Saturday, June 26, 2010

Welcome to America: Ghana's B%tch

Once again the USA gave up an early goal, but this time they just couldn't overcome it. People, did you know that (a) the only goals Ghana scored in group play came on penalty kicks?, (b) Ghana's best player never played at all? (c) Ghana also knocked the USA out of the World Cup the last time.

This piece puts the blame right where it belongs.

I am not upset though (not yet anyway), my team is Mexico!

Not the Onion

As far as I can tell this is serious, though of course it is not real.

The more you read, the better it gets. Smart. Incisive. Safe and Secure. Nice.
Here is their "What is IARPA?" page...

(Nod to Kevin L., who is smart and incisive, but not safe)

Interview with Iraqi Newsweekly GULAN

An "interview" with the Iraqi/Kurd newsweekly GULAN, and Ferhad M. Hassan, editor in chief. His questions in italics, my answers in Roman....The subject is the transition to democracy in Iraq and Kurdistan.

1- In the transitional stage, everything in the society is facing changes. So, we would like to ask you, how do you define post dictatorship transitional stage and what are the necessary steps required to be taken?

We have learned a lot about the problem of transition. The hardest problem is to reform the legal system, to ensure that judges, police, and public officials are fair in enforcing the law, and that the law applies equally to everyone.

Until this happens, the political transition cannot be fully effective, or complete. So the problem of the transitional stage is that the voters do not yet fully trust the government, or the police. And so they may not be willing to pay their taxes without close scrutiny. But that means that the government cannot pay the police, and judges, and so the system is always on the verge of running out of money.

Many scholars and professors in the U.S. have concluded that having a strong system of honest judges must come BEFORE a strong democracy.

2- As many experts think that transitional stage is not an easy step and takes many years. Is there any measurement to determine the end of the transitional stage?

In the U.S., it took a full decade, from 1791 through 1801. Even then, there were lots of problems. The key factor in proving the transition is complete is when an opposition party is able to run against the governing group, and win in a fair election. And then the defeated governing party hands over power voluntarily. Elections are "peaceful revolutions," where the outside group defeats the ruling group, and takes over the government, without war or bloodshed.

So, two things have to happen: 1. A free and fair election where the ruling party loses, and 2. A peaceful transition of power, accepted by all people (including the Army) as being legitimate.

3- The most important element in the transitional stage for building democracy is the political parties. Especially the countries which have been under dictatorship. So, the political parties to a certain extend are revolutionary not democratic. So, once the political parties need to be democratized first, how can they produce democracy?

Parties ARE revolutionary, yes. But democracy ensure peaceful revolutions. That is what elections are: peaceful revolutions. And parties are crucial for this. Imagine that there was to be a soccer match between "11 guys" and "Another 11 guys." No one cares about watching that. But if the "Party I Love" is going against the "Party I Don't Like", then I will go to the soccer match, or I will turn out for the election.

Experts on democracy nearly universally say that democracy is impossible without parties. Only parties can create a sense of connection with voters, and create a repuation that keeps government accountable, for success or failure.

4- Developing and implementation of economy market is another aspect of the transitional stage. But, many experts think that, transition from central economy to independent economy may result in corruption. So, how to avoid and prevent corruption in the transitional stage?

Again, the problem is fair judges and police. Also, having a market economy creates a middle class, a countervailing power that helps keep government accountable.

The problem faced by Iraq is that it has great oil wealth, and this wealth is a temptation for corruption. The oil wealth of the country means that politicians are tempted to promise cheap gas, and low taxes. Corruption results when people can make more money from misusing public office than they can from using private enterprise honestly. If a man starts a restaurant, he makes money by providing good food at low prices. If a man becomes a corrupt policeman, he makes money by stealing from drivers at checkpoints and by threatening people. Corruption is MUCH more likely in a planned economy, because people pay bribes to the center for favorable treatment.

5- Another important aspect of the transitional stage is the role of free mass media and intellectuals of the society. So, how far free mass media and intellectuals can play an effective role in the transitional stage?

The media and intellectuals must try to do two things. 1. Educate the public on the process of transition, and warn that it may take ten years, and 2. Report on corrupt practices, and violations of the law, even when it embarrasses the government. The problem is that the media cannot be truly "free" until it can carry out this function without fear of government reprisal and repression. This is the key to transition: when a newspaper or television person can write or say something critical of the government without fear. If there is fear, then the media, or intellectuals, cannot carry out their function. Even uncertainty about government response can have a "chilling effect," causing media and intellectuals to censor themselves.

6- Religion and politicization of religion is another aspect for building of obstacles in the transitional stage. So, how far the Islamic political parties are reasons for the backward situations in the eastern and Islamic societies?

The problem is not religion, the problem is religious intolerance. There are many "Islams" and many kinds of believers. An insistence that each citizen can live as he chooses is the guarantee of religious freedom for all.

So, the problem is not Islam, but rather demagogues and authoritarian leaders who try to use Islam as a way to get power over other people. This can only happen if voters allow it. Voters have to vote for leaders who vow to protect the freedom to practice Islam, not leaders who say they will impose one particular narrow view of Islam on everyone.

7- How success in the transitional stage is evaluated? And, what are the conditions that should be taking into consideration in deciding whether transitional stage is passed or not?

If people trust their police, and trust that judges will treat them fairly, and pay their taxes voluntarily, then democracy has begun.

If in addition the ruling party loses an election, and hands over power peacefully, then the transition is complete.

Friday, June 25, 2010

P-Krug: Neither Liar nor Quack

P-Krug is likely neither a liar nor a quack. So what gives?

Two examples of quotes: Is P-Krug confused? No. And he's not dumb. He must just think WE are dumb. And the people who read him, and quote him, ARE dumb.


1. Workouts, Not Bailouts - New York Times, Aug 17, 2007 Many on Wall Street are clamoring for a bailout -- for Fannie Mae or the Federal Reserve or someone to step in and buy mortgage-backed securities from troubled hedge funds. But that would be like having the taxpayers bail out Enron or WorldCom when they went bust -- it would be saving bad actors from the consequences of their misdeeds... Say no to bailouts - but let's help borrowers work things out.

2. Is saving our Fannie enough? - Seattle Times, Sep 9, 2008 The just-announced federal takeover of Fannie Mae and Freddie Mac, the giant mortgage lenders, was certainly the right thing to do - and it was done fairly well, too... So Fannie and Freddie had to be rescued...

Deficits and interest rates

1. Deficits and interest rates - New York Times, Aug 14, 2009 It turns out that there's a strong correlation between budget deficits and interest rates - namely, when deficits are high, interest rates are low ... On reflection, it's obvious why...

2. A fiscal train wreck - New York Times, Mar 11, 2003 But we're looking at a fiscal crisis that will drive interest rates sky-high. A leading economist recently summed up one reason why: ''When the government reduces saving by running a budget deficit, the interest rate rises.''

There is a lot more where this came from.

(nod to Mel H)

Brown Bailout

I have no brief for Fed Exp, particularly. But this is clever.

UPDATE: And THIS is cleverer. Thanks to Christian, in comments.

Angus's guide to yesterday's movies

I just couldn't bring myself to go to Iron Man II or Karate Kid II or Toy Story III (yes I am oddly snobby about some things), but here are a couple movies I just saw that I really liked:

1. Looking for Eric. Sad, disfunctional postman/dad gets life and love advice from Eric Cantona. This is a Ken Loach film and I really liked it from beginning to end. The scenes of the postmen hanging out together are fantastic and Cantona is fantastic too.

2. Youth in Revolt. I couldn't convince Mrs. Angus to see this in the theatre, but I did convince her to watch it on pay per view at home. I've been a big Michael Cera fan since Arrested Development, though I fear he'll be playing oddball kids when he's 60 years old! Fred Willard absolutely KILLS in this movie.

Senator Clint Webb

(Nod to Radley Balko, via Angry Alex)

Thursday, June 24, 2010

Interview with Sara Burrows

Did an interview yesterday, sitting in my beach chair under my umbrella, taking a break from reading, and talking to the lovely Sara Burrows.

And here today it is published on-line for the world to see. I think this whole internet thing is going to catch on.


States have to maintain balanced budgets, according to their constitutions, while the federal government can run a deficit for as long as it likes. So when states spend too much they have no choice but to raise taxes or ask for federal funding, Munger explained. Since raising taxes is not popular, federal bailouts offer state politicians an escape from being held accountable.

But federal bailouts lead to federal deficits, Munger said, and deficits are nothing more than future federal taxes.

“There’s this fiction that there are two different taxpayers — the state taxpayer and the federal taxpayer. There are not. We’re all both,” Munger said.

People who think they are receiving some sort of gift from the federal government are being deceived, he added. All they are incurring is a different form of taxation.

If voters really thought it was worth spending an average of $1 billion more per state than they are taking in to rescue teachers, police, and firefighters, they would agree to an immediate increase in state taxes in a referendum. State elected officials know higher taxes are not popular, so they use a roundabout method to secure the funds.

Summer Reading

Here at the beach, been reading some. Gone old school, and new school.

Old school:

Minnesota Rag: Corruption, Yellow Journalism, and the Case That Saved Freedom of the Press
, by Fred Friendly. A terrific 1st Amendment story, though quite an old book, about Jay Near and the "Saturday Press" in Minneapolis.

The Making of the Popes 1978, Andrew Greeley. Amazing story of the year where there were two papal elections. The politics and the description of the social choice rules, and the corruption of the Vatican, rotten to the core....fine summer reading.

The Gift of the Jews
, Thomas Cahill. A retelling of the Pentateuch story, with implications for the founding of the West. I had not thought of this before, and it is quite interesting. And well written.


Reflections on the Revolution in Europe: Immigration, Islam, and the West, Christopher Caldwell. Disturbing. Suggested to me by Dutch Boy*, on his return from 10 years living in the Netherlands.

Driving Like Crazy: Thirty Years of Vehicular Hell-bending, PJ O'Rourke. Needs no explanation.

The Age of Turbulence: Adventures in a New World, Alan Greenspan. In which AG covers the George Thorogood song, "It Wasn't Me."

Blink, The Power of Thinking Without Thinking, Malcolm Gladwell. A challenge for rational choice people, but likely a help in the long run. Better models are always better at predicting and explaining behavior.

*I may have to get a new pseudonym for Dutch Boy. It turns out that "Dutch Boy" is a derisive nickname that some lesbian women use to refer to hetero men who like to hang out with them. I believe the reference comes from The Wild Party, the 1975 movie with Racquel Welch. As the piano player started out, "The little Dutch boy taught a lesson that I like..." (If you cannot figure out why the name fits, you are not a real KPC reader.)

Our New #2 Export: Law Suits

Notice how when there were giant problems in the Gulf of Mexico, our President sent a team of crack ... lawyers? Not engineers, not people who do things, but people who sue people. (...are the luckiest the world!)

Well, our number 1 export today, by FAR, is debt. We make debt in Washington, and we sell it overseas. Surprisingly, we can sell it at a pretty high price*, because American debt is better quality than other sovereign debt, especially those snivelling Europeans. Their debt is low quality, and when you take it out of the box it's all coated with Greece. Yuck.

But it appears that our new second largest exports, if this Congress has its way, will be law suits. Got this note from SL:

Has anybody been paying attention to this delightful little treasure - The Foreign Manufacturers Legal Accountability Act?

It would require foreign manufacturers and producers that import products into the United States to designate a registered agent who is authorized to accept service of process here in the United States. It also imposes new burdens on importers - all importers.

It is being queued up in House Energy and Commerce and, on the Senate side, as part of tax extenders.

Marianne Rowden from AAEI had a good analysis of this bill when she testified on it last week in Energy and Commerce

I wonder if the massive export of lawsuits that this legislation will unleash will ultimately count toward the doubling of exports envisioned under the NEI?

Well, yes, I bet it does. And if you combine our exports of debt and our exports of lawsuits, I surmise that will be ALL of our increased exports. Our entire corps** of government officials at this point is composed of people who have never made anything except good grades in law school.

*Thanks to Angus for the correction. I had said "low price," when I meant low yield, which of course implies a HIGH price from the perspective of the purchaser.
**pronounced "core" not "corpse"

Wednesday, June 23, 2010

groundhog day, grasscourt style

Tomorrow, for the third day in a row, Jon Isner will wake up in the morning knowing that he has to play a tennis match against some French guy named Mahut.


Tuesday, they played 4 sets until the match was suspended by darkness at 9:00 pm London time with the score being 2 sets apiece.

Today, they played the 5th set (which at Wimbledon cannot end in a tiebreaker).

For over 7 hours.

Until play was suspended by darkness at 9:00 pm London time.

With the score being tied at 59 games apiece.

Tomorrow they will get up and do it again (amen).

Theoretically, this could go on forever.

People, the winner would be normally scheduled to play his next match already tomorrow.

Not sure how that will play out, but this is epic.

And it could actually go on forever. There are no other provisions in the rules beyond that a 5th set is played until someone wins 6 games or more and has a margin of 2 games.

Hater's Guide to Futbol

I am not a hater, actually (though I do hate vuvuzelas).

But this is pretty funny.

(Nod to Angry Alex, who doesn't hate anything, really. But he fakes it really, really well)

Animal Tricks

So Anonyman can't leave things alone, and had to top my animal stories from yesterday.

And, to be fair, he DID. The story of Sticky, now.

The backstory of Sticky.

Sticky removes arrow from own neck, despite lacking hands.

Anonyman: You win, bud.

Does the "zero bound" imply that inflation targets should be raised? Part II

A new (and recommended) NBER working paper (ungated version can be downloaded from here (it's the first entry under "working papers") by Olivier Coibion, Yuriy Gorodnichenko, and Johannes F. Wieland says no.

"We study the effects of positive steady-state inflation in New Keynesian models subject to the zero bound on interest rates. We derive the utility-based welfare loss function taking into account the effects of positive steady-state inflation and show that steady-state inflation affects welfare through three distinct channels: steady-state effects, the magnitude of the coefficients in the utility-function approximation, and the dynamics of the model. We solve for the optimal level of inflation in the model and find that, for plausible calibrations, the optimal inflation rate is low, less than two percent, even after considering a variety of extensions, including price indexation, endogenous price stickiness, capital formation, model-uncertainty, and downward nominal wage rigidities. In our models, price level targeting delivers large welfare gains and a very low optimal inflation rate consistent with price stability."

So basically, they almost agree with Uribe & Schmitt- Grohe, who argue that the optimal inflation rate is zero or negative.

Tuesday, June 22, 2010

Phosphorescent incandescent

People, do you know Phosphorescent (aka Matthew Houck)?

Amazing. Reminds me a bit of vintage Will Oldham, but not really.

Gorgeous, involving, and highly highly recommended.

Here are three videos. The first is the studio version of perhaps my favorite song of theirs, "Mermaid Parade". The second in a live solo version of the same song. The third is another great song "A Picture of our Torn up Praise".

Local Newspapers...

As I noted two days ago, it is fun to read the local newspaper at the beach.

Today, in the want-ads:

LOST: Boxer, 10 mo. old female, answers to "No-No." Needs medication. Call (number)

Now, yes, that's sad. But if you have to call your dog by screaming "NO! NO!" it is likely that (a) the dog will need medication, and (b) it will run away.

Two spots down, in the want-ads:

LOST: Fluffy female cat, black and gray striped, has 1 eye. Answers to "Roxy." Call (number)

Um... It's a CAT. It doesn't answer to anything. Cats only answer to reverse psychology: when you want them to go away, they come bug you. Perhaps if you go out and yell "NO! NO!" then old Roxy will come to you.

scorekeeping fail

Peter Orzag is leaving the Obama administration, stepping down as budget director.

Here is the money quote from the Times that inspired the title of this post:

A longtime scholar of health policy economics, Mr. Orszag also helped devise and sell the president’s signature initiative overhauling the health insurance system. He privately has told associates that having worked on two budgets, a stimulus plan and the health care law, it is time to leave while he is ahead.

I guess this could be accurate if by "ahead" he means "ahead of the angry crowds with pitchforks".

Public Choice: Use it, live it

I just wish Public Choice did not teach us so much about the world.

But it does.

Nod to Gamebill

Monday, June 21, 2010

Just So You See What I'm Dealin' With Here

The LMM comes out of our bedroom at the beach condo, wearing the gauzy little things that women wear in summer. She sidles up to me, and I catch a hint of sultry perfume.

She puts her arms around me, and says, "I was thinkin'."

Me: "Really? Thinking what?

LMM: "We might get really crazy tonight."

Me: (speechless, amazed, etc.)

LMM: "Yeah, I was thinking we could lock the doors, have a few beers...."

Me: (!!!!!YEAH? YEAH?!!!! still can't speak)

LMM: "And then we could have some more beers, and then get totally kinky, and NOT RECYCLE THE BEER BOTTLES!"

Sigh. She was just messing with me. I am, in spite of my complaints about the system, pretty serious about recycling.

viva la reconquista!

From USA Today:

A new kind of Mexican immigrant is making it big in the USA: huge Mexican corporations that are snapping up U.S. brand names, opening U.S. factories and investing millions of pesos north of the border.

From Thomas' English Muffins to Borden milk, Saks Fifth Avenue department stores to The New York Times newspaper, Mexican investors have taken advantage of low interest rates and depressed prices during the economic downturn to expand their holdings in el norte.

People, Grupo Bimbo (aqui hay Bimbo) owns Entenmann's!

How are those Spanish lessons coming?

The Culture that is Japan / Markets in everything

People, meet the latest Japanese import to cause a stir in the States. He's Paro, the therapy robot.

Five years ago, a Japanese robot manufacturer introduced Paro to the world. Built to resemble a baby harp seal—with a plush coat of antibacterial fur—Paro was hailed in Japan as a pioneer among socially interactive robots, one that would help lift the spirits of millions of elderly adults.

It never quite caught on. "It doesn't do much other than utter weird sounds like 'heeee' or 'huuuu,'" says Tomoko Iimura, whose adult day-care center in Tsukuba City keeps its Paro in a closet.

Now Paro has come to American shores, appearing in a handful of nursing homes and causing a stir in a way that fake seal pups rarely do.

Nursing-home workers and academics who study human-robot interaction are trying to figure out whether the $6,000 seal, cleared last fall by U.S. regulators as a Class 2 medical device (a category that includes powered wheelchairs) represents a disturbing turn in our treatment of the elderly or the best caregiving gadget since the Clapper

The Journal article debates the ethics of using Paro, which I am not sure I understand.

I just love the weirdness of it.

Are baby seals often kept as pets in Japan?

The article also says that most sales in Japan have been to private citizens living in buildings that don't allow pets. For %6,000? Wow!

Someone hasn't been paying attention

and that someone is Nobel Laureate Paul Krugman:

Spend now, while the economy remains depressed; save later, once it has recovered. How hard is that to understand?

Very hard, if the current state of political debate is any indication. All around the world, politicians seem determined to do the reverse. They’re eager to shortchange the economy when it needs help, even as they balk at dealing with long-run budget problems......So America has a long-run budget problem. Dealing with this problem will require, first and foremost, a real effort to bring health costs under control — without that, nothing will work.

Look, I clearly don't have a Nobel Prize or a gig at the Times, but I do remember the last year of history! The government put together a near 1 trillion dollar "stimulus" package and passed a comprehensive health reform bill.

That did happen, didn't it? Or am I just somehow plugged into the Matrix and missing the truth?

The government has enacted a big stimulus package, bailed out GM, extended unemployment benefits and the Fed has undertaken extraordinary expansionary measures. To me, this hardly qualifies as "eager to shortchange the economy".

A disinterested spectator could look at the evidence and easily conclude that old school macro policy didn't work rather than arrive at PK's conclusion which is apparently that it hasn't been tried!

It just seems to be an article of faith with Krugman, DeLong and others, some kind of twisted syllogism:

"Fiscal policy can always bring the economy to full employment. The economy is not at full employment, therefore fiscal policy has not been sufficiently applied."

On the long-run part of the equation, Krugman points, with apparently no sense of irony, to out of control health costs as the killer problem.

Wow. Just wow.

Krugman should be an anarchist at this point, shouldn't he?

He says we need currently need stimulus and health care cost control. Hey Paul, the government has spent most of the last year working on those two issues with apparently no results.

Paul, either your model is wrong or the government is totally incompetent (or both?)

Sunday, June 20, 2010

Undercover Operation: Strippers Take Clothes Off!

The LMM and I are at Wrightsville Beach, for the week.

One of the pleasures of being here is reading the local newspaper.

Here is a truly wonderful story: After a six-month (!!) undercover sting operation, the men of Charlottes's finest have concluded that strippers take. their. clothes. off.

Thank goodness we have a police force, to protect us from dangerous naked women. I think Mr. Fall has it right, below:

Chris Fall, owner of the Paper Doll Lounge on Wilkinson Boulevard, said the women from his club denied that they removed all of their clothing.

Fall is upset about the charges, saying the investigation is a waste of taxpayer money, particularly in tight financial times.

"The government, they're bad on money and they're coming after us," Fall said. "Paying (agents) to go to strip clubs... and have a good time."

He said the arrests have hurt his business: "Why run all the business off? You're supposed to be helping businesses, not hurting businesses."

The clubs could face disciplinary action by the state ABC commission, which controls licensing for businesses that sell alcohol.

So the cops told some undercover guys to spend six months going to strip clubs, buying drinks and tucking $20s into g-strings (you have to fit in, if you are undercover). And the result is that six young women are going to go to jail, for the crime of sharing.

Yes, I understand the police don't write the laws, and they have to enforce all the laws. But surely there are other priorities in Charlotte....

Words of wisdom!

1. Will Wilkinson on Bryan Caplan's crusade to "replentish the earth":

If Bryan really thinks rising education, wealth, and gender equality have somehow made us worse at evaluating the costs and benefits of children, he probably ought to turn in his economist card.

2. Tyler Cowen on the stimulus addicts:

I believe the "zero bound" is perhaps the single largest "red herring" in the economics profession today.

Manute Bol: RIP

People, Manute Bol has died at the age of 47. In my earlier life (pre Mrs. A), Tyler and I were Bullets season ticket holders during the Manute era. We got to see this:

Yes, seven feet seven inches and five feet three inches on the court at the same time. Bill Veck had nothing on Abe Pollin.

On the court, Manute was a shooting guard trapped in overly tall body. His favorite thing in basketball clearly was taking three pointers (something that his coach, Wes Unseld, didn't think very highly of), though he was also a prolific shot blocker.

Off the court, Manute did not have an easy life either before or after basketball. The Washington post has an excellent story on him here.