Kids Prefer Cheese

Immigration: Good!

2009-11-23T11:33:00.000-05:00

I showed this article to one of the people who constantly berates me for my support of (nearly) open borders.

Her response, verbatim: "What would you expect some damned foreigner to say? 'Giovanni'? What kind of American name is that?"

Nice.

(Nod to Angry Alex)

She blinded me with science

2009-11-23T09:08:00.002-05:00

Thanks as always to Tyler for bringing this "scandal" to my attention. I am using quotes here because, in my opinion, this is just business as usual in academics. There may not be such a blatant electronic "paper trail" on display, but protecting turf, punishing heretics, and rewarding your friends is the coin of the realm.

Take macroeconomics for example. Who is the premier employer of monetary economists? Yes, it is the Federal Reserve System. Who as a class of researchers really deeply loves them some Fed? Yes, it is monetary economists. Fed independence is taken as a given an as a desideratum. Heretics (sour grapes warning: I am a Fed heretic) find it extremely difficult to publish dissenting views.

I have a piece in the JME on political influence on the Fed. Pretty good publication for me, but the paper took 7 years to find a home and the results in it were unchanged from the first version (which was from my dissertation).

I would go so far as to say that every scientific "consensus" based on empirical evidence is far weaker that it is made to appear via mechanisms like those described in the Climategate story.

Cute! What is it for?

2009-11-22T20:34:00.001-05:00

Shirley, loyal reader, sent an email to my wife, the LMM.

The LMM had sent a bunch of pix from Europe and elsewhere, so Shirley could look at them all. And the LMM had put the pix on the little thumb drive, with a USB jack.

Shirley's response: "Oh forgot,what is USB Drive. It is really cute but I have no idea what it is for."

Which made me stop and think: it IS, in fact, pretty amazing what those little flash drives can do. Very cool. But you do have to know what a USB drive is. Otherwise, they are just "cute."

I'm a full grown man but I ain't afraid to cry

2009-11-22T16:40:00.001-05:00

Beck Hansen and Jack Black. People you KNOW it has got to be good!

Midnite Vultures "Sexx Laws" from Beck Hansen on Vimeo.

A Rant, and A Movie Review, Sort Of

2009-11-22T13:12:00.002-05:00

I went to see Michael Moore's "Capitalism: A Love Affair" a few weeks ago, working for WPTF radio. And, I actually thought it was pretty good. Funny. And the middle part was excellent, really first rate. MMoore smashed four people who needed smashing. Those four? L. Summers, T. Geithner, B. Frank, and C. Dodd. Two economists, a narcissistic goofball, and an unprincipled drunk, in that order.

But then I read something by the good DeLong. And it struck me....well, here's my rant:

Folks, there is a contest out there for who understands economics better. The contestants are Dr. Brad DeLong, econ prof at Univ of Cal-Berkeley, and....the filmmaker, Michael Moore.

Almost unbelievably, and frankly *I* can't believe I'm saying this, the winner is....Michael Moore.

Dr. DeLong is fussing and moaning that a few people have finally come to their senses, and (as he puts it) "dug in their heels" on the enormous deficit. As it stands, folks, combining the state and federal government deficits for the next two years, what we already KNOW about, each working person in the U.S. owes well over $100,000, mostly to the Japanese and Chinese, who have bought our bonds, our debt, our Treasury bills.

(Editor note: "working person" means people with jobs. There are only about 150 million working people in the US. The projected debt of the feds is about $70k / worker, and the states is about $30k / worker)

But Dr. DeLong thinks that is not enough! He is clearly disdainful of those of us who are worried about selling our country, about mortgaging the birthright of our children. He says that if we have one more, just one more, bad economic downturn we may now have a return of the Great Depression. DeLong puts the probability at 5%. What he wants to do is to spend our way out of the recession, but he is not sure we can, because our deficit is so big.

Amazingly, Dr. DeLong cites a discredited theory, a theory no real economists believe anymore. Again, I can scarcely believe this, but DeLong bases his argument on the so-called "Phillips Curve," the theory that unemployment can be driven down by increased inflation.

Folks, this theory has been debunked, and debunked, and discredited, yet policy makers still want to use it. I can cite you a whole fistful of Nobel Prize-winning economists who have proved, absolutely proved, that announcing you are going to use inflation as a policy NEVER reduces unemployment.

So, Dr. DeLong gets an F: back to school, sir!

On the other hand, and I can't believe I'm saying this, either: Michael Moore, in his new movie, gets the cause of the crisis, and the damage of the bailout, about 75% correct. A solid C, for Mr. Moore, a gentleman's C.

Who is to blame? It is clear in the movie, if you watch "Capitalism: A Love Story." The cause of the financial crisis, Mr. Moore is very clear, the men at the center of the financial crisis are....the guys who are now the Obama economic team, and the people in Congress who want to blame everyone but themselves.

Michael Moore lines them all up, and skewers them: Tim Geithner, now head of Treasury. Larry Summers, now Director of Obama's National Economic Council . And, this is the best part, he also goes after people in Congress. Chris Dodd, the Senator from , and Barney Frank, the guy who forced our banks to make all those bad loans to people who couldn't pay them back! Barney Frank, the guy who knocks down old ladies if they get between him and a microphone, and who wants to blame Wall Street....Michael Moore shows how Barney Frank helped cause the crisis! It's delicious.

The point is that the only thing we have to fear is, Porkulus itself! DeLong wants us to spend more, to increase the deficit. But we can't do that. Because, as none other than Michael Moore himself showed, all that TARP money, all that Porkulus money, was wasted, thrown away, poured down a rathole.

DeLong is right about one thing: if we have another crisis, we will really be in trouble. Because we won't be able to bail out Wall Street again. But the reason is that we already spent too much on a useless bunch of policies. We spent like drunken sailors on shore leave. I'm sorry, I take that back, it's an insult to drunken sailors.

The bottom line is unbelievable! Michael Moore gets it right, at least for about ten minutes of his otherwise terrible movie. And Dr. Brad DeLong, a Berkeley economist, gets it wrong. The Phillips Curve is dead. Let it rest in piece, Dr. DeLong.

Whew! I feel better now.

Help! Tyler made my head explode

2009-11-22T11:46:00.003-05:00

When he referred to this post by Krugman as one out of "two of the best recent economics blog posts, in some time." In fairness, Tyler did do some basic CYA by noting in parentheses that he wasn't sure if he agreed with the post.

So lets break it down, KPC style:

"From various bat squeaks I’ve put together a view of what I think lies behind the surprising — and damaging — deficit squeamishness of the Obama administration."

Ok, so we start off with a double WTF. Bat squeaks? Is he making fun of Larry Summer's speaking voice?

And what is this about the "deficit squeamishness" of Team Obama?

People, the fiscal 2009 deficit was $1.4 trillion! And thats not just a one time, caused by the recession, deal. According to the CBO, the deficit in 2019 will also be over $1 trillion. Plus Team Obama seems willing to sign on to a health care reform bill that will in all probability further raise the deficit beyond current projections.

I am sorry Paul, but I just don't see any reluctance of the Obama administration to run big deficits.

Krugman then claims, without any supporting evidence, that the main reason why we are running such tiny, puny, pusillanimous deficits is that the government believes that further borrowing could cause long term interest rates to skyrocket because it would unwind a sort of carry trade going on where people are borrowing at ultra low short term rates and lending out at higher long term rates. As he puts it:

"Well, what I hear is that officials don’t trust the demand for long-term government debt, because they see it as driven by a “carry trade”: financial players borrowing cheap money short-term, and using it to buy long-term bonds. They fear that the whole thing could evaporate if long-term rates start to rise, imposing capital losses on the people doing the carry trade; this could, they believe, drive rates way up, even though this possibility doesn’t seem to be priced in by the market."

PK thinks this is a dumb argument. So do I. However, I don't happen to think it is why our deficits are what they are (which to PK is small, but on planet earth where I live, it is fairly large).

People, if Team Obama really wants to run a bigger deficit in theory (which we have no real evidence that they do), but are not doing so in practice, the reason why is much more likely to be that they fear the political fallout from all of us irrational people who would object to such a policy.

I actually agree with Krugman that the government could borrow a lot more money without any directly adverse macro consequences in the short to medium term.

I just didn't see anything in the way the original stimulus bill was constructed and implemented that would make me believe that another round of stimulus from the same set of players would do much for job creation or help put our economy on a sustainable recovery path.

Pot? Meet Kettle!

2009-11-21T13:06:00.004-05:00

So in the process of inviting Dutch EU parliment member Hans Van Baalen to leave the worker's paradise of Nicaragua, the deputy foreign minister, one Manuel Coronel Kautz, called Holland a "Paisucho", which is being translated as "shitty little country" or "crummy little country".

The Nicaraguan government has apologized.

Apparently Manuel Coronel Kautz is known throughout Central America for his colorful and folkloric utterances.

People, if Holland is a shitty little country, what in the world does that make Nicaragua?

Anyone? Bueller?

An inconvenient truth, but for how much longer?

2009-11-20T13:06:00.000-05:00

In a comment on my earlier post about Hugo Chavez's adventures in authoritarianism, Globetrotter asked, "I wonder what they will do next?"

Well we didn't have to wait very long to find out:

President Hugo Chávez wasn't pleased with data released this week that showed the Venezuelan economy tumbling into a recession. So the populist leader came up with a solution: Forget traditional measures of economic growth, and find a new, "Socialist-friendly" gauge.

"We simply can't permit that they continue calculating GDP with the old capitalist method," President Chávez said in a televised speech before members of his Socialist party on Wednesday night. "It's harmful."

Mr. Chávez's comments came shortly after data showed Venezuela's gross domestic product -- a broad measure of annual economic output -- fell 4.5% in the third quarter from the year-earlier period. It was the second consecutive quarterly decline, and observers have questioned how Mr. Chávez will be able to generate growth without high oil prices.

Indeed it is harmful, Hugo. Harmful to your bid to be President for life.

Comments on "Late" Article

2009-11-20T08:26:00.004-05:00

More from the comments section of the "Sorry I'm Late" piece in the Chronicle. A comment, and my response (yes, I am going all Don Boudreaux on you. But at least my "letter" got published, even if only in a comments section):

62. consideritdone - November 19, 2009 at 07:09 pm

I'm fascinated by this thread in part because I am among the chronically late and have tried various techniques to remedy this habit, with uneven success. I recognize that some people choose to find my lateness a personal affront, and perceive that I value my time more than theirs. This is not the case.

I'm not late because I hate waiting. That has nothing to do with it. I am late because I overcommit, because I underestimate how long tasks will take, because I am a workaholic, and especially because few meetings that I attend actually begin at the appointed hour. Given the choice of arriving early or "on time" and doing some pre-meeting socializing (which can be valuable and fun, too) or finishing the sentence I am writing, I will almost always choose the latter. Then I arrive after the appointed hour. This might be late, or it might be "on time" if on time is defined as the actual moment at which the meeting begins. I never know in advance which outcome will come to pass. (So maybe I am often late because I am a gambler?)

My point is that the variability of actual start times compared to "advertised" start times contributes to lateness. In my town, there is a certain theater that begins movies after the advertised start time when there are still a lot of people in line to get tickets. I imagine they think they are being polite. What they are doing is training their patrons to be late. (And some of us need no assistance with this, as I've confessed.)

I'd suggest that in Mr. Munger's academic culture, the norm is that meetings do not begin at the appointed hour, yet he has not adapted to this reality; he expects punctuality. Meeting organizers have the most control in these situations. If you're in charge and punctuality matters to you (a value not everyone shares), start on time and don't do anything to accommodate latecomers.

63. mcmunger - November 20, 2009 at 08:17 am--Dear Consideritdone:

Wow. A poster child. Everyone who is chronically late makes it seem as the late person is someone better, even noble. YOU, unlike everyone else, are busier, a workaholic.

I hope you don't teach logic, though. First, you claim "I'm not late because I hate waiting. That has nothing to do with it."

And then you IMMEDIATELY say that you are usually late "especially because few meetings that I attend actually begin at the appointed hour." In other words, you hate waiting!

You are not a workaholic; you are simply inefficient and self-absorbed. That's fine; most of us are (I certainly am). One has to be, in fact, to be a successful academic and live mostly inside one's own head. And I'm sure you are in fact a terrific scholar. Perhaps we are making too much of this whole "late" thing; it's not that big a deal.

But I should note the following:

1. Most meetings DO start at the appointed hour, at Duke. But they start without important people (like YOU, consideritdone!) who are socializing, or writing one more sentence.

2. None of your reasons for being late involve unexpected events. You are NOT a Platonic Traveller. You are in fact intentionally and habitually late, as a matter of policy. That makes sense to me, and I applaud you for it. Many meetings are a waste of time, and you can show everyone else how important you are by arriving late.

My complaint, in the little article, is about people who arrive late, ALWAYS arrive late, and then make an excuse. The fact is that they left home, or their office, AFTER THE MEETING WAS SUPPOSED TO START. They are not sorry, in short. They are late on purpose, and won't admit it, even to themselves.

Consideritdone, you are honest and self-aware. I applaud you.

Thanks for the heads up!!

2009-11-19T20:37:00.003-05:00

Ron Artest explains his shoe toss

2009-11-19T14:46:00.003-05:00

A couple days ago, Trevor Arizza lost a shoe on the court, Artest picked it up and chucked it off the court, then went down to the other end of the court and made a 3 pointer while Trevor struggled to re-shoe himself.

That, of course, was awesome.

Even more awesome though is Ron-Ron's explanation of what happened:

“Well what happened was…obviously I didn’t know his shoe would come off that’s the first thing conservative reporters. I didn’t know his shoe was gonna come off. I don’t speak to his feet so I don’t know what his feet are thinking, I don’t know what his toes are thinking, I don’t know what he’s thinking. Then his shoe comes off and I’m like okay a shoe is not supposed to be on the basketball court without somebody standing inside of it. So I said alright, I’m just gonna buy me some time. I really didn’t know whose shoe it was, but I said it has to be one of the player’s shoe. As soon as I toss it off the court, not throw into the stands which some people said, it’ll buy me some time. What happens is I come back down, Trevor is trying to put his shoe on and I politely hit a three in his face.”

Man oh man, "I don't know what his toes are thinking"?? Thanks Ron!

Tanks on the borders of....Colombia?

2009-11-19T08:55:00.004-05:00

Everyone's favorite autocrat, Hugo F. Chavez, is mobilizing his military to the Colombian border to heroically repel the expected US invasion.

Ok, now repeat after me: WTF?

Seriously, Hugo, Wassup?

Well, now that he has more or less achieved total power, Venezuela is falling apart. Output there is still sharply falling and inflation is around 30%. Plus the country is facing water shortages and electricity blackouts. Crime in Caracas is a huge problem.

Although polls in Venezuela vary greatly, Chavez's popularity seems to be significantly falling in the face of all these problems.

I guess there is nothing like a good war scare to divert the populace from blaming you for the deterioration of their quality of life.

Still it's hard to believe that anyone would seriously expect the US to invade Venezuela. How could we ever get mad at this guy?

Hell is too far to go

2009-11-18T13:49:00.001-05:00

Freaky video from Beck!

Anonybaby!

2009-11-18T09:50:00.003-05:00

Anonywife is pregnant with a beautiful Anonybaby, a boy!

Anonyman, of course, just watched the sonogram. (I think that is how the conception happened, also, knowing Anonyman).

But, seriously, congrats to the whole Anonyfamily! We hope the pregnancy goes well...

Tommy the Brit Scores a Double!

2009-11-18T07:35:00.002-05:00

Tommy the Wannabe Brit is now OFFICIALLY a Brit, a REAL boy now.

First, and less important, he scored 350,000 pounds of Brit-cash, to run research.

Second, he passed his driving test! Now he can menace old ladies and bother the horses.

That'll do, Tom!

Somali Pirates 0, Maersk Alabama 2

2009-11-18T07:31:00.003-05:00

Pirates attack again. Pirates get beaten.

Perhaps we should ALL have automatic weapons, yes? To repel pirates.

Fox News

2009-11-17T21:09:00.003-05:00

I happened to flip over to Fox News when I was finishing my time on the elliptical machine in the living room.

They had an interview with some schmoe, talking about S. Palin's book, GOING ROGUE.

Only they had it spelled, GOING ROUGE. I think would have been a better title for the book, frankly. She uses quite a bit of make-up.

Lateness

2009-11-17T19:55:00.006-05:00

A little piece on lateness, for the Chronicle of Higher Education.

My favorite part is the reactions. Check this exchange, from the Chronicle comments section:

6. ridicula - November 16, 2009 at 11:31 am Mr Munger and referee101--who died and made you the gods of punctuality? When you obsess over and enrage yourselves over such things, you create an ugly work environment.
I suppose you both live in perfect worlds where nothing ever transpires to make you late, that you've had all bodily orifices sealed, have no family, no material reality to deal with whatsoever. You've never had a pimple or cut yourself shaving. You never speak to strangers. In fact, you must live in a space-time loophole from which you magically emerge whenever you have an appointment, spending the rest of your time in a state of suspended animation.

7. _perplexed_ - November 16, 2009 at 12:10 pm --hope I'm never on a committee with ridicula...

8. ridicula - November 16, 2009 at 12:34 pm --as I, in turn, hope I'm never on a committee

9. superdude - November 16, 2009 at 12:40 pm --Ridicula: No, an ugly work environment is caused by selfish people and one key sign of selfishness is being late. Late people have no concept of the value of everyone else's time and are by definition not team players.

As Head, I have strong expectations regarding punctuality. If I schedule a meeting for 3pm, it STARTS at 3pm, which means you need to have your butt in a chair BEFORE 3pm. I refuse to have a committee held hostage to someone who is late.

My own thoughts, for "ridicula":

1. Nice name. It fits.
2. As I read and reread your comment, trying to figure out what it means...I fail. I haven't obsessed over lateness, but I do find it amusing.
3. Because you see, it is easy to overcome all of the problems you list. Just leave earlier. That's it. The solution to being late is to leave earlier. Then even if you do have to go potty, you'll have time. And I'm pretty confident that you are not, in fact, busier than I am. You aren't busy at all. You are a crackpot.
4. To be fair, I see your game, though, Ridicula. It is to shirk and misbehave so badly as to avoid, as you admit freely, ever having to serve on a committee. And though I don't know you well, what I can see makes me think that having you NOT be in a position to impose your judgment on others is a nice equilibrium.

Ezra Klein is a tease

2009-11-17T14:19:00.004-05:00

I saw the headline of his article, "The $900 Billion Mistake" and I thought to myself, right on dude! You have come to your senses. Of course I shoulda knowed better; the mistake the article laments is limiting the cost of health insurance reform to only $900 billion!

Yes, according to Ezra:

"The problem is that the number, which was chosen at a point of political weakness for health-care reform and the Obama administration, is too low. Most experts think you need closer to $1.1 trillion for a truly affordable plan. Limiting yourself to $900 billion ensures that the subsidies won't be quite where you need them to be..."

Now I am just a dumb Okie, but that is not my understanding of what the word "affordable" means. I never knew it could mean "more expensive"

My nomination for Law Enforcement Officer of the Year!

2009-11-17T12:03:00.002-05:00

Money quote: "time is going really really slowly!"

On political competition

2009-11-17T08:46:00.000-05:00

Tyler had a interesting post yesterday about how increasing political competition via increasing the number of political parties is unlikely to bring about the same kind of improvements that increasing competition in the economic realm does.

I think he is right on the mark here.

However, there is another important dimension to political competition; viz polities compete with each other.

In the US, States implicitly are competing against each other for residents, businesses, jobs, etc.

In fact, if there is one thing Mark Crain taught me, it is that the States are hothouses of political innovations that often catch on and diffuse across the country.

Having our political system less centralized would allow inter-state competition to produce potential innovations in more spheres of policy.

In a way, devolving more functions of governance to the states increases competition over those functions in a way that is at least somewhat analogous to increasing competition in the economic realm.

Reading

2009-11-16T06:18:00.001-05:00

Some books I have read recently.

Charles Euchner, THE LAST NINE INNINGS. My bud Russ Roberts sent me this, and it was great. The last game of the 2001 World Series, where the Yankees LOST (HA!). Divided up into different parts of the game, at a micro-level. Excellent. But then I went back and reread another book that has some of the same approach, George Will, MEN AT WORK. The stuff on Tony LaRussa, I had forgotten, very interesting.

Rose George, THE BIG NECESSITY: THE UNMENTIONABLE WORLD OF HUMAN WASTE AND WHY IT MATTERS. Terrific, interesting book. Core questions--why do we take many streams of wastewater, combine them, and then try to clean them? In fact, why so much emphasis on water-borne sanitation? Finally, why so much emphasis on "clean water" when the real problem is "handle poop better"? (well, not "handle," exactly, but manage). A very interesting and useful book.

Amity Shlaes, THE FORGOTTEN MAN: A NEW HISTORY OF THE GREAT DEPRESSION. Well written, interesting, and an entirely different view of the motives, methods, and effects of the "New Deal." Read it to see where we may be headed, again.

James Protzman, JESUS SWEPT. An odd book, local fiction about Jesus returning to Earth as an itinerant sweeper. Yep, sounds bizarre, and it is, but it works pretty well. I liked it a lot. Very quirky.

Hunter Thompson, FEAR AND LOATHING IN LAS VEGAS. I hadn't read it in years. It holds up pretty well.

How Many Citizens Does It Take to Choose a Lightbulb?

2009-11-15T20:05:00.003-05:00

Trick question: you don't GET to choose your own light bulb.

Interesting story. Just gets better and better, as it develops.

As the story concludes....

Call your senators and your congressional representative instead. Tell them you've had enough of command-economy enviro-thuggery. And invite them to put cap-and-trade in a place where a solar array would be both impractical and painful.

(Nod to North Ohio Boy)

Sumner and Krugman are both wrong

2009-11-15T10:24:00.002-05:00

Or at the least way overoptimistic about what monetary policy can accomplish.

Tyler has been cooling lately in his ardor for the monetary views of Scott Sumner (here is an historical compendium), though he cites Krugman's latest piece as an "Answer to Scott".

In that piece, Paul avers that the first best monetary policy would be a Sumnerian "credible commitment to higher inflation". Why? "In order to reduce real interest rates".

People, it is just not clear that is possible, or if possible, it may be so in only a very limited sense.

Can the Fed set the real interest rate at whatever value it wants? I don't think so.

Do you think they could simultaneously credibly commit to say 10% inflation and successfully hold the nominal interest rate at zero? Me neither.

What about the simultaneous achievement of 5% expected inflation and a zero nominal interest rate? Doubtful at best.

The bottom line is that Fed can target the nominal rate or the inflation rate, but they simply cannot have independent targets for each. That is a basic message of the huge "instruments & targets" policymaking literature that appears to be lost in the current debate.

Drive Your iCar with your iPhone

2009-11-14T17:45:00.000-05:00

(Nod to Angry Alex)