Friday, October 31, 2008

Robert Rubin's obstruction and inaction as factors in the current credit crisis

I don’t agree with Rubin on everything, but on the genius of Fischer Black and strong dollar policy, we are unified. Timothy Noah gives us some pause in looking at Rubin’s Treasury Secretary tenure:

In 1998, Brooksley Born, chair of the Commodity Futures Trading Commission, proposed bringing derivatives under her jurisdiction. Rubin joined forces with Greenspan and Arthur Levitt Jr., then chairman of the Securities and Exchange Commission, to successfully derail the proposal in Congress. Rubin shared Born's worry about the derivative market's unregulated growth, and in his 2003 memoir, In an Uncertain World (co-authored by Jacob Weisberg, editor-in-chief of the Washington Post Co. unit that includes Slate), Rubin would later write that derivatives "should be subject to comprehensive and higher margin limits." So why did he oppose Born? Rubin doesn't discuss the episode in In an Uncertain World, but according to an Oct. 15 article by Anthony Faiola, Ellen Nakashima, and Jill Drew in the Washington Post, Rubin fought Born's plan for essentially political reasons: So "strident" a power grab by the CFTC, Rubin believed, would invite legal challenge, which in turn would create havoc in the derivatives market. Unfortunately, after killing off Born's proposal, Rubin never developed a less "strident" regulatory alternative—even after the September 1998 collapse of the Long Term Capital Management hedge fund, attributed in large part to its extensive investment in derivatives, demonstrated that concerns about these unregulated financial instruments were extremely well-founded. As a consequence of Rubin's obstruction and inaction, the market for one particular derivative—credit-default swaps—grew like a noxious weed. The credit-default swaps were unregulated insurance contracts on securities derived partly from subprime mortgages. If indiscriminate subprime mortgages were the vehicle that brought about the market meltdown, credit-default swaps were the fuel.

Freedom is not a mistake

Great question

Mr. Obama pledges to clean up our nation's politics and outpolls John McCain on honesty and ethics. Yet in Chicago, he moved with the Tony Rezkos and endorsed pols like Mayor Daley and Cook County Board President Todd Stroger. Can a politician so steeped in his hometown's ways really be an agent of change in Washington?

Thursday, October 30, 2008

Graph of the day

Via Mark Perry, comparing federal income taxes paid by residents of 6 states, versus Exxon’s corporate taxes.

McCain-acons exist, too

Here is Wendy Button, speechwriter for Barack and Michelle Obama, Hillary Clinton, John Edwards, and Joe Biden:

We can talk about the wardrobe and make-up even though most people don’t understand the details about Senator Obama’s plan with Iraq. When he says, “all combat troops,” he’s not talking about all troops—it leaves a residual force of as large as 55,000 indefinitely. That’s not ending the war; that’s half a war.

I was dead wrong about the surge and thought it would be a disaster. Senator John McCain led when many of us were ready to quit. Yet we march on as if nothing has changed, wedded to an old plan, and that too is a long way from the Democratic Party.

I can no longer justify what this party has done and can’t dismiss the treatment of women and working people as just part of the new kind of politics. It’s wrong and someone has to say that. And also say that the Democratic Party’s talking points—that Senator John McCain is just four more years of the same and that he’s President Bush—are now just hooker lines that fit a very effective and perhaps wave-winning political argument…doesn’t mean they’re true. After all, he is the only one who’s worked in a bipartisan way on big challenges.

Before I cast my vote, I will correct my party affiliation and change it to No Party or Independent. Then, in the spirit of election 2008, I’ll get a manicure, pedicure, and my hair done. Might as well look pretty when I am unemployed in a city swimming with “D’s.”

Whatever inspiration I had in Chapel Hill two years ago is gone. When people say how excited they are about this election, I can now say, “Maybe for you. But I lost my home.”

Glenn Reynolds with a timely policy reminder

Remember, no matter what we do, half the households in America will be below the median income.

Has my confidence in Bernanke

been vindicated now?


(I am sure commenter Harold Hecuba will find something that’s been missed).

Todd Zywicki's take on libertarian voting trends

Including his own:

Maybe I'm just slower at this than others, but it really took a long for it to sink in to me exactly how far left Obama really is. On every single issue that I am aware of, he seems to be at the far left end of the Democratic Party spectrum. I mean really out there.

I think that my slowness to really pick up on this was due to several factors. First, Obama's demeanor is essentially moderate--he doesn't come across as a Howard Dean crazy type. I think this leads one to assume his policies are moderate. Second, my resistance to McCain was really quite strong--I've criticized him here before, especially for the way it seems that he approaches problems. Third, until recently McCain has really run a terrible campaign in terms of explaining the differences between himself and Obama in terms of illustrating exactly how far left Obama is. Fourth, because of media bias, the media has tended to reinforce the idea that Obama is a moderate and not to highlight the embarrassing parts of his message.

Perhaps most fundamentally, given the history of the world over the past 25 years I think I just had assumed that no serious politician or thinker would in this day and age hold the sorts of views that Obama seems to hold. Raising taxes in a recession, protectionism, abolition of the secret ballot for union elections, big spending increases, nationalized health care, and most appallingly (to my mind) the potential reimposition of the "Fairness Doctrine"--I mean this is pretty serious stuff. And when combined with a Democratic Congress, I think we may be talking about (to use Thomas Sowell's recent phrase) a "point of no return." I guess I just assumed that Obama would be sort of Bill Clintonish--"the era of big government is over" and all that stuff. That he would have absorbed the basic insights of recent decades on taxes, trade, regulation, etc.

I experience similar “slowness”.  But, judicial activism and foreign policy risks aside, I’m not sure things would be different under either candidate.  Sure, division of power and gridlock will dampen legislative uncertainty and unintended consequences, but perhaps a few years of wilderness will bring the electorate closer to reality.

Markets in everything: teeth and shoes

Sean Masaki Flynn says:

Good shoes and nice teeth are costly signals of reproductive fitness.

A signal is only credible if it is costly. A person telling you they are honest is one thing. Watching that person later stick to being honest even though it costs him his job is another thing. Such an action shows a much higher level of credibility that he will be honest in all situations.

In the same way, a person telling you that he has good genes that would produce lots of descendants is one thing, while providing you with costly evidence to that effect is much more credible. To the extent that a person has nice teeth, they either have good genes or could afford braces growing up. Both may be taken as signs indicative of being able to provide either good genes or plenty of resources to help make a lot of descendants.

And the same is true for good shoes. A person with good shoes must be both fashion conscious and able to afford good shoes. Being fashion conscious indicates a level of social skills that might help one’s descendants to survive and do well in our very social species, while the ability to afford good shoes indicates the capability of marshaling resources that could also be useful for descendants and thereby increase their evolutionary fitness.

He also says:

Entrepreneurs make new jobs and new industries and new products. The question from a public-policy perspective is how to best encourage them. My personal view is that the government does a really bad job choosing whom to support — either through direct subsidies, protection against foreign competition, the provision of tax incentives, or any sort of industrial policy that favors some entrepreneurs over others.

Worse yet, the possibility of successfully lobbying for subsidies, tax incentives, or protection from competitors means that it is often more profitable to direct one’s entrepreneurial efforts not toward developing new products or better methods, but rather toward figuring out better ways to game the system; better ways to lobby Congress, get increased corporate welfare, get higher tax subsidies, and so on.


I went through the Los Angeles public schools, and I can tell you from firsthand experience that they are poorly managed, incredibly wasteful of money, and produce pathetic results. As a result, I would be the last one to put economic education as a top priority.



For example, do you want more spending on Head Start programs for preschool children? O.K., but remember that any increased spending for Head Start has an opportunity cost. Every dollar spent on Head Start means giving up a dollar of spending on feeding starving children in poor countries, efforts to decrease pollution, helping poor people get affordable housing, etc. Once a person starts thinking in terms of opportunity costs, they start making much more serious decisions about how to spend both their own money as well as taxpayer money.


The most important philosopher of science of the 20th century, Karl Popper, argued that economics was the only social science that had turned into a real science. To him, economics was the queen of the social sciences just as physics was the king of the physical sciences.

But why did he think this? Because economics was, to him, the only social science that engaged in systematically testing hypotheses about how the world works. Doing so is actually much easier if you engage in a lot of mathematical modeling. Why? Because in a ath model it is crystal clear what your assumptions are, and also what implications follow from those assumptions …

Economics was the social science that most early on embraced math modeling and therefore was the social science that led the way in terms of making very precise, testable predictions that could be compared with the real world to see if they held up. That is why economics got the reputation of being more of a real science than psychology.

To see what I mean, think about any of the Sigmund Freud’s writings. Is it at all clear what his assumptions are? What are his X, Y, and Z? And then, is the logic that he uses to get from his vague assumptions to his often-vague conclusions totally air tight? Not really. And then, are his predictions about human behavior in a given situation very precise? No. So, if we went out to test his “model” against what happens in an actual situation would we be able to? Not at all.

But before I get slammed by sociologists, anthropologists, psychologists, and others, let me say that much has changed. All the social sciences are now very much more mathematical and precise and thus very much more able to produce models that make precise, testable predictions. So, these days, I can’t really say that economics is more of a real science than many of the others. But I would say that we were first, and that we led the way, and that that was a very good thing.

Smart, articulate, honest guy.  Probably my favorite Freakonomics interview to date.

Global cooling cannot be stopped, despite hot air

Via Glenn Reynolds, Great Britain’s House of Commons holds a global warming debate and is blanketed with snow for the first time since 1922.


I remain short Intrade’s 2008.GLOBAL.TEMP.TOP5 contract.

Calvin Woodward checking Barack Obama's healthcare math

Via Don Surber, Woodward figures:

Obama's assertion that "I've offered spending cuts above and beyond" the expense of his promises is accepted only by his partisans. His vow to save money by "eliminating programs that don't work" masks his failure throughout the campaign to specify what those programs are—beyond the withdrawal of troops from Iraq.

A sampling of what voters heard in the ad, and what he didn't tell them:

THE SPIN: "That's why my health care plan includes improving information technology, requires coverage for preventive care and pre-existing conditions and lowers health care costs for the typical family by $2,500 a year."

THE FACTS: His plan does not lower premiums by $2,500, or any set amount. Obama hopes that by spending $50 billion over five years on electronic medical records and by improving access to proven disease management programs, among other steps, consumers will end up saving money. He uses an optimistic analysis to suggest cost reductions in national health care spending could amount to the equivalent of $2,500 for a family of four. Many economists are skeptical those savings can be achieved, but even if they are, it's not a certainty that every dollar would be passed on to consumers in the form of lower premiums.

THE SPIN: "I've offered spending cuts above and beyond their cost."

THE FACTS: Independent analysts say both Obama and Republican John McCain would deepen the deficit. The nonpartisan Committee for a Responsible Federal Budget estimates Obama's policy proposals would add a net $428 billion to the deficit over four years—and that analysis accepts the savings he claims from spending cuts. The nonpartisan Tax Policy Center, whose other findings have been quoted approvingly by the Obama campaign, says: "Both John McCain and Barack Obama have proposed tax plans that would substantially increase the national debt over the next 10 years." The analysis goes on to say: "Neither candidate's plan would significantly increase economic growth unless offset by spending cuts or tax increases that the campaigns have not specified."

THE SPIN: "Here's what I'll do. Cut taxes for every working family making less than $200,000 a year. Give businesses a tax credit for every new employee that they hire right here in the U.S. over the next two years and eliminate tax breaks for companies that ship jobs overseas. Help homeowners who are making a good faith effort to pay their mortgages, by freezing foreclosures for 90 days. And just like after 9-11, we'll provide low-cost loans to help small businesses pay their workers and keep their doors open. "

THE FACTS: His proposals—the tax cuts, the low-cost loans, the $15 billion a year he promises for alternative energy, and more—cost money, and the country could be facing a record $1 trillion deficit next year. Indeed, Obama recently acknowledged—although not in his commercial—that: "The next president will have to scale back his agenda and some of his proposals."

Tim Kane is thinking about job creation

Quote of the day

[Socialism] was the tragic failure of the twentieth century. Born of a commitment to remedy the economic and moral defects of capitalism, it has far surpassed capitalism in both economic malfunction and moral cruelty.—Robert Heilbroner

Intrade 2008 Recession contracts spike

from 70 to 85, due to the -0.3% 3rd quarter GDP announcement this morning.


I flattened my short position.

David Broder on John McCain

Really excellent:

We suspected, and soon confirmed, that he had limited interest in, and capacity for, organization and management of large enterprises. His first effort at building a structure for the 2008 presidential race collapsed in near-bankruptcy, costing him the service of many longtime aides. From beginning to end, the campaign that followed has been plagued by internal feuds and by McCain's inability to resolve them.

The shortcoming was intellectual as well as bureaucratic. Like Jimmy Carter, the only Naval Academy graduate to reach the Oval Office, McCain had an engineer's approach to policymaking. He had no large principles that he could apply to specific problems; each fresh question set off a search for a "practical" solution. He instinctively looked back to Theodore Roosevelt and the Progressive era, with its high-mindedness and disdain for the politics of doling out favors to interest groups. But those instincts coexisted uneasily with his adherence to traditional, Reagan-era conservatism -- a muscular foreign policy, a penchant for tax-cutting and a fondness for business …

His vice presidential choice, his best opportunity to put his stamp on the future, was made, typically, more on instinct than careful appraisal. McCain saw Sarah Palin as reinforcing his own reformer credentials. The convention embraced her, not as a reformer but as the embodiment of beliefs precious to the religious right. And the mass of voters questioned her credentials for national leadership.

The campaign has been costly in terms of McCain's reputation. He has been condemned for small-minded partisanship, not praised for his generous and important suggestion that the major party candidates stump the country together, conducting weekly joint town hall meetings -- an innovation Obama turned down.

The frustration for McCain and his closest associates is their belief that he is ready to practice the kind of post-partisan politics the country wants -- which they believe Obama only talks about.

Should McCain still win the election, it will demonstrate even more vividly than the earlier episodes in his life the survival instincts and capacity for overcoming the odds of this remarkably engaging man. If he becomes president, the country would have to hope this campaign has honed his leadership skills.

Wednesday, October 29, 2008

A government and press in bed togther

can intrude much more than any agency under the PATRIOT Act.

Capitulation soon?

Quote of the day

The power to tax is the power to destroy.—Chief Justice John Marshall

Even the government is guilty of insider trading

Ray Fisman’s account of the CIA coup in Guatemala and price movements of United Food Co. (now Chiquita).

Even Bryan Caplan sounds morose

You may have the rest of the media in the tank

but Fox News reports it straight (and Ms. Kelly is articulate, tough and rather beautiful):


But likely true:

And yesterday Biden let slip that he and Obama apparently have a sliding scale to determine who's "super-rich."

Obama, after all, has been promising a tax cut for the "middle class" - those making $200,000 a year or less.

Biden yesterday lowered that bar.

"What we're saying," he told a Pennsylvania TV interviewer, "is that [our] tax break doesn't need to go to people making . . . $1.4 million. It should go to [people] making under $150,000 a year."

Oops. That's a 25 percent downward redefinition of "middle class."

An Obama mouthpiece quickly dismissed the discrepancy as just another one of Joe the Senator's gaffes.

But consider: The campaign has a new TV commercial out declaring that families - not individuals - earning $200,000 or less would qualify for a tax cut. Two incomes - not one.

And, as most middle-class wage-earners know, that's a huge difference.

As Sen. John McCain said yesterday: "At this rate, it won't be long before Sen. Obama is right back to his vote that Americans making just $42,000 should get a tax increase."

We wouldn't be surprised - what with leading congressional Democrats like Rep. Barney Frank licking their chops at the chance to raise taxes.

"We'll have to raise taxes, ultimately," Frank declared over the weekend.

Juan Enriquez's Ten Proposals for the next President & Congress

here.  I think all of them have substantial merit:

1. We have to save the dollar (AAA rating in jeopardy)

2. We have to fundamentally and brutally restructure debt

3. All entitlements are fair game. To begin with...

a. If you are 60 to 65 you probably just lost a big chunk of your nest egg.

(we don't want anything from you)

b. If you are 55 to 60, we need two more years' work from you

c. 55 and under, we need three or four more years from you

4. Cut back military by 2% per year for ten years

5. Cap medical costs at 18% GNP (going to be a cat fight, but we need to have it)

6. We have to triage our support for companies (don't attempt to save dying whales)

7. The program has to be bipartisan. It has to make both Dems and Repubs unhappy

8. Simplify and broadly apply Sarbanes Oxley - apply it to government, apply it to hedge funds

9. We will invest in growing start up companies (which create the most jobs - this is where the economy is growing)

10. We will treat education as a varsity sport (and continue to recruit foreign PhDs)

Andrew Napolitano on presidents pushing beyond the limits

of the Constitution:

Remember that FDR had taken -- and either Mr. Obama or Mr. McCain will soon take -- the oath to uphold that old-fashioned document, the one from which all presidential powers come.

Unfortunately, these presidential attitudes about the Constitution are par for the course. Beginning with John Adams, and proceeding to Abraham Lincoln, Woodrow Wilson and George W. Bush, Congress has enacted and the president has signed laws that criminalized political speech, suspended habeas corpus, compelled support for war, forbade freedom of contract, allowed the government to spy on Americans without a search warrant, and used taxpayer dollars to shore up failing private banks.

All of this legislation -- merely tips of an unconstitutional Big Government iceberg -- is so obviously in conflict with the plain words of the Constitution that one wonders how Congress gets away with it.

In virtually every generation and during virtually every presidency (Jefferson, Jackson and Cleveland are exceptions that come to mind) the popular branches of government have expanded their power. The air you breathe, the water you drink, the size of your toilet tank, the water pressure in your shower, the words you can speak under oath and in private, how your physician treats your illness, what your children study in grade school, how fast you can drive your car, and what you can drink before you drive it are all regulated by federal law. Congress has enacted over 4,000 federal crimes and written or authorized over one million pages of laws and regulations. Worse, we are expected by law to understand all of it.

The truth is that the Constitution grants Congress 17 specific (or "delegated") powers. And it commands in the Ninth and 10th Amendments that the powers not articulated and thus not delegated by the Constitution to Congress be reserved to the states and the people.

What's more, Congress can only use its delegated powers to legislate for the general welfare, meaning it cannot spend tax dollars on individuals or selected entities, but only for all of us. That is, it must spend in such a manner -- a post office, a military installation, a courthouse, for example -- that directly enhances everyone's welfare within the 17 delegated areas of congressional authority.

And Congress cannot deny the equal protection of the laws. Thus, it must treat similarly situated persons or entities in a similar manner. It cannot write laws that favor its political friends and burden its political enemies.


Is a man defined by his friends?

John McCain's presidential campaign Tuesday accused the Los Angeles Times of "intentionally suppressing" a videotape it obtained of a 2003 banquet where then-state Sen. Barack Obama spoke of his friendship with Rashid Khalidi, a leading Palestinian scholar and activist.,0,5458024.story


Tuesday, October 28, 2008

Quote of the day

On the question of public funding of presidential campaigns, we Democrats who strongly support Sen. Barack Obama's candidacy and who previously supported limits on campaign spending and who haven't objected to Obama's opting out of the presidential funding system face an awkward fact: Either we are hypocrites, or we were wrong to support such limitations in the first place.--Bob Kerrey

Apologies for the light blogging

Could not access blogger from work. Hopefully it is a temporary predicament.

Monday, October 27, 2008

Would Paul Krugman write this letter to himself

and reject the Nobel prize:
First of all, it's just not fair that only you should get this prize this year when there are hundreds of thousands of other economists in this world. Honoring only one person in this way is a totally non-egalitarian thing to do.

Second of all, a white man like you getting the prize — again! — is racist and sexist to the max. I just checked out the list of laureates in economics since 1969 and almost all of them are white men!!

Third of all, the amount of money — $1.4 million — that Riksbank is offering is obscene. Who deserves that kind of money anyway, when coal miners in third world countries — many of them barely 14 years old — don't make even $30 per month — and they are the ones risking their lives every day! As you have pointed out in your writings, the gap between the rich and the poor is rapidly widening.

Fourth of all, the selection process employed by Riksbank was neither transparent nor democratic.

Fifth of all, the prize sends a wrong message to the society. We agree that you worked hard all your life. You went to MIT, you got your Ph.D. ... You were studying your ass off while others were partying like crazy. Now you got the Nobel Prize and they don't. That's just not fair. Do you know what message it sends? That if you work hard in life, you can achieve things that others can't! That's a nasty and brutish message to send. Conservatives say things like that, not liberals like you!

Sixth of all, the prize perpetuates the shameful legacy of colonization and imperialism. Almost all of the laureates have been from the first-world countries.

Seventh of all, you accepting this prize will lead to global warming. You and your loved ones will be traveling to Stockholm in an airplane that will be consuming hydrocarbons — yes the same hydrocarbons that pollute the environment and prop up the dictatorial regimes.
Read the whole thing.

Barbara West, a journalist who is doing her job

Freeman Hunt says:
Unsurprisingly, Biden lies about the campaigns affiliation with ACORN. Yes, ACORN has received money from the Obama campaign. And Biden's spin on his recent bizarre comments depended on the viewer not knowing what it was that he said ...

It is beside the point to characterize that as saying Obama will be tested like any other President and is ready. His quote mentioned "a generated crisis," alluded to known "scenarios," and indicated that Obama's response would be unpopular. Those are the parts of the statement that people want clarification on.

I loved the questions about Marxism and Sweden. Biden says that the top one percent of earners make a large percentage of income, but he leaves out that they pay nearly double that share in taxes already.

As for me, I don't mind aggressive questioning in either direction. There's nothing tawdry in this interview. She's not asking him ridiculous, crazy-town questions like "Is Barack Obama a Muslim?" She's tough. That's good. She should be. You're running for the highest office in the land, and you'd better be able to take the heat and explain what you mean. As President you'll be facing people a lot tougher, a lot more hostile, and a lot more consequential than local news reporters.

Manhattanites for the Second Amendment

Partial list:
Carlos Delgado (Mets outfielder)
Robert DeNiro (actor)
Alexis Stewart (Martha's daughter)
Donald Trump (billionare poser)
David Wright (Mets infielder)

A tale of two cities: Dallas and Detroit

One-way 26-foot U-Haul truck rental quotes for 11/1/2008:
1. Detroit to Dallas: $1850

2. Dallas to Detroit: $521

Art Laffer shoots and scores

Yes, the Laffer Curve is a partial miss. But his column today is all good:

No one likes to see people lose their homes when housing prices fall and they can't afford to pay their mortgages; nor does any one of us enjoy watching banks go belly-up for making subprime loans without enough equity. But the taxpayers had nothing to do with either side of the mortgage transaction. If the house's value had appreciated, believe you me the overleveraged homeowner and the overly aggressive bank would never have shared their gain with taxpayers. Housing price declines and their consequences are signals to the market to stop building so many houses, pure and simple.

But here's the rub. Now enter the government and the prospects of a kinder and gentler economy. To alleviate the obvious hardships to both homeowners and banks, the government commits to buy mortgages and inject capital into banks, which on the face of it seems like a very nice thing to do. But unfortunately in this world there is no tooth fairy. And the government doesn't create anything; it just redistributes. Whenever the government bails someone out of trouble, they always put someone into trouble, plus of course a toll for the troll. Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved.

If you don't believe me, just watch how Congress and Barney Frank run the banks. If you thought they did a bad job running the post office, Amtrak, Fannie Mae, Freddie Mac and the military, just wait till you see what they'll do with Wall Street.

Barack Obama's economic advisers

support John McCain's health care reforms:

"The fact that the tax subsidy, which supports the employer-sponsored system, is better than nothing is a feeble excuse for resisting any changes to the status quo." That's not John McCain's judgment. It's a quote from Jason Furman, who happens to be Mr. Obama's economic policy director. In a cri de coeur published in the journal Democracy in 2006, Mr. Furman implored fellow Democrats and other progressives to confront "a critical missing link" in their health ideology -- the same link his boss now spends most of his time demagoguing.

Mr. Furman used to portray the current system as regressive, inequitable and a subsidy for health plans that insulate consumers from the cost of their care, thus inflating health spending. When he was director of the Brooking Institution's Hamilton Project, Mr. Furman outlined a health reform -- again using tax credits -- that took the "sensible approach" of "exposing individuals to the price of health care through greater cost sharing."

When President Bush unveiled a health reform similar to Mr. McCain's in 2007, Mr. Furman co-authored a Tax Policy Center paper that called it "innovative and a step in the right direction." As recently as May, he published a long article in Health Affairs on the possibilities of health-care tax reform.

What a difference an election makes. "The choice you'll have," Mr. Obama warned of the McCain plan during one of the debates, "is having your employer no longer provide you health care." Sounds terrible. But wait, let's consult another one of Mr. Obama's advisers. David Cutler, the Otto Eckstein Professor of Applied Economics at Harvard, put it this way: "Health insurance is not something that is made better by tying it to employment. As a result, essentially all economists believe that universal coverage should be done outside of employment."

That passage comes from Mr. Cutler's 2004 book, "Your Money or Your Life," which outlined a strategy for universal health care. Not surprisingly, Professor Cutler's plan, like Mr. McCain's, also applied subsidies such as "tax credits -- people get a lower tax bill, or a refund from the government, to be used to purchase insurance." In this he was echoing many other liberal health experts such as MIT's Jonathan Gruber, another Democratic policy star.

These advisers know that Mr. Obama's claim that Mr. McCain will tax health benefits "for the first time in history" is particularly disingenuous. For people who stick with employer coverage under the McCain plan, the money employers take out of wages to pay for insurance would be taxed, but the new credit more than covers the bill. The people who decide to buy coverage on their own would see their wages rise. And everyone who joins the individual market -- many of them uninsured now -- would be equipped with new health dollars, instead of paying with after-tax income.

Obviously neither Mr. Furman nor Mr. Cutler would endorse the McCain plan outright. They are, after all, Democrats. Liberals who support rearranging the tax code for health care think it must be accompanied by other insurance reforms to protect families in the individual market that Mr. McCain doesn't include. Even so, speaking on a Tax Policy Center panel on taxes and health insurance in February of this year, Mr. Furman said that "I think we should be cheerleading" the emphasis on tax reform, "not writing it off."

He even prefaced his remarks by joking, "this talk might actually sound like a John McCain rally." Maybe Mr. Obama should be running attack ads against his own economic guru.

Howard Stern already discovered similar phenomena.

Free markets reduce discrimination

David Henderson says:
... notice what McCain is saying: Even countries that hate us want to sell us oil. To paraphrase Adam Smith, it is not from the benevolence of the Saudi Arabian or Venezuelan producers that we fill our gas tanks, but from their regard for their own self-interest. Indeed, this statement of McCain goes further than Adam Smith. In Adam Smith's world, the butcher, baker, or brewer might have been indifferent to you or only mildly liked you. But McCain's statement illustrates Gary Becker's point that free markets break down discrimination: you might hate that guy who wants your product, but you love yourself and your family, and so you sell it to him.
I would conclude that if one abhors violence, one should also celebrate freedom and free markets.

Greg Mankiw on taxes reducing his incentive to work

He observes:
... one dollar I earn today will yield my kids:


For my illustrative calculations, let me take r to be 10 percent and my remaining life expectancy T to be 35 years.

If there were no taxes, so t1=t2=t3=t4=0, then $1 earned today would yield my kids $28. That is simply the miracle of compounding.

Under the McCain plan ... a dollar earned today yields my kids $4.81. That is, even under the low-tax McCain plan, my incentive to work is cut by 83 percent compared to the situation without taxes.

Under the Obama plan ... a dollar earned today yields my kids $1.85. That is, Obama's proposed tax hikes reduce my incentive to work by 62 percent compared to the McCain plan and by 93 percent compared to the no-tax scenario.

The bottom line: If you are one of those people out there trying to induce me to do some work for you, there is a good chance I will turn you down. And the likelihood will go up after President Obama puts his tax plan in place. I expect to spend more time playing with my kids. They will be poorer when they grow up, but perhaps they will have a few more happy memories.

Quotes of the day

It looks like we've gone from a world where only Harvard grads could vote, to one where all you need is passing grades in kindergarten.--Bryan Caplan

Colleges trumpet the statistic that, over their lifetimes, college graduates earn more than nongraduates, but that's terribly misleading. You could lock the collegebound in a closet for four years, and they'd still go on to earn more than the pool of non-collegebound — they're brighter, more motivated, and have better family connections.--Mark Nemko

Remember that "problem" of an increasing share of income going to the superrich? Most likely, it has been solved.--Greg Mankiw

... after adjusting the Census Bureau data for three key factors — inflation-adjusted median household income for most household types increased by roughly 44 percent to 62 percent from 1976 to 2006.--Terry Fitzgerald

I mean no disrespect toward Obama and McCain. But I'm sure I wasn't the only one who watched the candidates debate and thought, "Out of a nation of 300 million, this is the best we can do?"--Glenn Reynolds

Friday, October 24, 2008

25 years ago today

241 Americans lost their lives in Beirut

Lives saved through deregulation

as the excellent Jon Henke points out:

This must be those harmful consequences of deregulation.

The rate of workplace injuries and illnesses in private industry declined in 2007 for the sixth consecutive year, the U.S. Department of Labor's Bureau of Labor Statistics (BLS) reported today. Nonfatal workplace injuries and illnesses reported by private industry employers declined from 4.4 cases per 100 workers in 2006 to 4.2 cases in 2007.

And since miners are often invoked as a symbol of workplace safety problems, the record on mine safety for the past few decades...

If you havin’ Church problems then don’t blame God, son…

I got ninety-five theses but the Pope ain’t one.

BCWUW4: illustration of popular microeconomics

via Don Luskin:
Today on my way to lunch I passed a homeless guy with a sign that read "Vote Obama, I need the money." I laughed.

Once in the restaurant my server had on an "Obama 08" tie, again I laughed as he had given away his political preference--just imagine the coincidence.

When the bill came I decided not to tip the server and explained to him that I was exploring the Obama redistribution of wealth concept. He stood there in disbelief while I told him that I was going to redistribute his tip to someone who I deemed more in need--the homeless guy outside. The server angrily stormed from my sight.

I went outside, gave the homeless guy $10 and told him to thank the server inside as I've decided he could use the money more. The homeless guy was grateful.

At the end of my rather unscientific redistribution experiment I realized the homeless guy was grateful for the money he did not earn, but the waiter was pretty angry that I gave away the money he did earn, even though the actual recipient deserved money more.

I guess redistribution of wealth is an easier thing to swallow in concept than in practical application.

Be careful what you wish for.

When you're in the voting booth, remember this face

Guess the quarterbacks after each of their first 5 starts

W-L: 3-2 vs. 3-2
Pass Yds/G: 204.6 vs. 188.6
Comp pct: 62.3% vs. 65.5%
TD-Int: 7-4 vs. 5-4
Passer rating: 85 vs. 83.2

It's Tom Brady vs. Matt Cassel. Closer than I thought it would be.

The markets may have yet to capitulate

but Alan Greenspan did yesterday.

Caught in the throes of history

Index futures are limit down, which means trading has been halted in them. S&P 500 futures halted since 4:35am EST.

UPDATE: Paul Kedrosky's graph, demarcating BusinessWeek's "Death of Equities" cover may suggest an exaggeration on my part:

Quotes of the day

Morituri te salutamus--gladiators of Rome (We who are about to die salute you)

I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.--Alan Greenspan

And the alternative? What should protect the shareholders? The altruism of regulators?--Russell Roberts

... a ¥3 million car was worth £19,500 in the morning and £21,600 a few hours later, thanks only to currency fluctuations. I'm not sure what this kind of FX volatility means for international trade, but hedging costs are going through the roof, which can't help one bit.--Felix Salmon

... if regulation is so great, how come one guy, or one fairly minor bill, can apparently single-handedly destroy the most heavily regulated industry in America that doesn't actively involve radioactive material? If your preferred system is really that fragile, then maybe we should be looking into alternatives.--Megan McArdle

The monetary base jumped by over $300B. Excess reserves jumped by less than $60B. Contrary to the liquidity trap, the new money is not flying straight into bank vaults and locking the vault door behind it. Not even close.--Bryan Caplan

When the stock market crashed, Franklin D. Roosevelt got on the television and didn't just talk about the, you know, the princes of greed. He said, 'Look, here's what happened.'--Joe Biden's television anachronism

Thursday, October 23, 2008

A brain drain is great!

Not at all terrible.

More regulation won't save the New York Times

anymore than it will save a flailing bank.

Most Democrats think spreading the wealth is a good idea (66 percent)

and most Republicans think it is a bad idea (72 percent).

Personally, I think spreading the wealth is a great idea, but done without compromising freedom or privacy. Which is why I have no political party; both major parties have left me independent.

The main reasons why government is a poor intermediary between the wealthy and the poor is that
1) it disintermediates any direct connection between individuals (which increases deadweight loss and decreases accountability), and
2) it maximizes rent-seeking and free-riding

Supreme Court Justices

Another reason I am girding my loins:

Presidents come and go. Even our worst ex-president, Jimmy Carter, lasted only one term, so the damage he could do, while grievous, was finite. People could act on their buyer's remorse at the next election.

Supreme Court justices are a different story. They are appointed for life, and the damage they can do to our nation is infinite and usually irreversible. Who appoints them matters.

Tax uncertainty

coming from the Obama & McCain camps:
Sen. McCain, who proposes a "refundable tax credit" as the cornerstone of his health-care plan, has described Sen. Obama's proposal to offer a series of refundable tax credits as similar to offering "welfare." The Illinois senator has said 95% of Americans would benefit from some form of tax relief under his economic plan.

Sen. McCain has said his opponent's plan would give tax relief to the 38% of Americans who do not pay any federal income taxes. The Obama campaign says beneficiaries pay payroll taxes.

The McCain campaign said Mr. Goolsbee's comment reflected Sen. Obama's "willingness to say whatever is necessary in the moment." Sen. McCain on Wednesday said Sen. Obama had indicated his preference for redistributing wealth over promoting economic growth.

"It raises a question: What is their philosophy of taxation?" said senior McCain adviser Douglas Holtz-Eakin. "No one would design a tax policy about mortgage interest, but say, 'If you're laid off, you're not going to become eligible anymore.'"

President-Media-Elect Obama, you are a smart man, right? What is the opposite of stimulus? Taxes! So how about lower taxes and spending?

Quotes of the day

I may be estranged from my former thesis adviser, Robert Solow, in other ways, but here I agree with him that: (a) you probably need sociology to explain sticky wages and unemployment; but (b) it's not an economist's comparative advantage to pursue it.--Arnold Kling

Markets are complicated things that rest on a mixture of law, custom, and individual action. There is no libertarian state of nature in which human beings survived without some form of coercively enforced rules. All libertarianism can do is maximize the scope for individual action within that framework.--Megan McArdle

Beware any politician who promises to create new jobs.--Jacob Sullum

No. I'm trying to save the system, and the main thing we need is less reckless lending. Your position is that we need more credit to solve problems of debt.--John Carney, to Felix Salmon

I have no idea where you get this idea that the market has a clear idea of how solvent banks are. It doesn't. It does, however, have a clear idea of what any given bank's borrowing costs are. That's a liquidity issue, but it's used as a proxy for solvency, precisely because no one knows what the real solvency situation is.--Felix Salmon, back at John Carney

The richest vein I have seen is two guys/gals who want to create a tool that they themselves want to use. This describes, for example, Google, Yahoo and Apple. I have come to believe that almost everyone has the entrepreneurial gene — it’s been necessary for survival for thousands of years. ... The issue is whether that gene is expressed, and the only way to really “know” is with retroactive, after-the-fact analysis. Unfortunately, venture capital doesn’t work this way. You take your best shot and pray — then you thank God if you’re right a few times.--Guy Kawasaki

That someone in [Erwin] Chemerinsky's position would pre-emptively react with personal attacks on a judge who has kicked off such a debate suggests he knows that the advocates of politicized pro bono will have much to be defensive about.--Walter Olson

Dear everyone who’s ever thought of starting an NGO: Don’t do it. You’re not going to think of a solution no one else has, your approach is not as innovative as you think it is, and raising money is going to be impossible. You will have no economy of scale, your overhead will be disproportionately high, and adding one more tiny NGO to the overburdened international system may well make things worse instead of better.--Alanna Shaikh

I play her bubble-headed too when I imitate her.--Sarah Palin, on Tina Fey

It gives us an opportunity to actually see the ball on the ground, kick the ball and have another shot at it.--Adam Vinatieri, on icing the kicker

Obviously, a lot of those sacks aren’t on [the offensive line], they’re on me. That’s just something I’m getting a little more used to as I go forward.--Matt Cassell

I regret the fact that after one misstep, I let them pile on. They don't have a reason to stop if you don't correct them.--Darryl Strawberry

Wednesday, October 22, 2008

The case for global cooling mounts

as the merits of the CO2 warming hypothesis wane:

2008 global surface temperatures average 0.379 Celsius over GISS baseline. This means that, unless Sep-Dec 2008 temperatures average 1.10 over baseline (and the single month record, since 1880 when the data collection begins, is 0.85 in Jan 2007), this contract will expire at 0.0:

I remain short the Intrade global warming contracts.

UPDATE: The Gore Effect, in full effect.

UPDATE: Via Don Surber, Lorne Gunter has more.

I never would have guessed Howard Stern to be so much like John Stossel

I don't think Howard Stern has been published in a peer-reviewed journal, but this piece was pretty well done. He had one of his guys interview Harlem voters asking first who they were voting for. They would say Obama. Then, the interviewer mentioned McCain's policies, pretended they were Obama's, and the interviewees thought these were great ideas. That is, they would ask questions like this: "Are you more for Obama's policy because he's pro-life, or because he thinks he our troops should stay in Iraq and finish this war?" And they would say something like, 'because he's keeping the troops in Iraq'.

ACORN and the Catholic Church

working together, and then not.

Is this the best birthday gift ever?

I think a case can be made.

I tip my cap to these 2 Mikes

Nolan and Singletary.

A proven way to reduce inequality

is to increase poverty. Inequality might be bad, but isn't poverty much worse?

Forbes Richest 10

posted by Natalie:

Which candidate for President pays men and women similar wages

and which candidate pays women 28% less than men? The answer may surprise you.

UPDATE: More surprises.

Rhode Island beats Michigan in the dubious honor

for the highest state unemployment award.

I remember speaking to a family friend who worked in healthcare, and was so proud that healthcare was the state's largest industry.

It's amazing I even know how to write or do simple arithmetic, growing up there ...

Robert Murphy has a strong response to Tyler Cowen and Paul Krugman

Austrian business cycle theory, specifically capital consumption effects.

And Tyler Cowen has the integrity and self-esteem to post it. Bob Murphy even comments on Tyler's post (scroll down). Here are some excerpts from Murphy's thought-provoking piece:
The basic Austrian story is that during the artificial boom, workers' labor and other resources get channeled into investment projects that aren't compatible with the overall level of real savings. Sooner or later, reality rears its ugly head, and the unsustainable projects have to be abandoned before completion. Entrepreneurs realize they were horribly mistaken during the boom, everybody feels poorer and slashes consumption, and many workers get thrown out of jobs until the production structure can be reconfigured in light of the revelation.

For Krugman, his argument relies on a static conception of income and spending. Just using that accounting tautology — without indexing for time — Krugman could also argue that real income can never change in an economy, even if the government announced that the most productive 10% of workers in every firm would be shot. (After all, total income would still equal total spending.)

As for Cowen, he seems to be assuming that "real income" is equivalent to "real consumption." I don't know what to say except, "No it isn't." If a worker gets a job in a silver mine and gets paid in ounces of silver that he stores in his basement, he can have very high "real wages" even if his consumption is very low.

Without further ado, let's examine a hypothetical island economy composed of 100 people, where the only consumption good is rolls of sushi. ... But alas, one day Paul Krugman washes onto the beach. After being revived, he surveys the humble economy and starts advising the islanders on how to raise their standard of living to American levels. He shows them the outboard motor (still full of gas) from his shipwreck, and they are intrigued. Being untrained in economics, they find his arguments irresistible and agree to follow his recommendations. ... (If the reader is curious, Krugman doesn't work in sushi production. He spends his days in a hammock, penning essays that blame the islanders' poverty on the stinginess of the coconut trees.)

Finally, we predict that during the period of transition, some islanders will have nothing to do. After all, there will already be the maximum needed for catching fish with the usable boats and nets, and there will already be the corresponding number of islanders devoted to rice collection and sushi rolling, given the small daily catch of fish.

People in grad school would sometimes ask me why I bothered with an "obsolete" school of thought. I didn't bother citing subjectivism, monetary theory, or even entrepreneurship, though those are all areas where the Austrian school is superior to the neoclassical mainstream. Nope, I would always say, "Their capital theory and business-cycle theory are the best I have found." Our current economic crisis — and the fact that Nobel laureates don't even understand what is happening — shows that I chose wisely.

The Economist offers some great advice to the McCain campaign

I think that the campaign may be too maverick-y to synthesize the recommendations:
First, Mr McCain should point out that his opponent is one of the least business-friendly Democratic candidates in a generation.

Second, Mr McCain should hammer away at the dangers of single-party rule in Washington, DC.

Third, Mr McCain should point out that his opponent has never once in his career said boo to a Democratic goose.

Has Sarah Palin been submitting illegitimate travel expenses back to Alaska?

The AP claims so.

If true, that's not very maverick-y, but something I'd expect a Charles Rangel to practice.

The US Dollar is risky

but safer than other currencies:

Quotes of the day

[Joe] Biden is trying to put lipstick on the Bay of Pigs.--Tom Maguire

What happens when the voter in the exact middle of the earnings spectrum receives more in benefits from Washington than he pays in taxes? Economists Allan Meltzer and Scott Richard posed this question 27 years ago. We may soon enough know the answer.--Paul L. Caron

If Lehman had been saved, a cataclysmic month might have been avoided. But there would still have been a series of minibanking crises. Such death by a thousand cuts — similar to the one suffered by Japan in the 1990s after its bubble burst — would have been less dramatic but might, ultimately, have been more debilitating.--HUGO DIXON and DWIGHT CASS

Economists ought to admit that we do not know much about what is going on today. Neither do the Fed Chairman and the Treasury Secretary. Of course, the market demand is for "strong" leaders and for "strong" economists, who can fool the public into believing that they have great knowledge. The ones who do this best are those who have fooled themselves.--Arnold Kling

Lady, I know I'm in jeans and you're all throwing that scarf around over your suit, but two years of blogging has left me pretty confident that my thought is rigorous. I like being a sleeper, having people underrate me because I dress like a grad student and use small words.--Megan

I never realized this was going to blow up and hurt so many people.--Jose Canseco, on his outing of steroid users

If you played for the Red Sox, you wouldn't be sitting here.--Joba Chamberlain heckler

When small men begin to cast big shadows, it means that the sun is about to set.--Lin Yutang

Tuesday, October 21, 2008

Arnold Kling draws the limits to Fischer Black

and complains about the bastardizations beyond. Great piece.

Quotes of the day

[Hank Paulson] was more Santa Claus than Vito Corleone: the agreement allowed the banks to continue paying dividends to common shareholders.--DAVID S. SCHARFSTEIN and JEREMY C. STEIN

You cannot simply say, "We must have transparency." Requiring transparency means requiring people to disclose information that is costly to acquire. But that undermines their incentive to acquire information.--Arnold Kling

Ben Bernanke apparently wants four more years as Federal Reserve Chairman. At least that's a reasonable conclusion after Mr. Bernanke all but submitted his job application to Barack Obama yesterday by endorsing the Democratic version of fiscal "stimulus."--WSJ Editorial Board

Of the presidents he worked with, [Alan] Greenspan reserves his highest praise for Bill Clinton, whom he described in his book as a sponge for economic data who maintained "a consistent, disciplined focus on long-term economic growth."--Orin Kerr

Barack Obama is one of the most liberal members of the Senate. His reaction to the financial crisis is to blame deregulation. He even leverages fear of deregulation onto other issues. For example, Sen. John McCain wants to allow consumers to buy health insurance across state lines. Mr. Obama likens this to the financial deregulation that he alleges got us into the current mess. ... Unlike FDR, Mr. Obama will not have to create the mechanisms government uses to interfere with the economy before imposing his policies. FDR had to get the Supreme Court to overturn a century's worth of precedents limiting the power of government before he could use the Constitution's commerce clause, among other things, to increase government control of the economy. Mr. Obama will have no such problem.--Paul Rubin

I wasn't surprised about Colin Powell joining Barack Obama

But I was surprised about Paul Volcker. I think it's a good thing, though. I hope Obama heeds the advice of Volcker and Austan Goolsbee over the cacaphony of priests of Big Government who surround him.

Unfortunately, the track record is not good.

Monday, October 20, 2008

Not much of a hip-hop fan here

but lovin' me dis:

i’m jeremiah wright cause tonight i’m the preacha
i got a bookish look and you’re all hot for teacha
todd lookin fine on his snow machine
so hot boy gonna need a go between
in wasilla we just chill baby chilla
but when i see oil lets drill baby drill

my country tis a thee
from my porch i can see
russia and such

all the mavericks in the house put your hands up

Truman may not have helped the Nationlists in China

but rather, embargoed them.

Intrade responds to charges of manipulation in the contracts for US President

As a result of our investigations we would like to advise the following.

The trading that caused the unusual price movements and discrepancies was principally due to a single "institutional" member on Intrade. We have been in contact with the firm on a number of occasions. I have spoken to those involved personally.

We are satisfied that they are using our markets in good faith and in the ordinary course of their business and that there has been no contravention of our Exchange Rules. Our investigations lead us to believe that the member is using increased depth in these markets to manage certain risks.

Further, it is apparent that the cost of time in accumulating the desired positions by those "institutional" members responsible for moving the McCain market up and the Obama market down differs fundamentally to loyal "retail" members that Intrade relies on.

The Exchange views this unusual activity as an indication of the increased relevance and traction of Intrade markets as risk management tools coupled with the yet maturing state of the prediction market industry as a whole.

As our markets gain further fluency and are more broadly used to help manage risk, we expect to see other cases where single, well-financed parties accumulate large positions in short periods of time in our markets and possibly distort prices away from prices on other platforms. As funds flow between platforms gets easier, arbitrage opportunities will last for far shorter periods that is currently the case.
UPDATE: Jason Ruspini with some great analysis.

Hawaii abandons only universal healthcare program

It was limited to kids, but it still failed to work.

Senator Chuck Schumer waxes idiotic about retail gasoline prices

He seems to think if crude prices fall by half, then consumer prices should fall by half as well. I guess he likes to ignore the realities of refining, transport, insurance, property and inventory costs.

As well as taxes.

John Tierney doesn't see a shortage of scientists or engineers

anymore than I did this past spring. He observes:

If the United States really has a critical shortage of scientists and engineers, why didn’t this year’s graduates get showered with lucrative job offers and signing bonuses?

... employers don’t have to throw around that kind of money because there’s no shortage of workers — and they won’t be increasing their offers if the federal government artificially inflates the labor supply with an extra 100,000 graduates. As Daniel S. Greenberg wrote in the Scientist magazine in 2003: “Despite the alarms, no current or impending shortage exists, and never did. Instead, we’re glutted with scientists and engineers in many fields, as numerous job seekers with respectable credentials can attest.”

Sarah "Caribou Barbie" Palin delivers highest Saturday Night Live ratings

in 14 years.

The last blog post of fallen soldier Stephen Fortunato

(via Stephen Green). Fortunato writes:
I am not a robot. i am not blind or ignorant to the state of the world or the implications of the "war on terrorism." i know that our leaders have made mistakes in the handling of a very sensitive situation, but do not for one second think that you can make me lose faith in what we, meaning America's sons, daughters, fathers, and mothers in uniform are doing.

I am doing my part in fighting a very real enemy of the United States, i.e. Taliban, Al Qaida, and various other radical sects of Islam that have declared war on our way of life. Unless you believe the events of 9/11 were the result of a government conspiracy, which by the way would make you a MORON, there is no reasonable argument you can make against there being a true and dangerous threat that needs to be dealt with. i don't care if there are corporations leaching off the war effort to make money, and i don't care if you don't think our freedom within America's borders is actually at stake. i just want to kill those who would harm my family and friends. it is that simple. Even if this is just a war for profit or to assert America's power, so what? Someone has to be on top and I want it to be us. There's nothing wrong with wishing prosperity for your side.

Mark Perry suggests hedging your own psyche

with Intrade contracts.

"Gird Your Loins"

Exactly what I'm expecting and worried about:

"Mark my words," the Democratic vice presidential nominee warned at the second of his two Seattle fundraisers Sunday. "It will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking. We're about to elect a brilliant 47-year-old senator president of the United States of America. Remember I said it standing here if you don't remember anything else I said. Watch, we're gonna have an international crisis, a generated crisis, to test the mettle of this guy."
But don't worry - just a little warning on all the change about to come:
"...I promise you, you all are gonna be sitting here a year from now going, 'Oh my God, why are they there in the polls? Why is the polling so down? Why is this thing so tough?' We're gonna have to make some incredibly tough decisions in the first two years. So I'm asking you now, I'm asking you now, be prepared to stick with us. Remember the faith you had at this point because you're going to have to reinforce us."

"There are gonna be a lot of you who want to go, 'Whoa, wait a minute, yo, whoa, whoa, I don't know about that decision'," Biden continued. "Because if you think the decision is sound when they're made, which I believe you will when they're made, they're not likely to be as popular as they are sound. Because if they're popular, they're probably not sound."