Whooah, we're halfway there

Livin' on a prayer
Take my hand and we'll make it, I swear ...



We've got to hold on ready or not
You live for the fight when its all that you've got

Remember to ask your doctor about

false positives. Arnold Kling and Megan McArdle and Derek Lowe have more.

The most important prediction market in this life is your life. Don't let a doctor who lacks basic probability skills distort it.

Core inflation 0.2% for Sep; 2.1% year-over-year

I begged you.

UPDATE: So does Tim Kane.

It can take 1,700 gallons of water to produce 1 gallon of corn ethanol

Madness, in today's WSJ:

Heavily subsidized and absurdly inefficient, corn-based ethanol has already driven up food prices. But the Senate's plan to increase production to 36 billion gallons by 2022, from less than seven billion today, will place even greater pressure on farm-belt aquifers.

Ethanol plants consume roughly four gallons of water to produce each gallon of fuel, but that's only a fraction of ethanol's total water habit. Cornell ecology professor David Pimentel says that when you count the water needed to grow the corn, one gallon of ethanol requires a staggering 1,700 gallons of H2O. Backers of the Senate bill say that less-thirsty technologies are just around the corner, which is what we've been hearing for years.

Ethanol's big environmental footprint is not limited to water, because biofuels like ethanol are highly inefficient. In September, the Chairman of the OECD's Roundtable on Sustainable Development released a report entitled, "Biofuels: Is the Cure Worse than the Disease?" Authors Richard Doornbosch and Ronald Steenblik compared the power density of different energy sources, measured in energy production per unit of the earth's area. Oil -- because it requires only a narrow hole in the earth and is extracted as a highly concentrated form of energy -- is up to 1,000 times more efficient than solar energy, which requires large panels collecting a less-concentrated form of energy known as the midday sun.

But even solar power is roughly 10 times as efficient as biomass-derived fuels like ethanol. In other words, growing the corn to produce ethanol means clearing land and killing animals on a massive scale, or converting land from food production to fuel production. Peter Huber of the Manhattan Institute says that the best-case scenario promoted by ethanol cheerleaders will actually cause the greatest environmental disaster. If people can actually refine cheap, low-maintenance production techniques that don't require huge water supplies, Mr. Huber predicts a world-wide leveling of forestland as farmers turn vegetation into fuel.

Slowly but surely, these problems are beginning to alert public opinion to the huge costs of force-feeding corn ethanol as an energy savior. The ethanol lobby is still hoping it can keep all of this under wraps long enough to shove one more big mandate through Congress, but the Members need to know the problems they'll be creating. We hope that House conferees, who did not include a new mandate in their energy bill, insist that any final bill is ethanol-free.

Here is one ethanol alternative that might work out better. Here is more on solutions being more problematic than the problem being addressed.

UPDATE: Daniel Botkin has more science (vs. global warming religiosity):

The key point here is that living things respond to many factors in addition to temperature and rainfall. In most cases, however, climate-modeling-based forecasts look primarily at temperature alone, or temperature and precipitation only. You might ask, "Isn't this enough to forecast changes in the distribution of species?" Ask a mockingbird. The New York Times recently published an answer to a query about why mockingbirds were becoming common in Manhattan. The expert answer was: food -- an exotic plant species that mockingbirds like to eat had spread to New York City. It was this, not temperature or rainfall, the expert said, that caused the change in mockingbird geography.

You might think I must be one of those know-nothing naysayers who believes global warming is a liberal plot. On the contrary, I am a biologist and ecologist who has worked on global warming, and been concerned about its effects, since 1968. I've developed the computer model of forest growth that has been used widely to forecast possible effects of global warming on life -- I've used the model for that purpose myself, and to forecast likely effects on specific endangered species.

I'm not a naysayer. I'm a scientist who believes in the scientific method and in what facts tell us. I have worked for 40 years to try to improve our environment and improve human life as well. I believe we can do this only from a basis in reality, and that is not what I see happening now. Instead, like fashions that took hold in the past and are eloquently analyzed in the classic 19th century book "Extraordinary Popular Delusions and the Madness of Crowds," the popular imagination today appears to have been captured by beliefs that have little scientific basis.

Some colleagues who share some of my doubts argue that the only way to get our society to change is to frighten people with the possibility of a catastrophe, and that therefore it is all right and even necessary for scientists to exaggerate. They tell me that my belief in open and honest assessment is naïve. "Wolves deceive their prey, don't they?" one said to me recently. Therefore, biologically, he said, we are justified in exaggerating to get society to change.

Scary baseball tonight

I'm trembling in the Wake.

Last time I saw him pitch was at Yankee Stadium in 2003 ALCS. Aaron Boone's walkoff HR landed about 40 feet from my seat.


UPDATE: Amalie Benjamin brings up the Kielty vs. Drew debate, too.

Interactive visual guide to Federal expenditures

Pretty cool (via Sunlight Foundation).

Peter Bottke traces the roots of Mechanism Design

back to the classical school of economics:

Yesterday Leonid Hurwicz, Eric Maskin and Roger Myerson won the Nobel Prize in Economic Science for their pioneering work in the field of "mechanism design." Strangely, some have used this occasion to disparage free-market economics. But the truth is the deserving recipients owe a direct debt to free-market thinkers who came before them.

Mechanism design is an area of economic research that focuses on how institutional structures can be manipulated by changing the rules of the game in order to produce socially optimal results. The best intentions for the public good will go astray if the institutional arrangements are not consistent with the self-interest of decision makers.

While we celebrate the brilliance of Messrs. Hurwicz, Maskin and Myerson, we should also remember that Hayek's challenge provided their inspiration. Hayek concluded that the private-property rights that come with the rule of law, freedom of contract, and freedom of association is still the one mechanism design that mobilizes and utilizes the dispersed information in an economy. Furthermore, it does so in a way that tends to capture the gains from trade and innovation so that wealth is continually created and humanity is made better off.

Great quote for the prediction markets faithful

It's the same each time with progress. First they ignore you, then they say you're mad, then dangerous, then there's a pause and then you can't find anyone who disagrees with you.

-- Tony Benn

Pats continue

their streak.

Today is the 20th Anniversary of Black Monday

The 23% drop in stock market value in October 1987 was the largest ever single-day loss in history.

Jan 1, 2008 is Baby Boomer Retirement Entitlement Day

Kathleen Casey-Kirschling, a retired Maryland teacher who was born at 12:00:01 a.m. on Jan. 1, 1946, applied this afternoon for early retirement benefits. She'll become eligible to receive benefits in January when she turns 62.

Like we say in the gym: Feel The Burn. (Via Paul Kedrosky)

Other notables who may be eligible this coming January include Diane Keaton and Dolly Parton.

Assuming that the Baby Boom ended with a whimper during the Cuban Missile Crisis, some of the June 1963 births, just eight months later, include Johnny Depp and Helen Hunt.

Even more "Science Is Religion": The Goran

Tim Blair:

ABC News reporter David Wright wonders at those who would defy a small panel of Norwegians:

Even the Nobel Prize is not going to be enough to silence the naysayers ...

It’s called dissent, pal, and for your information it happens to be the greatest form of patriotism. Among the sayers of nay remains Mark Steyn:

A schoolkid in Ontario was complaining the other day that, whatever subject you do, you have to sit through Gore’s movie: It turns up in biology class, in geography, in physics, in history, in English.

Whatever you’re studying, it’s all you need to know. It fulfils the same role in the schoolhouses of the guilt-ridden developed world that the Koran does in Pakistani madrassas.

In the West, they study the Goran.

In actual global warming news, the GISS Land-Ocean temperature for September plunged to +49 Celsius (above mean), the lowest in more than a year. Go make a trade at the Global Warming Exchange (link also embedded in the charcoal panel in the upper right of this blog).

UPDATE: Interesting WSJ piece on Climate Geo-Engineering:

Expressed in terms of the metaphor of the "greenhouse effect," it would work like this: Geo-engineering would put a "parasol" over the greenhouse to deflect 1% or 2% of the sunlight that now affects the Earth. Scattering this small fraction into space would reduce global warming. In the language of climate science, we would increase by a few percent the Earth's "albedo" -- the ratio of incoming sunlight reflected back into space relative to the total inbound from the sun.

We know it would work because it happens naturally all the time. Clouds routinely deflect sunlight and thereby cool the Earth. Volcanoes -- when they erupt and inject millions of tons of fine particulate material into the stratosphere (mostly sulfate aerosols) -- have also cooled large regions of the globe. Mount Pinatubo in the Philippines erupted in 1991 and cooled most of the Earth for a few years, erasing for a short time roughly half of the global warming that took place during the entire 20th century.

The best Maureen Dowd column ever

cuz, it was written by Stephen Colbert:

Surprised to see my byline here, aren’t you? I would be too, if I read The New York Times. But I don’t. So I’ll just have to take your word that this was published. Frankly, I prefer emoticons to the written word, and if you disagree :(

I’d like to thank Maureen Dowd for permitting/begging me to write her column today. As I type this, she’s watching from an overstuffed divan, petting her prize Abyssinian and sipping a Dirty Cosmotinijito. Which reminds me: Before I get started, I have to take care of one other bit of business:

Bad things are happening in countries you shouldn’t have to think about. It’s all George Bush’s fault, the vice president is Satan, and God is gay.

There. Now I’ve written Frank Rich’s column too.

So why I am writing Miss Dowd’s column today? Simple. Because I believe the 2008 election, unlike all previous elections, is important. And a lot of Americans feel confused about the current crop of presidential candidates.

For instance, Hillary Clinton. I can’t remember if I’m supposed to be scared of her so Democrats will think they should nominate her when she’s actually easy to beat, or if I’m supposed to be scared of her because she’s legitimately scary.

Or Rudy Giuliani. I can’t remember if I’m supposed to support him because he’s the one who can beat Hillary if she gets nominated, or if I’m supposed to support him because he’s legitimately scary.

Our nation is at a Fork in the Road. Some say we should go Left; some say go Right. I say, “Doesn’t this thing have a reverse gear?” Let’s back this country up to a time before there were forks in the road — or even roads. Or forks, for that matter. I want to return to a simpler America where we ate our meat off the end of a sharpened stick.

This is eerily reminding me of this.

Parasites Attack Future Leaders of America!!!

According to IvyGate.

Nice wrap-up of the Nobel Prize in Economics

here. I made $6 trading the contracts! Liquidity just wasn't there.

Michael Kinsley applies Greenspan's Aristotelianism on Greenspan

and gets interesting results:

You could describe what Volcker did as officially accepting the theory of monetarism, or as contracting the supply of M1. Whatever. But put bluntly, what he did was to purposely engineer the deepest decline since the Great Depression in order to wring inflation — and the expectation of future inflation — out of the economy. This set the stage for the generation of prosperity that Greenspan presided over.

Greenspan deserves enormous credit for staying the course. And yet — as he himself tells it in this book — he also helped Ronald Reagan in 1980 to demagogue economic policy as a way of attacking Jimmy Carter. He wrote a speech for Reagan blaming Carter for “one of the major economic contractions in the last 50 years.” Reagan changed that to “a new depression — the Carter depression.” Within a week, this had turned into: “A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his!” Greenspan says, “What attracted me to Reagan was the clarity of his conservatism.”

As Greenspan surely knows but doesn’t admit, Reagan achieved this appealing clarity by ignoring the “objective reality separate from consciousness” that Greenspan used to treasure. And Greenspan does the same. Early in Reagan’s administration, as a member of the president’s economic advisory board, he supported Reagan’s tax cuts “if spending was restrained” and if the Fed kept money tight. Volcker’s Fed continued to do its bit but Reagan, famously, did not, leading to enormous deficits. Greenspan says, “Congress shied away from the necessary restraints on spending.” But the data — those good old data — show that the budgets Reagan proposed were only slightly smaller than the budgets Congress eventually passed.

The data also show that George W. Bush has done a better job than Reagan did at controlling government spending. Spending has averaged 19.7 percent of G.D.P. during Bush’s first six years — Iraq war and all — while it was 22.4 percent during Reagan’s eight years. (If you assume a year’s lag between policy and result, it’s 22.3 percent.)

Half this book — the half that is getting no attention — isn’t memoir: it’s what Greenspan calls “detective stories”: just Alan riding the data wherever it takes him, having the time of his life, trying to solve all the world’s economic puzzles, like why it took so long for computers to affect productivity, why incomes are becoming more unequal and what to do about it, the energy crisis, immigration, entitlements and so on. Not all of this is wildly original, but there are great nuggets and aperçus. And it is all written in English and fully comprehensible.

Gore had better kayak over to Oslo

The latest bit of genius from John Tierney:

I don’t want to dampen the celebration over Al Gore’s Nobel Peace Prize, but I wonder if this is, as they say, a “teachable moment.” Should he skip the trip to Oslo, Norway, on a fuel-burning jet and instead accept the award by teleconference?

I realize two plane flights would make little difference to Mr. Gore’s carbon footprint (certainly by comparison with the much-publicized utility bills for his home). But as he pointed out in “An Inconvenient Truth”:

Flying is another form of transportation that produces large amounts of carbon dioxide. Reducing air travel even by one or two flights per year can significantly reduce emissions. . . . If your airplane travel is for business, consider whether you can telecommute instead.

Should Mr. Gore follow his own advice here? You could argue that the publicity generated by his presence in Oslo would do more to combat global warming than the reduced emissions from trip. But you could also argue that the symbolism of staying home would send an even more powerful message about the need for everyone to conserve energy. He could generate plenty of publicity by delivering the Nobel lecture through a video link and letting the prize be sent to him on an energy-efficient ship.

What about Lomborg's Peace Prize

(Via David Boaz):

This year's Nobel peace prize justly rewards the thousands of scientists of the United Nations climate change panel (the IPCC). These scientists are engaged in excellent, painstaking work that establishes exactly what the world should expect from climate change.

The other award winner, former US vice-president Al Gore, has spent much more time telling us what to fear. While the IPCC's estimates and conclusions are grounded in careful study, Gore doesn't seem to be similarly restrained.

Gore concentrates above all else on his call for world leaders to cut CO2 emissions, yet other policies would do much more for the planet. Over the coming century, developing nations will be increasingly dependent on food imports from developed countries, not primarily as a result of global warming, but because of more people and less arable land in the developing world.

The number of hungry people depends much less on climate than on demographics and income. Extremely expensive cuts in carbon emissions could mean more malnourished people. If our goal is to fight malnutrition, policies like getting nutrients to those who need them are 5,000 times more effective at saving lives than spending billions of dollars cutting carbon emissions.

Likewise, global warming will probably slightly increase malaria, but CO2 reductions will be far less effective at fighting this disease than mosquito nets and medication, which can cheaply save 850,000 lives every year. By contrast, the expensive Kyoto protocol will prevent just 1,400 deaths from malaria each year.

With attention and money in scarce supply, we should first tackle the problems with the best solutions, thereby doing the most good throughout the century. Focusing on solving today's problems will leave communities strengthened, economies more vibrant, and infrastructures more robust. This will enable us to deal much better with future problems - including global warming - whereas committing to massive cuts in carbon emissions will leave future generations poorer and less able to adapt to challenges.

To be fair, Gore deserves some form of recognition for his resolute passion. However, the contrast between this year's Nobel winners could not be sharper. The IPCC engages in meticulous research where facts rule over everything else. Gore has a very different approach.

Scott Boras just misses the top of the market for his client?

The money, certainly in NYC, is generally nervous. Markets are pretty much at all time highs, and most managers of money see more potential downsides than upsides.

I think this is why the Boras Team is assembling such a treatise on the economics of A-Rod staying with the Yankees. Because, despite the other large market teams who would be logical alternatives to sign him, no responsible manager of baseball talent would invest half, a third, or even a fourth of their entire payroll on one player. (I'm thinking, like in equities portfolio management, one-seventh is the cap for one player--and that should not be a long-term position). So, to pay him his preferred $30 mil for even a single year, the total team payroll should top $210 million, and the Yankees are the only ones who can go there.

Bill Simmons and one of his astute readers agree:

Q: How about Bob Brenly accurately describing the astounding ambivalence of Eric Wedge (and Carmona) toward A-Rod in that ninth-inning at-bat in Game 2? Tying run on second, open base, two outs in the ninth of a 1-1 game, and you PITCH to the HR, RBI, runs scored, and ninth-inning batting average leader in all of baseball?!? Amazing how heavy the postseason baggage is for A-Rod.
--Chris, Philly

SG: Yeah, I don't think you'll see that moment mentioned in Scott Boras' 200-page pamphlet that will be handed to every baseball team as he's gunning for a $300 million contract. By the way, in the aforementioned podcast, JackO mentioned a Jimmy Chitwood-type scenario in which A-Rod tells the media, "Torre stays, I stay ... he goes, I go" and becomes a hero in New York for sticking up for his manager. (Note: Rivera pulled this move Wednesday but A-Rod's gesture would carry more weight and change the way he's perceived by Yankees fans forever. Of course, he'd never do it because Boras would tie him up in Zed's basement and stick a red rubber ball in his mouth for the entire winter before letting it happen, but still.)

It's up to you, New York, New York (queue the brass section). These are now available for your trading pleasure:

The Al Gore 9/11 Conspiracy

Decoded by Tim Blair. I'm short a bit, and it's in the money.