Dismal Science

2007-03-20T23:11:00.000-07:00

The AP reports:

A defiant President Bush warned Democrats Tuesday to accept his offer to have top aides speak about the firings of federal prosecutors only privately and not under oath, or risk a constitutional showdown from which he would not back down.

Democrats' response was swift and firm: They said they would start authorizing subpoenas as soon as Wednesday for the White House aides.

"Testimony should be on the record and under oath. That's the formula for true accountability," said Patrick Leahy (news, bio, voting record), D-Vt., chairman of the Senate Judiciary Committee.

Bush, in a late-afternoon statement at the White House, said he would fight any subpoena effort in court.

Wow, things are going to get ugly. Don't get me wrong the Bushies need to be accountable, but I do get the feeling that maybe Democrats are pursuing this scandal so vigorously because they aren't doing well in the Iraq debate right now.

What Next?

2007-03-20T17:55:00.000-07:00

Walter Reed, Attorney Gate, what next? Uh-oh.

The Guliani Chavez Connection

2007-03-20T13:24:00.000-07:00

Hugo Chavez is a client of one of Mr. Guliani's consulting firms. There is no real connection here, but would it be such a bad thing if there were?

Attorney-Gate

2007-03-19T23:40:00.000-07:00

Matthew Yglesias on why firing US Attorney's for not being political hacks might be a bad idea.

Bill Clinton beat George H.W. Bush in an election, took office a few months later, and swiftly fired all of Bush's appointees for US Attorney jobs. He then replaced them with people chosen, in practice, by the relevant local political stakeholders -- that state's Democratic Senators, if any, and a more complicated process in states represented by two Republicans. The message this sends to people working in US Attorney's offices throughout the country is that . . . US Attorneys will lose their jobs if the partisan control of the White House switched. George W. Bush, by contrast, fired a handful of US Attorneys who had displeased the Bush team's political fixers, under circumstances where (contrary to historic practice) the White House got to hand pick their successor. The message this sends to federal prosecutors throughout the land is that US Attorneys' are now considered part-and-parcel of George W. Bush's political team and that those who fail to act accordingly will be sacked.

Gonzales even admitted that things shouldn't have been handled the way there were. What does it take for people to get disgusted any more? Have we become desensitized?

Let's Count Divorces

2007-03-19T16:31:00.000-07:00

Gulinani - 2
McCain - 1
Romney - 0
Gingrich - 2

Hilary - 0
Obama - 0
Edwards - 0
Gore - 0

Via TPM: Horses Mouth

Single Payer vs Single Provider

2007-03-17T17:34:00.000-07:00

Megan McArdle poses the question of the day.

should one be required to stake out a consistent policy across school and healthcare funding? Or can some single-payer supporter explain to me why healthcare will work with what is basically a voucher system, but education won't?

To which Kevin Drum replies:

My initial answer is no, there's no reason to be consistent here. Healthcare has some unique characteristics that (I believe) end up pointing toward single-payer as the best, most efficient solution for universal coverage.

Drum goes on to say he favors the status quo in schooling: a combination of public schools and charter schools which are not funded or subsidized by the government. Basically what he favors is a single-provider system with some private education available for those who can afford it. I'm not sure that answers Megan's question to anyone's satisfaction. And I certainly don't feel that the best way to improve education in inner cities is to leave things the way they are.

Here is my attempt to answer Megan. I favor a single-payer healthcare system because there is a great amount of risk involved in health. The current system of pooling risk through employer based insurance is inefficient and becoming more so as employees become less attached to a single employer.

Education is less about risk than about providing a public good: educated citizens.

Update: Matt responds with a good point about the non-feasibility of a national single-player education system given our starting point. If we can agree that such a system is a good goal why are vouchers considered such a bad step toward that goal?

Talking Points Memo

2007-03-17T01:18:00.001-07:00

I've been reading Joshua Micah Marshall's blog for many years now. It's good to see him getting the credit he deserves. I can still remember him asking his readers for money to travel to New Hampshire to cover the 2004 Democratic primaries. Now he has several full time employees.

I have one quibble with this LATimes article though. They say:

Neither side in the blog-MSM debate seems to have great appreciation for what the other brings to the party. Simply put, while mainstream media does the heavy lifting of careful, day-to-day and occasional in-depth reporting, bloggers have revivified political commentary, mainly through their exuberance.

In my experience bloggers do have a great deal of appreciation for what the mainstream media does. Almost all of the bloggers I read link to articles published online by traditional newspapers. And they completely recognize that they couldn't sit at their computers and pontificate on current events if nobody was around to report them. I think it has been almost entirely the MSM side of the debate which has lacked appreciation for what the other side does.

Google acquires Gapminder

2007-03-17T00:46:00.001-07:00

Google acquires Gapminder. Gapminder is a data visualization company. Here is a very interesting presentation using Gapminder data visualization. It's a long video, but well worth it.

Demand Curves Slope Down

2007-03-14T21:19:00.000-07:00

Kroger slashed prices and sales went up. Interestingly so did profits. If only they had thought of that sooner.

The Benefits of Global Warming

2007-03-13T17:00:00.000-07:00

More room for forests to expand!

Rising temperatures fueled by global warming are causing forests of spruce trees to invade Arctic tundra faster than scientists originally thought, evicting and endangering the species that dwell there and only there, a new study concludes.

Global Warming

2007-03-12T23:04:00.000-07:00

The North Pole is cold therefore global warming doesn't exist. Brilliant.

Twitter!

2007-03-12T17:24:00.000-07:00

Check out Twitter on the side bar. I can send updates via my cellphone. Apparently it's all the rage with the kids.

Krugman on Purge-Gate

2007-03-12T04:38:00.001-07:00

Paul Krugman on the US Attorney firing scandal Kevin Drum creatively calls Purge-gate.

Krugman:

The Bush administration has been purging, politicizing and de-professionalizing federal agencies since the day it came to power. But in the past it was able to do its business with impunity; this time Democrats have subpoena power, and the old slime-and-defend strategy isn't working.

What You Get

2007-03-11T11:21:00.000-07:00

Is Walter Reed what you get when you let government into healthcare, or the result of an incompetent administration that is all to happy to contract out government services to private companies?

The GOP has less incentive to provide quality government services under their watch. If they screw up the scandal rolls off their back as an example of the inherent property of government bureaucracy. Even when that bureaucracy is a function of government that nobody believes should be eliminated. Say, care for our wounded soldiers, for example. Democrats on the other hand believe that government can work and needs to work. We should expect higher quality government outcomes under Democrats than Republicans.

Does the Government Provide Good Healthcare?

2007-03-11T11:03:00.001-07:00

Is the VA hospital system a shining example of a well-run government program, or is it a dire warning to all those who would support a government run health care system?

Greg Mankiw seems to shoot from the hip when it comes to connecting the Walter Reed controversy to the VA system. Just a few years ago wasn't everyone singing the praises of the remarkable turn-around in the VA system? But now, according to the Washington Post "It Is Just Not Walter Reed ":

Across the country, some military quarters for wounded outpatients are in bad shape, according to interviews, Government Accountability Office reports and transcripts of congressional testimony. The mold, mice and rot of Walter Reed's Building 18 compose a familiar scenario for many soldiers back from Iraq or Afghanistan who were shipped to their home posts for treatment. Nearly 4,000 outpatients are currently in the military's Medical Holding or Medical Holdover companies, which oversee the wounded. Soldiers and veterans report bureaucratic disarray similar to Walter Reed's: indifferent, untrained staff; lost paperwork; medical appointments that drop from the computers; and long waits for consultations.

So which is it?

Test Post

2007-03-04T21:09:00.001-08:00

This is a test post because I figured out I can post from my email and I wanted to see how it works. Man, its been a long time since I posted anything... I'm just too busy right now.

A Bit of Nice PR for Walmart

2006-09-21T14:25:00.000-07:00

Wal-Mart to Offer $4 Generic Prescriptions, NYTimes

Wal-Mart, the nation’s largest retailer, said it would begin selling generic versions of widely prescribed drugs to its workers and customers at sharply reduced prices, a move that could force rival pharmacies to do the same.

The giant discount chain, which has used its size to knock down the costs of toys, clothing and groceries, will sell 300 generic drugs for as low as $4 for a one-month supply. On average, generic drugs cost between $10 and $30 for a 30-day prescription.

"The constitution, the Senate, the House of Representatives, the cabinet and the Constitutional Court have all been terminated"

2006-09-19T18:28:00.000-07:00

The quote is from General Sonthi Boonyaratglin one of Thailand's new military rulers.

Days like today I realize my fortune in being born an American. I very much dislike Bush. I feel he may be breaking the law. I think his policies are bad for the country. But I am fairly sure that if the military tried to take over the country or any other group tried to take control of this country through violence I would be on the front lines fighting against them.

Somehow, through luck or design we have inherted tremendously stable institutions. I can't imagine having our government overthrown in a military coup which is exactly what happened in Thailand today. Here is a helpful timeline from the Financial Times. Apparently he is being overthrown for corruption charges. I don't understand it at all.

We talk about the close election in 2000 and we hear Democrats say "Well, Gore won the 2000 election". This is usually a statement meant to bring a friendly reminder and a smile. We might have complained, we might have been bemused a little. Nobody boycotted the next election. It's like watching a very important football game and your team loses due to a poor call from a referee. You deal with it. You come back next year.

Here's to our country. Cheers.

Beyond Propaganda

2006-08-14T13:47:00.000-07:00

Republicans are drumming up terrorism fear to try to win the elections

2006-08-13T20:16:00.000-07:00

This is not unpredictable at all. Apparently Michael Chertoff was calling for tougher terrorism laws on the Sunday circuit. The argument this time around is that US authorities still do not have enough power when it comes to dealing with domestic terrorism. They hold up British law as an example.

Before the left-wing reacts to this by saying "Holy crap, the Patroit Act wasn't enough for these guys?" Let's actually look at what they are requesting. The following is from a WSJ article:

"I think we should always review the law," Mr. Chertoff told "Fox News Sunday." "Certainly the ability to be as nimble as possible with surveillance, and their ability to hold people for a period of time gives them a legal advantage. We have to have a legal system to allow us to do that rather than punishing people after the fact."

I'm sure other bloggers will have better insight into why being able to hold people for 28 days without charging them with a crime provides an advantage over the 48 hours US authorities are granted. I also want an explanation of why it is so hard to call up a judge and get permission for sullvenlence.

But here are my suggestions to Democrats. If these points turn out to be legitimate, let them pass into law and don't complain too loudly. Tell them, "yes, under the circumstances, given this information these are good ideas. Let's pass them and kick some terrorist ass." This would completely deny the Republicans any ground on this issue. No doubt Republicans will make this as hard as possible for Democrats to stomach. They will include unneccessary provisions aimed only at pissing Democrats off. The response in that case might be to introduce their very own, responsible and credible law-enforcement bill.

Kevin Drum's Forbearance

2006-08-13T09:33:00.000-07:00

Over at Political Animal Kevin Drum writes this:

FORBEARANCE....Over at bloggingheads.tv, Robert Wright mentions something that's been on my mind for a while. He's talking with Ann Althouse about the war in Lebanon and makes the following observation:
What I think is actually sometimes the smartest thing to do in response to terrorist provocation, which is forbearance, is very hard to counsel. [But] if you ask what kind of shape would Israel be in if they had done a day's worth of retaliation, and since then just endured any missiles, and said, "OK, look, at this point there's no excuse for what they're doing, we're not even fighting them," I think Israel as a nation would be more secure than they are.

But it's very hard to convince people of that, and I admit that rhetorically it's hard to make that a winning strategy.
...It's human nature to demand action following an attack. Any action. Counseling restraint in the hope that it will pay off in the long run is politically ruinous.

But our lives may depend on figuring out how to make this case. If it wasn't obvious before, it should be obvious by now that conventional military assaults are usually counterproductive against a guerrilla enemy like the ones we're fighting now. We can't kill off the fanatics fast enough to win, and in the meantime the war machine simply inspires more recruits, more allies, and more sympathy for the terrorists. It's not the case that conventional military force is always useless in these cases Â the Afghanistan war still holds out hope of success Â but as Praktike says, it usually results in a terrorism own goal.

This is an argument I'm pretty sympathetic to. It lies close to my argument for why the Iraq War was a bad idea. But I see some problems.

First, an immediate unilateral retreat might have been perceived as a defeat for Israel. That would havbolstereded Hezbollah and been bad for Olmert domestically. Of course, this might not be true. Israel certainly diminished their reputation for ass-kicking anbolstereded Hezbollah by fighting for several weeks with no clear victory in sight.

Second, and more importantly: Hasn't Israel been restrained about attacks from Hezbollah for several years now? It was my understanding that Hezbollah has been tossing a few rockets into northern Israel for years prior to the recent war. How much sympathy did noretaliatingng for so long win them?

This is not my endorsement of military occupation in response to terrorism. I still don't believe that is effective, but I don't think Israel would have come out ahead in this case by doing nothing.

The Real Right-Wing

2006-08-13T00:57:00.001-07:00

I thought this was interesting:

Sheik Yousuf Al-Qaradhawi: Kerry, who ran against Bush, was supported by homosexuals and nudists. But it was Bush who won [the elections], because he is Christian, right-wing, tenacious, and unyielding. In other words, the religious overcame the perverted. So we cannot blame all Americans and Westerners.

But unfortunately, because the Westerners - Americans and others - want to flatter these people on account of the elections, a disaster occurs. In order to succeed and win the elections, he flatters these people, rather than saying to them: No, you are sinning against yourselves, against society, and against humanity. This is forbidden. Instead of leveling with them, people flatter them to win their votes. This is the disaster that has befallen humanity.

Read the whole interview, it is very short. No comment for now, but I might have more to say on this later.

Passed on via Andrew Sullivan.

The Real Right-Wing

2006-08-13T00:57:00.000-07:00

I thought this was interesting:

Sheik Yousuf Al-Qaradhawi: Kerry, who ran against Bush, was supported by homosexuals and nudists. But it was Bush who won [the elections], because he is Christian, right-wing, tenacious, and unyielding. In other words, the religious overcame the perverted. So we cannot blame all Americans and Westerners.
But unfortunately, because the Westerners - Americans and others - want to flatter these people on account of the elections, a disaster occurs. In order to succeed and win the elections, he flatters these people, rather than saying to them: No, you are sinning against yourselves, against society, and against humanity. This is forbidden. Instead of leveling with them, people flatter them to win their votes. This is the disaster that has befallen humanity.

Read the whole interview, it is very short. No comment for now, but I might have more to say on this later.

Passed on via Andrew Sullivan.

Should Democrats Be Scared?

2006-08-10T08:29:00.000-07:00

I'm seeing a lot of articles trying to explain why Lamont's victory is a bad sign for the Democrats. One of the most sensible is this article on Slate. Jack Weisburg says that Lamont represents an anti-war movement that is not only anti-Bush and against the current war, but represents a weak stance against terrorism in general. He compares this to the 1970's era Democrats purging themselves of Vietnam era leaders and embracing the anti-war movement.

I don't think Lieberman got in trouble because he originally supported the war. I don't think he lost because he was tough on terror. There are plenty of Democratic Senators who supported the war and aren't calling for an immediate withdrawl that aren't facing a primary election threat. The reason I think Lieberman lost was his die-hard support of the President on the war. Last December Lieberman came out and said,

It’s time for Democrats who distrust President Bush to acknowledge that he will be the commander in chief for three more critical years and that in matters of war we undermine presidential credibility at our nation’s peril.

As Weisman himself pointed out, Ned Lamont only decided to run for office after reading an editorial by Lieberman that painted a rosy picture of Iraq. Good for him, good for CT, good for the USA.

Republicans are Scared

2006-08-09T19:49:00.000-07:00

Tony Snow made some interesting comments today:

Democracies operate on different principles than totalitarian states. In a democracy, you have to respond to the will of the people. In a democracy within the United States, whether it be Joe Lieberman and Ned Lamont competing for votes in Connecticut or on the local level dealing with the needs for people to have safe streets, good schools and services they can depend upon, those are the things -- you respond to the state desires of the people. In totalitarian states, the despot alone has the opportunity to declare what he or she wants to do, and frankly, quite often they are much more war-like.

Democracies respond to the will of the people. Amen Tony. That must be a scary thought for you. He also mentioned that a "white flag" in Iraq is the same as a white flag against terror. Desperation.

Government Popularity and Exchange Rates

2006-08-07T19:55:00.000-07:00

This is a "Markets are Emotional not Rational" paper if I ever saw one. They are able to conclude that exchange rate shocks can affect political popularity and that political popularity can affect exchange rates.

Polls and Pounds: Public Opinion and Exchange Rate Behavior in Britain
This article examines the relationship between government popularity and exchange rate movements in Britain since 1987. It argues that: (1) unexpected drops in the government's public support lead to currency depreciations and increased exchange rate volatility, and (2) unanticipated depreciations hurt the government's public support. It estimates separate models of the exchange rate and government voting intention iteratively and recursively. At each iteration, measures of exchange rate and public opinion shocks are generated. These generated variables are employed in the next iteration of estimates, including measures of political shocks in the model of exchange rate behavior and measures of exchange rate movements in the model of voting intention. This enables, therefore, the measurement of both the political costs of currency depreciation and the exchange rate consequences of political competition.
http://www.qjps.com/qjps/vol1/iss1/art3/

I saw this on New Economist.

Calling Political Scientists and Mid-East Experts

2006-07-27T07:24:00.000-07:00

From the NYTimes:

“We received yesterday at the Rome conference permission from the world,’’ Justice Minister Haim Ramon told Israeli radio, “to continue this operation, this war, until Hezbollah won’t be located in Lebanon and until it is disarmed.’’
Mr. Ramon also raised the possibility of an expanded air assault, saying “all those now in south Lebanon are terrorists who are related in some way to Hezbollah.’’

How does anybody see this ending? Is the war in Lebanon simply a fact of life now for the near future?

Al Qaeda Responds

2006-07-27T07:11:00.000-07:00

A day after I read that "Al Qaeda's Sunni ideology regards Shiites as heretics, and it profoundly distrusts Shiite groups like Hezbollah" we have this:

Al Qaeda's No. 2 leader issued a worldwide call Thursday for Muslims to rise up in a holy war against Israel and join the fighting in Lebanon and Gaza until Islam reigns from "Spain to Iraq."

I don't think he ever mentions Hezbollah by name, but it pretty clear these people are united in their hate of Israel and by extention, us.

Have You Seen College Textbook Prices Lately?

2006-07-26T08:03:00.000-07:00

NPR is once again shocked by high textbook prices. The mechanism behind high textbook prices is highly analogous to high healthcare costs. The person selecting the product, the person paying for the product, and the person using the product are usually 3 different people. In healthcare the doctor determines the treatment, the patient benefits from the services, and the insurance company pays for it (beyond the deductible). In textbooks the professor selects the book (presumably the newest edition with a CD-ROM, study guide and other bells and whistles), the student is the one actually using it, and the student's parents are usually the shelling out the cash for the books.

The professor has an incentive to assign "the best" textbook. She receives free trial copies and probably doesn't look at the price too much. The students are most likely passing the bill on to Mom and Dad so they are less likely to seek out cheaper alternatives. This is further amplified by the fact that colleges and universities usually have an "official" bookstore on campus that makes it very easy to pass the costs directly onto the tuition bill.

You can find textbooks for cheap if you spend some effort looking which makes me somewhat unsympathetic the people in the NPR story who are "feeling the crunch". However lowering textbook prices in general could be achieved by making it easier for students to find out which books they need without going to the campus bookstore, and making it harder for them to charge their expenses to their tuition bill.

Procrastination

2006-07-25T00:10:00.000-07:00

I haven't fully fleshed this out yet, but I'd like to propose a model of procrastination. Suppose my enjoyment of a particular activity can vary with time. An activity may be ardous today, but there might be some point in the future where I actually find this task enjoyable. Utility can be maximized, i.e. it is rational, to put off what I am not in the mood for right now with the expectation that it will become more enjoyable in the near future.

Obviously, self deception is a danger here. Perhaps the task I am putting off will never be enjoyable to me.

Blogging and Careers in Academia

2006-07-24T14:41:00.000-07:00

The Chronicle of Higher Education has an collection of articles from the academic blogosphere on the case of University of Michigan professor Juan Cole who was recently denied a tenured job at Yale University. Juan Cole authors a popular blog on current events in the Middle East. The title of the symposium is 'Can Blogging Derail Your Career?'

Mark Thoma over at the Economist's View blog weighs in with his own thoughts. He agrees with Brad Delong (who is one of the contributor's the the Chronicle's collection and a tenured Economics professor/blogger himself) that his blogging is primarily about trying to raise the level of public debate and start of conversation with a wider general audience. What's more is that he feels writing the blog has expanded the set of issues he feels he can write intelligently about and it has even helped him keep up with developments in his very narrow field of study. It has made him happier and more productive.

Where he seems to part with Brad Delong however is on the "commercial gains" to having a blog:

Finally, I don't have any interest at all in using this blog to promote commercial interests, to sell books or anything like that. I'd start a second blog if I wanted to do that. One reason is that I wouldn't want anyone worried that I'm afraid to say something because it might hurt book sales, or whatever else is being peddled. But I don't mean in any way, shape, or form to look askance at anyone using their web log in that way, that's their choice not mine, it's just not for me. I don't want the constraints on my own ability to comment nor the questions from readers about how the commercial intent of the web log interacts with its primary academic mission. And I don't want the public face I present for myself and as a representative of my Department, the University, and more general academic community to be subject to criticisms along these lines. The views I present are my own, not the views that will sell the most stuff.

Whether the blog's purpose is to promote books or not is irrelevant. This blog is now a permanent addition to the Mark Thoma brand and by extention the University of Oregon. As Greg Mankiw puts it, "Have you noticed there are no ads on this blog? That's because this blog is an ad. It's the blogosphere version of the infomercial." The product is the blogger.

Something Happened Indeed

2006-07-23T20:03:00.000-07:00

Mark Thoma points to an article by Ben Stein in the NYTimes:

Thanks to some fine reporting at The Wall Street Journal, we now know that right after 9/11, as the crushed bodies of heroic firemen were still being pulled from the rubble of the World Trade Center, and the nation was in deep, bone-chilling mourning, the smart people who run some of America’s biggest and most powerful corporations may have already figured out An Angle.
Certain officers and directors at companies including UnitedHealth, Merrill Lynch, Teradyne, Black & Decker and Home Depot knew that their stock was way down because of panic about the attacks and whether more were coming. They also knew that their long-term prospects were excellent and that their stocks were a bargain. And right after the attacks, they quickly awarded themselves options priced to strike at the super-low prices their stocks reached when the fires at the Pentagon were still smoldering. In many cases, they went on to make serious money from those options.

That sounds dire, but I fail to see why I should be outraged here. Who did these people make money from? They didn't make money off of the victims of 9/11. They made money from people who, in the aftermath of 9/11 were dumping stocks in these American companies as fast as they could. This isn't some example of the greedy rich taking advantage of the little guy.

The Oil We Eat

2006-07-20T13:43:00.000-07:00

Here is a disturbing article about the current state of human population and the energy it requires. Read the article because I cannot summarize it with any justice.

Basically, the food we eat is produced using a tremendous amount of energy. All energy on Earth at some point came from the Sun. The sun gives us a certain, fixed amount of energy each year. For millenia though a lot of this energy was stored. Some of it was stored in bio-matter that died and eventually became oil.

The food we eat today is not produced in an energy efficient way. Our food is processed and transported. This takes a tremendous amount of energy. In fact, it takes many times the amount of energy in fossil fuel to produce the food I eat than the amount of energy in calories that I get out of the food. We are able to sustain this because of the tremendous amount of stored energy on earth.

The implied question is "What happens when we run out?" We can't run a deficit in energy forever can we?

Frankly, I this concern ignores human innovation. The most disturbing thing about this argument is the assumption that a wealthy human being is a poor use of the world's resources. Humans have taken over the planet and displaced countless species in the process. My question is "So what?" Isn't survival and reproduction the goal or any form of life? Why should humans be different?

This is not to say I am closed to arguments about misuse of resources or dangers we are creating for ourselves.

I found the link to this article over at Marginal Revolution.

Private School Advantage Entirely Due to Self-Selection

2006-07-17T05:00:00.000-07:00

A study of 4th and 8th graders finds that on average public schools might be slightly ahead of private schools when it comes to reading and math. From the NYTimes:

The report, which compared fourth- and eighth-grade reading and math scores in 2003 from nearly 7,000 public schools and more than 530 private schools, found that fourth graders attending public school did significantly better in math than comparable fourth graders in private schools. Additionally, it found that students in conservative Christian schools lagged significantly behind their counterparts in public schools on eighth-grade math.

This study cannot be taken to mean that public schools are better than private schools. The report itself warns against such comparisions, because of the great variation in performance within private schools themselves. But it does show that on average, when taking into account "social and economic backgrounds" public schools do not fall behind private schools. This means the higher test scores seen in private schools can almost entirely be attributed the social and economics class of the students themselves.

Gambling...again

2006-07-08T06:30:00.000-07:00

I can hardly believe what I'm hearing from Greg Mankiw. He writes,

In a comment on my previous post on gambling, Jacqueline Passey says:

gambling is distributive justice, moving money from stupid people to smart people.
The utilitarian in me points out that Jacqueline gets things exactly backwards: distributive justice demands moving money from smart people to stupid people. Smart people have the potential to make a lot of money and thus have lower marginal utility per dollar, while stupid people have less money-making potential and higher marginal utility.

I don't think he is actually trying to make the case that gambling (and poker) should be prohibited by the government. The libertarian in him stands in the way of his moralism and utilitarianism. He does wish that people wouldn't "waste" their lives by gambling either for enjoyment or for profit.

In a previous post he noted that playing chess is a more noble hobby than gambling. But isn't Gary Kasprov "wasting" his life as well in the same way? If he had applied his talent to become a software engineer instead of a professional chess player wouldn't he have contributed more to society?

This brings up an interesting question. Do people maximize their contribution to society over their lifetimes? Are our labor resources efficiently used? If the labor market is perfect people are paid their marginal productivity for a job. If they maximize their income over their lifetime then labor, like any other resource would be efficiently allocated by the market.

Is Poker Gambling?

2006-07-05T15:05:00.000-07:00

Poker is a form of gambling, but I am sometimes amazed that people do not see the distinction between poker and other forms of casino gambling. In every other form of gambling you are playing against the house and stastically you will lose.

Poker on the other hand is a game played against other players. There is no mathematical certainty that you will lose. If you are better than everyone else you play with and you can cover the amount the casino charges you to play (the rake) then you can make money in the long run.

Greg Mankiw reveals his inner moralist in this post about why he hates gambling.

Unemployment in Sweden

2006-06-15T05:54:00.000-07:00

McKinsey says Sweden's "real unemployment rate" is about 15 percent. As Tyler Cowen points out, you might expect a lot of libertarians and economists to be happy about this number. After all, how could a welfare state maintain such high employment and economic growth over the years?

But this brings up an interesting problem with comparing employment rates between countries. Definitions of unemployment can vary. McKinsey included more than those who want to work and are actively seeking a job (the BLS definition used in the US employment numbers).

McKinsey reached its conclusions by including those who want to work and those who could do so, meaning people on government programmes as well as those on prolonged sick leave.

If you included those people you would likely obtain a much higher number for unemployment in any country.

Who are the Commenters?

2006-06-04T09:36:00.000-07:00

Seth Godin, a marketing author, consultant and blogger, allowed comments on his blog for exactly one post and then took them away. He explains why in a post entitled "Why I don't have comments". There seems to be something of an uproar about this in and marketing blog community. The general opinion seems to be that comments are almost a requirement for a serious blog. Some are even questioning whether a blog without comments is even a blog. This seems strange to me because up until recently most of the blogs I have read do not allow comments, especially the ones with a higher levels of traffic.

Disallowing comments does not mean the author fails to engage the community. Trackbacks and linking to other blogs in the same sphere is universal. The commentless blogs I read often quote emails and reply to questions or challenges posted on other blogs.

I think Seth makes a great point in his explanation post in pointing out that the audience for his blog is not represented by those who leave comments. He says

...it permanently changes the way I write. Instead of writing for everyone, I find myself writing in anticipation of the commentary.

Some have taken this to mean he ignores his audience, but they fail to realize that the vast majority of readers will not be commenters. Readers and commenters may differ in some fundamental ways. So are comments really the best way to hear what your readers have to say?

Another thing that critics of Seth don't consider is that comments don't necessarily add value. Comments tend to be of low quality. I can leave a comment in 5 seconds with no regard for how the comment reflects on me. If I comment about your ideas on my blog I am responsible for my opinions. My post reflects the quality of my blog and my readers will judge me for that whether I am anonymous or not.

Some bloggers will want to foster a community of readers. They dream of people coming to their blog and spending time communicating with other readers and the author. Others create blogs because they want to become a part of a larger community of thinkers on a topic. They want to join the discussion and have a voice. For these people comments can be an unnecessary hassle.

A blog without comments is simply a blog without comments.

Nike and Apple

2006-05-24T23:56:00.000-07:00

Nike and Apple are teaming up to create a running shoe:

A sensor and receiver embedded in the shoe provide a wireless connection
to the iPod, with workout information stored on the device and displayed on
the screen. Runners can get audible feedback through the headphones, and
data stored on the Nano can be downloaded to a Mac or PC after a run...

..."What's cool about the Apple-Nike announcement is that the iPod is now an
application platform for personal information," said Ted Schadler, a Forrester
Research analyst, in a blog posting. "It could always store contacts and photos.
But now it can log your miles, calories, and exercise time."

I personally can't wait until iPods and cell phone merge to a larger extent than they do now.

Besides the topic I thought this article was interesting because they quoted someone from the person's blog. It is disappointing they didn't provide a link. That is something very basic that seems to be missing from any "traditional" print newpaper/magazine on the web.

Economists' Open Letter on Immigration

2006-05-17T16:14:00.000-07:00

Alex Tabarrok of Marginal Revolution has written an open letter to the President and Congress representing the views of many economists.

I have written an open letter on immigration reflecting the consensus opinion of economists on the major issues. In cooperation with the Independent Institute I am looking for as many signatures as possible from economists and other social scientists. Brad DeLong, Greg Mankiw, Vernon Smith, Tyler Cowen and many others from both the left and the right have already signed on.

Tyer Cowen (a contributor to the same blog) posts with links to studies on the assimilation of latinos.

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Has Rove been Indicted?

2006-05-17T16:02:00.000-07:00

According to a report for Truthout.org Karl Rover has been indicted on charges of perjury and lying to investigators. This was reported Saturday, May 13th, but the story has not been reported in the mainstream media yet. Despite criticisms the reporter has not backed down from his story.

Developing...

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Oil Prices Drop

2006-05-15T20:43:00.000-07:00

Oil prices fell today on fears that oil prices were too high (Bloomberg, Forbes ).

Did anybody else chuckle when they read that?

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Reasoned and Respectful Tone

2006-05-15T19:40:00.000-07:00

Bush's speech tonight was masterful because he did not incite fear or attack anyone's patriotism. As an economist and a liberal I am not in favor of sending the United States military to the border to set up walls, roads, sensors, cameras, and drone planes. But Bush proposed this and several other points in a thoughtful and respectful manner. He didn't piss me off which is a major accomplishment.

This is what a President should be. I predict this will help his approval rating.

The early headlines focus on policy:

WaPo: Bush Will Send 6,000 Guard Troops to Border

CNN: Bush: 'Catch and release' of illegal immigrants will end

Fox: Bush Unveils Border Battle Plan

I think they should do a little better at pointing out the real story here. This was a President addressing the nation in a civil manner and calling for a "reasoned and respectful tone". I for one am a fan of this speech.

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Economics, Brands and Advertising

2006-05-14T21:55:00.000-07:00

This is a topic I've been diving into over the last couple of weeks. I found, to my surprise, that a lot of research has been done on the economics of marketing. This was surprising because I heard very little about the topic before I began searching. Finding this literature is reassuring because it seems to me that advertising is a huge part of our everyday economic lives, and has a huge impact on the markets we study. How can we pretend to understand markets without explaining the role of "marketing".

By far the most helpful resource has been Kyle Bagwell's survey (pdf) of the advertising literature. He presents the theory and empirical evidence along with a historical context so you can really see how the discussion has evolved over time and where it might be headed.

The questions are far from answered in this field. We do know that advertising has an immediate effect on consumers. Advertising increases a firm's sales. The effect is easily testable, and if it were not true we would be very surprised to see so many companies wasting money for so many years. But beyond this fact the empirical regularizes seem to stop. Advertising does not seem to have a consistent effect across all industries, firms, and brands.

To understand whether advertising is socially beneficial or harmful we need some theory that explains why it works. For example, if advertising works because it changes a consumer's tastes and preferences it clearly not efficient from the point of view of society. The resources used to produce advertising would be better off put to some other use. On the other hand, if advertising provides customers with information at low cost, or it adds some extra value to consuming the product then these expenditures could actually be improving the general welfare.

After doing some very basic reading I can see why marketing is not on the tip of every economist's tongue. First, advertising doesn't have an explanation that readily presents itself in economic theory. Advertising does not have any purpose in a perfectly competitive market where there is no product differentiation, buyers are perfectly informed, and a firm and sell as much of the good as it can produce at the market price. Second, of the competing theories that do exist, none of them appear to be valid on all situations.

This is a fascinating topic and I plan to be posting about it on a regular basis.

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What is the World Coming To?

2006-05-14T08:23:00.000-07:00

Whole foods is advertising its low prices and Wal-mart is moving into the organic foods market.

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Qumana Editor

2006-05-13T11:18:00.000-07:00

I'm trying out a new blog editor now...

The Qumana Editor has worked perfectly since the moment I downloaded it. I think this will greatly simplify the posting process and increase the quality of this blog.

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RocketPost

2006-05-12T20:49:00.000-07:00

This is a test post with my new blog editing software. I’ve had it crash twice on my already so perhaps this will be a short experiment.

Bad Beat of the Day

2006-03-31T18:01:00.000-08:00

I've recently take up online poker. I've managed not to lose too much money in the last few weeks even though I have spent a considerable amount of time playing. Mostly I play Sit 'n' Gos with a $5+.50 buy-in along with a few larger $10+1 tournaments.

Everybody needs an outlet for their bad beat stories. Unfortunately nobody likes to hear them. That's why I've decided to post them here, where no one will ever read them. And I've got a couple of doozies to start you off with....

I'm in a 500 person tournament. I've managed to capitalize on a couple of early good hands and I have spend the majority of the tournament in the top 10 in chips. I have made a few ill-timed raises in an attempt to seal some blinds and one extremely bad call, but somehow my chip-stack keeps on growing. I was rubbing my hands together in anticipation of a final table showing and potentially a huge pay-out. We were down to 27 player when my bad beat occured. At this time I had $60,000 in chips and the blinds were somewhere around $1k-$2k. I was feeling pretty comfortable. And I was dealt cowboys--two Kings. The person sitting to my right raised to around $10k. This was a very big pre-flop raise at the time. I re-raised to $30k. Of course everyone folded around to my opponent. He decided to push all-in with slightly more chips than I had. I didn't have to think about this call. This would be a great opportunity to win some chips-I would be chip leader by far if I won. He turns over Ac 2c. I almost couldn't believe it. How could someone go that crazy with that hand. Before I could even think "No Ace" the flop came and with it an Ace. I didn't catch a King and my tournament was over with a lowly payout.

I hope you enjoyed my Bad Beat of the Day. I will have another story soon I'm sure.

Dubai Ports Deal

2006-03-11T15:14:00.000-08:00

As you should know by now a company owned by the government of Dubai made a bid to purchase a London-based business which controlled some terminal operations at several US ports. This was made public and many people became concerned about the risk of terrorism. Facing the real threat of being blocked by Congress the company has promised to turn over control of US-based operations. Democrats are claiming victory and Bush has taken a beating by defending the deal.

I am torn because I am excited to see Democrats finally win an issue and also disappointed because this is an issue I strongly agree with the President on. Globalization is important for American prosperity and we cannot start interfering with multi-national deals at random. We should be building alliances with moderate Arabs and not insulting them in a paranoid, xenophobic frenzy.

That being said I am not an absolutist and I am still trying to find out if there really was a security threat here. The vehement reaction of members of Congress makes me want to believe there was. So let's find out what we can do to make our ports more secure instead of letting the issue die with the Dubai deal.

Democrats won this issue in true Rovian style. They pounced on this topic with a unified voice when the other side was divided on the issue. Now that it is over they triumphantly claim victory. Democrats look strong, in touch with the people, they had national security at heart. Republicans look like they are running away from the President just to save face.

I wonder if this issue could have played out differently. What would have happened if this deal became public a year ago when the President's popularity was higher and Republicans weren't trying to distance themselves? Perhaps they would have rallied around the President. The deal would have been studied by the media and public and I think opinions would have turned around. Even if they did not, the deal would still go through and Democrats would look powerless.

So in a way Republicans handed Democrats this issue. Basically their lack of cohesion on the issue caused the Democrats to look good and win. The reverse has been true many times. I hope this happens more, I just hope my chosen party picks issues I can agree with them on. I have always found virtue in Democratic positions even if I disagree with them. I have a bad feeling though that I will feel revolted just as much with Democrats controlling the government as I am with Republicans.

Is Blogging a Fad?

2006-01-29T20:16:00.000-08:00

Arnold Kling proposes a very simple and interesting model of how blogging disseminates information. Distinguishing between fads and trends he concludes that blogging is a trend. That is, it offers improvements over currently existing technologies for sharing information and therefore we can expect it to be around for a long time.

He makes a prediction that Corporations may one day require employees to keep blogs as a means for internal communication. I think that makes a lot of sense.

One of the things he emphasizes (and I have seen emphasized by others) is blogging's eventual application towards local politics:

My prediction is that in niches where the ratio of information value to
entertainment value is high, blogs will prove to be superior mechanism for
disseminating news. For example, local politics tends to have lower
entertainment value than national politics. To me, that implies that at some
point we will start to see elections for school board or city council influenced
more by coverage in blogs than by coverage in newspapers.

But ask yourself: when is the last time I read a blog focusing on
local politics? Personally the blogs I enjoy have no geographic
focus. Blogs that do focus on local politics, in my experience, seem to be
of inferior quality.

I would like to amend Kling's model. Suppose the goal of each blogger is to maximize the number of readers who visit her site. To do this the author needs to update the site frequenty, write well, add value in the form on new information or ideas, and have that information be of interest to a broad group of people. Focusing on local politics is clearly not the optimal strategy for the audience seeking blogger.

Gas War

2006-01-01T10:59:00.000-08:00

Russia Halts Natural Gas Sales to Ukraine

On Saturday, Russian President Vladimir Putin said Ukraine could continue
paying the old price of $50 per 1,000 cubic meters for the first quarter of
2006, but only if Ukraine agreed by the end of the day to start paying the new
price of $230 in the second quarter.

Gazprom has said the price increase is necessary to conform to world gas
price levels.

Ukraine has not objected to a market price but wants the increase to be
phased in. Yushchenko said late Friday that the most his country could pay now
is $80 per 1,000 cubic meters.

My question is how did the current price regime come about?

Tabarrok is pissed a Liberals

2005-12-28T05:32:00.000-08:00

Over at Marginal Revolution Alex offers a new line of defense for the President's right to torture and spy.

Liberals are claiming that President Bush has violated constitutional
restrictions on torture and spying on Americans. Don't they understand that the
constitution is a living document that must be reinterpreted in light of new
events and understandings? An originalist reading of the constitution would
throw us back into the primitive past when the minimum wage was
unconstitutional. Fortunately, conservatives know that constitutional
interpretation must change with the times and never more so than now. We live in
a different world. The Founding Fathers may have been great in their time but
they did not face the problems that we face today and we should not be bound by
their 18th century ideas of liberty and executive tyran

My problem with this is not that I think the Constitution should be interpreted strictly and conservatives do not support Bush's wire-tapping because they have some enlighted view of constitutional law. The problem is I don't trust the government to do things without transperancy or at least oversight. We have not yet heard a reason why these particular wire-taps had to be done without FISA court approval. I do not suspect these wiretaps are being grieviously abused. I bet they could have gotten approval from judge for all of the necessary wiretaps, but they just don't see it as necessary.

Great Aritcle by the Undercover Economist

2005-12-18T11:46:00.000-08:00

There are currently massive shortages of Xbox 360 systems. Microsoft has priced the system at $300, but it is selling on ebay for up to $700. Why did Microsoft not price the system much higher? This situation isn't unique to Microsoft. Every single year shoppers seem to be frustrated by shortages of the latest "it" item.

Tim Harford provides a plausible non-answer in a column over at The Slate. He takes Microsoft at its word when it says it missed judged demand and is probably sorry for doing so. This explanation assumes that Microsoft determined the price long before launch and has difficulty changing that price once it is set.

I would be interested in knowing how companies go about pricing such a product.

Good News

2005-12-16T06:24:00.000-08:00

Voter participation in Iraq was around 70%

ABCNews

Torture

2005-12-14T18:41:00.000-08:00

Every since Andrew Sullivan's response to Krauthhammer's arguement in favor of torture I've been wondering if that is the best anyone can do. I have a lot of respect for Sullivan, but I found his essay lacking.

Finally, Michael Kinsley answers with witty deconstruction of the "ticking time-bomb" argument.

Bush: I am Responsible

2005-12-14T11:53:00.000-08:00

In the last couple of days Bush has admitted that the number is civilians killed in Iraq by the US Military is up to 30,000, that pre-war intelligence was faulty, and he is responsible for the decision to go to war.

I predict his approval rating is going to turn around fast.

This is all we've wanted since shortly after the war began. Admit the cost is high, admit there were mistakes made, take responsibility. Now we can try move forward.

Bush: 30,000 dead in Iraq

2005-12-12T11:19:00.000-08:00

This estimate probably comes from Iraq Body Count. It is based on media reports and counts only civilian deaths.

Aussie, Aussie, Aussie! Oy, Oy, Oy!

2005-12-12T07:05:00.000-08:00

Racial riots in Sydney. More on this later.

WTO

2005-12-11T10:39:00.000-08:00

Now that the UN conference on climate change has ended another international deliberation is preparing to commence. The cheering crowds in Montreal will be replaced hissing protesters as the WTO meets in Hong Kong.

My initial reaction to the protesters is always one of confusion. The WTO is the international organization governing and promoting free trade. How can anyone oppose trade? But I’m not one to call somebody a stupid hippie and be done with it. At the very least you have to wonder what their objection is. Why do so many people around the world passionately oppose globalization? That they are uninformed is not a sufficient answer.

Part of the answer is environmental concerns. The WTO is a potential threat to environmental regulations passed by developed countries such as the United States. Developing countries have submitted complaints that energy efficiency standards and laws mandating timber be cut from sustainably managed forests are unfair barriers to free trade. If the WTO were to favorably rule on one of these objections (I very much doubt this would happen) a country could be subject to economic sanctions for having such a law.

That is how to get people who celebrate the Kyoto Protocol to panic when it comes to the Doha Round.

Climate Change II

2005-12-10T17:54:00.000-08:00

The Guardian:

The White House was forced into a U-turn on climate change yesterday after appearing to misjudge critically the international and domestic mood on its efforts to tackle global warming.
After American delegates walked out of the United Nations climate change conference in Montreal over the wording of a draft statement calling for international co-operation on the issue, they signed a revised version after making only 'trivial' changes.
The move came as 157 other countries agreed separately to extend the Kyoto international agreement aimed at reducing greenhouse gas emissions. The US has not joined Kyoto, so it was not involved in the talks on its future.

I have to do some more reading on this but it looks like this is seen as a big defeat for the Bush Administration. None of the American press articles I can find make it look this bad for us. Here is the most recent article on the conference on CNN's website. There is nothing about a U-Turn or "misjudging critically" in the CNN article.

Climate Change

2005-12-10T16:51:00.000-08:00

ABCNews:

Explaining that stand earlier in the week, U.S. delegation chief Paula
Dobriansky said the Americans "believe firmly that negotiations will not reap
progress, as indicated, because there are differing perspectives."
Instead,
the U.S. delegation said it favors voluntary efforts and bilateral and regional
arrangements to tackle climate change. It repeatedly pointed to U.S. government
spending on research and development of energy-saving technologies as a
demonstration of U.S. efforts on climate.

Why does the Bush administration think that the public sphere is the best place for these innovations and not the private market. I think its pretty clear why the market is a better place to pick technological advances than the government. You cannot shift to command and control when it comes to technology. The place of government should be set goals and provide incentives that offset the market externalities such as climate change.

Further, I'd like to find out what exactly these programs are and how much funding goes into them. I wouldn't be surprised if many of these funds are being handed-off to energy companies.

Sudoku

2005-12-10T12:40:00.000-08:00

I have recently taken up an interest in Sudoku and I it made me wonder about the mathematics of the game. How many possible Sudoku games are possible in the standard 9x9 grid? How many squares must be given to ensure at unique solution? Is there always a unique solution in the games usually published? How are the difficulty rankings determined? How hard would it be to write a program to solve Sudoku puzzles?

I found a good article with some of the answers. Its amazing that we don't know the answers to some of these questions. For example, with a 9x9 grid we know that with less than 8 (3^2-1)given numbers their must be at least 2 solutions. But that doesn't answer the question. If you have 10 given numbers must there be a unique solution? The answer is we don't know. One researcher is guessing that the magic number is 17, but he hasn't been able to prove it yet.

Good stuff.

2005-12-10T10:42:00.000-08:00

I noticed something weird over at Foxnews.com. They have an Associated Press article about Clinton's speech at the Montreal climate change conference under 2 different headlines. Here are the headlines:

Clinton: Bush 'Flat Wrong' About Global Warming
Clinton: Bush 'Flat Wrong' About Greenhouse-Gas Emissions

The article, as far as I can tell, is identical under both headlines. Clinton said that Bush is "flat-wrong" that reducing greenhouse-gas emissions would harm the US economy. A quick Google search pulls up the same article on a number of other sites. The headlines vary from 'Flat Wrong' about Climate Change to 'Flat Wrong' about Kyoto. All of those headlines seem to accurately reflect the story.

I found it strange that Fox would have the article twice though.

Playing Poker

2005-12-10T08:05:00.000-08:00

I went over to Harrah's and played some $3-6 last night and had a great time. Friday nights at the 3-6 table just seems like the perfect time to go. Throughout the night I would say half of the people at my table really knew what they were doing. For the other half it was probably their first time playing live poker, or if it wasn't they have some serious issues. That is a typical Friday night, but the great thing was most of the newbies were sitting on one side of the table and most of the good players were sitting on the other. This formed a kind of "us against them" feeling and everyone was very friendly. I don't think a single person on my side of the table was down at the end of the night except sunglasses boy. We'll get to him in a second. Let me tell you about the characters at this table.

The guy sitting next to me always ask how much it was to call when he was in a hand--every time. He had trouble seeing the cards in the middle of the table and I swear he was partially def as well. There was another guy who looked like a disgusting Santa Claus. He was big and fat and had a bushy white beard. The disgusting thing was he took is coat off and had only white sleeveless t-shirt.

We had a sunglasses guy at our table. He was straight from the NL tables and raising just about every pot early on. I broke a rule with myself not to get involved in large pots with players like this and I lost a top pair to a bottom 2 pair. I have serious troubles with players like this because I continuously underestimate their hands.

There was also an old lady at the table for a while. Old ladys are great to play against because if they are betting you KNOW they have a good hand and if they are raising...duck and cover. Most of the time they are content to let other people bet their hands because they are scared. This lady raised pre-flop once the entire night. I think she had one caller and he folded right after the flop.

I have to tell you about one more character at this table because I had the great read on him. I'll call him happy-young-guy. He was drinking beer and had a buddy at the table. The great thing about this guy is he would try bluff but had the most obvious tell. He would put his hand over this mouth and get this mischievious look. I started calling it "that twinkle in his eye". I never got a chance to exploit this read but the guy sitting next to me once called him down with a pair of fours to win the pot.

I did find an opportunity to bluff a pot at one time during the 6 hours I was there. I had K-8 of diaminds and decided to raise pre-flop. The reason was several people were already in the pot, I was in good position, and I had an extremely tight image at this point. I wanted to build the pot in case I flopped a good draw, and I wanted to loosen up my image a little bit.

Everyone calls the raise and the flop comes all low cards with 2 hearts and a diamond. Everyone checks to me so I thought I'd take a shot at it. A bunch of people fold and its down to me and 2 other guys. The turn is diamond. Now I actually have a draw. At this point, even before they checked to me I could tell the other guys weren't really interested in this pot. They check and I bet again. One of them folds. When the other guy called something told me he had a heart draw. It wasn't really his betting pattern because I would have expected this guy to bet the flop with 4 to a flush. Then again, I had raised pre-flop so he probably knew I would bet the flop for him. And if he had bet it he was thinking I would have raised him on the flop and that would have knocked out all of the other players diminishing his profits if he actually hit the flush. All of that flashed through my head between the time he called and the dealer threw the river out there which was a black card-total blank. He checks and I fire another bet with my King high. He actually thinks about it for a second making me think he had a pair, but then he folds.

Now, technically this wasn't the greatest bluff in the world. I probably had the best hand with King high, but I was a situation where I used my table image to take in a decent sized pot.

Another great thing about the table was that the newbies would go crazy with obviously beaten hands. For example in this one pot I had AK. The flop brings an ace and 2 low cards. I bet, sweaty-guy raises, I re-raise and he calls. I bet the turn and he raises. At this point I'm pretty sure I'm beat. He's got to have 2-pair right? I call and call him on the river. To my amazement he flips over A5. He had nothing but a pair of aces on the flop with a 5 kicker and he turned a gut-shot straight draw.

This sweaty-guy was a real character as well. He sat down at the table with his fresh rack of $100 and could barely stack his chips because his hands were shaking so much, and he literally had beads of sweat on his forehead. He won a couple of big pots right away and settled down a bit.

One more guy I have to mention. He was only at my table for 30 minutes or so before he moved over the $4-8, but he made an impression. This guy would not shutup. It didn't matter if he was in hands or not the running commentary continued. It was literally hard to think or pay attention to any player besides him the whole time he was there. He was teasingly asking our dealer if she would give him a ride home when she got off work.

"Come on, please...I need to go see my buddy who is in prison."

"At 11 o'clock at night?"

"No, I mean I'd spend the night with you and then go see him in the morning."

"Ummmm..."

"No? It's probably because I'm black right?" He pulls a wad of cash out of his pocket. "Look at this,"I've even got a bunch of money and she won't have anything to do with me."

Then the best comment of the night: The dealer says "Those are all 1's. You probably just came from the strip club."

You just can't experience this stuff playing online. I've written a lot now and I still haven't told you about half the people at the table or very many of my interesting hands. This is why I love live poker so much and I can't bring myself to start playing online. Playing with real people is a fun evening of entertainment.

Delay

2005-12-05T17:14:00.000-08:00

Judge Upholds Most Serious Charges Against DeLay
and
DeLay's Money Laundering Charges Upheld

News for Free?

2005-12-04T10:03:00.000-08:00

Why do news organizations give news away for free?

There would be a couple of components to this answer. First of all, game theory. I'm thinking of a prisoner's dilema where all news providers would be better off if no one offered news for free. But each individually sees a benefit to free news. The huge traffic to their website would increase their advertising revenue greatly. But if one newspaper provides free online news all organizations find it in their interests to follow.

Actually setting this up to require understanding the trade-offs between online advertising, print advertising, and subscription fees.

Competitive Journalism II

2005-12-04T09:23:00.000-08:00

This is a continuation of the previous post.

What is the optimal amount of resources devoted to news in a society? Do we expect a free market to naturally achieve this level? This is impossible to answer. We'd need to know the value to society of investigative reporting on the government. And what is the value of that reporting? What was the benefit to the US of Watergate? Once we figure out the value of this reporting we'd need to know the marginal contribution of resources to this reporting. For example if spending on investigative reporting rose 15% how many more stories would be reported? Of course this value is dependent on how corrupt the government is.

One model could look like this: The first several units of investigative reporting are immensely valuable to society. Large indescretions by the government and corporations are discovered first. The assumption is that the most costly corruption is reported first. After some level each additional unit of investigative reporting has greater difficult finding a story and the stories they do find are of less benefit to society because they are uncovering less costly corruption. So we have diminishing marginal benefits to investigative reporting.

Some people might argue the marginal costs of investigative reporting include damage to society for uncovering corruption. Or they might say the marginal benefits are less because uncovering corruption doesn't necessarilty lead to better government.

This model could be augmented with party affiliation. For example: Some members of society get a benefit when the party they oppose is exposed on some charge regurdless if society at large benefits. Members of the other party experience some costs regardless if the corruption was actually damaging to society.

Under this model it is likely that each side would devote resources to exposing the other side and perhaps resources to defending their own side from being exposed.

Now that we have models...is there reason to expect our society achieves a sub-optimal level of investigative reporting? Now the question is can any of this be measured and studied?

On that note, here is some investigative reporting. What is the value to society of this reporting? Is there damage to society from this article? Who is benefiting? Who is bearing the costs? Might one side feel the press is biased if they support these activities and get caught?

Competitive Journalism

2005-12-04T08:34:00.000-08:00

In the spirit of this blog being a recording of various issues I am concerned about and not a finished product for general consumption I am going to make more of an effort to throw out more questions and ideas I am unsure of as opposed to my own opinions or simply linking to the news. I very much doubt I will find the time to research these issues and report on them further. So my first question...

How do journalists compete? Or rather how to media organizations compete and how does that affect reporters and editors and ultimately, readers?

What is the strategy of one media business to grow market share and advertising revenues over other media businesses? How have these strategies changed in recdent years with the proliferation of 24 hour news networks and the growing influence of the Internet?

How important are quality reporters and editors to the bottom line? What is the value of a scoop?

How does the Washington Post grow its brand and reputation? I think most people would agree that www.washingtonpost.com and www.nytimes.com and www.latimes.com offer extremely similar experiences. You won't find news on one that you wouldn't find on the others. The only differences perhaps the layout and the feeling that reader have for that particular media organization. Is USAToday a name you trust?

How does being considered biased affect your paper? Many conservative wing-nuts believe the NYTimes is a liberal-biased media organization. How does this affect the NYTimes brand image? How does it affect their revenues? My initial feeling is that it may hurt the NYTimes but help Foxnews. Does it help an organization to be considered liberal or conservative?

How do subscription fees for content affect revenues? How do they affect the brand? The NYTimes recently put some of its content behind a subscription fee. They did not put their "news of the day" content behind this subscription. Obviously with many competitors offering almost identical services on the web for free it would be surprising if they could increase profits by doing that. Presumably some hardcore NYTimes readers would pay a fee for that subscription but it seems likely that a vast majority of readers would simply move over to the WaPost or other "national" paper. Lost advertising revenues would more than offset any subscription revenues.

But the NYTimes did place a subscription on its editoral content. How will this affect the revenue and the brand? One clear distinction is that editoral content can not be easily copied by other papers. The columnist work exclusively for the NYTimes and they obviously felt these people were not easily copied by other news organizations. Note, I can go to other news sites for opinion so there can be substitution here. In fact, that is probably what most NYTimes readers did. So the NYTimes feels that revenues from a subscription for its editorial content will more than offset the lost traffic of people visiting its site specifically for this content. It will be interesting to see what becomes of these fees...some people predict they will have a negative effect.

What if advertising prices go up?

This is a very interesting topic to me.

Congrats Tucker Carlson...

2005-12-02T22:22:00.000-08:00

...you seem to have won a debate on your show with a guy who is in favor of human exinction. Good job, we can all rest easy tonight.

I like Tucker Carlson, but I just can't stand his new show on MSNBC because, like some other commentator shows of this kind, he invites guests who have radical opinions and then debates them. The goal of the show is not to have a good discussion though, it is for the host of the show to win. You will never hear someone say "Hmmm, well, that's a good point. I hadn't thought of that before." No, the show is based on a contention between guest and host.

I think the only people who can stand to watch these shows for longer than 20 seconds are people who are probably cheering, "Yes, he defeated guest #2 tonight!" Our democracy is safe for another night.

The Propoganda War

2005-12-01T11:38:00.000-08:00

From the NYTimes:

Titled "The Sands Are Blowing Toward a Democratic Iraq,"
an article written this week for publication in the Iraqi press was scornful of
outsiders' pessimism about the country's future.
"Western press and
frequently those self-styled 'objective' observers of Iraq are often critics of
how we, the people of Iraq, are proceeding down the path in determining what is
best for our nation," the article began. Quoting the Prophet Muhammad, it
pleaded for unity and nonviolence.
But far from
being the heartfelt opinion of an Iraqi writer, as its language implied, the
article was prepared by the United States military as part of a
multimillion-dollar covert campaign to plant paid propaganda in the Iraqi news
media and pay friendly Iraqi journalists monthly stipends, military contractors
and officials said.

This is how the Pentagon defended this practice in the Washington Post:

"This is a military program to help get factual information about ongoing
operations into Iraqi news," said Lt. Col. Barry Johnson, a military spokesman
in Baghdad. "Because this is part of our ongoing operations and an important
part of countering misinformation in the news by insurgents, I can't provide
details of what that entails. I want to emphasize that all information used for
marketing these stories is completely factual."

Contradictory Headlines

2005-11-13T16:27:00.000-08:00

NYTimes: "Conservatives to Dominate Afghanistan"
LATimes: "Karzai Supporters May Dominate Afghanistan's New Parliament"

I am really confused. Says the AP article in the LATimes:

Nearly all winning candidates ran as independents, making it difficult to
determine where power will lie in the 249-seat legislature. But Western
diplomats and other political analysts said it appeared that supporters of
the U.S.-backed Karzai dominate.
"The government has the support of more than 50% in the parliament," said Ali Amiri, a respected political analyst who writes on Afghan affairs. "There are some small opposition groups, but nothing big enough to challenge Karzai."
...
Ahmad Fahim Hakim, deputy chairman of the Afghanistan Independent Human Rights Commission, said more than half of the winners are regional strongmen, prompting fear that they will block efforts to reform government and bring to justice those responsible for years of bloodshed.

But the NYTimes article states:

Based on early analyses of the full results of the Sept. 18 elections, the
National Assembly will be dominated by religious conservatives and jihadist
figures. They may form a strong base of opposition to the president, Hamid
Karzai.

The AP article seems to be talking only about the 249 member "Wolesi Jirga" or "House of the People". The voting for that Jirga occurred September 18th but results have been delayed due to an investigation into possible ballot-box stuffing. The NYTimes notes that 32 members of the upper house or "Meshrano Jirga" were elected this Saturady. Thirty-four of the 102 members of this legislature will be appointed by Kazai.

Today's Papers over at the Slate mentioned this discrepency in headlines.

Pat Robertson is a nut job

2005-11-13T11:51:00.000-08:00

The city of Dover has just voted out all 8 members of its school board who pressed for ID to be taught in the science classroom. This is what Pat Robertson had to say:

I’d like to say to the good citizens of Dover: If there is a disaster in your
area, don’t turn to God; you just rejected him from your city. And don’t wonder
why he hasn’t helped you when problems begin, if they begin. I'm not saying they
will, but if they do, just remember, you just voted God out of your city. And if
that’s the case, don't ask for his help because he might not be there.

Iran with Nukes

2005-11-12T12:36:00.000-08:00

There is going to be an article in the NYTimes tomorrow about some of the evidence the US has been presenting to prove the Iran is pursuing a nuclear weapon.

There is no evidence that Iran has a bomb, and their is no evidence that they would be able to build one before 2010. Can we please go forward causiously on this one?

Oh Really Mr. O'Reilly?

2005-11-09T21:16:00.000-08:00

Boy, I can't agree with Bill on anything. Apparently (I haven't actually watched the show, I've heard and read) that he is after oil companies now for making a profit because of high energy demand.

This is the type of Republican I really hate. They are fanatic about social issues and then it turns out they aren't even conservative when it comes to free markets. If they keep this up people are going to start to realize that the party that truly wants the Federal Government out of our private lives is the Democratic Party and all of the differences on economics issues are trite in comparision.

And if you want something truly aggrovating just read this part of the conversation:

So Mr. Flynn, I mean, I've got stats, man.

PHIL FLYNN, VP, ALLERON TRADING CORPORATION: You sure do.

O'REILLY: I've got them.

FLYNN: Double profits at a time when oil demand is at an all-time high.

O'REILLY: At a time when the country's suffering.

FLYNN: And, guess what? What you didn't show with these numbers, Bill, how much dollars invested did it take to get those profits?

O'REILLY: Stop. Stop.

Riots in France

2005-11-08T18:15:00.000-08:00

Here is an interesting description of one of the slums of Paris.

The Economics of Sexuality

2005-11-08T17:16:00.000-08:00

Andrew Francis develops (pdf) a model of sexual behavior where, as the cost of one sexual act rises relative to other activities people tended to substitute away from that act. Choices of sexual activity people might choose between are vaginal and oral sex, or protected and unprotected sex. Rising costs for these might include the spread of a sexualy transmitted disease.

What makes this paper very interesting is that he explores the "choice" between hetero and homosexual sex with the introduction of AIDS as the increase in cost. Knowledge of AIDS increases the cost of homosexual sex for men, and heterosexual sex for women. He finds that indeed men shifted towards heterosexual and women toward homosexual when they were more likely to know about AIDS and how it is spread.

What conclusions can we draw? This shift, while significant, occurs on the margin between homo and heterosexuality. Preferences between them in the model are assumed to be biological in nature. The vast majority of men and women do not change their sexual behavior even given the sharp increase in its cost. This suggests though, there is a middle area for both men and women whose members can possibly be influenced by cost.

As Alex points out over at MR, there seems to be a higher number of homosexual men in prisons where the cost of heterosexual sex is extremely high, if not infinite.

One thing we must consider is the implications this has toward sexual policy in this country. If you believe that homosexuality is wrong then you are right to suppose that keeping restrictions on gay marriage and other cultural factors that make it costly to be gay will reduce the population of openly homosexual people. You would be correct in saying that lessoning these barriers would result in an increase in homosexual activity.

I think I remember reading somewhere that women are more likely to report having a homosexual experience than men. This could be explained by the fact that (I think) there is less stigma attached to females having homosexual sex than males. I mean, come on. Two chicks doing it? That is hot.

Via MR.

Congratulations Daniel

2005-11-08T17:14:00.000-08:00

One of my favorite bloggers has landed a nice job.

Intelligent Design, Again

2005-11-08T16:37:00.000-08:00

There seems to be a very emotional war going on within Christianity right now between conservative Christians and everybody else. I fall in the everybody else side, and I came to an interesting conclusion. I believe in the premise behind what has come to be known as Intelligent Design.

What I have believed since a very long time ago was that God created the universe, the world, us. It so happened, I learned later that this was done through a process of evolution that continues even to this day. Learning about this did not shake my belief in God at all. I simply discounted some of the fanciful stories in the Old Testment. Coming from my version of Christianity (Methodist) this was easy to do. I do not believe that Noah built an boat that housed every species of animal in the world either.

ID goes one step beyond my belief system though. ID states that life forms such as ourselves are vastly too complex to have evolved from single cell organisms without the guildence of a higher being. Therefore, if it can somehow be proven that complex organisms can evolve from the building blocks of life then ID has been disproven. My own personal beliefs would still hold.

This harmony between religious beliefs and scientific discovery is discussed in Jimmy Carter's new book as well.

Intelligent Design vs. Evolution

2005-10-13T07:42:00.000-07:00

According to a recent Gallup poll 61% of Americans think Evolution should be taught in public schools. That means 39% didn't say they think Evoltuion should be taught. That makes me sad.

Don't mistake me, I'm all for teaching intelligent design. Put it in the philosophy course though. Biology teachers shouldn't have to teach it.

Should we re-build

2005-09-01T16:17:00.000-07:00

Hastert is bound to get some flak for this:

House Speaker Dennis Hastert dropped a bombshell on flood-ravaged New Orleans on Thursday by suggesting that it isn’t sensible to rebuild the city.

"It doesn't make sense to me," Hastert told the Daily Herald in suburban Chicago in editions published today. "And it's a question that certainly we should ask."

But I think this is an important question to at least ask. Nature has changed the area into an extension of the Gulf of Mexico. Do we need to pump all that water out and hope it doesn't happen again?

Why Didn't More People Leave?

2005-09-01T15:52:00.000-07:00

Why didn't more people get out of New Orleans before Hurricane Katrina demonlished the city? A lot of people are mad right now that 100% of the people were not evacuated? But is that even possible? And how costly would that be?

You don't need to under-estimate the devastation or its probability of coming true to have made a rational choice to stay. For some, the costs probably out-weighed the benefits of leaving. We would expect it to be relatively more costsly for the poor to get out than the wealthy. And surprise, the poor seem to be disproportionately affected.

There might be a fair criticism of the city or state government for poor preparation or how they have handled it since. Knowing the incentives people have (ie knowing that a large population wouldn't choose to leave the city) would have made it possible for planners to try to change those incentives.

But perhaps the governments' actions were rational too. What were the costs of ordering a mass evacuation and what was the probability that nothing so serve would end up happening? Perhaps all the choices involed were probablistically correct and we just ended up getting unlucky?

All this reminds me of playing poker.

Wedding Crashers...but sorta in reverse

2005-08-24T20:46:00.000-07:00

This company rents out wedding guests in India.

Humans vs The Natural World

2005-08-18T19:42:00.000-07:00

"As the first Americans strolled onto their open real estate 13,000 years ago, at the end of the Pleistocene epoch, their continent quickly lost much of its grandeur. More than 60 North American species weighing over 100 pounds went extinct, including the continent's own elephants, lions, camels, and cheetahs. The cause was likely overhunting"

Read the article before you read what I have to say

through most of this article I couldn't figure out if this guy was being serious or about to shift gears and talk about how this is not a good idea. Starting with the quote I copied above you could make a very good argument that pretending humans are outside the ecosystem is ridiculuous.

It is clear he is not proposing we repopulate our country with these animals outside of well confined areas. But I do think he is serious about the idea that lions, elephants, and cheetahs should still be roaming around in North America freely in an ideal world. If only these pesky humans had never shown up!

My question is what is wrong with the humans showing up? It is apparent that we came in a changed the ecological system. How is this different from any species entering an ecosystem and changing the mix of other species present? We came in and changed the ecosystem. Several species went extinct...so what?

Isn't this Ishmael's point about pretending to know the difference between right and wrong? Is it right for the lion to kill the rabbit? Is it right for the rabbit to escape and let the lion go hungry? Humans are part of this process as well. It is this author's wish that we live completely outside of the eco-system and try to damnest to restore it to what it was before we showed up? In fact, lets not let anything change the ecosystem ever again.

And you wonder why its a blue state....

2005-08-15T16:23:00.000-07:00

A letter from the Chairman the Republican Party of the Third District of Wisconsin to Ron Kind (D) the representative of that district:

Ron Kind can celebrate the Socialist Ponzi scheme, house of cards, band-aid of the great
depression if he wants but now it's a tourniquet on our future

What was he talking about? Social Security. Via John Marshall.

Economic Sociology II

2005-07-25T19:47:00.000-07:00

Just another note about the Postrel article...

I need to study up on Brian Uzzi

Uzzi finds that businesses do best when they find a ''bliss point," combining just the right mix of arm's-length and ''embedded" relationships. Strictly economic relations bring in new information, while more personal connections are better at solving specific problems. In looking for bank loans, small businesses find out about interest rates and new loan structures by shopping the market, but they get customized deals from the aptly named ''relationship managers" at their existing banks.
''What my work showed was that really neither approach, in its purest form really works best," says Uzzi ''If people are purely rational and atomistic, they underproduce. If people care entirely about community and ignore what market signals are giving out, they don't do well. Those that do best are those that find a balance."

This raises a question I've thought of a couple of times. What does effect "customer engagement" have on the economy? Its not just "branding" and finding ways to price discriminately--it has to do with creating value. Having information about what your customer want/need increases the value of your market transactions with them, not just for you, but for them as well.

I also need to read Postrel's book: "The Substance of Style: How the Rise of Aesthetic Value Is Remaking Commerce, Culture, and Consciousness"

Economic Sociology

2005-07-25T18:57:00.000-07:00

Virginia Postrel, a well respected blogger and author, comments on Economic Sociology in the Boston Globe. Economic Sociology is the application of Sociology's tools and frameworks to markets and the topics normally monopolized by economicts. This is only fair, she writes, because economists have been applying their models and theories to social structures for decades now. We might call that Social Economics.

The application of Economic Sociology that immediately leaps into my mind is economic development and growth models. Economists have been stumped for years as to why some countries grow with viral capitalist economies and other have been stagnating for centuries. We have run millions of regressions correllating international trade and openness, labor force education, savings rates and capital investment, and a million other variables with growth. Most recently the focus has been on economic institutions such as stable, uncorrupt government, central banks and monetary institutions, ect... But while we know what a healthy economy looks like, creating one is a different sort of task.

How might understanding culture lead to better solutions? How much better can we explain and predict economic growth when accounting for culture or other socio-economic variables? These are exciting questions. As Robert Lucas says:

The consequences for human welfare involved in questions like these are simple staggering: Once one starts to think about them, it is hard to think about anything else.

Moneymaker

2005-07-18T20:50:00.000-07:00

Moneymaker did not change poker.

I'll heard or read that "Chris Moneymaker changed poker" several times over the last few weeks as the 2005 World Series of Poker reached its conclusion. Sure the year after Chris Moneymaker won the WSOP its size more than doubled. Then the year after that the field more than doubled again for the championship event. This has more to do with the World Poker Tour and the explosion of other televised poker since 2003 than with any single champion.

And don't get me wrong, I'm not one of those guys saying that the WPT changed poker either. At least not in the way that it is normally meant. The typical explanation for the WPT's shocking success is its "revolutionary" pocket cam. The Wall Street journal glorified this innovation proclaiming "for the very first time, viewer can see the player's hole cards." For years ESPN has shown us hole cards before the hand is over by simply finding out what the cards were after the hand was over, and going back and putting it in the taped broadcast or by using a similar type of hole-cam. Neither program comes close to showing half of the hands played so the new found popularity can't be explained by viewers being treateded to more information.

People watch poker on TV because they want to see their favorite pro win, not because they want to see some schmuck get lucky and have victory fall in his lap. They wanto to see drama, not gambling. That's one thing the WPT does well.

Sure, Moneymaker will be remembered as the first poker champion of a new era. However, this makes me feel sorry for another unlikely amatuer who happened to win 1 year before Chris. Does anybody remember Robert Varkonyi?

Pokernomics

2005-07-18T20:39:00.000-07:00

Noooooooo. That damn Freakonomics guy beat me to it. I was just thinking the other day about how great it would be to analyze the data from an online poker tournament.

That's okay. He'll do a piss poor job, and I'll re-do it. He is asking people to voluntarily send in their hand histories from playing online. Hmmm, there couldn't be any self-selection bias there could there? Is he going to combine all the data from low-limit and high-limit and no-limit, tournaments?

The real travesty here is the same as the book, the name. Pokernomics. This has nothing to do with Economics. It is an economist applying statistical methodologies to various subjects. I'll stick with Super System.

Evolution vs Creationism

2005-06-21T16:25:00.000-07:00

Alex Tabarrok is missing something in his Theism vs Evolution posts. He claims that "Creationism follows rationally from Theism." That is, you are being perfectly rational believing in Creationism given that you believe in God. Here is his argument:

Suppose that you find a watch in the forest. If you know there is no watchmaker then the theory of evolution is a brilliant and compelling explanation for the presence of complexity without design. But suppose that you know a watchmaker exists then surely the simplest and most compelling explanation is that the watchmaker made the watch. Any other explanation, particularly one so improbable (see extension) as evolution would seem to be preposterous and beside the point.

But now suppose that you are out in the forest and you find fossils. You find evidence that species have been slowly changing over time and some have died out. Suppose you find DNA and learn how is it passed on. You find a probable mechanism for evolution. Is the rational explanation still that a Creator have must made all the different species at some definate point in time? Or is it more likely that while a Creator could still be an explanation of why life exists or how it became so complicated, perhaps it was through a process of evolution that she did the creating.

Defending his first post Tabarrok writes

Suppose that God came down from the heavens tomorrow in all his glory, throwing thunderbolts, raising the dead, turning water into wine, whatever it takes to convince everyone of his existence. If this were to occur I have no doubt that even Richard Dawkins, precisely because he is a rational scientist, would say 'hmmm, perhaps I wasn't quite right about all this evolution stuff.'

This is confirmation that he thinks of Evolution and the existence of God as mutally exclusive. No rationalist needs to feel compelled to change his opinion on evolution given evidence of God.

This just in...

2005-06-20T17:11:00.000-07:00

The Internet has changed the way most young people consume news I believe. Those that do consume news that is. I'm sure there are still people who exclusively read the morning paper and watch the evening news. I'm definately not one of them. Over the past several years the proportion of news I read that comes from blogs and other small websites has increased dramatically.

The beautiful thing about this is I can tailor my news intake to my taste. I don't have to see the world through Dan Rather or Brit Hume's eyes each night. However, I feel a little out of touch when people at work start talking about all of the details of Terry Schiavo, Michael Jackson, the abduction of some girl in Aruba, or whatever the national tradjedy of the moment is. The paradox of the Internet is that people now have access to more forms of news and a greater amount of information, but will probably become more specialized in what information they choose to gather.

Emily Oster

2005-05-25T15:39:00.000-07:00

is a PhD student at Harvard. She seems to have created a stir several months back with a paper linking Hepatitis B infection rates to Asia's missing women. Now there is a Slate article written by Levitt and Dubner about her.

Personally, I think its an excuse to talk about a chick who sits poolside on vacation in Las Vegas reading Hepatitis B: The Hunt for a Killer Virus. Is that not the perfect woman?

Nuclear Energy

2005-05-22T19:22:00.000-07:00

Here's an article I was pointed to by macroblog. Three pretty good reasons why the US hasn't gone to nuclear energy to a larger degree:

Unknown costs of a disaster (Chernobyl) - better to face a known cost of a coal plant's pollution.
The political problem of storing nuclear waste.
Coal is cheaper/more profitable?

I don't know if that last one is true. If its not I would be really interested why we don't have more nuclear power. It could be a path-dependency problem. By the time nuclear technolgies matured we already had a huge infrastructure of coal burning plants whose costs were already sunk in building them. We don't have nuclear energy because we wanted those plants to pay themselves off first.

Couple of other things: France relies very extensively on nuclear power. Becker asserted they "recycle" their nuclear waste and don't have a big storage problem. Secondly, why couldn't we blast the waste into space? Presumably we could shoot if off I a direction where it wouldn't hit anything for hundreds of millions of years if ever.

Secondly, how scarce are the materials for nuclear power? Would we be trading dependence coal mines for dependence on uranium mines?

Finally, Wind farms. Basically you're pulling energy out of the sky. If you had big enough wind farms wouldn't that effect the local or global whether?

Europe Productivity

2005-05-19T05:15:00.000-07:00

Macroblog sneers at Europe for their "productivity bust". The graph indeed shows American productivity growth catching up and then exceeding Europe's since the mid 90's. US productivity growth has been steadily accerating while Europe is decelerating.

Last year the Economist published a good rebuttal to this argument that US productivity growth has out done Europe. Key points:

Europe GDP per capita growth 1.8% vs. USA GDP per capita growth 2.1%
That small difference can be explained by Germany's lone performance
Productivity figures are incomparable. Europe's include public sector. Also, there are differences in GDP calculation
Europeans take more leisure, Americans more income. The preference for leisure over income might be explained by higher marginal tax rates. Average GDP per hours worked is very close in both regions. (I'd suspect higher unemployment rates are involved here as well).

The Office

2005-03-25T18:53:00.000-08:00

I happened the catch the last half hour of "The Office" last night. I though it was pretty good because I love Steve Carrell's comedy, but I don't think it will be a big hit or anything. I don't think they could possibly hype it more. It's sad that a refreshing and quirky show on American television is a remake of a several year old UK comedy. Maybe I'll go pick up the DVD.

Update: Kevin Drum said he heard The Office (the original) was similar in tone to Office Space, the classic occupational parody by Mike Judge. I have to say, the only thing similar about the American version of The Office and Office Space is the title. Office Space is parody of our lives, dated only by the mention of Y2K. Everything in that movie, from Peter Gibbon's apartment walls to the office copier/fax machine seemed perfect, and made me chuckle. By comparison The Office is just silly.

General Motors

2005-03-25T18:30:00.000-08:00

From Harper's Index via Marginal Revolution:

Ratio of active workers at General Motors to retirees on its pension rolls: 2:5

Total pension costs of the company per vehicle it produces: $675

Wow.

Why Blog?

2005-03-22T19:58:00.000-08:00

I'm not sure honestly. I like the idea of having of running collection of my thoughts. A place where I can look back in a year and feel a sense of accomplishment. I also just want to write and get my comment "out there".

My goal is to maintain a blog that I would enjoy reading. And you can probably see by the links to the right, my goal is going to be difficult to obtain. I enjoy reading blogs by authors who have something to add. They bring things to my attention I wouldn't have noticed, and they all have unique perspectives. They are professors and journalists for the most part, and their blog is tied directly with their full-time jobs.

My perspective is that of a part-time Economics grad student, and a full-time accountant. So I don't have a lot of time for this blog, but I enjoy discussing economics, politics, current events, and interesting ideas. And if I'm lucky, maybe you'll enjoy reading this blog.

American Health Care Costs

2005-03-22T17:17:00.000-08:00

Arnold Kling has a new article up on techcentralstation.com entitled "The Myth of Massive Health Care Waste ". He argues the that "conventional" explanations for the high proportion of GDP spent on health care in the US are lacking, and rather than spending on excessive waste, Americans are receiving better health care outcomes than other industrialized countries.

According to those who subscribe to the myth of massive waste in health care spending, the large discrepancy in the share of GDP devoted to health care (15 percent in the United States, compared with less than 10 percent in many other developed countries) reflects the inferiority of our system. They take our higher spending level as irrefutable proof of the inefficiency of our system of private and public financing relative to a more socialized approach.

Instead, I am prepared to make the following bet: ten years from now, it will be objectively clear that the United States provided significantly better health care to its citizens between 1990 and 2005 than did other developed countries. From the vantage point of 2015, the policy blunder of the past fifteen years will not be that the United States spent too much on health care, but that other countries spent too little. The socialized systems, forced to ration health care because tax revenues are not sufficient to pay for state-of-the-art care, are constraining their citizens from being diagnosed and treated as well as Americans.

I think Kling does a poor job of supporting his prediction.

The first "myth" is wasteful spending in the final year of life.

An urban legend has it that close to half of all health care spending comes in the last year of life. The facts are somewhat different. The most thorough study, by Donald Hoover, et al, finds that 27 percent of Medicare spending takes place during the last year of life.

Overall, 22 percent of health care spending on people over 65 takes place in the last year of life. However, only 1/3 of U.S. health care spending is for people 65 and older. Thus, as a percentage of overall U.S. health care spending, spending on the last year of life amounts to about 7 percent. That is high, but not staggering.

Obviously something is wrong with his calculation. According the the numbers he gives, 7 percent of healthcare spending occurs on people over 65 in their final year of life. People still die under the age of sixty, and when they do they do have medical expenses in their final year of life. Therefore, the actual amount spent on the final year of life I is much higher. Then he asserts:

Contrary to myth, the magnitude of what the United States spends on patients in the last year of life is not a factor in our excessive spending relative to other developed countries.

This without any comparision to what other countries spend during the last year of life!

His other "myths" of waste are excessive profits in the pharmaceutical industry, malpractice premiums and defensive medicine, and overhead and efficiency. Against these he argues they are too small to affect overall healthcare spending. Thus, taken alone they are not "magic bullets". Taken together though, they might represent 3 of GDP which would go a long way in bringing health care costs in line with other industrialized countries.

He contends physician pay and the utilization of high-tech procedures better explain why our health care costs are different from the Europeans, but reducing our spending on these would decrease the quality of our care.

So if your premise is that Americans don't spend more on health care because a lot of that spending is wasteful it would be nice to show that American receive better health outcomes than other countries. But proof of this is elusive. Americans have similar health outcomes to much of Europe. Kling's response is that the common measures of health outcomes: infant mortality and longevity are poor statistics.

Most health care spending is not focused on reducing infant mortality. Infant mortality is very low in all industrial countries, so any differences across countries are of little significance. It is questionable whether differences in measured rates of infant mortality are due to differences in definition. The United States attempts to save most premature infants and counts the failures as infant mortality. In some other countries, deaths of premature infants may be treated for statistical purposes as incomplete pregnancies, which takes them out of their infant mortality statistics.

Longevity calculations are not a sensitive measure of improvement in medical care. In my essay on lifespan, I showed how the longevity number is calculated as a peculiar weighted average of the survival rates for different population cohorts. I produced a simplified example in which the longevity number came out to be 68.9 years. In that example, suppose that 10 percent of the people who otherwise would die at age 60 instead receive treatment that allows them to live at least to age 80, when they die at the rate of other 80 year-olds. In that case, the overall longevity number would increase by less than 1.5 years, to 70.3 years. In international comparisons, such an increase easily could be swamped by other demographic and genetic factors.

I guess my main problem with Kling's essay is that he presents it as a defense of American, market-style health care. Kling supposes there are only two hypothesis why Americans spend more on health care while maintaining similar health to Europe. Either that spending is wasteful and socialized health care is more efficient or Americans will eventually achieve better health outcomes.

But health in a society depends on many things, only part of which is the quantity and quality of health care. Americans might spend more on health care simply because we are unhealthy.

Via Margin Revolution.

First Post

2005-03-13T12:27:00.000-08:00

This is my test run blog. I hope to have updates regularly, but we'll see how it goes.