Celtics surprisingly remain the NBA favorite

I don't think they are this good. But the Sam Cassell squawk is giving this contract some legs.

DISCLOSURE: I am long NBA.CELTICS

2008 Recession Contracts tanking with the stock market

DISCLOSURE: I am short US.RECESSION.08

Chris Masse picks on Don Luskin

and gets a can of whoopass opened in his face.

Anyone who can bring Paul Krugman into shock simply by asking him for an autograph at a book signing, needs to be picked on with caution.

Chris, I tried to warn you.

Unintended Consequences of sending doctors to medical school

reports Elizabeth Redden:

The longitudinal study finds significant decreases in “vicarious,” or emotionally driven, empathy, during the course of medical education. Significant drops happen after the first year and after the third, clinical year when “students,” the article notes, “were seeing patients they had, presumably, looked forward to helping.” (The drop at that point of first patient contact in the third year is particularly concerning, the lead author, Bruce W. Newton, said in an interview Thursday).

“The significant decrease in vicarious empathy is of concern, because empathy is crucial for a successful physician-patient relationship,” says the study, authored by Newton, Laurie Barber, James Clardy, Elton Cleveland, and Patricia O’Sullivan. All are from the University of Arkansas for Medical Sciences, except O’Sullivan, of the University of California at San Francisco.

“Empathy is one of the most highly desirable professional traits that medical education should promote, because empathic communication skills promote patient satisfaction and adherence to treatment plans while decreasing the likelihood of malpractice suits. Patients view physicians who possess the quality of emotional empathy as being better caregivers.”

(Via Tyler Cowen)

Previous UC installment here.

How $5 million in lobbying can cost taxpayers $19 million, and heart patients $1 billion

Timothy Carney reports:

The narrowly tailored provision, first added to the bill by Sen. Edward Kennedy, D-Mass., is the fruit of an impressive $4.6 million lobbying campaign featuring an all-star cast of former lawmakers and government officials from both parties.

Medicines Company, or MDCO, a pharmaceutical maker, has dispatched this full-court lobbying press in hopes of extending by 56 months its patent on a heart medication, preventing competition from generics in that period and boosting company earnings by $1 billion. To this end, the company’s lobbyists have crafted a change to patent law that would apply, in fact, only to MDCO.

The story line begins Dec. 15, 2000, when the Food and Drug Administration approved sale of Angiomax, the prescription heart medication on which MDCO held the patent. Because the FDA approval process took some time, MDCO was entitled to a 56-month extension of its Angiomax patent past the March 2010 expiration. However, MDCO didn’t apply for this extension until Feb. 14, 2001, 61 days after FDA approval, and thus one day past the deadline clearly set in law for such applications.

This meant generic versions of Angiomax would hit shelves in 2010 rather than in 2014 — good news for Angiomax patients and generic drugmakers, but bad news for MDCO. That one-day tardiness cost the company an estimated $500 million to $1 billion. MDCO begged for forgiveness, but the law doesn’t grant the U.S. Patent and Trademark Office any flexibility when it comes to this deadline.

Rather than forgo half a billion dollars, MDCO did what any company in its position would do — it started lobbying Congress to change the law. MDCO, however, assembled an unusually impressive lineup of lobbyists. The company hired at least eight lobbying firms and retained the biggest names available.

(via John Carney)

Why Andrew Clavell should be read (and Nouriel Roubini ignored)

Clavell's American Civil War:

The American householder is at war with the financial services industry. At stake, around two trillion dollars. At least, this is the inevitable conclusion if one accepts at face value Nouriel Roubini's recent testimony to Congress. This testimony rehearses the Professor's well publicised conviction in a doomsday scenario and concludes with dire forecasts:

"So let us consider the implications for the household sector of price declines of the order of 20 to 30%. The math is simple as I will flesh out in this note: 10 to 15 million households will end up in negative equity territory and will be likely to default on their homes and walk away from them. Then, the losses for the financial system from these massive defaults will be of the order of $1 trillion to $2 trillion"

Uh huh. 15 million households. Let's see - there are some 116m households in the US population of 303m. So sometime soon, Roubini expects 13% of them will be in the market for a U-Haul truck, cardboard boxes and a decent brazier against which to warm their hands under the arches. Steady on, chap. This isn't Darfur we are talking about. I'll keep it simple - where will these people go? Hmm, hang on, I just noticed something: 15m households on the street, and 15m empty homes.

Yet if Roubini is correct, who is having the last laugh here? None other than the 13% of underwater, insolvent, speculative households presently dialling 1-800-GO-U-HAUL. They have nothing more to lose; they cannot be compelled to pay without the means to pay. They have even managed, somehow, to destigmatise the concept of reneging on a mortgage. I don't doubt that there are presently some terrible hardship stories out there, but ultimately the cavalry will come. They will have their aspirational homes in the end - they just won't have had to work for them and pay for them.

Unintended Consequences in California's "tough" three-strikes-and-you're-out criminal laws

pointer from Greg Mankiw:

A new paper by Radha Iyengar on three-strikes-and-you're-out sentencing in California shows that crminals respond to incentives, sometimes in unintended ways:

I estimate that Three Strikes reduced participation in criminal activity by 20 percent for second-strike eligible offenders and a 28 percent decline for third-strike eligible offenders. However, I find two unintended consequences of the law. First, because Three Strikes flattened the penalty gradient with respect to severity, criminals were more likely to commit more violent crimes. Among third-strike eligible offenders, the probability of committing violent crimes increased by 9 percentage points. Second, because California's law was more harsh than the laws of other nearby states, Three Strikes had a "beggar-thy-neighbor" effect increasing the migration of criminals with second and third-strike eligibility to commit crimes in neighboring states.

Previous UC installment here.

Quote of the day

Most workers seem to have little knowledge of how much after-tax wages they are forgoing in exchange for their employer-provided health insurance. One result of this is less pressure for efficiency in the health sector. Indeed, given the apparent size of inefficiencies in health care, it may turn out that one of the biggest distortions from the tax code occurs through this channel.--Peter Orszag

Another episode of Bikini Statistics

courtesy of Russell Roberts:

Martin Brock, in response to this post, writes:

Still, the median debt is up 151% since 1989, adjusted for inflation, and if the "wealth effect" theory of the personal saving rate is correct, much of this increase is consumer debt (the cars and such). I don't see how the clarification makes this increase any less gloomy. Maybe it's not very gloomy at all, but if it's gloomy before the clarification, it's still gloomy after.

It's funny how numbers can be used to scare and mislead. One hundred and fifty one percent seems like a big increase. But the size of that number tells you nothing. It does sound scary. But it tells you nothing. Nothing. All it tells you is that in 1989, the median family with debt had debt of 22,000. In 2004, the median family with debt had debt of 55,000. Good or bad news? You can't tell. It tells you nothing by itself. It could mean people are living more and more beyond their means. It could mean that people have more wealth and income and are buying bigger houses and nicer cars. There is nothing inherently gloomy or cheerful until you know more information.

The fact that net worth is up from 68,000 to 93,000 makes it more likely that it's cheery. But let's look a little deeper. Here's another chart from the Federal Reserve Board's Survey of Consumer Finances, the source of all of these data:

Look at the line called Goods and Services. Flat. That's trying to measure people living beyond their means, using debt to buy furniture, food and so on. That's the line the Washington Post should have used to look at whether debt was being used for what the article called "day-to-day expenses." What this chart shows is that the increase in debt is due to people buying bigger houses and investing in a little more education.

The premise:

Statistics are like a bikini. What they present is suggestive, but what they conceal is vital--Aaron Levenstein

The previous BS installment here.

James Taranto points out that eloquence does not suggest sensibility

writing:

Obama's response to McCain, described in the same AP dispatch, makes even less sense:

"I do know that al-Qaida is in Iraq and that's why I have said we should continue to strike al-Qaida targets," he told a rally at Ohio State University in Columbus.

"But I have some news for John McCain," Obama added. "There was no such thing as al-Qaida in Iraq until George Bush and John McCain decided to invade Iraq. . . . They took their eye off the people who were responsible for 9/11 and that would be al-Qaida in Afghanistan, that is stronger now than at any time since 2001."

Obama said he intended to withdraw U.S. forces from Iraq "so we actually start going after al-Qaida in Afghanistan and in the hills of Pakistan like we should have been doing in the first place."

So let's see if we have this straight. Al Qaeda in Iraq isn't worth fighting because it wouldn't be there if it weren't for Bush and McCain. Obama is going to pull all U.S. troops out of Iraq to go fight in Afghanistan and Pakistan, although he will send them back to Iraq if al Qaeda are there, even though he now wants to withdraw notwithstanding al Qaeda's presence.

Yes, we can!

I pray that Bernanke has the courage of his previous inflation convictions

so says the WSJ:

Right on cue, the best indicators of inflation expectations hit new highs. Oil has surged past the once astronomical $100 mark and is now $102 a barrel; as recently as September, it was $70. Gold is nearly $975 an ounce, and the $1,000 threshold seems inevitable. The euro has broken $1.50 for the first time, while commodity prices in general are hitting record highs. These increases will roll through the rest of the economy and lift prices for food, energy, and countless other goods and services.

Call it the Bernanke reflation, though it's more precise to call it the Fed's second inflation gamble of the decade. The first was Alan Greenspan's roll of the dice from 2003-2005, keeping interest rates too low for far too long in the aftermath of the dot-com bust. That spurred the first boom in commodity prices, as well as the subsidy for debt that led to the housing bubble and the credit mania whose collapse we are now dealing with. Mr. Bernanke was a Fed Governor during much of that time, and he seems to have learned his lessons all too well. He's now going all-in for round two.

The people who aren't being fooled by all this are the American people. They don't pay their bills with "core" dollar bills, and they know those dollars buy less with each passing month. This explains their rising economic anxiety -- and anger -- better than trade or job losses do, especially since the job market has remained relatively healthy. Inflation is the great thief of the middle class, as even Americans who don't recall the 1970s are learning. With its all-in reflation bet, the Bernanke Fed is gambling with their money.

I said this back in September:

I think the best thing for Bernanke to do here is increase the rate by 25bps. When enough time passes, I suspect more people will agree with me. Inflation still looks like the greater threat.

Until August, it was a foregone conclusion that the target rate would remain above 5%. Shows what a lot of angst in the market can do. But like this piece says, I also think that the Fed needs to look in the mirror to see the biggest contributor to this current circumstance.

Our Worst Critics Prefer to Stay

Freakonomics awards the best six-word motto for the US:

As promised, we tallied the votes received in the first 48 hours after posting. There was a clear winner:

Our Worst Critics Prefer to Stay (194 votes)

Here are the runners-up:

Caution! Experiment in Progress Since 1776 (134)

The Most Gentle Empire So Far (64) votes

You Should See the Other Guy (38)

Just Like Canada, With Better Bacon (18)

I applaud your choice of winner, and I especially applaud “edholston,” the blog reader who wrote the motto. “Our Worst Critics Prefer to Stay” is, while perhaps not outrightly uplifting, a wonderfully concise acknowledgment of the paradox that a capitalist democracy inevitably is: a place that is often well worth complaining about, and which allows you to complain as loudly as you wish.

The ways William F. Buckley nurtured libertarianism

by Robert Poole:

Some commentators dubbed Buckley a "libertarian conservative," and in the broadest sense, I guess that was true. Though he seldom let National Review deviate from his own Catholic social issues positions (especially on banning abortion), Buckley courageously took a stance against drug prohibition, making common cause on that issue with Friedman and other libertarians. And that enlightened view seemed to survive Buckley's retirement as the magazine's editor in chief (as one hopes it will survive his demise).

And despite those Catholic social views, Buckley was always far more cosmopolitan and sophisticated about sex, drinking, dining, and other human pleasures than his fellow-travelers among today's religious right. That helped make Buckley-style intellectual conservatism more acceptable in salons, boardrooms, and the corridors of power. And the fact that William Buckley could maintain genuine friendships with people such as socialist John Kenneth Galbraith and gay anti-communist activist Marvin Liebman says a lot about his open-mindedness and tolerance.

There's a lot of good stuff out there, but this is the one I thought might resonate with those desiring freedom in markets.

UPDATE: Peggy Noonan's piece; she's pretty good at these reflections.

Quote of the 2008 Democratic Primaries

Having the middle name Hussein doesn’t make Obama any more a Muslim than having the middle name Jefferson made Clinton a strict constructionist.--Tzetzes, via Glenn Reynolds

Obama may be more a Bill Clinton than Jimmy Carter

Jon Henke reports:

Within the last month, a top staff member for Obama's campaign telephoned Michael Wilson, Canada's ambassador to the United States, and warned him that Obama would speak out against NAFTA, according to Canadian sources.

The staff member reassured Wilson that the criticisms would only be campaign rhetoric, and should not be taken at face value.

Late Wednesday, a spokesperson for the Obama campaign said the staff member's warning to Wilson sounded implausible, but did not deny that contact had been made.

"Senator Obama does not make promises he doesn't intend to keep," the spokesperson said.

Remember this gem:

The President," Stephanopolous said, "has kept all of the promises he intended to keep."

UPDATE: This is James Taranto's take:

Apparently the real enemy isn't Canada, it's cynicism.

What else should I expect from the UN

besides "all noise and no signal":

Glen Whitman writes,

suppose that a country currently provides everyone the same quality of health care. And then suppose the quality of health care improves for half of the population, while remaining the same (not getting any worse) for the other half. This should be regarded as an unambiguous improvement: some people become better off, and no one is worse off. But in the WHO index, the effect is ambiguous. An improvement in average life expectancy would have a positive effect, while the increase in inequality would have a negative effect. In principle, the net effect could go either way.

Almost two-thirds of the weight in the WHO index goes to these distributional factors. They focus more on inequality than on the absolute level of care received by the poor. In fact, if you dig deeply, what WHO is really measuring is not even inequality in terms of health services but just plain income inequality. Just having very rich people per se is enough to lower the quality of our health care system, according to WHO's methodology.

James Simons, (most successful trader ever?) profiled by the NY Times

here:

He was fired a few months later, in the spring of 1968, for talking with a reporter about his antiwar views. He still marvels that Stony Brook was willing to make him a department chairman that year, when he was just 30.

He left Stony Brook in 1976, he said, because he had been struggling with an unsolved problem for two years and was restless.

“Some money had come in from an investment,” he told The Times. “I invested that money, and it went very well. I thought, ‘Hey, I’ll try this.’ ”

Today, Renaissance Technologies does more than well, running a fund for its employees of nearly $9 billion, as well as two funds with about $25 billion for outside investors.

So does the Simons Foundation, his private philanthropy, which this year will give about $80 million in grants, many to universities, but most hewing closely to Mr. Simons’s primary interests, math and autism. (One of his daughters is mildly autistic.) “It’s all for very basic research,” he said.

Quote of the day

As the Democratic contest continues, it is becoming a race to the bottom on protectionism. Perhaps the best trade demagogue will win, but someone should point out that the last President who tried to govern as a protectionist was Herbert Hoover. It didn't turn out so well.--WSJ editorial board

A tie:

Democrats cannot simultaneously talk about improving America's standing abroad while acting like a belligerent unilateralist when it comes to trade policy.--Daniel Drezner, via Greg Mankiw

Quote of the day

Success is when all the right people hate you.--Ed Morrisey

The latest example of Nothing New Under The Sun

Both Democratic presidential candidates, who promise to curb the influence of corporate lobbyists in Washington, helped enact narrowly tailored tax breaks sought by major campaign contributors. (via Glenn Reynolds).

UPDATE: Also via Instapundit, proof that Obama could be Jimmy Carter redux.

Obama is NOT listening to his economic advisors

Hence, the job-killing Patriot Employer Act he is sponsoring:

Mr. Obama's proposal would designate certain companies as "patriot employers" and favor them over other, presumably not so patriotic, businesses.

The legislation takes four pages to define "patriotic" companies as those that: "pay at least 60 percent of each employee's health care premiums"; have a position of "neutrality in employee [union] organizing drives"; "maintain or increase the number of full-time workers in the United States relative to the number of full-time workers outside of the United States"; pay a salary to each employee "not less than an amount equal to the federal poverty level"; and provide a pension plan.

In other words, a patriotic employer is one which fulfills the fondest Big Labor agenda, regardless of the competitive implications. The proposal ignores the marketplace reality that businesses hire a work force they can afford to pay and still make money. Coercing companies into raising wages and benefits above market rates may only lead to fewer workers getting hired in the first place.

Under Mr. Obama's plan, "patriot employers" qualify for a 1% tax credit on their profits. To finance this tax break, American companies with subsidiaries abroad would have to pay the U.S. corporate tax on profits earned abroad, rather than the corporate tax of the host country where they are earned. Since the U.S. corporate tax rate is 35%, while most of the world has a lower rate, this amounts to a big tax increase on earnings owned abroad.

Put another way, U.S. companies would suddenly have to pay a higher tax rate than their Chinese, Japanese and European competitors. According to research by Peter Merrill, an international tax expert at PriceWaterhouseCoopers, this change would "raise the cost of capital of U.S. multinationals and cause them to lose market share to foreign rivals." Apparently Mr. Obama believes that by making U.S. companies less profitable and less competitive world-wide, they will somehow be able to create more jobs in America.

He has it backwards: The offshore activities of U.S. companies tend to increase rather than reduce domestic business. A 2005 National Bureau of Economic Research study by economists from Harvard and the University of Michigan found that more foreign investment by U.S. companies leads to greater domestic investment, and that U.S. firms' hiring of more offshore workers is positively, not negatively, associated with the number of American workers they hire. That's in part because often what is produced overseas by subsidiaries are component parts to final, higher-value-added products manufactured here.

It's all about Ohio in this election; if the Democrats can take this state they will have the election nearly locked up. Bush similarly pandered with his steel tariffs. The distortions of democracy in America (e.g. subsidizing corn ethanol ahead of the Iowa caucuses) lead to job destruction, ironically in the name of job protection.

UPDATE: Greg Mankiw, William Buiter, and Anne Sibert hate it, too.

UPDATE: Don Boudreaux notes Obama's deaf ear to his economic advisors as well, and invokes the concept of Consumer Sovereignty (hear ye, those of you who are "pro-choice"):

There are countless distressing facets of this anti-trade nonsense. One of these is the weaselly "I'm for free trade as long as it's fair trade" refrain. Such a claim (now as familiar in political campaigns as Dunkin' Donuts) is a cowardly attempt by the candidate to stand on both sides of the issue by invoking a word ("fair") loaded with emotion but devoid, in this context, of meaning. No one, as far as I know, favors unfair trade -- but by slapping the label "unfair" on any trade that a candidate's favorite constituents dislike, that candidate can oppose free trade while claiming still to support free trade.

Such a rhetorical gimmick is unfair.

Also distressing is the fact that Austan Goolsbee, the fine economist who is a close adviser to Obama, apparently is ignored by the would-be President of the USA on this front. Of course, I have no knowledge of what Goolsbee says and doesn't say to Obama, but I presume that Goolsbee isn't in the anti-trade camp. Consider that just this past June Goolsbee had this excellent column in the New York Times, with this key passage:

We [Americans] hate experiencing major adjustments and industry transformations that force people to look for new jobs. That experience has made many skeptical about the future of the United States in the world economy. Yet the evidence seems to show that for all our dissatisfaction, we are the most flexible economy around and may be best poised to take advantage of the coming changes on a global scale precisely because we are so good at adjusting.

A related source of distress is Alan Blinder's recent skepticism of trade -- his lending his good name and the prestige of the economics profession to protectionists.

Trade is just one manifestation of consumer sovereignty. Just as there are, by Blinder's calculus, winners and losers from consumers shifting their expenditures from goods made in America to goods made abroad, there are winners and losers from consumers shifting their expenditures from goods made in Illinois to goods made in Arizona - and from consumers shifting their expenditures from donuts, beef, cigarettes, whiskey, and train travel to bagels, fish, yoga lessons, wine, and air travel. Trade plays no unique, or uniquely important, role as an avenue of economic change spurred in part by consumer sovereignty. The only practical way to rid the economy of such "loses" is to try to freeze it, a futile step that will in the long-run only make losers of everyone.

UPDATE: Jagdish Bhagwati supports Obama yet says:

On NAFTA, he is dead wrong.

UPDATE: He needs some constitutional advisors, too. This pretty much takes away my perceived edge that Obama and Clinton each had over McCain. We haven't even voted, and I'm already depressed.

The latest episode of Bikini Statistics

here:

Nobody, or very very few, would notice that this model is completely made up. The reason is that, in real life, each of these x’s would have a name attached to it. If, for example, y was the amount spent on travel in a year, then some x’s might be x7=”married or not”, x21=”number of kids”, and so on. It is just too easy to concoct a reasonable story after the fact to say, “Of course, x7 should be in the model: after all, married people take vacations differently than do single people.” You might even then go on to publish a paper in the Journal of Hospitality Trends showing “statistically significant” relationships between being married and travel model spent.

And you would be believed.

I wouldn’t believe you, however, until you showed me how your model performed on a set of new data, say from next year’s travel figures. But this is so rarely done that I have yet to run across an example of it. When was the last time anybody read an article in a sociological, psychological, etc., journal in which truly independent data is used to show how a previously built model performed well or failed? If any of my readers have seen this, please drop me a note: you will have made the equivalent of a cryptozoological find.

Incidentally, generating these spurious models is effortless. I didn’t go through 100s of simulations to find one that looked especially misleading. I did just one simulation. Using this stepwise procedure practically guarantees that you will find a “statistically significant” yet spurious model.

This sort of thing is why we're barraged with studies showing that almost everything will kill you--no, wait! they'll make you live forever!

Original BS quote here.

Quote of the day

History doesn't repeat itself, but it sure does rhyme.--Mark Twain

McCain understands that subsidies are bad, better than Obama does

I made this observation about the candidates' respective constitutional understanding here.

But when it comes to ethanol subsidation (which can increase death via higher global warming than gasoline, plus starvation due to crop diversions to ethanol away from feeding people), McCain looks like the better:

David Brooks reports:

In 2000, McCain ran for president and reiterated his longstanding opposition to ethanol subsidies. Though it crippled his chances in Iowa, he argued that ethanol was a wasteful giveaway. A recent study in the journal Science has shown that when you take all impacts into consideration, ethanol consumption increases greenhouse gas emissions compared with regular gasoline. Unlike, say, Barack Obama, McCain still opposes ethanol subsidies.

UPDATE: Megan McArdle nails it on Obama's economic advisors:

The differences between Obama's team and McCain are also stark, but in a different way: his advisors are more technocrat than Ideologue.

If Obama's team has a fault, it is that they spend far too much time saying "Don't listen to him--listen to us!"

The 3 I's: IQ, Income, and Immigration

Bryan Caplan points this out:

Check out Garett Jones' new working paper, "An Explanation for Cross-country Income Differences." His motivation: Previous research indicates that within countries, 1 point of IQ raises wages by about 1%, but across countries, 1 point of IQ raises wages by about 6%. Jones builds a compelling (if stylized) model that is perfectly consistent with this result:

I contend that the average wage within a given country is pinned down by the productivity of its best workers in a Kremer-style (1993) “O-ring” sector. In this sector, high-skilled workers perform tasks that depend on strategic complementarities in production.

Other less-skilled workers in that same country ... can work in a conventional, diminishing-returns-to-labor “Foolproof” sector, earning only slightly less than the high-skilled workers in their own country. The key assumption of this model is that the wage of high-skilled workers must be equal across the two sectors, a simple invocation of the law of one price.

But across countries, a nation whose best workers are slightly lower in quality will be much less productive, since it means that workers in that nation’s “O-ring” or “weak link” sector will produce much less.

Long story short: Low-IQ immigrants do not reduce the productivity of high-IQ natives - any more than short immigrants reduce the height of tall natives. (See here for further discussion). IQ research has often been a rationalization for immigration restrictions, but that's largely because few psychometricians understand the principle of comparative advantage.

Intrade predicts Oscar winners accurately

over at Felix Salmon's:

How did InTrade do at the Oscars? Pretty well, it turns out. All the favorites - anybody trading above say 65 - won in their category. Immediately before the announcements were made, No Country For Old Men was trading in the low 70s for Best Picture, and the high 70s for Best Director. Javier Bardem and Daniel Day-Lewis were trading in the low 90s for Best Supporting Actor and Best Actor respectively.

Cotillard was not an upset so much as a comfortable second-favorite (Christie was trading in the mid 50s), while in the Best Supporting Actress category the InTraders seemed to be convinced it would either be Cate Blanchett (mid 40s) or Amy Ryan (around 30). And even Ruby Dee was trading at higher levels than Swinton.

So the Upset of the Night award, I think, has to go to the fabulous Tilda Swinton. In her honor, it's worth quoting some of her acceptance speech:

George Clooney, you know, the seriousness and the dedication to your art, seeing you climb into that rubber bat suit from "Batman & Robin," the one with the nipples, every morning under your costume, on the set, off the set, hanging upside-down at lunch, you rock, man.

If we'd known she had that speech lined up, I'm sure she would have been trading much higher.

Update: James Surowiecki notes in the comments that the play-money Hollywood Stock Exchange beat out InTrade in this instance. Conventional wisdom holds that prediction markets work much better when real money is at stake; that certainly wasn't the case here.

My retort to Surowiekci: Any given Sunday, James, any given Sunday.

Prediction markets for religious trends?

Might be interesting:

The survey, of 35,000 adults by telephone, offers an unusually comprehensive picture of faith among the nation's 225 million adults. This is in part because of the sheer number of people who answered questions, especially about their childhood religious affiliation. Several of the findings echo those of earlier studies, including the precipitous drop in mainline church membership and the rise in membership in nondenominational churches, the majority of which are evangelical Protestant churches.

Scholars say the Pew survey's most surprising finding is the fluidity of religious preference. The study found that 44% have left the faith in which they were raised, including Protestants who now practice another form of Protestantism and people who no longer worship at all. Sixteen percent of adults say they are unaffiliated with any religion -- including those who describe themselves as atheists, agnostics and "nothing in particular." That is double the number surveyed who say they were raised unaffiliated -- a trend noted by other religion surveys.

"Every single group in this country loses members at a considerable rate," says Luis E. Lugo, director of the Pew Forum, which conducted the study, part of the nonprofit Pew Research Center in Washington. "It is a highly competitive religious marketplace."

Protestants accounted for about two-thirds of the population in the 1970s and 1980s. Now, they make up about 51%, the Pew survey found. And of the Protestants, a quarter belong to an evangelical church, while 18% belong to a mainline church, such as Episcopal. The decline has been confirmed by other surveys of Protestants.

Unintended Consequences in bond market regulation

in today's WSJ:

What happens when the feds license only a few companies to provide a service, and then require investors to buy that service?

For the answer, take a look at the mess in today's bond market, where investors have been hanging on whether the main government-appointed credit rating agencies -- Standard and Poor's and Moody's -- would downgrade bond insurers MBIA and Ambac. Equities rallied yesterday when the agencies maintained their AAA ratings.

By now no one should care what the rating agencies think, but the problem is that by law we have to care. Since 1975, the Securities and Exchange Commission has limited competition in the market for credit ratings by anointing only certain firms as "Nationally Recognized Statistical Rating Organizations" (NRSROs). A 2006 law has begun to lead to faster approvals of new entrants, but this follows decades of protection for the incumbent firms.

Over time, federal and state laws and regulations have explicitly required NRSRO-rated securities to be held by money market funds, insurers and others. This in turn has created the impression that these ratings are something more than merely financial opinions, which are often less informed than opinions you can read in a newspaper. Every state and federal legislator eager to avoid a repetition of the subprime crisis should begin excising the term NRSRO from statutes and regulations.

This process has begun at the SEC.

Not surprisingly, the rating agencies are coming up with their own ideas for "reform," none of which seem to include more competition. In its 27-point proposal, S&P suggests more training for its analysts, better review of analytical models, and better disclosure of a security's collateral -- all welcome changes, but remember that Moody's and S&P also suggested reforms after the Enron rating debacle.

No doubt S&P and Moody's would love Congress to add rules that raise the cost of entry for new competitors. If Congress takes this bait, it will repeat the mistakes of Sarbanes-Oxley. "Reform" of the accounting industry ended up being a gold mine for the very auditing firms that Congress wanted to punish, as a few megafirms thrive in a more regulated market. The key to better ratings is for Congress to make the rating agencies compete in a market where no one is required to hire them.

UPDATE: Jesse Eisinger and Felix Salmon have more:

Why did Moody's do all that work over ten years to come up with the muni/corporate ratings equivalence and not move munis onto the regular scale? When I asked Moody's they said that the market likes to have fine distinctions in their muni ratings. Ok, so why does muni bond insurance need to exist, which makes every insured bond Triple A? Because, Moody's told me, the market likes the "commoditization" in the ratings that bond insurance brings. Hmmm. So which is it?

Previous UC installment here.

Obama can inspire, but can he lead?

That has been my question for awhile now. I donated to his Senate campaign after his 2004 DNC speech, which is the first and only time I have contributed to any Senate campaign (and I live in NY).

Stephen Hayes thinks Obama could be like Reagan:

Throughout his campaign, Reagan fought off charges that his candidacy was built more on optimism than policies. The charges came from reporters and opponents. John Anderson, a rival in the Republican primary who ran as an independent in the general election, complained that Reagan offered little more than "old platitudes and old generalities."

Conservatives understood that this Reagan-as-a-simpleton view was a caricature (something made even clearer in several recent books, particularly Reagan's own diaries). That his opponents never got this is what led to their undoing. Those critics who giggled about his turn alongside a chimp were considerably less delighted when Reagan won 44 states and 489 electoral votes in November.

Are Republicans making the same mistake with Barack Obama?

For months now, Hillary Clinton has suggested that Mr. Obama is all rhetoric, no substance. This claim, or some version of it, has been at the center of her campaign since November. One day after losing to him in Wisconsin and Hawaii -- her ninth and tenth consecutive defeats -- she rather incredibly went back to it again. "It's time we moved from good words to good works, from sound bites to sound solutions," she said -- a formulation that could be mistaken for a sound bite.

As she complained about his lack of substance, tens of thousands of people lined up in city after city, sometimes in subfreezing temperatures, for a chance to get a shot of some Mr. Obama hopemongering. Plainly, her critique is not working.

This part of Hayes' piece leads me to believe that Obama understands the Constitution better than McCain:

At Cornell College on Dec. 5, for example, a student asked Mr. Obama how his administration would view the Second Amendment. He replied: "There's a Supreme Court case that's going to be decided fairly soon about what the Second Amendment means. I taught Constitutional Law for 10 years, so I've got my opinion. And my opinion is that the Second Amendment is probably -- it is an individual right and not just a right of the militia. That's what I expect the Supreme Court to rule. I think that's a fair reading of the text of the Constitution. And so I respect the right of lawful gun owners to hunt, fish, protect their families."

Then came the pivot:

"Like all rights, though, they are constrained and bound by the needs of the community . . . So when I look at Chicago and 34 Chicago public school students gunned down in a single school year, then I don't think the Second Amendment prohibits us from taking action and making sure that, for example, ATF can share tracing information about illegal handguns that are used on the streets and track them to the gun dealers to find out -- what are you doing?"

In conclusion:

"There is a tradition of gun ownership in this country that can be respected that is not mutually exclusive with making sure that we are shutting down gun traffic that is killing kids on our streets. The argument I have with the NRA is not whether people have the right to bear arms. The problem is they believe any constraint or regulation whatsoever is something that they have to beat back. And I don't think that's how most lawful firearms owners think."

DISCLOSURE: I'm long 2008DEM.NOM.OBAMA, and short 2008.PRES.OBAMA.

UPDATE: Greg Mankiw worries, too.

The visual answer to Buster et nygiantsuc question tonight in the TS pit

Tennessee upsets Memphis on Saturday

and is now top ranked in the country.

The contract is trading pretty cheap, as Memphis, NC, Duke, UCLA and Kansas are all trading over 10.0.

DISCLOSURE: I am long NCAABK.TENNESSEE and NCAABK.DUKE, and short NCAABK.MEMPHIS, NCAABK.NORTHCAROLINA, NCAABK.UCLA and NCAABK.KANSAS.

Markets beat journalists, again

This episode is brought to you by Larry Ribstein, on the Take-Two offer.

Unintended Consequences of gun buybacks

includes increasing the number of guns in circulation:

Oakland's recent gun buyback was especially ridiculous. The police offered up to $250 for a gun "no questions asked, no ID required." The first people in line? Two gun dealers from Reno with 60 cheap handguns. Fortunately the buyback did manage to get some guns off the street, too bad they were turned in by a bunch of senior citizens from an assisted living facility. Whew, the streets are safe at last.

Even putting aside the obvious nonsense, gun buybacks simply don't work. In technical terms the supply of guns to Oakland is perfectly elastic so buybacks won't reduce the number of guns in Oakland. Here is an analogy from my op-ed in the Oakland Tribune.

Imagine that instead of guns, the Oakland police decided, for whatever strange reason, to buy back sneakers. The idea of a gun buyback is to reduce the supply of guns in Oakland. Do you think that a sneaker buyback program would reduce the number of people wearing sneakers in Oakland? Of course not.

All that would happen is that people would reach into the back of their closet and sell the police a bunch of old, tired, stinky sneakers.

Gun buybacks won't reduce the number of guns in Oakland. In fact, buybacks may increase the number of guns in Oakland.

Imagine that gun dealers offered a guarantee with every gun: Whenever this gun gets old and wears down, the dealer will buy back the gun for $250.

The dealer's guarantee makes guns more valuable, so people will buy more guns.

But the story is exactly the same when it's the police offering the guarantee. If buyers know that they can sell their old guns in a buyback, they are more likely to buy new guns. Thus the more common that gun buybacks become, the more likely they are to misfire....

Previous UC installment here.

Unintended Consequences of smoking bans

include increasing drunk driving fatalities (via Mark Perry):

One might expect that a ban on smoking in bars would deter some people from showing up, thereby reducing the number of people driving home drunk. But jurisdictions with smoking bans often border jurisdictions without bans, and some bars may skirt the ban, so that smokers can bypass the ban with extra driving. There is also a large overlap between the smoker and alcoholic populations, which would exacerbate the danger from extra driving. The authors estimate that smoking bans increase fatal drunken-driving accidents by about 13 percent, or about 2.5 such accidents per year for a typical county.

Previous UC installment here.

Only the latest in dirty government

in today's WSJ:

Should state Attorneys General be able to outsource their legal work to for-profit tort lawyers, who then funnel a share of their winnings back to the AGs? That's become a sleazy practice in many states, and it is finally coming under scrutiny -- notably in Mississippi, home of Dickie Scruggs, Attorney General Jim Hood, and other legal pillars.

We've recently examined documents from the AG's office detailing which law firms he has retained. We then cross-referenced those names with campaign finance records. The results show that some of Mr. Hood's largest campaign donors are the very firms to which he's awarded the most lucrative state contracts.

In 2007 alone Mr. Hood received some $790,000 from partners and law firms that have benefited financially from his office. That is more than half of all of Mr. Hood's itemized contributions for 2007.

This kind of quid pro quo is legal in Mississippi and most other states. However, if this kind of sweetheart arrangement existed between a public official and business interests, you can bet Mr. Hood would be screaming about corruption. Yet Mr. Hood and his trial bar partners are fighting even Mississippi's modest attempt to require more transparency in their contracts. The AG says it's all part of a plot to undermine his attempts to "recoup the taxpayers' money from corporate wrongdoers."

The real issue is the way this AG-tort bar mutual financial interest creates perverse incentives that skew the cause of justice. A decision to prosecute is an awesome power, and it ought to be motivated by evidence and the law, not by the profit motives of private tort lawyers and the campaign needs of an ambitious Attorney General. Government is supposed to act on behalf of the public interest, not for the personal profit of trial lawyers. The tort bar-AG cabal deserves to be exposed nationwide.

A history walk of a morphing kind

here (via Glenn Reynolds, who wonders if Vivian Leigh is the most beautiful)

LBJ lost the war on poverty

claims Jon Henke, and the graphical data he presents is compelling:

Yes, poverty did decline after the introduction of LBJ's War on Poverty....at about the same rate as it declined prior to the introduction of LBJ's War on Poverty.

And then it stopped declining in 1969. At about the same time welfare spending rocketed upward.

I am not suggesting there is a direct causal connection between increased welfare spending and stagnant poverty levels - perhaps there is, perhaps there isn't - but there's certainly more evidence for causality there than there is for causality between LBJ's relatively limited 64-65 programs and the decline in poverty that Krugman cited between 1963 and 1969.

There may be things that can be done to reduce the Poverty Rate in the United States - e.g., training and education - but government redistribution of wealth and welfare subsidies are not among them.

Terry Francona owns some pretty good baseball records

from ESPN:

His .710 winning percentage (22-9) in postseason games is the best in major league history among managers with at least 20 games. He also has the most World Series wins (eight) without a loss.

This was a nice "never-give-up" line:

Francona has come a long way since his four-year tenure as Philadelphia's manager, all losing seasons, from 1997-2000. Epstein studied that and decided that Francona had learned a lot from managing a team with mediocre talent.

"But for that experience in Philly, he wouldn't be the manager that he is today for us," Epstein said.

Tyler Cowen is unsure that carbon taxes will reduce carbon emissions

I think taxes will reduce emissions, but it is more of a faith thing in the face of Tyler's worries.

Mankiw nails universal health care

like a gold medal gymnast:

In any kind of national health system, some treatments will, by simple cost-benefit calculation, be deemed too expensive to provide to all citizens. But does that mean those of above-average income should be excluded as well? Should they lose basic benefits if they choose to pay for these marginal services with their own money?

If you say yes to this last question, as the U.K. health service has, here is a related one: Should a parent who hires an after-school tutor for his child be barred from sending the child to the public schools?

Some people like to think of health care and education of basic human rights. Maybe they are. But they are also normal goods. That is, the income elasticity of demand is positive. It is hard to escape the conclusion that the right cost-benefit calculation for providing the good depends on the income of the consumer.

Achieving both efficiency and equality in the provision of these goods is impossible. Dealing with this conflict will provide a major challenge to the political system in the years to come.

UPDATE: Steven Levitt nails education (hint, it's not about the kids):

A non-academic friend and I once had the idea of taking my cheating detection tools and turning them into a business to help school districts across the country. It turns out, however, that school districts don’t really want to catch cheaters. Cheating detection makes the districts’ test scores go down, and leads to problems with teachers’ unions. As such, no one wanted to buy our services.

Good NY Times journalism on the Farm Bill

Mark Perry rounds up NYT and Orlando Sentinel points:

3. Half the subsidies would go to farmers in just seven states producing a handful of crops — corn, cotton, rice, soybeans and wheat.

4. Two-thirds of the nation’s farmers would not benefit at all.

5. Subsidies will flow to farm families making as much as $2 million a year.

7. The largest commercial farmers reap the bulk of the subsidies, while most growers get little or nothing.

8. Subsidies spur overproduction, wasting resources and harming the environment.

9. They impede efforts to open more foreign markets to U.S. products.

10. Subsidies are especially uncalled for now, when biofuel demand has sent farmland values and crop prices soaring.

It's not nice to mess with constitutional rights

For instance, the right to free speech. Wouldn't you agree now, all these decades later and legislation with your name on it, Mr. McCain?

Yesterday, FEC Chairman David Mason said he still has questions about Mr. McCain's loan terms -- questions that need to be answered before the candidate will be allowed to drop out of the primary financing system and its restrictions. Adds Capital University Law Professor and Former FEC Chairman Brad Smith: "There is certainly an argument that what they did amounts to a pledge of the funds" as collateral. Either way, it appears that Mr. McCain has been employing lawyers to game the campaign finance rules he hails as a defense against "corruption."

Having decided not to accept public financing during the primary, the possibility of going up against Barack Obama in the general election is a different story. Mr. McCain insists he intends to take public financing, saying: "I made the commitment to the American people." And, by the way, he expects Mr. Obama to honor his earlier pledge to do the same. But, naturally, Mr. Obama is having second thoughts now that he's rolling in dough. (See "Obama's Cash Games")

Public funding was hatched in the 1970s and has now become one of those blind touchstones of "progressive" thinking. No matter how regularly its proponents are mugged by reality, they never give up. Running for President is a serious business, with millions of people devoting time and money to promoting the candidate of their choice. We suppose we can't blame Mr. McCain for trying to make the finance rules work for him, but it'd be nice if he finally admitted their embarrassing folly.

Department of Yuck or Blade Runner?

Me thinks Yuck Dept (via Freakonomics).

This election is getting weirder

all the time:

Hillary Clinton, later on in the same debate: "You know, the hits I've taken in life are nothing compared to what goes on every single day in the lives of people across our country."

Jack Stanton speech, in Primary Colors (New York: Random House, 1996), p. 162: "Y'know, I've taken some hits in this campaign. It hasn't been easy for me, or my family. It hasn't been fair, but it hasn't been anything compared to the hits a lot of you take every day."

Josh Marshall picked up on this as well:

9:46 PM ... That was an interesting final moment to end on for Hillary. Candy Crowley is on CNN now saying how it was a good connect moment for HIllary, which I suspect it may have been. But we all do remember that those words were borrowed from Bill Clinton's 1992 campaign, right?

John Henke on a compelling case why the NYT is unfair and unbalanced

here:

Fortunately, one Lefty blogger - Greg Sargent - stopped to think about what they were making a fuss about...

Let's try a little experiment. Let's take the meat of the big New York Times story and substitute the words "Dem Presidential Hopeful" for "John McCain" [...] If these words had appeared on the front page of The New York Times, wouldn't we all be yelling and stamping our feet about "panty sniffing" and condemning the use of anonymous sources who suggest a possible affair that may or may not have happened and wasn't directly alleged by anyone?

That's a sincere question. Wouldn't we?

The answer is "Yes, the Left would." Come on, do you even need to ask? Am I the only one who remembers...

• ...2004, when John Kerry was accused of having an affair.



• ...2007, when John Edwards was accused of having an affair.

In both cases, the Leftosphere was apoplectic. Media Matters ran multiple attacks on anybody who dared to discuss the 2007 allegations. Slate and Mickey Kaus were attacked by Lefty bloggers for mentioning the story, with some even pushing to have Kaus fired. In both 2004 and 2007, the Leftosphere was outraged - outraged, I tell you! - that people would cover these "sleazy whispering campaign" allegations.

Today, they're covering the vague allegations. Enthusiastically.

So this is the pattern:

• Thinly-sourced, unconfirmed 2004 rumor that a Democrat may have had an affair: the mainstream media won't cover it, and the Left bulldozes those who mention it.



• Thinly-sourced, unconfirmed 2007 rumor that a Democrat may have had an affair: the mainstream media won't cover it, and the Left bulldozes those who mention it.



• Thinly-sourced, unconfirmed 2008 rumor that a Republican may have had an affair: Front page of the New York Times

UPDATE: Gabriel Sherman has more here (via Ann Althouse):

The publication of the article [on John McCain] capped three months of intense internal deliberations at the Times over whether to publish the negative piece and its most explosive charge about the affair. It pitted the reporters investigating the story, who believed they had nailed it, against executive editor Bill Keller, who believed they hadn't. It likely cost the paper one investigative reporter, who decided to leave in frustration

Is cheating good for sports?

asks Stephen Dubner.

My answer is a definitive 'NO', as this erodes trust in the prediction markets, and therefore, erodes the markets themselves.

I don't think Dubner trades Tradesports as frequently as his co-blogger does.

Analogy of the day

Hillary :: Garfield, as Obama :: Nermal.

Quote of the day

McCain strikes me as a fundamentally honorable guy . . . so honorable that he doesn't realize when he's getting himself in a mess. Most politicians would do the risky things, but take more care not to get caught. I'm not sure whether this is a feature or a bug.--Megan McArdle

I disagree with Calculated Risk that unemployment claims suggest recession

CR makes it's case here, and provides the following graph:


But when I look at the graph, it looks like the 350,000 level was breached in every year on the graph except 1999 and 2000, which I would argue are the most distortionary years on the graph, due to the height of the tech bubble.

DISCLOSURE: I am short US.RECESSION.08

Russell Roberts on economic growth and prosperty

and fisking Harold Myerson along the way:

Harold Meyerson thinks we've become a nation of shoppers rather than a nation of producers:

If 19th-century England was a nation of shopkeepers, the United States today is a nation of shoppers, and our role in the world economy is to buy what other countries -- or U.S.-based corporations with factories in other countries -- make. It was not ever thus. In the four decades following World War II, our largest employer was General Motors; for the past decade, it's been Wal-Mart.

It's a fact. Sort of. Actually, the federal government is the largest employer—1.7 million employees and that excludes the Post Office. Does that mean we've become a nation of bureaucrats because a little over 1% of all employees work for the government? Does it mean we're on a perilous downward path where instead of making things, we regulate things? That would be a silly statement. It is equally silly to conclude that because Wal-Mart is the largest private employer we've stopped making things.

And as it turns out, we do make a lot of stuff here in the United States. Manufacturing output is dramatically greater today than 30 or 40 or 50 or 60 years ago, the halcyon era that Meyerson imagines once existed. Manufacturing output has almost tripled since 1970. What has happened over the last 60 years is that productivity in the manufacturing sector has increased greatly. That has allowed the US manufacturing sector to produce a lot more stuff with roughly the same or even a declining number of employees.

Wal-Mart is a red herring. It's success hasn't come at the expense of the manufacturing sector. The trends in the manufacturing sector go back 60 years, long before Wal-Mart existed.

Meyerson's solution to our alleged economic crisis is to elect either Hillary or Obama:

One of the crucial differences between the two parties this year is that Hillary Clinton and Barack Obama have both revived the idea of a national industrial strategy -- better late than never -- while John McCain still acts as if banks and corporations, left to their own devices, would revive our economy through their investments. Problem is, we've left banks and corporations to their own devices for decades, and they've funded the rise of low-wage, high-profit East Asia . Nonetheless, McCain calls for across-the-board corporate tax cuts, though that money may well be bound for Shanghai. Clinton and Obama, by contrast, call for the public sector to take up the slack created by the private sector's reluctance to invest in the United States.

Ah, that's the ticket. Let's try the Japanese economic strategy. And what does he mean by the private sector's reluctance to invest in the United States? Everybody wants to invest in the United States. Foreign governments, foreign investors, American investors and American companies. The money flows in because the United States is the most productive economy on the face of the earth. Would someone let Harold Meyerson in on this secret?

The UN censors Internet content?

Story here (via Glenn Reynolds).

I didn't imagine the UN would get worse than propping up dictators.

Missing ice found (actually the ice caps were never lost)?

Another global warming myth possibly busted:

It was feared that the polar caps were vanishing because of the effects of global warming.

But figures from the respected US National Oceanic and Atmospheric Administration show that almost all the “lost” ice has come back.

Ice levels which had shrunk from 13million sq km in January 2007 to just four million in October, are almost back to their original levels.

Figures show that there is nearly a third more ice in Antarctica than is usual for the time of year.

Probably busted; whether you agree or disagree, please go trade at the Global Warming Exchange.

Zogby has gone dark on state primary polling

since February 5. Remind me to use Rasmussen next time.

I'm calling the contest for Intrade; which was much more predictive of state primary results, and which actually presented predictive data for more than double the contests that Zogby did.

Vouchers lift all educational boats

Let's do it for the children.

Andrew Clavell explains why credit is tanking but not stock

The guy is razor sharp:

Put simply, credit markets anticipate, and equity markets confirm, recessions.

DISCLOSURE: I am short US.RECESSION.08

UPDATE: Paul Kedrosky links to this nice graph of 2008 GDP forecasts over time:

The Brother Grim

Guess who (via Eddy Elfenbein).

Metaphor of the day

In almost simultaneous events
last week Congress attacked baseball players for taking
performance-enhancing drugs while at the same time
supporting artificial and temporary stimulus for the US
economy no matter what the long-term costs.

Many people don’t like professional baseball players
using steroids because they mask the underlying ability of
the player. They taint the results.

But so does artificial economic stimulus. Monetary
policy accommodation can help people feel wealthier for
awhile, but it cannot create wealth. Printing money does not
make anyone wealthier. If it did, then counterfeiting should
be made legal and everyone in the world would then be
wealthy. The same is true for tax rebates. If they really
could increase wealth, then why not make them much larger
and much more frequent?

In the end, trying to increase spending without
increasing the country’s productive capacity is a fool’s
errand. Boosting demand without boosting supply causes a
misallocation of resources. Like with steroids any boost is
temporary and risks longer-term economic problems.--Brian Wesbury

Quote of the day

If a man tonight falsely assures a woman of his undying love only to score with her, we rightly regard him as a sleazeball. But when politicians do essentially the same thing, save on a much larger scale, we call them "public servants" and treat them as our saviors.--Don Boudreaux

It doesn't matter who Barack Obama says his economic advisors are

He is not listening to them.

I was afraid of the deaf ear syndrome.

Jeri Ryan, Kingmaker

History (and gossip, of course) at TMZ.

Steve Sailer seems to have found some election predictiveness

Explanation here.

Tom Smith's Seven Important Discoveries

Evangelical Christians actually enjoy sex as much as anybody.

Many Catholic priests do not molest children.

It's possible to watch somebody else make money and not hate them for it.

There's a lot to be said for getting married and staying married.

Children are cute.

Lots of people in the armed forces are really smart.

If you don't love America, try living abroad for a while.

I can confirm each one of these discoveries. (I think Catholic priests should study this more and get married).

Some of the old TS forum has been recovered on Intrade

here.

Alas, much of the forum history does not appear. Here's hoping that Intrade will be competitive enough to allow for uninterrupted unfettered speech in the forum, just as it's paying customers advocate for unfettered markets.

Better than biofuels (i.e. ethanol)

Solar. (via Glenn Reynolds)

Could virtual global warming be caused by something in Lampasas, TX?

Quite possibly:

According to NCDC’s MMS database, the Lampasas climate station has been at this location since 10-01-2000. Previous location was an observer residence, which appears to have been a park-like location according to MMS location map. The sensor was apparently converted to the MMTS style seen in the photo in 1986, so the move did not include an equipment change. See the complete survey album here.

But the big surprise of just how bad this location is came from the GISS plot of temperature. It clearly showed the results of the move to this location, causing a jump in temperature almost off the current graph scale. Note that before the move, the temperature trend of Lampasas was nearly flat from 1980-2000.

A mulligan on Hillary

John Lewis changes his mind.

DISCLOSURE: Yes, I see the irony of this link, given that one.

Bush's foreign policy does not seem very nuanced

according to my read of this:

Bush: “I view the Olympics as a sporting event.”

Bush gave an interview to the BBC’s Matt Frei. Midway through, Frei asks him about Steven Spielberg pulling out of the Olympics this year to protest Darfur.

BUSH: “That’s up to him. I’m going to the Olympics. I view the Olympics as a sporting event. On the other hand, I have a little different platform than Steven Spielberg so, I get to talk to President Hu Jintao. And I do remind him that he can do more to relieve the suffering in Darfur. There’s a lot of issues that I suspect people are gonna, you know, opine, about during the Olympics. I mean, you got the Dali Lama crowd. You’ve got global warming folks. You’ve got, you know, Darfur and… I am not gonna you know, go and use the Olympics as an opportunity to express my opinions to the Chinese people in a public way ’cause I do it all the time with the president. I mean. So, people are gonna be able to choose — pick and choose how they view the Olympics.”

FREI: “The Chinese government has been saying - part in response to this that - ‘America is [slipping back into] Cold War thinking’.”

BUSH: “Yeah. Well, you know, they’re… I think that’s just a brush back pitch, as we say in baseball. It’s… America is trapped in this notion that we care about human life.

“We respect human dignity. And that’s not a trap. That’s a belief. And that many of [us] in this country recognize that the human condition matters to our own national security. See, I happen to believe we’re in an ideological struggle. And, those who murder the innocent to achieve political objectives are evil people. But, they have an ideology. And the only way you can recruit for that ideology is to find hopeless folks. I mean, who wants to join an ideology say women don’t have rights? You can’t express yourself freely. Religious beliefs are… you know, the only religious belief you can hold is the one we tell you. And, oh, by the way, it’s great. You can be a suicider. Well, hopeless people are the ones who get attracted by that point of view. And, therefore, it’s in the world’s interest from a national security perspective to deal with hopelessness. And it has to be in our moral interest. I repeat to you… I believe to whom much is given, much is required. It happens to be a religious notion. But, it should be a universal notion as well. And… I believe America’s soul is enriched, our spirit is enhanced when we help people who suffer.”

It also seems to be working better than Carter's policies of unilateral disarmament or countering a Soviet invitation with skipping the Olympics.

Tim Harford strikes me as smart and humble

Might be a virtuous cycle.

RIDDLE OF THE DAY: Also, do governments pick losers, or vice versa?

Unintended Consequences of campaign finance laws

The dictionary needs to find a picture of Obama and McCain to place next to the word "hypocrisy":

Elizabeth Bumiller reports in the New York Times that John McCain has come up with an interesting way of defusing Barack Obama's financial advantage:

Senator John McCain’s presidential campaign said Thursday that it stood by a year-old pledge made with Senator Barack Obama that each would accept public financing for the general election if the nominee of the opposing party did the same. But Mr. Obama’s campaign refused to reaffirm its earlier commitment.

The McCain campaign’s latest stand on the issue was first reported Thursday by The Financial Times. On Tuesday, one of Mr. McCain’s advisers told The New York Times that the campaign had decided to forgo public financing in the general election, an awkward admission for a senator who has made campaign finance reform a central part of his political persona.

That adviser was speaking on the assumption that Mr. Obama, who has broken all records in political fund-raising and is currently drawing more than $1 million a day, would find a way to retreat from the pledge in order to outspend his opponent in the fall by far. Under public-financing rules, the nominees are restricted to spending about $85 million each for the two-month general election campaign, far less than what Mr. Obama might be able to raise on his own.

On Thursday, in an effort by the McCain campaign to speak with one voice and put the onus for abandoning the system on Mr. Obama, several McCain advisers called on him to make good on his pledge. Mr. Obama was the candidate who proposed the pledge in the first place, in February 2007, a time when he was not raising the prodigious sums he is now.

Mr. McCain, co-author of the McCain-Feingold act of 2002, which placed new restrictions on campaign financing, was the only other candidate to take Mr. Obama up on his pledge.

Previous UC installment here.

Even sports junkies have it in for the NY Times

The NY Times really isn't a leading sports rag, any way you slice it. But it comes under FanHouse scrutiny anyways:

As far as our coverage of the case itself, if the essence of your question is whether I feel good about it, the answer is that I very much regret my failure to recognize that we were dealing with a rogue prosecutor and that the university had compounded his bravado by overreacting to the initial reports about the case. I don't recall another instance of a university canceling the season of a team that was a contender for a national championship. Nor do I recall a similar example of a prosecutor launching such an aggressively wrongheaded investigation.

But the bottom line is that I'd do some things differently, and that knowledge gained by hindsight has informed our approach to other stories since then.

There's nothing the Times will ever be able to do to make up for the way it covered the Duke lacrosse story, but acknowledging their mistakes and vowing to change the paper's approach going forward is better than nothing.

It might be better to read another paper.

UPDATE: Maybe the Times is turning the corner? (via Glenn Reynolds)

Don Luskin notices the acid reflux of Krugman's Obama columns

while his Bush columns are quietly swallowed whole and digested:

The New York Times has never been especially vigorous about publishing letters from conservative readers complaining about the outpouring of hate, slander, innuendo and other species of satanic sputum from the mouth of Paul Krugman, as long as its target was George W. Bush and the Republican party. But when his column criticized Barack Obama's campaign for being a "cult of personality" based on "Nixonland" tactics -- in other words, when Krugman focused his hate on a liberal Democrat -- the Times has room for letter after letter after letter. Here is a sampling:

...Mr. Krugman, a consistent critic of Barack Obama, did not produce a shred of evidence for his categorical statement that the “venom” being displayed in the Democratic campaign comes from Obama supporters, “who want their hero or nobody.” And it seems to perpetuate the same bizarre bitterness that he derides in his column....

...I don’t have to give Mr. Krugman or anyone else my strong assurances that I will support the Democratic nominee, and I don’t have to apologize to Mr. Krugman or any Democratic Party apparatchik for passionately opposing Hillary Rodham Clinton. ...

...To top it all off, Mr. Krugman compares Mr. Obama’s ability to inspire and organize to George W. Bush’s demonstrated penchant for conceit and self-indulgence in Operation Flight Suit. Who’s perpetuating “Nixonland” now?...

...The fact that many Democratic voters would simply stay home in November rather than vote for Hillary Clinton is not a sign of “hate” or “venom.”...

My post last week on Megan McArdle noticing the same thing.

Earmark scorecards for Clinton, Obama, and McCain

at Greg Mankiw's place.

I am content with the Clemens' congressional hearings

I'd rather our legislators be performing low risk activities such as this one, rather than legislating more legislation with the unintended consequences. I've felt this way about Clemens for a long time.

A lot of intellectual food over at EconLog

Arnold Kling on Anthony de Jasay:

He is concerned with a deep problem. Those of us who are "minarchists," meaning that we favor government that is limited to adjudicating conflict, have no reliable mechanism for restraining government.

His point is that government can use its rule-making power to remake any rules that were used to create it. Certainly, we have seen this in the United States, where I would say that the original Constitution lies in shreds.

He concludes that only irrational standards or taboos can constrain the power of government. I tend to agree. If there is no taboo against government interference with activity X, then as long as it is in the interests of the governing coalition to interfere with activity X, that will happen.

I call these irrational standards and taboos folk beliefs. In my view, the real political contest in America is not between Republicans and Democrats but between a folk Locke-ism which restrains government and other folk beliefs, such as folk Marxism of college campuses or the collectivist religion that Daniel Klein calls the people's romance.

In other words, the irrational standards and taboos that undergird our political system are likely to reflect, for better or worse, our moral sense that evolved under tribal conditions. Hence, the "people's romance" comes from a (misguided) attempt to apply tribal morals to complex nation-states. So you get Senator McCain arguing that highly-paid individuals in the private sector are not doing their part to serve the tribe.

UPDATE: Megan McArdle adds:

This really seems like a special case of a larger problem that anyone who favors any restraint of government has to deal with. I've heard basically this argument advanced in favor of anarcho-capitalism, but of course one of the biggest problems with any anarchism is that unless you can secure unanimity (in which case you had better not imagine a polity where n>1), some form of coercion seems to be required in order to prevent people from forming governments. Even with strong taboos, has there ever been a society that actually succeeded in controlling the size and shape of its government in the way that libertarians imagine?

Does government create a lot of inflation?

Some believe this to be true (via Don Boudreaux).

I certainly think so.

Unintended Consequences of research regulation

Robert Teitelman:

Then-New York Attorney General (now New York Governor) Eliot Spitzer and a host of media camp followers argued that they were making Wall Street safe for retail investors by cleaning up conflicts and restoring "the even playing field." Instead -- and not excusing the antics of Henry Blodget or Jack Grubman -- Spitzer succeeded in eliminating any economic basis for Wall Street sell-side research. Instead, research has increasingly migrated toward the kind of wholesale institutions that can afford it, notably the hedge funds.

The bottom line: Research goes to the highest bidder, meaning there's a more uneven playing field than ever before.

UPDATE: It's even spreading to hamburgers.

Previous UC installment here.

Arnold Kling likes Kevin Drum's health care plan

But if it's price signals and competition you're after, why not cut out the middleman and have consumers pay doctors directly? For example, imagine a national healthcare plan that paid 75% of all medical expenses but required you to pay the other 25%. Your maximum out-of-pocket expense each year would be capped at, say, 5% of income at low income levels, 15% in the middle, 30% at the next level, and 50% for the rich.

...why not a simple single-payer system with copays instead of a massive new regulatory structure designed solely to keep health insurance companies in business? What's the point?

To me, this idea sounds much better than what we have now. It's simpler. It has most consumers paying more out of pocket at the margin than today. My guess is that when all is said and done, government spending on health care (if you include the tax subsidy for employer-provided health insurance as "spending") would be less than what it is today. I'm thinking that although the share of spending paid for by government would rise, total spending would decline, because consumers would be more careful in choosing procedures and shopping for better prices.

From my point of view, we could do better in terms of health care reform. However, we are much more likely to do worse.

I really want to see health care providers paying attention to consumers rather than third parties. Drum's off-the-cuff proposal seems like a step in that direction.

Arnold's dad has been wrestling with the current system, and it's not easy.

Melissa Lafsky is the latest to sound the alarm on biofuels

Very important posting:

A worldwide movement to cut emissions and halt what a growing number of scientists call a massive global crisis. Except it all hit a roadblock last week, when two newly-released studies reported that the net environmental effect of using biofuels may be even more harmful than burning the gasoline they were created to replace.

The first study, led by Princeton University environment and economics researcher Timothy Searchinger, found that replacing fossil fuels with corn-based ethanol could actually double greenhouse gas emissions for the next thirty years.

The second study, led by Joseph Fargione, a scientist at the Nature Conservancy, found that by switching to biofuels, we could essentially be worsening climate change for the next 93 years, in that “[t]he clearance of grassland releases 93 times the amount of greenhouse gas that would be saved by the fuel made annually on that land,” according to the Times. Not to mention the fact that, by switching to growing corn, U.S. farmers have turned away from growing other crops, such as soy. As a result, Fargione told the Times, “‘Brazilian farmers are planting more of the world’s soybeans — and they’re deforesting the Amazon to do it.’”

So in a matter of days, biofuels go from a celebrated fossil fuels alternative to a rainforest-killing disaster, with scientists already calling for government reform on biofuel policies. If anything, this provides a window into how little we actually know about this issue, and the wide lengths left to go in reaching a viable solution.

The happy few voting against the stimulus package

Notice how all the talk about "fiscal responsbility", "budget deficits" and "national debt" all got muted ahead of the stimulus package? Must we suspend our wits for this?

So we inject $100 billion into the economy via government payouts. That is $100 billion that we will have to find somewhere else. In addition, it is not a frictionless transaction--we need to spend additional resources to service and consummate all the transactions. That service fee should add a few billion on top of the payments.

Here are the 16 Senators and the 35 Representatives who kept their wits:

AZ: Sessions, Shelby
AK: Murkowski
AZ: Kyl
CO: Allard
ID: Craig, Crapo
NE: Hagel
NV: Ensign
NH: Gregg
OK: Coburn, Inhofe
SC: DeMint
TN: Corker
WY: Barrasso, Enzi

AR: Berry
AZ: Flake, Shadegg
CA: Campbell, Hunter, Loretta, Rohrbacher, Royce
CO: Tancredo
FL: Boyd, Wexler
GA: Broun, Deal, Gingrey, Kingston, Linder, Price, Westmoreland
IL: Johnson
MN: Peterson
MS: Taylor
NC: Coble
OH: Kaptur
TN: Cooper
TX: Burgess, Gohmert, Paul, Poe
VA: Davis (Tom), Forbes, Goode
WA: Baird, Smith
WI: Sensenbrenner
WY: Cubin

Don Boudreaux fondly remembers Julian Simon

here:

Simon's most important contribution was to crystallize and explain an insight that even the best economists before him only glimpsed -- namely, that human beings in free societies are "the ultimate resource." Nothing -- not oil, not land, not gold, not microchips, nothing -- is as valuable to the material well-being of people as is human creativity and effort.

Indeed, there are no resources without human creativity to figure out how to use them and human effort actually to do so. Recognizing the truth of this insight renders silly the familiar term "natural resources."

No resources are "natural."

UPDATE: Mark Perry looks back at Simon's famous winning bet with scientist Paul Ehrlich (author of The Population Bomb).

Quote of the day

It's like Warren Buffett is driving up to a hospital on fire, and cherry picking out all the healthy people.--Unattributed, commenting on Buffett's monoline munibond plan

Will Obama protect us from external threats as well as internal ones?

I have some doubts. Here are 2 adjacent WSJ pieces that seem concur. First the good news:

Some of this results from the political moment -- an unhappy public looking for "change" -- and Mr. Obama's skill in meeting it. His theme of optimistic, post-partisan, post-racial politics isn't so much defeating Hillary Clinton as transcending her. It must be maddening to Mrs. Clinton, the uber-wonk, that Mr. Obama's success is rooted in his style more than his substance. He is suddenly a phenomenon, of the sort our pop culture throws up every few months but that our politics rarely does.

Yet his success also owes something to the Clintons and their strategy. To an electorate looking for new ideas, Senator Clinton and her husband promised explicitly to go "back to the future." They've campaigned on a return to the "peace and prosperity" of the 1990s, while asking Democrats to forget what else happened that decade: The loss of Congress, the pardons as political favors, the scandals, the rise of al Qaeda, and the failure to achieve much of a lasting legacy.

The votes that Mr. McCain should really be worrying about, and preparing for, are those being cast for Mr. Obama. If he does go on to defeat Mrs. Clinton, Mr. Obama will only become more of a legend and more of a media favorite. The Republican won't be able to win in November with the kind of trench-warfare, turnout fight that might work against the Clintons. He's going to need his own reform agenda, one that competes for the "change" mantle and is about the future more than the past.

Now the not so good:

It says something about his national security world view, or his callowness, that Mr. Obama would vote to punish private companies that even the bipartisan Senate Intelligence Committee said had "acted in good faith." Had Senator Obama prevailed, a President Obama might well have been told "no way" when he asked private Americans to help his Administration fight terrorists. Mr. Obama also voted against the overall bill, putting him in MoveOn.org territory.

Of course, McCain's legislative record is far from stellar. Besides the hypocrisy the link describes, there's this thing called the First Amendement that seems to be ignored, at best.

UPDATE: Greg Mankiw is worried, too.

Penn Jillette predicts Obama to be the next president

based on his joke polling.

Why the dating markets may not be predictive of successful marriages

by Cassandra, via Tigerhawk.

Hers may be the cutest header ever:

QUOTE OF THE DAY:

A good marriage would be between a blind wife and a deaf husband.
---Honore de Balzac

What might Houston volunteers have to do with Florida primary delegates?

This picture rounding the blogosphere, as TigerHawk speculates:

One is forced to wonder whether the clowns who put Che's flag on the wall know that this could cost him Florida.

Joke of the day

at Perry Eidelbus's place:

Approaching the end of his presidency, George W. Bush works with the Democrat-controlled Congress to write a law giving a one-time $250,000 reparations payment to each black American descended from slaves. Democrats naturally support it wholeheartedly, and Bush convinces barely enough Republicans so it would pass: "Just trust me." But the GOP can't believe it when Bush proudly announces that he's invited Jesse Jackson and Al Sharpton to the signing ceremony.

So there's the trio in the Oval Office, surrounded by White House aides and the press. Jesse's thinking how the money will come in handy for his child support payments, and Al's dreaming of a hamburger run. Bush signs the bill and then asks the two, "Do you happen to have your checkbooks with you today?" Jesse and Al look at Bush quizzically and simultaneously say, "What do you mean?"

Bush replies, "Well, I guess you missed the key amendment that Republicans put in. Reparations will be paid out after deducting the costs of welfare, housing projects and other federal social spending for black Americans, and after giving reparations to descendants of Union Army men who died in the Civil War. Rather than receive $250,000, the GAO calculates that each black American instead owes $39,165."

Jesse blurts out, "That's ridiculous! I was never on welfare. Why should I pay for something that never involved me?"

Al blows up, "Yeah, and why should money go to the descendants who were never hurt themselves?"

Bush looks up with a smile, his eyes twinkling. "Bingo!"

One area where Bush seems smarter than Obama

Is Latin American policy:

It was George Bush who proposed CAFTA, a trade agreement that has strengthened ties with several countries in Latin America. Obama voted against it. It was also George Bush who has pushed for trade agreements with Peru, Colombia, and Panama. Obama failed to vote for the Peru FTA, and he has yet to reveal his position on the other two.

Is Barack not getting it? Or Austan not dishing it?

Richard Posner and Gary Becker pan Bill Gates' "Creative Capitalism"

Posner writes:

There is a hint in Gates's speech that profit maximization is the real goal, and the question for "recognition" a veneer. When he talks up "business models that can make computing more accessible and more affordable," it sounds as if he may be trying to develop new markets for Microsoft. That is also the implication in Prahalad's statement that I quoted. Gates talks about "markets that are already there," that is, in poor countries, "but are untapped." In other words, there are business opportunities in poor countries, and business opportunities require imagination rather than altruism to exploit.

A curious omission in Gates's speech is a theory of why so many people are desperately poor. When he says that "diseases like malaria that kill over a million people a year get far less attention than drugs to help with baldness," he does not pause to inquire why that is so. It is so, first of all, because people in wealthy countries do not suffer from malaria, and, second, because cheap but highly effective methods of combating malaria, such as mosquito netting and indoor spraying of DDT (which would have few negative environmental effects, unlike outdoor spraying), are somehow not provided, but for reasons political and cultural rather than financial. We know that a nation doesn't have to be rich in natural resources to be prosperous. The essential ingredient of economic growth is human capital, and it depends primarily on the existence of a political system that prevents violence, enforces property rights, provides a minimum level of public goods, and minimizes governmental interference in the economy. Without such institutions, economic growth will be stunted; altruistic capitalists will not cure their absence.

Becker pens:

My own belief is that there are far more effective ways to help poor nations of Africa and elsewhere speed up their rates of economic development and reduce the impact of malaria, Aids, and other devastating diseases. Probably the single most important step is to encourage much more market-friendly policies by African and other governments in poor countries. In addition, it would help to reduce, better still eliminate, tariffs by rich countries on the agricultural and other exports from developing countries, encourage more widespread use of DDT and mosquito netting in combating malaria (see my post on deaths from malaria on Sept. 24, 2006), and provide private and perhaps public subsidies to the development of new drugs that help fight diseases mainly found in poor countries.

Prediction of the day

CNN reports (via Don Surber):

Hillary Clinton, responding to a question about whether there might be a “new business or personal scandal” involving her husband Bill Clinton, said Monday night that voters should not be worried about the possibility. "You know, I can assure this reader that that is not going to happen," she said.

UPDATE: Debra Burlingame remembers presidential pardons of yore.

Fed governors not seeing recession ahead

in Greg Mankiw's roundup.


DISCLOSURE: I am short US.RECESSION.08

Econ 000

Maybe the current President and all the candidates running for the next term could brush up on this (via Josh Hendrickson).

Arnold Kling gets real on the insurance industry

He says:

The insurance industry may be the only private-sector institution that I trust less than government. In auto insurance, I find that unless I change providers every few years, my premiums just get ratcheted up for no reason. I think that life insurance is a huge rip-off, particularly considering that it starts out with a tremendous tax advantage.

I do not trust my fellow consumers to understand the concept of insurance well enough to make insurance companies offer products that make sense. Too many consumers think that good insurance is something that provides payouts for small problems rather than protection against rare catastrophes.

In fact, as I have pointed out before, most people do not want insurance of any sort. They get homeowners' insurance to satisfy the mortgage lender. They get car insurance to satisfy the state. They get health insurance only when they think their employers are "giving" it to them.

The insurance industry is heavily regulated, and it has gotten quite cozy with that arrangement. My guess is that something like the Massachusetts health care mandate, which completely eliminates any meaningful form of competition but which leaves the private insurance companies still standing, appeals to the typical insurance company.

My wife recently sought information on long-term care insurance. What I concluded is that we would be trading one risk for another. Now, we face the risk that long-term care would eat up our savings. If we had insurance, we would face the risk that the insurance company would not pay a claim, because of how it reads the fine print in the contract. I'd rather take the risk I understand--having my savings not accumulate--than the risk I do not understand--getting into a dispute with the insurance company over a large claim.

Quote of the day

"If you think health care is expensive now, wait until you see how much it costs when it is free."--P.J. O'Rourke

This is easy to empirically verify. The heaviest subsidized sectors in our economy are education and health care. They happen to be the most hyperinflated sectors, too.

Chris Perruna is anti-prediction

He's got a lot of notable quotes, but not all are completely negative (via Felix Salmon):

“If one could foresee the next three days, one could become rich for several thousand years.” - Anonymous

“In the future, instead of striving to be right at a high cost, it will be more appropriate to be flexible and plural at a lower cost. If you cannot accurately predict the future then you must flexibly be prepared to deal with various possible futures.” - Edward de Bono

Tax rates do matter?

From the WSJ today:

Our friends on the left say Americans are willing to pay more taxes to get better government services, but their migration patterns reveal the opposite. Governors would be wise to heed these interstate migration trends as they try to cope with what may be one of the worst years in recent memory for state finances. The people who tend to be the most mobile in American society are the educated and motivated -- in other words, the taxpaying class. Tax them too much, and you'll soon find they aren't there to tax at all.

Quote of the day

The way to channel aid is from individuals to individuals (or small organizations to small organizations), not from government to government. This is a simple concept, but highly counter-intuitive.--Arnold Kling

Unintended consequences of laws

Freakonomics has a round up of laws which make things worse for the people that the laws purportedly were meant to help.

Ted Olson predicts superdelegate lawsuits

He writes:

These superdelegates, Byzantine hyper-egalitarian Democratic Party delegate selection formulas, and the fact that many delegates are selected at conventions or by caucuses rather than primaries, combine to offer the distinct possibility that by convention time the candidate leading in the popular vote in the primaries will be trailing in the delegate count.

How ironic. For over seven years the Democratic Party has fulminated against the Electoral College system that gave George W. Bush the presidency over popular-vote winner Al Gore in 2000. But they have designed a Rube Goldberg nominating process that could easily produce a result much like the Electoral College result in 2000: a winner of the delegate count, and thus the nominee, over the candidate favored by a majority of the party's primary voters.

WSJ reports additional credit woes

today:

In the past few days, low-rated corporate loans -- the kind that fueled the buyout boom of recent years -- have plummeted in value. As a result, banks are expected to try to unload some of those loans this week at fire-sale prices.

Nervous buyers also have retreated in recent days from the market for securities backed by student loans and municipal bonds, roiling some corners of the short-term money markets. Similarly, investors have recoiled from debt backed by commercial real estate, such as office buildings.

Over the weekend, the world's top banking authorities warned that the U.S.-led economic slowdown and continued uncertainty about securities could lead banks to further reduce their lending, and choke off economic activity. (Please see related article.)

One sign of investors' anxiety: Standard & Poor's said its index of the prices on high-risk corporate loans fell to a record low of 86.28 cents on the dollar at the end of last week.

Three weeks ago, I said this (and I'm sticking with my calls):

While I think we are in the 8th inning of the stock market drop, this does not hold true for credit markets. Though $100 billion has been written down off the balance sheets of banks, I think there is at least another $100 billion to go. The financial sector will continue to be a drag on the bigger equity indices.

Why statistics will not help Roger Clemens

The story is here.

What is the consumption gap between the highest and lowest income quintiles?

The income gap is 15 to 1. But the consumption gap is 2 to 1.

Here is the explanation.

Greg Mankiw also has the answer to the riddle: Why is $25,000 per year better than $35,000?

No Zogby state primary polling data available for the weekend contests

Question of the day

Why in a world where politicians promise to "provide for us" is it possible for one hotelier to save more African lives than the whole United Nations?--Belmont Club

Herbert Gintis, a radical maverick (according to Bryan Caplan)

Gintis on Thomas Sowell's Economic Facts and Fallacies:

Thomas Sowell is a serious economist and a fine writer. There is not a single argument in this book that I think is either incorrect or even disingenuous. Everyone interested in economic and social policy should read this, and his other writings. Sowell is best as showing how statistics can mislead. For instance, he says "It is an undisputed fact that the average real income...of American households rose by only 6 percent over the entire period from 1969 to 1996...But it is an equally undisputed fact that the average real income per person in the United States rose by 51 percent over that very same period." (p. 125) Both are true because average household size decreased dramatically over the period, with more elderly couples and fewer children per married couple in the later period.

To whet the reader's appetite, here are a few of Sowell's positions. (1) Rent control is a stupid way to help the poor, because it drives down the supply of affordable housing; (2) Racial discrimination is not the cause of income differences between blacks and whites, which are virtually equal when correcting for IQ, education, experience, and other demographic variables; (3) the same is true for the role of gender discrimination in accounting for the lower incomes of women as opposed to men; (4) Slavery, racism, and discrimination are not the cause of the social pathologies associated with poor black inner-city neighborhoods; rather the causes lie in a variant of black culture inherited from traditional southern poor white culture; (5) Poverty in the third world is not caused by imperialism or wealth in the rich countries.
In each of these, and several other areas, I think Sowell's arguments are correct, and should be take serious when proposing vigorous social policies for creating a more equal and fair distribution of the world's resources and produced wealth.

Gintis also reviewed Paul Krugman's The Conscience of a Liberal:

This book epitomizes what is wrong with American liberalism. Krugman was a fine, perceptive international trade theorist, but he is a political hack, with nothing new to offer. There is one problem as far as Krugman is concerned: inequality. But inequality is an intellectual abstraction, not a politically motivating issue. People hated the Robber Barons because they were robbers and barons, not because they were rich. Oprah Winfrey and Bill Gates do not send the Pinkerton men out to protect their ill-gotten gains; nor to the other super-rich. Socialists' ringing political slogans dealt with fairness, social progress, and power to the people, not "inequality." Moreover, a truly progressive movement must built on technical progress that is impeded by the reigning powers that be (Sam Bowles and I call this efficiency-enhancing egalitarian redistribution), not the beggar-thy-neighbor, zero-sum-game sort of redistribution favored by Krugman.

I am sorry that we can't do better than Krugman. There are very serious social problems to be addressed, but the poor, pathetic, liberals simply haven't a clue. Conservatives, on the other, are political sophisticated and hold clear visions of what they want. It is too bad that what they want does not include caring about the poor and the otherwise afflicted, or dealing with our natural environment. Politics in the USA is no longer Elephants and Donkeys; it is now conservative Pigs and liberal Bonobos. The pigs are smart but only care about what's in their trough. The Bonobos are polymorphous perverse and great lovers, but will be extinct in short order.

(via Bryan Caplan). Gintis was (is?) known as a radicalist. For instance, what do you detect when skimming these notes on his Schooling in Capitalist America?

Wow, Dick Cheney is really a puppeteer (CORRECTION: Al Gore, not Cheney)

I would take the use of force very seriously. I would be guarded in my approach. I don't think we can be all things to all people in the world. I think we've got to be very careful when we commit our troops. The vice president and I have a disagreement about the use of troops. He believes in nation building. I would be very careful about using our troops as nation builders. I believe the role of the military is to fight and win war and therefore prevent war from happening in the first place.--George Bush, via Russell Roberts

This is why I have a hard time trusting McCain. This straight talk about taxes and immigration is just eurphoric amnesia, I'm predicting.

I don't believe in Obama more than McCain; I just trust his word more.

Perhaps one of Carter's smartest advisors

and one of my alma mater's smartest professors, Alfred Kahn is worried about the big crack opening up in the middle of his party (via Glenn Reynolds):

The assumption of Democratic control of Congress last year and the probability that its majority will be increased by this year's elections portends a growing, deeply troubling ideological split within its ranks, already visible, on matters of economic policy generally and regulatory policy specifically - between the more radical (and at the same time reactionary) populists, who label themselves Progressives, and the 20th century liberals, who have dominated in the formulation of their party's economic programs for the last three-quarters century.

[I examine] the economic issues on which the two are likely to diverge, defending and proposing policies consistent with historical 18th through 20th century liberalism:

• international trade policy, in which the Progressives demonstrate a formidable misinterpretation of our huge trade deficits and insufficient appreciation of the major contribution of retaliatory beggar-my-neighbor policies to intensifying the Great Depression of the 1930's;

• threatened recartelization of industries deregulated in the 1970's and 80's - such as the airlines, trucking, and telecommunications;

• recourse to wage and price controls rather than monetary policy as a curb on inflation;

• recourse to concerted anti-competitive restrictions or rationing rather than market pricing as a remedy for congestion, and

• proposed laws imposing network neutrality obligations on providers of access to the Internet.

UPDATE: Roger Clegg's reporting unfortunately bolsters Kahn's worry (via Greg Mankiw):

Now that the excitement of Super Tuesday has passed, we should remember the kinds of policies and principles at stake, Exhibit A: three pieces of legislation pending in Congress that would dramatically increase the liability of private companies for alleged acts of employment discrimination.

The first would resurrect the discredited idea of "comparable worth." The second would add various sexual orientations to the classifications protected from employment discrimination. The third is a plaintiffs' bar wish list, aimed mostly at overturning cases it lost in the Supreme Court.

President Ronald Reagan correctly called comparable worth "a cockamamie idea." A great lesson of economic theory, not to mention historical experience, is that government-set wages and prices not only curtail freedom, but lead to shortages, surpluses and market disruptions.

In addition, this [third] bill would make it easier to bring and win "disparate impact" lawsuits under a variety of statutes, including Title VI of the 1964 Civil Rights Act and the Age Discrimination in Employment Act. Disparate impact claims need not allege that the criteria an employer uses to hire workers are discriminatory on their face, or discriminatorily applied, or adopted with discriminatory intent. Disproportionate results are enough.

The threat of such lawsuits not only decreases productivity by pressuring private (and public) entities to abandon perfectly legitimate selection criteria, but also encourages the use of surreptitious quotas. Both of these outcomes, needless to say, are perfectly fine with the civil rights lobby and its lawyers.

Obama's economic advisors

Austan Goolsbee is one of Barack Obama's advisors, and a lot of smart yet sane people like him. Today, Tyler Cowen talks about health care mandates and another advisor, David Cutler:

Cutler is very smart, tenured at Harvard, arguably the leading health care economist, and yes he is an advisor to Barack Obama. He says mandates are not the way to go, and no I do not think he is just "falling in line" here. Read the whole thing. Yes, the key is to make insurance cheaper, not more expensive. Yes, mandates are a political loser. Yes, ex post fiddling can make up for a lot of the problems in the "no mandate" approach and there is going to be lots of ex post fiddling anyway.

You know, I might come out for Obama, even in the worst case scenario, if I knew that he actually listened to his economic advisors.

UPDATE: Mickey Kaus worries like I do (via Glenn Reynolds):

Remind me again, what is the evidence--in terms of policies, not affect or attitude or negotiating strategy--that Obama is not an unreconstructed lefty (on the American spectrum--a paleoliberal or a bit further left)? For example, would he roll back welfare reform if he could?

UPDATE: And Shelby Steele, has this, as much as I doubt his doubts (via Ron Paul fan Don Luskin):

Determinism automatically blames and obligates white power for black problems, so it becomes the central faith of the black identity. When a black argues against it, he invokes the Uncle Tom label...

The point is not that Barack Obama is a blind and true-believing follower of this identity. Few blacks are. The point is that he is accountable to it. If, for example, Obama broke with this determinism by saying that blacks themselves were largely responsible for closing the academic achievement gap with whites, he would likely be seen as an Uncle Tom for letting whites "off the hook." So, in order to be black, he must pay tribute to a determinism that makes whites ultimately responsible for black uplift, even when it is obvious that only black responsibility will make a difference.

Peggy Noonan thinks Barack Obama is much more electable than Hillary Clinton

With Mr. Obama the campaign will be about issues. "He'll raise your taxes." He will, and I suspect Americans may vote for him anyway. But the race won't go low.

Mrs. Clinton would be easier for Republicans. With her cavalcade of scandals, they'd be delighted to go at her. They'd get medals for it. Consultants would get rich on it.

The Democrats have it exactly wrong. Hillary is the easier candidate, Mr. Obama the tougher. Hillary brings negative; it's fair to hit her back with negative. Mr. Obama brings hope, and speaks of a better way. He's not Bambi, he's bulletproof.

The biggest problem for the Republicans will be that no matter what they say that is not issue oriented--"He's too young, he's never run anything, he's not fully baked"--the mainstream media will tag them as dealing in racial overtones, or undertones. You can bet on this. Go to the bank on it.

The Democrats continue not to recognize what they have in this guy. Believe me, Republican professionals know. They can tell.

Intrade probabilities agree with Noonan to a point. Conditional probabilities (aka Bayesian probabilities) for Obama and Clinton (the probability of winning the White House, conditioned on the probability of winning the party nomination):

64% Obama
62% Clinton

Meanwhile, McCain's electability is currently trading around 39%.

Dan Henninger has a view from the conservative side:

There are murmurs of heading into the political wilderness. Sit this one out. Rather than sell the party's soul to John McCain, let Hillary have it, or Barack. Go into opposition for four years while the party gets its head together and comes up with an authentic conservative candidate. If this sourness takes hold at the margin, say among GOP anti-immigrant voters, it might happen.

The wilderness is a good place to find yourself, if you're a prophet. There are reasons, though, why a principled political retreat won't make conservative prospects better. The point of a principled retreat would be to rediscover coherence amid doctrinal confusion. The exact opposite is likely to happen.

Conservatives, like everyone else, live in a new political space. It's a 24/7 world of blogs, Web sites and talk shows. It's feisty and maybe even democratic. But consensus? This milieu makes consensus harder than ever.

This has become an unusual presidential election. If the gods have willed that Barack Obama should suddenly stir the electorate into a state of grand expectation -- another 1960 or 1980 -- then you shouldn't want to be on the losing side when the winning wave breaks in November. Gerald Ford losing to Jimmy Carter in 1976 was no big deal. This one will be a big deal. The energy exploding out of both parties' primaries, producing record turnout, makes that clear. This isn't just about "change" anymore. It's tectonic. Ask the Clintons. In such a time, many voters' allegiances are on offer. But one has to compete for them.

Quote of the day

Statistics are like a bikini. What they present is suggestive, but what they conceal is vital--Aaron Levenstein

That was a lot easier than reading any given paragraph of The Black Swan, and basically saying the same thing!

James Taranto goes boldly where no one has gone before

Maybe there's a reason they call it the "red" planet:

And I would have gotten away with it, if it weren't for you darn facts!

Tyler Cowen points out:

The tax credit for ethanol is an example of a cost ineffective subsidy. The cost of reducing CO2 emissions through this subsidy exceeded $1,700 per ton of CO2 avoided in 2006 and the cost of reducing oil consumption over $85 per barrel.

I am not shocked, but it is worse than I had thought. Here is the full paper. But the funny thing is, that's not even the worse thing I read about biofuels today. Courtesy of Daniel Akst, try this article:

...a growing body of scientific evidence suggests these gasoline alternatives will actually boost carbon-dioxide levels and thereby aggravate the problem of global warming. A study published in the latest issue of Science finds that corn-based ethanol, instead of reducing greenhouse-gas emissions by a hoped-for 20%, will nearly double the output of CO2 and other gases that trap the sun's heat. A separate paper in Science concludes that the clearing of native habitats around the world to grow more biofuel crops will lead to more carbon emissions.

I've been sounding the alarm on corn ethanol for some time.

UPDATE: Don Surber has more.

Complexity does not get a president elected

Shankar Vedantam reports (via Robin Hanson):

The study found that in the first three years after a new president takes office, his speeches displayed higher levels of complexity compared with addresses in the fourth year in office. In the first three speeches, presidents were more likely to acknowledge other points of view, potential pitfalls and unintended consequences. In the fourth year, however -- as they were about to run for reelection -- the complexity of their speeches plunged.

Not only that, but American presidents who showed a sharper decline in complexity were more likely to be reelected than those who continued to acknowledge that the challenges facing the nation were complex.

Previously, on Idiocracy.

Maureen Dowd may have trouble with lineups of a different color

She confuses reporter Michelle Henery with Michelle Obama.

Rich.

NFL Franchise Tag values

via Karen Guregian, in millions:

$ 10.7	Quarterback
$ 9.5	Cornerback
$ 8.8	Defensive end
$ 8.1	Linebacker
$ 7.8	Wide receiver
$ 7.5	Offensive line
$ 6.5	Running back
$ 6.3	Defensive tackle
$ 4.5	Tight end
$ 4.4	Safety
$ 2.5	Kicker

The Patriots are mulling a tag on Randy Moss, since they can't tag Asante Samuel again. The tag is usually used for one of the best players on the team, who becomes a free agent and projects to have another strong season. Reacting to a tag may be the biggest test Moss has faced all year.

The relative values for the tags reflect the average of the top 5 salaries for each position. Cornerback values have been climbing over the years, accurately reflecting scarcity for top players in that role. I believe that passing has increased over the last few seasons as well.

Running backs are still critical, but a lot of them tend to see their most productive years while playing under rookie contracts, and have a shorter shelf life because of the number of hits they take and the size of the defensive players hitting them.

CEO Pay

ruminated upon by Tim Harford and Megan McArdle.

Canadian scientists worried about coming Ice Age

The headline reads: Sun Stays Sluggish as Weathermen Fight for Anti-Ice Age Funding (via Don Surber)

I've been trading all wrong at the Global Warming Exchange!

UPDATE: IBD has more.

Ways to reduce global warming (thinking outside the box, but inside the coffin)

I don't agree with Don's entire list, but here are some notable ideas:

First on my list is to turn off the air conditioner in the summer and turn off the furnace in the winter. This way, people will not use as much electricity and natural gas, thus not only decreasing their carbon footprint but their utility bills substantially.

Second stay in bed under as many blankets as possible in the winter. Without a furnace, it will get mighty cold at home. Sleeping reduces activity, which reduces the amount of oxygen consumed, which reduces the carbon dioxide emitted.

Third, get direct deposit for that unemployment check when you lose that job due to your annual hibernation. That spares the planet the emissions of carbon dioxide from the treks to the unemployment office and the bank.

Fourth, quit watching Hollywood movies. Hollywood movies also have large carbon footprints, as they often travel by airplane to reach the local theaters. Watching only organically grown videos made by friends and neighbors would not only save the planet, but help the local economy. Fifth, if you cannot avoid Hollywood movies, at least shun those that are shown at the ... film festivals.
Sundance is bad for the environment because it took a pristine area of Utah and developed it into a paradise for the elite, who expel all sorts of carbon dioxide as they fly in and out of Utah.

Eighth, don't change the light bulb. I know. Congress has mandated switching to lights that emit more light for less energy. But not changing the light bulb means that when it burns out, you will use no electricity. Using only sunlight means darker houses at night, which means more sleep, which means even less activity, which means an even smaller carbon footprint.

My final idea: Stop exercising. Those self-centered people with the slim waists and big biceps are emitting way too much carbon dioxide. Healthy people also increase health costs by living longer and dying of more expensive diseases, according to a Dutch study online Monday in the Public Library of Science Medicine journal. The Dutch found that it costs $326,000 to treat the average smoker after age 20; $371,000 to treat the average obese person; and $426,000 to treat the average healthy person.

Hmm. Of course, if we kill off the planet, everyone dies and look at the money we will save on both health costs and Social Security.

Of course, I was way ahead on the Hollywood movies strategy.

How's that for prediction market liquidity?

Brett Arends reports:

InTrade, based in Dublin, has 70,000 customers world-wide. Mr. Delaney says "a significant proportion" are based in the U.S. In total, he said, the bookmaker has seen more than $50 million wagered on the U.S. presidential election including "millions of dollars" in the past few days.

(via Chris Masse)

The Law of Coughlin

I'm done mourning the Super Bowl. I knew it was over when I heard that Spagnuolo was staying with the team, with a big bump in pay, and I was happy for Giants fandom.

Not that I'd trade teams, nor even crotchety Belichick for (less) grouchy Coughlin.

But Coughlin has made his mark on the sport, and perhaps all professional team sports. Rather than resting one's best players once playoff seeding has been locked in, we will see more coaches playing their best players as a confidence builder and competition sharpener for the playoffs.

Of course, the law needs to be tested. It may only work for teams who hate playing at home because their fans are so unsupportive.

Mankiw sense, in response to Conrad nonsense, on the national debt

Professor Greg relates:

If you look at the end of [Bush's] eight years of responsibility, we see the debt as being over $10.4 trillion. That is almost a doubling of the national debt on his watch.--Senator Kent Conrad, ND

Yes, the federal debt is higher than when the President took office. Debt in 2001 = 35.1% of GDP. Projected debt in 2009 = 37.9% of GDP. The claim that the debt is "almost doubling" under this President is absurd. Measured as a share of the economy, it's about 8% higher than it was when the President took office. (37.9 - 35.1) / 35.1 = 8%. This debt increase comes in the context of: an inherited recession, a stock market crash, corporate scandals, a terrorist attack, war, and a huge increase in the price of oil.--unnamed White House economist

This is correct as far as it goes. What my friend forgets to mention, however, is that the Medicare prescription drug bill signed by President Bush significantly increased the long-term spending trajectory. (FYI, both Senator McCain and Senator Clinton voted against the bill. Barack Obama was not yet in the Senate. Senator Conrad, who above expresses so much concern about fiscal responsibility, voted in favor.)--Greg Mankiw

But not all is rosy. Here's the last graph from the White House:



Could we cut a little spending please? We did it in my bank, in my church, and in my household all in these last several months. Trimming 10% to start is not difficult.

Never mind

Eddy Elfenbein:

Do you remember Gilda Radnor’s SNL character Emily Litella? She was the older lady who would do news commentary on an item that she invariably misheard. This led her to discuss topics such as free Soviet jewelry, Presidential erections or making Puerto Rico a steak.

Yesterday, Dow Jones reported that Warren Buffett said that if the current account deficits continue, the dollar will be "worthless."

One small problem. He actually said it will be "worth less."

In other news, recession contract is ticking back down:


DISCLOSURE: I am short US.RECESSION.08

The Senator would be Emperor (of Healthcare, at least)

Today's WSJ:

At a recent debate, [Mr. Obama] drove the point home, asking Mrs. Clinton, "You can mandate it but there will still be people who can't afford it. And if they can't afford it, what are you going to fine them? Are you going to garnish their wages?" And in an interview with ABC's George Stephanopoulos on Sunday, Mrs. Clinton conceded that "we will have an enforcement mechanism" that might include "you know, going after people's wages."

Well, well. In other words, HillaryCare II isn't all about "choice," but would require financial penalties for people to pay attention, including garnishing wages. To put it more accurately, the individual mandate is really a government mandate that requires brute force plus huge subsidies to get anywhere near its goal of universal coverage.

Let the people choose for themselves, please.



DISCLOSURE: I am long 2008.DEM.NOM.OBAMA (and also long 2008.DEM.NOM.CLINTON)

UPDATE: After getting some ribbing on this disclosure, I am extending it to say than I am short 2008.PRES.CLINTON, short 2008.DEM.NOM.GORE, and was also short 2008.DEM.NOM.EDWARDS earlier, but am flat now.

QUOTE OF THE DAY:

Or to look at it another way, if Hillary Clinton's entire agenda were enacted, her climate change proposals would wind up doing more to improve public health than would her health care proposals.--Matt Yglesias, via Tyler Cowen

UPDATE: Oh, that's why it's got to be universal. Steve Bainbridge says:

On the radio driving to work today, I heard a report that Hillary Clinton’s campaign workers not only are going unpaid, but also now have lost their health care benefits.

BCWUW4: Mark Perry on Sweden's health care system being inaccessible

up to 40% of patients cannot even make a phone connection.

Be Careful What You Wish For.

Raceball and Johan Santana

at FanHouse:

In March of '05 NY Magazine profiled Minaya's building of a "Latin Dream Team" and positioned him as a contrarian to the popular Moneyball, a book with the tagline: "The art of winning an unfair game." Three years later the Johan Santana signing may be the final crowning chapter for the would-be manual on Raceball: The art of using racism to create a winning culture.

Women more competitive than men

in some cultures:

Our experimental results reveal interesting differences in competitiveness: in the patriarchal society women are less competitive than men, a result consistent with student data drawn from Western cultures. Yet, this result reverses in the matrilineal society, where we find that women are more competitive than men. Perhaps surprisingly, Khasi women are even slightly more competitive than Maasai men, but this difference is not statistically significant at conventional levels under any of our formal statistical tests.

All I know is, in my American cultural experience, men are more competitive but women hold more grudges. And women say more words, especially once out of larger social arenas (where men are competing for best joke teller or story teller).

Darwin Awards: American voter edition?

More from Megan, this time anecdotes about Super Tuesday:

Noah Millman offers an anecdote:

So my liberal Democrat mother-in-law gets to the polling place planning to vote for Hillary Clinton, and discovers that, unbeknownst to her, she has been a registered Republican for the last 40 years. New York being a closed primary state, she dutifully goes into a Republican booth. All she knows is that she can’t stand John McCain. So she votes for . . . Mike Huckabee, with whom she disagrees about pretty much absolutely everything.

Puts those mysterious Florida Buchanan voters from 2000 into perspective.

To which a commenter replies:

Sorry, Florida voters are still the dumbest in the United States. Our local Supervisor of Elections received a flood of calls yesterday from people wondering where to vote. The Supervisor of Elections had to inform each caller that our primary was back in January, and that it was a good thing they didn’t get a chance to vote.

I feel a book idea coming on: Myth of the Sentient Voter?

And sadly, it won't be science fiction.

Megan notes that when Obama is Krugman's target instead of Bush

more people start to wince and complain.

Harold Pollack, a credentialed expert on health policy, having taken the drastic step of reading the actual study, gives us the answer: Gruber's imagined Obama-like plan with a mandate achieves the feat of virtually universal coverage by ... assumption.

Gruber:

In particular I assume that 95% of those who would not voluntarily choose to insure are forced to insure through the mandate.

[emphasis added]

So the "finding" comes out of precisely nowhere. Of course if the mandate succeeds, it will increase coverage, with most of the cost coming from the people paying those mandatory premiums rather than the [other] taxpayers. But the claim that it will actually succeed is based on nothing but an assumption. And yet no reasonable reader of Krugman's column would understand that.

Welcome to the club. Would that we could get a coalition to banish silliness like this from all political discourse, not merely the kinds we don't like. And yes, I'm sure I don't do a very good job of criticizing people I agree with either.

Why the government program OSHA did not noticably reduce worker fatalities

This picture says a thousand words about government efficacy (immeasurable? Without that vertical line, there's no way to tell when OSHA started or when it finally started making a difference):

I got here via Marginal Revolution. In the same post, we learn:

Annual OSHA penalties for safety violations (2002): $149,000,000

Annual Workers Compensation Premiums (2001): $26,000,000,000

Estimated Annual Wage Premiums for Risky Activities (2004 dollars): $245,000,000,000

His point: Market incentives for worker safety dwarf legal incentives, which in turn dwarf regulatory incentives. The level of safety we see in the workplace today is about the same as the level we'd see if government just looked the other way.

Income mobility

courtesy of Mark Perry:

I understand the probable reason why redistributionists (who call themselves progressives) decry stagnant wages for the last several decades. It's because wages for entry level jobs which do not require a college education have remained stagnant.

What the wage data does not show is how someone who makes $30,000 at 20-25 years of age may end up making $50,000, with health care benefits on top of that, by the time (s)he is 30 years old. It happened to me, it happened to my wife, it happened to my condo superintendent.

In a pool of 20 of workers without college education that I have observed in New York City over the last 7 or more years, the only ones without upward income mobility are the ones who do not have legal status to reside in the country.

Quote of the day

Unfortunately, many assignment editors confuse ignorance with objectivity, and they assign someone to cover religion who knows absolutely nothing about it, thinking that in that way they’re being unbiased. I said, “If you did that in sports, imagine the riots in the street.”--John Foley, Vatican press officer

So that is why the press is so unreliable? Eureka!

Jerome Kerviel will not be scapegoated!

He states:

I was singled out by Société Générale. I am taking my share of responsibility, but I will not be the scapegoat.

Back on January 24, when the story first broke, I had said:

My understanding is that he couldn't have done it alone. A lot of capital needs to be posted to the clearing corporation and as margin. That pledging must be done with the approval of senior officers in the bank. Monsieur Kerviel could be a scapegoat, like Nick Leeson was.

UPDATE: Dan Ariely conducted an interesting cheating experiment done with MIT and Harvard students, the results of which he applies to Kerviel trading derivatives. (I'm not sure if the French should be offended by this; you know, being compared to the bougies at those Cambridge schools). Via Tim Harford.

Intrade beats Zogby on Super Tuesday

Both the prediction market and the pollster called 5 of the 7 head-to-head contest winners, so it was mostly ties between them. But in the NJ Democratic primary and the California Republican primary, Intrade contracts pointed to the winner on election eve, while Zogby indicated a tie in NJ and Romney in California.

Standings
Wins	Losses	Ties	Pct	Contender	Avg Eve Prob
5	2	9	59.4%	Intrade	69.6%
2	5	9	40.6%	Zogby	39.2%

Schedule
Score	Date		State	Party	Intrade	Zogby	Winner		Intrade Pct	Zogby Pct
5-2-9	5-Feb		NJ	Rep	McCain	McCain	McCain		96%	52%
5-2-8	5-Feb		NJ	Dem	Clinton	2-way-tie	Clinton		67%	43%
4-2-8	5-Feb		NY	Rep	McCain	McCain	McCain		98%	53%
4-2-7	5-Feb		GA	Dem	Obama	Obama	Obama		96%	48%
4-2-6	5-Feb		MO	Dem	Obama	Obama	Obama		63%	47%
4-2-5	5-Feb		CA	Rep	McCain	Romney	McCain		56%	40%
3-2-5	5-Feb		CA	Dem	Obama	Obama	Clinton		52%	46%

Election eve predictions here.

Why Al? Why do you continue to lie to us?

Gawker (via Tim Blair):

Al Gore's Current TV, a "youth-oriented news company," is filing for a $100 million dollar public offering. Which means we all get to find out that apparently Gore's little tv station has been lying about its profitability for three solid years. Fast Company, NewTeeVee, the New York Times, and BusinessWeek all repeated claims by Current reps that the company was profitable. Turns out, not so much. "The youth-oriented news company had a net loss of $9.8 million in 2007, based on revenue of $63.8 million. It lost $7.6 million in 2006 and $14.3 million in 2005. Altogether, Current had $36.5 million in debts as of the end of last year."

Wait, I've heard about this business model before.

Like I was saying Sunday night

FanHouse asks today:

Patriots cornerback Ellis Hobbs will undergo surgery this week for a sports hernia and groin injury suffered earlier in the season, Alex Marvez of Fox Sports is reporting.

That raises a few questions. First, if this injury was suffered earlier in the season, why wasn't Hobbs listed on the Patriots' Super Bowl injury report?

Secondly, and more importantly, why was a guy who has a groin injury matched one-on-one with Plaxico Burress on the Giants' game-winning touchdown pass? That's Hobbs on the right in the above photo, watching as he's just been burned for the touchdown that ended the Patriots' undefeated season. Couldn't Bill Belichick have come up with a coverage scheme that didn't match the Giants' No. 1 receiver with an injured player?

which is what I asked immediately after the game:

Yes, we should be bitter about the coaches leaving Ellis Hobbs out in single man coverage against Burress with no safety help over the top.

Recession contracts ticking back up

DISCLOSURE: I am short US.RECESSION.08

Would Barack Obama be better than Jimmy Carter?

I know several Bush voters who are thinking about voting for Obama if he is the nominee. Besides Ann Coulter, I haven't come across any Bush voters who are voting for Clinton if she is the nominee.

But Obama's soaring rhetoric is a double-edged sword for me. On one hand, it unites the country, rather than playing the politics of division. On the other, it can mask serious deficiencies in foreign policy.

Which brings me to the comparison with Jimmy Carter. James Taranto has great food for thought:

Time reported contemporaneously on the interview under the assumption that Carter was simply pandering to the kind of man who reads Playboy. Yet it really does seem to shed some light on Carter's worldview more broadly, and on liberal sanctimony more generally.

Carter focuses on one particular sin--pride--and suggests that it is more problemati