Wednesday, November 30, 2011

Chart of the day: Millionaires are fleeting

Source here, via Chris Masse.

Reducing false positives

Razib Khan making sense, including:
  • Authors must decide the rule for terminating data collection before data collection begins and report this rule in the article.
  • Authors must list all variables collected in a study.
  • Authors must report all experimental conditions, including failed manipulations.
  • If observations are eliminated, authors must also report what the statistical results are if those observations are included.
Via Tim Harford.  In addition to professors and doctors, perhaps climate scientists will be more, um, scientific about how they do their jobs.
Statistics are like a bikini. What they present is suggestive, but what they conceal is vital.--Aaron Levenstein
Photo link here.

Quotes of the day

How confusing it is to entangle acclaim and love. How much of a balancing act to determine your real value to another person. When you cultivate a literary friendship, it’s good to remember — and hard to prove — that it’s the work which is a commodity, not you.--Glen David Gold

Joanne Rowling was a welfare mother in Edinburgh, Scotland. All that has changed. As the writer of the "Harry Potter" novels, having a net worth of $1 billion, she is the world's wealthiest author. More importantly, she's one of those dastardly 1-percenters condemned by the Occupy Wall Streeters and other leftists.
How did Rowling become so wealthy and unequal to the rest of us? The entire blame for this social injustice lies at the feet of the world's children and their enabling parents. Rowling's wealth is a direct result of more than 500 million "Harry Potter" book sales and movie receipts grossing more than $5 billion.
In other words, the millions of "99-percenters" who individually plunk down $8 or $9 to attend a "Harry Potter" movie, $15 to buy a "Harry Potter" novel or $30 to buy a "Harry Potter" Blu-ray Disc are directly responsible for contributing to income inequality and wealth concentration that economist and Nobel laureate Paul Krugman says "is incompatible with real democracy." In other words, Rowling is not responsible for income inequality; it's the people who purchase her works.--Walter E. Williams

Capitalism is not the source of our problems, as an economy or as a society, and capitalists are not the scourge that they are too often made out to be. As a group, we employ many millions of taxpaying people, pay their salaries, provide them with healthcare coverage, start new companies, found new industries, create new products, fill store shelves at Christmas, and keep the wheels of commerce and progress (and indeed of government, by generating the income whose taxation funds it) moving. To frame the debate as one of rich-and-entitled versus poor-and-dispossessed is to both miss the point and further inflame an already incendiary environment. It is also a naked, political pander to some of the basest human emotions - a strategy, as history teaches, that never ends well for anyone but totalitarians and anarchists. With due respect, Mr. President, it's time for you to throttle-down the partisan rhetoric and appeal to people's better instincts, not their worst. Rather than assume that the wealthy are a monolithic, selfish and unfeeling lot who must be subjugated by the force of the state, set a tone that encourages people of good will to meet in the middle. When you were a community organizer in Chicago, you learned the art of waging a guerilla campaign against a far superior force. But you've graduated from that milieu and now help to set the agenda for that superior force. You might do well at this point to eschew the polarizing vernacular of political militancy and become the transcendent leader you were elected to be. You are likely to be far more effective, and history is likely to treat you far more kindly for it.--Leon Cooperman

If the government borrowed or printed a trillion dollars and gave the money to me, would there be any losers? If you don’t think there has been a wealth transfer, if you don’t think ordinary people have lost, please call your Congressperson and ask her to cut me a trillion dollar check. In some abstract sense, this policy of giving me money would push government debt higher. But that is so very vague a cost! I promise I’d do great things with a trillion dollars. My ideas are so much cooler than Goldman Sachs’, despite all the wholesome commercials they are running.--Steve Randy Waldman

JPMorgan Chase (JPM)
$34.90 (+$0.72) (+ 2.1%) The financial world was shaken today when CEO Jamie Dimon stated that the Occupy Wall Street movement had significantly eaten into the banking titan's profits, announced Chase would have to drastically reformulate its business plan, and then paused a beat before saying, just kidding, they made a record $17.4 billion last year.
--The Onion

Twenty-one months ago, we faced five critical problems: high taxes, runaway government spending, inflation, high interest rates, and unemployment. Getting to the roots of unemployment meant fighting inflation and high interest rates caused by runaway government spending and taxing, because we know that when inflation shoots up, it triggers a delayed-action rise in unemployment. Now inflation is being driven back down, and lower unemployment will follow.
So, we started by winning the first real tax cut for the American people in nearly two decades. Our program brings down income tax rates 25 percent. At the same time, we've been cutting costly, wasteful government regulations and the rate of increase in government spending. We've reduced the rate of government spending growth by nearly two-thirds. Inflation, which registered 12.4 percent in 1980, is down to just 5.1 percent so far this year.
Interest rates, which had climbed as high as 21\1/2\ percent before we took office, have this week fallen to 12 percent -- not low enough, but certainly heading in the right direction. Unemployment, always a lagging indicator in times of recession, has not yet stopped its upward drift.
But in 21 months, we've already brought tax rates down by a quarter, with the third installment coming next July, and brought down the rate of increase in government spending by nearly two-thirds. That's helped us to bring down the rate of inflation by more than half, and that's helped us to bring down interest rates by 40 percent.
So, on four out of five problems that faced us in 1980, we've made important progress. We haven't solved them all, but we're making headway.--Ronald Reagan, October, 1982

Reagan made good on lowering the unemployment rate, too.--Cav
Photo links here and here.

How independent is the Fed these days?

Seems less than ever.

UPDATE: Megan McArdle writes:
This is a band-aid. It's a good band-aid. But making it easier for local banks to borrow in dollars does not, in the end, fix any of the problems with the euro-zone. It just delays the rate at which the current sovereign crisis turns into a banking crisis.

Tuesday, November 29, 2011

Quotes of the day

Paul Krugman's wife, Robin Wells, came out with a piece arguing Occupy Wall Street's issues are something economists should address. I wonder whether she thinks biologists should all teach about creationism because so many students believe in some sort of transcendental spark to life. Probably not.   ... You see the same thing with Noam Chomsky, were socialism always is to be encouraged, but any time it happens, as in the Soviet Union, the Eastern Bloc, or Cambodia, these aren't considered 'true' socialist countries (if only Trotsky won!). Their naive beliefs do not work because they aren't feasible, and so too the idea that large banks can be some big cookie jar for agreed-upon investments as opposed to being administered by professionals.--Eric Falkenstein

Moral of the story: it’s harder to tax the top earners than you think.
The second moral is that tax incidence remains a neglected topic, even among top economists.
The third moral is that too many people, including both Krugman and his critics on this point, have been neglecting the literature.--Tyler Cowen

NASA records released to resolve litigation filed by the American Tradition Institute reveal that Dr. James E. Hansen, an astronomer, received approximately $1.6 million in outside, direct cash income in the past five years for work related to — and, according to his benefactors, often expressly for — his public service as a global warming activist within NASA.--Christopher Horner

Religions are sustained in the long run by the consolations of their teachings and the charisma of their leaders. With global warming, we have a religion whose leaders are prone to spasms of anger and whose followers are beginning to twitch with boredom. Perhaps that's another way religions die.--Bret Stephens

We have waited for the wave of investigative journalism seeking the reasons for Black absenteeism — but so far we have been disappointed. Black failure to attend right wing demonstrations appears to be a mysterious matter demanding detailed investigation, but there is nothing to discuss when they shun left wing ones. Moreover, a relative absence of Black faces in right wing crowds clearly demonstrates the racism of both the protesters and their ideas, while an absence of Black faces in left wing crowds means — absolutely nothing.--Walter Russell Mead

Occupy Wall Street might seem like a movement that would resonate with black Americans. After all, unemployment among African Americans is at 15 percent, vs. almost 8 percent for whites. And between 2005 and 2009, black households lost just over half of their median net worth compared with white families, who lost 16 percent, according to the Pew Research Center.
A Fast Company survey last month found that African Americans, who are 12.6 percent of the U.S. population, make up only 1.6 percent of Occupy Wall Street.
While the black press and civil rights groups such as the NAACP and the National Urban League were critical to past protest movements, black churches were the organizational force behind the rhetoric. Church leaders mobilized famous names and unsung heroes to end segregation through meetings, marches, demonstrations, boycotts and sit-ins. But where is the church now?
Some argue that the black church is losing its relevance, especially among young people who have been turned off by the religious theater of celebrity preachers. Even after lenders were accused of targeting black churches and communities as fertile markets for subprime mortgages, these churches are not joining Occupy protests en masse.
And despite their inclusive mission statements, major civil rights organizations and leaders appear to be selling out black America for corporate money. Beginning in the 1980s, for example, the tobacco and alcohol industries meticulously cultivated relationships with leaders of black communities. Institutions such as the NAACP, the United Negro College Fund and the Congressional Black Caucus have counted those industries as major donors — at the expense of the health of the black community.--Stacey Patton

What if fat is good and carbs are bad? What if the government has been nudging people toward obesity, diabetes, and heart disease. Oops! Maybe it would be better to allow more competition in ideas and less nudging. I’ll nudge myself, thank you very much.--Russ Roberts

What you're looking for is some characteristic that is common to the people own pets, exercise regularly, have an occasional drink or two, and practice religion. What could be inferred about all of those people? I'm interested in your answers because the readers of this blog are good at pattern recognition. You'll probably come up with several plausible answers. The pattern I noticed is that each of the lifestyle choices directly lowers stress by improving a person's attitude. My hypothesis is that stress is the root cause of most health problems.--Scott Adams

In the context of daily life as we experience it, of course our joys and sorrows feel intensely meaningful. But just as it surely makes a (if you will) meaningful difference why the war itself is being waged, it surely makes a rather large difference whether our joys and sorrows take place in, say, C.S. Lewis’s Christian universe or Richard Dawkins’s godless cosmos. Saying that “we know life is meaningful because it feels meaningful” is true for the first level of context, but non-responsive for the second.--Ross Douthat

Chart of the day: Imports as share of US oil consumption

Source here.

Monday, November 28, 2011

Happy belated Thanksgiving

I was out of town, busy with family, and did not blog. I did not eat turkey, first time in a few decades, but did feast on seafood and steak and need to exercise, as December could be fattening.

Here is the best thing I read this holiday:
In fairness, Krugman probably doesn’t understand what actually happened at Plymouth. He certainly doesn’t favor an extreme form of socialism where there’s zero incentive to produce. But if you want to mock conservatives for believing that an economic system based on sharing could leads to all sorts of unspeakable evils, you might want to pick an example that doesn’t prove their point.
Photo links here and here.

Government program of the day: The Chevy Volt

is turning out to be a bit of a hazard.

I would expect nothing less from a product that is being subsidized by the taxpayer, at $7,000 a pop.

Chart of the day: Fed bailing out Morgan Stanley

Source here.

Ron Paul, are you listening?

Quotes of the day

After the financial crisis erupted in 2008, continental Europe on the whole appeared to be in better shape than the US. The main reason was that the big EU banks held smaller amounts of questionable mortgage-backed securities than did American (and British) banks. The housing markets in Germany, France, Italy, and most other member countries-Spain and Ireland are two exceptions- had not boomed as much as the American and British markets.
Unfortunately, the apparent more solid position of EU banks has turned out to be an illusion because these banks held large amounts of euro-denominated sovereign debt of Greece, Portugal, Italy, and other economically weak members of the EU. The presumption of EU banks in holdong so much sovereign debt of weak members was that the strong members would not allow defaults on any sovereign debts issued in Euros. This same presumption led the now bankrupt American fund, MF Global Holdings, to bet billions of dollars on the expectation that sovereign debt of all members of the euro-zone would be paid off in full.
Weaker member nations will continue to be stressed by shocks to their economy and to their fiscal balance sheets, with many of these shocks not easy to anticipate in advance. The crisis helps demonstrate that a common currency makes adjustment to individual country shocks far more difficult than when countries can devalue their own currencies. This will continue to be a devastating weakness of the euro unless labor and product markets became much more flexible in the euro-zone, and unless labor mobility across member nations increases greatly.--Gary Becker

So which is it? Is the Keynesian theory wrong? Or did Keynes not believe his own theory? I say the Keynesian theory is wrong. There was no reason for Keynes not to own stocks in 1937. The events that caused the severe recession also caused the stock market crash–and those occurred in the last half of 1937. EMH + market monetarism >>>>>> Keynesian theory.--Scott Sumner

... there are three i-words that need to be banned; inflation, income and interest rates. And they need to be replaced with NGDP growth, consumption, and asset prices.--Scott Sumner

When you've spent your professional life trying to correct the error of priceless economics (the fallacy of assuming that shortages and surpluses are permanent, with no price to clear markets), you apply your thinking to the labor market.--Arnold Kling

Guessing that theists and atheists are equally trustworthy is just as speculative as guessing that they're not. Given this inevitability, it seems better for people to expose their speculation to public criticism instead of pretending that their beliefs are based on "evidence alone." If you want to "overcome bias," you will reward candor, not feigned agnosticism.
That's my speculation, anyway.
Challenge: As long as speculation is clearly labeled, shouldn't truth-seekers want people to freely speculate? If not, why not?--Bryan Caplan

How did the Brooklyn of ... crack houses turn into what it is today—home to celebrities like Maggie Gyllenhaal and Adrian Grenier, to Michelin-starred chefs, and to more writers per square foot than any place outside Yaddo? How did the borough become a destination for tour buses showing off some of the most desirable real estate in the city, even the country? How did the mean streets once paced by Irish and Italian dockworkers, and later scarred by muggings and shootings, become just about the coolest place on earth? The answer involves economic, class, and cultural changes that have transformed urban life all over America during the last few decades. It’s a story that contains plenty of gumption, innovation, and aspiration, but also a disturbing coda. Brooklyn now boasts a splendid population of postindustrial and creative-class winners—but in the far reaches of the borough, where nary a hipster can be found, it is also home to the economy’s many losers.
the borough is a microcosm of the nation’s “hourglass economy.” At the top, the college-educated are doing interesting, motivating work during the day and bicycling home to enjoy gourmet beer and grass-fed beef after hours. At the bottom, matters are very different. Almost a quarter of Brooklyn’s 2.5 million residents live below the poverty line—in the housing projects of East New York, in the tenements of Brownsville, or in “transitional” parts of Bushwick and Bed-Stuy, all places where single-mother poverty has become an intergenerational way of life. Between 2000 and 2010, the percentage of the area’s population on welfare did decline markedly, but the number of Medicaid recipients almost tripled, to nearly 750,000. About 40 percent of Brooklyn’s total population receives some kind of public assistance today, up from 23 percent a decade ago.
To make matters worse, according to Crain’s New York Business, Brooklyn’s unemployment rate doubled between 2008 and 2009, a considerably higher rise than in Manhattan, Queens, or Staten Island. When manufacturing jobs do become available, they tend to require skills that high school graduates—and dropouts—lack. East New York and Brownsville also remain the highest-crime areas in New York.
And no one believes that’s transitional.--Kay Hymowitz

Many educators sooth their consciences by insisting that "I teach my students how to think, not what to think." But this platitude goes against a hundred years of educational psychology. Education is very narrow; students learn the material you specifically teach them... if you're lucky.
Other educators claim they're teaching good work habits. But especially at the college level, this doesn't pass the laugh test. How many jobs tolerate a 50% attendance rate - or let you skate by with twelve hours of work a week? School probably builds character relative to playing videogames. But it's hard to see how school could build character relative to a full-time job in the Real World.
At this point, you may be thinking: If professors don't teach a lot of job skills, don't teach their students how to think, and don't instill constructive work habits, why do employers so heavily reward educational success? --Bryan Caplan

... many of the criticisms of capitalism are really criticisms of "crony capitalism."--Mark Perry

Like any virtues optimism and confidence are useful only in thoughtful moderation, in the right context.--Eric Falkenstein

I would say that 1931 is the greatest birth year in baseball history, the best vintage.--Joe Posnanski

What Milton Friedman might say to Occupy Wall Street.--Greg Mankiw

Reducing the burden which government places on the economy, through tax cuts, is the surest way to promote growth. I have never heard of a country that taxed itself into prosperity. Yet Britain last year raised the top rate of income tax from 40 per cent to 50 per cent. For more economic growth, and more tax revenue, this rate should be lowered immediately.
This paradox — lower rates, but higher yield — has been demonstrated time and time again, the world over. Between 1980 and 2007, the US cut tax rates on every form of income, the highest, the lowest and all those in the middle. The result was that the rich paid more, even if their tax levels were reduced. Let’s take the top 1 per cent of earners. Over this 27-year period, their contribution to the income tax collected in America doubled from 19.5 per cent to 40 per cent. The same dynamics applied in Britain: when the top rate of income tax was lowered to 40 per cent in 1988, the share of income tax collected from the richest 1 per cent rose from 14 per cent then to 27 per cent last year. Raising tax rates on the rich is about as bad an idea for the UK as I could imagine.
The government doesn’t need to do something. It needs to undo much of what it already has done. If you want poor people to do better, create jobs, not welfare — and to do this make taxes lower, not higher. ‘The best form of welfare,’ in the words of John F. Kennedy, ‘is still a good high-paying job.’--Arthur Laffer

Barney Frank announced today that he was stepping down. He gets a lot of criticism from the right, and to be sure, some of his more spectacular personal pecadillos, and some of his policy decisions on the banking industry, are ripe for criticism.
Nonetheless, I confess, I like Barney Frank. I also think that, whatever his mistakes, he's pretty knowledgeable about finance. And you need only look at the committee list to see that it could have been so, so much worse.
Guess which Democrat now becomes the ranking member on the financial services committee? That's right, none other than our favorite batty aunt, Maxine Waters.--Megan McArdle

Hypocrisy of the day: Alec Baldwin's Capital One earnings

He says:
My partnership with Capital One serves as a platform to generate awareness about the need for arts funding. Government funding has been significantly reduced and I think that is bad for arts education and America’s cultural heritage.
I'm still seeing Capital One commercials with Jerry Stiller and Jimmy Fallon, but haven't spotted a Baldwin edition in some time. Hmmm, perhaps he regrets Occupying Wall Street?

Wednesday, November 23, 2011

Quotes of the day: Scott Sumner tweet edition

here. Some of my faves:

All multiplier estimates are nothing more than forecasts of central bank incompetence.

You can’t squeeze blood from a stone; you can’t squeeze consumption from Warren Buffett

If you aren’t targeting the forecast, you are expecting to fail.

Hellooooo . . . NGDP crashes cause financial crises . . . almost always.

The dual mandate: It’s not just a good idea, it’s the law.

and a bonus:
If I ever get sucked into Twitter it will mean: divorce – - -> unemployment – - -> mental institution – - -> endogenous money proponent.

MEA: Mixed Economic Arts

Christina Romer hits John Taylor.

John Taylor hits back.

I miss playing Call of Duty, and hope for a Gingrich-Obama debate series.  (I have currently have no idea if Newt Gingrich will be a better President than Barack Obama, Hillary Clinton, or Mitt Romney).

Photo links here and here.

Quotes of the day

Hugo is the ultimate kid’s movie, in a sense, because its director, Martin Scorsese, turns out to be the ultimate kid. It’s a movie about movies, and the ways in which they came to occupy people’s hearts and minds. There’s a pair of inquisitive children, a hazardous quest, and a wondrous treasure. But the child at the center of the story, looking back more than a hundred years to the wellspring of his art, is Scorsese himself.--Kurt Loder

When Teddy [Forstmann] got to one [Croatian refugee] camp where all the kids seemed to be down with colds and the flu he was distressed. How could such conditions exist in civilized Europe? He pledged a few million dollars to rebuild the camp with proper sanitation. And just before leaving, Teddy spotted a very fetching young lady and gave her his coat. He figured she would need it in the winter. If there was a pretty woman present Teddy would spot her. He was fun in a good cause or a great deal. There was no one else like him.--R. EMMETT TYRRELL, Jr.

... a wave of firings that has washed away more than 200,000 jobs in the global financial-services industry this year, eclipsing 174,000 in 2009, data compiled by Bloomberg show. BNP Paribas (BNP) SA and UniCredit SpA (UCG) announced cuts last week, and the carnage likely will worsen as Europe’s sovereign-debt crisis roils markets.--Max Abelson and Ambereen Choudhury

The text of the Second Amendment is maddeningly ambiguous. It merely says, “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” Yet to each side in the gun debate, those words are absolutely clear.
The Founding Fathers instituted gun laws so intrusive that, were they running for office today, the NRA would not endorse them. While they did not care to completely disarm the citizenry, the founding generation denied gun ownership to many people: not only slaves and free blacks, but law-abiding white men who refused to swear loyalty to the Revolution.
For those men who were allowed to own guns, the Founders had their own version of the “individual mandate” that has proved so controversial in President Obama’s health-care-reform law: they required the purchase of guns. A 1792 federal law mandated every eligible man to purchase a military-style gun and ammunition for his service in the citizen militia. Such men had to report for frequent musters—where their guns would be inspected and, yes, registered on public rolls.
Justice Scalia [the foremost proponent of constitutional originalism], in other words, embraced a living Constitution. In this, Heller is a fine reflection of the ironies and contradictions—and the selective use of the past—that run throughout America’s long history with guns.--Adam Winkler

In the twentieth century philosophy of mind became one of the central areas of philosophy in the English-speaking world, and so it remains. Questions such as the relationship between mind and brain, the nature of consciousness, and how we perceive the world, have come to be seen as crucial in understanding the world. These days, the predominant position in philosophy of mind aims at equating mental phenomena with operations of the brain, and explaining them all in scientific terms. Sometimes this project is called ‘cognitive science’, and it carries the implicit assumption that cognition occurs in computers as well as in human and animal brains, and can be studied equally well in each of these three forms.--Laura Weed

Do you see the problem with [Ronald] Green’s assertion? He asks us to believe that just because obesity is 80% genetic, it can’t also be 80% due to laziness. But why? What are those two hypotheses viewed as mutually exclusive? Is it because genetic characteristics are viewed as “not one’s fault,” whereas laziness is viewed as a character flaw? But why shouldn’t character flaws be genetic?--Scott Sumner

Students want not knowledge, but certification. Future employers only see your grade and diploma - and the less a professor teaches, the less students have to learn to get the grade and diploma they want. So, human capital extremists, what gives? Do you deny that canceling class makes students happy? If not, how can you reconcile your theory with the facts?--Bryan Caplan

The tax attacks on Republicans therefore look like this:
  • Republicans refused to raise taxes as part of a deficit deal. No longer valid.
  • Republicans refused to buck Grover Norquist and Americans for Tax Reform. Invalid.
  • Republicans refused to raise taxes on the rich. No longer valid.
  • Republicans would not raise taxes enough.
  • Republicans would not raise taxes on the rich enough.
As you follow the deficit reduction debate over the next year, it will be important to remember how significantly the Super Committee Republicans changed the negotiating playing field during these negotiations, and how their offer has changed the nature of the fiscal policy debate.--Keith Hennessey

In short, the modern revolutionary, being an infinite skeptic, which he must be, is always engaged in undermining his own mind.  In his books on politics he attacks persons for trampling on morality, but in his book on ethics he attacks morality for trampling on persons.  Therefore the modern rebel has become practically useless for all purposes of revolt by rebelling against everything, he has lost his right to rebel against anything…  There is a kind of thought that stops thought, and that is the only kind of thought that ought to be stopped.--G.K. Chesterton

I could summarize the employment environment of the times this way:

Lots of jobs for people who were willing to relocate
Low entry-level pay
Company-paid healthcare
Company-paid training, including external degree courses
Inexpensive cost of living
Clear opportunities for advancement

How's that different from today? The quick answer is that every part of what I described is different. And you need the whole system in place or else the economy can't be a sustained job creation machine. So I don't think we can tweak the current economy, or stimulate it, enough to make much difference. What we need is Cheapatopia.--Scott Adams

Bikini Statistic of the day

The New England Patriots defense ranks 32nd (i.e. dead last) in total yardage allowed (404 yds/game) and passing yardage allowed (300 yds/game) after 10 of its 16 regular season games.

However, the defense ranks 10th in points allowed (20).

The team does not seem to be the best in recent memory, but looks to be on its way to a first round playoff bye. This is yet another thing for which I am grateful.  Happy Thanksgiving!
Statistics are like a bikini. What they present is suggestive, but what they conceal is vital.--Aaron Levenstein
Photo link here.

Monday, November 21, 2011

Artwork of the day: Pepper spray meme

Source here, via Catherine Rampell.

Gender divides in higher education

reported by Mark Perry. Degrees mostly conferred to women:

87% Family and consumer sciences/human sciences
85% Health professions and related clinical sciences
82% Public administration and social service professions
79% Education
77% Psychology

Degrees mostly conferred to men:

84% Engineering and engineering technologies
82% Computer and information sciences and support services
67% Theology and religious vocations
62% Philosophy and religious studies
59% Physical sciences and science technologies

Photo link here.

Quotes of the day

Will the “Occupy” movement develop into a significant political force? I am doubtful: the movement is already losing supporters in most places where it has been active. Cold weather will accelerate the decline. The movement is losing ground not because the issues it raises are unimportant, but rather because the great majority of Americans and those in other countries with Occupy groups do not sympathize with most of the people doing the occupying.
Although, on the whole, I believe that most members of the top 1% provide useful services to society, I share the concern of “occupiers” and Tea Party members about many of the bailouts. The rich bankers and others who took large risks should have taken much larger haircuts. I have also supported from the beginning of the recession higher capital requirements for banks, especially for the large “too big to fail banks” that will be bailed out if they get into financial difficulties.
Nevertheless, the overall earnings inequality has far greater relevance for the vast majority of occupiers and Tea Party supporters than do the earnings of men and women at the very top of the financial sector. The most effective way for the US to reduce overall inequality that will help the largest number of young persons is by finding ways to bring American high school and college graduation rates up to the levels achieved by the other nations, such as South Korea and some European nations, that have replace the US as worldwide leaders in education achievements.--Gary Becker

Why are liberals so desperately unhappy with the Obama presidency? There are any number of arguments about things Obama did wrong. Some of them are completely misplaced, like blaming Obama for compromises that senators forced him to make. Many of them demand Obama do something he can’t do, like Maddow’s urging the administration to pass an energy bill through a special process called budget reconciliation—a great-sounding idea except for the fact that it’s against the rules of the Senate. Others castigate Obama for doing something he did not actually do at all (i.e., Drew Westen’s attention-grabbing, anguished New York Times essay assailing Obama for signing a budget deal with cuts to Medicare, Social Security, and Medicaid that were not actually in the budget in question).
Liberals are dissatisfied with Obama because liberals, on the whole, are incapable of feeling satisfied with a Democratic president. They can be happy with the idea of a Democratic president—indeed, dancing-in-the-streets delirious—but not with the real thing. The various theories of disconsolate liberals all suffer from a failure to compare Obama with any plausible baseline. Instead they compare Obama with an imaginary president—either an imaginary Obama or a fantasy version of a past president.
the liberal failures of Obama and Clinton are but tiny potholes next to the vast gulch of failure that was the Carter presidency. Today, Carter is remembered as a president anchored in liberal values, a revision of history both conservatives and Carter himself are happy to leave uncorrected. But the truth is that Carter’s domestic agenda carried only small bits of liberalism, and those small bits (a consumer-protection agency, tax reform) met with total failure in the Democratic Congress.
Roosevelt did not run for office promising to boost deficit spending in order to stimulate the economy. He ran castigating Herbert Hoover for permitting high deficits, then immediately passed an austerity budget in his first year. Roosevelt did come around to Keynesian stimulus, but he never seemed to understand it, and in 1937 he reversed himself again by cutting spending, helping plunge the economy into a second depression eventually mitigated only by war spending.--Jonathan Chait

Neither the politics of polarization nor those of noblesse oblige on behalf of the fortunate will serve to protect the interests of the middle class in the post-industrial economy.--Lawrence Summers

The great thing about an experience like this is that you learn who your friends really are.--David Frum

I was happier when I didn’t know.--David Frum's wife

... what seems beyond argument is that the U.S. political system becomes more polarized and more dysfunctional every cycle, at greater and greater human cost. The next Republican president will surely find himself or herself at least as stymied by this dysfunction as President Obama, as will the people the political system supposedly serves, who must feel they have been subjected to a psychological experiment gone horribly wrong, pressing the red button in 2004 and getting a zap, pressing blue in 2008 for another zap, and now agonizing whether there is any choice that won’t zap them again in 2012. Yet in the interests of avoiding false evenhandedness, it must be admitted: The party with a stronger charge on its zapper right now, the party struggling with more self-­imposed obstacles to responsible governance, the party most in need of a course correction, is the Republican Party. Changing that party will be the fight of a political lifetime.--David Frum

In my capacity as an independent candidate for President of the United States, I feel it's my job to offer specific suggestions for getting people back to work. I don't know what those other candidates were doing today, but it probably involved sexual harassment, lobbying while calling it something else, dodging blame, being ineffective, worshipping the wrong god, and that sort of thing. I did most of those things today too, but I also came up with this job bunching idea, and that's not nothing.--Scott Adams

The article quotes Beane as saying that Lewis understood what he was doing within minutes: "You’re arbitraging the mispricing of baseball players". And I don't think that it can be put in fewer words: that's exactly what someone with a Wall Street background would make of it, and it's exactly right. Now to our own business. Can you think of an industry whose assets are mispriced more grievously, and more routinely, than drug research?
Think about it. All those preclinical programs that never quite work out. All those targets that don't turn out to be the right target when you get to Phase II. All those compounds that blow up in Phase III because of unexpected toxicity. By working on them, by putting time and effort and money into them, we're pricing them. And too much of the time, we're getting that price wrong, terribly wrong.
That's what struck me when I read Moneyball several years ago. The problem is, drug research is not baseball, circa 1985. We're already full of statisticians, computational wizards, and sharp-eyed people who are used to challenging the evidence and weighing the facts. And even with that, this is the state we're in. The history of drug research is one attempt after another to find some edge, some understanding, that can be used to correct that constant mispricing of our assets. What to do?--Derek Lowe

... we are at the dawn of “neuroeconomics.”--Robert Shiller

... the people who do not devote themselves to the words of God eventually lose them. The loss is catastrophic. The only adequate analogy is a desperate famine. It is easy to see how this judgment works out in history. For complex historical reasons, France turned on the Huguenots and persecuted them almost out of existence, so the Bible and the Reformation never took hold in France as it did in England. Sometimes the antipathy toward the Bible has arisen from drift, rather than from persecution. In many Western countries, the public sense of morality was until a few decades ago largely tied to the Ten Commandments. Nowadays very few even know what the Ten Commandments are. The result is not freedom and integrity, but a lilting scorn that flaunts its superiority over something no longer even understood, much less respected—and what shall the end of these things be?--Don Carson

John Hempton swats Felix Salmon's derrière


As with all else on this blog, most safe for work.

Friday, November 18, 2011

Quotes of the day

Genuine courage presupposes fear that is overcome. If there is no fear at all, there can be no courage. Similarly, if there is no wrath, forbearance is no longer a virtue; it dissolves into some strange alchemy of niceness and moral indifference.--Don Carson

Being frank burns too many bridges.--Eric Falkenstein

If what such girls experience isn’t slavery, that word has no meaning. It’s time for a 21st-century abolitionist movement in the U.S. and around the world.--Nicholas Kristof

Every province in China is Greece.--Larry Lang, chair professor of Finance at the Chinese University of Hong Kong

We need reform that provides real transparency. Congress should be subject to the Freedom of Information Act like everyone else. We need more detailed financial disclosure reports, and members should submit reports much more often than once a year. All stock transactions above $5,000 should be disclosed within five days.
We need equality under the law. From now on, laws that apply to the private sector must apply to Congress, including whistleblower, conflict-of-interest and insider-trading laws. Trading on nonpublic government information should be illegal both for those who pass on the information and those who trade on it. (This should close the loophole of the blind trusts that aren't really blind because they're managed by family members or friends.)
No more sweetheart land deals with campaign contributors. No gifts of IPO shares. No trading of stocks related to committee assignments. No earmarks where the congressman receives a direct benefit. No accepting campaign contributions while Congress is in session. No lobbyists as family members, and no transitioning into a lobbying career after leaving office. No more revolving door, ever.
This call for real reform must transcend political parties. The grass-roots movements of the right and the left should embrace this. The tea party's mission has always been opposition to waste and crony capitalism, and the Occupy protesters must realize that Washington politicians have been "Occupying Wall Street" long before anyone pitched a tent in Zuccotti Park.--Sarah Palin

It’s hard to believe how much damage Bush did to the US economy in 8 short years.--Scott Sumner

But the way it’s structured here is, I’ll take responsibility for all the plays that are called. I have the final say on it. If I don’t want to run the play, then I can call it off – that’s my right as a head coach. Any of the bad ones, you can blame me for because ultimately I could change them if I wanted to.--Bill Belichick

On the budget, I propose a plan to cut every Federal government expense by 10% and increase every Federal tax by 10%. I'd call that the default plan, meaning I prefer a better plan, but I wouldn't expect anyone to come up with one. The advantage of this plan is that it's bad for every American. That's a little something I call "fair."--Scott Adams

As the deadline looms for the congressional super committee, there's seems to be a growing sense that tax revenue for the government is like income for the household. That's wrong. Raising taxes is nothing at all like earning income. Instead, it's a lot more like visiting the ATM. The government's debt is the American people's debt. If we pay down that debt through higher taxes, we will, for the most part, pay those taxes by drawing down our savings. That's no more "responsible'' than drawing down those savings to finance overconsumption within the household. If you buy a kayak you don't need and can't afford, you're unlikely to placate your spouse by saying "Don't worry, dear, I withdrew the money from our retirement account.'' If your government insists on maintaining social programs we don't need and can't afford, nobody should be placated by a congressional agreement to finance that program with money withdrawn from those same accounts.--Steve Landsburg

I remember learning, in one of the few West Wing episodes I watched, that Aaron Sorkin had awarded President Bartlett the Nobel Prize in economics. No doubt this sounded super-awesome to Sorkin, but if you've ever met a Nobel prizewinner, it's ludicrous. The talents required to win the Nobel prize in economics include things like incredibly single-minded focus on one idea at a time, a willingness to ignore the opinions of others, and a positive enjoyment of the vast amounts of time you will spend alone in your office, thinking. I understand why Sorkin thinks that these would be very admirable qualities for a president to have . . . but I doubt he'd actually hire this person as, say, a producer on one of his shows. The type of person who is good at the one is not good at the other--and being president probably looks slightly more like producing a television show than winning the Nobel Prize.--Megan McArdle

My only regret is not suggesting that it would be a “worthwhile Canadian initiative” for our northern neighbors to “test drive” the [NGDP targeting] policy before we tried it here in the much more important American economy.--Scott Sumner

You know how things end for Sonny Corleone — he ignores his consigliere, makes it personal and ends up gorging on a bowl of bullets parmigiana. His brother, Michael, assumes command and remains all-business for his first few years, slowly losing perspective and becoming more and more paranoid. He stops trusting his inner circle, grows apart from his family and murders his bumbling brother. Killing Fredo is strictly business for Michael, a warning that nobody should ever cross him. He can't see anything beyond making money and keeping power. He's dead inside. No different than Sonny, really. What does this have to do with the NBA lockout? The owners wanted to blow up their current model; the players gave them gas and matches. But why? I think the answer lies in that Godfather scene. The owners treated these negotiations as a natural extension of their business, only caring about their bottom line and nothing else. The players took the proceedings much more personally.--Bill Simmons

In short, grade inflation in the humanities has been contributing to college students moving away from science, technology, engineering, and math fields, as well as economics, for the last half century. It's time for the pendulum to start swinging back. A gentle starting point would be to making the distribution of grades by institution and by academic department (or for small departments, perhaps grouping a few departments together) publicly available, and perhaps even to add this information to student transcripts. If that answer isn't institutionally acceptable, I'm open to alternatives.--Timothy Taylor

I expect the medical profession to undertake an all-out effort to raise fear, uncertainty, and doubt about technology to replace the doctor, until eventually people realize that they have more fear, uncertainty, and doubt about doctors themselves.--Arnold Kling

A new experiment appears to provide further evidence that Einstein may have been wrong when he said nothing could go faster than the speed of light, a theory that underpins modern thinking on how the universe works. The new evidence, challenging a dogma of science that has held since Albert Einstein laid out his theory of relativity in 1905, appeared to confirm a startling finding that sub-atomic particles called neutrinos could travel fractions of a second faster. The new experiment at the Gran Sasso laboratory, using a neutrino beam from CERN in Switzerland, 720 km (450 miles) away, was held to check findings in September by a team of scientists which were greeted with some skepticism.--Kate Kelland

The American Farm Bureau Federation (AFBF) recently reported that Americans will pay more to feed 10 people for Thanksgiving dinner this year than since the mid-1980’s. The average turkey feast for 10 this year will cost $49.20 – that’s $5.73 more than it cost just last year. Shoppers at Walmart will pay 1/3 (31%) less for the same Thanksgiving groceries and will have an extra $15 in their wallet with this savings.--Walmart
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