30 August 2010


Cafe Hayek | Don Boudreaux | Why are Crunchy ‘Progressives’ So Prejudiced Against Non-local Folk?

Here’s a letter to the New York Times:
David Sassoon of Harlemville, NY, is a locovore because, in his words, he’s “interested in restoring community through the act of eating, rather than swallowing the cold logic of global economics” (Letters, Aug. 28).

I wonder if Mr. Sassoon’s refusal to “swallow the cold logic of global economics” goes beyond his dietary choices. Does he promote community by wearing only clothes made from locally grown fibers and woven at local mills? When he is ill, does he stick to his principle of not swallowing the cold logic of global economics by refusing also to swallow any pharmaceuticals not made locally? Does he drive a locally manufactured automobile? Is the furniture in his home and office made only of materials found in or near Harlemville? And are the novels he reads, the musical composition he listens to, and the movies he watches only those that are produced locally?

Of course not. But he needn’t berate himself.

A beautiful consequence of the so-called “cold logic of global economics” is that it knits people from around the world into a kind of community – into a worldwide web of peaceful and productive mutual dependence. Commerce over large geographic areas undermines the nativism and insularity – and poverty – that result when people live in local communities with little or no contact with outsiders.

Donald J. Boudreaux
Crowing on about only buying from your local community is a polite way of saying you're a parochial xenophobe who doesn't like people from far away.  If that's what you feel like doing then go for it, but don't think there's anything inherently more just about doing business with people in close geographic proximity to you.

29 August 2010


I've come across several links this morning to this Guy Deutscher NY Times piece reconsidering the Sapir-Whorf hypothesis and language (e.g. here and here).

I think it's good and worth reading, but not that great.  If you want some really good coverage of how language shapes our minds, listen to this episode of Radio Lab from a couple of weeks back, titled "Words".

Sapir-Whorf is all about how different languages shape the thinking of the people who speak them, but the Radio Lab episode gets at how language itself — any language at all — interacts with our ability to form complex thoughts.  For instance, when performing a distractor task that impedes verbalization of phrases like "to the left of the red wall" subjects become markedly worse at navigating around spaces where the primary visual cue is a red wall.  I'm not entirely convinced by the evidence they presented (I'd have to read the original studies), but it seems reasonable.

Some minor notes on the NY Times piece:
Do English speakers who have never heard the German word Schadenfreude find it difficult to understand the concept of relishing someone else’s misfortune?
English actually did (or does) have a word for Schadenfreude: epicaricacy.  Let's all use it more.
Languages like Spanish, French, German and Russian not only oblige you to think about the sex of friends and neighbors, but they also assign a male or female gender to a whole range of inanimate objects quite at whim. What, for instance, is particularly feminine about a Frenchman’s beard (la barbe)? Why is Russian water a she, and why does she become a he once you have dipped a tea bag into her?
Wait, wait, hold on. Let's clear something up before we move on.  Calling these categories of words "gender" is a historical accident. It's a result of Latin "genus," meaning kind or family or similar grouping. "Gender" is grammar should be understood to mean something more akin to "genre" than "sexual grouping." It's an unfortunate turn of events that we still label the primary groups in Romance languages "male" and "female;" far better we abandon those and adopt something with less connotation like up/down, charm/strange and top/bottom.
When speakers were asked to grade various objects on a range of characteristics, Spanish speakers deemed bridges, clocks and violins to have more “manly properties” like strength, but Germans tended to think of them as more slender or elegant. With objects like mountains or chairs, which are “he” in German but “she” in Spanish, the effect was reversed.

In a different experiment, French and Spanish speakers were asked to assign human voices to various objects in a cartoon. When French speakers saw a picture of a fork (la fourchette), most of them wanted it to speak in a woman’s voice, but Spanish speakers, for whom el tenedor is masculine, preferred a gravelly male voice for it.
This made me think of Köhler's "Booba-Kiki" test.

This was perhaps the best bit:
In what other ways might the language we speak influence our experience of the world? Recently, it has been demonstrated in a series of ingenious experiments that we even perceive colors through the lens of our mother tongue. There are radical variations in the way languages carve up the spectrum of visible light; for example, green and blue are distinct colors in English but are considered shades of the same color in many languages. And it turns out that the colors that our language routinely obliges us to treat as distinct can refine our purely visual sensitivity to certain color differences in reality, so that our brains are trained to exaggerate the distance between shades of color if these have different names in our language.
This didn't make a ton of sense to me until a friend pointed out that we have a top-level descriptor for the (hue, saturation, value) triplet (0,100,100) — "red" — and a similarly basic label for something around (0,50,100) — "pink." And we have a basic label for (240,100,100) — "blue" — but we don't have a top-level label for (240,50,100). In English we would have to call that color some variation on "blue" like "light blue." Why do we have "light blue" but no "light red"?

This is the beginning of the conclusion of Guy Deutscher's piece:
For many years, our mother tongue was claimed to be a “prison house” that constrained our capacity to reason. Once it turned out that there was no evidence for such claims, this was taken as proof that people of all cultures think in fundamentally the same way.
(1) This kind of overreaction in scientific circles really grinds my gears. Maybe just because my field was victimized my Minsky and Papert's spurious condemnations of single layer perceptrons, which scuttled all of Neural Networks for several decades. Just because a theory doesn't hold up the wildest expectations of it's proponents doesn't mean that it entirely lacks validity.

(2) I like the Radio Lab piece because it's format is the opposite of the idea that language constrains thought: language enables thought. It's the same notion underneath, but a much more interesting way of thinking of it.  Be sure to check that out, and for more anecdotes of language weirdness, check out this story in The Economist I blogged back in January.

28 August 2010

Don't come inside the Beltway without an armed escort.

The Atlantic Wire | Max Fisher | Tea Partier's Warning-Filled Guide to D.C.

With the approaching Glenn Beck Tea Party rally planned for August 28 in Washington, DC, Tea Party organizer and blogger Andrew Ian Dodge decided to write up a comprehensive guide for his fellow patriotic Real Americans on visiting their nation's capital. The Tea Party guide to Washington is filled with advice and, more than anything else, warnings about this scary mid-sized city of 600,000.
This "guidebook" has been getting a lot of flack, and deservedly so. Just look at the areas that Dodge describes as safe:

That rules out everywhere in the city that isn't within spitting distance of the Smithsonian, plus — oddly — Foggy Bottom. Better not wander up into Friendship Heights. The street toughs that hang out at the J.Crew and the Maggiano's will tear your protesting, tourist self right up.

On the other hand, I think that Dodge is getting a bit of a bad rap. Here's Adam Serwer in The American Prospect, for instance:
[The guide] goes out of its way to impose on Tea Party activists the necessity of not accidentally visiting any of D.C.'s mostly black neighborhoods.
Dodge's problem isn't that he points people away from visiting black neighborhoods, it's that he points people away from almost every neighborhood.

I wouldn't want my wife and (hypothetical) kids stranded down at the DC Armory after midnight, but this isn't Caracas. You don't have to live in fear of everywhere that isn't a national landmark. Just keep your damn wits about you and use some common sense, same as every other city in the world.

The Atlantic Wire pulls out this quote, with the heading "On Scary African People"
"DC's population includes refugees from every country, as the families of embassy staffs of third world countries tend to stay in DC whenever a revolution in their homeland means that anyone in their family would be in danger if they went back. Most taxi drivers and many waiters/waitresses (especially in local coffee shops like the Bread and Chocolate chain) are immigrants, frequently from east Africa or Arab countries. As a rule, African immigrants do not like for you to assume they are African Americans and especially do not like for you to guess they are from a neighboring country (e.g. Eritrea, Ethiopia, Somalia) with whom they may have political or military tensions."
(1) DC has one of the larger East African and probably the single largest Ethiopian immigrant population in America. This is true.

(2) I have no idea where Dodge gets the idea that they're all related to people in the diplomatic corps. That's absurd.

(3) Recent African immigrants actually don't like being confused for what we consider "African-Americans." This shouldn't be so controversial either. I hear that Spaniards and Chileans don't like it when you ask them about tacos and Guillermo del Toro movies and Cinco de Mayo and Mariachi music. Lumping together someone who just moved here from Addis Ababa with someone whose great-great-great-great-grandparents got hauled over here to work on a tobacco plantation is plain rude. It says "screw you and your wildly different cultures, you have the same skin tone so you must be the same."

I've been dealing with clueless tourists and protestors and interns coming to DC my whole life. Many of them show up wildly confused and holding some bizarre expectations. Read DCist's "Overheard in DC" column on Fridays if you don't believe me.  I'm not sure why people are so surprised that the chumps Glenn Beck coaxed out here are similarly confused and mistaken.

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PS The Economist does a good podcast series called "Doing Business In..." which gives a fifteen minute outline of what a business traveler needs to know about a major world city.  Things like how to get into town from the airport, what district you might go to for a business lunch or to shop for a gift to bring home, what to expect culture-wise in your meetings, what to pack.  It's all really applicable stuff.  I wish someone would do a less business-oriented version of that for casual travelers.  Then maybe I wouldn't spend ten minutes trying to figure out whether to rent a car from the Kansas City airport, and we wouldn't be having this discussion about clueless protestors who think DC is like a Thunderdome full of angry Ethiopians.

27 August 2010

"America stops buying homes"; Pareto

Felix Salmon | America stops buying homes

The number is so low that it looks like a statistical aberration: let’s hope it is. Because if it isn’t, the news is gruesome. It means that despite record-low mortgage rates, people aren’t able to buy houses: essentially all the benefit from those low rates is going to people who already own their homes and are taking the opportunity to refinance.
So what? I wish the residential real estate market was nice and fat and liquid, but it isn't.  In the meantime, why should I care who is taking out their first mortgage and who is refinancing?

Seriously, why should I care if the benefit of low mortgage rates accrue to people who already have mortgages and are refinancing them? How does that make me any worse off? Is this some zero-sum thing, where benefits to home owners who refinance must be costing me something?  Why should I prefer a counterfactual with fewer current owners and more first-time owners taking advantage of low mortgage rates?

I know I'm picking on this line from Salmon more than it deserves, but I've been seeing a lot of people lately insisting that any situation or policy must benefit everyone equally.  I'm sorry if blind people don't benefit from the latest reading gadget or blockbuster movie, but those things are still Pareto improvements.

Good news for some people may not be as nice as good news for everyone, but it's still better than no good news for anyone.

College Costs

Goldwater Institute | Jay P Greene | Administrative Bloat at American Universities: The Real Reason for High Costs in Higher Education

Between 1993 and 2007, the number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent. Inflation-adjusted spending on administration per student increased by 61 percent during the same period, while instructional spending per student rose 39 percent. Arizona State University, for example, increased the number of administrators per 100 students by 94 percent during this period while actually reducing the number of employees engaged in instruction, research and service by 2 percent. Nearly half of all full-time employees at Arizona State University are administrators.
I don't think this is the reason for such cost increases, but it's on my shortlist of contributing factors.

I would add to the list that most of the economy has experienced a tremendous rise in productivity from trade and technology over the previous generations, but those factors do not help professors teach more productively. Students might learn better with things like Power Point rather than chalk boards, but you don't get any more students through each class with those things, so you need just as many professors as you did before.

I think reason #3a is the changing attitude toward the goal of college. Uni is now a place to go to learn things, but also a place to go to discover and invent yourself, so Johnny and Jane Undergrad will need lavish facilities for ... everything. Fancy gyms, fancy dorms, fancy food, fancy theaters, fancy clubs, fancy activities.  Throw on top the idea that college is supposed to make connections for you and schools need more alumni services, more career counseling, more internship and study abroad programs, more industry partnerships, more specific majors, more research institutes, more ...

Reason #3b is that it's become gauche to suggest there is such a thing as too much to pay for junior's education. Even among families that put an upper limit on what they will pay it's usually framed around not being able to pay, rather than not being willing. It's the same situation as housing: people pay for a house whatever the bank will lend them for a mortgage, and people whatever tuition they can get student loans to cover. Very few are the people who can get aid packages for $40k turn down the college with $40k tuition and opt for paying $12k at State U Satellite Campus.

Put 3a and 3b together and you have schools competing almost entirely on the benefits side and relatively little on the costs side.  We know what happens when customers do too little cost-benefit analysis.  (*cough* comprehensive health care plans!)  You might think the results are still worth it, but it's no way to set prices.

This is another part of the puzzle:
EconLog | Arnold Kling | More Predatory Education

The Washington Monthly has the scoop:
The Washington Monthly and Education Sector, an independent think tank, looked at the 15 percent of colleges and universities with the worst graduation records--about 200 schools in all--and found that the graduation rate at these schools is 26 percent.
These are not the for-profit schools that have gotten such bad publicity recently. These are ordinary private and public universities and colleges.
Again, screw you to the 111th Congress for trying to crack down on all for-profit schools, regardless of acheivement, and giving a pass to all (nominally) non-profit schools, regardless of achievement. (I say nominally, because schools chase down plenty of profits, they just have to spend them.)

Anyway, I say this is part of the problem because we have a culture that explicitly states a goal of trying to get every adolescent to go to college. Even the ones that barely make it out of high school and don't enjoy or benefit much from education are told they are supposed to be going to college for more education.

The flip side of the stat from the Washington Monthly is that students who finish in the bottom quarter of their high school class are startling unlikely to get a degree.  With such an exploding customer base and relatively limited capacity is it any wonder that prices go up? (And quality can come down?)


The Atlantic | Megan McArdle | Credit Card Interest Rates Much Higher

The spread on credit card interest--the difference between the interest rate on your charges, and the Treasury benchmark rate--is the highest it's been in 22 years. The culprit? The CARD Act, which has given banks much less flexibility in the fees they charge. Banks now have to give you 45 days notice before they raise your interest rate, and they need to give you the option of paying off the debt in order to avoid interest rate hikes. [...]

Of course, lots of people weren't being soaked on the back end by tricks and hidden fees; the people who pay their bills on time or even early. Those people are paying more, while folks who have temporary cash flow problems (or permanent forgetfullness) will pay somewhat less. Whether or not you think this is fair depends on a set of moral judgements about indebtedness; do the timely bill payers deserve a bonus for living within their means, or do the bill-missers deserve some help because they're more likely to be hard up?
Screw you, 111th US Congress.

I'm going to harp on this again because I think it needs saying: if we, as a society, decide that people with temporary cash flow problems who are unable to pay their credit card bills deserve some help then we, as a society, need to provide it. Don't fob off that duty on other credit card customers who do manage to keep it together and honor their commitments. It's not my responsibility to shield the people who, through either laziness, inattentiveness, self-indulgence, or pure bad luck don't pay their bills.  If we're going to do that then everyone needs to pony up for it.  Don't reach into my pocket to fund that charity campaign just because I'm standing nearby.

offloading some blogging backlog

You heard about the Moby Dick of Traffic Jams, right?
The Daily What | Traffic Jam of the Day Month

It’s official — you are no longer allowed to bitch about your commute: Motorists headed toward Beijing on China’s National Expressway 110 have been sitting in traffic for the past nine days, snarled for over 100 kilometers in a jam that is expected to last a month.

From Xinhuanet:
Since August 14, thousands of Beijing-bound trucks have jammed the expressway again, and traffic has stretched for more than 100 kilometers between Beijing and Huai’an in Heibei Province, and Jining in Inner Mongolia Autonomous Region, China National Radio (CNR) reported Sunday.

Small traffic accidents or broken-down cars are aggravating the jam, the report said.
Didn't everyone freak out about a ten hour jam up on Penn. Turnpike a couple of holiday seasons back? Doesn't seem so bad now.

This comment from a Chinese truck driver, via Tyler Cowen, is priceless. (Har. Priceless. Get it? Of course not. You have to read the comment first.)
“Everybody has to use this road as the other is too expensive, it should be free.”
Tom Vanderbilt explains:
That’s the root of the problem here. When a scarce good is under-priced, we trade the savings in money for costs in time — more people will queue for it. The other road may be overpriced, but I can guarantee that no traffic problem has ever been solved by making a crowded road free.
Liberals (more or less fairly) ask people who habitually oppose tax increases in there is any tax increase they would actually support. I'm on board with more congestion pricing on roads. (Interestingly people who support pricing roads rarely support making transit customers pay the full cost of their rides through increased fares. Hrrrrm.)
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Peter Suderman writes about Brian K Vaughn's excellent comic series Ex Machina, which has just ended its run. It's about a superhero-turned-mayor-of-New York, and as Suderman says, it has some pretty accurate and commendable descriptions of politics.

I'm a few collections behind, but it's been one of my favorites since it started coming out. It pretty nearly coincides with when I began reading comics, actually.
Ex Machina

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I said recently that CS was a discipline that revolved around problem solving because it is all about developing procedures which explain to a computer how to solve problems for you. Of course AI takes this to the next level by more-or-less restricting the domain to problems that humans traditionally do (or do better than computers).*
dispatches from TJICistan | TJIC | Market Garden, AI, state machines, helicopter navigation, the age of sail, failed startups, MS Windows

Speaking of re-purposing mental tools from one domain to another, I was on a certain mailing list a while back, and there was an interesting post (or, I think, forwarded message, or web page, or something) written by a CS grad student studying AI. He talked about how the study of AI had made him a better thinker, not in the BS liberal arts stock-justification way (“writing all these bull-@#$ papers makes me a better critical thinker, and thus I think I’d really be an asset to you as either a fry cook, or a janitor who can clean grease traps”), but because it made him think a lot about systematic ways of accomplishing tasks, and these systems could then be applied to other domains.

* Of course this creates a bit of a moving-the-goalposts problem for AI researchers.  As soon as a computer gets better than humans at some task it more or less stops being a part of AI.  This is a definition that makes us look bad in the aggregate, but I still think it's the best one.

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The Tax Breakdown Project allows you to input how much you paid in federal taxes and see how much of your money went to each department and program. Very informative.

It would be nice if they had a description for each of the line items. What does "DOT :: FHA :: Miscellaneous trust funds" mean? There numbers seem to date from 2008, so someone get them some funding to update and edit things a little.

I think the IRS should be responsible for sending a receipt of this form to everyone each summer.

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Eric Stansifer, (formerly?) of Cal Tech CS, offers a great breakdown of P vs NP and Deolalikar's recently attempted proo". Pretty easy to follow stuff. I can see why people much more informed than I have come to the conclusion that he's probably wrong but introduced some new lines of questioning that may prove fruitful in the future.

Stansifer, BTW, is a former member of Cal Tech's DNA and Natural Algorithms Group, which does some pretty cool stuff. It's not exactly my balliwick, but anyone who starts off their manifesto with a quote from John Joseph Hopfield is okay in my book.

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Investing advice I think I will be carrying with me as I age and save:
EconLog | Arnold Kling | Two from the New York Times

As a non-state-employee taxpayer, your stock market beta is double. If stocks go down, not only does the value of your portfolio go down, but your future taxes to pay state pensions go up. The state does not make up your losses. But you make up the state's.
This is less applicable, but still worth noting:
I agree with [Edmund] Phelps that the focus on aggregate demand is misplaced. I also really like the idea of tax credits for employing low-wage workers. Of course, as Greg Mankiw pointed out, the minimum wage is like a subsidy for low-wage workers paid for by a tax on firms that hire low-wage workers. Repealing the minimum wage and replacing it with a straight subsidy would be better.
If we — as a collected society — decide that low-productivity workers should make more money than they can command in the market then we — again as a whole — ought to shoulder that burden, rather than putting it on the employers who are willing to hire these folks at some price.

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This one is for Mrs SB7 as she starts her teaching certificate program:
View From The Porch | Tam | ...and they vote.

It's often been joked that you can ascertain someone's politics by asking them how they feel about prayer in public schools. If they say "I'm against it!" you have a liberal; if they say "I'm in favor of it!" you have a conservative; and if they say "Public schools?!?" you have a libertarian.

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The headline alone in this story is enough to scare the shit out of me:

Daily Mail | Fay Schlesinger | Prince Charles: 'My duty is to save the world'

I don't want your goddamned saving, Chuck.
The savior who wants to turn men into angels is as much a hater of human nature as the totalitarian despot who wants to turn them into puppets.
— Eric Hoffer
The pagentry of the Queen's Guard is the only redeeming quality of the Crown.

(Via Random Scrub)

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LabRat offers a good rant about people who are tremendously insulting but don't use profanity, and thus somehow think they're being polite and better than someone who just lays it out there. I agree completely.

I'll aim the same contempt at people who say insulting things, but preface them with "not to be rude" or "all due respect" and think that makes everything okay.

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Since we're talking about politeness, this week's Martini Shot was about AT&T customer service, who were exceedingly polite but utterly incapable of fixing Rob Long's problem. Apparently reassuring him a thousand times that they aim to provide great service makes up for the fact that they don't actually give him any service. As he said, "I'll take rude and effective over polite and impotent." I got the same treatment from Amazon recently. Their representatives were almost maddeningly polite, but it still took them six weeks to resolve my fairly simple issue.

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This SMBC comic should be nailed to the Supreme Court doors so that it's in the background of every numbskull protest on their steps.

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Warning labels for bad journalism.  Love it.  Way to go, Tom Scott.
Warning! Journalist hiding their own opinions by using phrases like "some people claim"

Warning! To ensure future interviews with subject, important questions were not asked.

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From the obits:
Washington Post | T Rees Shapiro | Bill Millin, bagpiper who accompanied British troops on D-Day, dies at 88

Bill Millin, 88, a Scottish bagpiper who braved mortar shells, raking machine guns and sniper fire to play morale-pumping tunes for his fellow commandos from the beaches of Normandy on D-Day, died Aug. 17 at a hospital in the English county of Devon after a stroke. [...]

Dressed in the kilt his father wore in World War I and armed with only a ceremonial dagger, Mr. Millin was a 21-year-old soldier attached to the 1st Special Service Brigade led by Simon Fraser, better known by his Scottish clan title, Lord Lovat. [...]

Mr. Millin was the only bagpiper to take part in Overlord, because British high command had banned pipers from the front to reduce casualties.

"Ah, but that's the English war office," Lovat told Mr. Millin. "You and I are both Scottish, and that doesn't apply."
Bill Millin, you have the biggest brass balls of the century.

It's no wonder he went to work as a nurse in a mental hospital later in life. It's always the crazy ones attracted to psychiatric work.

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The NY Times concurrently wins Most Egregious Abuse of Scare Quotes of the Year and Greatest Misunderstanding of the Code of Law of the Year:
The Volokh Conspiracy | Jonathan H Adler | Only Legal Because It’s Legal

From today’s NYT editorial on the Justice Department’s decision not to bring charges against former House Majority Leader Tom DeLay comes this gem:
Mr. DeLay, the Texas Republican who had been the House majority leader, crowed that he had been “found innocent.” But many of Mr. DeLay’s actions remain legal only because lawmakers have chosen not to criminalize them.
Well, yes. That’s the way it works.

(Hat tip: Ramesh Ponnuru)
In other news, my ham-and-cheese sandwich remains legal only because lawmakers have chosen not to criminalize it.

26 August 2010

You can't afford to be sloppy in (intellectual) combat

Marginal Revolution | Tyler Cowen | David Brooks on Larry Summers
To use a fancy word, there’s a metacognition deficit. Very few in public life habitually step back and think about the weakness in their own thinking and what they should do to compensate. A few people I interview do this regularly (in fact, Larry Summers is one). But it is rare. The rigors of combat discourage it.
The full piece is here.
That is the opposite of true. The rigors of combat absolutely demand that you analyze the weaknesses in your own thinking. The realities of combat may demand that you not admit those weaknesses, but you must recognize what they are. There is no teacher but the enemy; only the enemy shows you where you are weak, etc.  My thinking and writing is a lot stronger than it otherwise would be because I'm forced to stop and think what people like Jim (the Porch Dog) or my friend J.P.C. will call me out on.

The problem Brooks' is discussing is much more easily explained by acknowledging that very few public "intellectual" figures actually engage in combat.  Oh they appear to, but there's little actual contest going on.  There are rarely winners and losers on the public stage.

These people don't need to win, they don't need to convince enemies or fence-straddlers, they only need to hold on to enough people who agree with them to retain their positions and influence. As long as N people think having a David Brooks column in the NYT is worth it, Brooks wins. It doesn't matter how many holes his arguments have or how ludicrous he becomes: he only needs to appeal to the people who already agree with him and support him. (See especially: Paul Krugman.) At no point does Brooks need to actually confont his critics and demonstrate why he is right and they are wrong. He keeps saying what he says, they keep saying what they say, and the show goes on.*  It's a poverty of combat, not a surplus of it, that leads to unexamined reasoning.

(* That's one reason that The McLaughlin Group is the only talking head show I can stomach.  The guests are more or less forced to actually engage each other. They can't back in their chair and wait for the host to give them their turn at a sound bite. In most shows every guest gets to walk off the stage with their sense of dignity and superiority intact, because no producer wants to risk losing access to VIP guests by telling them they're not making any sense.  McLaughlin doesn't have that problem, because his panel is whatever chums of his he wants it to be.  Sure, the final arbiter of who "wins" and who "loses" is stentorian John McLaughlin proclaiming from on high, but at least the guests are forced to face up to some arbiter.)

Courtesy as a convenient way of encapsulating economic rationality

The specific consequence is what you should do if someone cuts in front of you in a line: (a) ignore them, (b) say "I think you might not have noticed that the line starts back there" or (c) say "you asshat, get in line!"
Ideas | David D Friedman | Economics of Language and Courtesy

My objective is to get him to go back to the end of the line, getting me through a little faster, and to do it with a minimum of unpleasantness. By treating his act as a mistake I lower the cost to him of doing what I want, since doing so does not require him to implicitly confess a deliberate violation of local norms. Lowering the cost to him of doing what I want makes him more likely to do it. What my friend regarded as behavior due to courtesy appears to me as a simple application of economics.

One can carry the argument one step further. If, instead of offering the norm violator an easy out, I loudly upbraid him, he will be less likely to quietly concede his error . But, since I will have raised the cost to him of cutting into line, he may be less likely to do it again. If my objective were the general good rather than my own private good, that might be the sensible choice, deterring future offenses against other people at some cost in current unpleasantness. In my friend’s view, the reason to be courteous was the benevolent desire to maintain social harmony. But courtesy, at least in this case, causes me to sacrifice the general good for my private good—precisely the behavior that economics predicts.
I need to share this one with Special Lady Friend. I'm more of an option (c) kind of guy. Not always, but I tend to (c) more than the average person. SLF, being a kind and gentle gal, is more of an option (b) sort. Now I can explain to her that yelling at the chump that cuts me off isn't an angry thing to do; it's quite the opposite. I'm actually being selfless by discouraging selfish behavior in others in the future.

I'm confident she'll be convinced by this argument immediately.

25 August 2010

There is no spoon clock signal.

dispatches from TJICistan | TJIC | why small businesses aren’t hiring

Issue two: structural misallocation and the Great Recalculation

In poker you’re always thinking (or should always be thinking) thoughts like: “based on his betting, I think his hole card is a Jack, therefore, my chances of getting X on the next card is Y, and I think that my chances of taking the pot are Z, therefore I’m willing to raise R…”.

…and then, you get a new piece of information. A new card comes up, or an opponent does something that indicates that your assumption was incorrect.

Now you need to think through that whole chain of logic from scratch, plugging new numbers in.

In poker, these recalculations are purely mental.

In the real economy, though,

  • You have to instantiate your thoughts with dollars, employees, warehouses, machinery, investments, and capital. This takes time.
  • The process is iterative – you don’t see the entire new world all at once, with a single card flip. Recall the logic problems where on day 1 the villagers don’t know if X knows that Y knows that Z knows, but on day 2, Y knows that Z knows, but no one else yet knows . The real economy is like that. I want to buy more DVDs to supply more customer demand … as soon as new customer demand manifests, but my suppliers don’t yet know that I’m going to do that, so they don’t put new titles into production. The clock pulse of the circuit board does not fire at 2 GHz. This takes time.
Ha! I love that last line.

(Side note: I read this morning that it took the owner of Fine and Dandy a year to get someone to manufacture a 1" tie bar for him, rather than the standard 2".  A year!  To make something extremely simple like a tie bar a bit smaller than it was.)

I want to take it a step further though: there is no clock circuit!

This is a theme that's been coming up a lot in my reading lately regarding biologically plausible neural networks for decision making. The brain does not have a clock circuit. There is no signal that goes out to neurons that says "wait for it... wait for it... NOW!" and sets every neuron to updating its state. Instead each of them are independently integrating all their inputs continuously and making stochastic decisions all the time about when to fire a pulse on down the line.

This seems mundane, but it has tremendous implications for how your mind works, especially for something called "the binding problem." In a nutshell, you've got some pattern of activity firing in your brain for "red" and another set of activity for "apple." How do red and apple get binded together to form red apple? And if the guy sitting next to you is wearing a red shirt, how is red also bound to shirt? Can you have multiple representations of red? How are these representations unbound? How do the colors of all the other things in the room bind to the representations of those objects without interfering with red apple? All of this would be easier if you could get neurons marching along at exactly the same rate and updating along a set schedule.  Decision making, planning, task switching... all sorts of things would be much easier to understand and model if there was a clock signal in your brain, but there isn't.

The economy is the same as the brain in this respect. No one says: "okay, everyone digest new information and make new decisions... NOW!" Not at 2Ghz, not at any frequency. Information propagates slowly, and noisily, and stochastically, and continuously. Decisions are made at different rates. The refraction period after a decision can be longer or shorter.  There is no drummer to march to; we've all got our own kettle of fish.

This sounds kind of obvious, but I think it's just one more way we need to get away from thinking of the economy as some giant Age of Steam industrial device, with valves that are turned by POUTS and levers pulled by The Fed, and Demand that drips in from Consumers and reservoirs of Capital and all the rest. The economy is not a steam engine, and it's not a computer: it's messy and slow and nondeterministic and generally ineffable.

PS I don't think that TJIC thinks the economy is like this. His metaphor of clock speed is perfectly sound for his purposes, I just wanted to riff on the idea of clocking, the brain and the economy and his quip gave me the seed for it.

Even more charts: Investing in division and housing shell games. (Also: screw you, gerontocrats.)

Not so much commentary on the usefulness or misleadingness of charts this time, just three plots from Coyote Blog I thought I'd post since I'm apparently in graph mode.
Coyote Blog | Warren Meyere | In Praise of Divided Government

I must say that I am not much of a fan of trying to find spurious relationships between long-term economic trends and the political parties who hold office at various times. But I must say I kind of liked this one from Mark Perry:

Somewhere around here I've got a prospectus for a fund which stays in money-market-mode most of the time, and moves into equities whenever congress goes out of session. They claim some pretty impressive results.

~ ~ ~ ~ ~

Coyote Blog | Warren Meyere | I Sense a Pattern Here

Here is a chart I ran a while back on auto sales, showing how the cash for clunkers “stimulus” program simply spent a bunch of money to pull forward car sales by a month or two

Here are housing sales — I don’t have time this morning to annotate the chart but the housing stimulus program expired in May

This is the multi-billion dollar equivalent of a kid pusshing his peas all around the plate so it looks like he ate more of them.

By the way:
EconLog | Arnold Kling | A Consensus to Question

Old consensus: we need Freddie and Fannie in order to make housing "affordable."

New consensus: we need them in order to "prevent further house price declines," in other words, to make housing less affordable.
For every house buyer there's a house seller. Pretty much everyone will be both at different times; in fact most people are both at the very same time, give or take a few weeks. Lower prices scare people when they're in their "I'm a seller" mode, but they forget that it's good news for them in their "I'm a buyer" mode. There is nothing inherently better about home prices being considered high, unless you place more value on older generation than younger ones.  That sounds silly, but that's the way a lot of other policies in this country are set, so I find it pretty convincing.

~ ~ ~ ~ ~

Addendum — Daniel Invoglio, creator of the housing chart above, also posted a copy with the vertical axis set to zero, as I prefer.  You can find that here.  Here is a version with data going back to 1999.  The extra context makes the extremity of July's numbers even clearer.

More Charts

Blogging has been on hold recently while I was out of town doing something very few people get to do. This weekend I got to witness my own father take his perpetual vows. He is now officially "My Father, The Brother." Way to go, dad.

Now, on to content. I'll sort of pick up where I left off, with some criticism of a chart that's been going around, though this time I'm outsourcing the work since I'm still not up to speed around here. Take it away, Mr Whitman...

Agoraphilia | Glen Whitman | Tax Cuts Relative to Tax Payments

So this graph from Ezra Klein is making the rounds. In a nutshell, it shows that the proposed GOP tax cut (really an extension of the Bush tax cut) gives lots of money back to the very rich, whereas the Democratic tax cut (really a partial repeal of the Bush tax cut, meaning a tax increase) is not so generous with the rich.

The graph speaks for itself. Or does it? What the graph doesn’t show is how much each income group pays in taxes to begin with. The real question is how much each group is getting back relative to how much they put in.

Think of a tax cut as a kind of rebate: the government took some of your money, and now it’s giving some back. So how big is the rebate per dollar of tax paid? Using IRS data and the numbers in Klein’s graph, I’ve broken it down:

The chart shows that under both plans, the highest-income groups get a much smaller rebate per dollar, while the lowest-income groups get a much larger rebate per dollar. [...]
This reminds me of a parable of sorts I read a ways back. (Maybe in Armchair Economist?) Five friends go out for drinks every week and always run up a $200 tab. Because they each have different incomes they've agreed that Abe will pay $2 each week, Bill will pay $10, Carl $20, Dave $38 and Eddie $130, even though they're all drinking the same amount. (That pretty much fits the 2001 data for federal taxes including Social Security. If we don't count SS, then the fellas would be chipping in -$5, $0, $10, $30 and $165. But let's not get mired in the details.) So one week the bartender decides to reward his regulars and cuts 25% off the bill. How should the $50 be divided up amongst the crew?

I contend that there's no inherently "fair" way to divide up the new check.

You could give everyone 25% of their money back, which sound "fair" to me, but then Abe gets 50 cents and Eddie gets $32.50, which sounds outrageous to many others. I just did a back-of-the-envelope version of the max-min fairness allocation algorithm and got Abe putting in $0, Bill $0, Carl $7.33, Dave $25.33 and Eddie $117.33. This would seem "fair" to some, but it doesn't make much sense to me that a discount results in Eddie paying an even larger share of the bill than he did before.  I think you could make the argument that Eddie should get all of the refund, since he's the only guy paying more than the $40 he's drinking.  Those are three completely different policies, and they're all "fair" in their way.

I'd like to see every candidate for high office have to say how they would divide up the bar tab in this situation. If you can't defend your position on such a toy example, how can I expect you to make a principled decision on something as complicated as the federal tax code?

(See also another tax parable from Armchair Economist which I discussed a ways back. That's another toy problem congressmen ought to be able to answer before taking their pens to the tax codes.)

18 August 2010


There was some discussion recently about innovating more energy efficiency in the transport sector here and in Europe.  This was at the center of some of it:
Matt Zeitlin | What Price Innovation?

Europeans simply use much less carbon in their transportation sector than we do. And here’s a nice handy chart, using data from the International Energy Agency. This is the per capita carbon emissions in the transportation sector in 2007 of the U.S. and an assortment of wealthy European countries.
Zeitlin then presents the following chart:

I call shenanigans on this chart.  Shenanigans! ( <— you can't just say you're calling shenanigans, you have to actually do it.)

First red flag: the vertical axis doesn't start at zero. This magnifies the difference between the US and everyone else.  Whenever you see that in a chart you need to take a closer look.

What's especially annoying about making this error is that it doesn't enhance the message. Even if you present the chart honestly there's still a big, obvious difference between America and everyone else.  Don't over do it.

Here's the original chart, with just the US and the UK:

Here's what it should look like if it was more honest:

Still a big difference, but not as misleading.

The reason I reduced it to just us and Merry Olde is related to the second big problem here -- this data doesn't correct for the fact that we consume much more transport than these other countries.  I've only been showing two countries because I couldn't be bothered finding the relevant data for more. See here and here. Americans travel ~18,000 miles per person annually, the British "over 7,000." Unfortunately the US data is for 2002 and the British data is 2006. Very far from ideal, but I'm an amateur and I'm busy. Deal with it.

Yeah, we use about three times as much CO2 to move about. Guilty as charged.  We also do about three times as much moving about.

Here's what that looks like:

That's the relevant chart right there. The one Zeitlin presented and others reposted is more about how much transportation is done, not how efficiently it's done. And it's presently misleadingly to boot.

17 August 2010

President supports new mosque; letting people tie their left shoelace first!

I'm all for letting a mosque or community center or 1001-Nights-themed titty-bar-and-flight-school be built wherever the hell someone owns a private chunk of land, "hallowed ground" or no. It might be tasteless or rude, but so what? I'm going to mind my own business and hope that when it comes time for me to do something unpopular everyone else will mind theirs.

Despite supporting this mosque business these headlines I spotted on the newspaper rack of the grocery this weekend ground my gears. They totally missed the point. One was from the NY Post and the other was the Daily News, but I can't remember which was which. In their typically understated 60 point type, their front pages read:

Prez: Build This Mosque!


Obama Blesses Mosque: Allah Right by Me

The sentiment behind those annoys me almost as much as the blowhards who want to get the project banned. The whole point of property rights is that you don't need anyone else's approval including the President's. Turning to authority to sanction something that's right and valid anyway also undermines the rule of law almost as much as the hullaballoo from Gingrich and Palin et al. "Private project goes forward after presidential approval" scares me just as much as "Private project canned after politician's disapproval."

It's nice that Obama supports letting this thing be built.  I much prefer it to the alternative.*  I prefer even more that it not matter what he thinks.  The entire point of this mosque kerfuffle is that it does not matter what you or I or anyone else including the vocal and powerful think should be done on that plot of land.

(* But I can't help but notice that he's been no great respecter of property rights before this, so it's not exactly a principled stand on his part, is it?)

We need to grow up and stop turning to Daddy-in-the-Oval-Office to weigh in on every issue of minor public interest.  What should some land owner be allowed to do with his property?  What should we do about the BCS and college football?  What should we do about steroids in baseball?  What should we eat for breakfast?

16 August 2010

"What conscription rate maximizes the size of the army?”

That bit at the end of my last post reminded me I wanted to blog this as well:
The Big Questions | Steve Landsburg | Laffering All The Way at Steven Landsburg

The Washington Post’s Ezra Klein had a great idea this week: He asked a bunch of economists and pundits to tell him where the Laffer curve bends. In other words, what is the marginal tax rate above which higher taxes lead to lower revenues? [...]

Greg Mankiw made the excellent point that it matters whether we’re talking about short-run or long-run effects. If I cut your wage by 20%, you probably won’t change your hours very much right away — but eventually you’ll look for a different job with different hours. So the long-run Laffer peak is probably well to the left of the short-run peak.

But Martin Feldstein gave the best answer of all, which was, in essence, that the whole question is stupid. Nobody, not even the most way-out leftist, thinks that the goal of tax policy should be to maximize government revenue. We also care about things like, you know, the quality of life.

Asking “what tax rate maximizes government revenue?” is like asking “what conscription rate maximizes the size of the army?”. Who cares? The right question is: What tax rate, and what conscription rate, will make us happiest in the long run? There is more to life than feeding the government."
They're talking general income tax rates of course, but this is also one of the problems I have with a lot of specific taxes and sin taxes and "user fees" and "excises" and whatever else they get called. Tobacco taxes have long stopped being about the negative externalities of smoking and have become a way to extract money from people with an unpopular habit. Ditto alcohol taxes, "big box" retailers, importers, employers who hire low-skilled labor, etc. It's no longer "what's appropriate for citizens to contribute?" Now it's "what can the fisc get away with taking?" And as I said in the last post, it's only a matter of time before citizens jump on the "what can I get away with claiming for myself?" train.

~ ~ ~ ~ ~

[Edited 17 Aug 2010 — That was Dylan Matthews writing in Ezra Klein's space in the Post, not Klein himself. I mistakenly propogated Landsburg's misattribution, not that that's an excuse. Thank to Jim for pointing that out.]

Overpay your taxes in NC? The stationary bandits say "tough cookies, chump."

Popehat | Patrick | I Hand The Cashier A Ten Dollar Bill For A Five Dollar Purchase. She Gives Me Fifteen Dollars In Change.

Before 2009, policy at the North Carolina Department of Revenue was, whenever a taxpayer was marked by a computer as having overpaid his taxes, the money was returned.

Since 2009, the taxman has a more realistic policy: When a taxpayer overpays, the Department will stay silent, saying nothing. If the taxpayer realizes his error within three years (as required by statute), the Department will, maybe, grudgingly refund the money. Otherwise, the Department will spend the money on no-bid construction contracts, and laugh at how it put one over on the citizen.

Of course this only works in one direction: A citizen who inadvertently stiffs the North Carolina Department of Revenue will be forced to pay a penalty, may have his name tarnished as a tax cheat, and could get to enjoy an audit or worse. If not paid back immediately, the Revenue Department will react with the fury of the wounded innocent at being cheated of its rightful gains.

All of which may be perfectly legal, but is it right? That’s the question I’m here to pose: We teach our children to obey the government because, by and large, its laws are just.
Not me. I'm teaching my children to obey the law because the state has all the guns.

Bottom Elephant: Legality and morality are orthogonal.

If the right thing to do happens to correspond with the law then whoop-dee-do! that's an easy decision. But you do it because it's right, not because it's lawful.

Here's the decision matrix my kids will learn in state-run schools:

Legal Illegal
Moral do it don't do it
Immoral meh don't do it

Here's what my kids will learn at home:

Legal Illegal
Moral do it do it
Immoral don't do it don't do it

(Of course, in the intermediate, amoral case, it becomes a cost/utility analysis.)

Patrick continues:
But if the government is just another shark in the marketplace, if the government just follows the law of the jungle, shouldn’t we teach children to obey the government out of fear, and for no other reason? Unless of course, they can get away with it? That doing the right thing is for suckers and sheep, if you’re smart enough?

That’s certainly the lesson that the North Carolina Department of Revenue is teaching their parents.
Here, here.

If the government is fleeces the people they learn to fleece right back.

That's part of the problem with all the recent hoopla about where we sit on the Laffer curve. If the idea is that tax rates should be set based on how much money can possibly be extracted from the citizens then citizens will try and extract as much money from the state (and by extension, from everyone else in society). The game shifts from "what is it right for me to receive?" to "what can I get away with claiming?"

15 August 2010

This will give me nightmares

Popehat | David | Making ready the way of the Messianic State

Thus spake Peter Krämer:
“…donors are taking the place of the state. That’s unacceptable…. [I]t’s not the state that determines what is good for the people, but rather the rich want to decide. That’s a development that I find really bad. What legitimacy do these people have to decide where massive sums of money will flow? …superwealthy people want to decide what their money will be used for. That runs counter to the democratically legitimate state. …the US has a desolate social system and that alone is reason enough that donations are already a part of everyday life there.”
The State is not coincident with Society.

No further comments.

14 August 2010

Don't create more work than you have to. Or more jobs.

The Undercover Economist | Tim Harford | Why we have got our work cut out for us creating jobs that matter

My wife and I only argue about the big issues, such as whether it’s a good idea for her to leave utensils in the sink. For the record, clearly not: it means that coffee-filter cones and colanders which need nothing more than a quick rinse are infected with deposits of grease from other dishes. My wife is simply creating work.

The other day, as I was running a sink of hot, soapy water in order to clean a coffee-filter cone, I mused on an inconsistency: we celebrate creating jobs in the wider economy, but complain bitterly about creating them around the house.

Jobs are a cost, not a benefit.

Talking about "creating jobs" misses the point. There are always an infinite number of jobs. People always want things done. What's limited is people's willingness to pay for those things to get done.

This may seem like a petty syntactic distinction, but I think it's an important point which guides the way we think about policy, especially in a recession.

Read the rest of Harford's post; as always he is on point.

(Via TJIC.)


I know little to nothing about the relevant engineering, so I'm mystified by the recovery from our latest power outage.

We, along with another 90k or so customers of my utility, lost power Thursday morning. About 36 hours later we got a call from a friend in our building that our power was "sort of on." Two hours later is was off completely again. An hour after that it was back on completely for two minutes. Then off again. Off and on for another ten minutes or so. Then it settled down to a situation where lights in two rooms were fully on, lights in the other rooms were operating on partial voltage, and other circuits including the refrigerator were off completely. I think the garbage disposal was also on partial voltage.

I have a vague memory that operating some types of motors on low voltage is a Bad Thing, so... I don't understand how this situation can be explained unless both my utility and the management of the apartment is doing something unusual.

No real point to this post. I'm just confused. I'm used to having power, and used to having no power. I'm not used to having some power. Just putting this out there.

I guess if anyone can point me to a convenient primer on home electricity and the local power system I'll have to add it to my queue. Got to rectify this hole in my knowledge so I'm not tempted to prattle on like a twit on the internet next time PEPCO leaves me stranded. Which will probably be next week if this summer keeps up.

12 August 2010

"Scientists, engineers, and politics"

The Thinker | Jeffrey Ellis | Scientists, engineers, and politics

Hopefully you will now understand that the term “rocket scientist” is a misnomer. There are no rockets existing in nature, waiting for scientists to come decipher their underlying principles. Rockets are designed and built by engineers, so the correct term should be “rocket engineer.”
This is one reason I wish my field was not called "computer science." I don't study computers, as they exist as physical objects. I study computation, the abstract process. Computers are only a tool for computation.

(The other main reason I don't like being a "computer scientist" is because it gives people the expectation that I can or am interested in fixing their computer, but that's neither here nor there.)
Scientists deal with the scientific method and apply it to investigating how nature works. When a hypothesis fails, it’s still progress: the scientist successfully proved that something isn’t the correct explanation. Eventually the underlying principle is discovered, reinforcing scientists’ faith in intellect and the scientific method. It doesn’t seem too odd to me, then, that scientists lean towards the liberal/progressive view that smart people can plan, manage, and fix things, without incurring dangerous unintended consequences. (Einstein, for example, was a huge fan of central planning and an apologist for Stalin.)
I have always found computer scientists and associated folks to be more libertarian than average.  Why this is is a perennial subject of discussion.  I have several possible, non-exclusive answers.

I think things might be a little different in Computer Science than in Science generally, primarily because CS is a discipline of mathematical problem solving.  Let me explain a bit, since everyone likes to think (with varying degrees of correctness) their discipline is about problem solving.

Algorithms and Data Structures are the heart of CS.  When you give an answer on an algorithms exam it's not the solution to a specific problem, it's a method for solving any instance of a general class of problems.  Computer Science is all about explaining to a rather dumb machine the exact steps needed to take an unknown input and turn it into something useful.  Computer Scientists don't just have to solve problems, we have to get an idiot to solve them for us.  Then we spend much time analyzing the complexity of problems and solutions.

I think grounding in complexity theory, in addition to familiarity with things like distributed systems, makes it easier for CS people to appreciate exactly how difficult it is to control societal mores or economics outcomes from the top-down.  I have explained, for instance, the socialist calculation problem to fellow computer scientists by saying that n = 300,000,000 people and d = [several trillion goods and services throughout time and space].  They know of the curse of dimensionality intimately.  Their instinct tends to immediately recognize that no algorithm could ever solve that for an optimal allocation.
Just as scientists defend science against quackery and take a dim view towards “pseudoscience” (misguided beliefs and practices disguised as real science), I think engineers are hostile towards what I’ll call “pseudoengineering” — intellectually arrogant attempts to plan, manage, and engineer things (e.g., society) that are divorced from any tried and true processes and methods.
Great term. I'm going to have to use that.

retirement PPS

I said in my last post that, to a first approximation, if you want to consume value you need to produce some value first.

Of course some people can not manage to create enough value for others in order to get the things we collectively think they should have.  Through some linear combination of factors which are their fault and those that aren't, they do not produce enough value to account for the value they want to consume.

We tend to spend a lot of energy arguing about how to get those people those valuable things and how much value they should get. I think that skips right over the real questions: why can't they create value on their own? On the implementation side: how can we help them create more value?

That's the way things ought to be framed, not just for this pension debate, but for minimum wage and health care and all sorts of other things. It's one thing to say "this guy is only creating $6/hr worth of wealth, but we want to make the minimum wage $10: good idea or bad idea?" It's another to ask why an hour of his time is only worth six bucks. How can he or we make sixty minutes of his time more productive?

Then there's the related issue: we don't really care how many dollars this guy takes home, we care about what he can get for them. So trying to artificially raise his salary not only ignores his actual production of resources by masking signals, it ignores the consumption of resources that's the goal. Question Two needs to be: how can we get people the things they want while using up the less valuable resources? Trying to drive down the cost of consumption goods has the same moral goal as trying to drive up the value of labor.

retirement; the ambiguity of "social contracts"

The New Republic: Citizen Cohn | Jon Cohn | Why Public Employees Are the New Welfare Queens

But ask yourself the same question you should have been asking then: To what extent is the problem that the retirement benefits for unionized public sector workers have become too generous? And to what extent is the problem that retirement benefits for everybody else have become too stingy?

I would suggest it's more the latter than the former. The promise of stable retirement--one not overly dependent on the ups and downs of the stock market--used to be part of the social contract. If you got an education and worked a steady job, then you got to live out the rest of your life comfortably. You might not be rich, but you wouldn't be poor, either.

Unions, whatever their flaws, have delivered on that for their members. [...] But unions have not been able to secure similar benefits for everybody else. That's why the gap exists, although perhaps not for long.
This is a real abuse of the concept of a social contract. Just because people have come to expect something to happen does not mean the rest of society has an obligation to make it happen.

In this case we're talking about a retiree per every two workers, which is pretty much impossible at current levels of productivity and consumption.  It doesn't really matter at all how much people expect to be supported in retirement, or whether it's part of a social contract, it's not going to work.

Retirement is a 20th century concept. It's only existed for a few generations. If I began promising everyone that golden apples would rain down upon them, and for decades they did, that wouldn't make golden apples a part of the social contract. Someday we're going to run out of golden apples, and they'll stop falling, contract or no.

Cohn can claim that an easy retirement is a part of the social contract, but I can just as easily claim that the social contract includes "he does not work does not eat." That's a lot more entrenched in the history of society, so I feel I'm on stronger ground. If you want to consume value that other people have created then you need to create some value for other people. And if you want to spend the last years of your life kicking back, not creating anything for the rest of society, then you better make while the making's good in your youth.

That's the problem with a social contract: it means whatever the speaker wants it to mean.  One guy wants it to mean "no soup for you," another wants it to mean "everyone gets a pony." Neither of those guys is really wrong, at least within the bounds of social contract thinking.  Fifty years ago "the social contract" got you a roof over your head and running water and government cheese, now it apparently gets you a free-standing house with a yard and a car and a liberal arts degree and a liver transplant. Provided that's that the speaker wants you to have.  In the contract I agreed to the world does not owe anyone a living.  Or a retirement.  Cohn seems to have signed on to a different contract.  How can he and I — not to mention everyone else with all their expectations and desires and understandings — be said to have come to any agreement, let alone a meaningful contract?

Cohn is arguing from a position that begins with the idea that union members have gotten their fair due, and everyone else is somehow being denied a cut of the booty. But the stockpiles don't exist. There is no store of wealth to hand out to retirees. (That's why I've stopped using "redistribution" — it implies there is a preexisting, top-down distribution that needs to be modified, but there isn't.)  Indeed, there is no wealth unless someone creates it. Cohn seems to think that retirees will get the resources they've been promised by "society" from ... somewhere. We just need to snap our fingers and wish hard enough for them to get their slice of the pie. But that wealth needs to be created by someone first. I don't see any plan for that.
In the long term, though, it seems like we should be looking for ways make sure that all workers have a decent living and a stable retirement, rather than taking away the security that some, albeit too few, have already. But that's a conversation about shared vulnerability and shared prosperity--a conversation we don't seem to be having right now.
Saying this is a conversation about shared vulnerability and prosperity is question begging. Cohn presupposes that vulnerability and prosperity must be shared when it comes to retirement. I happen to think the best way to prepare for winter is to have people gather their own harvests as much as possible. Cohn sidesteps that idea out of hand, and invokes the fear of vulnerability to boot.

PS People far from me in ideology-space tend to think that I am taking a very selfish position here and Cohn is being egalitarian.  I want to preemptively dispute that.  Cohn thinks things — educations, salaries, pensions — should be provided to himself and others by other people.  I think that if you want valuable things for yourself you need to do valuable things for other people first.  Or put another way, if you want to consume some of society's resources you need to produce some resources for other people in society.  As a first level approximation, setting aside special cases, contend my position is less selfish.

11 August 2010

"Sex At the Dawn of Never-Never"

Atomic Nerds | LabRat | Sex At the Dawn of Never-Never

I was listlessly kicking around a post that requires some extra research that on a warm breezy afternoon I was feeling frankly uninclined to do at that moment, then a friend of mine dropped rant material in my lap. So off to the races we go to savage an old favorite target, an “evolutionary psychologist” (actually JUST a psychologist, if he knows much about primate or human evolution it’s not evident from his writing) hawking his new book about how humans are really exactly like chimpanzees and human culture is a sinister plot. [...]
Research from primatology, anthropology, anatomy and psychology points to the same conclusion: A nonpossessive, gregarious sexuality was the human norm until the rise of agriculture and private property just 10,000 years ago, about 5 percent of anatomically modern humans’ existence on Earth.
The term for this would be “blatant and egregious lie”," unless his most recent source was Desmond Morris, who was himself highly problematic for a host of reasons. Though it’s a funny lie, in that anatomically modern humans have not existed for long enough for ten thousand years to represent 5% of our period of tenure on earth.
LabRat does an excellent fisking here. This is just one nice chunk. Check it out the rest.

I think what I find most amusing is that this chap, who is selling some free love whoop-dee-doo utopinaism is doing it in such a nakedly conservative way. Not conservative as in flag-lapel-pins-and-talk-radio, but conservative as in thinks we should take cues for how to act now based on how things used to be and generally opposes change in society.

Let's assume Ryan is actually right about human sexuality from 198,000 BC to 8000 BC. (He isn't.  But let that slide.) His argument boils down to "this is the way things used to be, so this is how we should do things now." He's preaching sexual revolution with reactionary logic.

Information scarcity in hiring

How can I not post this cross-over between two of my Top Five Favorite bloggers?
The Atlantic | Megan McArdle | Why Do Employers Use FICO Scores

A few days ago, I wrote about employers using FICO scores to screen potential employees. One thing that neither I nor Kevin Drum really answered is: why are employers using them? They're at best a weak proxy. Of course, corporations do stupid things all the time, because they're not infallible. Still, it's a question that bears asking.

Over at CoyoteBlog, an employer offers one possible answer: because we've made other forms of information gathering illegal. IQ tests are out, as are any other tests that have disparate impact on minority groups. And references have become useless:
That being said, as someone who has 500 service employees working for me, I understand the insatiable desire for information on employee reliability and conscientiousness. A large number of our employees we hire who interview well tend to get released within 60 days of their hire. I can't tell you how many people who seem totally normal and friendly turn out to be raving maniacs in stressful customer contact situations.

The elephant in the room that neither McArdle or folks like Kevin Drum mention is that businesses are starved for reliability information on potential employees. It used to be the best source was to check job references. Nowadays, though, very few employers will give a honest job reference, or will provide any information at all. I know I am guilty of that -- my company does not allow any manager to give out performance data on past employees. I only needed to be sued once over somehow interfering with someone's living by giving honest information about that employee's reliability to change my behavior.

I understand that this is exactly what the Left is shooting for - an environment where the competent have no advantage over the incompetent. If employers are resorting to FICO scores, it just demonstrates how all the other reasonable avenues of obtaining information have been closed to them.
That's uncharitable, but I think there's a grain of truth in it. And to be sure, everyone has an interest in ensuring that people who've done something stupid in the past can get a fresh start.
That is a little uncharitable. At worst, to the extent that the Left has any intentionality, advantaging the incompetent at the expense of the competent is a by-product, not a goal.

But we actually already have a way for people to start over when they've done something stupid. We let them turn eighteen.

Now I've been accused, not entirely inaccurately, of being a little harsh on the "people need to deal with the consequences of their decisions" front, so know that I'm being a little facetious with the above. But I'm also being a little serious. There is a distinction between what makes someone a juvenile and what makes someone an adult, and it's not the ability to buy smokes and titty mags at the convenience store. Children aren't expected to be responsible for their actions. Adults are.

I see a lot of the past two years as the story of decoupling consequences from actions. Oh, you lent money to the wrong bank; the government will make it all better. You borrowed a bunch of money you couldn't afford to repay; the government will make it all better. You run up overdraft fees on your credit card; the government will make it all better. Your state gorged itself in the boom times and now it's budget is bloated and unsustainable; the government will make it all better. You invested in too much housing stock and now no one wants to live there; the government will make it all better. You made lots of unfunded pension promises with no assets to back them up; ... you get the point.

We need to figure out what it means to be an adult and be responsible for your self.
But no matter how valuable privacy is, it cannot be true that you have a right to control the dissemination of information about all of your public interactions. Other people have an interest in knowing if you are a rageaholic who will cost them customers, destroy the apartment you're renting, or stiff them for goods bought on credit.

I'm not sure why credit reports should fall into the category of sacred information that no one else has a right to see. The amount of money someone has is private--but not paying your bills is a very public action with large repercussions for others. Why do you have an absolute right to keep others from knowing that you've stiffed a third party?
This is the key to why I don't mind employers using credit reports. The things listed on a credit report are not private transactions. When I make a deal with someone else they have every bit as much right to talk about it as I do.* Customer and business are both parties to a transaction; the customer doesn't have any ownership or claim over who gets to talk about the transaction. John Q. Customer gets to leave bad reviews of the business and the business gets to leave bad reviews of John. It has to work both ways.

(* Unless, of course, not talking about it is part of the deal that's been agreed to.)

PS Consider also what I posted a minute ago about hiring being a risky proposition for a firm even when you ignore direct costs like salary and benefits.

"unemployed = 21st century draft horse?"

Philip Greenspun's Weblog | unemployed = 21st century draft horse?

The U.S. has 15 million officially unemployed workers and additional tens of millions who aren’t working and aren’t looking for a job. Could these folks be the draft horses of the 21st century?

The cost of a low-skill worker has increased tremendously in the U.S. Let’s look at four kinds of costs:
  • direct payments for wages and payroll taxes
  • health insurance
  • mistakes
  • employment lawsuits
The minimum wage has increased steadily in the U.S. even as the average skill of a high school graduate has fallen. The federal minimum wage was increased in July 24, 2009, 1.5 years into our current economic depression. More important, perhaps, are the heavy increases in payroll taxes over the years, notably for Medicare and Social Security. [...]

Most subtly, and perhaps most significantly, the potential cost of a mistake by an individual worker has skyrocketed. In industrial plants, the link between individual employee action and billions in losses is fairly obvious, e.g., with the Bhopal explosion. A tiny misstep in a chip factory and a wafer containing hundreds of valuable integrated circuits becomes worthless scrap. Computer networks, however, have made the potential costs of a clueless or careless office worker dramatically higher. Suppose that a company hires a low-skill not-very-alert office worker for $10/hour. This person accepts an email invitation to follow a hyperlink. One click later and the company’s network is infected with a virus. Best case: IT department spends $50,000 cleaning up; worst case: customer lists, customer credit cards, and other private data are compromised, costing millions of dollars.

As the government has increased the number of ways in which an employee can sue an employer, the expected cost of litigation from each additional employee has gone up. The cost of trying out a worker who might not work out is much higher than formerly, especially if that worker is older, female, or belongs to a government-recognized minority group. It might be smarter to employ fewer higher skill workers because the chance of litigation is lower with 100 workers than with 200 workers.

Or we can rephrase the entire posting as “How comfortable would you feel working at your present job alongside someone whom you would rate as among the least competent 25 percent from your high school?”
I like the rephrasing best.

There's been much talk of "zero marginal productivity workers" in the last few days, and this ties into that, but I have another reason for thinking this is interesting.

My father told me yesterday that he read a profile of Bradley Manning, who released all that material to Wikileaks. The newspaper profile paints a picture of pretty unreliable and untrustworthy guy. Why did such a person have access to this kind of damaging material?

My first reaction is that, assuming the article is accurate and Manning was noticably a weirdo, the Army is facing the same risks as other employers. A hundred years ago when an anti-social loner knocks on the recruiting depot's door they can always put him to work shoveling shit in Louisana. Now there's a much higher chance that the weirdo is going to be in charge of important or expensive or dangerous stuff.

"Chop shop" does not mean what Chuck Schumer wants you to think it means

The Economist: Free Exchange | S.D. | Chop shop?

Charles Schumer, senator from New York, thinks that companies like Indian software giant Infosys are “chop shops”, which he defines as companies that “outsource good, high-paying American technology jobs to lower wage, temporary immigrant workers from other countries”. [...]

I think Mr Schumer’s choice of rhetoric is very deliberate indeed: when you want to demonise someone, why not imply that what they do is somehow illegal or generally dodgy and suspect? But perhaps he could do with a small lesson in the way the commercial-services industry works. [...]

Mr Schumer also thundered that this measure “will not affect the high-tech companies such as Intel or Microsoft that play by the rules and recruit workers in America”. I’m not sure what “rules” he is referring to: he makes it sound as if companies who use legal methods to staff projects in the US, using a visa scheme that the American government has set up, are dodgy operators in some sort of grey market. I, for one, did not know that there were unwritten “rules” about the ratio of foreign workers to American ones that companies operating in the US had to follow. [...]
Why am I posting this?

(1) I always like stories that make Chuck Schumer look like the lying windbag he is.

(2) Whenever people like me support free trade and oppose protectionism we get criticized along the "easy for you to say, you don't work in a shoe factory" lines. Well software/IT/misc. professional services is something I do, and I'm still for more open trade, outsourcing, and the rest. The spice must flow.

(3) There are a lot of fine people in India and elsewhere overseas and they "deserve" these jobs exactly as much as anyone here. There's no rational basis for claiming that these positions "belong" to America.

PS Further evidence that you should not attempt to screw with only one half of the import-export system:
What’s also funny about all this chest-thumping service-sector protectionism is that it comes from the world’s leading exporter of commercial services, who you’d think would understand the need for open markets in an industry where it is the world’s biggest player. In 2008, the last year for which the WTO has comprehensive worldwide data, America’s exports of commercial services were around 5 times India’s (and about 28% of its total exports). And while latecomers like India have been playing catch-up, America's service-sector exports have not exactly done badly: they more than doubled in value between 1999 and 2008, when the US had a big surplus in its commercial-services trade.