Friday, October 21, 2011


Turns out that the TSA considers the US Bill of Rights to be subversive. You can be arrested for reading it.

Just stand in line and keep quiet, and hope they don't notice you.

Liberty Book Club?

Anybody up for a virtual Liberty Book Club?

KPC fan Brandon Capitalism writes, "Would you be willing to ask on your blog, if any students would be interested in starting a Students for Liberty / IHS Book Club?

They would read the books listed on your blog. And they could, if they wanted, have debates about the books on our Capitalism Facebook page (up to 40k members). I would love that and help them as an Leadership Institute field rep... The vision is for students to organize themselves to study the ideas that Universities don't.

Sounds good to me. Contact Brandon Capitalism if you want more info...

Giving Stimulus a bad name since 2009

President O's $447 billion stimulus, er, I mean jobs bill has been rejected by Congress. Now the pieces are coming up in the Senate, one at a time.

The first was a proposal to give $35 billion to State and Local governments to support salaries for teachers, cops & firefighters. It's paid for by a surtax on people earning more than $1 million a year.

People, when did stimulus come to mean shoveling money to public employee union members only? when did stimulus come to mean tax increases?

According to WAPO, $30 billion of the money would "Support almost 400,000 education jobs for one year".

Notice that the word "support" in there means they are not claiming almost 400,000 new jobs; this is the old "create or preserve" rhetoric.

Suppose the bill really could deliver 400,000 new teaching jobs for one year. At $75,000 per job/year that would be a marvel of government efficiency. But why teachers? why not $37,500 for 800,000 construction workers? Or cut a check for $18,750 to 1.6 million unemployed people selected by lottery? or $9,375 to 3.2 million unemployed people?

This isn't stimulus; this is simple redistribution from a likely pro GOP group to a likely pro Democratic Party group. No wonder the Republicans are against it.

(Yes I know that one can argue schoolteachers have a higher MPC than do "millionaires", but that would be at best a second order effect, and this effect would be bigger if the money went straight to more unemployed people)

Our Correspondent, Anonyman

Anonyman, in the field for a KPC exclusive, sends this report:

"Apparently, they have agreed on a sign!"

Thursday, October 20, 2011

Someone needs to give orders....

They were Rousseauvians. But now Hobbes is starting to sound more right. Time someone was in charge; too many liberties.

From the OWS folks in the stinky park....

From today’s battles, it’s not yet clear who will win the day: the organizers or the organized. But the month-long protest has clearly grown and evolved to a point where a truly leaderless movement will risk eviction — or, worse, insurrection.

As the communal sleeping bag argument between Lauren Digion and Sage Roberts threatened to get out of hand, a facilitator in a red hat walked by, brow furrowed. “Remember? You’re not allowed to do any more interviews,” he said to Digion. She nodded and went back to work. But when Roberts shouted, “Don’t tell me what to do!” Digion couldn't hold back.

“Someone has to be told what to do," she said. "Someone needs to give orders. There’s no sense of order in this fucking place.”

Not even anarchists believe in anarchy. Someone needs to give orders. Hee hee!

This is actually a reason that I do support the OWS thing, nationwide. It's time kids found out that "spontaneous politics" is dangerous nonsense. In markets nobody has to give orders, because someone would OWN that spot. In this communal arrangement where some are just more equal than others, someone has to give orders, and eventually will have to bring in guns to back up those orders.

A nice WSJ article on the proceedings. Catatonic? Heh.

(Nod to Anonyman, whose wife gives HIM orders)

Apologies and Social Capital

Apologies as Signals: With Evidence from a Trust Game, Benjamin Ho, Management Science, forthcoming

Abstract: Apologies are part of a social institution designed to restore frayed relationships not only in daily life but also in the domains of corporate governance, medical malpractice litigation, political reputation, organizational culture, etc. The theory shows that in a general class of moral hazard games with imperfect information about agents with two-dimensional type, apologies exhibit regular properties — e.g., apologies are more frequent in long relationships, early in relationships, and between better-matched partners. A variant of the trust game demonstrates that communication matters in a manner consistent with economic theory; specifically, the words “I am sorry” appear to select equilibrium behavior consistent with the theory's main predictions.


Does Social Capital Promote Safety on the Roads?, Matthew Nagler, Economic Inquiry, forthcoming

Abstract: I present evidence that social capital reduces traffic accidents and related death and injury, using data from a 10-year panel of 48 U.S. states. The econometric challenge is to distinguish the causal effects of social capital from bias resulting from its correlation with unobservable characteristics by state that influence road risks. I accomplish this by employing snow depth as an instrument, and by restricting attention to summertime accidents. My results show that social capital has a statistically significant and sizable negative effect on crashes, traffic fatalities, serious traffic injuries, and pedestrian fatalities that holds up across a range of specifications.

(Nod to Kevin Lewis)

Ron Paul loses his Sh*t in the WSJ


Here is the money quote: "The Fed's quantitative easing programs increased the national debt by trillions of dollars."

Good luck 'splainin' that one away. The article is here.

People, Ron Paul is a gynecologist, not an economist (and it shows).

To crib a phrase from Mungowitz, he's "straight up loony tunes".

Which is why he fits in so well with the rest of the Republican presidential candidates.

Joe Biden Loses His Sh*t in Philadelphia

VP Biden sells jobs bill to 4th graders. Really.

That man J-Bide is a loony tune, straight up. This is pretty amazing. Howard Dean just said "yeaaaah!"

Nod to the Blonde

UPDATE: Jason Mattera asks an obvious question: How many of the rapes that Prof. Biden is upset about could have been prevented with the half billion US dollars poured down the Solyndra rathole? Those Solyndra jobs were pretty "temporary," weren't they, J-Bide?

Cards Rap

Nod to the Blonde

Big Foot, but not THAT Big!

Man orders size 14.5 slipper, gets size 1450.

Not convinced that this is real. A little too pat, at the expense of those "wacky Chinese." Still, a good picture. "Real" slipper at lower left.

(Nod to the Blonde)

UPDATE: More and more questions. "His oversized foot..." FOOT? He only has one? Apparently, because he even says, "I am going to sell it on Ebay." Not them, it. Wouldn't it be a little strange to get an order for one slipper? I mean, even separately from the size 1450 thing, which is probably pretty common, if Art Carden buys shoes. Overall, I cry bullish.

An observation entirely appropriate for the Euro debt summiteers

“After one strips out all the window dressing there is no way to make $6 billion in liquidity worth more than $6 billion in liquidity. But there are several creative ways to make it less.”

~Ken Rogoff [quoted by Paul Blustein in his wonderful book "And the Money Kept Rolling In (and Out)]

You have been E-mooned!

Assicons: The new cool emoticons for people over 30 who never do anything cool, so that this isn't actually cool, either. Nonetheless... assicons:

(_!_) a regular ass

(__!__) a fat ass

(!) a tight ass

(_*_) an ass hole

{_!_} a ass out on the floor shakin'

(_o_) an ass that's been around

(_x_) kiss my ass

(_X_) leave my ass alone

(_zzz_) a tired ass

(_E=mc2_) a smart ass

(_$_) Money coming out of his ass

(_?_) Blonde Ass


Wednesday, October 19, 2011

Irony is Dead. Up is Down. Through the looking glass....

"Our" solar producers are mad because their subsidies (which are more than 100% of their total revenues!!!) are not as big as the Chinese subsidies.

Pot, I want you to meet Kettle. Hey! Which is which? You subsidized government activities all look the same.

Nod to Anonyman.

Caption Contest

So, please put in the best caption, in comments. (This picture is from the SFL conference at Salem College; pic taken by Mark Benfield).

Feel free to click for an even more ridciulous image...


you make the call

Whattya think people? Is this an endorsement of vegetarianism or nymphomania?

Some Facts on Green Jobs

Now, I understand that no sensible person actually believes that "green jobs" are going to save the economy.

Saying that we need green jobs is just a way of justifying increased government payments to corrupt shell corporations like Solyndra. I bet the perpetrators of this fraud are actually pretty amused that it worked.

But here are some facts: even if the maximum good things happen, the impact will be negligible. And it is not likely that anything good will happen.

(A nod to @mfbellemare , who is not complicit in my interpretation)


VdR on the stimulus. Nice resource.

Jeff Miron on consequentialist and deontological libertarianism. Since no more than 2% of the US population knows what either of these words mean, it is an illustration of why libertarianisms' cultivated irrelevance is like to survive.

The "Battle for Brooklyn." Very cool, very interesting.

The Mitt-tator calls China out for being a currency manipulator. After we have implmented the Rogoff-Krugman plan and have 6% inflation, presumably the Mitt-tator will call out the U.S. for being a currency manipulator.

Bail-out? Fannie and the Fred have PLENTY of cash, thank you very much. And the Ben Bernank says there is more where that came from.


My kingdom for a counter-factual

Popular Macro debates are getting so tiresome, strident and pointless. The standard of what counts as evidence has fallen to ludicrous levels, even for people who should know better.

For example, consider this common line of reasoning: Tax cuts don't work. After all, taxes were higher under Clinton than under Shrub and the economy performed better under Clinton.

Or this one: Stimulus doesn't work. After all, we spend $800 billion and unemployment just kept going up.

Both of these arguments are non-germane and virtually worthless because no reasonable counterfactual is being offered.

We are not told what would have happened under Clinton if taxes had been cut, or what would have happened under Shrub if taxes had not been lowered. The comparison offered holds no water because it is unreasonable to assume that the only factor that varied between the two time periods relevant for explaining economic outcome is the Federal Tax Schedule. We know that is not true.

The stimulus argument is even weaker. To evaluate its effect, we need to know what would have happened without its application. It is unreasonable to assume that the only factor that varied which was relevant for unemployment was the stimulus.

People, anytime you see a strong empirical claim being made and the supporting evidence is a graph or an anecdote or simple comparison of A vs. B, ask yourself: what is the counterfactual being offered? Is it reasonable?

To my mind, it is precisely because Macro is a non-experimental field (meaning convincing counterfactuals are difficult to find) that it has become so politicized. People can look at the same events and draw diametrically opposing conclusions.

Macro has all the interesting questions, but Lord is it hard to find good answers!

Tuesday, October 18, 2011

She Blinded Greece with Science

Benford's Law, applied to Greece.

Thanks to the ward boss...

Oh, and that's "Benford," not Binford.

Props to P-Kroog

Interesting, thoughtful article.

By Paul Krugman, lest we forget that he is actually a very smart man.

Blackberries Cause Traffic Accidents

The effect, 40%, seems implausible. Still, interesting.

The original article in the UAE paper, THE NATIONAL.

Nod to the Blonde.

Looks like Intraders have discovered Hibbs

On Intrade this morning, Obama's re-election probability is 47.9%, which is the low point for this contract:

This low-ish probability of re-election is now in line with what my main man Doug Hibbs has been predicting via his "Bread & Peace" model, namely Obama loses (Hibbs is predicting 46.2% of the vote for Obama):

(clic the pics for a more Romnian view)

Hibbs has been predicting an Obama loss since May, which is when the Intrade Obama contract peaked at 70% (due to his RIP OBL bounce).

All hail the Stormin' Mormon?

The View of the Fed, 1912

(Click for a dramatically more paranoid image)

And a shout out nod to Plasmaquatic Technolithic Mist

Monday, October 17, 2011

Euvoluntary Exchange In NRO

Interesting NRO piece by Reihan Salam on Euvoluntary Exchange. Nice examples. And the question at the end is the right one. I just don't know the answer.

What are the sources of the disparities we care, or rather that we should care, about?

Occupy Wall Street--Carter Administration Edition

When you have an inept President who blames employers for not hiring people, you get this. From 1979, but quite fresh and timely. No jazz hands, though, which is a shame.

Nod to the Blonde...


Where seldom is heard, a missing G word, and judges do strip searches all day!

At the World Scrabble Finals in Warsaw, one competitor accused another having hidden the "G" tile. He demanded that the miscreant be strip searched to find the missing tile.

In the US this would have been done, as long as the guy spoke Spanish and had committed a traffic offense. But not in Poland.

(Yes, the title is intentionally misspelled)

Nod to the Blonde

Jazz Hands

Wow, these OWS guys are even more self-congratulatory than this blog! And we are (mostly) kidding when we self-congratulate.

I do like the jazz hands.

Finally, Angus, in spite of his protests, would last about 90 seconds in this crowd before he got into a fight with one of them. Their diagnosis, I will admit, is in some important ways correct. Their prescription for cure? Not so much. Angus's claim that he could be in that crowd and not make fun of it.... that made ME laugh. Good one.

we going to Sizzler!

One of the few good things about going to Wash U was Cardinals baseball. Me and Mungo were there for some pretty good years (1980-84). We would sit in the LF bleachers (I want to say that tickets were $1.50 but that can't be right can it?), smoke cheap cigars, chant obscenities at the people in the RF bleachers and hate the Cubs. A couple times we even took the train to Chicago and caught a Cards-Cubs game at Wrigley. Jeez, no wonder we almost didn't make it through the program!

Sunday, October 16, 2011

I'm down with OWS!

I, Angus, just want to tell you all that, contrary to my good friend and co-blogger Mungowitz, I am totally down with and supportive of the OWS movement.

The ever stronger link between big finance and big government is really hurting this country, and who knows, maybe OWS will start the ball rolling somehow to improve things.

Even if it doesn't, who are they really hurting?

I say let 'em protest in peace with a minimum of mockery.

Heck, if there was an Occupy Norman, I might check it out. Maybe find some elevators where we could push all the buttons at once....

Special Bagels or Something

Actual Egyptians near the park of OWS in New York are scornful of the "pain" of rich kids whining about hardship.  An interesting bit...

As Anonyman summarizes it:

But although she said the destitution in the square reminded her of the Third World, the occupation didn’t strike her as another Tahrir. “We were fighting for a big, big thing: for life, to eat, against a giant snake that would kill us.” Unsurprisingly, she employs a smart breakfast metaphor: “Here, they’re not fighting to eat, say, regular bread, but … special bagels or something.”

The Grand Game: Farmer Bob Edition

In the contest for worst analogy ever, "The economy is like a farm" has GOT to be a serious contender. In today's NY Times, Bob Shiller trots it out for a spin.

Let's start at the beginning. I grew up in a rural setting and have worked on farms. Farmers don't wait until winter to fix their fences. If there is a break in the fence and the cows are loose, you fix the damn fence then and there. Same with your barn. If there's a hole in the barn roof in June, you don't wait until January to patch it.

Then there's what I think is the weirdest part of the analogy:

The farm needn’t go into debt to do this. All able-bodied people on the farm are expected to contribute their labor, an imposition we can view as an informal tax.

In my experience, farmers laid off many of their seasonal workers after the harvest. Those that were kept on, to deal with animals or to do projects were paid hourly wages. They weren't "expected to contribute their labor".

The farmer had to save part of the farm's income to pay for what workers were needed in periods when the farm wasn't making a lot of income.

(A lot of the kids I knew that lived on farms were expected to make this "contribution" year round and they really really hated it. Winter was their favorite time of year because they didn't have to work nearly as hard)

I acknowledge that in some areas of the country and for some types of farms, business is seasonal. However, farmers mostly deal with that seasonality by laying off workers!


The funniest thing of all about this is probably the title of the HTML link for the article which I reproduce here for your enjoyment (I am NOT making this up):