Definition of Irony

A Greenpeace representative just came to my door bundled up in gloves, beanie, down parka with fur-lined (fake, of course) hood, the works! He was gathering signatures for a petition for.......

You guessed it. Global warming!

I know, I know. This is hardly evidence against climate change. But you have to admit, it is....well, ironic.

It's always dangerous when I talk about health care

There's been a fascinating discussion going on at Megan McArdle's blog today about the connection between drug innovation and a free market health care system. To me, this is the absolute heart of this issue. When I look at health care, I think any system (public or private) should focus on the following:

1. Ensuring that everyone has access to a good standard of care, both emergency and preventative. As government resources are directly expended toward that end, they should go to the following: the poor and sick, the poor, the sick.
2. Ensuring a system where people are free to acquire a standard of care above the 'good' standard if they are able
3. Ensuring that medical advances are incentivized
4. Ensuring that important medical advances necessary for a good standard of care are available widely

There are 2 major problems (for me) with these priorities: what is a good standard of care? How do you balance medical innovations with affordability?

Personally, I don't care if we have a public system or not. It appears to me that a purely private system simply cannot meet conditions 1 and 4. It appears to me that a purely public system cannot meet conditions 2 and 3. Therefore it seems that either I need to pick among 2 pairs of optimal outcomes, or there needs to be an alternative system. So what is the alternative system? Is it possible to have a system like college? Bear with me a second, this just ocurred to me today, but if you were to ask me what is important about a high education system, I think I might say the following:

1. Ensure that everyone who wants it has access to some standard of higher education
2. Ensure that colleges and universities continue to make their faculty/school services better
3. Ensure that people should be able to get a higher level of higher education if they're able to do so

Admittedly, there is no corralary for my health care #4 point, but aside from that I think it tracks. The obvious difference is (I think) that risk/merit is much more easily signalled through fair methods in education and that there is an incentive for good colleges to take in students who cannot afford their tuition. There is no incentive for insurance companies to take in even really healthy people if they can't pay premiums. There are many other huge differences as well, but I do wonder if the higher education system in this country (which I believe is generally regarded as the finest in the world) might offer some suggestions as to how health care could be provided. Or is this the stupidest thought ever.

Degree of Stimulus

The Fed cut interest rates by 75 basis points last Wednesday. Around that time there was speculation that a single rogue trader from Societe Generale, a French bank, was responsible for market volatility immediately preceding the Fed rate cut (volatility starting Friday, into Monday and Tuesday, the rogue's losses were finally announced Thursday I think). But the Fed has had time to evaluate whether that factored into their decision, but rather than indicate that in any way, they have decided to lower rates by an additional 5o basis points.

Reducing rates by 1.25% over 8 days is unprecedented. And considering that the Fed is an independent agency of the government (not under the control of Congress or the President), it is highly unlikely that they are using monetary policy for any political goal. Is it possible that officials at the Federal Reserve are looking at data-- unavailable to the public-- that suggests that we are headed for a recession that looks a lot worse than we currently imagine?

Point of Order

The state governments of Michigan and Florida moved their primaries up to January, defying a Democratic rule that allowed only New Hampshire, Iowa, Nevada and South Carolina to vote in January. As a result,
Democratic candidates have been all but forbidden to campaign in these two states. Why?

I don't understand. It sounds as if the DNC is acting like a defied child, establishing useless rules. Are there stated reasons that it cites for allowing Iowa, New Hampshire, Nevada, and South Carolina to go first? It doesn't make a whole lot of sense.

Lamenting the never-ending campaign cycle some 16 years ago (when it was months shorter) a researcher at Harvard's Shorenstein Center on Press, Politics, and Public Policy suggested that we have a single, national primary day. Can someone tell me why this doesn't make a whole lot of sense? There are some really significant problems in this country that derive from placing states like Iowa on a pedestal (such as our fascination with ethanol). Why is the DNC standing behind such madness? Surely there is a good reason.

Giuliani to Concede?

I will sleep well tonight. I appreciate that he is on the liberal side of some social issues. But I also think he is just plain crazy.

Also-- it looks like John McCain has a hot daughter. Check out the link above.

Stimulus Dust-up at LAT

DRH and KLR had interesting posts recently about the stimulus package now being considered by the senate. Steven Landsburg of the University of Rochester and Jason Furman (of Brookings) have had a series of three debates about the stimulus concept this week in the LA Times (here, here, and here).

It has been fun to read, and it makes me proud to have Landsburg's Price Theory on my book shelf (thank you first to David Hunger for assigning it, and then to the GU bookstore for refusing to buy it back). I am very skeptical of the stimulus package for a couple of reasons, but primarily because it is deficit spending-- as KLR has said, it is nothing but a transfer of wealth from future generations. I found Furman's posts to be frustrating at points. He tried to manipulate Landsburg's arguments but only awkwardly bastardized them; he didn't actually make effective use of them to draw a compelling line of reasoning (example: his discussion of how Landsburg would respond to the multiple choice question).

Unsung Heros

Here is a fascinating post over at Café Hayek. It refers to an obituary of Viktor Schreckengost, a virtually unknown artist and capitalist. Russ Roberts salutes Mr. Schreckengost for doing more to improve the welfare of the average American—particularly lower income Americans—than any politician you can name.

I actually learned about Schreckengost in my Art 101 class at Oregon State. It is, perhaps, the only thing I retained from the course, which I earned a C in.

Roberts heralds the man as an unsung hero. Good for him, I say. But he is said to have contributed over $200 billion to the economy and I’m sure he was amply rewarded for his contributions. That’s the beauty of markets. Do something to help me and I will give you my money.

The politicians Roberts refers to, on the other hand, mostly lack the innovation to be successful in the economy so they must seek the fame, power and profits available in the political sphere. Do something to help me (or more often, just convince me that something you might do might help me) and I will give you my vote.

Which do you think are the more noble incentives?

I might be the most stupidest person with a college degree

I don't recall ever seeing the plural of Mr. in print before yesterday. WSJ has been using it a lot in reference to the pool of Republican presidential candidates. I think I read it twelve times in the last 24hrs before realizing it wasn't a crazy typo that kept getting repeated. I really thought I was a victim of some sort of conspiracy for awhile.

I am NOT smart. Please, someone take my diploma away before I hurt myself.

Where's the Beef?

I just want to point out this article in the NYT. I think some *interesting* points are made. But my favorite is when a better alternative to confined feeding operations—which the author very impartially refers to as “factory farms” who “grow” meat—is offered:

Longer term, it no longer seems lunacy to believe in the possibility of “meat without feet” — meat produced in vitro, by growing animal cells in a super-rich nutrient environment before being further manipulated into burgers and steaks.

Mmm. Mmm. Good.

I think our food supply is probably the single issue on which the average person--on both sides--is most blissfully ignorant and/or furiously delusional.

My Favorite Post- State of the Union Quotes

#1. Man on the aisle after the speech: “Mr. President, I just had one question. How do you give a rebate to someone who never put in a bate?”


#2. Kansas Governor Kathleen Sebelius giving the Democratic response: “In this time, normally reserved for the partisan response, I hope to offer you something more”….then proceeds to give an entirely partisan response.


#3. Mitt Romney: “Here is a President who served our country for seven years and can now speak from the heart without a thought about his political future.”

My roommate: “Yeah, he couldn’t even get elected to school board.”

My Second Animal-Related Post Today

Yeah. This one is worth a watch. Make sure you can hear it too. That's live TV for you.

Brazen Dumbasses

Two men in Florida were arrested for violating the Endangered Species Act. They were trying to fish for manatees. How were they caught? They posted a video of their adventure on MySpace.

A Quick Clarification

The media keeps referring to the economic growth plan as “a large tax cut”. Just to be clear, deficit spending is NOT a tax cut. It is a tax transfer from the present to the future. If I borrow $10 from a friend I don’t call it “income”.

Books that Make you Dumb

Here is a clever and entertaining idea--plotting the top 100 most popular books on facebook against SAT scores. Notice the smartest people read Atlas Shrugged and Freakonomics. Coincidence? I don't think so!

Who doesn't like a little stimulation?

I am going to attempt to answer DRH’s questions on the fiscal stimulus. I’m responding in a post rather than a comment because, well, comments are overrated.

Now, I’m no expert; my opinions are really just an aggregate of the blog personalities who I respect (mostly out of GMU) and my limited economic intuition. On the other hand, this blog is semi-anonymous so…f*ck it, I AM an expert!

Starting from the bottom. There are MANY reasons why food stamps are colossally bad policy on both ethical and efficacy grounds. The question posed, though, is: “Why are food stamps—intended to generate increased food purchase—an ineffective way to stimulate the economy?”

The point of long-term growth policy is to increase the productive capacity of the economy. The point of a fiscal stimulus is to increase consumer demand to utilize productive capacity that ALREADY exists, spurring increased output and more jobs. Megan McArdle is making the argument that, in the short-term, the ability to produce more food is limited. This is just the nature of agriculture production. If a food stamp goes to purchase a porkchop or loaf of bread, I can’t manufacture another pig or suddenly whip up a new bushel of wheat. This is what Megan means when she says purchases will just “draw down perishable stocks rather than generating new economic activity.” Of course, the economic activity will not be zero, but it will be lower than if the funds had gone toward some other good. Maybe food stamps are fungible and the spending WILL go toward other goods…but, then why the hell are we handing out food stamps in the first place?

Back to the original question: “Why is a fiscal stimulus bad if it is ineffective and pointless? Shouldn’t the government do SOMETHING?”

This seems like a very dangerous line of reasoning. Why NOT change the oil in my car every 500 miles? Why NOT water my lawn in the winter? The bigger picture answer is that resources are limited and seemingly harmless action can have unintended consequences.

But let’s assume for a minute that there is virtue in action just for sake of action. If that’s true, then why a $146 billion stimulus? Why not a $300 billion stimulus? Why not a $100 million stimulus? Why not do a rain dance and pray for economic recovery? My guess is your objections would be, respectively, (1) We can’t afford that large of a stimulus, (2) That small of a stimulus is the same as doing nothing, (3) You're being stupid.

Well, the first response demonstrates that a fiscal stimulus is not costless. A large deficit, bureaucratic leakage, and misguided distortion of an otherwise generally healthy economy are just a few of the costs. So, if doing SOMETHING is ineffective and costly, wouldn’t it be better to NOT do something?

Response #2 might actually be the best policy. If a stimulus is ineffective and costly, then why not do nothing, but convince the public that you are doing something. Some would argue that this is exactly what is going on--$146 billion just seemed like a convincing number. In fact, an even better policy might be to promise a large stimulus and then never send any checks. Politicians know best and people are stupid, no one will ever notice!

As for #3, well, it is SOMETHING and you asked the question.

This is all very facetious. I assume the real question is, “Isn’t it the job of the government to restore and maintain confidence in the economy.” This, I think, is an excellent point. Unfortunately, incentives in politics and the media guarantee that will never happen in an honest way. The media needs something to talk about during the troughs between celebrity drug overdoses. And politicians can’t lose! If there isn’t a severe recession, they can claim to have helped avoid catastrophe. If there is a recession, they can claim to have done everything they could and that it could have been much worse.

Ideally, politicians, wonks and the media should stop demagoguing the issue. The CBO and prediction markets are now anticipating a year of slow, but not negative growth (around 2%) and a small increase in unemployment (to about 5.1%). If this news made its way to the public, it would accomplish a great deal toward restoring consumer confidence and likely do more to stimulate the economy than any level of government spending. Delivering this news is the SOMETHING that should be done. We are not IN a recession and this economic downturn is likely to be mild.

If this were not an election year, the SOMETHING would be NOTHING. Sad and ridiculous.

Tax Reform

Disclaimer: I'm about to delve into an area that I don't know an awful lot about.

Greg Mankiw wrote today about John McCain's commitment to reforming the tax code by working with the bipartisan Advisory Panel on Tax Reform's recommendations (report here). In concept, it sounds like a great idea to me.

Prof. Mankiw suggests that 90% of economists would support the changes proposed in the commission's report, which I have no reason to doubt. However, I don't think it will get the same support from taxpayers and politicians mainly because of what the Advisory Panel suggests be done with the home mortgage deduction. Currently, home mortgage deductions are available only to those who itemize, and for interest up to $1.1 million of mortgage debt. Under both proposed systems, there would be a home ownership credit equal to 15% of mortgage interest paid. It would be available to all taxpayers, but the size of the mortgage would be "limited to average regional price of housing (limits ranging from about $227,000 to $412,000)."

Our current subprime mortgage problems stem from the fact that with interest rates low, people unfit for standard mortgages were able to afford homes (temporarily!). As I understand it, home ownership (which has historically hovered around 65% of the nation's population) rose to about 75%, which suggests that 10% of us owned homes that maybe we really shouldn't have. Not all of that extra 10% or so have/are going to default on their loans. But I bet that nearly all of them have been planning on the mortgage interest deduction. And I bet almost none would prefer tax simplification to tax advantage. Is it conceivable that the simplification plans would benefit the average homeowner (with somewhere on the order of $220,000 debt) enough to offset the difference in the home mortgage interest deduction?

I understand the distinction between tax deductions (the current system) and credits (the two proposals) is important, but even with a credit under the new system, I believe the difference remains rather stark. I looked in the report for more details about the change to the home mortgage deduction, but I couldn't find discussion past the executive summary.

Has anyone studied tax policy? I think GPPI offers a course, but I certainly (obviously?) haven't taken it.

Stimulussing

I have to admit that I have only followed the economic stimulus package from a distance. I’ve read posts editorializing on the good and the bad of the package (mostly bad from the blogs I frequent), but much less which simply describes what is actually in it. I write this in the hope it will provide some context if what I’m about to ask is really stupid. In short: I don’t really know what I’m talking about.

That being said, my question is this: I totally understand how the new stimulus may be ineffective and pointless, but why is that so bad? Giving tax payers $600 may not do anything to address in the short term the causes for the fiscal slowdown/recession/whatever, but so what? I think we can all agree that your average American is concerned about the economy. It’s also fair to say, that they would like government to do SOMETHING about it. From what I can tell, the people criticizing the stimulus approach are basically saying we should just wait it out, or undertake some changes with a long-term focus. However, I’m just not sure if that’s politically feasible. I also think there really could be some value to reassuring some Americans that something tangible is being done to actively address the economy.

And while I understood in the abstract that throwing $140 billion dollars at a problem when we have a good sense that it probably won’t fix the problem is not good public policy. But I also believe that it’s also not good public policy to let your average citizen think that we’re careening headlong into a recession that will primarily impact the middle and lower class and that government isn’t doing anything about it.

One last question. From my understanding, as of now the package does not include expanded food stamp benefits. In a post today Megan McArdle listed some reasons why such an inclusion would be a bad idea. I understand (though am not totally convinced) by all her reasons but one. I don’t understand this one:

The limits on the type of goods available to food stamp consumers, and the growing season, mean that some (it's hard to say how much) of the food stamp spending will simply draw down perishable stocks rather than generating new economic activity. Eventually this will probably generate more economic activity, but probably well after your stimulus is needed.

I just don’t get that – it strikes me as total crap (again, not the argument that increasing the benefit is an ineffective stimulus), but I may just not be understanding what she is saying.

My hands are covered with time

My Work Computer is Like an Old Person
By DRH

I have named my work computer Elmer. I have chosen this unfortunate moniker not because of any love for the name Elmer or because I wish to demean and degrade my work computer. No, Elmer is my work computer's name because my work computer shares so many characteristics with your average old person. And Elmer is an old person's name. "But wait!" I hear you gasp, "Elmer may be slightly older than the average work computer, but the similarities with an older person must end there!" But no, you don't know Elmer. You see this has nothing to do with Elmer's physical age; it has everything to do with Elmer's temperament and habits. We'll start with the obvious:

1. Elmer is grouchy and stubborn – Care to open a pdf file? Elmer doesn't like pdf files. Yes, Elmer will let you open it, but only after flashing an incomprehensible warning across the screen. And Elmer won't move any further until you let Elmer know that yes, you got his warning about pdf's and you STILL (foolishly) want to read your pdf.
2. Elmer likes to take things slow – Oh, Elmer will close windows and documents, but don't rush him. Elmer likes to move at his own speed. So if it is 4:50 and you want to successfully close out all your applications by 5:15, well too damn bad. Elmer will not be rushed.
3. Elmer has strong and irrational prejudices – Elmer hates California. I've never been able to get at the root cause for this intense loathing of Elmer's, but every time I go to the state of California's website, Elmer reacts first by freezing his screen with rage. When Elmer gains enough control of himself to act, he cruelly closes down every open Internet window I have. In my time working with Elmer, I have learned it's best to just leave California alone.
4. Elmer needs an afternoon nap – Everyday, like clockwork, Elmer gets a little crankier than usual around 2pm. He starts forgetting things; he starts to make weird noises; and he starts to do things that just don't make sense. You see, Elmer needs a nap. After turning Elmer off and restarting, he's good to go again, but without his afternoon nap, Elmer's old agey-ness really begins to show.
5. Elmer distrusts and fears new technology – Elmer is old-timey, and as such is made very uncomfortable by new-fangled technology. Elmer does grudgingly coexist with "the interweb" (as he calls it), but that's about as far as it goes. Youtube? Radio on the Internet? Java script? Thank you, no (Elmer crankily says). Elmer doesn't understand them and Elmer doesn't work with them.

Makin' Music

It was revealed to my American friends some time ago that in my mis-spent youth in New Zealand I was in a rock band... actually more like a death-metal band, but whatever.

Last week, having not heard our band's music since circa 1998 (we were teen rockstars), our first (and last) demo recording appeared on the interweb (that's the cover above, printed in glorious dot-matrix).

If you wish to be subjected to our sweet, sweet music you can download one song (that's probably going to be enough for now) on this blog.

Enjoy!

For the Three of Us Reading

The book discussion has started over at Marginal Revolution. The first post is from Bryan Caplan, author of Myth of the Rational Voter.

I'm mid-way through the second chapter and, so far, it is an interesting read--engaging, etc.--but the market is pretty saturated with similar "economics is SO shocking" content that I can't help but feel that this is the same old story. This could also be because I mostly accept rational choice theory.

Google Reader

I use Google Reader to collect all of my favorite blogs in one easy to read place. However, a couple of the blogs only display the first two or three lines in Reader; I have to visit the actual site to read any more of each post. Does anyone else have this problem? Is anyone aware of a way around it?

Instrumental Variable

While I think that GPPI's quant track could probably be condensed into two semesters, I find it gratifying when I read about statistical techniques that I would not otherwise understand without having had quant 3. That was certainly the case when I found the following passage in Paul Collier's new book, The Bottom Billion. In a discussion about what makes a country prone to civil war, he mentions research he has done with a colleague looking into whether economic growth is correlated with civil-war-risk. Without using the term "instrumental variable," he indicates that it is one of the techniques they used in their model:

On this point, one might ask whether we have the causality backward-- might it be the case instead that it is the anticipation of civil war that causes decline? After all, when a civil war looks to be in the cards, investors flee, and the economy declines. It looks like decline causes war, but actually it's the anticipation of war that causes decline. This objection can be dealt with by looking at a factor that affects growth, but has no direct connection to civil war, and seeing whether the subsequent effects make civil war more or less likely. In low-income countries rainfall shocks (too much or too little rain) affect economic growth, but they do not directly affect the risk of civil war-- that is, prospective rebels do not say, "it is raining, let's call off the rebellion."

Evidently this work has been very controversial. He takes great pains to stress that the model can not and should not be used for predictive purposes, but rather to understand the risks that face countries with long-term stagnant economies.

Fox News

I find Bill O'Reilly excruciating. In fact, I pretty much find all of Fox News unwatchable. I should say that the same holds true for left-wing blowhards, so it's not necessarily a bias problem. Tonight I couldn't help watching that channel, though (I was at a friend's house, and it was on in the background).

Today the Fed lowered interest rates by 75 basis points, the stock market plunged something like 5% before rallying most of the way back, and the only things Fox News would talk about for nearly three hours were the details of Heath Ledger's tragic death. THE ONLY THING.

I remember being in Grand Central Station a few months ago on the day OJ Simpson was arrested for breaking into a hotel room to steal old mementos. That was all Fox News could talk about for an hour or two (I was waiting a LONG time for a train).

Fox News surprises me in that I am always unprepared for how much I can abhor it.

Climate Debate Daily, et al.

I don't have the time or knowledge (or, frankly, the interest) to closely follow the climate debate, but I find this new website refreshingly well-balanced. (HT: Kling at EconLog)

Arnold Kling also peels away some layers of a post by Gary Becker on the black-white gap and draws the following analysis. I think it's not quite this simple. But the claim is that "the gaps...would decline", not disappear.

What he is saying is that the white-black gap reflects a capitalism-socialism gap. Too many blacks are caught in a socialist trap of government schools without choice, drug laws that create economic opportunities for criminals, and so on. He believes that if blacks were brought into the capitalist system, then the gaps between blacks and whites in terms of education and income would decline.

Electing Advisors

To paraphrase Spencer Ackerman on this Bloggingheads:

What a candidate says on the campaign trail is, at best, an imperfect guide to governance. A more direct indicator is who candidates surround themselves with.

Megan McArdle gives an interesting review of economic advisors on the presidential campaign trail. Her analysis loosely parallels my point here. Ackerman follows up on national security.

At Tombs on Thursday I made an observation about Ms. McArdle. I COMPLETELY retract that statement. I was wrong and I know when to admit it!

For the People

“By the people, for the people” is a familiar mantra. Americans are proud of our democracy, presumably, because it is the institution that assures the greatest amount of freedom for the people. But does it? What many aren’t willing to acknowledge or admit is that democracy actually GUARANTEES coercion. Often, a great deal of it.

Every time votes are tallied there is some group that loses. If a majority rules, that group could be up to 49%. If a simple plurality decides, then the group that suffers is often much larger. All democracy guarantees is freedom for roughly 50% of the population. What is the alternative?

With very few exceptions, the answer is the free market. In his characteristic simple brilliance, Milton Friedman would make this point with the “green tie analogy” (a YouTube search was unsuccessful). In a democracy, if I want a blue tie and you want a green tie, and the majority of people agree with you, then (much to my chagrin) I have to wear a green tie. Simple enough. Just let people choose their tie in a free market. Where most people lose the analogy is in realizing that markets deal in more than consumer goods. There are also markets for ideas, culture, religion, fashion, art and any other activity that involves human decision-making and choice.

Markets and individual choice is the only sure way to expand freedom; whereas, democracy is a direct limitation to freedom. Occasionally limited freedom is necessary. But once that conclusion is reached, it becomes natural to slowly broaden the definition of what justifies collective decision-making. People begin to think that because democracy works well in one instance, it must work in other similar situations. It’s very intuitive that the wisdom of a crowd and deliberate planning will achieve better outcomes than the *anarchy* of individuals acting in their own self interest. But intuition is not always correct. The slope becomes slippery and freedoms are eroded.

A post at Free Exchange is getting at this concept when it refutes the idea that we must choose between existing as “economic particles in constant collision in a material marketplace, and hence can equate flourishing with robust competition, or we can conceive of ourselves as civic beings embedded in communities, who thrive on cooperation.” It's a false dichotomy. There is a third option: “civic beings in constant cooperation in a material marketplace.”

The entire concept of democracy having a monopoly on creation and expansion of freedom and civility is utter bupkis. Markets achieve cooperation and unanimity. Applied in excess, democracy breeds conflict, coercion, and oppression.

Markets are where people trade. Trade stands second only to speech as the quintessential form of human cooperation. The competition at the heart of capitalism is a competition to cooperate on ever better terms -- a competition to offer consumers more for less.

A culture of individualism is a culture of innovation and customization. Market competitions to cooperate with consumers to mutual gain are won by constantly innovating in ways that ever better gratify individual desires.

Democracy is essentially a mechanism of conflict to which we repair when the cooperative unanimity of market exchange is infeasible. Unable to provide certain necessary goods through voluntary market mechanisms, we require a decision procedure that works on less than unanimity and an institution that can back up those non-unanimous decisions with force. A decent constitution minimizes the wasteful competition and conflict inherent in democracy by strictly limiting the scope of democratic choice to a bare minimum.

"Logic of Life"

For those interested:

"Our book forum starts this coming Wednesday, make sure you've read at least chapter one by then. You can buy the book here."

Bill Clinton is Mad as Hell

Bill Clinton’s role in his wife’s campaign is one of the most fascinating stories of the election, as evidenced by this NYT article. He’s been a pretty consistent newsmaker on the campaign trail, as one would imagine. Oftentimes the news he’s made has revolved around two criticisms:

• He is more campaigning for his legacy and his ego than for his wife;
• His periodic angry outbursts have made him a liability.

I have to say, I’m skeptical of both of these criticisms (which is not to say I’m skeptical of the media’s ability to convince a lot of people the criticisms are well grounded). For all his real and perceived faults, there has always been general agreement that Bill Clinton is a masterful politician. He has weathered many storms (most of his own making) to endure as one of the most popular presidents of the 20th Century. Given that, is it really likely that he has lost his grip on the pulse of this country so quickly that he’s fallen into two such obvious traps? Or might it perhaps be more likely that he is willing to throw himself into the middle of the campaign and expend a little of his political capital and reputation to do these things:

• Remind people how happy they were when a Clinton was president;
• Emphasize his legacy as a candidate of populist change and then point out how it his is wife and not Barack Obama that is rightful heir to that role;
• Act as the most well-respected attack dog any national candidate has ever had.
  

Maybe it’s true that Bill Clinton is like some kind of punch-drunk heavyweight who has sadly stumbled on to the national stage again to pathetically embarrass and hurt his wife’s campaign. Or just maybe, the president who only ten years ago managed to sidestep a sordid sex scandal and leave office with sky-high approval ratings, actually knows what he’s doing.

Too Drunk to Walk

New Zealand: Drunk-Mowing Charge

By THE ASSOCIATED PRESS
Published: January 16, 2008

Richard Gunn, 52, was driving a lawn mower down a street in Dargaville late Monday evening when the police stopped him and accused him of driving the mower while drunk, a police spokeswoman said. He had already lost his driver’s license and said he had since been using the lawn mower — top speed 5 miles an hour — to get around. The police impounded the mower for 28 days.

Welcome Home, Bin!

Check out this map. The 50 U.S. states have been renamed for countries with similar GDP. Note what state is representing New Zealand. (HT: Econlog)

We're talkin' Baseball (and Guttenberg)

A couple of my favorite websites/blogs have some interesting things to say:

• Ever wonder how a team can turn a triple play without ever touching the ball? John Beamer at Hardballtimes.com has the answer here, along with some other quirky aspects of out Nation's pastime.
  
• Ever wanted to read a detailed comparison of the career trajectory of Tom Hanks vs. Steve Guttenberg? Me too. Luckily, Joe Posnanski (he of The Greatest Blog on the Internet) has it for you.
• Did you know that Mitt Romney dislikes eggplants? Well, Wikipedia did.
  

Finally, I have a dark and disturbing confession to make: I am, in all likelihood, the least competent person in the world when it comes to voice mail. How does my incompetence manifest itself? Well, in a couple of vital areas:

1. I have a congenital inability to listen to an entire message. Check that, I have a congential inability to listen to a message past the "Hey Doug, it's X" part of the message. And I only make it that far if I don't recognize the person's voice before they identify themselves. Why is this a problem? Well it's not unless you consider the following type of exchanges somewhat annoying:

Me: Hey! You called!
Person who called: Yeah, so what do you think?
Me: (Confused) Umm...think about what?
Person: The urgent message I left you...
Me: (remembering I deleted the message after.021 seconds and have no idea what the person is talking about) Umm...well I think you raised some interesting points.
Person: My message said that I didn't get in to law school and I'm devastated.
Me: And I thought you raised some good points when you implied you're not very bright and that your life is ruined.

--Scene--

2. I leave work messages for people without indicating what I want to talk to them about.
3 (related to problem #2). I never write down what I left people messages about. This very problem reared its ugly head yesterday. Leading to this, equally awkward exchange:

Guy I called: Hey Doug, it's XXX from YYY. You had a question for me
Me: (In a panic trying to remember what I called about): Hey XXX! Good to hear from you!
Guy: So how can I help?
Me: (Having no recollection as to the purpose of my call and quickly deciding to lie) Actually, I already got that information so I think I'm all set. Thanks for the call though!

Hello, my name is DRH. And I have a voice mail problem.

StickK.com

Economists at Yale have just started StickK.com. The concept is fascinating. You set a goal for yourself (lose weight, stop smoking, kick meth...you name it). You commit a certain number of dollars and designate someone as a monitor (and, if you like, others as supporters). If you accomplish your goal you recieve all of your money back, totally free of charge. But...and here is the catch...everytime you slip a portion of your account gets donated to a charity of your choice.

Here is Tim Harford on StickK. Coincidentally Harford also authored the book MCC and I (and others) will be reading with Marginal Revolution later this month. FYI-Amazon just shipped and Slate has excerpts this week.

I think the idea behind StickK is remarkable and I will be surprised if the website isn't hugely successful. Who needs expensive weight loss programs and fancy exercise equipment when you can just log on to a website for what you really need...motivation? And, other than death, what is a better motivator than $$$. I want to come up with a goal to try it just for shits and giggles, but I can't decide which of my many failings I want to tackle first.

I also share Harford's concern that sending a few dollars to a good cause might not be appropriately negative incentive. Snoozing for testicular cancer research actually sounds pretty noble. But I'm sure if I make my financial commitment large enough there won't be a cause in the world good enough to keep me from jogging a couple times a week. Of course, as an alternative, you could select a charity or cause that you detest. For me, the risk of contributing to the DNC ought to do the trick!

Budget-Busting Proposals

I liked this article from Reason Online on the budget implications of policies proposed by various candidates of both parties.

The fact that we can't afford what the candidates propose doesn't surprise me, but I'm a little shocked at just how much we can't afford them:

According to the nonpartisan website PolitiFact, which assesses the accuracy of what candidates say, all the programs envisioned by Hillary Clinton would add about $174 billion a year in outlays. And that was before she unveiled a $70 billion fiscal stimulus plan Friday. Barack Obama, according to a November analysis in the McClatchy newspapers, has promised "at least $181 billion in new annual spending on middle-class tax cuts, health care and retirement and energy plans."

How would they pay for it all? Their prime source is repealing the Bush tax cuts for the wealthiest households. What they don't acknowledge is that those tax cuts are already scheduled to expire in 2010, helping to eliminate the deficit. But if the money is going to be used to close the fiscal shortfall, it can't be used to pay for new programs.

I can't recall having heard either Clinton or Obama talk about where the revenue to cover their proposals would come from, but it wouldn't surprise me if they were hoping we wouldn't notice that it's spoken for more than once.

Is anyone bringing these figures out in the debates, or am I just not hearing about it?

FYI-Maskin is in Town

One-third of last year's Nobel prize in economics will be at Georgetown on Thursday. Here are the details:

The Economics Department of Georgetown University invites you to a public lecture by Eric Maskin entitled "How Should We Elect Presidents?"

Professor Maskin is at the Institute for Advanced Study in Princeton and won the Nobel Prize in Economics in 2007.

Thursday, January 17th, 2008 at 11.00am in Gaston Hall.

The lecture is open to everyone who wishes to attend and will end at approximately 12.30pm

Today's WashPost has an op-ed about Maskin and his visit.

Becker and Posner on Health Care in the US

For some reason Google Reader always shows the reply post on the Becker-Posner blog before the original (the post to which the response is directed).

In any event, Gary Becker has posted several suggestions for health care reform. I would love to know what the implications are for his suggestions in terms of cost, particularly eliminating the link between employment and the tax advantage of private health insurance. I suppose Ezra Klein will let us know what those are (from the liberal perspective) before too long.

Among the other insights in the posts are good discussions of the moral implications various policy reforms. Both also address the issue of political problems with reform: namely that since the majority of people in the US wouldn't realize any benefit from reforming access for the poor, they are unlikely to support the rather staggering cost.

If you aren't familiar with the blog, it's fantastic. Gary Becker is a Nobel Prize winning economist, and Richard Posner is a modern renaissance man. He's a Circuit Court judge, a professor of law, an economist, and a highly regarded literary critic. I'm sure there is much more...

Off the Books

I posted yesterday about Steven Leavitt's new paper on prostitution in Chicago. His co-author, Sudir Alladi Venkatesh is the author of: Off the Books: The Underground Economy of the Urban Poor. It offers more insights into the off-the-books transactions supporting the economy in Chicago's ghettos. A review, by the lovely Kerry Howley of Reason magazine is here.

Like the Pinker-Venkatesh article, there are some choice excerpts. My favorite:

Take Oceana, a mother of six whose last six months of employment are a picture of elbow-greased, bootstrapping entrepreneurialism. “I picked up garbage for a guy who worked in the city and who was fucking some lady in the van and needed some time off one day,” she tells Venkatesh. “I bought some kids some beer. I always have someone who can’t leave work but who needs a bag [of pot or cocaine]. The lady at the library lets me put the books on the shelves. That minister likes me to walk on his back, or sometimes do a little more, but I’m not talking about that. Unless you paying.” Also on Oceana’s résumé: washing cars, painting houses, and minding a local store while a hooker gives the proprietor a blow job. She summarizes, “I do just about anything and everything, baby.”

The Moral Sense

Steven Pinker has an article in this week's New York Times Magazine that is pretty fascinating. I have read most of Pinker's book How The Mind Works, and enjoyed it.

Among many other ideas Pinker considers is the mechanism by which the mind makes moralistic calculations. Consider, for example:

On your morning walk, you see a trolley car hurtling down the track, the conductor slumped over the controls. In the path of the trolley are five men working on the track, oblivious to the danger. You are standing at a fork in the track and can pull a lever that will divert the trolley onto a spur, saving the five men. Unfortunately, the trolley would then run over a single worker who is laboring on the spur. Is it permissible to throw the switch, killing one man to save five? Almost everyone says “yes."

Consider now a different scene. You are on a bridge overlooking the tracks and have spotted the runaway trolley bearing down on the five workers. Now the only way to stop the trolley is to throw a heavy object in its path. And the only heavy object within reach is a fat man standing next to you. Should you throw the man off the bridge? Both dilemmas present you with the option of sacrificing one life to save five, and so, by the utilitarian standard of what would result in the greatest good for the greatest number, the two dilemmas are morally equivalent. But most people don’t see it that way: though they would pull the switch in the first dilemma, they would not heave the fat man in the second. When pressed for a reason, they can’t come up with anything coherent, though moral philosophers haven’t had an easy time coming up with a relevant difference, either.

We had this debate in ethics this fall. I don't imagine our wisdom-contribution was particularly revolutionary. But it seems that recent research explains how we make up our mind in this situation, and it has to do with an instinctual "revulsion to manhandling an innocent person." There are different regions of the brain involved in the two separate moral questions, which is evidence that moral behavior is based at least partly on biology, not just culture and values.

It's a long article, but I think it's worth the read. Here are Will Wilkinson's thoughts on it.

Obama '08

As someone who aligns himself far to the right (particularly on economic issues) of both Clinton and Obama I have recently defended why I, if forced to choose a president from the democratic pool, would prefer Obama to Clinton. The very reasonable question goes something like: "Obama is more liberal than Clinton, so why from a conservative perspective is he the lesser of evils?" A commenter at Marginal Revolution sums up my views beautifully:

Obama is to the left of Hillary. He would likely be more difficult to beat in a national election and would likely be able to implement change more effectively.

But he, unlike Clinton, is more prudent and intellectually honest.

I would add that, in my view, Obama does possess some sort of unifying and image-improving value. The benefit of this might be small and short-lived, but it is not zero. And, I would argue that the fact that Obama's experience in manuevering the political machine is nil means he would actually be less effective at implementing change. This last point might be enough to support Clinton over Obama...but not for a Republican!

Guest Contributor: JDB

You may have noticed that Ron Paul is getting exactly zero play in the media despite his Fall fundraising success. He wasn’t even invited to participate in recent debates and he’s had to defend some personal accusations lately. It’s my observation that the bulk of attitudes toward RP’s campaign in the blogosphere (those that I pay attention to, anyway) have turned from intrigue to dismissal or even opposition. See here, here and especially here, for example.

JDB has the distinction of being this blog’s most frequent (only) commenter. Thus, by default, he is one of Coarse Evaluations biggest fans. JD is an ardent Ron Paul backer and an expert on all things Mormon, so he has some interesting perspectives on the Republican campaign. Here is JD:

I tend to agree that the Ron Paul campaign is a cult. Many of his followers look past the faults of the leader-his mistakes, personal deficiencies, and evils. However, Ron Paul's campaign isn't about getting votes based of any personality traits (which is why I think he won't win). Ron's campaign is about issues and ideology. You can't win the office of President by focusing on issues; you CAN win on personal qualities. Paul couldn't win even if he did run that way (he looks kind of old, scrawny, has kind of a whiney voice).

I also think that a cult leader asks for the recognition/praise of the group. I don't think Paul is looking for that kind of support. I really feel like he wants people to look past him and to the issues--not because he has something to hide, but because that's the type of guy he is. I think the smarter Paul followers are interested in the issues, so it naturally leads them to look past the man.

I think Paul's message is more, "Here are the problems that need to be fixed and here are the years and years of evidence/conspiracy/bad practices that led to the problems and...." I like Paul's message better, but I don't think it is the winning one.

Manatee Boy has AIDS

DEB sent this article along over email. The Headline reads: "Manatee Boy Has AIDS; Mother Charged." My first thought was: what would some poor kid have to look like to earn that nickname?

It turns out, though, that Manatee is the name of a county in Florida. The issue raised by the article is whether or not the mother's care for the child constitutes felony neglect. According to the article, the mother was aware she had HIV before giving birth. Evidently, by following a certain regimen of retroviral drugs, it is possible to give birth without passing the virus on to the baby (in fact, if proper care is taken, it is extremely uncommon for the mother to pass the disease along to the baby). The mother took all of the precautions for her first baby, but not the second. Her reason? She did not want the baby's father to know that she was HIV positive.

In Florida it is a crime for someone who knows they have HIV to have sex with anyone without telling them. Also, "under Florida child-neglect laws, parents can be charged with failing to seek medicine or medical services 'that a prudent person would consider essential for the well-being of a child.'"

These laws seem are extremely justifiable to me. Are there any compelling civil liberty arguments that disagree?

Dr. Phil for President

"You know, the economists can argue about it," Clinton said of whether the country is headed for a recession. “But the statistics are one thing, the stories are something altogether different." Clinton said later: "It doesn't matter what you're told. It's what you feel, what you feel deep down."

From WashPost.

That's an interesting approach to policy analysis. I wonder if it also matters how strongly you feel something. Perhaps if I feel it strongly enough, it will be true. I REALLY feel (deep down) Hillary shouldn't be president!

Update: Don Boudreaux feels my pain!

On police and Prostitutes

Steven Leavitt (author of Freakonomics) and a collaborator have just released a working paper at the ASSA conference on prostitution in Chicago. They present some pretty shocking findings (from Foreign Policy):

What's particularly interesting is the authors' section on bargaining and the law. They estimate that roughly 3 percent of all tricks performed by prostitutes who aren't working with pimps are freebies given to police to avoid arrest. In fact, prostitutes get officially arrested only once per 450 tricks or so, leading the authors to conclude that "a prostitute is more likely to have sex with a police officer than to get officially arrested by one." When freebies given to gang members are factored in, about one in 20 tricks go solely for protection and the "privilege" of plying their trade.

It bears repeating: a prostitute in Chicago is more likely to have sex with a police officer than to get officially arrested by one.

One of the multitude of things about this paper that I find fascinating is the way they collected data. From the paper:

...through a partnership with pimps and prostitutes working in two Chicago neighborhoods, we were able to gather detailed, real-time transaction-level data for over 2,200 tricks performed by roughly 160 prostitutes.4 The bulk of these data were collected by our trackers who stood on street corners or sat in brothels with
prostitutes, recording the information immediately after the customer departed.

I would hate to have been Leavitt's poor undergrad research lackey that day.

HT: Reason Magazine, which notes that in legalized Nevada brothels "condom use is 100 percent. There's no 'protection sex' for crooked cops or gang members, and there hasn't been a single case of HIV since 1988."

Chavez Dubbed

This from Charles Krauthammer:

The Democratic primary campaign has been breathtakingly empty. What passes for substance is an absurd contest of hopeful change (Obama) vs. experienced change (Clinton) vs. angry change (John Edwards playing Hugo Chavez in English).

I just like the line about Edwards.

Who Said Politics Isn't Sexy?

Now here is a politician I could support.

The Logic of Life

KLR and I have been eagerly anticipating the availability of Tim Harford's new book, The Logic of Life (coming out on the 15th). Harford is the author of The Undercover Economist, a great blog. He just posted a short video of himself talking about the book. It looks like it's going to be a great read; thematically similar to Freakonomics, offering a logical explanation of what at first glance appears to be irrational human behavior.

Should we start a Coarse Evaluations book club?

Kiwi legend passes on

I just arrived home tonight to find out that NZ's most notable living individual, Sir Edmund Hillary, passed away today aged 88. Time has a good summary of his fascintaing life. Sir Ed was a truly remarkable individual - ambitious yet humble, and a real humanitarian. He will be sorely missed.

It's hard to disagree

KLR recently posted about a Don Boudreax letter (he's over at Cafe Hayek), which reminds me of one of Boudreaux's other recent posts in which he insists that he would be ashamed if his son ran for President. His point is that politicians, particularly those that seek high office, rarely (if ever) have pure intentions. Really what they are looking for is power and its trappings.

Alan Greenspan says something very similar in his new memoir, The Age of Turbulence, which I received for Christmas from my brother:

There's a Constitutional amendment that I've been pushing for years without success. It says, "Anyone willing to do what is required to become President of The United States is thereby barred from taking that office."

I've had similar thoughts before, and recent events such as Sentator Clinton's "crocodile tears" and watching footage of Iowa and New Hampshire retail politics is making me think it again.

I'm only about 100 pages in, but I'm really enjoying the book so far. If anyone wants to borrow it when I'm done, you're more than welcome.

Debating Milton

This video has won some awards on YouTube. The commentator at the end is Nobelist Gary Becker.



HT: KPC

Update: Cafe Hayek just posted this. I am very proud to have beat them to the punch. Which, of course, only demonstrates that their time is more valuable than mine.

Be Afraid. Be Very Afraid.

I was surprised to find this article on the global warming debate in the NYTimes. If you skim, careful to not make the mistake of assuming the article is denying global warming. It is not. The argument is that GM is being oversold not fabricated.

When judging risks, we often go wrong by using what’s called the availability heuristic: we gauge a danger according to how many examples of it are readily available in our minds. Thus we overestimate the odds of dying in a terrorist attack or a plane crash because we’ve seen such dramatic deaths so often on television; we underestimate the risks of dying from a stroke because we don’t have so many vivid images readily available.

Slow warming doesn’t make for memorable images on television or in people’s minds, so activists, journalists and scientists have looked to hurricanes, wild fires and starving polar bears instead. They have used these images to start an “availability cascade,” a term coined by Timur Kuran, professor of economics and political science at Duke University, and Cass R. Sunstein, a law professor at the University of Chicago.

But perhaps playing to public fear is justified if the threat is great enough and not accurately understood. When (if ever) is it okay to intentionally inflate risk or dramatize consequences to encourage certain favorable behavior? I can think of a couple examples of this in practice:

1. The sex education I am familiar with in public schools appears to try to scare students into abstinence and safe sex.
2. Terrorist threat and existence of WMDs to gain support for war in Iraq.
3. ???

Any others? And if you endorse any, do you have to endorse all "availability cascades." If not, what rationale is there for selectively supporting only those you agree with? It seems to me that this position requires a pretty arbitrary argument against honesty.

HT: Cafe Hayek

Infidel

Here is a fascinating interview. Ayaan Hirsi Ali's book is now on my reading list.



What are your thoughts on Ayaan Hirsi Ali?
What are your thoughts on the interviewer?

Here is background on Hirsi Ali.

10 Months to Go...

A good friend emails me this political slang definition that I must admit I hadn't heard before. Here is UrbanDictionary describing a "ratfuck":

Formerly known as "the double-cross," it refers to infiltration and sabotage of the opposition party, particuarly during (but not limited to) an election campaign. The second half of "All the President's Men" describes ratfucking done to 1972 Democratic presidential candidates by employees of the Committee to Re-Elect Nixon.

Ken Clawson, Nixon's communications director, confessed to a ratfuck when he told how he forged a letter making it look like a Democratic candidate was a racist.

A typical ratfuck is to falsely claim there's a political rally for the opposition party, order 300 pizzas for delivery in the name of the party, and then nobody shows up.

Politics in our country is so dignified we use rodent bestiality to describe it. Beautiful.

Oh. And here is Hillary Clinton's crocodile tears if you haven't seen them already.

For Our Tasman Readers

A FORMER New Zealand prime minister once joked the migration of his citizens to Australia increased the IQ of both countries.

But a study shows the joke is on NZ. Australians are far more productive and earn much more than their Kiwi cousins.

Here is the original article. And here is a response with a deeper explanation in defense of NZ. Either way, NZ expats gotta feel a little guilty!

The Best Sentence I Read Today

"I dislike watching the likes of Mike Huckabee, John McCain, Barack Obama, and Hillary Clinton for the same reason that I dislike watching professional wrestling."

From Don Boudreaux, with lead in: "...my sense is that in political campaigns the ratio of genuine ideas to posturing-and-pandering is minuscule."


I noticed our readership went down significantly over winter break. Is it because we stopped posting and so readers stopped coming? Or is it because we stopped posting and we ARE the readers?