Mel Hinich: In Memoriam

The "In Memoriam" article for Mel Hinich was just published in PUBLIC CHOICE.

OMG. O. M. G. OMFG!

It starts bad. But then....the SONG.

End the DAFT!

Our policy is daft. DAFT! Because *D*eficits *A*re *F*uture "T*axes. The DAFT Republicans want to borrow money to pay for tax cuts. And the DAFT Democrats want to borrow money to pay for unemployment benefit extension. It's DAFT! Deficits Are Future Taxes!

I'm going to get t-shirts made: "End the DAFT!"

It's easy....

Instead of "Hell no, I won't go!" we can try, "Like Hell I say, I won't pay!"

Monday's Child is full of links

Anon is angry. (Nod to Alex, who KNOWS from Angry)

It's a temptation that, as we've seen from the class of '94, some of them can't withstand." EWWWW! Stop him before he schtoops again. (Nod to Kevin Lewis)

Joe Scarborough's Class of 2010 Survival Guide.


Class 2010 rapidly putting money in their g-strings. (Nod to Lord Kent)

Breaking up: easier some times than other times. (Nod to Kevin Lewis)

Partisan filters. (Nod to Kevin Lewis)

Good? Or good enough... (Nod to Kevin Lewis)

You're So Unbelievable

Dear Fed:

You are so unbelievable.

Nothing the "greedy" banks are doing is irrational. It makes perfect to gamble with house money.

The question is why the "house" puts up with it. And the answer is that the "house" (meaning the Fed) is playing with taxpayer money. Nobody who is deciding anything has any skin in the game.

Lordy. Lordy pie.

(Nod to Anonyman)

In defense of Greg Oden?

Over at MR, Tyler asks if we should value economists who are like Ronald Coase or those who are more like Nolan Ryan. (I am not making this up!). This is an instant classic Tyler post containing the sentence "Nobody calls him (Greg Oden) the Ronald Coase of rebounding."

I think he's asking if we should value people with a high "home run" percentage in their output or those with a lot of output.

I think there is an easy way out of this and that is to look at citations, not raw output. After all a rebound is a rebound is a rebound, but not all articles are created equal!

It's possible to have a very long vita without making any discernible impact on the profession and (this should go without saying, but sometimes doesn't) a very short vita is not necessarily a sign of high quality.

So on the citation front, it's no contest. According to Google Scholar, Ronald Coase has over 31,000 cites to his two classic articles. Nolan Ryan only has 9!!

A more serious comparison might be to someone like Alberto Alesina. When I look at the first four pages (40 articles) of his cited articles in Google Scholar, I count roughly 27,000 cites, while his two most cited articles ring up a total of around 4900 cites.

I am somewhat already agreeing with Tyler in that I'm using total citations rather than citations per author here (i.e. not penalizing Alberto for having a lot of co-authored articles).

Who's better?

Hard to say really in this case, but I think total citations are the metric to compare scholars with different vita lengths.

Why Bruce Bartlett is hopeless

I'm not sure what to make of this post from Bruce Bartlett, called "Why fixing the budget is hopeless"

He cites a survey where 848 Americans think 25% of the Federal budget is spent on foreign aid and 10% is given as the ideal amount.

He then points out that official bilateral foreign aid in 2009 was less than 1% of the Federal budget.

First, taking everything at face value, I am not sure why this means fixing the budget is hopeless.

Second, there is a hell of a lot more to foreign aid that "bilateral foreign aid". There's US contributions to multilateral aid agencies, then there's NATO, there's our military presence in Japan, South Korea, etc., there's whatever the heck we're still doing in Iraq after a second president has said "mission accomplished". I'm not saying it's 25%, but it's way way way more than 0.6%.

Why take a question where the definition of aid is not given and could easily be construed broadly and match the answer to a very distinct, narrow definition of aid?

Unless of course, you're hopeless!

Bang a gong

One of the only changes I've made to Mrs. Angus in our 16 years together was to institute a "no bangs" policy for her.

I'm not a fan of bangs for women. Chad, however, is a big bangs fan and he schooled me on the origin of the look.

People, bangs were invented in the 8th century by an Iraqi socialite nicknamed Ziryab or Blackbird!

It must be true, it says so right here in the Wikipedia.

He got kicked out of Baghdad for singing too good, so he moved to Spain.

Once there, he did NOT rest on his laurels though.

He put more strings on the oud. He opened up a chain of beauty parlors. He invented toothpaste. And, just to top it all off, he invented the three course meal.

He was the Marc Bolan of 8th century Andalucia!

Why didn't I think of that?

In today's NY Times, Christy Romer solves our economic problems:

"The Federal Reserve, Congress and the president need to reaffirm that they will do whatever it takes to restore the economy to full health... They should follow up with powerful fiscal and monetary actions to create jobs — coupled with a concrete plan for tackling our long-run budget problems."

Look, I know the Times only pays $1,000 per column, but this has got to be a joke, right?

What exactly are these mysterious "powerful" policy actions and why didn't the government try them when Dr. Romer was head of the CEA?

Good grief!

Don't Forget to Say Happy Birthday to Jesus

According to the LMM, this is actually a documentary.

Nice Mug Shot, and Woman Trouble

1. Nice mug shot. It is interesting that taking drugs helps you escape the drug possession charge. I guess you can't have your cocaine and eat it, too.

2. Women...women who hate women...are luckiest people?

(Nod to Anonyman)

Sell Everything. Quickly.

From the "7:30 Report" in Oz.

(Nod to the Ward Boss)

Thank goodness for sub-titles

This is simultaneous the worst and the best video I've seen in quite a while.

Enjoy:

Tree!

Because it makes me happy, that's why.

(Nod to the Blonde, who has to do her own tree. Can you help?)

So near but yet so far

Dean Baker gets a lot of stuff right early, but then heads off the rails again Ozzie-style:

China's government is saying is that it has no better use for its money than subsidising the consumption of people in the United States and other wealthy countries, by propping up the value of the dollar. That may seem surprising since per capita income in China is less than $8,000 a year, while it is over $45,000 a year in the United States, but if this is what China's leaders insist, who are we to argue?

In effect, China is subsidising its exports to the United States. This is very generous of the Chinese government, since the United States can take advantage of China's generosity to enjoy a higher standard of living. Currently, our deficit with China is equal to 2% of GDP. This means that China is handing us goods and services that are worth roughly $280bn a year more than the value of goods and services we give them in exchange.

I wouldn't put it exactly this way, but kudos, Dean, you're nailing it!

Then there's this:

While this displaces a large amount of domestic production, we can ensure that the displacement does not result in unemployment by simply shortening working weeks. If everyone's working week was shortened by 2.0% (the equivalent of one week per year of vacation), we could keep the workforce fully employed even in the case of reduced demand.

People, the idea that every $ of the trade deficit with China represents a $ of lost domestic production is risible. Does Dean really think the next cheapest producer of Walmart products operates plants in the USA? What about Indonesia, Vietnam, India, Sri Lanka, even Mexico? Bilateral trade is not a leak-proof iron pipe. Reductions in a trade deficit with a single country does not guarantee reductions in the overall trade deficit. That's just econ 101.

Dean is also a bit confused about where most low education workers in the USA work:

At present, China's trade policy primary hurts non-college-educated workers, since those with college and professional degrees are largely protected from the same sort of competition that manufacturing workers face. It is important to eliminate the barriers that protect doctors, lawyers and university professors from competition with their lower-paid counterparts in the developing world. This way, trade with China would put downward pressure on the wages of professionals, not just manufacturing workers.

First, most non college educated workers do NOT work in manufacturing. Manufacturing employment is a small fraction of overall employment. Many non-college educated workers work in the service sector and thus are largely "sheltered" from import competition.

Second, as Dean knows full well, American university professors in the USA face tremendous competition from foreign workers. In our small department in Oklahoma we have a Greek, an Argentine, a Turk, and three Chinese professors; about one third of the department lived abroad before starting grad school. Go look at the home page of the Harvard economics department and count the foreigners.

I fully support increased immigration for professionals (and indeed for almost everyone), but Dean just does not have his facts straight here.

John Nye: Interesting Talk on North, and Economics

Great, great talk. John is a wonderful guy, funny and smart.

(Nod to Pete B)

Take the skinheads bowling

One of my alltime favorite bands is Camper Van Beethoven. Turns out their front-man, David Lowery also has a head for business, as he was involved in the founding of Groupon which just sold itself to Google.

Here is Lowery on the subject:

"In 2008 I was appointed to the board of advisors of a small web startup called www.the point.com. The site the brainchild of Andrew Mason was a " tipping point" mechanism, a social networking site that allowed people "commit" to take group action. In particular the hope was they would take group action for social change. The investors quietly noted there was not a clear way to monetize Andrew’s experiment. However they hoped that by watching the way users used the tipping point mechanism, a viable way to monetize this website would present itself.

I was asked to start a campaign on www.thepoint.com."To get a feel for it". Not being very socially conscious I decided that I wanted to use The Point for my own narrow self interests.

Cracker and Camper Van Beethoven have a festival, The Campout. It’s rather remote and since we produce the small festival ourselves we take considerable financial risk. While the previous years had been marginally successful we were worried about the rapidly deteriorating economy (I believe Bear Stearns had just gone bankrupt). So I started a campaign to get a "break even" amount of CVB and Cracker fans to commit to attend the festival. In this way our fan’s promises to attend would become a sort of promissory note. no pun intended. While you couldn’t exactly peg it’s value, these collective promises to attend at some point seemed to be worth enough to go ahead and book the flights, PA, lights, and port-o-potties.

Other successful "campaigns" on The Point also involved similar commitments for group purchasing. It wasn’t long before The Point became Groupon."

Wow, Elvis Presley died and David Lowery got paid?

Hat tip to DG!

Economics is fun: Follow the money

Follow the money.... why repeal the estate tax, really?

Raise the price of a substitute (savings), and you shift out the demand curve for life insurance.

See, it's easy, and FUN!

(Nod to Angry Alex)

He's just not that into you

Danny G is taking this whole LeBron breakup thing pretty hard:

"The Cleveland Cavaliers have poured hundreds of thousands of dollars into a high-powered Midwestern law firm to investigate their suspicions that the Miami Heat broke NBA tampering rules while pursuing LeBron James, and owner Dan Gilbert has privately vowed he won’t relent until he has a thick binder of findings to drop on the desk of the NBA commissioner, league sources told Yahoo! Sports."

Man, I know break-ups are tough, but this is nuts. Hiring a private dick to try and piece together whether your ex started cheating on you before the divorce? Does he think he'll get LeBron back?

I guess he just wants LeBron's new love to be hurting too. He should just sneak up on Pat Riley and sucker-punch him!

My Safety University

So, MSU played well, if getting CHILIPUNK'D by a freshman counts as playing well. Here is photographic evidence that the boys in green from My Safety University were actually there, in Cameron, doing whatever it is that they do.

Since I have been to games with Aaron, I know what they were doing. Aaron was saying some remarkably brazen things, during quiet moments, terrifying his "friends." In this case the friends stand out because they are wearing the "tools of ignorance" green shirts that come with being MSU fans.

Went to a Durham Bulls game with Aaron, in September. We were in the third row, directly behind the visitors dugout. You could throw a peanut and hit the on-deck batter in the backside, couldn't have been more than 15 feet.

During quiet moments, Aaron would go after the kid who was playing left field for the other team. The guy had missed a grounder, trying to hurry and make a throw to the plate. The ball had skipped under his glove, and gone to the fence. Two runs scored, man on third, instead of first and third, one run in.

So Aaron is going after this kid pretty hard, and it's often quiet in minor league ballparks. Not totally silent, but Aaron the Foghorn Voice could be heard in the far reaches. "In Little League...IN LITTLE LEAGUE! You learn you have to catch the ball before you can throw it! Hey, Todd! Why didn't you catch it before you threw it? That's Little League."

Aaron, between innings, finds out that the kid (Todd Frazier) DID play Little League. In fact, he played on the LL WORLD CHAMP TEAM! Played for Toms River, and went 4-4 in final game against Japan, one of the hits a homer.

Next at-bat for Todd: "Hey, Todd! You DID play Little League! You should have known. How did you miss that grounder?"

Todd keeps turning around, clearly has rabbit ears. Finally, Todd turns around and mouths, "You are fat! Lose weight!"

Now, Aaron is in heaven, of course. That is not a very good comeback. But more important Todd's head is up in the stands, not in the game. Aaron's work is done.

So he goes after another guy, with long shaggy hair. Looks up the guy's hometown, in the trusty game program. "Hey, Smith! Nice hair! By this time Saturday, you're going to be home in (guy's actual hometown), waking up late and getting your hair done! Does your wife have a favorite place for you to get your hair done! Hey, Smith!"

Then two more developments.

First, the mousey little guy ahead of us turns around and berates Aaron for being a loud-mouth goofball. Except he does it in the most whiny, "Why can't you be nice? We're just here to see the game. Don't be mean to people!" junior tree-hugging granola way. I mean, this weasel made @kohenari look macho. Photographic evidence of Mr. Mouse: To Aaron's credit, he backed off a bit. We were afriad Mouse Man might quiver himself to death or something.

Then, a guy up to our right, five rows over and five rows back, starts giving it HARD to the Bats in the N'awlins Old School fashion. This old guy looks like a Confederate cavalry officer, with white goatee and flowing white hair. Thick Loosiana accent. "Hey, battah! That bat too heavy, now. That bat doan got dat heavy, heavy gris-gris all ovah it. You cain't even pick dat bat, dat's a gris-gris bat! Who dat gawnna hit wit dat gris-gris bat? Not you, sawn, not you!"

We were rolling around in the aisles at this point. First, this guy had some great stuff. I can't remember most of it, but it was tremendous. Aaron was trying to take notes. (Since he went to MSU, he can't actually write, but he was trying). Second, the guy ahead of us, Mr. "Let's all get along and watch the game!" was staring straight ahead. No way he was going to mess with Colonel Jeb Stuart over there. Ol' Jeb would have brought dat hoodoo right down on that little leftie bed-wetter head of his.

But...oh, glory! The Bat's pitching coach, the COACH, comes up to the top step and starts bickering with ol' Jeb the Heckler. Coach yelled, "Hey, old man: You're an idiot!" Jeb nods happily: SCORE! Aaron, knowing he was in the presence of true heckling greatness, nodded and remembered. A rabbit-eared 22 year old....easy. A 55 year old veteran coach, who should know better...Practice, Aaron, practice.

So, anyway, though I was not at the Duke-MSU game last night, I am confident that there was invective and heckling taking place, right up to and perhaps slightly past the point where Aaron got physically threatened.

(UPDATE: My bad, photo credit to Chris DeSante, who clearly has ESPNHD and a TV nicer than most grad students can be expected to have)

Holiday Postcard

A holiday postcard from the Bishop. That's out the window of his office. His office at the B-school. The view outside that office is better. The INSIDE that office is better, too.

Grand Game: Climate Edition

You know what to do. Here is the meat...

(Nod to Pelsmin)

It Happened Like THIS, you see...

(Nod to the LMM)

The Scarlet Band...Period!

This can't be true, can it?
Let's hear again how free and open those Scands are.

Got That New-Time Religion....

What, me worry?

"Rep. John Shimkus is standing by a controversial comment that global
warming isn't something to worry about because God said he wouldn't destroy
the Earth after Noah's flood. The Illinois Republican running for the
powerful perch atop the House Energy and Commerce Committee told POLITICO on
Wednesday that his understanding of the Bible reaffirms his belief that
government shouldn't be in the business of trying to address rising
greenhouse gas emissions." [Politico]

What, me think rationally?

"My father, David Brower, the first executive director of the Sierra Club
and the founder of Friends of the Earth, could confer no higher praise than
'He has the religion.' By this, my father meant that the person in question
understood, felt the cause and the imperative of environmentalism in his or
her bones." [Kenneth Brower, Atlantic Monthly]

(Nod to Kevin Lewis)

Do ya do ya want my cash?

People, Robert Reich slipped up this week and put in writing what a lot of progressives really think about our current fiscal situation:

"Tuesday, the President meets with Republican and Democratic congressional leaders to begin working out a compromise for extending the Bush tax cuts. Both parties say they want to preserve the tax cuts for lower- and middle-income families. But this would cost $3 trillion over the next decade. Republicans also want to extend them permanently for the top 2 percent of earners, for an added $700 billion. The top don’t need the cuts, don’t deserve them, and won’t spend the windfall (and thereby stimulate the economy)."

Ah yes, rich people just plain old don't deserve to keep their money. They might do something with it that the progressives wouldn't approve.

It's a strange argument to make; the $3 trillion "tax cut" is OK, while it's the $700 billion "cut" that blows out the budget.

Shoplifting in Edmond, OK

Hey, I bet *I* could shoplift this way, too!

The video...

(Nod to the Blonde, who couldn't POSSIBLY shoplift this way, skinny little thing that she is)

New York Bus System

I have been working on the stupidity of urban transit systems, and their occasional successes, for some time.

New York's new "Select" system? It goes down on the "stupid" side of the ledger.

A general description.

And the actions of a new bus Gestapo.

"I'm from the government, and I'm here to .... arrest you! For being confused."

Oldie but goodie....Capital Strike

You have likely seen this.

But I want to make sure you have ALL seen this...(Thanks to CG for the update)

Bar Stool Economics
Suppose every day, ten men go out for beer and the bill for all ten comes to $100 and If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.)
So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." so drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected...They would still drink for free...But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'...They realized that $20 divided by six is $3.33..

But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner
Suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before...And the first four continued to drink for free...

But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man," but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison.
"We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

For some reason, this little internet meme is usually attributed to Prof. David Kamerschen, at UGA. But he did NOT write it, and disavows either knowledge or opinion of the piece. So....there.

Good news for people who love bad news

Here's a cheery note to start your morning: Economists are doomed!

Yes, we are in the same category (high paying jobs with no future) as travel agents and newspaper reporters according to Yahoo! Finance:

The Federal government is the largest employer of economists in the country. More than half — 53 percent — of all economists in the U.S. work for declining government sectors, so Uncle Sam's not hiring a lot of economists just now. "Econ" is a hot college major, but most of those newly-minted grads won't find work as traditional economists. Instead, they'll end up in niche sectors in business, finance, insurance, and education. Those set on working as conventional economists better have a Plan B, or a Plan Ph.D, because they'll need one. The economists at BLS do tell us that by 2018, an additional 900 economists will be employed — so the outlook is not as dismal for dismal scientists as it is for, say, travel agents. But if current trends continue, the future isn't promising. "You look at the last 10 to15 years and it has been flat," says Henry Kasper of the BLS. "There's little reason to think it's going to get better."

So it's not technology that's killing economists, it's smaller government? I guess that helps to explain a few things, no?

I personally think economists are like meteorologists; the more we screw up, the more we are in demand!

We are also like chameleons; we can change our stripes and insinuate ourselves pretty much anywhere in the workplace. That is part of what makes "econ" such a great major.

Balance

Can your robot do THIS?

Inverted Pendulum from Tensor on Vimeo.

I think... NOT!

(nod to @jrhorn424 )

My Boy Schaller, With Whom I am Well Pleased

My boy Tom Schaller finally says something smart in his Balt Sun column. I guess if you write THAT much, at some point you find wisdom.

Tom used to be (18 years ago) a moderate Republican. Then, like any sensible person, he kicked those idiots to the curb. Unfortunately, he was so beat up he became an (ick!) Democrat wobbly apologist.

So this whole new "kill the old people!" kick is most welcome, MOST welcome.

Watch out where the Okies go....

don't you eat that yellow...ice??

Oh my, people, Oklahoma city resident Eugene Junebug Eddins (I am NOT making this name up) has a problem:

"A drunken man decided a bathroom break couldn’t wait and relieved himself near an ice skating rink on Friday afternoon.

The man was spotted by an off-duty sergeant with the Oklahoma City Police Department who was with her children, according to the police report released on Monday.

Witnesses told police a man was urinating in the open with his genitals exposed.

Eugene Junebug Eddins, 39, was arrested and charged with public indecency.

After checking the Eddins’ background, the officer said Eddins was wanted on four Oklahoma City Arrest Warrants.

Two of the warrants were for public drunkenness and the others were for failure to appear in court."

the irresistible force and the immovable object

This is so great. China is trying to censor Wikileaks!

"According to WikiLeaks’ calculations, China appears in more than 8,300 of the cables—good enough for fifth place, behind Israel and just ahead of Afghanistan. The U.S. Embassy in Beijing accounts for 3,300 of the roughly 250,000 cables WikiLeaks claims to have in its possession. Six of the Beijing embassy cables have been released on the site so far."

Hmmm, wonder why they've got their Mao-shorts in a knot over this stuff.


"Contained in the cables are assertions that could make things awkward between China and the U.S., including suggestions that China ignored a U.S. request to stop transfers of ballistic missile technology Tehran and offered Kyrgyzstan $3 billion to close a U.S. airbase there.

Another cable, not yet released on the website but seen by the Guardian, quotes an unnamed source saying China’s Politburo—the powerful governing group within the Communist Party-–directed hacking attacks against Google after one of its members searched his own name on the U.S. company’s site and didn’t like what he saw."

Oh.

Hot Links!

1. Mary Anastasia O'crazy is starting to make sense to me.

2. Why Albert Pujols should own a piece of the Cards.

3. Hayek uber alles.

4. Tyler revises his views on the progress of Obamacare.

5. Alan Garcia explains his unpopularity.

Social Security: a third way?

The debate (and by debate I mean scream-fest) on social security has largely been between people who want to cut benefits and people who want to raise tax rates or do away with the cap on how much income is subject to the tax, with each side disparaging the other.

But, there is another alternative. Social security takes $$ from current workers and gives it to the current elderly. We are in trouble partly because the ratio of elderly to workers is rising (and also because benefits have been increasing).

No, people, I am NOT suggesting euthanasia. Shame on you!

I am suggesting getting more workers via immigration!

It's win-win-win. Grandma gets her check, tax rates don't rise, and more people get to come to America and better provide for themselves and their families.

Let's take some baby steps. How about tripling the quotas on H1-B visas and easing the path to permanent residence from them? How about making an easy path to permanent residence for anyone who graduates from a US university. If that's too "liberal" for you how about anyone who gets an advanced degree from a US university?

There are a lot of things we can do to let wealth generating people "in".

And so I say unto you: tear down that wall! Grandma needs the money!

Amen.

Monday's Child is full of links

A mini-Grand Game entry. I like the "Boone's Farm" angle, but there are others. (Nod to Anonyman)

Moments of moment: Gov. Christie. AS is amused. (Nod to Kevin Lewis)

"Not everyone who thinks they need an exorcism actually needs one..." Truer words were never spoken. (Nod to Kevin Lewis)

Darned autocorrect! (nod to Angry Alex)

AND THIS HOW YOU DO ME?

In grad school, we played football, under the name "Trout's Raiders," named after the famous Wash U micro theorist, J. Trout Rader, III. (Yes, there three J. Trout Raders, the sins of the grandfather being visited on a little boy)

Late in a game, we were down 5, and threatening to score. About five yards from goal line.

Fourth down.

Anyone was eligible to receive a pass. So we made up a play (Mike Smirlock was QB this day, though he was later known for other things...). The play was: I would center, then block, then run forward five yards, just over the goal line, and the pass would be there.

I did, I did, I did, and it was (there), right in the tummy. But I dropped it. Michael S's pass was perfect, and it was NOT too hard, or low, or anything. We lost. And I obviously still remember it.

Turns out I should have blamed God for "making" me drop it. That particular excuse did not occur to me, I have to admit.

Spammer Test

"But what about all the actual non-bot humans who won't be able to join the community, because they're incapable of making remotely accurate judgments about what is constructive ... Oh!"

(Nod to frequent, sometimes constructive, commenter Tom, who suggested the whole thing)

Stocks....Winning, and Sleeping

On October 8, I wrote this. Bailed out completely. DJIA was at 11006.

Friday, DJIA closed at 11096. If I had stayed in stocks, I would have had a 90 point bump, or 0.86%.

Instead, I made about 1.1% in that same period in inflation-linked bonds. And I slept better. Hard to say I was actually right to bail. But even with hindsight you can't say I was wrong, either.

You Had Better Go Back to Your Bars, Your Temples...

Beauty Queens and Battling Knights: Risk Taking and Attractiveness in Chess

Anna Dreber, Christer Gerdes & Patrik Gränsmark
Stockholm University Working Paper, November 2010

Abstract: We explore the relationship between attractiveness and risk taking in chess. We use a large international panel dataset on chess competitions which includes a control for the players’ skill in chess. This data is combined with results from a survey on an online labor market where participants were asked to rate the photos of 626 expert chess players according to attractiveness. Our results suggest that male chess players choose significantly riskier strategies when playing against an attractive female opponent, even though this does not improve their performance. Women’s strategies are not affected by the attractiveness of the opponent.

Which of course made me think of this. Darn women. Darned risky moves.

Toucha Toucha Toucha TOUCH Me! I wanna be a better player!

Tactile communication, cooperation, and performance: An ethological study of the NBA

Michael Kraus, Cassey Huang & Dacher Keltner, Emotion, October 2010, Pages 745-749

Abstract: Tactile communication, or physical touch, promotes cooperation between people, communicates distinct emotions, soothes in times of stress, and is used to make inferences of warmth and trust. Based on this conceptual analysis, we predicted that in group competition, physical touch would predict increases in both individual and group performance. In an ethological study, we coded the touch behavior of players from the National Basketball Association (NBA) during the 2008–2009 regular season. Consistent with hypotheses, early season touch predicted greater performance for individuals as well as teams later in the season. Additional analyses confirmed that touch predicted improved performance even after accounting for player status, preseason expectations, and early season performance. Moreover, coded cooperative behaviors between teammates explained the association between touch and team performance. Discussion focused on the contributions touch makes to cooperative groups and the potential implications for other group settings.

I have always said, you just can't beat those early season touches. Those are the best.

(Nod to Kevin L)

Ou est la plume de ma tante?

Mrs. A and I are on Staten Island visiting my aunt for Thanksgiving. She, for some reason, has taken exception to my choice of headwear, saying it makes me "look like a cuckoo-bird".

Here we are, after dinner last night in a pizza joint that serves a pretty good GF pie (among other things). People, you be the judges:

Bike theft: "You are so big and strong!"

Stanley Milgrom used guys with white coats. But it turns out all he needed was a cute blonde.

As one of the commenters says: "Good lord, are men ever stupid."

The earlier video is perhaps more disturbing. Actually, it just IS more disturbing.



What's disturbing is that I wonder if I would have treated the white kid and the black kid the same. I'm not sure. Just not sure. Disturbing.

UPDATE: A commenter asks, "Isn't this just statistical discrimination?"

"Just statistical discrimination"? Um...yes. But the point is that I knew what was going on, and I *still* found myself watching the black kid and getting madder, thinking, "It looks like he's stealing that bike."

Racism is persisting in a biased race-based belief even when evidence to the contrary is clear and convincing. I knew the trick, but I still was watching the black kid and getting mad.

When I was at Wash U, with Angus in grad school, sharing our office with Steve from "Day-ton," I went out on night late to ride my bike home. I saw a black kid sitting beside my bike, and immediately thought, "Is he stealing my bike?" In my defense, it was 3 a.m., and an odd time to be just sitting beside a bike in a parking area.

But I thought, don't be an asshat racist. Just go over there. As I walked up, he tried to hide the bolt cutters under his leg, and struck up a conversation. I asked if he had seen any really big rats around, since something had chewed the cable on my bike lock nearly through.

He jumped up, took his bolt-cutters, and sauntered off, whistling.

I reported the attempted theft. The Wash U po-po was all excited, "We know that guy." (My description had been, "Black guy, medium height, orange shirt.")

Next day, they called me in to do a photo line-up. Nine photos. Now, I am not making this up, people. Of the nine, four of the photos were of white guys. Of the remaining five, four were black and white photos. The remaining one was in color. The color was...orange. It was a black guy with an orange shirt.

I am ashamed to admit I went through with it, pointing out ("j'accuse!") the one color photo guy. The local Dick Tracies were VERY excited; "That's the one, all right, that's him, yepper!"

They told me he would be charged, and I would be called as a witness. But apparently when they called St Louis police to do the arrest, the kid ran. He ran out into a street, and was hit by a taxi. He died the next day.

The point is that I have some baggage here, on the whole black kid stealing a bike with bolt cutters thing. "Just statistical discrimination?" It is unjust statistical discrimination, I'm afraid.

life in an alternative universe

Brad Delong says this:

Thus, I would confidently lecture only three short years ago that the days when governments could stand back and let the business cycle wreak havoc were over in the rich world. No such government today, I said, could or would tolerate any prolonged period in which the unemployment rate was kissing 10% and inflation was quiescent without doing something major about it.

I was wrong. That is precisely what is happening.

People, what has the government done?

Let's see, there's the TARP, the Stimulus bill, the GM bailout, the Fed buying mortgage backed securities, cash for clunkers, the Fed pushing short rates to effectively zero, the credit for homebuyers, the extension and re-extension of unemployment benefits, a big deficit financed increase in discretionary spending (aka last year's budget), and now the Fed has commenced QEII.

Nothing "major"? Really?

It's kind of an interesting syllogism at work here. (1) The government can always control the state of the economy, (2) the economy is still bad, therefore (3) the government has not actually attempted to control the state of the economy.

If only there was a term for this kind of thinking!

Just in case you're tired of turkey

Grand Game: Freakishly Self-Important Edition

This screed by Mark Ames could be a remarkably witty and carefully executed satire.

But I fear it's not....and so let's play the Grand Game! What's your favorite passage? I like #3, near the end, of course:

3. Anytime anyone says anything libertarian, spit on them. Libertarians are by definition enemies of the state: they are against promoting American citizens’ general welfare and against policies that create a perfect union. Like Communists before them, they are actively subverting the Constitution and the American Dream, and replacing it with a Kleptocratic Nightmare.

Some good stuff there. I, for one, never knew that the Communists were bent on replacing the American Dream with a "Kleptocratic Nightmare." In fact, equating Libertarians and Communists seems almost Hayekian, in a deeply confused (or satirical, I can't rule that out) way.

Note to Mr. Overwater: There's some Left Wing Authoritarianism for ya, bud.

Happy Thanksgiving from Nassim Taleb

He sees 25 years into the future, people! And it's not good:

"The great top-down nation-state will be only cosmetically alive, weakened by deficits, politicians’ misalignment of interests and the magnification of errors by centralised systems. The pre-modernist robust model of city-states and statelings will prevail, with obsessive fiscal prudence. Currencies might still exist, but, after the disastrous experience of America’s Federal Reserve, they will peg to some currency without a government, such as gold."

Yep, it's the middle ages with coffee-makers for us.

Is anybody besides me getting real tired of this guy? Yes, asset returns have too fat of tails to be correctly modeled by a normal distribution. Thanks, pal. We already know that. It doesn't make you a prophet.

Carrboro Culture

A performance by "The Pretense" or Vampire Weekend, or Nickelback, or something.

With multiple camera angles. Nice.

The EYM is the one with the white American flag sweatshirt, and the one boxing glove, MJ style.

I like how they incorporate the fire alarm into the aural montage. It could be accidental, but it is not clear how you could know that. Pretense just happens, after all. It isn't planned.

In Soviet Russia (and Miami), sneakers wear YOU!

Not Sure About This...

So, a guy gets arrested for possession of a firearm in a Planned Parenthood parking lot.

Except, he was wearing the sidearm in a holster, clearly visible. He has a permit for the gun. In fact, he has a concealed carry permit. And he wasn't near the building, he was in the parking lot.

I'm good on the whole "It's private property, you can't have a gun here without permission." He should have been asked to leave. TOLD to leave, in fact, and arrested if he resisted or made any threats.

But he was just straight up arrested.

And then there's this bizarre story that he was looking for a woman, a woman for whom he has neither phone number nor address. And he "forgot" the name of the web site they communicate on. AND he has met the woman for coffee. He just has no idea how to get in touch with her.

The evidence that he was up to no good? He had MAPS in his car, ammunition, and binoculars. The foul fiend! Wait...I have those things in MY car. That must mean I am up to no good, right? (What it means is that it's hunting season, here in NC)

The coolest part? He is a Minnesota state legislator. Really. He was going to chair a key committee, but not now.

Man, those armed rednecks up north freak me out. Thank goodness I live here in good ol' civlized Dixie.

(nod to @LauraLeslie)

Hello From Mr. Tootie Thrills Tanzi!

On my recent return from Sweet Home Oklahoma, I was honored to pass on the greetings that Mr. Tootie had given me for Hobo and Tanzie.

To say the least, Tanzie was excited!

Easley: It Just Doesn't Make Any Sense

The two best reporters on state politics in NC are Laura Leslie and Rob Christensen. And since Gov. Easley yesterday pled guilty (sort of; Alford plea) to a felony, it was time to check in.

I got to talk to Laura, which was fun. She's really great. Great voice, knows everyone, very fair. And I got to say, "It just doesn't make any sense!" How profound.

And this morning I got to read this piece by Rob C. Exactly right, again very fair, to the point.

Makes me proud to be North Carolinian. Two really first rate reporters. Plus, Rob wrote the BEST book on North Carolina political history. I use parts of it in class. A very fun read, with a nice balance between personalities and good research. On the LL side of the ledger, Laura is a blogger, and she tweets, from @LauraLeslie. Finally, though, and I mean this in a purely paternal way of course: Laura is somewhat cuter than Rob.

Viva Gridlock!

Can we has more gridlock, pleeees? All us turkeys here at KPC sure HOPE so! Credit: Signe, PDI
Happy Thanksgiving, and Happy Holidays, from the grinning gridlock brothers!

Should the IMF enable Argentina?

Argentina is seeking "technical assistance" from the IMF to help design a new inflation index.

Why?

Well, the past (in more ways than one) and current President have made the inflation numbers a political football, firing statisticians and deliberately underreporting inflation by a large magnitude.

Why?

Well, among other reasons, Argentina had issued a lot of inflation indexed bonds and allowing the real inflation rate to be officially reported would have cost the government a lot of money.

Which is exactly why the IMF should NOT be getting involved here.

Making this into a technical issue of coverage or method and not an issue of systematic fraud and abuse will cover the government's tracks and protect it against potential lawsuits by holders of indexed debt.

The Kirchners have been crapping on the IMF for years. It's hard to imagine that the organization has such low self esteem that they are willing to enable their tormenters just to get their foot back into the door.

The Grand Game! Edition--The Nation

The Nation is...well, they are even more batshit crazy than usual.

What is your favorite absurdity?

(Nod to RB)

.

Mappage!

Anatomy of unemployment over the last four years, by county.

Kobe Bean Bryant: I owe it all to Michael...JACKSON??

What a fantastic column by Adrian Wojnorowski.

Here's the highlight:

Out of nowhere one afternoon, Michael Jackson made a call to the irrepressible and isolated Kobe Bryant, and so much changed for him. From a distance, the King of Pop could sense so much of his own obsessive genius within the prodigy. Bryant was the 18-year-old wonder for the Los Angeles Lakers, and no one knew what to make of a restlessness borne of a desperate desire for greatness.

“He noticed I was getting a lot of [expletive] for being different,” Bryant said.

They would talk for hours and hours, visiting at Neverland Ranch, and Bryant has long been fortified by the lessons Jackson instilled about the burden of honoring true talent, about the ways to open your mind to be smarter, sharper and insatiable in the chase.

“It sounds weird, I guess, but it’s true: I was really mentored by the preparation of Michael Jackson,” Bryant told Yahoo! Sports.

Bryant isn’t much for nostalgia and sentimentality, but it hung in the air as he cut into his steak over dinner recently in the fourth-floor restaurant at the Graves Hotel. Jackson is gone, but Bryant is going on 15 years with the Lakers.

“We would always talk about how he prepared to make his music, how he prepared for concerts,” Bryant said. “He would teach me what he did: How to make a ‘Thriller’ album, a ‘Bad’ album, all the details that went into it. It was all the validation that I needed – to know that I had to focus on my craft and never waver. Because what he did – and how he did it – was psychotic. He helped me get to a level where I was able to win three titles playing with Shaq because of my preparation, my study. And it’s only all grown.

“That’s the mentality that I have – it’s not an athletic one. It’s not from [Michael] Jordan. It’s not from other athletes.

“It’s from Michael Jackson.”


I don't think I'll be able to get the smile this gave me off my face all day.

Advice to Grad students: get Hitched!

Interesting paper from Cornell. Here's the abstract:

Using data on 11,000 graduate students from 100 departments over a 20
year period, I test whether graduate student outcomes (graduation rates, time to degree, publication success, and initial job placement) differ based on a student’s gender and marital status. I find that married men have better outcomes across every measure than single men. Married women do no worse than single women on any measure and actually have more publishing success and complete their degree in less time. The outcomes of cohabiting students generally fall between those of single and married students.

Wow!

Markets in everything: Holiday gift card edition

Mrs. Angus suggested I title this post, "for the woman who has everything"! But I figured, why be sexist?

TSA will kill three planeloads of Americans in next few years

TSA is killing us. Yes, I recognize that the post-9/11 driving craze was because planes were not safe ENOUGH.

But let me put it this way: Instead of looking for bombs, we should be looking for terrorists.

The underwear bomber had a bomb in his underwear. And we had information, from the guy's own DAD, that the kid was a terrorist.

So our conclusion is that we should do a little profiling, and focus on people who have spent time in Yemen, and who are FAR more likely to be terrorists?

No. Our conclusion is that we will assume, as a matter of policy, that all people are equally likely to be terrorists, and put all our effort into looking for bombs.

At a minimum, it seems to me that you want to equate the marginal safety productivity of the two types of investment. This podcast gives good evidence we are failing the basic "equate at the margin" condition for Pareto optimality.

The point being: I don't object to security at airports. But we are overinvesting in airport security, and underinvesting in intelligence. Ditch the scanners, and spend that $20 billion on intelligence. And, yes, profiling.

The problem is that air safety is a constraint, not the objective function. We want to minimize cost of air travel, and maximize convenience, choice, and comfort, subject to the constraint that there are no bombs or terrorists on board. So we should be arguing about the trade-offs between cost and comfort/convenience. Instead these Niskanen-esque bureau-bozos are frantically trying to MAXIMIZE air safety, so they can increase their budgets. It's public choice 101.

UPDATE: George Will makes the right points.... "What the TSA is doing is mostly security theater, a pageant to reassure passengers that flying is safe. Reassurance is necessary if commerce is going to flourish and if we are going to get to grandma's house on Thursday to give thanks for the Pilgrims and for freedom. If grandma is coming to our house, she may be wanded while barefoot at the airport because democracy - or the equal protection clause of the 14th Amendment; anyway, something - requires the amiable nonsense of pretending that no one has the foggiest idea what an actual potential terrorist might look like...The average American has regular contact with the federal government at three points - the IRS, the post office and the TSA. Start with that fact if you are formulating a unified field theory to explain the public's current political mood."

Big ups to Mungo

Over at MR, Tyler has a lengthy homage to Timur Kuran.

Timur is joint in polisci and econ at Duke.

You know who was instrumental in getting him there?

Mungowitz!

Well done, lad.

Two wrongs don't make a right

I agree with Tyler that the TSA's obsession with American genitals is not the worst thing our government is doing in the war on terror.

Warrant-less wiretaps, renditions, torture, assassinations, civilian deaths are all clearly worse, and I am strongly opposed to all those things.

But that doesn't make the TSA policies right, and it doesn't mean I cannot or should not rail against them.

That's the part of his argument I don't agree with.

HP Printer: It doesn't work, he doesn't pay

So, his HP "All in one" printer didn't.

Print, that is. So he asked HP for some assistance. But HP insisted he should have to pay for tech service, even though should still have been under warranty.

So, he went all Mungowitz on its ass!

(Two people sent me this video. Can't imagine why...)

Article on "Security"

Nice article on TSA "security" checks.

It's the costly signal thing, as I have argued elsewhere. There is no actual content to the searches.

I was trying to explain it to a kid at Duke. I think it's like Nyquil. Nyquil tastes bad on PURPOSE. Given two identical (save for taste) cough medicines, people choose the one that is tastes bad, assuming it must be stronger. Nyquil has secured a niche by tasting like battery acid, ON PURPOSE.

And now TSA is trying to win us over the same gentle way. You gotta be cruel to be kind. Some fun ideas for messing with the man. MARCO!

(Nod to @lauraleslie for the 2008 article)

Mappage!

Very cool map of US political history, by my boy D. Sparks.
His description of what's going on, on his web page.

Grand Game: NYT Ed Page

This is a remarkable piece of innuendo.

Let's play the Grand Game! What is the most nonsensical, unsupported assertion here in the op-ed?

For me, it's the claim that "Wall Street" and "Republicans" are on the same side. If you look at the contributions to Obama, and the contributions for the past decade to Barney Frank and Chris Dodd, that is a LOL miscue. And that is just what was disclosed: Goldman basically bought its own bailout, by paying off Obama and his boys.

Even Michael Moore got THAT part right (I was screaming and laughing during the movie, because the smackdown on Dodd and Frank was so brutal!)

Sufjan Stevens has lost his marbles!

Check out this performance where he appears to be wearing a ton of cut up post-it notes on his body (and to have badly failed a modern dance class):

The performance is part David Byrne, part Parliment/Funkadelic, part IDM, but I have to admit the song is actually pretty good.

People: Do NOT eat Wheaties!!

Because from what I learned today, they make you very, very, very dumb.

Let me break it down for you. First, Tyler sends me to a Brad Delong post about medicare. Then I see a link to another Delong post called "Joe Klein has really eaten his Wheaties today". Intrigued, I checked it out, only to come to the horrifying discovery that Wheaties must be really bad for your brain.

Here's Klein:

Perhaps it isn't a coincidence that so many of the people whinnying the loudest are prominent members of the financial community, the sector that has had the most to do with hollowing out our manufacturing base....

People, you just know that this bizarre claim is submitted without any evidence or proof! It's a real head-scratcher. The Goldman-Sachs destroyed our manufacturing sector? Really? How? This is nuts.

Here's more Klein:

There is, for example, Glenn Hubbard, who was featured on the New York Times op-ed page recently in defense of the deficit commission, describing the problem this way: "We have designed entitlements for a welfare state we cannot afford." This is the same Glenn Hubbard who served as George W. Bush's chief economic adviser when Dick Cheney was saying that "Reagan proved deficits don't matter." One imagines that if Hubbard was so concerned about deficits, he might have resigned in protest from an Administration dedicated to creating them.

Wow. First, one can easily and logically consistently believe both of the following: (A) Our entitlement programs are unaffordable and (B) deficits don't matter.

Saying entitlements are unaffordable means you want entitlement spending cut. It's the SPENDING THAT MATTERS. Deficits, to a first approximation are future taxes so, yes one could hold the view that, while deficits don't matter, spending does, and the future path of our entitlement programs put us on a path to too high spending.

I am an example of someone who believes both (A) and (B) above, so is Milton Friedman.

Look, I am not a Glenn Hubbard fan by any stretch of the imagination, but there is really nothing necessarily hypocritical in simultaneously espousing the two views being attributed to him by the wheat-and-milk-addled Klein.

The last bit, that anyone who didn't resign from the Bush administration has no legitimate standing to discuss future entitlement spending, is just plain asinine.

People, Brad is a smart guy, so I figure he knows Klein is full of it. Thus I view his post as an elliptical, but important PSA on the ill effects that Wheaties have on brain function.

Thanks Brad!

I just picked out Mungowitz's Xmas present!

More info here.

Merry Chistmas Mr. Mungo!

Answering your questions about thesis defenses

Yes, people, they really do involve snakes. Please read the whole thing, but here is one crucial part:

Q: Would someone who wrote a bad thesis and defeated a large snake get the same grade as someone who wrote a good thesis and defeated a small snake?

A: Yes.

Is Tyler Cowen an Exhibitionist?

Judge for yourselves people:

Check out this tweet, and this one, and this one (the last was a re-tweet by TC), and this blog post, and this one too.

When I contacted him for comments before running this story, Tyler said:

"In my view in the long run better scans mean fewer pat-downs!

I would encourage people to start by calculating the "p" that, twenty years from now, the major airlines get nationalized. Work backwards from there and compute the liberty-maximizing policy."

I, on the other hand, would encourage people to calculate the "p" that, twenty years from now we all have microchips implanted in our body that allow the Feds to track all our movements and conversations. Working backwards from there and computing the liberty-maximizing policy might lead to a differing conclusion than does Tyler's thought experiment!

Don't Blame the Police

This is really dumb.

But don't blame the police: it is the LAW. Cops don't get to pick which laws to enforce. I have argued this before...

So the lady in the article who says cops are wrong, is wrong.

And the lady who says, "Get rid of the chess tables" is an even bigger doofus. How is society made better off by destroying existing chess tables that are heavily used?

The problem is the stupid law. You can't even run on the grass, in the park, unless accompanied by a minor.

The thing is that the freqeuncy of child molestation or abduction by strangers has plummeted. It is NOT, simply not, an actual problem. This paper, in 2004, debunks a number of myths. And stranger abductions have gone DOWN since then.

The problem is nanny-fascist city council members, all over the country, who give in to pressure to make up ridiculous new laws.

(Nod to Anonyman)

Balling

Carville defiant on Obama comment By: CNN Political Unit

Washington (CNN) – Democratic strategist James Carville compared President Barack Obama to his Democratic primary rival and current Secretary of State Hillary Clinton Thursday, implying in rather lewd terms that Obama needs to toughen-up.
And he's not sorry for it.

"If Hillary gave up one of her balls and gave it to Obama, he'd have two," Carville said at a "Christian Science Monitor" breakfast discussion. His comment was a response to whether Obama is taking strong enough stands on taxes and repealing the "Don't Ask, Don't Tell" military policy. Carville made a similar comment to "Newsweek" during the 2008 campaign season when he compared Clinton and Obama's toughness.

"If she gave him one of her cojones, they'd both have two," he said.
He reacted to the comment on CNN's "John King, USA" Thursday.
"If I offended anybody, I am not sorry and I do not apologize," Carville told CNN's Chief National Correspondent John King.

But he also said he intended the comment to be a joke. "Of all the things people say about the president, I think this is fairly mild," Carville said. "I repeated a joke I made in the campaign."

(Nod to the Blonde)

Piling On: Leave the Beast Alone

This is unfair. I am happy to enjoy making fun of President Obama for doing stupid s**t, but how can we blame him for taking security seriously? The tone of this story is just out of line. The "symbol" of riding around in little roller skate cars is not the point of the summit. The press is wrong, here. (And I say this as an experienced limo driver myself...)

However, it does reflect that President Obama has become our new Jimmy Carter. Just a joke, a clown. Not entirely his fault, by any means. Even Charles Krauthammer is saying that the press is "silly and vindictive," for heaven's sake.

Can you believe that just a year ago the slobbering Euro-weenies were giving this guy the Nobel Peace Prize? Now they hate him because he doesn't ride in SmartCar. Oh, you fickle Euro-weenies!

Assault rifle: Good ; Nail clippers: Not so fast

It's a meme now: TSA is crazy. May or not be true, but the meme is fully viral.

Like this... Nail clippers? One guy with nail clippers is going to take over a plane also occupied by 200 veteran infantry troops? An M-16, even without bullets, is plenty of club to face down a vicious nail clipper wielder.

(nod to the Blonde, who said she laughed so hard she snorted)

Even Canada Thinks We are Hilarious

When Canadians are laughing at you, and they are RIGHT, then you are in sad shape.

Markets in everything: Canned goods edition

I can't decide which is funnier; "quality guaranteed" or "in tomato sauce"!

BFFs

Today in Moscow, Prime Minister Putin and President Medvedev appeared at a joint news conference:

"Has the Ben Bernank ever run in an election?"

No but he has a nice beard!

People the first three minutes of this video are pure gold:

Fail Contest:: Biggest Fail?

Who is the biggest fail? The keeper or the forward?
To me, this is an allegory. The keeper is the Republicans, failing to make even a cursory effort to protect budget stability.

And the idiot striker who strikes out is the Pelosi-Reid congress, missing the open goal and just doing stupid stuff.

Waddya think?

Appropriations Committees: Nein, danke

Wow! People are turning down Appropriations Committee assignments? That's pretty amazing....

(Nod to @tofias)

KPC solves your problems

Mungo and I have been deluged by emails from KPC readers aghast at the Feds banning their favorite beverage, Four Loko.

Fear not, people. Behold: DIY Four Loko!!

You sunk my battleship!

Wow! KPC friend Will Wilkinson scores a bulls eye. Please read the whole thing but here's a teaser to get you going:

"When it comes to macro policy, talk of bounded rationality, animal spirits, and the like is mostly just handwaving used to justify a retreat to "old-fashioned hydraulic Keynesianism" against the dominant stream of professional opinion when doing so suits one's ideological predilections."

How to evaluate the Fed

My friends Larry White, George Selgin and Bill Lastrapes have a new paper claiming the Fed has been a failure. They look mainly at US macroeconomic performance to make this claim.

However, I think any realistic evaluation of the success or failure of the Fed would have to look at reelection rates of incumbent politicians!

A novel idea

Wow! The NY Times had an epiphany and announced that economic growth might actually serve some useful purpose; it could reduce the deficit!

Very open-minded of them. I can just picture the editorial meeting where the writer fought for his story: "See, growth isn't all bad, it can at least raise government revenues."

Sadly, their ideas for "cultivating growth" all involve the government doing more things like "reforming" the tax code and "investing" our money.

One of the problems with this approach is that our government insists on investing money in things that don't have a positive economic return like "green jobs", "alternative fuels", high speed trains, and bribing Brazilian cotton farmers so they can keep paying off US cotton farmers.

The article does argue that the government should "prioritize" education and science, and I am in favor of subsidizing the production of public goods. But what has increased government spending in education actually accomplished so far? Has more money brought better performance, or a stronger, more politically active bunch of public sector union members?

Still and all, the Times saying something good about growth has to be counted as progress of a sort.

Motes vs. Beams

People, Dean Baker is quite a piece of work. He goes after people hard with what I will charitably describe as less than a fully correct analysis.

Here's another example, a post purporting to explain "Robert Samuelson's confusion on real interest rates:

In an economy operating below capacity, it would be desirably to have very low real interest rates to boost investment. This means that the cost of borrowing is low relative to the return on investment. Because interest rates can't go negative, it is impossible for real interest rates to fall as much as would be desired given the weakness of Japan's economy. It would be ideal if it could keep its nominal rates at their current near zero level, while inflation rose to 3.0 or 4.0 percent.

The other reason why inflation would be desirable is that it would allow homeowners to get out from under their debt burdens. If wages rose 3.0-4.0 percent annually in step with inflation, the burden of a fixed mortgage debt would be eroded through time. Also, if house prices rose in step with inflation, consumers would gain equity in their homes.

Excuse me for a moment.....

[AAAAAAAARRRRRRGGGGGGHHHHHHH!!]

Thanks, now I feel a bit better. I think I may even be able to make a couple comments.

First, if the real rate is negative, then investment projects with a negative return may actually be "profitable". If the real rate is -4%, then a project with a -2% return "works". Strange way to rebuild an economy, no?

Second and more importantly, the most widely used model of the real interest rate is the Fisher equation which states that the nominal rate is equal to the required real rate plus a premium for expected inflation. It is beyond bizarre (but sadly not uncommon) to assert that inflation can rise significantly without nominal rates also rising.

Third, if inflation rose in a predictable manner, mortgage interest rates would rise as well (see point two) and there'd be no "savings" on new mortgages.

Fourth, to the extent that inflation was unanticipated, yes, borrowers would gain. But this is a zero sum game. Lenders, who after all are people, consumers, and voters too would lose an equivalent amount.

Fifthly and finally, as for how inflation builds home equity, all I can say there is WTF??? Housing is in the CPI. If all prices go up 3% how is the real value of your home increasing?

People, I am fine with trying a little bit of inflation here in the US of A. There are tons of idle cash sitting around, inflation is a tax on holding money, so maybe peoples will spend more. I don't think QE2 is the first sign of the apocalypse. But, even if it works to the specifications of its most ardent supporters, it's not going to come close to solving our problems.

Interesting Video

I don't think there should be laws against anti-gay hate speech, or bullying. A teacher is obliged to protect ALL students from abuse and threats. A classroom has to be safe, and to feel safe. Singling out gay students for special protections will make the problem worse.

This video is impressive. The kid is quite a speaker.

But the article raises some questions, to me. First, no Confederate flags? Really? In my high school, that would have meant sending about half the kids home. Even the women. Yes, it would have. There were lots more Confederate flags than U.S. flags on jackets, pockets, and so on.

Second, "the" home of the KKK? Nice that we have those dangerous maniacs segregated off into one small town in Michigan, but my impression was that the problem was somewhat more widespread, frankly. It's hard to prove a negative, but it appears that the headquarters of the Michigan KKK was near Howell, emphasizing the "WAS." If you are really worried about hate speech, perhaps you shouldn't go making up blatantly false stuff about Howell, MI.

Finally, what is the procedure for expelling a kid? I don't see why the teacher would be a hero for just telling the bully / problem kid to "get out of my classroom." Sure, it's a hassle to follow the rules. But the 14 year old kid who was told to "get out" is in school because the law forces him to be there. You can't just let him wander the halls. If the teacher was suspended for ignoring the rules on suspensions, then I have to say the suspension is consistent with standard practice.

So, two cheers for the teacher. And three cheers for the kid in the vid; good advocacy, and well done standing up to bullies that way.

(Nod to Anonyman)