Someone has gone and made the Bishop angry. You won't LIKE the Bishop when he's angry. Here is his email:
After watching the really well done and moving "I Pledge" paean to President Obama and feel-good liberalism, I took the challenge and wrote my own pledge: I pledge to not buy a hybrid since its life cycle costs exceed those of my Tahoe. I pledge to increase my carbon footprint in order to encourage more plant growth. I pledge to not purchase any electricity from wind farms because they greatly increase costs without any measurable environmental benefit and they are UGLY. I pledge to overthrow the Endangered Species Act because it makes endangered species worse off. I pledge to educate my grandchildren about the evils of government. I pledge to promote free market environmentalism. I pledge to respect my neighbor's property rights by fighting restrictive zoning. I pledge to spend more time growing tomatoes. I pledge to introduce even more students to the great works of Western Civilization. I pledge to re-read Milton Friedman. Friedrich Hayek, Ronald Coase and the other great University of Chicago economists. I pledge to not be a servant to any government official but to serve my neighbors.
I'll take that pledge myself.
Thursday, September 03, 2009
Mother in Law jokes: NOT Funny to Mother in Law
Sunda Croonquist is being sued by her Mother in Law, for making fun of the MiL in the stand-up comedy show that Sunda does.
The MiL is suing for actual damages, it appears. But the MiL should remember that truth is a defense in libel cases. As in, the daughter comic is "libel" to win. An example of the kind of jokes in question: Sunda's first visit (Sunda is black, btw) to her mother-in-law's (very white, very Jewish) house: "I walk in, I say, 'Thank you so much for having me here, Ruthie.' She says, 'The pleasure's all mine, have a seat."' Then, in a loud aside, 'Harriet, put my pocketbook away.'"
Here's the best part: Sunda's husband Mark is a lawyer. He is personally represnting Sunda, in court, against his own mother. What could POSSIBLY go wrong with that plan!? I guess grandma is not going to get to see much of the grand daughter. Sad, really.
The video....see for yourself if Sunda goes over the line.
Fortunately, I have a WONDERFUL mother in law, one who never does anything nuts or bizarre. So, I'm never tempted to blog about her, and get sued like this.
Nod to RL, who has an even BETTER MiL than I have. (Yes, he made me say that...)
The MiL is suing for actual damages, it appears. But the MiL should remember that truth is a defense in libel cases. As in, the daughter comic is "libel" to win. An example of the kind of jokes in question: Sunda's first visit (Sunda is black, btw) to her mother-in-law's (very white, very Jewish) house: "I walk in, I say, 'Thank you so much for having me here, Ruthie.' She says, 'The pleasure's all mine, have a seat."' Then, in a loud aside, 'Harriet, put my pocketbook away.'"
Here's the best part: Sunda's husband Mark is a lawyer. He is personally represnting Sunda, in court, against his own mother. What could POSSIBLY go wrong with that plan!? I guess grandma is not going to get to see much of the grand daughter. Sad, really.
The video....see for yourself if Sunda goes over the line.
Fortunately, I have a WONDERFUL mother in law, one who never does anything nuts or bizarre. So, I'm never tempted to blog about her, and get sued like this.
Nod to RL, who has an even BETTER MiL than I have. (Yes, he made me say that...)
Papers on Housing and Financial Regulation
Yet Another View on Why a Home Is One's Castle
Fuad Hasanov & Douglas Dacy, Real Estate Economics, Spring 2009, Pages 23-41
Abstract: We compute equity-based real after-tax rates of return for homeowners and landlords in the United States for 1952-2005. The study confirms that a combined aggregate for residential housing provides a high average net return and low volatility, has low correlation with financial assets and can provide a hedge against inflation. The efficient frontier analysis shows that the optimal portfolio for a household with a coefficient of relative risk aversion of four to five is one which contains a bit larger amount of housing than stocks, close to what one observes in the real world.
-----------------------
The Impact Of Deregulation And Financial Innovation On Consumers: The Case Of The Mortgage Market
Kristopher Gerardi, Harvey Rosen & Paul Willen Journal of Finance, forthcoming
Abstract: We develop a technique for assessing the impact of changes in the mortgage market on households. We start with an implication of the permanent income hypothesis: that the higher a household's expected future income, the more it desires to consume, ceteris paribus. If perfect credit markets exist, desired consumption matches actual consumption and current spending forecasts future income. Since credit market imperfections mute this effect, the strength of the relationship between house spending and future income measures the "imperfectness" of mortgage markets. Using micro-data, we find that over the past several decades, housing markets have become less imperfect in this sense. Mortgage securitization has played an important role in explaining this phenomenon.
-----------------------
The Housing Crisis and Bankruptcy Reform: The Prepackaged Chapter 13 Approach
Eric Posner & Luigi Zingales, University of Chicago Working Paper, March 2009
Abstract: The housing crisis threatens to destroy hundreds of billions of dollars of value by causing homeowners with negative equity to walk away from their houses. A house in foreclosure is worth 30 to 50 percent less than a house that a homeowner either retains or sells on the market, and a foreclosed house damages neighboring property values as well. We advocate a reform of Chapter 13 that would allow homeowners to strip down the value of their mortgages in a prepackaged bankruptcy. Such a plan would give homeowners an incentive to keep or resell their homes, thus reducing the market value loss of homes while protecting the effective value of creditors' interests. Two further key elements of the plan are that it uses prices based on the average house price in a particular ZIP code, which reduces moral hazard; and it is automated, requiring only a rubber stamp by a bankruptcy judge or other official, thus preserving judicial resources. Other plans, including that of the Obama administration, are compared.
(Nod to Kevin L, who phones home)
Fuad Hasanov & Douglas Dacy, Real Estate Economics, Spring 2009, Pages 23-41
Abstract: We compute equity-based real after-tax rates of return for homeowners and landlords in the United States for 1952-2005. The study confirms that a combined aggregate for residential housing provides a high average net return and low volatility, has low correlation with financial assets and can provide a hedge against inflation. The efficient frontier analysis shows that the optimal portfolio for a household with a coefficient of relative risk aversion of four to five is one which contains a bit larger amount of housing than stocks, close to what one observes in the real world.
-----------------------
The Impact Of Deregulation And Financial Innovation On Consumers: The Case Of The Mortgage Market
Kristopher Gerardi, Harvey Rosen & Paul Willen Journal of Finance, forthcoming
Abstract: We develop a technique for assessing the impact of changes in the mortgage market on households. We start with an implication of the permanent income hypothesis: that the higher a household's expected future income, the more it desires to consume, ceteris paribus. If perfect credit markets exist, desired consumption matches actual consumption and current spending forecasts future income. Since credit market imperfections mute this effect, the strength of the relationship between house spending and future income measures the "imperfectness" of mortgage markets. Using micro-data, we find that over the past several decades, housing markets have become less imperfect in this sense. Mortgage securitization has played an important role in explaining this phenomenon.
-----------------------
The Housing Crisis and Bankruptcy Reform: The Prepackaged Chapter 13 Approach
Eric Posner & Luigi Zingales, University of Chicago Working Paper, March 2009
Abstract: The housing crisis threatens to destroy hundreds of billions of dollars of value by causing homeowners with negative equity to walk away from their houses. A house in foreclosure is worth 30 to 50 percent less than a house that a homeowner either retains or sells on the market, and a foreclosed house damages neighboring property values as well. We advocate a reform of Chapter 13 that would allow homeowners to strip down the value of their mortgages in a prepackaged bankruptcy. Such a plan would give homeowners an incentive to keep or resell their homes, thus reducing the market value loss of homes while protecting the effective value of creditors' interests. Two further key elements of the plan are that it uses prices based on the average house price in a particular ZIP code, which reduces moral hazard; and it is automated, requiring only a rubber stamp by a bankruptcy judge or other official, thus preserving judicial resources. Other plans, including that of the Obama administration, are compared.
(Nod to Kevin L, who phones home)
RTL-Day Minus 4: Coordination Games and Bastiat
From 3-news, Kiwi-land, regarding the decision of the fake "Cabinet Meeting" on Tuesday....
Roina Vavatau, an opponent to the change, says there should be a delay in implementing the rules.
“We wanted to have a delay since we were not successful with the court case,” he says. We had anticipated that the best that we want to request from the government is to delay it further.”
Mr Vavatau’s request was ignored and on Monday the rules will change, but some villages near the main port of Sa'vaii are vowing to continue to enforce driving on the right hand side - even if only on the one kilometre stretch of road in their village. Protest organisers say the change is being implemented in an undemocratic way, and some village chiefs or matai's will ignore the rules.
Samoan Community Leader Litea Ah Hoi says the village chiefs want to maintain there local authority. “They are very proud to retain their position of authority even to the extent of defying central government,” she says.
Samoan leader Fa'amatuainu Tino Pereia says the change is positive for Samoa. “I think for Samoa it will harmonise Samoa’s driving patterns with the rest of the region,” he says.
“Not only that but also with the two significant countries of the region, Australia, and New Zealand which will then allow Samoa to have some sort of mobility within its own country.”
Mr Tino Pereira says September 7 will get off to a bumpy start but the majority off the 160,000 will eventually see sense in the change.
Many amazing claims in these quotes. First, the idea of a "region" for an island is a bit odd. You cannot drive from NZ or OZ, or Hawaii, to Samoa (and it's the same distance, approximately, with OZ being the furthest away.) Thus, by far the cheapest cars are the CARS YOU ALREDY HAVE. All of these are Left Hand Drive cars.
There are NO car-carrying ferries from OZ, NZ,or HI. Not one. And shipping cars 4000 miles is about 10% more expensive than shipping them 1000, on a bulk carrier. Just not a consideration. The expensive part is loading and unloading.
So, "mobility within its own country" suggests staying with the existing system.
As for "maintaining there local authority" (that is THEIR typo, not mine), this is coordination game, AND a power struggle. But if everyone else switches, the threat to stay on the right side of the road is not credible.
Finally, I am reminded of Bastiat's famous observations on the broken window, chapter 1 in "That Which is Seen and Not Seen." Bastiat addresses the argument that a broken window is a good thing, because it creates new business for the glazier. Bastiat goes on to say, "what will you say, disciples of good M. F. Chamans, who has calculated with so much precision how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?"
It is true enough that forcing people to buy new cars, and new buses, and make other changes, will create the appearance of economic activity. What we won't see is the business, and work, and activity, that WOULD have taken place without this ridiculous in-kind tax.
Roina Vavatau, an opponent to the change, says there should be a delay in implementing the rules.
“We wanted to have a delay since we were not successful with the court case,” he says. We had anticipated that the best that we want to request from the government is to delay it further.”
Mr Vavatau’s request was ignored and on Monday the rules will change, but some villages near the main port of Sa'vaii are vowing to continue to enforce driving on the right hand side - even if only on the one kilometre stretch of road in their village. Protest organisers say the change is being implemented in an undemocratic way, and some village chiefs or matai's will ignore the rules.
Samoan Community Leader Litea Ah Hoi says the village chiefs want to maintain there local authority. “They are very proud to retain their position of authority even to the extent of defying central government,” she says.
Samoan leader Fa'amatuainu Tino Pereia says the change is positive for Samoa. “I think for Samoa it will harmonise Samoa’s driving patterns with the rest of the region,” he says.
“Not only that but also with the two significant countries of the region, Australia, and New Zealand which will then allow Samoa to have some sort of mobility within its own country.”
Mr Tino Pereira says September 7 will get off to a bumpy start but the majority off the 160,000 will eventually see sense in the change.
Many amazing claims in these quotes. First, the idea of a "region" for an island is a bit odd. You cannot drive from NZ or OZ, or Hawaii, to Samoa (and it's the same distance, approximately, with OZ being the furthest away.) Thus, by far the cheapest cars are the CARS YOU ALREDY HAVE. All of these are Left Hand Drive cars.
There are NO car-carrying ferries from OZ, NZ,or HI. Not one. And shipping cars 4000 miles is about 10% more expensive than shipping them 1000, on a bulk carrier. Just not a consideration. The expensive part is loading and unloading.
So, "mobility within its own country" suggests staying with the existing system.
As for "maintaining there local authority" (that is THEIR typo, not mine), this is coordination game, AND a power struggle. But if everyone else switches, the threat to stay on the right side of the road is not credible.
Finally, I am reminded of Bastiat's famous observations on the broken window, chapter 1 in "That Which is Seen and Not Seen." Bastiat addresses the argument that a broken window is a good thing, because it creates new business for the glazier. Bastiat goes on to say, "what will you say, disciples of good M. F. Chamans, who has calculated with so much precision how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?"
It is true enough that forcing people to buy new cars, and new buses, and make other changes, will create the appearance of economic activity. What we won't see is the business, and work, and activity, that WOULD have taken place without this ridiculous in-kind tax.
Wednesday, September 02, 2009
RTL-Day Minus 5: Continued
So, who is bigger tool, the PM of Samoa or those two wacky French mayors?
Listen, and decide for yourself....
On the Pacific island of Samoa, traffic will switch next week from the right side of the road to the left. Protesters took to the streets. Bus companies are stuck with passenger doors on the wrong side. In France, two feuding mayors have declared a busy street one way — in both directions. Now no one can take the road that used to carry thousands of commuters into Paris each day.
Interview, on Radio Australia, with the attorney for PASS...
Listen, and decide for yourself....
On the Pacific island of Samoa, traffic will switch next week from the right side of the road to the left. Protesters took to the streets. Bus companies are stuck with passenger doors on the wrong side. In France, two feuding mayors have declared a busy street one way — in both directions. Now no one can take the road that used to carry thousands of commuters into Paris each day.
Interview, on Radio Australia, with the attorney for PASS...
RTL-Day Minus 5: Dagen H
Håll dig till höger, Svensson
An astute reader (yes, all KPC readers are astute, but this person is astute even by those elevated standards) notes that one should compare the impending Samoan disaster to the analogous disaster in Sweden.
Well, at KPC we live to serve. Well, and to complain. To serve and to complain, that's what we live for. Anyway, some background on Dagen H. Start with the WikiP entry, which is quite good. Excerpt:
Dagen H (H day), today mostly referred to as Högertrafikomläggningen ("The right-hand traffic diversion"), was the day, 3 September 1967, on which traffic in Sweden switched from driving on the left-hand side of the road to the right. The H stands for Högertrafik, the Swedish word for "right-hand traffic".
There were two major arguments for the change: (1) All Sweden's immediate neighbours drove on the right (including Norway, with which Sweden has a long land border). (2)
Most Swedes drove left-hand drive (LHD) vehicles. This led to many head-on collisions when passing on two-lane highways, which are common in Sweden because of its low population density and traffic levels.
Nonetheless, the change was widely unpopular, and had repeatedly been voted down over the previous forty years. In a 1955 referendum, 83 percent voted to keep driving on the left. In 1963, the Riksdag (the Swedish parliament) approved the change and established the Statens Högertrafikkommission (HTK) ("state right-hand traffic commission") to oversee it. It also began implementing a four-year education program, with the advice of psychologists.[1]
The campaign included displaying the Dagen H logo on various commemorative items, including milk cartons, men's shorts and women's underwear. Swedish television held a contest for songs about the change; the winning entry was Håll dig till höger, Svensson ('Keep to the right, Svensson') by the Telstars.
As Dagen H neared, every intersection was equipped with an extra set of poles and traffic signals wrapped in black plastic. Workers roamed the streets early in the morning on Dagen H to remove the plastic. Similarly, a parallel set of lines were painted onto the roads with white paint, then covered with black tape. Before Dagen H, Swedish roads had used yellow lines.
On Dagen H, Sunday, 3 September, all non-essential traffic was banned from the roads from 01:00 to 06:00. Any vehicles on the roads during that time had to follow special rules. All vehicles had to come to a complete stop at 04:50, then carefully change to the right-hand side of the road and stop again before being allowed to proceed at 05:00. In Stockholm and Malmö, however, the ban was longer—from 10:00 on Saturday until 15:00 on Sunday—to allow work crews to reconfigure intersections. Certain other towns also saw an extended ban, from 15:00 on Saturday until 15:00 on Sunday.
One-way streets presented unique problems. Bus stops had to be constructed on the other side of the street. Intersections had to be reshaped to allow traffic to merge.
Why put a reminder to "switch sides" on women's underwear? Why did one-way streets present unique problems? Why does Samoa want traffic to look like this?
UPDATE: This Salon piece makes the comparison with Sweden quite nicely, and (importantly) mentions the timeless musical classic "Keep to the Right, Svensson." Ya gotta recognize....
An astute reader (yes, all KPC readers are astute, but this person is astute even by those elevated standards) notes that one should compare the impending Samoan disaster to the analogous disaster in Sweden.Well, at KPC we live to serve. Well, and to complain. To serve and to complain, that's what we live for. Anyway, some background on Dagen H. Start with the WikiP entry, which is quite good. Excerpt:
Dagen H (H day), today mostly referred to as Högertrafikomläggningen ("The right-hand traffic diversion"), was the day, 3 September 1967, on which traffic in Sweden switched from driving on the left-hand side of the road to the right. The H stands for Högertrafik, the Swedish word for "right-hand traffic".
There were two major arguments for the change: (1) All Sweden's immediate neighbours drove on the right (including Norway, with which Sweden has a long land border). (2)
Most Swedes drove left-hand drive (LHD) vehicles. This led to many head-on collisions when passing on two-lane highways, which are common in Sweden because of its low population density and traffic levels.
Nonetheless, the change was widely unpopular, and had repeatedly been voted down over the previous forty years. In a 1955 referendum, 83 percent voted to keep driving on the left. In 1963, the Riksdag (the Swedish parliament) approved the change and established the Statens Högertrafikkommission (HTK) ("state right-hand traffic commission") to oversee it. It also began implementing a four-year education program, with the advice of psychologists.[1]
The campaign included displaying the Dagen H logo on various commemorative items, including milk cartons, men's shorts and women's underwear. Swedish television held a contest for songs about the change; the winning entry was Håll dig till höger, Svensson ('Keep to the right, Svensson') by the Telstars.
As Dagen H neared, every intersection was equipped with an extra set of poles and traffic signals wrapped in black plastic. Workers roamed the streets early in the morning on Dagen H to remove the plastic. Similarly, a parallel set of lines were painted onto the roads with white paint, then covered with black tape. Before Dagen H, Swedish roads had used yellow lines.On Dagen H, Sunday, 3 September, all non-essential traffic was banned from the roads from 01:00 to 06:00. Any vehicles on the roads during that time had to follow special rules. All vehicles had to come to a complete stop at 04:50, then carefully change to the right-hand side of the road and stop again before being allowed to proceed at 05:00. In Stockholm and Malmö, however, the ban was longer—from 10:00 on Saturday until 15:00 on Sunday—to allow work crews to reconfigure intersections. Certain other towns also saw an extended ban, from 15:00 on Saturday until 15:00 on Sunday.
One-way streets presented unique problems. Bus stops had to be constructed on the other side of the street. Intersections had to be reshaped to allow traffic to merge.
Why put a reminder to "switch sides" on women's underwear? Why did one-way streets present unique problems? Why does Samoa want traffic to look like this?
UPDATE: This Salon piece makes the comparison with Sweden quite nicely, and (importantly) mentions the timeless musical classic "Keep to the Right, Svensson." Ya gotta recognize....
What makes Roger go?
Insightful multimedia commentary here and a look at what it's like to play him for the first time here.
The men's side of the Open is amazing this year with Federer, Roddick, and Murray all playing well, the uberpunk Djokovic seemingly regaining form, and the chance that Nadal might come back to life.
The women's side is basically Serena and a bunch of Russian players with serious serve issues (there are 40 players in the women's draw whose last name ends in "a").
Tuesday, September 01, 2009
Running out of land....NOT
Unlearned Lessons from the Housing Bubble
Robert Shiller, The Economists' Voice, July 2009
"Many people all over the world seem to have thought that since we are running out of land in a rapidly growing world economy, the prices of houses and apartments should increase at huge rates. That misunderstanding encouraged people to buy homes for their investment value - and thus was a major cause of the real estate bubbles around the world whose collapse fueled the current economic crisis. This misunderstanding may also contribute to an increase in home prices again, after the crisis ends. Indeed, some people are already starting to salivate at the speculative possibilities of buying homes in currently depressed markets. But we do not really have a land shortage. Every major country of the world has abundant land in the form of farms and forests, much of which can be converted someday into urban land. Less than 1% of the earth's land area is densely urbanized, and even in the most populated major countries, the share is less than 10%. There are often regulatory barriers to converting farmland into urban land, but these barriers tend to be thwarted in the long run if economic incentives to work around them become sufficiently powerful... Despite a huge twenty-first century boom in cropland prices in the U.S. that parallels the housing boom of the 2000s, the average price of a hectare of cropland was still only $6,800 in 2008, according to the U.S. Department of Agriculture, and one could build 10-20 single-family houses surrounded by comfortable-sized lots on this land, or one could build an apartment building housing 300 people. Land costs could easily be as low as $20 per person, or less than $0.50 per year over a lifetime. Of course, such land may not be in desirable locations today, but desirable locations can be created by urban planning. Many people seem to think that the U.S. experience is not generalizable, because the U.S. has so much land relative to its population...But, to the extent that the products of land (food, timber, ethanol) are traded on world markets, the price of any particular kind of land should be roughly the same everywhere...Shortages of construction materials do not seem to be a reason to expect high home prices, either. For example, in the U.S., the Engineering News Record Building Cost Index (which is based on prices of labor, concrete, steel, and lumber) has actually fallen relative to consumer prices over the past 30 years. To the extent that there is a world market for these factors of production, the situation should not be entirely different in other countries."
(Nod to Kevin L, who doesn't need land. He has evolved into pure energy, and exists in the atmosphere)
Robert Shiller, The Economists' Voice, July 2009
"Many people all over the world seem to have thought that since we are running out of land in a rapidly growing world economy, the prices of houses and apartments should increase at huge rates. That misunderstanding encouraged people to buy homes for their investment value - and thus was a major cause of the real estate bubbles around the world whose collapse fueled the current economic crisis. This misunderstanding may also contribute to an increase in home prices again, after the crisis ends. Indeed, some people are already starting to salivate at the speculative possibilities of buying homes in currently depressed markets. But we do not really have a land shortage. Every major country of the world has abundant land in the form of farms and forests, much of which can be converted someday into urban land. Less than 1% of the earth's land area is densely urbanized, and even in the most populated major countries, the share is less than 10%. There are often regulatory barriers to converting farmland into urban land, but these barriers tend to be thwarted in the long run if economic incentives to work around them become sufficiently powerful... Despite a huge twenty-first century boom in cropland prices in the U.S. that parallels the housing boom of the 2000s, the average price of a hectare of cropland was still only $6,800 in 2008, according to the U.S. Department of Agriculture, and one could build 10-20 single-family houses surrounded by comfortable-sized lots on this land, or one could build an apartment building housing 300 people. Land costs could easily be as low as $20 per person, or less than $0.50 per year over a lifetime. Of course, such land may not be in desirable locations today, but desirable locations can be created by urban planning. Many people seem to think that the U.S. experience is not generalizable, because the U.S. has so much land relative to its population...But, to the extent that the products of land (food, timber, ethanol) are traded on world markets, the price of any particular kind of land should be roughly the same everywhere...Shortages of construction materials do not seem to be a reason to expect high home prices, either. For example, in the U.S., the Engineering News Record Building Cost Index (which is based on prices of labor, concrete, steel, and lumber) has actually fallen relative to consumer prices over the past 30 years. To the extent that there is a world market for these factors of production, the situation should not be entirely different in other countries."
(Nod to Kevin L, who doesn't need land. He has evolved into pure energy, and exists in the atmosphere)
RTL-Day Minus 6 (continued)--Datelines and Separated at Birth
One of the cool things about Samoa is the fact that you can travel to yesterday just by going a few hundred miles. Consider the map: 
Notice that if you fly (or swim, if you swim fast) from Tonga to Samoa, you go from today back to yesterday.
Samoa: The last place on earth where it is today.
The reason that this is important is that the Prime Minister announced today that the protesters' last appeal is rejected.
Which reminds me: Consider this "separated at birth" sequence. Is it just me, or are these guys related?
Notice that if you fly (or swim, if you swim fast) from Tonga to Samoa, you go from today back to yesterday.Samoa: The last place on earth where it is today.
The reason that this is important is that the Prime Minister announced today that the protesters' last appeal is rejected.
Which reminds me: Consider this "separated at birth" sequence. Is it just me, or are these guys related?
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