Saturday, April 07, 2012

Weinersmith Hour

Very cool conversation with Zach Weiner (of SMBC note) and partner Kelly, together the "Weinersmiths." Had an hour of talk and discussion of economics. Zach sounded like he had terminal pneumonia, but it was fun nonetheless.

A great headline

Here's the headline (sent in by Angry Alex):

Gravy-wrestling model suffers horrific facial injuries after being hit with monkey wrench when she interrupted a friend having sex!

There is a story, too. But after you read the headline, there's not really much more to tell...

Friday, April 06, 2012


So, Eugenio took JP and me out to the Tip Y Tap, a distinctly Chilean place. (Okay, a distinctly Chilean place that specializes in hamburgers, hot dogs, and french fries, but...well, trust me, it's distinctly Chilean. Paltas on EVERYTHING).

We were food explorers in search of "crudo." The particular version of crudo I sought was "tartaro": .75 kilos of raw ground beef, with a big raw egg on top. Just so you get the idea:

You add a lot of lemon juice, aji, cebollas, and perejil, and stir (plus, you stir in the egg). Then you eat, with beer. It's pretty darned good. The EYM had it, last time we were here (2010). Once you get used to the idea that you are eating totally raw meat, and lots of it, it tastes great!

The employment situation

The March jobs report is out from BLS and it's not good.  After job growth averaged over 225,000 per month the last three months, the current number is 120,000. "Expectations" were for 205,000.

We are not out of the woods yet, people.

Bhagwati dishes:

Dr. B. is not a fan of the Obama administration's pick of Jim Kim for World Bank President.

He's also not a fan of an exclusively micro approach to development:

But perhaps the most compelling factor in Obama’s choice seems to have been a fundamental misunderstanding of what “development” requires. Micro-level policies such as health care, which the Obama administration seems to believe is what “development” policy ought to be, can only go so far. But macro-level policies, such as liberalization of trade and investment, privatization, and so forth, are powerful engines of poverty reduction; indeed, they are among the key components of the reforms that countries like India and China embraced in the mid-1980’s and early 1990’s. Such reforms turned these countries from stagnation to stellar growth. 

The anti-reform lobbies reacted by arguing that poverty and inequality had worsened. But new empirical studies show otherwise: growing economies benefit the poor not because wealth “trickles down,” but because growth “pulls up” those at the bottom. In fact, it is the rapid acceleration of economic growth in the major emerging countries that has reduced poverty, not only directly, through jobs and higher incomes, but also by generating the revenues governments need to undertake the public-health, education, and other programs that sustain poverty reduction – and growth – in the long term. India followed this path...

The problem with Kim, and presumably with the Obama administration’s development experts, is that they do not understand that successful development requires big-payoff pro-reform, pro-growth policies, not just small-payoff micro-level policies. Bangladesh has gone down that road, substituting such policies for macro-level reforms, and is developing at a far slower pace than India, where macro-level reforms came first.

I have to say that while I don't think it really matters who becomes president of the WB, I am quite sympathetic to Bhagwati's point of view about what really matters for development.

Thursday, April 05, 2012

Coming Back Like a Bad Penny

Actually, maybe ALL pennies are bad.

Canada has decided to get rid of them.

US is considering same. What do you think, folks?


My latest piece with LeBron is up at

In it we tackle the problem of asymmetric information when purchasing sports experiences. The idea for the piece came from a very nice paper by J. Zinman and E. Zitzewitz at Dartmouth, for which we thank them.

Here's a lovely bit:

The biggest issue is that our own desire for thrills often works against our better judgment. As a species, we derive pleasure from thinking about what will come — how nice that powdery snow on the slopes is going to be. So we turn off our critical faculties at the worst possible moment in hopes of maximizing the value of the anticipation and getting a bigger buzz. This is particularly bad when it comes to sports experiences, which are rife with "asymmetric information" — when the seller knows something you don't. Your best defense, of course, is to be aware of your vulnerability and maximize your information, as any smart shopper does when in the market for a used car. But when it comes to shopping for experiences, emotions all too often rule. 


Lucky, sure, but....

So, hitting from sharply downhill lie on lip of water, he skips the ball across the water, and then.... well, you'll see.

Someone Else's Money on A Service for Someone Else

Milton Friedman famously noted that we should think about care in spending cash as a two-by-two box (all important theories are two-by-two boxes, in fact, so why would this be different?)

Here is my version of Uncle Milty's theory:

So, if you spend your money on yourself, you will spend what you think it is worth, but check to see if you get high quality.

If you spend someone else's money on yourself, you don't care much about price, but you will check to make sure the quality is good.

If you spend your money on someone else (not a family member, someone you don't know and will never meet, call them a "welfare recipient") you will underpay and care little about quality, so the service will be terrible.

Finally, if you spend someone else's money on a service for someone else, you will pay more than $700 million in unauthorized overtime for crappy, abusive service.

EVERYTHING the state does, by definition, is spending someone else's money on a service for someone you don't care about. What could possibly go wrong with THAT brilliant scheme?

Oh to be in England?

People, everything is relative I guess.  Check this awesome twitter stream: #samanthabrickfacts and then check out the cause of the commotion.

Wednesday, April 04, 2012

A little more of the interview....

The interview with El Merc reporter C. Alvarez was too long, so I cut part of it.

But, @donaldtaylorjr rightly points out that the omission is important. So, here is another snippet:

—With Romney as the clear favorite of the competition: Is this the confirmation of a more centrist GOP?

I think it is more an indication of the weakness of the field. Santorum is a very weak candidate, and Perry and Gingrich are very close to being clowns. I know Santorum personally, and my experience in talking to him is not very impressive. He just does not strike you as being a leader. So, Romney is a weak leader of an even weaker field. In many ways, Romney is the Republican version of John Kerry, who lost to President Bush in 2004. Kerry was a fine man, with accomplishments. But there was nothing about him that made you trust him, or want to go out to work for him. Romney is like that. His campaign slogan should be "Romney: He's not so bad."

So....yes. The big difference is that Clinton and Obama were better candidates, MUCH better candidates.

Interview con la bonita Carolina del Mercurio

My friend Carolina Alvarez sent an email asking about the Republican primary follies in the US. I replied that, since I was in Santiago, we should meet for coffee. But no time today, and her deadline for El Mercurio is tomorrow. So, today the "interview" and tomorrow the coffee. Here were her questions, and my answers, a KPC "Read it before you can buy it on the street!" special!

—Even though Romney still needs almost the double of delegates he now has, last night primaries allowed him to sustain a momentum he is carrying since March. Do you think this was check-mate, or a turning point?

The US primary system for choosing presidents is a war of attrition, not a battle. It is a war of logistics, and planning ahead.

It is important to remember that in 2008 the Democratic race between Barack Obama and Hilary Clinton was not decided until May. Romney is in a better position now, April 5th, 2012, than Obama was on April 5, 2008. I did an analysis of the delegate counts, based on this information. For the Democratic candidates in 2008. On April 5, 2008:

Obama--52% of delegates up to that point

Same date, 2012

Romney--58% of delegates up to this point

It's not even close! Romney is FAR ahead of Obama at the same date. One difference is the super delegates, and timing. By this time, Obama had 70% of the delegates he needed for the nomination, while Romney has only 56% of the delegates he needs. That's because the Republican primaries have decided only about half the delegate totals, while by this time the Democrats had held more primaries, and so had determined 70% of the total.

Let's put it in futbol terms. On April 5 2008, Obama led Clinton by a score of 3-2 with ten minutes left in regulation time.

On April 5 2012, Romney leads Santorum 3-1, at halftime. So, Romney has a bigger lead, but there is more game left. Still, a 3-1 lead is a very big lead. Romney can just hang back and play defense at this point, and can continue to run out the clock. All he needs to do is split the remaining primaries 50-50, and he will win.

—Rick Santorum vows to stay in the race. How important is for him to compete in his home state (next 24th), and what does he win staying longer in the race?

Santorum is not popular in Pennsylvania. It is not assured he will win. The polls say he is ahead, but Romney will spend money on ads in Pennsyslvania. And Santorum lost his own Senate seat there. If Santorum loses in Pennsylvania, it will hurt him, but it will not kill him. Santorum will in any case stay on until Texas, May 29,whether he wins or loses in Pennsylvania. The Texas primary has LOTS of delegates, and Texas is very conservative, a good place for Santorum. If Santorum wins Texas, he can claim that he is still viable. If Santorum loses Pennsylvania AND Texas, then he might think about quitting.

—Finally: Republicans changed the rules to have longer primaries, in part to excite voters —thinking perhaps in a contest like the one Democrats had in ’08. But many have pointed out that in the end this prolonged competition did more damage than good to the party, since President Obama is already campaigning. How much is the damage caused to the potential Republican nominee by “friendly fire” and how much has the President won?

Wait, "prolonged competition"? As I noted above, Obama was not selected until the end of May, six full weeks from now. Romney is FAR ahead of Obama, in terms of competition. The Democratic Party actually benefitted from the excitement and interest generated by the contested primary. It helped the Democrats to have a race that ran through the end of May.

So, this will likely help the Republicans, too. One difference, which was a product of the court system, is the very late Texas primary. The federal court system forced Texas to move its primary to the end of May, because the court rejected the Texas redistricting plan. That is a problem, because Texas has so many delegates (155, more than 13% of the TOTAL required to win) and it's so late. The Republican choice may not be made until June, for that reason. But that's only a week or so later than the Democrats in 2008, and the long competition helped the Democrats, so it may help the Republicans.

If the long competition does NOT help the Republicans, I think that will be because the candidates are weak, not because the competition was strong. As Clinton-Obama showed in 2008, a strong competition between good candidates is actually helpful.

Hit me with your memory stick

In a meeting with parents in a Catholic school in Northern Ireland held to prep them on what happens with their kids during their first communion, Father Martin McVeigh stuck his memory stick into the school's computer and out popped 16 "indecent images" of men.

The Father yanked his memory stick out of the computer and fled the room, only to return 20 minutes later and ask that the children consider giving some of their first communion loot to the Church.

The parents were unhappy and complained, but McVeigh's Bishop said everything was fine because the police told him "no crime had been committed".

Indeed, I would think that was a fairly accurate briefing on what kids can expect in their interactions with the Church!

He'd save children (but not the British children)

In the ultimate test of Bryan Caplan's theory, Paul McCartney's son wants to get a kid from each of the other Beatles and.....put on a rock show!

What could possibly go wrong?

So far, the only thing standing between us and musical armageddon is... Zak Starr?

God bless you sir.

Tuesday, April 03, 2012


Okay, so I'm reading about the Florence strip-search and jail case. And I'm thinking, "Please let the guy be white, so this isn't just police racism." No such luck. Mr. Florence is black. In a BMW. Has a BMW dealership, in fact. So, cops stop black people in a BMW, for "speeding." No citation given to wife, who was driving. (WHY WERE THEY STOPPED IN THE FIRST PLACE?). Cop does check on the car. Finds old unpaid ticket, after what is basically a fishing expedition.

Mr. Florence is handcuffed, strip-searched TWICE, jailed for a week with no bail (HE'S A FLIGHT RISK! NO BAIL, BECAUSE HE ALREADY SKIPPED ON A TICKET!). Finally sees judge. Is able to prove that in fact HE PAID THE TICKET! On time. Police just failed to record the payment. Whoopsie daisy, sorry, fella. Have a good day.

Exactly the same thing happened to me, Dec. 2010, except no arrest and strip search. Got notice of failure to pay ticket that had, in fact, been paid. Had to send copy of cancelled check, had to get notarized statement, all because the state is too busy to recognize when citizens do what the state forces them to do. It happens all the time. The state is remarkably incompetent, and indifferent to the consequences of that incompetence, given that if YOU make a mistake the consequences are enormous.

You'll want to watch this excerpt from one of best movies of all time, Brazil. Four mins, watch it through, please.

Now, the Supreme Court case is about the strip-searching. I'm afraid, on that narrow question, the court got it right. If (IF!) you are going to put the guy in jail, for a week, for a nonviolent traffic ticket (which he had actually already paid, but never mind for a minute, suppose he hadn't), then you HAVE to strip search him. It's the logic of domination and humiliation in the prison system. The strip search is a consequence of the dangerous security situation in the jail where the state is choosing to hold this person. In jail, you lose the presumption of innocence.

The real questions didn't come up in the court case. Why did police stop a black couple just because they had a BMW, and then searched for something, anything, to nail the guy. Then why send him to jail, with no way out, for a week. And why not keep better records, if the stakes are really this high? If failing to pay a ticket is worth a week in jail, away from work and family, what should be the punishment for failing to record a valid and timely payment for a ticket? Shouldn't it be symmetric?

The REAL question, then, is why all our sensitive leftist friends put so much faith in a state that routinely does the sorts of things described above. I bet (paraphrasing Edmund Burke) it's because you fall out only with the abuses, and think that the thing itself is good. The THING! The thing itself is the abuse!

Why do you people love the state so much? It doesn't love you.


Some links....

Justin Wolfer's "Academic Manifesto"

To understand voting, follow the sacredness.

Markets in too MANY things?

Saying and doing: GM *says* that the Volt is doing great, set a record. But what did they *do*? They closed the factory for an additional week, extending layoffs.

Is Your Chld About to Throw Up?

Got this from Nanny News. Not sure whether they think our readers are childish, or that this site makes readers vomit. But, in any case, here you are:

10 signs your child is about to throw up. (Some Synonyms, from Oz)

But it seems to me this just scratches the surface. Our own experience was the EYM would stand up in his bed and scream for hours, until he vomited on his own feet. Then, satisfied, he would happily lie down and go to sleep in same. Anyone else want to share?

Hatin' On the Econ Game

New York Times has been running a series; more to come.

Here is the good N. N. Taleb, on models. Not sure he has this right.

And also in the Times (though not in the same series) Clarke and Primo on physics envy.

Monday, April 02, 2012

Minimalist Economics Posters

Some minimalist economics posters.

And, some more. New and improved: Now, with REAL econ!

Thanks to John-O!

Thank you note from Mexican drug cartels

Thanks, Prez O, for taking care of keeping drugs illegal!

Thanks to Angry Alex

Stand Your Ground

Okay, here's the thing: I'm a big fan of rights to gun ownership, and concealed carry laws. I have myself qualified for a concealed carry permit in NC. Those laws should be "shall issue," and not up to the discretion of local authorities. Full stop. But..."stand your ground" laws, as they may be applied (NOTE: EDITED) in Florida, are nuts. If you are carrying a gun, you have it only to use as a last resort, and you are required, both morally and as a matter of law, to forebear from doing certain things you might otherwise do. If you are carrying a gun with CC permit, you cannot:

1. Drink alcohol. At all, not any.
2. Intentionally put yourself in a situation where you need to use the gun.
3. Get into a fight.

If for some reason you do get into a fight, you have to walk away. If walking away does not work, you have to run.

Only if you have made a serious reasonable effort to escape, or are prevented by circumstances from doing so (eg, other person has a deadly weapon) can you use your weapon, or for that matter any other kind of deadly force, in response. Someone pulls a knife on you, you don't have to run. Someone talks bad about your mama, walk away.

Now, a test case. Consider the following: "Citing the Florida [stand-your-ground] law, a judge dismissed a murder charge against Greyston Garcia, who had chased and stabbed to death a suspected burglar who had stolen his car radio. The judge ruled that a bag of radios swung by the suspect, Pedro Roteta, at Mr. Garcia amounted to a lethal threat." [WSJ story]

So, a quiz: Did Mr. Garcia satisfy the conditions for using a concealed weapon? (Assume the knife was large and concealed.) No. Not even close. You cannot use deadly force to defend property, unless there is also a threat to YOU. The robber (assume he was in fact *A* robber, who stole stuff, and *THE* robber, who stole in particular Mr. Garcia's stuff. He might not be, and it's not for Mr. Garcia to decide. But suppose). The robber ran away. You can run after him, but if you do you forfeit the right to use deadly force. Now, you might still use deadly force if your life was threatened (a bag of radios? really?). But if you do, you are guilty of manslaughter, just like anytime A kills B in a fight A started.

Now, the actual point. Re the Trayvon Martin / George Zimmerman thing. The question is, did Zimmerman try to walk away/run away? He did not. Mr. Zimmerman, in fact, followed Mr. Martin. That means Mr. Zimmerman cannot use his weapon. If he does, and kills Mr. Martin, then Mr. Zimmerman is guilty of manslaughter, even if the only account of events we credit is that given by Mr. Zimmerman. ZIMMERMAN FOLLOWED MARTIN. (Plus, the police definitely told him not to, just in case Zimmerman was confused). If after that Zimmerman shot Martin, even if it was self-defense in the particular circumstances of that moment, Zimmerman is guilty of manslaughter. A kills B in a fight A started. A following B is starting a fight, seeking out a fight. It's not walking away.

"Stand your ground" laws are fine inside your home. Someone breaks into your home, empty the clip at them, no questions asked. But invoking "Stand your ground" when YOU chased THEM? That's just an excuse to commit murder and get away with it.

UPDATE: Jake Syma sends this link to a HuffPo piece by JM Granholm. Nice piece.

UPDATE II: It may be that the FLA SYG law will NOT apply in this case. That is certainly the view of the law's primary author, as here. If SYG is disallowed as a defense here, then I stand corrected and SYG is okay as written. If not, I've got beef. And I still find the application in the Garcia case above to be incomprehensible.

(Nod to Kevin Lewis and Jake Syma for links)

Sunday, April 01, 2012

Big Dunk

Yes, I know there was no Derrick Rose, but the Thunder beat down the Bulls this afternoon in OKC. Mrs. Angus and I were there and had a great time.

Westbrook made one of the strongest dunks I've ever seen live. It didn't seem like he could make it to the rim from where he took off but he surely did. In the video below, the view shown at the 14 second mark is how it looked to us live, like he just somehow kept going and going.


Sustainable development?

The indefatigable Michael Clemens reports that a new Millennium Village project in Ghana plans to spend a minimum of $12,000 per household lifted out of poverty in the project. This is something north of 30 times higher than average annual household income in the region where the project is going.

I have no doubt that many of these households will be "lifted out of poverty" during the years when these expenditures are made.

But, I don't think it can be called development.

Clemens proposes an interesting cost -benefit hurdle for the MVP by noting that if the money was placed in a trust that earned 5%, each household would receive $600 / year FOREVER (which would be triple the average annual household income in the region). He asks if the MVP method of spending the money will permanently triple the average incomes of these households.