Monday, August 23, 2010

Friday, August 20, 2010


Don't know much about this, but this is me:

Main Type
Overall Self
Take Free Enneagram Personality Test

Enneagram Test Results
Type 1 Perfectionism |||||||||| 38%
Type 2 Helpfulness |||||||||||| 46%
Type 3 Image Focus |||||||||| 38%
Type 4 Hypersensitivity |||||| 22%
Type 5 Detachment |||||||||||||||| 70%
Type 6 Anxiety |||||||||||||||| 62%
Type 7 Adventurousness |||||||||||| 46%
Type 8 Aggressiveness |||||||||||||||||| 74%
Type 9 Calmness |||||||||||||| 54%
Your main type is 8
Your variant is sexual
Take Free Enneagram Personality Test

Anyone out there have any insights on this? I stumbled onto it reading Don Miller.

Quotes of the day

Without even realizing it he’d fallen into one of those Let’s Be Friends Vortexes, the bane of nerdboys everywhere. These relationships were love’s version of a stay in the stocks, in you go, plenty of misery guaranteed and what you got out of it besides bitterness and heartbreak nobody knows. Perhaps some knowledge of self and women.--Junot Díaz

Everybody wants to win on Sunday. Not everybody wants to do what it takes Monday through Saturday in order to win on Sunday.--Bill Parcells

As the Anglican theologian John Macquarrie observed, "We must avoid the mistake of thinking that because human sexuality is personal, it is also private." Macquarrie went on to say that sex has any number of social ramificiations--sex leads to babies, babies get property, and so on. But Christians have an additional reason to worry about sex--what I am or am not doing in bed affects my relationship with God as much as what I do in church does, and it's the job of my sister in Christ to hold me accountable. The problem isn't that Sarah made my sex life her business. It's that her evangelical vocabulary left her with nothing to say but "whore."--Lauren Winner

Shakespeare always got a kick out of intellectual vanity. And luckily, the Bard’s paying customers didn’t care one jot about the snobs who aimed to knock him down; they voted with their money and saved his works from the oblivion that swallowed up most of his literary contemporaries. Thank God Shakespeare’s audiences had the freedom to do that. This is where a scary specter walks onto the stage, and I’m sorry to say that it happened right here on American soil a few weeks ago, just as I thought I had shaken all that fatal European conceit off my feet. I found myself at a book event in New York, where I heard a fellow author pride himself on giving his books away for free. In the same breath he swooned over the fact that I was from Denmark and declared that he adores Denmark because of all the public arts funding. In his opinion, art should be created without regard for the demands of the market (it’s awfully distracting to have to worry about whether anyone actually wants to read the stuff you’re writing) and funded exclusively by the state, whose representatives will then determine what deserves funding and dish out other people’s money accordingly. Rather than all of you readers wasting your hard-earned cash on a Swedish detective story, your taxman-turned-arts connoisseur will send those twenty bucks to a scrawny poet living in some studio loft, so he can buy another Che Guevara T-shirt. “You know what,” I told him, “we tried that already. It’s called communism. So, unless you really like poems about tractors and paintings of smiling Stalins, I don’t recommend it.”--Anne Fortier

I like that God made everybody speak different languages at the tower of Babel. It was as if He didn’t want human progress to move too fast, because human progress was bad for humans. I wonder if I worked all the time, without sleep, what stupid thing I would create, what stupid thing that might make me feel like I could somehow be like God.--Don Miller

China has formally overtaken Japan as the world's second largest economy. Yet, for all the recent excited commentary, there's less cause for baijiu toasts in Beijing than they might think. That's because China's economic growth has followed what's sometimes called "the Japanese model." In Japan and other Asian countries, this model has proved extraordinarily successful in the short term in generating eye-popping rates of growth -- but it always eventually runs into the same fatal constraints: massive overinvestment and misallocated capital. And then a period of painful economic adjustment. In short: Beijing, beware. Japan's "lost decade" of the 1990s -- from which it still has not emerged -- followed a period of high growth, at the heart of which were massive subsidies for manufacturing and investment. The Japanese model channels wealth away from the household sector to subsidize growth by restraining wages, undervaluing the currency, and, most powerfully, forcing down the cost of capital. In every prior case, once the train gets rolling, it has been very difficult to correct course. That's because too much of the economy depends on hidden subsidies to survive.--Michael Pettis

Joe Posanski on Roger Clemens' self-denial


I haven't trusted him since he got the biggest contract in baseball, and proceeded to show up fat for spring training and just go 40-39 over 4 seasons with the Red Sox.

UPDATE: Jeff Miron says:
All that aside, the prosecution of Clemens and other athletes for using performance-enhancing drugs is a waste of government resources.

Professional athletes do incredibly damaging things to their bodies every time they play or practice. If they want to use performance-enhancing substances, that should be between them and their employers.

Photo link here.

Thursday, August 19, 2010

Quotes of the day

Film people, actors, are puppets. We are silly. We are silly folk.--Christiane Kubrick

I am not remotely an expert in complexity theory, but for the past week I have been largely glued to my screen reading these comments, understanding some of them, and learning a lot of mathematics as I struggle to understand the others. It’s been exhilarating. Why is this momentous? In some ways, there’s nothing new about any of this. It’s not terribly uncommon for a serious looking paper to address a major outstanding problem, and it’s de rigeur for experts to comb through those papers, searching simultaneously for new paradigms, irreparable flaws, and salvageable insights. We call it peer review. But what’s new is that this played out in public, and that it took a week instead of the usual months or years, and that the dozens of conversations taking place all over the world were melded into one giant conversation where every idea was available for everyone to hear—and for everyone to shoot down. Many very smart people said very smart things that turned out to be wrong, and in the world before the Internet, they might have gone on believing those things for weeks or months. The Net made it very difficult to believe wrong things for more than an hour.--Steve Landsburg

The map is not the territory. The map — the set of axioms — is either consistent or it’s not. If it’s inconsistent, there’s no corresponding territory. If it’s consistent, there are many corresponding territories and the map can’t tell you which one you’re in.--Steve Landsburg

Unlike industrial policy, government provision of infrastructure and education does not override consumer choice in order to promote favored industries. Unlike industrial policy, the provision of public goods does not protect firms or industries from competition. Unlike industrial policy, the provision of public goods is not part of a government plan to achieve specific, foreseeable, and targeted patterns of investment and employment. The fact that government supplies a blank canvas does not imply that it is an artist capable of painting a pretty picture.--Don Boudreaux

[Eckhard] Höffner has researched that early heyday of printed material in Germany and reached a surprising conclusion -- unlike neighboring England and France, Germany experienced an unparalleled explosion of knowledge in the 19th century. German authors during this period wrote ceaselessly. Around 14,000 new publications appeared in a single year in 1843. Measured against population numbers at the time, this reaches nearly today's level. And although novels were published as well, the majority of the works were academic papers. The situation in England was very different. "For the period of the Enlightenment and bourgeois emancipation, we see deplorable progress in Great Britain," Höffner states. Indeed, only 1,000 new works appeared annually in England at that time -- 10 times fewer than in Germany -- and this was not without consequences. Höffner believes it was the chronically weak book market that caused England, the colonial power, to fritter away its head start within the span of a century, while the underdeveloped agrarian state of Germany caught up rapidly, becoming an equally developed industrial nation by 1900. Even more startling is the factor Höffner believes caused this development -- in his view, it was none other than copyright law, which was established early in Great Britain, in 1710, that crippled the world of knowledge in the United Kingdom. Germany, on the other hand, didn't bother with the concept of copyright for a long time. Prussia, then by far Germany's biggest state, introduced a copyright law in 1837, but Germany's continued division into small states meant that it was hardly possible to enforce the law throughout the empire.--Frank Thadeusz

The aberration in Japan’s recession was not the behavior of growth, which is best seen as a series of recoveries aborted by policy errors – a sawtooth, not a flat line. Rather, the surprise was the persistent steadiness of limited deflation, even after recovery took place. This strikes me as a more fundamental challenge to our basic macroeconomic understanding than is commonly recognized, and we need more research on it. The UK and US economies are at low risk of turning Japanese in the sense of having recurrent recessions through macroeconomic policy mistakes - but deflation itself cannot be ruled out. The UK worryingly combines a couple of financial parallels to Japan with far less room for fiscal action to compensate for them than Japan had. More active investors and greater openness in the UK than in Japan may be able to. One major problem which Japan did not face during its Great Recession was poor prospects for external demand and the need to reallocate productive resources across export sectors. The UK, US, and many Euro Area economies do now face this challenge simultaneously, which may limit the pace of, and our share in, the global recovery.--Adam Posen

In stressed times after a bubble (eg, the 'after' line above), the private sector tries to run a big surplus as it pays down debt. This causes recessions, which can be mitigated if not eliminated via countercyclical budget deficits by the public sector. This argument would be tenable if it were 1936 and people never tried it, but it has been tried over and over and if a government could spend itself to prosperity and stability, a couple such countries would demonstrate this. Instead, we have the examples of the contrary, where fiscal restraint and modest automatic stabilizers were consistent with the wealthier countries post WW-II. But what I love is the way Krugman totally ignores the heterogeneity of investment and employment, and simply thinks that people and companies are saving 'too much', and so anti-savings by the government would offset this, leading to full-employment bliss. That kind of thinking is profoundly misleading.--Eric Falkenstein

To get the housing finance system out of intensive care, short-term policies need to be implemented that promote deleveraging. Perhaps some of the excess supply of foreclosed properties should be sold to buyers who agree to put 40% down and use the properties as rentals. Josh Rosner, managing director of the research firm Graham Fisher, has suggested that homeowners who voluntarily pay down a portion of the principal on their underwater mortgage receive a tax credit also applied to their mortgage principal. In return, they would forgo future tax deductions of their mortgage interest payments. While the road to housing hell may have been paved by the government, the road back will be built by the private sector.--Edward Pinto

Chinese Exclusion stayed in effect de facto until 1965, when the racist provisions of US immigration law were removed, liberalizing immigration by all non-European groups. Only 5 years later in 1970, Chinatown had already expanded greatly. Italians and Jews had already left for middle-class and upper-class neighborhoods elsewhere. ... Today Chinatown is one of Manhattan’s most thriving neighborhoods. Other East Asian immigrants also congregate there. The ladder out of poverty continues for today’s immigrants, following the Italians and Eastern Europeans, who in turn had followed the Germans and Irish.--William Easterly

Maybe if you don't talk to me, I can help you lose your job.--Spencer Rich, Washington Post reporter

Wednesday, August 18, 2010

Arnold Kling catches Bill Gross in an opposite of a truth


Don't always trust the smart rich powerful guy.

Quotes of the day

[Music] artists don't put out albums anymore, they put out single hits, so they have reasons to tour. Hits and tours make you relevant, and they get you sponsorships, and earn you money from merchandise.--Zack O'Malley Greenberg

Having a sense of the rhythms and emotions of music helps poetry, and so to does the logic of mathematics help economics. But good economics, like good poetry, almost always stands by itself without the adjunct. Just as we should beware of poetry that only sounds good when there's music playing, we should distrust economic analysis that only seems profound within mathematical models. There's the hope that if we use some rigorous method of reasoning economics will avoid the stagnation of ideas we see in politics or journalism. Would that it were true.--Eric Falkenstein

The French president, Nicolas Sarkozy, was on to something when he said he was worried about the shift towards ‘self-hatred’ within French society and its potentially destructive impact. Unfortunately, his call for a debate about ‘national identity’ has been as clumsy as that initiated by British politicians, while his decision to stop Muslim women wearing the burqa in public suggests that France really has lost its understanding of what it means to be a secular, liberal nation rooted in Enlightenment values. Gainsbourg appears to be influenced by these contemporary tensions in French society. While on the one hand it happily plays on the Gallic stereotypes of freedom-loving aesthetes with a liberal attitude towards sex, it also morbidly dwells on the Nazi occupation and residual racism across French society. Appealing to past glories and abasing past disgraces, however, won’t help resolve the question of French national identity today. The French only need to look across the Channel to see the folly in that strategy.--Neil Davenport

So why not alert listeners that you might be getting a “liberal” or “leftist” perspective from those two sources, just as you warned them that the Cato Institute was speaking from a fiscally conservative perspective? Back on March 23, I noted but did not blog about references on “Morning Edition” to “the libertarian Cato Institute,” the “conservative American Enterprise Institute,” and “the Brookings Institution.” No label needed for Brookings, of course. Just folks there.--David Boaz

Words I never thought I’d write: I pine for George W. Bush.--Peter Beinart

Except for George Washington, all of the presidents have lived in the White House. They’ve all taken the same oath to uphold the same constitution. But the modern presidency—Barack Obama’s presidency—has become a job of such gargantuan size, speed, and complexity as to be all but unrecognizable to most of the previous chief executives. The sheer growth of the federal government, the paralysis of Congress, the systemic corruption brought on by lobbying, the trivialization of the “news” by the media, the willful disregard for facts and truth—these forces have made today’s Washington a depressing and dysfunctional place. They have shaped and at times hobbled the presidency itself. ... Like many changes that are revolutionary, none of Washington’s problems happened overnight. But slow and steady change over many decades—at a rate barely noticeable while it’s happening—produces change that is transformative. In this instance, it’s the kind of evolution that happens inevitably to rich and powerful states, from imperial Rome to Victorian England. The neural network of money, politics, bureaucracy, and values becomes so tautly interconnected that no individual part can be touched or fixed without affecting the whole organism, which reacts defensively. --Todd Purdum

I punted all these balls to my successor and discovered I was the receiver.--Robert Gates

U.S. troops were fighting and dying in two foreign wars, but the Pentagon bureaucracy was shuffling through its peacetime paces. The Army and the Marines, for example, had a new armored vehicle, the MRAP, which could provide greater protection against Iraqi roadside bombs and save many troops' lives. But the brass were doing nothing to accelerate production. Similarly, the Air Force had a new generation of unmanned aerial vehicles, "drones" equipped with real-time video cameras and remote-control-fired missiles; troops in the field were clamoring for more, but Air Force leaders were not stepping up deployment. [Defense Secretary Bob] Gates quickly intervened, taking both programs outside normal channels. He added $16 billion to build more MRAPs on a crash schedule. And he fired the Air Force's chief of staff, Gen T. Michael Moseley, in part for negligence with the nuclear command, but mainly, according to knowledgeable officials, for his sluggishness on the drones. Gates replaced him with Gen. Norton Schwartz, head of the Air Force's unglamorous Transportation Command. He picked Schwartz because he had tirelessly worked out a way, at Gates's request, to speed the air delivery of MRAPs to Iraq; that is, he'd acted as if a war was going on. (Schwartz's promotion made him the first Air Force chief of staff to come up through the ranks as neither a bomber pilot nor a fighter pilot; the move marked the beginning of a huge cultural shift in that branch of the military.) Gates also noticed that the Army's most innovative colonels -- brigade commanders who not only understood counterinsurgency theory but practiced it in Iraqi cities and villages -- were getting stalled in their careers by generals with much less battlefield experience and who were wedded to Cold War precepts of combat. So, near the end of 2007, Gates called on Gen. David Petraeus, then the U.S. commander in Iraq and the architect of the counterinsurgency strategy there, to chair that year's Army promotion board, which would advance 40 colonels to the rank of brigadier general. More than a dozen of the Army's promising colonels, at least one of whom had been passed over twice, got their stars. With this single stroke, the Army's culture -- the signals sent to the troops of what kind of soldiers get promoted and what kind don't -- changed dramatically. ... When Gates submitted his budget to Congress, the president attached a message that he would -- not "might," but "would" -- veto the bill if it contained money for even one more F-22. It was the only veto threat in the president's first budget, and it worked. By then, it was clear -- to the surprise of many -- that the two men had hit it off. Their biographies were very different, but their executive sensibilities were nearly identical: pragmatic, problem-solving, averse to ideological formula and cliché, inclined to give everyone involved a say and then make a crisp decision. Several officials said that Obama had asked Gates to stay on as defense secretary mainly to provide continuity in the management of the wars -- and cover for any resulting controversies, owing to his credibility with the Joint Chiefs and with both sides of the aisle on Capitol Hill. But it was soon evident that Gates had become, as one official put it, "a core player on the team." --Fred Kaplan

After much self reflection, I have decided to retire from managing client funds and I wanted to give you prompt notice of my intentions and explain the reasons for this. I have had to recognize that competing in the markets over such a long timeframe imposes heavy personal costs. While the joy of winning for clients is immense, for me the disappointment of each interim drawdown over the years has taken a cumulative toll that I cannot continue to sustain. This is true even though to date we have delivered an unbroken record of positive annual performance which I hope will continue for 2010 as well. And while our clients were certainly pleased that we achieved positive results for 2008 and 2009 in a challenging environment, as you may have surmised I was dissatisfied with those results because they did not match my own, internal long-term standard. You may remember that I chose to leave Soros Fund Management ten years ago because the challenge of managing an enormous amount of capital was having a clear impact on my ability to perform, as well as my state of being. Unfortunately, as Duquesne has grown, these factors have again emerged.--Stanley Druckenmiller

It turns out that sex often triggers a large stress response, leading to a spike in glucocorticoid levels. The good news, though, is that this stress is good for us. While chronic stress normally leads to a dramatic reduction in neurogenesis, or the birth of new brain cells, the stress produced by sex has the exact opposite effect, at least in the dendate gyrus.--Jonah Lehrer

Monday, August 16, 2010

An amazing prediction a century ago

Robert Sloss predicted the iPhone.

Quotes of the day

... even with the best of responses the recovery probably would have been slow and uneven. But both the Congress and the administration of President George W. Bush, and especially the Congress and President Obama since his election in 2008 made the main mistakes after the crisis hit. Instead of concentrating mainly on fighting the recession and promoting faster economic growth, the Congress elected in 2008 believed they had a mandate to radically remake the American economy. Aside from repeated attacks on American business, especially banks-some of them deserved- they not only passed various stimulus packages (that did not stimulate much), but also tried to promote a vast legislative program that had nothing to do with fighting the recession.--Gary Becker

George W. Bush left a big growling bust of Churchill near his desk in the White House, in an attempt to associate himself with Churchill’s heroic stand against fascism. Barack Obama had it returned to Britain. It’s not hard to guess why: his Kenyan grandfather, Hussein Onyango Obama, was imprisoned without trial for two years and tortured on Churchill’s watch, for resisting Churchill’s empire. ... In the end, the words of the great and glorious Churchill who resisted dictatorship overwhelmed the works of the cruel and cramped Churchill who tried to impose it on the world’s people of color. [Richard] Toye teases out these ambiguities beautifully. The fact that we now live at a time where a free and independent India is an emerging superpower in the process of eclipsing Britain, and a grandson of the Kikuyu “savages” is the most powerful man in the world, is a repudiation of Churchill at his ugliest — and a sweet, unsought victory for Churchill at his best. --Johann Hari

Australia posted 7.5% after-inflation returns per year during that time, with a standard deviation of 18.2%, according to a study from Credit Suisse. Those returns are the highest and the volatility the second lowest of the 19 major markets the researchers studied. During that time, U.S. stocks made a 6.2% return, with a standard deviation of 20.4%.--Howard Gold

From prostitution scandals to corruption allegations to the steady drumbeat of charges against corporate executives and world-class athletes, it seems that the headlines are filled with the latest misstep of someone in a position of power. This isn't just anecdotal: Surveys of organizations find that the vast majority of rude and inappropriate behaviors, such as the shouting of profanities, come from the offices of those with the most authority. Psychologists refer to this as the paradox of power. The very traits that helped leaders accumulate control in the first place all but disappear once they rise to power. Instead of being polite, honest and outgoing, they become impulsive, reckless and rude. In some cases, these new habits can help a leader be more decisive and single-minded, or more likely to make choices that will be profitable regardless of their popularity. One recent study found that overconfident CEOs were more likely to pursue innovation and take their companies in new technological directions. Unchecked, however, these instincts can lead to a big fall.--Jonah Lehrer

Car owners may not want to hear this, but we have way too much free parking. Higher charges for parking spaces would limit our trips by car. That would cut emissions, alleviate congestion and, as a side effect, improve land use.--Tyler Cowen

Masticate. Meditate. Masturbate.--Lauren Winner, summarizing Eat, Pray, Love

Biologists have been long perplexed by the peacock’s tail, economists by the use of advertising. In both cases the struggle has been to understand why something so self-evidently pointless and potentially damaging can survive in a vicious world of winner-takes-all, loser-goes-extinct natural selection. Meanwhile researchers from both worlds have been closeting themselves ever deeper in an arcane world of computer modelling, where truth can be validated only by mathematics. Hints of answers to these puzzles have come not from number crunching but from fuzzy human intuitions about the way the world actually works. Peacocks and advertisers have something in common – in both cases it turns out the handicaps they place themselves under send signals to their potential suitors. Behavioral advertisers, who aim to remove these handicaps, take note: a peacock without a stupid tail won’t get a mate and an ad that’s easy to deliver won’t get a customer.--Psy-Fi Blog

Aid recipients understand unconditional conditions all too well. Afghanistan President Hamid Karzai knows that USAID will have to spend its Afghanistan budget no matter what, so he makes some token commitment, does nothing, and indeed the aid keeps flowing. I can certainly understand why USAID would prefer not to talk about this unsavory equilibrium. But the stakes are far higher in Afghanistan than in the usual aid recipient. As the war there drags on, we have to ask the following question: Is U.S. aid winning hearts and minds? A U.N. survey taken in January found that 52% of Afghans believe aid organizations "are corrupt and are in the country just to get rich." I don't know much about waging a counterinsurgency, but it seems to me that we're getting very little for our money.--William Easterly

Saturday, August 14, 2010

The wisdom of Bill Simmons

There's an old saying that a good deal leaves both sides a little upset afterward. When one side feels they could have gotten more, and the other side feels like they could have paid less, that's when you've found a middle ground. This can't happen every time in sports. Sometimes, it leads to a holdout. Almost every time, we blame the player. After all, they are lucky to play sports for a living. After all, they signed a contract. After all, we would kill to switch places with them. We skip over the part that, if we were in their shoes, we would probably do the same thing.

Friday, August 13, 2010

George Lucas, seduced by the Dark Side?

I could see where things were headed. The toy business began to drive the [Lucasfilm] empire. It’s a shame. They make three times as much on toys as they do on films. It’s natural to make decisions that protect the toy business, but that’s not the best thing for making quality films. The first film and ‘Empire’ were about story and character, but I could see that George’s priorities were changing.--Gary Kurtz

Via Jeffrey Overstreet.

30 prediction models

rounded up by Ian Ayers, via Tyler Cowen.

Stimulus projects: real or fake?

Via Don Boudreaux.

Quotes of the day

... something that nobody can demonstrate is taken as a norm, and any deviation from that norm is somebody's fault!--Thomas Sowell

In a move of stunning hypocrisy, the United Federation of Teachers axed one of its longtime employees -- for trying to unionize the powerful labor organization's own workers, it was charged yesterday.--Tom Topousis

In 1993, just after Democrats won the White House, Reid filed a bill that would have done exactly what some Republicans now demand — end birthright citizenship for children of illegal immigrants.--Ed Morrisey

The first rule of the (old) Upper Class Club always was that you don't talk about the Upper Class Club.--Peter York

... just because a tax is levied on the rich, that doesn't mean the rich are the ones most hurt by it; luxury taxes on yachts put working-class boatmakers out of a job, not corporate CEOs. ... So the right question to me is not "where do we maximize [tax] revenue", but "where do we maximize utility [between workers and employers]?" Obviously, that's not an easy question to answer. But when you add in deadweight loss, and the long-run drag on economic growth it implies, I think it's pretty clear that the right answer is well short of the rate where we collect the most taxes.--Megan McArdle

... according to Matthew Yeager, a data storage expert who works for the UK data services and solutions company Computacenter, emails—especially those with attachments—still use energy and create greenhouse gas emissions, even if you don't print them. Last month, Yeager told the BBC that sending an email attachment of 4.7 megabytes—the equivalent of about 4 photos taken on a point-and-shoot digital camera—creates as much greenhouse gas as boiling your tea kettle 17.5 times. I called Yeager to find out the whole story.--Kiera Butler

Over the past few years, Sun has been one of the more outspoken companies against abusing the patent system, with former CEO Jonathan Schwartz explaining that real companies innovate, not litigate. However, Sun and its patents are now owned by Oracle, and apparently Larry Ellison feels otherwise. Oracle is now suing Google for patent infringement, using a bunch of patents that Sun owns around Java, claiming that Google's Android implementation of Java is done without a license.--Mike Masnick

... the best paid athlete of all time—was a Lusitanian Spaniard named Gaius Appuleius Diocles, who had short stints with the Whites and Greens, before settling in for a long career with the Reds. Twenty-four years of winnings brought Diocles—likely an illiterate man whose signature move was the strong final dash—the staggering sum of 35,863,120 sesterces in prize money. The figure is recorded in a monumental inscription erected in Rome by his fellow charioteers and admirers in 146, which hails him fulsomely on his retirement at the age of “42 years, 7 months, and 23 days” as “champion of all charioteers.” His total take home amounted to five times the earnings of the highest paid provincial governors over a similar period—enough to provide grain for the entire city of Rome for one year, or to pay all the ordinary soldiers of the Roman Army at the height of its imperial reach for a fifth of a year. By today’s standards that last figure, assuming the apt comparison is what it takes to pay the wages of the American armed forces for the same period, would cash out to about $15 billion.--Peter Struck

30 Ways To Wreck a Career

Nice personal inventory.

I couldn't help but think how much this is relevant to dating, too. At least back in in the Eighties and Nineties as I can remember.

Thursday, August 12, 2010

Redemption of the day: Car powered by

human poo, via Steve Levitt.

Tim Heffernan, constitutional scholar?

Never heard of the guy until I read this bit of wisdom:
Leaving aside any argument against this view, let me suggest that CNN conduct a new poll with the following two questions, so we may define, in raw numbers, how much of this opposition is truly constitutionalist, truly conservative, truly American — and how much is mere xenophobia. I invite Newt, Sarah, Petey the King, Paterson the Quisling, and the staff of the National Review to weigh in.

1. Do you have the right to offend me?

2. Do I have the right to steal your house if you do?

Let me suggest that Mr. Heffernan give some more insights into his own constitutional views, so we know that he really cares about the Constitution and those who swear to defend it.

For instance, do you concur with Stevens, Breyer, Ginsburg, Kennedy and Souter on Kelo vs. City of New London; or do you dissent with O'Connor, Renquist, Scalia, and Thomas? If you dissent, well that is consistent with your view on Cordoba House. If not, please pray tell why!

UPDATE. Actually, I have heard of the guy.

Quotes of the day

Yahoo had two problems Google didn't: easy money, and ambivalence about being a technology company. ... Hacker culture often seems kind of irresponsible. That's why people proposing to destroy it use phrases like "adult supervision." That was the phrase they used at Yahoo. But there are worse things than seeming irresponsible. Losing, for example.--Paul Graham

In finance terminology, we experienced a lot of volatility—the major indexes have fluctuated a lot—but not much real growth. One possible explanation for this pattern is that the equity premium has eroded. Markets have grown more efficient over time, as more and better information—and the computer tools to analyze it—has become available. Meanwhile, the stock market has democratized. ... The equity premium’s shrinkage may have another reason. Financial markets have an interesting feature that has undone many a trading strategy: once everyone starts believing something, it often stops being true.--Megan McArdle

Mathematically, society simply cannot have a high and growing dependency ratio--at least, not if the retirees expect to be supported in the style to which they have become accustomed. (I take it that this is what is meant by "a decent living and a stable retirement"). We can warehouse people in spartan old folks homes (or treat them like kids and move them into the spare bedroom), in which case they can enjoy a lengthy retirement. Or they can retire for less time, and live more lavishly. But there is no conceivable system that is going to allow the vast majority of the population to spend a full third of their adult life in retirement, at anything like the same standard of living they had when they were working.--Megan McArdle

The most important job I have I don't get paid for: raising my kids. Just because you aren't getting paid does not mean something important isn't necessary, onerous, and time consuming, just like paid jobs. It is a mistake to think those without paying jobs are or should be sitting around waiting for a foreman to tell them where to shovel. Everyone has many jobs to do right now. Entropy naturally creates disordered states that need reorganizing. We all could invest more in ourselves by learning Java, or fix things in our house. Unless you are an invalid you have jobs to do that increase your wealth and that of the community. ... A make-work job, like charity that it is, does not generate happiness for the recipient because it is degrading. That's why if you want someone to like you, ask them a small favor, it shows you appreciate them; if you want them to hate you, do them a big favor. A good example is how France loved America for needing their help in our revolution, so much so they built us a Statue of Liberty 100 years later. After freeing them from the Germans twice in 30 years, however, the French find Americans annoying. ... A bureaucrat, who's not financially interested in your employment status, and does not know you well, will certainly find you a worse employment match in whatever job is given to you. Life has a lot of randomness to it, but thoughtfulness and effort help tilt the probabilities in your favor. Effort and thoughtfulness pays off, if only statistically. --Eric Falkenstein

Is there another human being on Earth more singularly terrifying and insane than Grace Jones? Anyone?--Eric Gillin

... the actual facts of the sacrifices [of professional athletes] repel us when we see them: basketball geniuses who cannot read, sprinters who dope themselves, defensive tackles who shoot up with bovine hormones until they collapse or explode. We prefer not to consider closely the shockingly vapid and primitive comments uttered by athletes in postcontest interviews or to consider what impoverishments in one's mental life would allow people actually to think the way great athletes seem to think. Note the way "up close and personal" profiles of professional athletes strain so hard to find evidence of a rounded human life -- outside interests and activities, values beyond the sport. We ignore what's obvious, that most of this straining is farce. It's farce because the realities of top-level athletics today require an early and total commitment to one area of excellence. An ascetic focus. A subsumption of almost all other features of human life to one chosen talent and pursuit. A consent to live in a world that, like a child's world, is very small.--David Foster Wallace

Casey [Mulligan] points out that there is a regular surge in teenage employment during the summer months because more teenagers are available to work (that is, the supply of their labor has increased). That is no surprise: It is normal supply and demand in action. But if aggregate demand were the main constraint on employment, this increase in supply should not translate into higher employment during deep recessions such as this one. But it does! ... I am neither a supply-side economist nor a demand-side economist," I said. "I am a supply-and-demand economist.--Greg Mankiw

Agricultural output is several times higher today, both in absolute amount and in yield-per-acre. Available supplies of nearly all minerals continue to increase. Americans of all income levels are much better fed, much better clothed, much better housed, and much better cared for medically. The automobile cleaned America’s streets of the dung and flies that once cursed denizens of cities and towns. Electricity and petroleum have replaced far-filthier coal and wood as major sources of household energy. Perhaps most significantly, life expectancy in 2010 is 30 years longer than it was in 1910. Let’s hope that this “catastrophe” continues.--Don Boudreaux

While suffering, though, I achieved enlightenment. In my anguish, my constant thought was, "Must do something or other about this!" Rationally, I realized that any action I took would be ineffective or counter-productive. I've tried it all; nothing works better than nothing. But my skin kept screaming at me to try something... anything. And through my pain, I finally understood the TARP mentality of 2008. Call it the Activist's Fallacy: "Something must be done; this is something; therefore, this must be done." It's inane.--Bryan Caplan

... there actually are secular arguments [against same-sex marriage]. Americans are both extremely naïve about sex and extremely selfish about marriage. But marriage evolved to structure the specific ways in which sex between a man and woman can be really devastating to society, or really fruitful. In order for men and women to have sex with one another, to avoid causing a lot of disruption and wrong action in society, they have to do a lot of difficult things. The fact that a lot of them don’t want to do those things now and don’t even see those things as related to marriage is part of the problem, not an excuse to further move away from the idea of marriage as the structure. ... So if humans were perfectly able to control their reproduction, could pick when they had kids and with whom, and men and women are interchangeable both socially and biologically, then you don’t have marriage. Why would you? It arises to manage not only procreation, but also the social and biological differences between men and women prior to reproduction.--Eve Tushnet

... 40 percent of blacks in marriages and live-in relationships who attended religious services regularly had a partner who did the same, compared with 29 percent of non-Hispanic whites and 29 percent of Hispanics. White couples, in general, reported greater relationship satisfaction than other groups, presumably because of income and educational advantages, the study says. But the racial gap lessens when religious similarities come into the mix.--Donna St. George

Wednesday, August 11, 2010

I still think President Obama wins reelection

The Republicans don't have anyone close to a Reagan to run in 2012 (or 2016, as far as I can see).

Maybe Paul Ryan, someday.

Via Mark Perry.

UPDATE: Interesting comparison between Reagan and Obama by Fouad Ajami:
It was canonical to [the Obama] administration and its functionaries that they were handed a broken nation, that it was theirs to repair, that it was theirs to tax and reshape to their preferences. Yet there was, in 1980, after another landmark election, a leader who had stepped forth in a time of "malaise" at home and weakness abroad: Ronald Reagan. His program was different from Mr. Obama's. His faith in the country was boundless. What he sought was to restore the nation's faith in itself, in its political and economic vitality.

Big as Reagan's mandate was, in two elections, the man was never bigger than his country. There was never narcissism or a bloated sense of personal destiny in him. He gloried in the country, and drew sustenance from its heroic deeds and its capacity for recovery. No political class rode with him to power anxious to lay its hands on the nation's treasure, eager to supplant the forces of the market with its own economic preferences.

To be sure, Reagan faltered midway through his second term—the arms-for-hostages trade, the Iran-Contra affair, nearly wrecked his presidency. But he recovered, the nation rallied around him and carried him across the finish line, his bond with the electorate deep and true. He had two years left of his stewardship, and his political recovery was so miraculous that he, and his first mate, Secretary of State George P. Shultz, would seal the nation's victory in the Cold War.

There is little evidence that the Obama presidency could yet find new vindication, another lease on life. Mr. Obama will mark time, but henceforth he will not define the national agenda. He will not be the repository of its hopes and sentiments. The ambition that his would be a "transformational" presidency—he rightly described Reagan's stewardship in these terms—is for naught.

Chart of the day: Acting white

Paul Krugman needs a few rounds of duct tape

for his mouth.

Yuck: The richest place on earth in mid-18th century


Quotes of the day

Such is the irresistible nature of truth, that all it asks, and all it wants, is the liberty of appearing. The sun needs no inscription to distinguish him from darkness.--Thomas Paine

Good looks can kill a woman's chances of snaring jobs considered "masculine," according to a study by the University of Colorado Denver Business School. Attractive women faced discrimination when they applied for jobs where appearance was not seen as important. These positions included job titles like manager of research and development, director of finance, mechanical engineer and construction supervisor. They were also overlooked for categories like director of security, hardware salesperson, prison guard and tow-truck driver.--Belinda Goldsmith

Put more sex in your life: It slows aging. A Scottish study found that thrice-weekly action stripped at least four years off participants' faces, and getting busy even boosts immunity and reduces heart disease. There are beauty bonuses, too — sex perks up your appearance instantaneously.--Marie Claire

We obtained consistent and converging evidence that personality differences between liberals and conservatives are robust, replicable, and behaviorally significant, especially with respect to social (vs. economic) dimensions of ideology. In general, liberals are more open-minded, creative, curious, and novelty seeking, whereas conservatives are more orderly, conventional, and better organized.--Political Psychology, Vol. 29, No. 6, 2008

I am skeptical of Paul Ryan's roadmap. Not because it's dishonest, but because it's hard. Really hard. As in, I-don't-see-how-it-could-possibly-survive-the-legislative-process hard. ... Nonetheless, I think it's a really, really important document. Why? Because it is the most honest attempt I've seen by a politician to grapple with the challenges ahead of us. Strike that; it is the only attempt that I'm aware of to grapple with what lies ahead of us. Others have been willing to discuss things piecemeal, or delegate the nasty job of balancing a budget to a commission, but as far as I know only Paul Ryan has come forward and said, "Here's how all the moving parts are going to fit together." ... The people complaining that he hasn't spent all his time highlighting the least popular aspects of his roadmap are making ridiculous demands that they would never deliver to their own side. They might as well claim that true honesty demands that he campaign in his birthday suit and open every speech with his unvarnished feelings about his mother in law. Don't get me wrong, there are fair criticisms, and I'm trying to make some of them. But I'd love to see the people kvetching about his plan offer an alternative plan of their own. How much tax revenue would it take to pay for the welfare state that Democrats want us to have? How deeply are they willing to cut military spending? What politically difficult choices are those sniping at Paul Ryan willing to make? His plan may have flaws, but I'll take it over people who have vague plans to deal with the problem by raising taxes on the rich, "closing the loopholes", or, um, ending our wildfire epidemic of unnecessary amputations.--Megan McArdle

Health care now approaches 20 percent of the economy. With health insurance included in compensation, that means that 20 percent of compensation is determined not by your skill level, but by the median cost of health insurance. If the value of your skills has been rising faster than the median, then maybe that is not a problem. However, if the value of your skills has been rising more slowly than the median, then your skill level is no longer enough to overcome the health insurance hurdle.--Arnold Kling

Imposing a 20% income tax is not the same as cutting your wage by 20%. That’s because the income tax grabs not just a chunk of your current wages, but also a chunk of the future interest and dividends those wages enable you to earn. So a 20% income tax will, in general, discourage work more effectively than a 20% wage cut. This is important if you’re using data on wage cuts to predict the effects of income taxes. ... Nobody, not even the most way-out leftist, thinks that the goal of tax policy should be to maximize government revenue. We also care about things like, you know, the quality of life. Asking “what tax rate maximizes government revenue?” is like asking “what conscription rate maximizes the size of the army?”. Who cares? The right question is: What tax rate, and what conscription rate, will make us happiest in the long run? There is more to life than feeding the government.--Steve Landsburg

In order to reduce China’s excessive dependence on export surpluses and investment, it is vitally important that household consumption, which in China represents probably the lowest share of GDP ever recorded, rise significantly. To that end Beijing has implemented a number of policies aimed at boosting Chinese consumption. Are these policies working? On the positive side, automobile sales surged last year. For most analysts, this was immensely good news and they argued that this increased demand signaled a major shift in the consuming and saving behavior of Chinese households. But skeptics like me disagreed. We claimed that the surge in demand for automobiles was caused mainly by government subsidies, and that these were not sustainable. The same thing happened, by the way, to durable goods, which were also subsidized and which also saw a surge in retail sales. More importantly, we argued, any current increase in automobiles sales and durable goods would be reversed in the future as households absorbed the cost of the subsidies. Remember that subsidies are not manna from heaven. They must be paid for, and ultimately it is the household sector that pays for them, usually in the form of higher taxes but sometimes, and certainly in the case of China, in the form of financial repression.--Michael Pettis

Most terrorists come from fairly prosperous backgrounds, and though the Internet does help disseminate hate, a close look at terrorism shows that, almost invariably, a necessary step in the process to radicalization occurs in a place of worship. This doesn't mean that all mosques are bad, of course, but it does mean that some have played an important role in the West's decades-long struggle with radical Islam. The mosque that was closed on Aug. 9 is a good example. It's better known around the world by its old name, al-Quds, where Mohamed Atta and two other of the 9/11 pilots worshipped. (It was renamed in 2008.) When the attacks took place in 2001, I went to Hamburg along with many other journalists and tried to talk to the people who ran it and worshipped there. Everyone we met said that they didn't know the plotters and that their radicalization must have taken place elsewhere. That turned out to be exactly wrong, as police investigations later showed. In 1998, in fact, the al-Quds mosque showed up in a German police investigation. A Sudanese man, Mamdouh Mahmud Salim, had been arrested in a Munich suburb, charged with conspiring to build an al Qaeda network in Germany. ... When deciding whether a mosque should exist on public property, simply look at the people involved, figure out what they've done, and look into where the money comes from. Radicals leave a trail, and it really isn't that hard to find it. The hard part is acting when you find the evidence.--Ian Johnson

Google and Verizon announced Monday, as part of their bilateral net neutrality trade agreement they want Congress to ratify, that open wireless rules were unnecessary. “We both recognize that wireless broadband is different from the traditional wire-line world, in part because the mobile marketplace is more competitive and changing rapidly,” the joint statement said. “In recognition of the still-nascent nature of the wireless-broadband marketplace, under this proposal we would not now apply most of the [Net Neutrality] wire-line principles to wireless, except for the transparency requirement.” That’s fancy language for: Verizon and the nation’s telecoms have yet again won, Google officially became a net neutrality surrender monkey, and you — as an American — have lost. Google defends its reversal, saying through a spokeswoman: “We have taken a backseat to no one in our support for an open internet. We offered this proposal in the spirit of compromise. Others might have done it differently, but we think locking in key enforceable protections for consumers is progress and preferable to no protection.” Compare Monday’s statement to this one, from a post on Google’s official blog in 2007: “The nation’s spectrum airwaves are not the birthright of any one company. They are a unique and valuable public resource that belong to all Americans. The FCC’s auction rules are designed to allow U.S. consumers — for the first time — to use their handsets with any network they desire, and and use the lawful software applications of their choice.” Back then, Google figured it would need those rules to catch up to Apple’s iPhone dominance in the mobile world, and its interests and the American people’s were aligned. It created the “Open Handset Alliance” with handset makers — not carriers.--Ryan Singel

It's typical of the morons at UC irvine that they would think Bill Lerach is the right guy to teach an ethics course of any sort. The guy did jail time and was disbarred for gross ethical improprieties.--Steve Bainbridge

Tuesday, August 10, 2010

Why some secrets and privacy is a good thing

Mr. Wolf provides the apophatic case:
This posting is for all those 'James M' types out there- who write us trying to convince us that there are no 'secrets' or supposed to be any 'secrets' in the military or government.

Well, I tell you what. I'm a man of my word- you can ask any of the gents on here- and I'm going to propose a tit-for-tat, quid-pro-quo to all you "haud specialis" types out there.

Here's the offer: if you truly believe there are no secrets, and that there are no cause for 'secrets', then I would like you to post, in the comments to this entry, the following items:

Your Social Security Number
Your Credit Card Numbers (to include expiration dates and CVV numbers on the back)
Your REAL name
Your current address
Your date of birth
Your bank account number/routing number
The last 3 years of IRS tax returns. You can transpose them into the comments or link to a page with them.


See, my taxes paid for the Social Security Administration to process your info and give you a number. I have a right to that information since my taxes generated it. My taxes also bailed out financial institutions, and keeps banks afloat/guarantees (thru FDIC) your money, so we should share that info. I won't ask you to share your money, just the information. That's all. My taxes paid for the IRS to process your returns, and to store them. So, I should have access to that paperwork as well. It's a government agency, and they should not be keeping 'secrets' from me. Fair is fair.

12 economists answer "Where does the Laffer curve bend?"

And there seem to be more answers than answerers. Take Greg Mankiw (to whom Tyler Cowen awards the "Best Answer" prize):
My guess is that that the short-run answer and the long-run answer are quite different. For example, if you raised the top rate from 35 to, say, 60 percent, you might raise revenue in the short run. Over time, however, you would get lower economic growth, so the additional revenues would fall off and eventually decline below what they would have been at the lower rate.... I will pass on offering a specific number, as it would require more time and thought than I can offer just now, but I will opine that I think the long-run answer is actually more important for policy purposes than the short-run answer.

Monday, August 09, 2010

I think we need a re-examination of the social contract

Tony Woodlief thinks:
I’m all for presumption of innocence before guilt is proven, and for humane treatment of guilty-as-sin prisoners. But, ... at some point, perhaps when the number of your victims requires a football field for burial, you give up the right to any nourishment beyond a daily bowl of gruel, and anything that comes from your piehole other than “I’m so sorry for being a murdering sack of monkey poo” gets you a slap in the jaw. But I’m a conservative troglodyte that way.

Informative post on how economics gets processed in the White House

by Keith Hennessey.

This is what he says about differences between how things work between the Obama administration and its predecessors:

I can see at least three obvious structural differences between the way the Obama economic team operates and the way we did during the Bush 43 tenure:

* President Obama meets with a few of his principal economic advisors daily. Gut reaction: this is both a blessing and a curse. President Bush met with different configurations of his advisors as needed, rather than with the same group each morning. During normal times this averaged 2-3 meetings with the President per week. During the financial crisis it was almost every day, and sometimes more than once on a busy day.
* The proliferation of White House czars means that economic policy processes and decision-making are more dispersed in the Obama White House. As best I can tell, NEC did not run the health policy process for President Obama in 2009-2010, nor the cap-and-trade policy process, as it did during the Bush era. You can decide whether that’s good or bad.
* The current NEC Director has previously served as Treasury Secretary and is a leading academic economist in his own right and would be extremely well qualified to chair the CEA. This makes him at least a potential threat to both Secretary Geithner and the CEA Chair, and it means that everyone needs to work extra hard to make sure their roles are understood and that they can function together as a team.

UPDATE: Scott Sumner wonders "if this means Obama will not go along with attempts to extend the Bush tax cuts?" in a post entitled "Is Larry Summers the Dick Cheney of the Obama Administration?"

John Taylor endorses the Paul Ryan Roadmap


UPDATE: Ted Gayer of Brookings defends the roadmap. Practically bipartisan support then!

Quotes of the day

... should current economic weakness spread beyond what now appears likely, having a tax cut in place may, in fact, do noticeable good.--Alan Greenspan, 2001

They should follow the law and let [Bush's tax cuts] lapse.--Alan Greenspan, 2010

As a non-state-employee taxpayer, your stock market beta is double. If stocks go down, not only does the value of your portfolio go down, but your future taxes to pay state pensions go up. The state does not make up your losses. But you make up the state's.--Arnold Kling

... the relentless approach of age, infirmity, and death assumes a greater and greater reality and presence of mind as one ages. Most young people below the age of 30 simply cannot comprehend—on a visceral, emotional level—the ineluctable fact of their approaching decrepitude and eventual obliteration. This lurking thought grows slowly in one's mind as one ages, hiding in the shadows but never forgotten, and it begins to affect almost every aspect of one's behavior. For men, fear of death can make one grasp at youth, and excitement, and beauty in a desperate subconscious bid to stave off the Reaper.--Epicurean Dealmaker

... while characters in novels may improve their lives immeasurably when they learn to stop worrying about what other people think and just be true to themselves, this is not a life path that is open to political figures.--Megan McArdle

[I don't oppose school vouchers] for any economic reason; all the economic reasons favor school vouchers. It is because what made me an American is the United States Army and the public school system.--Robert Solow

Admirable in its candor and lucidity, Solow’s reply suggests a solution to a broader conundrum. If government intervention creates an official and common frame of reference, a set of cultural focal points, a sense of togetherness and common experience, then almost any form of government intervention can help to “make us Americans.” If people see government activism as a singular way of binding society together, then they may favor any particular government intervention virtually for its own sake—whether it be government intervention in schooling, urban transit, postal services, Social Security, or anything else—because they love the way in which it makes them American.--Daniel Klein

There is a strong likelihood that the cost projections in the new trustees report under current law understate the actual future cost that Medicare will face. A strong likelihood. I've gone so far as to say that I don't think it's a reasonable projection of what will really happen.--Rick Foster, the chief actuary of Medicare

Given Americans' near-religious objections to both taste-based and statistical discrimination, it's puzzling that the law doesn't merely allow, but actively facilitates them. Most Americans, I suspect, would defend these laws with arguments that would make them cringe in other contexts. E.g. "Consumers have a right not to support countries of which they don't approve," or "Knowing what country a product comes from helps consumers make a wise choice."--Bryan Caplan

Part of my view of modern U.S. economic history is that the pre-automobile economy died in the 1930's and the automobile-oriented economy emerged in the 1950's. [David] Halberstam's description of those four businesses, which I read years ago and am now re-reading (boy, does the book suffer from horrible editing--many paragraphs have two versions of the same sentence, slightly reworded), is what put the idea into my head. I am inclined to view what is happening today as the death of the pre-Internet economy.--Arnold Kling

The minimum wage has increased steadily in the U.S. even as the average skill of a high school graduate has fallen.--Philip Greenspun

A study published this week by Dr Catherine Hakim of the London School of Economics has found that men do slightly more work than the women they live with when employment and domestic work are measured together. This is the first time I can remember in 40 years that an authoritative study on a key issue of so-called gender politics has come out with a self-evident truth that runs directly contrary to orthodox feminist ideology. The fact that it has been written and published by a woman makes it even more delightful.--Neil Lyndon

Under the long reign by the conservative Christian Democratic Union, little was done to reform the German labor market. In a reminder again of the “Nixon going to China” doctrine, the socialistic Social Democrats, led by Gerhard Schroder, introduced various labor market reforms in 2003 after being elected to power in 1998. He cut the length of the period of eligibility for unemployment compensation, extended the age of retirement and reduced retirement pensions, and made it a little easier for companies to layoff workers. In good part as a result of these policies, while Germany unemployment had been close to 10%, it fell to 7.5% prior to the onset of the recession, perhaps mainly due to these reforms. ... Let it be clear that I am not claiming that US employment and unemployment has been very sluggish in recovering to pre crisis levels mainly because the US has had a large stimulus package and large fiscal deficits. They probably have been factors, but the evidence is still too uncertain to reach such a judgment. But it is clear that the stimulus package completely failed relative to the explicit predictions of the Obama administration and its Council of Economic Advisers about what would happen to unemployment. They predicted unemployment would decline by about 1.5 percentage points from a much lower peak, whereas so far the total decline from the higher unemployment peak of 10.2% is only 0.7 percentage points. I continue to believe that the biggest factor in the sluggish employment recovery of the US is that many of the actual new and proposed anti-business legislation, as well as the large fiscal deficits, made businessmen and investors cautious about taking on new workers. These proposals and laws include the health care bill, the pro-union bias and anti-business rhetoric of Congress and the president, suggested increased taxes on higher earners, changes in anti-trust laws to be less pro-consumer, and the endlessly complicated and largely misplaced financial “reform” law. Germany, by contrast, has continued with the same coalition government headed by the mainly pro-investment, pro trade Christian Democrats. Germany surely made various mistakes during this recession, but the US has made many more.--Gary Becker

Judging from surveys of how Americans describe themselves, most of the privileged don’t feel all that privileged. Why is that? One reason is the American mythology of middle-classness. Another is geography: in a place like Manhattan, where the average apartment sells for nine hundred thousand dollars, your money doesn’t go as far. And then there’s a larger truth about how wealth is getting concentrated in this country. As the economists Thomas Piketty and Emmanuel Saez have documented, people who earn a few hundred thousand dollars a year have done much worse than people at the very top of the ladder. Between 2002 and 2007, for instance, the bottom ninety-nine per cent of incomes grew 1.3 per cent a year in real terms—while the incomes of the top one per cent grew ten per cent a year. ... Our system sets the top bracket at three hundred and seventy-five thousand dollars, with a tax rate of thirty-five per cent. (People in the second-highest bracket, starting at a hundred and seventy-two thousand dollars for individuals, pay thirty-three per cent.) This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates. LeBron James and LeBron James’s dentist: same difference.--James Surowiecki

If you're a journalist in a two income couple that makes $300,000 and still has to give up vacations in order to pay school tuition, it hardly seems fair that LeBron James and you are in the same tax bracket--not while you're living in less than 2000 square feet. But if you're someone who has to give up vacations in order to pay the dentist and the electric bill, this probably seems eminently fair. ... The other question is, isn't there some upper limit on tax brackets for the wealthy? When the Bush tax cuts expire, that top rate will go to 39.5%. Then there's the 2.9% Medicare tax, and the 0.9% Medicare surtax we just enacted. There are, for those living in places like New York, New Jersey, California, or DC, state and local income taxes that can add an extra 5-10% onto the tax bills. We're now well over 50% marginal rates before we've even considered things like property and sales taxes. When more of your extra dollars are going to the government than yourself, I think it's a problem, even if you're very rich. I think that has to be factored into any argument about the "fairness" of the tax system.--Megan McArdle

On the one hand, it's terrible to think that aid is keeping economies from developing--and this isn't the only such critique; there are also fears that aid acts like a "resource curse", insulating political leaders from the need to win public support for their spending, and breeding corruption. On the other hand, I'm not sure I'm quite willing to walk up to a woman dying from malnutrition to tell her that I'm sorry, we'd like to help, only unfortunately it would distort the local economy and so I'm afraid you'll need to lean into the strike zone and take one for the team. On the third hand, I'm conscious that in this scenario, I am biased towards the seen harm, rather than the unseen--I'll never identify the people who might have been pulled out of poverty if we hadn't screwed up their economy, so my tendency is to discount them. Aid is the most depressing topic in economics. I don't know how William Easterly and Jeffrey Sachs stand it.--Megan McArdle

The NYT revealed today a new way to launder contributions to Congress for purposes of influencing legislation. Corporate lobbyists help fund a chair or research institute at a university, naming it after the Congressperson they want to influence. This naturally excited the fundraising department of Aid Watch. We welcome suggestions from readers on which corporate lobbies we could suck up to for funding and which politicians can be bought honored with these funds. Right now we are conducting a search for the new Sarah Palin Professorship in Geographical Studies.--Aid Watch

Sunday, August 08, 2010

Two valedictorians kneel before you, that's what I say now

Eric Falkenstein makes sense:
This [valedictorian] speaker, however, is wrestling with what should be the primary issue in every young person's life: what gives my life meaning? Victor Frankl's book Man's Search for Meaning is one of my favorites. It's a question that many never address directly but always wonder. I'm sure that whatever she does with her life, she'll be a mensch.

In contrast, the New York Times reports about a young man from a gifted school in NYC who lambasted the disparate impact in standardized tests (at Elena Kagan's alma mater, no less). His valedictory speech got a standing ovation from the school's faculty, which should be no surprise because seniors submit graduation speeches and a faculty committee selects one to be read. The faculty was congratulating itself on the bold idea that that geometry and antonym tests are biased (but not against Asians for some reason). The speech is filled with bromides and sanctimony ("We are playing God, and we are losing", "I apologize if this is not the speech you wanted to hear"). The kid is a tool for academic establishment cliches, and unfortunately, is being told that he's precociously authentic and wise. The line, "this is not the speech you wanted to hear" was chosen among many as the speech they wanted to hear, and no one seems to have noticed.

Friday, August 06, 2010

Quotes of the day

... sadness lowers the probability of earning A grades, and raises that of receiving grades of C or below, by over 15%.--NBER Working Paper No. 16239, Issued in July 2010

The more I think about it, the more convinced I am that the stories we are told govern what we believe possible.--Brooke Berman

I’ve preached too much and studied too little.--Billy Graham

Stubbornness is a virtue if you are right.--Tony Dungy

When Berkshire Hathaway earnings are released tomorrow they will report a further mark to market loss on their equity index put option portfolio. This could be up to $3bn. Collateralisation is being mooted, and talk of a Berkshire exit has long dated option markets rattled. ... Were Buffett inclined to close his positions because finreg and ratings downgrades forced unwelcome collateralisation I am fairly sure you can think that sort of level, at least, for an exit cost of almost $3bn. And that is before the impact on their position from the pressure on forwards (delta impact ought to be low as it would be a cross.) An unwind would be mass destruction, by anyone's reasoning. I find it unlikely, yet the mere thought of it as an unintended consequence of finreg is a sure fire reason for the striking upward moves in long dated volatility, particularly in the S&P 500 (if, in fact, Berkshire have not actually covertly started buying back vega). Buffett will resist collateralisation, but if it ends up a choice between cutting the position outright or posting collateral, major equity index option traders should be holding their breath for the latter.--Andrew Clavell

Like all presidents who win a big national election, Barack Obama wanted to whip as many measures through Congress as fast as possible But it’s not “obstructionism” for the Senate to decline to act like the British House of Commons, enacting whatever it pleases the chief executive to propose. There’s a big difference between the Senate of the 1950s refusing session after session to consider civil rights legislation backed by the overwhelming majority - and the Senate of the 2010s declining to try for the fourth time in 10 years to shove through an immigration amnesty that Americans do not want. ... If a president can mobilize the country behind an idea, it’s amazing how the filibusters will fade away. Look at how Republicans opted to step out of the way of the Sonia Sotomayor appointment or unemployment insurance extension. If the president cannot mobilize, he will fail. The Senate may be one of the more visible manifestations of that failure. But don’t mistake the manifestation for the cause.--David Frum

Elena Kagan’s confirmation represents a victory for big government and a view of the Constitution as a document whose meaning changes with the times. Based on what we learned the last few months, it is clear that Kagan holds an expansive view of federal power — refusing to identify, for example, any specific actions Congress cannot take under the Commerce Clause. She will rarely be a friend of liberty on the Court. It is thus telling that Kagan received the fewest votes of any Democratic nominee to the Supreme Court in history, beating the record set only last year by Sonia Sotomayor. Even several senators who had voted for Sotomayor voted against Kagan, including Democrat Ben Nelson — as did Scott Brown, the darling of these high-profile Senate votes.--Ilya Shapiro

In recent months Beijing has elevated its claims to territory in the South China Sea to the level of a "core national interest" on par with Tibet or Taiwan, and that has sparked considerable anger among the other countries in the region -- including Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam -- that claim ownership of pieces of the sea. A few days after Clinton's sally, China's minister of foreign affairs, Yang Jiechi, issued a harsh statement of his own in which he slapped down any effort to internationalize the dispute and called Clinton's statement "virtually an attack on China." Then, just in case the Americans and the Southeast Asians still didn't get the message, the Chinese navy staged large-scale maneuvers in the sea, deploying ships from all three of its fleets. Admirals watched as the ships fired off volleys of missiles at imaginary enemies -- all of it shown in loving detail by Chinese television. Experts agreed that the whole display was unprecedented. What's going on here? Aren't these the same Chinese who were being praised, a few years back, for their subtle diplomacy, shrewd PR, and clever exploitation of the strategic openings created by Washington's Middle Eastern adventures?--Christian Caryl

I am glad that Paul Krugman is afraid of Paul Ryan

You don't attack what you don't fear.

Here's a 2 minute drill of why Krugman is understandably wetting his pant leg.

This is the first time I have ever said or typed the following words

Thank you, Jimmy Carter.

Thursday, August 05, 2010

Quotes of the day

Orville Wright did not have a pilot’s license.--Gordon MacKenzie

I ran the numbers and was surprised to learn that the S&P 500 hasn't shown any net capital gain whenever the 10-year/30-year spread is wider than 43 basis points. ... [previously] The spread is now at 114 basis points. We just took out the previous high of 111 points from October 6, 1992.--Eddy Elfenbein

In my mind, a positive spread ought to have a positive impact on equity prices. I found that if I take out the period from October 2007 to March 9, 2009—yeah, I know, that’s a very big if—then numbers start to make more sense. Suddenly, a positive 10/30 spread is good for stocks.--Eddy Elfenbein

Former employees who had left Goldman were rarely mentioned. The unanimous phrase for it was ‘no longer with the firm,’ said in the same tone used to describe the passing of a family member. This tendency reached the height of comedy inside the strategies division, where some of the quants published academic papers on the more theoretical aspects of their work. If an author quit Goldman though, his name would be removed from the official version of the publication. It got to the point that some papers had no authors, and had apparently written themselves. ... If Wall Street investment bankers were dogs, they would flaunt their expensive collars and leashes as marks of status, not realizing their true purpose.--Antonio

If you're a politician, admitting you're wrong is a weakness, but if you're an engineer, you essentially want to be wrong half the time. If you do experiments and you're always right, then you aren't getting enough information out of those experiments. You want your experiment to be like the flip of a coin: You have no idea if it is going to come up heads or tails. You want to not know what the results are going to be.--Peter Norvig

A mathematical understanding of infinity was a conundrum for rationalists, who believed it could be mastered by using only the methods of scientific logic, unsullied by eschatology or religion. But as Jean-Michel Kantor and Loren Graham show, they were wrong. Centuries after Bacon and Descartes, and the birth of the scientific method of the moderns, mysticism came to the rescue of one of the most intractable problems posed by abstract human thought. It was mysticism, not rationalism, that helped to crack infinity.--Oren Harman

The belief in rationality may seem the most quixotic of all, but many elements of the [financial] crisis were provoked not by irrational behavior but by rational responses to perverse incentives. Too many people were able to take the following bet: “Heads I win, tails the financial system loses.” The countervailing view comes from behavioural economics, the intersection between economics and psychology. Like the young man who at the age of 14 thought his father was an idiot, and was then astonished at how much the old fellow had learnt in just a few years, I take behavioral economics much more seriously now than I used to.--Tim Harford

David Mamet, America’s most famous and successful playwright, caused widespread consternation two years ago when he published an essay in the Village Voice called “Why I Am No Longer a ‘Brain-Dead Liberal’” in which he announced that he had “changed my mind” about the ideology to which he had previously subscribed. Having studied the works of “a host of conservative writers,” among them Milton Friedman, Paul Johnson, Thomas Sowell (whom he called “our greatest contemporary philosopher”), and Shelby Steele, Mamet came to the conclusion that “a free-market understanding of the world meshes more perfectly with my experience than that idealistic vision I called liberalism.” For the most part, members of the American theater community responded to the publication of “Why I Am No Longer a ‘Brain-Dead Liberal’” in one of two ways. Some declared that Mamet’s shift in allegiance was irrelevant to the meaning of the plays on which his reputation is based. Others claimed to have suspected him of being a crypto-conservative all along, arguing that the essay merely proved their point.--Terry Teachout

According to Thomas Sowell, many of our modern policy debates boil down to a question of one's view of the capacity of the human mind and the institutions it develops to solve problems. [FN59] It is a debate about experts versus markets. [FN60] In one camp, we find those who believe that optimal social policy is something that can be discovered by experts based on an analysis of data and argument. ... In the other camp, we find those who believe that social problems are not comprehensible by the human mind and that no amount of conferences, policy papers, or deep thinking will find solutions for them. [FN63] There are no solutions, just tradeoffs. Sowell describes the “constrained vision” as seeing “the evils of the world as deriving from the limited and unhappy choices available, given the inherent moral and intellectual limitations of human beings.”--Todd Henderson

To me, the theme of faith in experts wielding models vs. skepticism of experts and respect for decentralized markets keeps showing up. Again, I ask, did the Soviet experiment fail just because they used the wrong experts? Or does it reflect a deeper problem, that centralized expertise is not the answer? And if the latter is the case, does the Soviet experiment not tell us something about less drastic attempts to correct market failure?--Arnold Kling

For people like me, the national debate mostly revolves around a liberal-moderate-conservative axis, and more hard-left or even traditional liberal views are fairly marginal. Journolist brought people like me into contact with a lot of those sort of liberals, and my main response was to realize that I'm a lot less liberal than I had thought.--Jonathan Chait

Yet it makes a big difference what a government worker actually does, as while many add value most do not, and they get paid either way. I know someone who works for a small bank of about 10 people, and he was telling me about once a year, about 6 people from the FDIC come in for a week and go over their books. He says they work always with an eye on the clock, and if you are talking to them at 11:30, you can expect them to leave mid-sentence because they take breaks, show up and leave like union regulars. Of course, they don't highlight anything useful to the bankers, or society, in their annual exercise (remember, pre 2007 regulators were mainly critical that banks lent too little to historically underserved homeowners).--Eric Falkenstein

The government is less worried about protecting itself from default than protecting itself from voters who want to buy a home at cheap rates.--Megan McArdle

But the point is, being embarrassed in the least of our problems. I'm sorry I have to run around in my underwear trying to extinguish my burning house, but my house is on fire. ... If somebody has become or is an embarrassment to good, old cause, then that's a problem. Embarrassment is your good sense and taste trying to tell you something. Yet it needs to be remembered that embarrassment is also a weapon that the enemies of liberty and our best traditions have used with great effect.--Tom Smith

One thing we are seeing is an enormous expansion of the intellectual engagement of ordinary people, many of whom turn out to be not so ordinary, in national politics. I'm reluctant to be specific but I will just say a lot of time, right wing radio talkers just seem to be selling schtick, using conservatism the way some insincere televangelists use religion. And that's to be expected. If people were angels, we should indeed support progressive government. It's only in the real world that we need such strict limits on power. Or take Sarah Palin, who graduated from the University of Idaho, whose alma mater was sung at my father's funeral, so don't neg the U of I around me. She's not as well educated as Michelle Obama. She's not as well educated as a President or Vice President should be. But had she gone to Harvard Law her ideas about the constitution would be a lot less sound than they happen to be. That is what we have come to. The prestige of such ancient institutions as we have are now used as weapons against the most fundamental principles of our frame of government and really our way of life. This means we are in a bad way. It's as if we have to defend ourselves against invaders and for the last 50 years West Point had been teaching that war is wrong and love is all you need. We have just put a former dean of the Harvard Law School on the Supreme Court in the certain knowledge that at the first opportunity she will rule that absolutely nothing in the Constitution prevents the federal government from requiring a person to buy insurance from some private company. Nothing. And it was probably the right thing to do because there were many far worse people our president would have been happy to nominate, all of them with resumes to die for. --Tom Smith

If politics were literature, Bill Clinton would be Tom Buchanan in "The Great Gatsby," casually smashing lives around him while remaining untouched by the chaos he creates. Barack Obama is more like Macon Leary in "The Accidental Tourist," the author of tour guides who hates travel. ... Events leave him apparently untouched. He doesn't need the crowd. Americans have always loved Obama more than he seems to care for us. ... Obama's challenge is not a lack of theatrics. It is a lack of range. The most effective modern presidents -- a Franklin Roosevelt or a Ronald Reagan -- were able to adopt a number of tones and roles. They could express grand national ambition, withering partisan contempt, humorous self-deprecation, tear-jerking sentimentality, patriotic passion -- sometimes all in the same speech. ... To switch metaphors, Obama is a pitcher with one pitch. He excels only at explanation. Initially this conveyed a chilly competence. But as the impression of competence has faded, we are left only with coldness. ... Obama's limited rhetorical range raises questions about the content of his deepest beliefs. For this reason among others, the man who doesn't need the love of crowds is gradually losing it. --Michael Gerson