were reminded of good Churchill stories, by the previous post.

The accuracy of these stories is MOST questionable, and in any case they are examples of much older jokes, attributed to Churchill. Still, it IS fun.

1. Shortly before George Bernard Shaw’s 1913 play Pygmalion received its first English performance at His Majesty’s Theatre in London (on April 11, 1914), Shaw sent the following telegram to Winston Churchill :
Churchill sent this telegram to Shaw in reply :

2. Lady Nancy Astor: If I were your wife I would put poison in your coffee!
Churchill: And if I were your husband I would drink it!

George Thayer (who worked as research assistant to Randolph Churchill on the latter's biography of Winston), wrote in 1971 that this anecdote was false. In any case, this joke appears to be an old one. The January 3, 1900 issue of the Chicago Tribune printed the following: “‘If I had a husband like you,’ she said with concentrated scorn, ‘I'd give him poison!’ ‘Mad'm,’ he rejoined, looking her over with a feeble sort of smile, ‘If I had a wife like you I'd take it.’”

3. Bessie Braddock: Winston, you are drunk, and what's more, you are disgustingly drunk.
Churchill: Bessie, my dear, you are ugly, and what's more, you are disgustingly ugly. But tomorrow I shall be sober and you will still be disgustingly ugly.

This exchange was confirmed to Richard Langworth by Ronald Golding, a bodyguard present on the occasion (as Churchill was leaving the House of Commons in 1946).
Note : in the 1934 movie It’s a Gift W.C. Field’s character, when told he is drunk, responds, ‘Yeah, and you’re crazy. But I’ll be sober tomorrow and you’ll be crazy the rest of your life.’

4. Young man (seeing Churchill leaving the bathroom without washing his hands):
At Eton they taught us to wash our hands after using the toilet.
Churchill: At Harrow they taught us not to piss on our hands.

5. Churchill: Madam, would you sleep with me for five million pounds?
Socialite: My goodness, Mr. Churchill... Well, I suppose... we would have to discuss terms, of course...
Churchill: Would you sleep with me for five pounds?
Socialite: Mr. Churchill, what kind of woman do you think I am?!
Churchill: Madam, we've already established that. Now we are haggling about the price.'

KY v. Duke in KY Senate race

A little more, after before, about the Kentucky Senate primary, and the role of Duke v. UK.

Meanwhile in the Dem race, candidates are bickering over a bracket wager. A challenge from Lt. Gov. and UK grad Dan Mongiardo to his contender, Duke grad and Kentucky Attorney General Jack Conway was publicly refused.

In the wager, Mongiardo suggested that if Duke lost, Conway would serve as Mongiardo's personal golf instructor. If UK lost, Mongiardo would be Conway's guide on a wild turkey hunt.

Conway refused to participate and published an open letter to Mongiardo's camp saying that a wager would "cheapen America's greatest sporting event by injecting lowbrow political attacks into the NCAA tournament."

"Evidently, he got really upset by it. He said it was a lowbrow political move. I'll guess he is part of the highbrow crowd," said Kim Geveden, spokesman for Mongiardo's camp.

Conway's camp did not respond to The Examiner's request for further comment.

Munger said Conway's decision to keep the brackets separate from the ballots was the right one.

"Absolutely it was the right thing to do. Don't ever validate something that makes you opposed to the state you are running in," he said.

Wednesday, March 17, 2010

Raleigh Transit Throws Mungowitz Under the Bus

As all of you know, I am ALL about the greening of my life. So, as part of my renewed dedication to making easy things difficult, and reducing my productivity by wasting my time on useless pro-environment symbolism, I thought about taking the bus from my house to the airport. It's a trip I make often, and I wanted to know if the huge public subsidy to the bus system actually provides anything we can use.

Because, my suspicion is that our bus "service" is mostly designed to provide sinecures for bus drivers. Since the busses are nearly always empty, I assume this meant that the drivers find actually stopping for passengers to be annoying.

Anyway, I went to the Triangle Transit central web site, and asked the crack computer staff (yes, I think they smoke crack) to plan a route for me. Here is.... that first route they suggested:

Walk - 3.25 miles From:
08:31PM - 10020 bushveld ln, Raleigh

To: 09:45PM - Brennan at Creedmoor
33c - CAT - Glenwood-Creedmoor Connector - 0h 21m
Get on: 09:45PM - Stop #8693 - Brennan at Creedmoor
Get off: 10:06PM - Stop #8367 - Duraleigh at Glenwood

Walk - 6.86 miles
From: 10:06PM - Duraleigh at Glenwood
To: 12:43AM - RDU Airport at Terminal 1

Okay, got that? They suggest I walk three miles, then take a bus, then walk 7 miles from there to the airport. Not exactly excellent service. That's 4 hours to get to the airport, and that's assuming I can walk at a pretty good clip, carrying luggage. But, to be fair, there was another suggestion....

Walk - 6.95 miles
From: 09:07PM - 10020 bushveld ln, Raleigh
To: 11:46PM - RDU Airport at Terminal 1

In other words, by simply walking, I can make the trip in only 2.5 hours. What I like about this is that the computer actually suggests this as a viable route. Doesn't say, "no service." It says, "Hey, fat ass, I gots yer bus route right here: WALK!"

To paraphrase Glenn Close in "Fatal Attraction," I'd have more respect for the bus system if they just told me to go to hell.

Of course, that was in the evening. Maybe there is a better way in the morning, right? The computer suggested:

Walk - 3.25 miles
From: 09:16AM - 10020 bushveld ln, Raleigh
To: 10:30AM - Brennan at Creedmoor
4 - CAT - Rex Hospital - 0h 41m
Get on: 10:30AM - Stop #8693 - Brennan at Creedmoor
Get off: 11:11AM - Stop #8273 - Hillsborough at Friendly

Walk - 0.03 miles
From: 11:11AM - Hillsborough at Friendly
To: 11:11AM - Hillsborough at Dixie
105 - Triangle Transit - RTP/Raleigh - 0h 25m
Get on: 11:45AM - Stop #8241 - Hillsborough at Dixie
Get off: 12:10PM - Stop #1000 - Regional Transit Center (RTC)

747 - Triangle Transit - RDU Airport Shuttle - 0h 9m
Get on: 12:20PM - Stop #1000 - Regional Transit Center (RTC)
Get off: 12:29PM - Stop #1576 - RDU Airport at Terminal 1

Remember, this is less than 7 miles. At the BEST, the bus system can get me there
in 3 and 1/2 hours, with 44 minutes of wait time.

No wonder the computer I suggested I walk. The computer knows how messed up the bus schedule is!

Three Escheats to the Wind

(Title by John Hood; article, too!)

Reminds me of a wonderful story, which of course may be apocryphal: Clement Atlee was standing at a urinal. Winston Churchill came in, goes to opposite end of long row of urinals.

Atlee: "Feeling a bit standoffish, Winnie?"

Churchill: "Why, no, Atlee. It's just that whenever you see something large and in private hands, you try to nationalize it!"

Tuesday, March 16, 2010

Empirical Work is Useful

Do Good Recruits Make Good Cops? Problems Predicting and Measuring Academy
and Street-Level Success

Billy Henson, Bradford Reyns, Charles Klahm & James Frank
Police Quarterly, March 2010, Pages 5-26

Abstract: The purpose of this study is to extend White’s analysis predicting successful police recruit performance during academy training. Using police personnel data collected on 486 officers hired between 1996 and 2006 by a Midwestern police department, the authors examine characteristics related to academy success as well as active police service. The results show that most demographic and experience variables did not predict academy or active service success. However, White recruits and those scoring higher on the civil service exam consistently performed better on multiple academy outcome measures than their counterparts. In addition, those scoring higher on the overall academy success measure generally received better evaluations from their superiors. The results also show that higher education is not related to any of the measures of academy or on the job success used in these analyses.

Retributive versus compensatory justice: Observers' preference for punishing
in response to criminal offenses

Jan-Willem van Prooijen
European Journal of Social Psychology, February 2010, Pages 72-85

Abstract: In the current paper, the author examines whether independent observers of
criminal offenses have a relative preference for either retributive justice (i.e., punishing the offender) or compensatory justice (i.e., compensating the victim for the harm done). In Study 1, results revealed that participants recommended higher sums of money if a financial transaction was framed as offender punishment (i.e., the offender would pay money to the victim) than if it was framed as victim compensation (i.e., the victim would receive money from the offender). In Study 2, participants were asked to gather information about court trials following three severe offenses to evaluate whether justice had been done in these cases. Results revealed that participants gathered more information about offender punishment than about victim compensation. In Study 3 these findings were extended by investigating whether observers' relative preference for punishing is moderated by emotional proximity to the victim. Results revealed that the relative preference for punishing only occurred among participants who did not experience emotional proximity to the victim. It is concluded that observers prefer retributive over compensatory justice, provided that they do not feel emotionally close to the victim.

(Nod to Kevin L)


Keith Krehbiel: An Artist Like It's 1999

I found an old drawing in my desk drawer. The "artist" is Keith Krehbiel, famed political scientist at Stanford.

To set the scene, the background for this drawing was the end of the 1999 NCAA tournament where Trajan "The Alaskan Assassin" Langdon screwed the pooch on two consecutive trips down the floor. The Krehbiel drawing immortalizes the second trip. Here is the video of the end of the game. The relevant events start at about 1:45. Dr. Krehbiel was moved to artistic expression.... the "play" Duke ran. The reason I use scare quotes is that, as Dr. Krehbiel points out, the Duke players pretty much lined up for a rebound, and let Langdon bring the ball up by himself against three defenders. And, as Dr. Krehbiel further notes on the drawing, Langdon's nickname was "The Alaskan Assassin," not "The Speedy Alaskan Dribbler."

What happened was that Langdon dribbled up, stopped, tried to dribble between three defenders, and then fell down. Never took a shot, never made a pass.

Admittedly, Davidson ran this same (non)play against Kansas in the final 8 game three years ago. But Duke actually had other players, including Elton Brand, who might well have scored. And, if you watch, Curry passed the ball and at least they got a shot off. Yes, they missed, but the guys took a shot. Langdon took a dive.

Keith Krehbiel, artiste and man of the world: Thanks.

Duke Is Key to KY Race

Kentucky senate races turn on ... Duke love?

Seriously, check this out....

Though mentioning rival basketball teams in a U.S. Senate race is unusual, it's not uncommon for candidates to paint their opponents as outsiders, said Michael C. Munger, chairman of Duke's political science department.

Voters generally want to identify with the candidates they support, Munger said. "Many think, 'You are the same as I am, therefore I will vote for you.'"

As teams for the NCAA Tournament were selected Sunday night — UK and Duke both received No. 1 seeds — Secretary of State Trey Grayson launched an online ad highlighting his key Republican opponent's medical degree from Duke, in Durham N.C.

"In March, there's one big difference between Rand Paul and Trey Grayson," says the ad, which then shows an unflattering picture of Paul with a caption that says "I'm Rand Paul and I'm a Duke Blue Devil."

Bad Guys?

The organizational structure of international drug smuggling

Jana Benson & Scott Decker
Journal of Criminal Justice, forthcoming

Abstract: While most group offending is not well organized, it is generally assumed that high levels of organization can be found in group offending that generates revenue, such as white-collar crime, drug sales, and smuggling drugs or humans. The organizational structure of international drug smuggling has typically been viewed as highly rational and formally structured. Employing interviews with thirty-four federal prisoners convicted of smuggling large volumes of cocaine into the United States, this study explored the organizational structure of high level international drug smuggling. The subjects described a general lack of formal structure and depicted the drug smuggling operations as composed of isolated work groups without formal connections among each other. These findings bring into question the idea that these groups are rationally organized around pursuing efficiency and support recent research that suggests network security or minimizing risk are key organizing principles of drug trading organizations.


Lost in the Mail: A Field Experiment on Crime

Marco Castillo, Ragan Petrie, Maximo Torero & Angelino Viceisza
George Mason University Working Paper, January 2009

"We send identical envelopes to different households in Lima, Peru from two American cities and record arrivals. The experiment includes a large population of volunteer households across neighborhoods of different socio-economic backgrounds. To better understand the motivation behind the commission of crime, we manipulated the contents, the sender of the mail and the gender of the recipient. In particular, every household was sent four envelopes over the course of a year. Two envelopes had a sender with a foreign name and two had the last name of the sender and recipient matched. Finally, one of each of the two envelopes contained something inside the enclosed card (a small amount of money) that could not be easily detected without careful attention. The other envelope just contained the enclosed card. All these modifications were as subtle as possible and the order in which each different envelope was sent was random. The experiments show first that the mail service in Peru is highly inefficient. The overall rate of mail lost is 18%. The loss rate, however, hides the fact that mail containing money is lost 21% of the time while mail containing no money is lost 15% of the time. That is, we find evidence of shirking as well as crime. Also, the quality of service is not independent of socioeconomic status. Mail is lost at the same rate (roughly 18%), whether it contains money or not, when sent to a poor neighborhood. When sent to a rich neighborhood, however, mail without money is lost only 10% of the time and mail with money is lost 17% of the time."

Nod to Kevin L


Monday, March 15, 2010

Tea it up

"'We should be creating the biggest tent possible around the economic conservative issue,' said Ryan Hecker, the organizer behind the Contract From America. 'I think social issues may matter to particular individuals, but at the end of the day, the movement should be agnostic about it. This is a movement that rose largely because of the Republican Party failing to deliver on being representative of the economic conservative ideology. To include social issues would be beside the point.'" [NYT]

(Nods to Neanderbill and to Kevin L)

Sunday, March 14, 2010

Nancy Grace Remembered

No, NG is not dead.

But I do have to remember her on this anniversary of the party on Buchanan Street in Durham.

John Stewart remembered her. (Yes, I have blogged that link before.... but it's very good).

The only better treatment was the Amy Poehler as Nancy Grace thing. That was the best. But that video does not seem to be publicly available any more. You can see in the show notes where it took place.

Still, I remember.... Nancy Grace.

Saturday, March 13, 2010

Bananas Foster Hysteria

WPTF poobah, and News and Observer columnist, Rick Martinez is quite a tough guy.
But it turns out you can make him shriek like a baby who has dropped its baba.

Just use Maker's Mark as the flammable in "Bananas Foster."

Daoj Mot

The title of this post is "Tom Joad" backwards.

And it seems to be happening!

(Angus, with thanks to Tyler C)

Buchanan Blvd : Four Years Ago Tonight....

My pal Bob Lee writes a retrospective on the N&O and coverage of Duke Lacrosse.

The article by Ruth Sheehan (can't find a link, may be in gated archives) started like this:

Members of the Duke men’s lacrosse team: You know.

We know you know.

Whatever happened in the bathroom at the stripper party gone terribly terribly bad, you know who was involved. Every one of you does.

And one of you needs to come forward and tell the police.

Do not be afraid of retribution on the team. Do not be persuaded that somehow this “happened” to one or more “good guys.”

If what the strippers say is true — that one of them was raped, sodomized, beaten and strangled — the guys responsible are not “good.”

She does say "if," but she means "since." Because "we know you know."

Her later thoughts. And, as Bob Lee says, fair enough. A commentator comments. Sometimes s/he will get it wrong. When they get it wrong, they apologize.

When you remember, remember the biggest idiot in the world, Nancy Grace. No apology from Nancy Grace. What an idiot.

The Grand Game: Show Me State Edition

Wow. This guy is quite a piece of work. Nice article.


People depend on government assistance, subsidies and protection. Business depends on the flow of funds from food stamps, rent subsidies, Medicaid and other government cash. The local grocery store, paving contractor, property management firm, nursing home, hospital and many other businesses rely on the government to provide a fair market and a dependable customer base.

... our society has evolved a successful symbiotic relationship between people, private business and government. It is not the way it was, it is the way it grows; it is a work in progress. But it works -- business thrives, people are better off and freedom triumphs.

Government is the goose that lays golden eggs. We can choose to nurture the goose or starve it. I am patriotic. I am willing to make the sacrifice and fight to sustain and even improve our government.

"Government assistance"? Just change that to "heroin" in the above, and it changes his point.... not at all. Getting citizens addicted to government-provided heroin would have all the same effects he is claiming for welfare. Increased sales for business, subsidies, protection...

This fellow doesn't want freedom. He is very clear: His vision of America is one where every citizen is dependent on something called "government." What he means is "politicians," of course. He wants all of us to be dependent on politicians for our daily bread, not on our own efforts or talents. And once we are hooked, the politicians will come around with their heroin-welfare to keep us hooked.

It's the Grand Game! Please discuss....

Friday, March 12, 2010

Panning Planning?

Longtime KPC friend JS writes:

Many Transportation planners are bemoaning the lack of increase in the federal gas tax for the past 15 years, and the infrastructure industry has said it is doubly bad because not only do we have inflation, but we now have electric vehicles/hybrids and in general more fuel efficient vehicles. The planners add on observations the new steep decline in driving shown on page 9 of the VMT trends. Therefore the Transportation/ Industrial complex is banging their chest for new funding.

I have been reading the New Geography blog with Wendell Cox as a major contributor, HT to the Reason Foundation Out of control blog. New Geography published this Hampton Roads Lightrail blog where Cox cites:

“Tide” light rail line has now escalated to nearly $340 million. This is up nearly one-half from the estimates made when the project was approved by the Federal Transit Administration. According to federal documentation, the line will carry 7,100 daily passengers in 2030. This means that the capital cost alone will amount to an annual subsidy of approximately $6,500 per daily passenger (using Office of Management and Budget discount rates), plus an unknown additional operating subsidy.

Translating $6,500 into per trip and generously applying the full trip length that results into 365 days and the full 7.4 mile rail corridor yields, a $17.64 per rider and $2.40 mile for just the capital cost, compared to the $1.50 proposed fare per trip. It would seem that this huge market distortion cannot be increasing welfare when taking into account taxes or monetary devaluation needed to pay for this monument.

So my point? The payers into the highway trust fund must notice the numerous diversions that are changing the “user fee” into “general tax” distributed by the politician. The road users are also asking themselves each day if they think that an increase in user fees will change their driving experience. Transportation planners need to look more at the markets than the micro mechanisms that are failing their current product lines.

Cows With Guns

UPDATE: This reminded Angry Alex of this Dr. Demento Song, in this video....

Thursday, March 11, 2010

Fair Trade Coffee? No, Thanks!

Chicago just passed a stupid law.

Article on why it was stupid, according to me.

The City of Chicago passed a resolution this month supporting fair trade efforts in the city, but critics say there’s more to the fair trade story than most consumers realize.

Mike Munger, chair of the political science department at Duke University, said the concept of fair trade – which certifies businesses for paying workers a living wage and observing social and environmental criteria -- isn’t always successful. “It probably succeeds close to half the time,” he said.

People don’t want to hear that because they want to feel better about themselves, Munger said. “It’s just not true, the premise is not true.”

One problem is an imbalance when too many companies go for certification in one product – say, coffee – and that drops the price and also keeps farmers from growing other crops.

Another problem is where the money goes.

Several studies demonstrate that a middle man may be the real winner, Munger said. Consumers are paying middle men more, not the worker. The money can be dissipated somewhere before it gets to the worker, he said, possibly in paying bribes for certification.

Obtaining fair trade certification is expensive, and there’s no way to prove that the workers are the ones reaping the benefits of the premium prices the consumers are paying, Munger said.

Check this. Unbelievable.

A podcast on Fair Trade

An article in England, with a remarkably self-hating man commenting.

A guest blog post, and also my best shot at explaining why Fair Trade is idiotic.

"Fair trade" raises costs to consumers. Worse, it enslaves the people it claims to help, with the invisible chains of artificial subsidy, and arrested economic development. If it pleases you to think of happy natives, living primitive lives, just go rent a BBC documentary, and let the market work.

Sufjan Stevens

A few years ago, sufjan Stevens promised 50 albums for the 50 states but quit after Michigan and Illinois. Now with the publication of his latest book, it appears that Paul collier has taken up a similar challenge. He's got B and P covered so let's help him out people! How about "Dithering Democracies"? Or "Failed Fatwas"?

Call me at the station, the lines are open.

Angus (on the lam)

Wednesday, March 10, 2010

How Much Does It Cost to be TBTF?

How Much Did Banks Pay to Become Too-Big-To-Fail and to Become Systemically

Julapa Jagtiani & Elijah Brewer
Federal Reserve Bank Working Paper, December 2009

Abstract: This paper estimates the value of the too-big-to-fail (TBTF) subsidy. Using
data from the merger boom of 1991-2004, we find that banking organizations were willing to pay an added premium for mergers that would put them over the asset sizes that are commonly viewed as the thresholds for being TBTF. We estimate at least $14 billion in added premiums for the eight merger deals that brought the organizations to over $100 billion in assets. In addition, we find that both the stock and bond markets reacted positively to these deals. Our estimated TBTF subsidy is large enough to create serious concern, since recent assisted mergers have allowed TBTF organizations to become even bigger and for nonbanks to become part of TBTF banking organizations, thus extending the TBTF subsidy beyond banking.

(Nod to Kevin L)

Sweet Strange Stories

What I like about these stories is not that they are so strange (though they are), but rather that they are so sweet.

Since he was reported to be 8 feet, 4 inches tall, everybody looked up to Al Tomaini – especially his wife, Jeanie, who measured 2 feet, 6 inches. She was born with no legs.

The Half Lady and The Giant met and fell in love in 1936 when their separate shows chanced upon each other in the same place. Six months later the couple eloped, believe it or not, in Ripley, N.Y. The Tomainis went on to work with Ringling Bros. and eventually ran their own sideshow.

In 1950, the couple settled in Gibsonton, Fla., where they raised a family and opened the Giant's Camp restaurant and fishing camp. Al also organized the town's first fire department and served as its chief.

The Giant passed away on Aug. 30, 1962. Jeanie continued to operate the Giant's Camp for decades, living there until she died on Aug. 10, 1999, just weeks before her 83rd birthday.

Their adopted daughter, Judy Rock, never thought there was anything unusual about her parents. "Our home life was wonderful," she remembered. "It was what everybody wishes theirs was: no talk of divorce, no big fights, no drinking, no smoking. Just a family."

(Nod to Angry Alex)

The Takeaway

NPR radio show this morning, "THE TAKEAWAY."

Some commenters think I should be taken away....

Tuesday, March 09, 2010

Consensus, or Census-Con?

Remarkable. You can't make this stuff up....

A Georgia man accused of killing two people used an innovative legal strategy Monday in an attempt to get his murder charges dismissed. Call it the Census defense.

Floyd Wayne Williams Jr. wants the charges dropped — or at least his trial delayed — until the 2010 Census is done so that a jury more accurately reflecting the county's racial makeup can be chosen. Williams, who is black, is to be tried in the south Atlanta's Clayton County, which has seen a surge in African-American residents since the 2000 Census.

Jury pools in Clayton County, like many other jurisdictions, are drawn from voter registration lists, driver's license data and utility records. The list is then balanced by race and gender from the Census to reflect a cross-section of the population.

(nod to the LMM)

Tracked it down....

I have been told several times an anecdote about Marx despairing of ever seeing a revolution in Germany. He supposedly recalled an incident where German workers failed to attend a demonstration because they had trouble with their tickets.

The joke being, if you are going to start a revolution against capitalism, WE DON'T NEED NO STINKIN' TICKETS!

Well, I tracked down the reference. It was STALIN, not Marx, in an interview with an unctuous German writer in 1931. Here is the money quote:

Ludwig: Do you not think that among the Germans as a nation love of order is more highly developed than love of freedom?

Stalin: There was a time when people in Germany did indeed show great respect for the law. In 1907, when I happened to spend two or three months in Berlin, we Russian Bolsheviks often used to laugh at some of our German friends on account of their respect for the law. There was, for example, a story in circulation about an occasion when the Berlin Social-Democratic Executive fixed a definite day and hour for a demonstration that was to be attended by the members of all the suburban organizations. A group of about 200 from one of the suburbs arrived in the city punctually at the hour appointed, but failed to appear at the demonstration, the reason being that they had waited two hours on the station platform because the ticket collector at the exit had failed to make his appearance and there had been nobody to give their tickets to. It used to be said in jest that it took a Russian comrade to show the Germans a simple way out of their fix: to leave the platform without giving up their tickets.... But is there anything like that in Germany now? Is there respect for the law in Germany today? What about the National Socialists, who one would think ought to be the first to stand guard over bourgeois legality? Do they not break the law, wreck workers' clubs and assassinate workers with impunity? I make no mention of the workers, who, it seems to me, long ago lost all respect for bourgeois legality. Yes, the Germans have changed quite a bit lately.

Nic Tideman and I are working on our Public Choice paper, and are writing about meta-rules. And this passage is interesting, because it shows that the same group of people can be constrained, and not constrained. It's all about the meta-rules.

Old School Reference: J. V. Stalin, Talk With the German Author Emil Ludwig, December 13, 1931. First Published: Bolshevik, April 30, 1932, No. 8. Source: Works, J.V. Stalin, Foreign Languages Publishing House, Moscow, 1955, Volume 13, pp. 106-25.

Monday, March 08, 2010

Is the Census Mandatory? And is THAT constitutional?

A letter from a reader:

I've been getting a lot of questions on this subject from fellow students.

As both a Libertarian and a military veteran, I find the numerous, intrusive questions asked by the Census greatly disturbing. Are the questions, besides the ones directly related to the number of people in your household, unconstitutional? Personally, I believe that they are. If I refuse to answer questions other than those pertaining to the size of my household, what, if any, legal consequences could I face? I ask because I can't seem to find any concrete information on the subject. Also, if I may ask, how do you all plan on approaching the Census?

Dear Reader: Yes, I happen to know the answer to that.

The American Community Survey is conducted under the authority of Title 13, United States Code, Sections 141 and 193, and response is mandatory. According to Section 221, persons who do not respond shall be fined not more than $100. Title 18 U.S.C. Section 3571 and Section 3559, in effect amends Title 13 U.S.C. Section 221 by changing the fine for anyone over 18 years old who refuses or willfully neglects to complete the questionnaire or answer questions posed by census takers from a fine of not more than $100 to not more than $5,000. The U.S. Census Bureau may use this information only for statistical purposes. We can assure you that your confidentiality is protected. Title 13 requires the Census Bureau to keep all information about you and all other respondents strictly confidential. Any Census Bureau employee who violates these provisions is subject to a fine of up to $250,000 or a prison sentence of up to five years, or both.

Here is the reference for Title 13, if you want to read it

Now, you asked if the law making responses mandatory is constitutional. You could mean, "where is it in the Constitution?" The fact is that there is SOMETHING there, about the Census, but of course not the intrusive questions. But Article I, Section 2, Clause 3 does have a provision that a counting be done, "in such manner as [Congress] may direct."

Or you could mean, "What Supreme Court case contains the decision that justifies the law?" In that case, here is a legal history

Hons Dons and Two MA Smoking Oxons

"Oh, KerEIST! This is a PhD in Political Science! How am I ever going to fence that!"

Virginia is NOT for Lovers

Virginia is only for STRAIGHT lovers, it appears.

(Nod to Ed Cone As Ed notes, "Old times there are not forgotten." Old times like Leviticus....Leviticus 18:6 reads: "You shall not lie with a male as one lies with a female. It is an abomination." A similar verse occurs two chapters later, in Leviticus 20:13: "A man who sleeps with another man is an abomination and should be executed." Of course there is also DEUTERONOMY 22:13-21--"If it is discovered that a bride is not a virgin, then she must be executed by stoning immediately." I think perhaps we SHOULD forget old times.)

Mrs. Munger's Class: "Passed What?"

Nemo to world: Greece WILL default

"The only questions are (a) when and (b) who will be left holding the bag."

In a great post on the blog "Self Evident", Nemo breaks down Greece and their crisis

Highly recommended.

Here is the ending:

"On the bright side, this is just entertainment; the entire Greek economy is a rounding error. The real show begins in a few years when major countries face the same problem."


Greatest Comparativist in History

On the scabrous PSJR site, the questions was raised, "Greatest Comparativist Ever? Living or Dead?"

Usual names. Someone suggested Marx. My response is here:

Marx is plausible as an answer to the "Best Comparativist."

But he was a student of Aristotle. And, Aristotle's work on comparatie constitutions is still widely cited.

I think you have to go with Aristotle, then. The problem is that none of his work was refereed, and even his books were not published by major presses. That may be why he didn't get tenure, after Plato deeded the Academy over to his nephew Speusippus. Of course, Ari had to go look for another job, even though he had great teaching evaluations and had been doing all the busy work for Plato for years.

Fortunately, having ivy league background gave Ari a leg up when he moved to Asia Minor, but who wants to have to teach in one of those "directional countries"? Ari ended up hiring out to teach some rich brat, who left to fight wars before they got to the more advanced stuff.

Ari went back to Athens, but got snubbed AGAIN for the TT job at the Academy. That brown-noser Xenocrates got the job, leave Ari to work as a VAP. Ari started his own school, the Lyceum, and did some of his best work, including two big NSF grants and attracting some excellent grad students. (And I mean, EXCELLENT. I think one of Michael Ting's ancestors thought about going to the Lyceum, but ended up staying at Columbia)

But then there were student riots after Alexander the Great died. The students were pissed off about core requirements, and of course the hegemony of "dead Macedonians" in the curriculum. Ari was accused of impiety, and loudly making that motorboat sound whenever he saw a hot undergraduate wearing a low-cut peplos. Some deans threatened to put a committee together to study some of the contingencies of toughening their rhetoric, and Ari had to go live with his mom on the island of Euboea.

Moral of the story: Publish in refereed journals, and get a tenure-track job. Otherwise, even if you are the greatest comparativist who EVER lived, you may have to go live with your mom. Oh, and don't make that motorboat sound.

Bad news for Everyone

Mark Linkous, AKA Sparklehorse is dead by his own hand. Here is the story from Pitchfork, and here is another from Rolling Stone.

For those of you who don't know Sparklehorse's music, the 2001 album, "It's a wonderful life" (God, what a horrible title that is now) is, in my opinion, their best and one of the very best works of this new, blighted, century.

What does it say about a person when his artistic heros keep killing themselves?


Sunday, March 07, 2010

Underground hotel: Not Much of a View, but Quiet

Null Stern (Zero Star) Hotel.

In a bunker.

You Think Joe Stiglitz is Funny? NYT is funny, too!

The New York Times, apparently now the "Pay Lady of News," is busy whoring out to the "don't worry, be happy!" crowd.

Check this article....

The concern, of course, is that one day rates will inevitably go up, which means interest payments will too. According to this school of thought, as our debt grows, lenders will be willing to take the risk of giving more money only if they can get more in return. And yet with the rise of China, India and Brazil, the world is awash in money looking for safe places. Even with the U.S. economy weak, the dollar remains one of the few truly safe havens, and that means interest rates could stay low for a very long time, which in turn means that our debts — however big — can be managed.

Indeed, though eliminating deficits might seem wise, it could actually be fatal to future prosperity. China is spending hundreds of billions of dollars on infrastructure, while America can hardly repair its bridges. The U.S. has to invest and spend to build a future, to help re-create a workforce, and for now debt is a means to that end — provided Washington shows it can effectively channel that money.
(See the best business deals of 2009.)

Like home mortgages, much of the debt never has to be paid down. Half of the debt of trillions of dollars is owed by the federal government to itself, and a quarter more is owed to the American public. Because of the unique role of the dollar as the global reserve currency, the debt the government owes itself can simply be rolled over endlessly. Only the interest payments are a must. As long as the dollar remains central to the global system — and there is little chance of that changing in the next decade — the U.S. will have the latitude to borrow more than most other countries.

Worrying about debt is like gaining too much weight and worrying about the size of your clothing.

Okay...first, it's NOT "like gaining too much weight and worrying about the size of your clothing." The US debt is like gaining too much weight and saying it's okay to gain more weight.

Second, if you want to make that bizarre analogy work, you would have to say, "Eating 5,000 calories a day would be okay if you are training for a marathon. But if you are sitting around watching curling, eating 5,000 calories a day is disastrous."

I accept, as Angus did before, that debt might be okay if we were investing it. But we are not. We are using debt to fund pet projects that have no purpose other than re-electing Senators, or paying to put more people on the public employment roles so they will reliably vote Democrat.

Third, the dude actually says, "According to this school of thought, as our debt grows, lenders will be willing to take the risk of giving more money only if they can get more in return. And yet with the rise of China, India and Brazil, the world is awash in money looking for safe places." That's not a school of thought, that's accounting physics. Further, if either the Eurozone or Chinese get their act together, our complacency ("sure we suck, but they suck worse! Eat that pie!") will be hammered.

Yes, I realize that the author is in fact some shill, not the NYT ed page itself. Still, this is pretty funny. Almost as funny as Joe Stiglitz.

(Nod to Kesav)