These superdelegates, Byzantine hyper-egalitarian Democratic Party delegate selection formulas, and the fact that many delegates are selected at conventions or by caucuses rather than primaries, combine to offer the distinct possibility that by convention time the candidate leading in the popular vote in the primaries will be trailing in the delegate count.
How ironic. For over seven years the Democratic Party has fulminated against the Electoral College system that gave George W. Bush the presidency over popular-vote winner Al Gore in 2000. But they have designed a Rube Goldberg nominating process that could easily produce a result much like the Electoral College result in 2000: a winner of the delegate count, and thus the nominee, over the candidate favored by a majority of the party's primary voters.
Monday, February 11, 2008
Ted Olson predicts superdelegate lawsuits
WSJ reports additional credit woes
today:
In the past few days, low-rated corporate loans -- the kind that fueled the buyout boom of recent years -- have plummeted in value. As a result, banks are expected to try to unload some of those loans this week at fire-sale prices.
Nervous buyers also have retreated in recent days from the market for securities backed by student loans and municipal bonds, roiling some corners of the short-term money markets. Similarly, investors have recoiled from debt backed by commercial real estate, such as office buildings.
Over the weekend, the world's top banking authorities warned that the U.S.-led economic slowdown and continued uncertainty about securities could lead banks to further reduce their lending, and choke off economic activity. (Please see related article.)
One sign of investors' anxiety: Standard & Poor's said its index of the prices on high-risk corporate loans fell to a record low of 86.28 cents on the dollar at the end of last week.
Three weeks ago, I said this (and I'm sticking with my calls):
While I think we are in the 8th inning of the stock market drop, this does not hold true for credit markets. Though $100 billion has been written down off the balance sheets of banks, I think there is at least another $100 billion to go. The financial sector will continue to be a drag on the bigger equity indices.
Sunday, February 10, 2008
What is the consumption gap between the highest and lowest income quintiles?
Here is the explanation.
Greg Mankiw also has the answer to the riddle: Why is $25,000 per year better than $35,000?
Friday, February 08, 2008
Question of the day
Herbert Gintis, a radical maverick (according to Bryan Caplan)
Thomas Sowell is a serious economist and a fine writer. There is not a single argument in this book that I think is either incorrect or even disingenuous. Everyone interested in economic and social policy should read this, and his other writings. Sowell is best as showing how statistics can mislead. For instance, he says "It is an undisputed fact that the average real income...of American households rose by only 6 percent over the entire period from 1969 to 1996...But it is an equally undisputed fact that the average real income per person in the United States rose by 51 percent over that very same period." (p. 125) Both are true because average household size decreased dramatically over the period, with more elderly couples and fewer children per married couple in the later period.Gintis also reviewed Paul Krugman's The Conscience of a Liberal:
To whet the reader's appetite, here are a few of Sowell's positions. (1) Rent control is a stupid way to help the poor, because it drives down the supply of affordable housing; (2) Racial discrimination is not the cause of income differences between blacks and whites, which are virtually equal when correcting for IQ, education, experience, and other demographic variables; (3) the same is true for the role of gender discrimination in accounting for the lower incomes of women as opposed to men; (4) Slavery, racism, and discrimination are not the cause of the social pathologies associated with poor black inner-city neighborhoods; rather the causes lie in a variant of black culture inherited from traditional southern poor white culture; (5) Poverty in the third world is not caused by imperialism or wealth in the rich countries.
In each of these, and several other areas, I think Sowell's arguments are correct, and should be take serious when proposing vigorous social policies for creating a more equal and fair distribution of the world's resources and produced wealth.
This book epitomizes what is wrong with American liberalism. Krugman was a fine, perceptive international trade theorist, but he is a political hack, with nothing new to offer. There is one problem as far as Krugman is concerned: inequality. But inequality is an intellectual abstraction, not a politically motivating issue. People hated the Robber Barons because they were robbers and barons, not because they were rich. Oprah Winfrey and Bill Gates do not send the Pinkerton men out to protect their ill-gotten gains; nor to the other super-rich. Socialists' ringing political slogans dealt with fairness, social progress, and power to the people, not "inequality." Moreover, a truly progressive movement must built on technical progress that is impeded by the reigning powers that be (Sam Bowles and I call this efficiency-enhancing egalitarian redistribution), not the beggar-thy-neighbor, zero-sum-game sort of redistribution favored by Krugman.(via Bryan Caplan). Gintis was (is?) known as a radicalist. For instance, what do you detect when skimming these notes on his Schooling in Capitalist America?
I am sorry that we can't do better than Krugman. There are very serious social problems to be addressed, but the poor, pathetic, liberals simply haven't a clue. Conservatives, on the other, are political sophisticated and hold clear visions of what they want. It is too bad that what they want does not include caring about the poor and the otherwise afflicted, or dealing with our natural environment. Politics in the USA is no longer Elephants and Donkeys; it is now conservative Pigs and liberal Bonobos. The pigs are smart but only care about what's in their trough. The Bonobos are polymorphous perverse and great lovers, but will be extinct in short order.
Wow, Dick Cheney is really a puppeteer (CORRECTION: Al Gore, not Cheney)
I would take the use of force very seriously. I would be guarded in my approach. I don't think we can be all things to all people in the world. I think we've got to be very careful when we commit our troops. The vice president and I have a disagreement about the use of troops. He believes in nation building. I would be very careful about using our troops as nation builders. I believe the role of the military is to fight and win war and therefore prevent war from happening in the first place.--George Bush, via Russell RobertsThis is why I have a hard time trusting McCain. This straight talk about taxes and immigration is just eurphoric amnesia, I'm predicting.
I don't believe in Obama more than McCain; I just trust his word more.
Perhaps one of Carter's smartest advisors
The assumption of Democratic control of Congress last year and the probability that its majority will be increased by this year's elections portends a growing, deeply troubling ideological split within its ranks, already visible, on matters of economic policy generally and regulatory policy specifically - between the more radical (and at the same time reactionary) populists, who label themselves Progressives, and the 20th century liberals, who have dominated in the formulation of their party's economic programs for the last three-quarters century.UPDATE: Roger Clegg's reporting unfortunately bolsters Kahn's worry (via Greg Mankiw):
[I examine] the economic issues on which the two are likely to diverge, defending and proposing policies consistent with historical 18th through 20th century liberalism:
• international trade policy, in which the Progressives demonstrate a formidable misinterpretation of our huge trade deficits and insufficient appreciation of the major contribution of retaliatory beggar-my-neighbor policies to intensifying the Great Depression of the 1930's;
• threatened recartelization of industries deregulated in the 1970's and 80's - such as the airlines, trucking, and telecommunications;
• recourse to wage and price controls rather than monetary policy as a curb on inflation;
• recourse to concerted anti-competitive restrictions or rationing rather than market pricing as a remedy for congestion, and
• proposed laws imposing network neutrality obligations on providers of access to the Internet.
Now that the excitement of Super Tuesday has passed, we should remember the kinds of policies and principles at stake, Exhibit A: three pieces of legislation pending in Congress that would dramatically increase the liability of private companies for alleged acts of employment discrimination.
The first would resurrect the discredited idea of "comparable worth." The second would add various sexual orientations to the classifications protected from employment discrimination. The third is a plaintiffs' bar wish list, aimed mostly at overturning cases it lost in the Supreme Court.
President Ronald Reagan correctly called comparable worth "a cockamamie idea." A great lesson of economic theory, not to mention historical experience, is that government-set wages and prices not only curtail freedom, but lead to shortages, surpluses and market disruptions.In addition, this [third] bill would make it easier to bring and win "disparate impact" lawsuits under a variety of statutes, including Title VI of the 1964 Civil Rights Act and the Age Discrimination in Employment Act. Disparate impact claims need not allege that the criteria an employer uses to hire workers are discriminatory on their face, or discriminatorily applied, or adopted with discriminatory intent. Disproportionate results are enough.
The threat of such lawsuits not only decreases productivity by pressuring private (and public) entities to abandon perfectly legitimate selection criteria, but also encourages the use of surreptitious quotas. Both of these outcomes, needless to say, are perfectly fine with the civil rights lobby and its lawyers.
Obama's economic advisors
Cutler is very smart, tenured at Harvard, arguably the leading health care economist, and yes he is an advisor to Barack Obama. He says mandates are not the way to go, and no I do not think he is just "falling in line" here. Read the whole thing. Yes, the key is to make insurance cheaper, not more expensive. Yes, mandates are a political loser. Yes, ex post fiddling can make up for a lot of the problems in the "no mandate" approach and there is going to be lots of ex post fiddling anyway.You know, I might come out for Obama, even in the worst case scenario, if I knew that he actually listened to his economic advisors.
UPDATE: Mickey Kaus worries like I do (via Glenn Reynolds):
Remind me again, what is the evidence--in terms of policies, not affect or attitude or negotiating strategy--that Obama is not an unreconstructed lefty (on the American spectrum--a paleoliberal or a bit further left)? For example, would he roll back welfare reform if he could?UPDATE: And Shelby Steele, has this, as much as I doubt his doubts (via Ron Paul fan Don Luskin):
Determinism automatically blames and obligates white power for black problems, so it becomes the central faith of the black identity. When a black argues against it, he invokes the Uncle Tom label...
The point is not that Barack Obama is a blind and true-believing follower of this identity. Few blacks are. The point is that he is accountable to it. If, for example, Obama broke with this determinism by saying that blacks themselves were largely responsible for closing the academic achievement gap with whites, he would likely be seen as an Uncle Tom for letting whites "off the hook." So, in order to be black, he must pay tribute to a determinism that makes whites ultimately responsible for black uplift, even when it is obvious that only black responsibility will make a difference.
Peggy Noonan thinks Barack Obama is much more electable than Hillary Clinton
With Mr. Obama the campaign will be about issues. "He'll raise your taxes." He will, and I suspect Americans may vote for him anyway. But the race won't go low.
Mrs. Clinton would be easier for Republicans. With her cavalcade of scandals, they'd be delighted to go at her. They'd get medals for it. Consultants would get rich on it.
The Democrats have it exactly wrong. Hillary is the easier candidate, Mr. Obama the tougher. Hillary brings negative; it's fair to hit her back with negative. Mr. Obama brings hope, and speaks of a better way. He's not Bambi, he's bulletproof.
The biggest problem for the Republicans will be that no matter what they say that is not issue oriented--"He's too young, he's never run anything, he's not fully baked"--the mainstream media will tag them as dealing in racial overtones, or undertones. You can bet on this. Go to the bank on it.
The Democrats continue not to recognize what they have in this guy. Believe me, Republican professionals know. They can tell.
Intrade probabilities agree with Noonan to a point. Conditional probabilities (aka Bayesian probabilities) for Obama and Clinton (the probability of winning the White House, conditioned on the probability of winning the party nomination):
64% Obama
62% Clinton
Meanwhile, McCain's electability is currently trading around 39%.
Dan Henninger has a view from the conservative side:
There are murmurs of heading into the political wilderness. Sit this one out. Rather than sell the party's soul to John McCain, let Hillary have it, or Barack. Go into opposition for four years while the party gets its head together and comes up with an authentic conservative candidate. If this sourness takes hold at the margin, say among GOP anti-immigrant voters, it might happen.
The wilderness is a good place to find yourself, if you're a prophet. There are reasons, though, why a principled political retreat won't make conservative prospects better. The point of a principled retreat would be to rediscover coherence amid doctrinal confusion. The exact opposite is likely to happen.
Conservatives, like everyone else, live in a new political space. It's a 24/7 world of blogs, Web sites and talk shows. It's feisty and maybe even democratic. But consensus? This milieu makes consensus harder than ever.
This has become an unusual presidential election. If the gods have willed that Barack Obama should suddenly stir the electorate into a state of grand expectation -- another 1960 or 1980 -- then you shouldn't want to be on the losing side when the winning wave breaks in November. Gerald Ford losing to Jimmy Carter in 1976 was no big deal. This one will be a big deal. The energy exploding out of both parties' primaries, producing record turnout, makes that clear. This isn't just about "change" anymore. It's tectonic. Ask the Clintons. In such a time, many voters' allegiances are on offer. But one has to compete for them.
Quote of the day
Statistics are like a bikini. What they present is suggestive, but what they conceal is vital--Aaron LevensteinThat was a lot easier than reading any given paragraph of The Black Swan, and basically saying the same thing!
And I would have gotten away with it, if it weren't for you darn facts!
The tax credit for ethanol is an example of a cost ineffective subsidy. The cost of reducing CO2 emissions through this subsidy exceeded $1,700 per ton of CO2 avoided in 2006 and the cost of reducing oil consumption over $85 per barrel.
I am not shocked, but it is worse than I had thought. Here is the full paper. But the funny thing is, that's not even the worse thing I read about biofuels today. Courtesy of Daniel Akst, try this article:
...a growing body of scientific evidence suggests these gasoline alternatives will actually boost carbon-dioxide levels and thereby aggravate the problem of global warming. A study published in the latest issue of Science finds that corn-based ethanol, instead of reducing greenhouse-gas emissions by a hoped-for 20%, will nearly double the output of CO2 and other gases that trap the sun's heat. A separate paper in Science concludes that the clearing of native habitats around the world to grow more biofuel crops will lead to more carbon emissions.
I've been sounding the alarm on corn ethanol for some time.
UPDATE: Don Surber has more.
Thursday, February 07, 2008
Complexity does not get a president elected
Previously, on Idiocracy.The study found that in the first three years after a new president takes office, his speeches displayed higher levels of complexity compared with addresses in the fourth year in office. In the first three speeches, presidents were more likely to acknowledge other points of view, potential pitfalls and unintended consequences. In the fourth year, however -- as they were about to run for reelection -- the complexity of their speeches plunged.
Not only that, but American presidents who showed a sharper decline in complexity were more likely to be reelected than those who continued to acknowledge that the challenges facing the nation were complex.
NFL Franchise Tag values
| $ 10.7 | Quarterback |
| $ 9.5 | Cornerback |
| $ 8.8 | Defensive end |
| $ 8.1 | Linebacker |
| $ 7.8 | Wide receiver |
| $ 7.5 | Offensive line |
| $ 6.5 | Running back |
| $ 6.3 | Defensive tackle |
| $ 4.5 | Tight end |
| $ 4.4 | Safety |
| $ 2.5 | Kicker |
The Patriots are mulling a tag on Randy Moss, since they can't tag Asante Samuel again. The tag is usually used for one of the best players on the team, who becomes a free agent and projects to have another strong season. Reacting to a tag may be the biggest test Moss has faced all year.
The relative values for the tags reflect the average of the top 5 salaries for each position. Cornerback values have been climbing over the years, accurately reflecting scarcity for top players in that role. I believe that passing has increased over the last few seasons as well.
Running backs are still critical, but a lot of them tend to see their most productive years while playing under rookie contracts, and have a shorter shelf life because of the number of hits they take and the size of the defensive players hitting them.
Canadian scientists worried about coming Ice Age
I've been trading all wrong at the Global Warming Exchange!
UPDATE: IBD has more.
Ways to reduce global warming (thinking outside the box, but inside the coffin)
Of course, I was way ahead on the Hollywood movies strategy.First on my list is to turn off the air conditioner in the summer and turn off the furnace in the winter. This way, people will not use as much electricity and natural gas, thus not only decreasing their carbon footprint but their utility bills substantially.
Second stay in bed under as many blankets as possible in the winter. Without a furnace, it will get mighty cold at home. Sleeping reduces activity, which reduces the amount of oxygen consumed, which reduces the carbon dioxide emitted.
Third, get direct deposit for that unemployment check when you lose that job due to your annual hibernation. That spares the planet the emissions of carbon dioxide from the treks to the unemployment office and the bank.
Fourth, quit watching Hollywood movies. Hollywood movies also have large carbon footprints, as they often travel by airplane to reach the local theaters. Watching only organically grown videos made by friends and neighbors would not only save the planet, but help the local economy. Fifth, if you cannot avoid Hollywood movies, at least shun those that are shown at the ... film festivals.
Eighth, don't change the light bulb. I know. Congress has mandated switching to lights that emit more light for less energy. But not changing the light bulb means that when it burns out, you will use no electricity. Using only sunlight means darker houses at night, which means more sleep, which means even less activity, which means an even smaller carbon footprint.
Sundance is bad for the environment because it took a pristine area of Utah and developed it into a paradise for the elite, who expel all sorts of carbon dioxide as they fly in and out of Utah.My final idea: Stop exercising. Those self-centered people with the slim waists and big biceps are emitting way too much carbon dioxide. Healthy people also increase health costs by living longer and dying of more expensive diseases, according to a Dutch study online Monday in the Public Library of Science Medicine journal. The Dutch found that it costs $326,000 to treat the average smoker after age 20; $371,000 to treat the average obese person; and $426,000 to treat the average healthy person.
Hmm. Of course, if we kill off the planet, everyone dies and look at the money we will save on both health costs and Social Security.
How's that for prediction market liquidity?
InTrade, based in Dublin, has 70,000 customers world-wide. Mr. Delaney says "a significant proportion" are based in the U.S. In total, he said, the bookmaker has seen more than $50 million wagered on the U.S. presidential election including "millions of dollars" in the past few days.(via Chris Masse)
The Law of Coughlin
I'm done mourning the Super Bowl. I knew it was over when I heard that Spagnuolo was staying with the team, with a big bump in pay, and I was happy for Giants fandom.
Not that I'd trade teams, nor even crotchety Belichick for (less) grouchy Coughlin.
But Coughlin has made his mark on the sport, and perhaps all professional team sports. Rather than resting one's best players once playoff seeding has been locked in, we will see more coaches playing their best players as a confidence builder and competition sharpener for the playoffs.
Of course, the law needs to be tested. It may only work for teams who hate playing at home because their fans are so unsupportive.
Mankiw sense, in response to Conrad nonsense, on the national debt
If you look at the end of [Bush's] eight years of responsibility, we see the debt as being over $10.4 trillion. That is almost a doubling of the national debt on his watch.--Senator Kent Conrad, NDBut not all is rosy. Here's the last graph from the White House:Yes, the federal debt is higher than when the President took office. Debt in 2001 = 35.1% of GDP. Projected debt in 2009 = 37.9% of GDP. The claim that the debt is "almost doubling" under this President is absurd. Measured as a share of the economy, it's about 8% higher than it was when the President took office. (37.9 - 35.1) / 35.1 = 8%. This debt increase comes in the context of: an inherited recession, a stock market crash, corporate scandals, a terrorist attack, war, and a huge increase in the price of oil.--unnamed White House economist
This is correct as far as it goes. What my friend forgets to mention, however, is that the Medicare prescription drug bill signed by President Bush significantly increased the long-term spending trajectory. (FYI, both Senator McCain and Senator Clinton voted against the bill. Barack Obama was not yet in the Senate. Senator Conrad, who above expresses so much concern about fiscal responsibility, voted in favor.)--Greg Mankiw
Could we cut a little spending please? We did it in my bank, in my church, and in my household all in these last several months. Trimming 10% to start is not difficult.
Never mind
In other news, recession contract is ticking back down:Do you remember Gilda Radnor’s SNL character Emily Litella? She was the older lady who would do news commentary on an item that she invariably misheard. This led her to discuss topics such as free Soviet jewelry, Presidential erections or making Puerto Rico a steak.
Yesterday, Dow Jones reported that Warren Buffett said that if the current account deficits continue, the dollar will be "worthless."
One small problem. He actually said it will be "worth less."
DISCLOSURE: I am short US.RECESSION.08
The Senator would be Emperor (of Healthcare, at least)
Today's WSJ:
At a recent debate, [Mr. Obama] drove the point home, asking Mrs. Clinton, "You can mandate it but there will still be people who can't afford it. And if they can't afford it, what are you going to fine them? Are you going to garnish their wages?" And in an interview with ABC's George Stephanopoulos on Sunday, Mrs. Clinton conceded that "we will have an enforcement mechanism" that might include "you know, going after people's wages."Let the people choose for themselves, please.Well, well. In other words, HillaryCare II isn't all about "choice," but would require financial penalties for people to pay attention, including garnishing wages. To put it more accurately, the individual mandate is really a government mandate that requires brute force plus huge subsidies to get anywhere near its goal of universal coverage.
DISCLOSURE: I am long 2008.DEM.NOM.OBAMA (and also long 2008.DEM.NOM.CLINTON)
UPDATE: After getting some ribbing on this disclosure, I am extending it to say than I am short 2008.PRES.CLINTON, short 2008.DEM.NOM.GORE, and was also short 2008.DEM.NOM.EDWARDS earlier, but am flat now.
QUOTE OF THE DAY:
Or to look at it another way, if Hillary Clinton's entire agenda were enacted, her climate change proposals would wind up doing more to improve public health than would her health care proposals.--Matt Yglesias, via Tyler CowenUPDATE: Oh, that's why it's got to be universal. Steve Bainbridge says:
On the radio driving to work today, I heard a report that Hillary Clinton’s campaign workers not only are going unpaid, but also now have lost their health care benefits.
Wednesday, February 06, 2008
Raceball and Johan Santana
In March of '05 NY Magazine profiled Minaya's building of a "Latin Dream Team" and positioned him as a contrarian to the popular Moneyball, a book with the tagline: "The art of winning an unfair game." Three years later the Johan Santana signing may be the final crowning chapter for the would-be manual on Raceball: The art of using racism to create a winning culture.
Women more competitive than men
Our experimental results reveal interesting differences in competitiveness: in the patriarchal society women are less competitive than men, a result consistent with student data drawn from Western cultures. Yet, this result reverses in the matrilineal society, where we find that women are more competitive than men. Perhaps surprisingly, Khasi women are even slightly more competitive than Maasai men, but this difference is not statistically significant at conventional levels under any of our formal statistical tests.All I know is, in my American cultural experience, men are more competitive but women hold more grudges. And women say more words, especially once out of larger social arenas (where men are competing for best joke teller or story teller).
Darwin Awards: American voter edition?
I feel a book idea coming on: Myth of the Sentient Voter?Noah Millman offers an anecdote:
So my liberal Democrat mother-in-law gets to the polling place planning to vote for Hillary Clinton, and discovers that, unbeknownst to her, she has been a registered Republican for the last 40 years. New York being a closed primary state, she dutifully goes into a Republican booth. All she knows is that she can’t stand John McCain. So she votes for . . . Mike Huckabee, with whom she disagrees about pretty much absolutely everything.Puts those mysterious Florida Buchanan voters from 2000 into perspective.
To which a commenter replies:
Sorry, Florida voters are still the dumbest in the United States. Our local Supervisor of Elections received a flood of calls yesterday from people wondering where to vote. The Supervisor of Elections had to inform each caller that our primary was back in January, and that it was a good thing they didn’t get a chance to vote.
And sadly, it won't be science fiction.
Megan notes that when Obama is Krugman's target instead of Bush
Harold Pollack, a credentialed expert on health policy, having taken the drastic step of reading the actual study, gives us the answer: Gruber's imagined Obama-like plan with a mandate achieves the feat of virtually universal coverage by ... assumption.Gruber:
In particular I assume that 95% of those who would not voluntarily choose to insure are forced to insure through the mandate.[emphasis added]
So the "finding" comes out of precisely nowhere. Of course if the mandate succeeds, it will increase coverage, with most of the cost coming from the people paying those mandatory premiums rather than the [other] taxpayers. But the claim that it will actually succeed is based on nothing but an assumption. And yet no reasonable reader of Krugman's column would understand that.
Welcome to the club. Would that we could get a coalition to banish silliness like this from all political discourse, not merely the kinds we don't like. And yes, I'm sure I don't do a very good job of criticizing people I agree with either.
Why the government program OSHA did not noticably reduce worker fatalities
I got here via Marginal Revolution. In the same post, we learn:
Annual OSHA penalties for safety violations (2002): $149,000,000
Annual Workers Compensation Premiums (2001): $26,000,000,000
Estimated Annual Wage Premiums for Risky Activities (2004 dollars): $245,000,000,000
His point: Market incentives for worker safety dwarf legal incentives, which in turn dwarf regulatory incentives. The level of safety we see in the workplace today is about the same as the level we'd see if government just looked the other way.
Income mobility
I understand the probable reason why redistributionists (who call themselves progressives) decry stagnant wages for the last several decades. It's because wages for entry level jobs which do not require a college education have remained stagnant.
What the wage data does not show is how someone who makes $30,000 at 20-25 years of age may end up making $50,000, with health care benefits on top of that, by the time (s)he is 30 years old. It happened to me, it happened to my wife, it happened to my condo superintendent.
In a pool of 20 of workers without college education that I have observed in New York City over the last 7 or more years, the only ones without upward income mobility are the ones who do not have legal status to reside in the country.
Quote of the day
Unfortunately, many assignment editors confuse ignorance with objectivity, and they assign someone to cover religion who knows absolutely nothing about it, thinking that in that way they’re being unbiased. I said, “If you did that in sports, imagine the riots in the street.”--John Foley, Vatican press officerSo that is why the press is so unreliable? Eureka!
Jerome Kerviel will not be scapegoated!
I was singled out by Société Générale. I am taking my share of responsibility, but I will not be the scapegoat.Back on January 24, when the story first broke, I had said:
My understanding is that he couldn't have done it alone. A lot of capital needs to be posted to the clearing corporation and as margin. That pledging must be done with the approval of senior officers in the bank. Monsieur Kerviel could be a scapegoat, like Nick Leeson was.UPDATE: Dan Ariely conducted an interesting cheating experiment done with MIT and Harvard students, the results of which he applies to Kerviel trading derivatives. (I'm not sure if the French should be offended by this; you know, being compared to the bougies at those Cambridge schools). Via Tim Harford.
Intrade beats Zogby on Super Tuesday
| Standings | |||||
| Wins | Losses | Ties | Pct | Contender | Avg Eve Prob |
| 5 | 2 | 9 | 59.4% | Intrade | 69.6% |
| 2 | 5 | 9 | 40.6% | Zogby | 39.2% |
| Schedule | ||||||||||
| Score | Date | State | Party | Intrade | Zogby | Winner | Intrade Pct | Zogby Pct | ||
| 5-2-9 | 5-Feb | NJ | Rep | McCain | McCain | McCain | 96% | 52% | ||
| 5-2-8 | 5-Feb | NJ | Dem | Clinton | 2-way-tie | Clinton | 67% | 43% | ||
| 4-2-8 | 5-Feb | NY | Rep | McCain | McCain | McCain | 98% | 53% | ||
| 4-2-7 | 5-Feb | GA | Dem | Obama | Obama | Obama | 96% | 48% | ||
| 4-2-6 | 5-Feb | MO | Dem | Obama | Obama | Obama | 63% | 47% | ||
| 4-2-5 | 5-Feb | CA | Rep | McCain | Romney | McCain | 56% | 40% | ||
| 3-2-5 | 5-Feb | CA | Dem | Obama | Obama | Clinton | 52% | 46% | ||
Election eve predictions here.
Tuesday, February 05, 2008
Why Al? Why do you continue to lie to us?
Al Gore's Current TV, a "youth-oriented news company," is filing for a $100 million dollar public offering. Which means we all get to find out that apparently Gore's little tv station has been lying about its profitability for three solid years. Fast Company, NewTeeVee, the New York Times, and BusinessWeek all repeated claims by Current reps that the company was profitable. Turns out, not so much. "The youth-oriented news company had a net loss of $9.8 million in 2007, based on revenue of $63.8 million. It lost $7.6 million in 2006 and $14.3 million in 2005. Altogether, Current had $36.5 million in debts as of the end of last year."Wait, I've heard about this business model before.
Like I was saying Sunday night
FanHouse asks today:
Patriots cornerback Ellis Hobbs will undergo surgery this week for a sports hernia and groin injury suffered earlier in the season, Alex Marvez of Fox Sports is reporting.which is what I asked immediately after the game:
That raises a few questions. First, if this injury was suffered earlier in the season, why wasn't Hobbs listed on the Patriots' Super Bowl injury report?
Secondly, and more importantly, why was a guy who has a groin injury matched one-on-one with Plaxico Burress on the Giants' game-winning touchdown pass? That's Hobbs on the right in the above photo, watching as he's just been burned for the touchdown that ended the Patriots' undefeated season. Couldn't Bill Belichick have come up with a coverage scheme that didn't match the Giants' No. 1 receiver with an injured player?
Yes, we should be bitter about the coaches leaving Ellis Hobbs out in single man coverage against Burress with no safety help over the top.
Would Barack Obama be better than Jimmy Carter?
But Obama's soaring rhetoric is a double-edged sword for me. On one hand, it unites the country, rather than playing the politics of division. On the other, it can mask serious deficiencies in foreign policy.
Which brings me to the comparison with Jimmy Carter. James Taranto has great food for thought:
Worst case? If 4 years of a Carter bust can bring about 20 years of a Reagan-Bush-Clinton boom, I think it's a good trade. Of course, in the long run we're all ... you know, not around here anymore.Time reported contemporaneously on the interview under the assumption that Carter was simply pandering to the kind of man who reads Playboy. Yet it really does seem to shed some light on Carter's worldview more broadly, and on liberal sanctimony more generally.
Carter focuses on one particular sin--pride--and suggests that it is more problematic than lust or even adultery. In this telling, we all are subject to lust, even Jimmy Carter. Some of us succumb to it, and some do not. If you are one of those who do not, it is a sin for you to think that makes you a superior man.
So far, so good. But the Carter of the Playboy interview does not measure up to his own standard. He begins by acknowledging his own lustfulness, but then describes a hypothetical man who "leaves his wife and shacks up with somebody out of wedlock" and one who "screws a whole bunch of women." Carter's protestations notwithstanding, there is no escaping that this comparison is highly favorable to him.
Why does Carter feel it necessary to contrast others' reprobate behavior with his own relatively innocent conduct? Not, he asserts, because he thinks he is better than anyone else, but precisely because he thinks he isn't. Not only does he live a sexually upright life, but he isn't proud of it. He wants everyone to know that he has risen above the sin of pride. But that proves that he has not.
Carter's formulation of morality is entirely self-centered. For his purposes, the adulterer and the lothario exist only as instruments, enabling him to display his own ability to be nonjudgmental. What does not figure into Carter's equation at all is the wife and children the adulterer betrays, or the string of women the lothario uses. It is a morality in which intention counts for everything and consequences for nothing.
This is where the analogy to a certain kind of liberal foreign policy becomes clear. The idea is that America (or another Western country, usually Israel) is not perfect, and therefore has no business passing judgment on the affairs of its adversaries. All nations, like all men, are predisposed to sin, and the greatest national sin of all is for a dominant power to exhibit pride. By this reasoning, it is morally worse for an American leader to call (say) the regimes of North Korea, Iran and Saddam Hussein's Iraq "evil" than it is for those regimes to undertake actions that deliberately hurt or endanger innocent people.
When applied to public as opposed to private morality, this kind of above-it-all attitude, this self-regard masquerading as humility, provides an excuse for inaction in the face of evil. To be sure, sometimes inaction is a wise course, because available actions would only make matters worse. But this is a practical question--one of consequences, not intention.
To make the perfect the enemy of the good, to make a principle of responding to evil with inaction, is a dangerous way to approach the world. That should have been the lesson of the Carter presidency. It is a lesson American voters would do well to keep in mind as November approaches.
I have no idea who I am voting for. Consequences are important--book smart is nothing compared to market smart (i.e. my teachers and students loved me, but I couldn't feed my family).
I'd rather be governed by a wise Turk rather than a foolish Christian--Martin Luther
UPDATE: James Dobson and Rush Limbaugh are anti-McCain Bush voters, too.
Quote of the day
Credit ratings are a bit like virginity. It's easier to lose it than to get it back--Wilbur Ross, on CNBC
Free Money at Intrade!
If you think that Hillary is going to do better than the polls on Super Tuesday, and you're going to sneer afterward and say that Intrade was "just tracking the polls", buy Hillary now.
If you think that Obama is going to do better than the polls on Super Tuesday, and you're going to gloat about how prediction markets didn't call this surprise in advance, buy Obama now.
If you don't do either, then clearly you do not really believe that you know anything the prediction markets don't. (Or you don't understand expected utility, or your utilities over final outcomes drop off improbably fast in the vicinity of your current wealth minus fifty bucks - you don't have to bet the full $250.) It is free money, going now for anyone who genuinely thinks they know better than the prediction markets what will happen next.
Prediction markets do not have supernatural insight. If they give the candidates fifty-fifty odds, it means that the market collectively doesn't know what will happen next. Even if you're well-calibrated, you get surprised on 90% probabilities one time out of ten.
The point is not that prediction markets are a good predictor but that they are the best predictor. If you think you can do better, why ain'cha rich? Any person, group, or method that does better can pump money out of the prediction markets.
If prediction markets react to polls, they're getting new information, that they didn't predict in advance, which happens. Being the best predictor doesn't make you omniscient.
Everyone's going to find it real easy to make a better prediction afterward, but if you think you can call it in advance, there's FREE MONEY GOING NOW.
Monday, February 04, 2008
Is it me, or are the filp-floppers coming from the GOP this year
I think I have more confidence in what I'm actually getting with Obama and Clinton, than with McCain or Romney.
Super Tuesday Showdown: Intrade v. Zogby
NJ Dem: Intrade calling for Clinton, while Zogby in a tie.
CA Rep: Intrade calling for McCain, while Zogby calling for Romney.
| Intrade | Zogby | NJ Rep | ||
| 96% | 52% | McCain | ||
| 3% | 26% | Romney | ||
| 7% | Huckabee | |||
| 4% | Paul | |||
| 0% | Giuliani | |||
| 0% | Thompson | |||
| 0% | Gingrich | |||
| 3% | Someone else | |||
| 9% | Undecided | |||
| 0% | FIELD | |||
| NJ Dem | ||||
| 67% | 43% | Clinton | ||
| 33% | 43% | Obama | ||
| 1% | Gravel | |||
| 0% | Edwards | |||
| 0% | Gore | |||
| 0% | Richardson | |||
| 0% | Dodd | |||
| 3% | Someone else | |||
| 10% | Undecided | |||
| 0% | FIELD | |||
| NY Rep | ||||
| 98% | 53% | McCain | ||
| 1% | 19% | Romney | ||
| 0% | 8% | Huckabee | ||
| 5% | Paul | |||
| 5% | Someone else | |||
| 10% | Undecided | |||
| 0% | FIELD | |||
| GA Dem | ||||
| 96% | 48% | Obama | ||
| 4% | 31% | Clinton | ||
| 2% | Gravel | |||
| 10% | Someone else | |||
| 11% | Undecided | |||
| 0% | FIELD | |||
| MO Dem | ||||
| 63% | 47% | Obama | ||
| 37% | 42% | Clinton | ||
| 0% | Gravel | |||
| 3% | Someone else | |||
| 9% | Undecided | |||
| 0% | FIELD | |||
| CA Rep | ||||
| 44% | 40% | Romney | ||
| 56% | 32% | McCain | ||
| 12% | Huckabee | |||
| 5% | Paul | |||
| 0% | Giuliani | |||
| 0% | Thompson | |||
| 0% | Gingrich | |||
| 4% | Someone else | |||
| 8% | Undecided | |||
| 1% | FIELD | |||
| CA Dem | ||||
| 52% | 46% | Obama | ||
| 48% | 40% | Clinton | ||
| 0% | Gravel | |||
| 0% | Edwards | |||
| 0% | Gore | |||
| 0% | Richardson | |||
| 0% | Dodd | |||
| 5% | Someone else | |||
| 9% | Undecided | |||
| 0% | FIELD |
More Megan McArdle towering over Paul Krugman
UPDATE: Bryan Caplan points out this detailed Krugman analysis by Dan Klein and Harika Bartlett:
Klein and Barlett inventory all of Krugman's NYT columns, and find a curious pattern of omissions and deviations that are hard to reconcile with Krugman's self-image as a "champion of the poor."
First, the omissions. After reviewing all of Krugman's columns in the sample, the paper finds that he virtually never advocates helping the poor by getting rid of bad government programs (even though there are plenty to choose from).
Second, the deviations: Klein and Barlett trace Krugman's gradual turn against low-skilled immigration. It's pretty ugly, especially for someone who claims to worry so much about "the poor".
Dan Klein tells me that, so far, his critique of Krugman hasn't gotten the attention he was hoping for. The reason, I suspect, is that attitudes toward Krugman have grown so bimodal. Am I the only economist who read this piece who genuinely felt disappointed that Krugman's creative mind and intellectual courage could give way to so much conventional demagoguery?
Best of both worlds (and the quote of the day)
Greg Mankiw. I think he's making a lot more than the average or median Goldman Sachs employee. Good for him!
UPDATE: The quote of the day comes from Mankiw's NY Times piece:
I hope that when I celebrate my 100th birthday in 2058, my descendants won’t look upon Grandpa and his generation as the biggest economic problem of their time.
My nominee for Super Bowl XLII MVP
Gisele Bundchen:
In the aftermath of their 21-12 victory over the San Diego Chargers, Tom Brady's celebrated girlfriend startled onlookers by promising to run naked down Broadway in the unlikely event the Patriots lose to the Arizona-bound N.Y. Giants -- unlikely until the very moment she parted her full lips and made the surprise announcement.
UPDATE: I was duped! Sorry, readers.
Sunday, February 03, 2008
Congrats to the NY Giants and their fans
It's almost 10:30pm and people are still whooping it up in the streets of Manhattan. I had to turn the TV off after Belichick ran over to congratulate Coughlin, but I don't feel that badly. The Giants were just dominant. The front seven of the defense shamed the best offense in the game, and Manning was as poised as Brady has ever been.
I've believed in them, more than any Giant fan I know in the city, all year, so I'm not that surprised. This is what I posted a couple of weeks ago:
I have a lot of respect for this Giants team. They almost won their last regular season game against the Patriots. I drafted Eli Manning to be my fantasy QB before Labor Day when none of the Giants fans in the league wouldn't touch him, and wanted Coughlin out. No Giant fan was thinking playoffs, even as late as Thanksgiving. Just a lot of grumbling every time I brought the team up and said how good they were looking.And for the disappointed Pats fans out there, I think there is a silver lining. Yes, we should be bitter about the coaches leaving Ellis Hobbs out in single man coverage against Burress with no safety help over the top. But I think, had the Pats made the type of history we all wanted tonight, the team would probably have disintegrated into egos and big money contract squabbles.
I don't think Seau, Harrison, or even Tedy Bruschi should try for another one. But for the rest of the guys I am thinking:
In every defeat lie the seeds of victory.I think now that Brady and Moss will be willing to be more flexible on their contracts (maybe even Asante Samuel). Losing last year's AFC championship was the catalyst to this awesome team. The Pats need to upgrade their defense, and this loss will taste as bitter as that one, and we might see a better team next season.
Friday, February 01, 2008
The huge gaping hole in John McCain's swing
I'm getting a bit tired of Senator McCain's anti-business shtick. The line about serving 'for patriotism, not for profit' is pathetic. America spends more on its military than the next 35-40 biggest military spenders on the planet combined: Where does he think the money for that comes from?
As for his line about "some greedy people on Wall Street who need to be punished", aside from being almost entirely irrelevant to the subject under discussion (the subprime "crisis"), it reveals, I think, one of the most unpleasant aspects of McCain. For a so-called "maverick", he's very comfortable with the application of Big Government power, and the assumption of Big Government virtue. Undoubtedly there are "greedy people on Wall Street". Why should he and his chums be the ones who decide whether they need to be "punished"?If greed is to be punishable, why doesn't he start with a pilot program applied to, say, the United States Senate and report back to us in five years how that's going?
BCWUW4: Don Surber rounds up how nationalized healthcare systems manage costs
Be careful what you wish for. A market cannot say "no" to you, only "how much".
A government program? What can't a government say?
Heidi Moore on the fade of Motorola and American manufacturing
Motorola has been losing the game of catchup for years, ever since it sat on its laurels with its successful Star-Tac phone in 1996. But by 1998, Motorola was restructuring. It was restructuring again in 2002, and in 2004, and again now.It's sad that U.S. factories perform as well as NY Yankee free agent pitcher acquisitions. But even protectionists are probably buying non-Motorola phones--next time you hear a Lou Dobbsian complain about lost manufacturing jobs, check out their cellphone.All the while its mostly foreign rivals–Nokia, Samsung, Sanyo, LG and a flock of Chinese competitors–were pecking away at its market share, taking the luster off Motorola’s famous batman-like M ensignia. Motorola is today left with a modest 13% share of the global cellphone market, leaving it looking up to South Korea’s Samsung (14.5% share) and Nokia. And it’s not even that the market is more fragmented: Motorola was the dominant player in 1995–its best year — with an estimated 31% market share. Nokia now rules with nearly 40%.
Motorola’s manufacturing costs–and infamously slow manufacturing speed–have hardly been a strong statement for American industrial competitiveness. When Apple introduced the iPhone last July, it enjoyed margins of 55%, BlackBerry maker Research In Motion’s margins were 52% and despite aggressive outsourcing abroad Motorola’s mobile phones lagged far behind at less than 30%.
And I am glad the Red Sox did not give up their prospects and cash for Johan Santana!
Freakonomic Superbowl preview
Wolfers likes the Pats by 21 points or more.
Levitt likes the under.
DISCLOSURE: I am short the NFL.NYGvNEP.NEP-17.5, but also long other Patriots contracts.
Quote of the day
Beware the Keynesian who wants to have it both ways.--Tyler CowenHe leads up to this quote in saying:
Flexibility of wages makes it harder to embrace the Keynesian framework. Keynesianism requires sticky nominal wages and since we have been having low inflation times (until now, at least) that means relatively sticky real wages as well. Yet it is claimed implicitly [by Keynesians] that many real and nominal wages have been falling.