Saturday, February 11, 2012

We are all Secretly Canadian now

The label is knocking it out of the park with its reissues of Nikki Sudden's back catalog. The Swell Maps are now again available on vinyl, CD re-issues have extras like videos and the like. Amazing job.

Cheer up Greece, your "lost decade" is almost half-way over

Latin America has been a great laboratory for studying sovereign debt crises.

In the 1980s, the borrowing countries got pushed around by the lenders (big US banks), agreements were brokered and quickly broken, significant debt relief took a VERY long time to happen.

The countries were strung along with new loans and conditions until the banks had written down those loans to the point where debt relief was feasible for their balance sheets. The countries suffered the proverbial "lost decade" of economic misery.

In 2001, Argentina took another path. They broke their link to the dollar and defaulted on their debts.
After a very steep but short lived economic implosion, the Argentine economy came roaring back. Argentina has since worked to deal with the creditors they burned, and is in no way, internationally isolated.

Greece has chosen to follow the first path. They have been strung along with new loans, new conditions and demands. Their economy is entering its 5th year of recession. And it appears that Germany and France now think their banks can withstand either significant debt write-downs or even a Greek default at this point.

The only question is whether Greece will get real debt relief to go along with all the conditions or whether the EU will just kick Greece off the bus by demanding conditions so stringent that the Greeks will finally say "no mas".

In my view, Greece has been making the wrong choices all along the way. Even at this late date, with the promise of significant debt relief in front of them, it would be better for Greece to get kicked off the bus than to take the deal.

I say that because the deal will continue to crush the Greek economy, and the best case debt scenario arising from it is a 120% debt to GDP ratio in another 10 years or so (i.e. it still won't solve Greece's problem).

It would have been better for Greece to default and devalue 3 or 4 years ago. Their economy would be growing now and they could start making amends and getting back into international capital markets. However, even at this late date, I believe the Argentina option is still better for Greece than continuing to eat Germany's sandwich.

Friday, February 10, 2012

Here come the torches and pitchforks

LeBron & I have a new piece out at about how American football might die out and what the effects of its death may be.

Here's the bit that may get me into trouble:

Any location where football is the only game in town will suffer. If the Jets and Giants go, New York still has numerous other pro sports teams, Broadway, high-end shopping, skyscrapers, fine dining, and many other cultural activities. If college football dies, Norman, Oklahoma (current home to one of us), has … noodling? And what about Clemson, in South Carolina, which relies on the periodic weekend football surge into town for its restaurant and retail sales? Imagine a small place of 12,000 people that periodically receives a sudden influx of 100,000 visitors or more, most of them eager to spend money on what is one of their major leisure outings. It's like a port in the Caribbean losing its cruise ship traffic. (Overall, the loss of football could actually increase migration from rural to urban areas over time. Football-dependent areas are especially prominent in rural America, and some of them will lose a lot of money and jobs.)

Thanks to Bill Simmons and Dan Fierman for giving us these opportunities.

Too much good news?

The Fed has promised two seemingly inconsistent things.

1. to keep interest rates "extraordinarily low" well into 2014

2. to keep inflation at 2%

As noted, these are really only compatible if the economic recovery remains sluggish.

But, growth accelerated last quarter (and there is talk that number will be revised upward), and early indicators show that growth may be strong this quarter as well. Unemployment is falling, initial jobless claims are falling, Greece continues to be willing to eat Germany's sandwich.

If these trends continue, it will be a case of too much good news for The Bernank, and the Fed will face a tough decision about which promise to break.

So, come on American economy! Let's kick some butt and make the Fed rue their super-bearish forecast.

Thursday, February 09, 2012

church & state

I heartily endorse Mungo's post yesterday that the 14th amendment is a straightforward reason to overturn Prop 8 in California and I'm totally in favor of same sex marriages.

However, the following comment appeared and got a fair amount of support in the thread:

"Why should the government ever be in the position of defining marriage? Let that be up to churches and have the government enforce the contracts."

People, that is nuts.

Say I'm an atheist. Where's my "equal protection"? Say a church allows marriages between 40 year olds and 12 year olds. Should the government "enforce the contract" or throw the church leaders in jail. Suppose a church refuses to allow divorce for any reason.

Note that "just go find another church" is not a viable solution. Not for the 12 year old. Not for the person in the abusive relationship. The simple fact of the matter is that churches can create all kinds of mischief and it's just not that easy to walk away if your family, future spouse, social network is all bound up in the church.

Sure majorities make mistakes. Pure majority rule can be tyrannical to minorities. But in my opinion, Theocracies make way more mistakes and create much more tyranny.

I simply don't see the "tyranny" of having the Government be in the marriage business in the USA, especially if it would simply respect the Constitution and provide equal protection to all its citizens.

Are you people seriously against a law denying the right to marry 12 year olds?

Wednesday, February 08, 2012

These are a few of my favorite things....

Angus and Mungowitz, together forever, in posterity!

At least, if you bought the video of game 4 of the World Series. Here it is, from the official video, admittedly only a few seconds, so I slowed it down.

If you missed it, here is the still shot:

Can't Help It: Majorities Suck

There, I said it.

Majorities suck. There is no reason to let majorities define morality for the rest of us. Even if I get Kos-trated, I'll still say it.

That's why we have the Bill of Rights. That's why we have the 14th Amendment, to ensure that the state governments, like the Feds, cannot use the tyranny of the majority to abuse individual rights. A key part of the 14th Amendment says: "no state shall ... deny to any person within its jurisdiction the equal protection of the laws."

That should have been the basis of the court decision blocking Prop 8 in California. Equal protection. The majority wanted Prop 8. The majority can go jump in the lake.

Not sure why the court used that crap about dignity. This is straightforward equal protection. You can't say we allow a contract between two consenting adults, depending on whether the majority happens to approve of those adults and their lifestyle. If the contract is valid and the state is going to insist on enforcing it, then that contract must be available to any couple that qualifies under the conditions for valid contract.

Majorities do not, and cannot be allowed to, define morality. In Prop 8 in California, the majority overstepped. The court did what courts should do (though their reasons were stupid: it's JUST EQUAL PROTECTION!).

Majorities suck. Why would anyone expect to find rectitude in the multitude?

And if we don't trust majorities to choose morality / religion / restrictions on speech for the rest of us, why would anyone trust voters to pick the right candidate? After taking these abuses, I'm warming to the Electoral College. It recognizes the importance of states in the Constitution, it increases motives for participation in battleground states, and it gives voters in small states more of a say. Sure, there are good arguments against the Electoral College, but just saying that "majorities should always get their way" means you need to go back to school.

The US is not a democracy. We don't trust majorities, because of stupid stuff like slavery and the Alien and Sedition Act, and the Patriot Act, and Prop 8. There is nothing special about the majority will, it's just what most people happen to believe.

(Note: This post was edited to remove two typos)

Tuesday, February 07, 2012

Context, Context, Context

Wow. Some folks over at Daily Kos have themselves all upset. They quote me, from a debate in 2009.

“The United States is not a democracy and shouldn’t be,” said Michael Munger, Duke University’s Political Science Department chairman and a 2008 Libertarian gubernatorial candidate attacking it at a League of Women Voters forum. “There is NO moral force in the majority. It is just what most people happen to think.”
The Corporatists/Christianists/CU have NOW spoken what and why many of us 99% are fighting against. They said that we, the 99% Have NO MORAL (christian values???) force. We don't know how to pick and choose between good and bad LEADERS?

Um....some context, folks.

1. It was a DEBATE. The League of Women Voters wanted a debate, with one side arguing FOR the Electoral College and one arguing AGAINST. I drew "for" the EC, and argued it. I could just as easily have argued "against." I am actually agnostic on the question of the Electoral College. But for the sake of a debate, I was willing to argue the case for the Electoral College. That's not a policy paper I did, it's a DEBATE. Quoting those claims and attributing them to me is pretty dumb, even by the standards of Daily Kos.  It would be just as wrong to have attributed to me the claims I would have made if I had drawn the "against" position.  IT. WAS. A. DEBATE.

2. I do stand by the "majority does not define morality" point. Two examples:
  • First Amendment to the US Constitution. Just because the majority happens to be Christian doesn't mean that the majority gets to impose Christian prayers in schools. Morality has to stay separate from Majority.
  • Second example: Roe v. Wade. Suppose a state has a majority that wants to outlaw abortion. Roe v. Wade says they don't get to. Roe v. Wade says, "No democracy on this question. It is an individual rights question."  There are lots of other examples.  But presumably the Daily Kosoids actually agree in those two instances that majorities should be prevented from forcing their will on the rest of us.  That's the American system.  We are NOT a democracy, because of the Bill of Rights.  Majorities cannot trample the rights of individuals. was a DEBATE.  I don't care much one way or the other about Electoral College, but as an intellectual assigned to a debate position I am capable of arguing either side, to help the audience make up their own minds.  That's the tradition of debate.  And the idea that majorities are not always right is enshrined in the 1st Amendment, and in the Roe v. Wade decision.

Let's just assume this was a simple misunderstanding....

Why Are Our Prisons Overcrowded?

Why are our prisons overcrowded?

a. Too many criminals
b. Too many laws
c. Not enough prisons

If you answered "b", you are CORRECT, sir!

Lots of background and graphics.

burying the lede

People, I don't care if it has over 1,000 calories or 54 grams of fat.

The only thing you really need to know about Jack-in-the-Box's "bacon" milkshake is this:


Come on, regulatory leviathan. Do your damn job.

People, if you want a real bacon dessert, for now you'll have to go to Denny's:

Monday, February 06, 2012

Praise the Lord & pass the ammunition!

Gisele made the switch from prayer to carpet-bombing pretty smoothly:

You [have] to catch the ball when you're supposed to catch the ball," she snapped back. "My husband cannot [expletive] throw the ball and catch the ball at the same time. I can't believe they dropped the ball so many times."

Court Gives Half a Loaf: NC Primary Still On

I have no idea what is going to happen in May.

There was supposed to be a set of primaries.

But the Repubs did what good partisan piggies do (and Democ partisan piggies did, and did again this year in Maryland), and redrew the district boundaries.

Here's the hilarious part. The contention of the Democs, and apparently with a straight face, is that the districts are (gasp!) racially gerrymandered! The court decisions let the primaries go forward, but allow the litigation that would invalidate the primaries to go forward, also. Really?

Here is a picture of the NC 12th District. It was explicitly created to draw a fence around all the black people in sight, to ensure a majority minority district. Some places it is no wider than I-85 (hint: no one lives in I-85, so this is just to achieve technical contiguity, without adding any actual people).

That's not a picture of a river, folks. That's a congressional district. Drawn by the Democs in the NCGA, and endorsed by your Dept of Justiciability.

Okay, fair enough: racial gerrymandering is clearly okay. That "map" is drawn to pick up every African-American neighborhood from Durham to Charlotte, a distance of more than 100 miles.

But then why is it okay for the Democs to do egregious racial gerrymandering, and not okay for Repubs to do some political gerrymandering? The reason the Repubs did this is not racial, it's just good ol' partisanship. Blacks tend to vote Democ. If you are going to create Democ districts, it will likely look like racial gerrymandering.

And if you think that racial gerrymandering is bad, you have to start by breaking up the 12th district. If you don't break up the 12th, you are just a partisan demagogue, and you should STFU.

End game for Greece?

The "Troika" (EC, ECB, IMF) is laying the smackdown on poor little Greece with demands of immediate public sector wage cuts, the closing of unprofitable publicly owned firms, and other spending cuts in exchange for the next "bailout" payment.

Supposedly, the "technocratic" (meaning unelected and troika-friendly) Greek PM can't get political buy-in, and without the "bailout" Greece could default quite soon.

While all this may just be weird Euro-posturing, I think that Germany and the EU is trying to show Greece the door.

I guess they think that the ECB's massive lending to banks has put them in a position to survive the default, but if I were them I'd be a bit more worried about what will happen in Portugal if Greece defaults and what might happen in Spain or Italy when Portugal defaults.

I think that if the Troika wants to keep the Eurozone intact, they should be putting much fewer conditions and burdens on Greece, not adding them.

Property and Disputes Over Property

Trial by Battle

Peter Leeson
Journal of Legal Analysis, Spring 2011, Pages 341-375

Abstract: For over a century England's judicial system decided land disputes by ordering disputants' legal representatives to bludgeon one another before an arena of spectating citizens. The victor won the property right for his principal. The vanquished lost his cause and, if he were unlucky, his life. People called these combats trials by battle. This paper investigates the law and economics of trial by battle. In a feudal world where high transaction costs confounded the Coase theorem, I argue that trial by battle allocated disputed property rights efficiently. It did this by allocating contested property to the higher bidder in an all-pay auction. Trial by battle's "auctions" permitted rent seeking. But they encouraged less rent
seeking than the obvious alternative: a first-price ascending-bid auction.


The Ecological and Civil Mainsprings of Property: An Experimental Economic
History of Whalers' Rules of Capture

Bart Wilson et al.
Journal of Law, Economics, & Organization, forthcoming

Abstract: This article uses a laboratory experiment to probe the proposition that property emerges anarchically out of social custom. We test the hypothesis that whalers in the 18th and 19th centuries developed rules of conduct that minimized the sum of the transaction and production costs of capturing their prey, the primary implication being that different ecological conditions led to different rules of capture. Ceteris paribus, we find that simply imposing two different types of prey is insufficient to observe two different rules of capture. Another factor is essential, namely, as Samuel Pufendorf theorized over 300 years ago, that the members of the community are civil minded.

(Nod to Kevin Lewis)

Sunday, February 05, 2012

The Fixie Index: The Hipsterest Places in America

The Fixie Index. Is YOUR town hip?

I can't imagine riding a bike like that. Literally cannot imagine doing it, or wanting to. I mean, just read this. Or this, a fixie in action (though, if he didn't see her, not sure why the lack of brakes is a problem...)

Not for me. Proving (as if proof were required) that I am NOT a hipster. This is not exactly a "stop the presses" announcement, I realize.

Of Course Economists Cannot Predict. Why Would You Think They Could?

Ha, ha, the funny stupid economists, can't predict anything.

But one of the conclusions of economics is that prediction is literally impossible.  At least public prediction.  If I publicly announce a policy of inflation, to increase growth, and people believe me, then the inflation is anticipated and the real growth effects are just about zero. Note that it doesn't matter whether the "announcement" is made by the Fed-o'-the-One-Bullet (as Angus has pointed out repeatedly) or by an economist who "knows" what the Fed is going to do.

Economic forecasts would only be made, or listened to, by people who don't know any economics.  So, sure, this sort of study confirms that.  But the conclusion is not that economists are bad at predicting.  It's that prediction is literally impossible, because of strategic reaction.

Suppose I publicly predict you are going to throw "rock" in an RPS game, and your opponent believes me. If you WERE going to throw rock, you would know that your opponent would be throwing paper. So you would switch to scissors.

It's worse than Heisenberg.  It's worse than Hawthorne.  In terms of the observer/predictor affecting the phenomenon being studied.  It's economics!  You can't possibly predict things.  Now, if someone pays me, I'll come up with a "prediction."  But I won't believe it.

Who should you be laughing at?  The morons who pay economists to come up with predictions.  You might as well hire meteorologists.

It's just me and Christy, me and Christy, me, me, me & Christy!

Last week, I begged to differ with a guy claiming that manufacturing was indeed special because people earned a wage premium simply by entering the sector, or as he put it, that there were "labor market rents" associated with getting a manufacturing job.

Turns out Christina Romer has my back!

She points out that (a) on the low skill end, manufacturing pay premia have shrunk and likely will continue to shrink, and (b) increased technical sophistication in manufacturing has created more jobs that require higher skills. She points out that the number of manufacturing workers with some college education has more than doubled.  Thus, subsidizing manufacturing is NOT likely to reduce income inequality in the US.

Romer attributes the shrinking premium to low skill workers to increased international competition, while I attributed it to both that factor and the decline of union strength. She doesn't point out that there is an upside to increased international competition, namely lower priced goods for American consumers.