Saturday, April 06, 2013

I think this post was mistitled

Yikes: Check out this professor's guide called "How not to write a PhD Thesis".

I would have to say it should be called "How not to be a thesis advisor"

Check out this gem:

I make my postgraduates pay for such statements. If they offer a generalisation such as “scholars of the online environment argue that democracy follows participation”, I demand that they find at least 30 separate references to verify their claim. 

I guess this professor subscribes to the "two wrongs make a right" theory of mentoring.

The other thought I had from reading the list was that I'm glad I work in economics and not literary theory!

Friday, April 05, 2013

Job Report Friday

Not a good initial number, people.  88,000 net new non-farm jobs in March (though the numbers for January and February were revised upward). Sure, this is an imprecise number, subject to revision, with a wide confidence interval, but....OUCH.

Full report is here.

The interesting question is whether this is just a soon to be revised blip on the road to full employment or if this is a harbinger of another spring-summer slowdown after a promising fall & winter. Last year showed a definite V shape in job growth as did 2011 to a lesser extent.

Another interesting question is how long after the end of a recession can you still refer to higher than the historical average unemployment as "cyclical'?

This is especially relevant because the reduction in unemployment we've seen during the "recovery" is largely due to declines in the labor force participation rate!

Sure, some of the decline may be due to demographics, but things are worse than what the headline numbers show.

Ayn Rand Live?

It's as if Ayn Rand is writing history, more than 20 years after her death.  An email from Pelsmin:

Every now and then I hear someone say this entire presidency is aimed at destroying America. Personally, I think that’s extreme, and it’s really aimed at “moving us to our proper place in the world,” which is less dramatic but also directionally misguided.

But then I read this story in today’s WaPo, explaining how the Obama administration wants to encourage aggressive mortgage lending to low-credit/low income buyers. They are working to assure banks that they won’t be held responsible for failed mortgages as long as they conform to FHA guidelines, and that the government (taxpayers) will repay on defaults.

Under FHA guidelines “a borrower can get a home loan with a credit score as low as 500 or a down payment as small as 3.5 percent.” The DOJ is getting involved. The only difference I can find with 2008 is that back then the government was pushing home loans with nothing down to high-risk individuals, with an implicit backing of Fannie Mae, and now the government is pushing home loans with nothing down to high-risk individuals, with an explicit backing from FHA. I didn’t think Washington could stun me. But here we are, the ashes of the economy still warm, and they’re breaking out the matches and gasoline again. And is this possible: “since the financial crisis in 2008, the government has shaped most of the housing market, insuring between 80 percent and 90 percent of all new loans”? Do we again have banks operating under the moral hazard of making loans with government assurance of repayment? Also, what’s the logic of the statement “as young people move out of their parents’ homes and start their own households, they will be forced to rent rather than buy, meaning less construction and housing activity.” I guess this is somehow possible, but don’t they need to live somewhere besides the basement? So they will move into homes they own, or homes they rent. Construction will be needed for buildings occupied by owner or buildings occupied by renter. What am I missing? This is the most disturbing news story I have read in years. Really.

Phone call for Joe Tham.  You doubted me.  What do you say now?

Thursday, April 04, 2013

Non-Single Peaked Preferences?

Three sizes for "growlers," or reusable take-out beer jugs:  32 oz (quart), 64 oz, and 128 oz (gallon).  Guess which one is illegal in Florida?  The MIDDLE one!

A story full of rich detail, raising many questions.

1. Are preferences really non-single-peaked, with the middle alternative worst?  Or is this just silly bureaucracy at work?

2. Did this really happen?  "At his urging, Sen. Maria Sachs, D-Delray Beach, tried to add a nearly 12-page amendment to Sen. Jack Latvala's two-line bill." Nice.  Very nice.

3.  One of the reasons beer is relatively expensive in the U.S. is the gigantic political power, and gross inefficiency, of distributors.  I hope we lift up this rock and look at all the scary things that crawl out.

4.  An irony:  Angus can't even drink beer, for health reasons.  But he's definitely a "growler."

A nod to Jeremy B.

Wednesday, April 03, 2013

The Golden Age of Macro Surrealism

Lebron von Strauss helpfully directed me to this blog, where we find the claim that (their version of) potential real GDP is below current real GDP.

Just like that, problem solved. Hey Paul, Mark & Brad: look at the chart. We are above potential!


(clic the pic to better see that the economy has actually been above potential for 2 years now!)

Before you scoff, you should know there's a method to this madness:

When capacity utilization is above effective labor share, ED potential real GDP will be below real GDP. When capacity utilization is below effective labor share, ED potential real GDP will be above real GDP.

Say what?????

People, I didn't say it was a reasonable method, did I?

Further following his muse, the inspired blogger busts out this gem:

The path forward may not be a matter of raising real GDP, but of raising potential real GDP.

I guess this could be epic trolling, but I prefer to think of it as the epitome of Dali-onomics.

Given that the guy calls his measure "ED potential real GDP", I think we all know how to raise it, no?

The Perfect KPC Post

 David Allen Coe agreed when Steve Goodman and John Prine claimed to have written the "Perfect Country Song."  It is worth listening to.  Here is Steve Goodman's version.

I now claim to have the Perfect KPC post.  It raises substantive social, political, economic, and scientific issues.  And if you read it you will understand the difference between a ruddy duck penis and the penis of a ruddy duck.  Most importantly, you will once again see an example of how people on the right are getting it wrong.

Nod to Angry Alex.

There IS No Great Stagnation

How could there be a great stagnation?  We still have bacon.

As an added bonus - and salty safety precaution - each condom includes "J&D's baconlube™ ultra premium water based meat flavored personal lubricant."  For $9.99, a pack of three fulfills your need to taste and smell like real meat when you bang.
No nation with bacon-flavored (and colored, to look more bacon-like, and scented, to smell bacon-like) condoms could possibly stagnate.  We may go to hell in a pork basket, but we won't stagnate.

With thanks to Charlottean KL.

Tuesday, April 02, 2013

Dub-MOE's Existentialist Turn

The Dub-MOE brings it, for April Fool's day.  It's even in black and ....(wait for it)...WHITE.

This MIGHT Happen, So We Should Regulate It?

So a guy with a grudge concocts an experiment to show that, in a close election, GOOGLE might swing the outcome. 

(ProTip:  In a close election, anything might swing the outcome.  And we are not talking about a situation where there is an obvious right answer.  The institutions we pick, with a particular form of primaries, restrictions on ads, and voting procedures, all swing the outcome far more.  Elections by their nature are arbitrary, and very nearly random, in terms of discovering some transcendent truth.  So the idea--dear to the naive left--that there is some utopian Archimedean Point to compare elections against is nonsense, from the outset.  Elections in the face of disagreement are at best poorly designed lotteries, and there is no way around that.  The absence of disagreement is called "unanimity," and not even the GOOGLE could mess with that.)

But, this Maxwell wants to swing his Silver Hammer down on the head of GOOGLE, because it might affect elections, and that would distort government.  Why don't people on the left get upset about the myriad real ways that governments really do distort outcomes by restricting ballot access, arresting "terrorists" who in many cases are simply dissidents, and so on?  Even by the standards of the silly left-wing academy, this is pretty silly.

UPDATE:  WEH emails...   When the phone book was a new phenomena business people wanted a name that would appear at the beginning of the phone book directory. Sound familiar to the above? 

Enter 1948 Warner Brothers. Warner Brothers? Yep, who did Wile E. Coyote purchase his merchandise from? Acme Corporation. Why “Acme”? Why “Acme”? Simple! The term “Acme” means best or top and hence many, many, many companies in the early part of the 20th century adopted Acme as part of their name so as to appear early in the phone directory listing e.g. Acme Pest Control, Acme Roofing, etc. The term "Acme" was everywhere associated with business names. Hence "Acme" was more than likely "business" to Chuck Jones, originator of Wile E. Coyote. 

Which begs a question: do you know of any giant conglomerate, super corporation or multi-national known as Acme? Nope! Hence being first in the phone book was nice but it didn’t cause a business to become successful to the extent business people might have thought. Lesson to be learned? Cartoons can and do aid economics.

Monday, April 01, 2013

Monday's Child is Full of Links

1.  Adam Thierer on network economies and net neutrality.

2,  Ken at Popehat.  I really, really like Ken.  But this is special. Nutter censors, or tries to.

3.  All complicated market interventions unravel.  Some just unravel faster than others.  ACA, for example.

4.  Max Baucus and Bill Shatner decry "government waste."  And they know how to waste money.  Max wants to maximize Medicare costs.  And Shatner...well.  Here's 10 gigantic wastes of money on tape.  Not ONE of those is as cheap as $60,000.

5.  It's all cheap talk, until somebody loses an arm.(And notice this is NOT published in AER)

6.  Video:  Golf "Fail" competition.  But they are ALL winners.

7.  Entertech toy gun commercial:  Hard to imagine seeing this today.  Plus, the Super Soakers are way better.  But they are NOT "realistic" guns, like this one is.

8.  If you have enough dumb regulations and bad tax laws, you can create a black market anywhere.

9.  Interesting question:  What would happen if there were no state medical licensing boards?  Answer:  a lot.  If Rotten Tomatoes can make a living "licensing" movies, then so could a site called Rotten Doctors, or "QUACKS!"

10.  A higher minimum wage is good, unless you are an intern in Congress.  Then, it turns out the experience is valuable, and the minimum wage is not so important, after all.  If experience is good, why do we need a minimum wage at all?

11.  Politician tells truth; Europe reels in shock and dismay.

12.  FGCU's "Hayekian Strategy"  But then that may not be surprising...

13.  The Crony Chronicles!

14.  Dear Leader is upset that his garage band didn't get invited to SXSW, perhaps?

15.  France overturns law that made it illegal to "look like" a prostitute.  There are so many ways to go with that, I leave it as an exercise to the reader to come up with the best joke.

16.  Nanny state, nanny state, whatcha gonna do?  New York is by FAR the most officious, intrusive nanny state.

17.  Kindred W reams Brad DeLong a new one.  Nicely done.

18.  A psychotically in-depth discussion of Basel III.  Me gusta.

19.  The enviro-politics of "eating local."(UPDATED:  Missing link fixed!  Thanks to commenter...

Sunday, March 31, 2013


It takes a talking ass.  Jim Carrey suffers from an enlarged sense of entitlement.  Well, and a talking ass.

David Stockman wants to pee in your cornflakes

Wow. David Stockman confuses cause and effect, goes all gold-buggy, slanders Milton Friedman, and just generally comes unhinged in a massive hissy fit in today's NYT.

Let's break down a little bit of it, shall we?

Since the S&P 500 first reached its current level, in March 2000, the mad money printers at the Federal Reserve have expanded their balance sheet sixfold (to $3.2 trillion from $500 billion). Yet during that stretch, economic output has grown by an average of 1.7 percent a year (the slowest since the Civil War); real business investment has crawled forward at only 0.8 percent per year; and the payroll job count has crept up at a negligible 0.1 percent annually.

 This is a great analysis except that the timing is wrong and the causation is wrong. Here's the Fed's balance sheet since 1990:


As you can see, there's nothing special about 2000. There's a tiny blip, but the balance sheet stays on its path from 1900 to 2008, when it explodes.

And of course, that is/was the Fed's RESPONSE to the great recession. The terrible numbers Stockman gives for GDP growth and job growth are a direct result of the great recession. Real GDP grew strongly from 2000 to 2007, then collapsed.

A continually expanding Fed balance sheet didn't produce consistently bad economic numbers; the great recession happened and the Fed responded.

Sure, the Fed responded in an unconventional way, with asset purchases, because its policy rate was already pegged at zero. And sure, the unemployment rate hasn't fallen rapidly in response to quantitative easing. But the Fed has a dual mandate of stable prices and maximum employment, and their attempts to raise economic activity have not in the almost 4 years of unconventional policy aggravated inflation.

Here's that chart:

You can see how the Fed's unconventional policy responses have been geared to fears of deflation. Both the initial burst of asset purchases and the second rise came in response to falling inflation rates that threatened to go or stay negative.

This is probably the least shared view in America, given the Fed's many critics on both the Left and the Right, but Bernanke has actually done a very good job during this crisis and slow recovery.

Now let's consider Stockman's weird attack on Friedman:

This explosion of borrowing was the stepchild of the floating-money contraption deposited in the Nixon White House by Milton Friedman, the supposed hero of free-market economics who in fact sowed the seed for a never-ending expansion of the money supply. The Fed, which celebrates its centenary this year, fueled a roaring inflation in goods and commodities during the 1970s that was brought under control only by the iron resolve of Paul A. Volcker, its chairman from 1979 to 1987. Under his successor, the lapsed hero Alan Greenspan, the Fed dropped Friedman’s penurious rules for monetary expansion, keeping interest rates too low for too long and flooding Wall Street with freshly minted cash.

So Arthur Burns was a Friedmanite? So Paul Volcker who conquered inflation with his "iron resolve" didn't use a policy of targeting monetary aggregates a la Friedman? So the "Friedman Rule" which states that the price level should fall at the rate of time preference is fuel for the fire of "roaring inflation"?

Is Stockman trying to get a date with Naomi Klein?

I'll leave deconstructing the rest of this dreck as an exercise to the reader.

It's really been a banner week for wingnuts.

Happy Easter!

NSFW: An Honest Cable Ad

Remember, NSFW.  But a pretty good description of the most likely result of trying to "regulate" monopoly.  It's....monopoly.

Nod to Angry Alex