31 July 2011

At least Nero fiddled, rather than debating what tune to play

Ideas | David Friedman | The Real News

[The debt limit debate] is an entertaining example of the game of Chicken as played by politicians but of limited importance otherwise, since both sides are focused not on how to deal with the long term debt problem but on the terms on which they will agree to postpone dealing with it.
This. This is it. This is exactly why I have felt disillusioned with the whole kabuki summed up in less than a sentence.

Send in the clowns.

Who gets the Flute?

Falkenblog | Eric Falkenstein | Amartya Sen's Justice

I was reading The Idea of Justice by Nobel Laureate Amartya Sen, now in paperback, and he starts out with the following example.

Take three kids and a flute. Anne says the flute should be given to her because she is the only one who knows how to play it. Bob says the flute should be handed to him as he is so poor he has no toys to play with. Carla says the flute is hers because she made it.

Sen argues that who gets the flute depends on your philosophy of justice. Bob, the poorest, will have the support of the economic egalitarian. The libertarian would opt for Carla. The utilitarian will argue for Anne because she will get the maximum pleasure, as she can actually play the instrument. Sen states there are no institutional arrangements that can help us resolve this dispute in a universally accepted just manner.

[...]

I thought his initial thought example rather curious. Instead of asking how to allocate the flute between the three children, why not ask first under which rules would the flute have come into existence? If Carla knew she would not get the flute, she would not have made it. Therefore, just add a time dimension to the puzzle, and there's no puzzle at all: only a libertarian form of justice is consistent with the flute existing.
Time dimension: that's clever.  And important.

These are the kinds of questions I want presidential candidates to be asked in debates. There's no room for the hand-waving of "Well, when I was in Canton I visited a piccolo factory and I met Derek, and Derek is a single father supporting a three kids and he's afraid the factory that he works in, and his father worked in, and his father worked in, is going to get shut down because of unfair competition from [blah blah blah] China! [blah blah] hard-working Americans [blah blah blah] middle class [blah blah] 21st century win the future jobs infrastructure hollowing out high tech green American dream feel your pain lockbox [blah blah blah blah blah] and that's why when I'm president everyone will get free music lessons in elementary school! And a pony!"

Okay. STFU. Who gets the flute, Anne, Bob or Carla? Show your work.

30 July 2011

"Whom Should the Treasury Department Pay First?"

The Volokh Conspiracy | Russell Korobkin | Whom Should the Treasury Department Pay First?

One approach is to approach the problem like a business or individual that has a serious cash flow problem but isn’t insolvent. This would suggest ordering payments based on how much the government is likely to need particular creditors on an ongoing basis going forward. [...]

If government officials think in terms of which creditors are most important to them personally rather than to the government as an entity (think managers who serve their own interests rather than those of the corporation’s shareholders), the calculus changes drastically, and the question is not how keep the loyalty of the nation’s most important business partners but how to keep the loyalty of the greatest number of voters. [...]

A very different approach would be to allocate incoming revenues based on the principle of equality. Rather than paying some in full and others not at all, this approach would counsel toward paying everyone to whom the government has a moral obligation — as a result of contract, promise, or reasonable reliance on the expectation of payment — the same amount. This approach would lead the government to pay bondholders, social security recipients, Medicare and Medicaid providers, etc. etc. 60% of what they have been promised (they get an IOU for the rest).

A third approach is to pay in order of the recipients’ need. [...]

Yet another approach is to try to pay those with the strongest moral claim to receive money from Uncle Sam first. [...]
There's is another guiding principal you could use which is worth mentioning: the max-min fairness algorithm. Yes, yes, I normally eschew the word "fair," but in this case it is given an actual definition so I'll make an exception.

You line up all the creditors. You pay everybody however much you owe to the person you owe the least. Then you cross that smallest creditor off the list. Then you take the new smallest creditor, and pay them the rest of what they are owed, and pay the same amount to everyone else in line. Cross them off the list. Repeat until you run out of money.

I'm not advocating actually doing it this way, but if "pay everyone 60% of what's due to them" is an option, then this is an option.

This would obviously work easier (better?) for some categories than others — payroll for full-time employees and social security recipients are easy to rank in the necessary way, but how to line up all the creditors who have sold you staplers and trucks and jet engines is more difficult because they haven't done the same things to incur the debt.

"Toddler Economics"

Ideas in Action | Tim Worstall | Wal-Mart and Toddler Economics

I don't even know where to begin excerpting this. Ezra Klein argues that Wal-Mart should be run more like Costco, and specifically ought to pay its workers the same as Costco.

Worstall opens up the Wal-Mart and Costco annual reports and uses the numbers plane Ezra Klein. Sure Wal-Mart could pay its workers the same as Costco does, but it would mean laying off about 900,000 of them.  This is a conclusion that can not be lightly side-stepped.  As Worstall writes "The child's view would be that everyone should just be paid more because I want it to be so! -- i.e. that there are no side-effects to such decisions."

This is very good analysis, but I must add two concerns: (1) What does Ezra Klein know about setting strategy for a national retail operations? (2) Why do we want different companies to be run the same way? Markets (and indeed all iteratively improving complex systems I can think of, like evolutionary processes) require diversity in responses.

Saying something like "here's a company I like; other companies should adopt the same strategy" seems to be a misunderstanding on a higher level of abstraction.  This is not to say that firms should not adopt what has worked for other firms, but rather if there are multiple successful strategies (and the profits of both Wal-Mart and Costco would indicate they each have successful strategies) then we do not want all agents to converge on one of those strategies.  It is unstable, and it needlessly sacrifices exploration of solution space.

Consumption Redistribution

The Money Illusion | Scott Sumner | You can't redistribute income ...

... but you can and should redistribute consumption. Income really is the Achilles heel of the progressive movement. The income statistics simply don’t mean what progressives think they mean–something like “resources available for redistribution.” If you want something closer to resources available, you’d use consumption, or wage income. If you combine wage and capital income in the same aggregate, you are counting the same resources twice. [...]

A rich guy with lots of income has three choices, consumption, savings/investment, and charity. Let’s dispose of charity quickly [...] the real money here is obviously in the consumption/investment categories. You can redistribute consumption from the top 1% and give it to average Americans working in a car factory, or a Walmart. But it’s an illusion to think you can redistribute investment from the top 1%, so that average Americans can have a higher living standard. Where do people think the car factory comes from? Or the Walmart building? BTW, this has nothing to do with trickle-down economics, a theory I reject. This is simple accounting. Money put into investment projects isn’t available to boost living standards for the lower classes, unless you don’t do those investment projects.

So what’s available to be redistributed? Basically consumption (including a modest amount of vanity charity.) And that’s it. Now come back to me with the consumption distribution data, and let’s see what that looks like. I predict that consumption inequality is far lower than income inequality. And that consumption inequality is rising at a far slower rate than income inequality. I’m not saying there’s no problem, but it’s way smaller than the progressives imagine, as the data they use is pure nonsense. Consumption inequality is economic inequality. Income inequality is . . . well it’s meaningless gobbletygoop.
Amen. Just ... yes.

Money is what you have between giving up resources someone else values and getting some resources you value. I care how much stuff people get to have, not how much money.

The more I think about these sorts of issues, the more I conclude that we should have no income taxation at all and shift to all consumption taxes. Sumner says something similar in this post, but also says he would like some payroll taxes. Why is this? Is it as a tax on businesses consuming labor inputs? Don't we have incidence issues to deal with?


Update: My "Amen" is to the "can redistribute consumption," not necessarily to the "should redistribute consumption."  The difference between income and consumption, and the greater importance of the latter, is a very, very, very valuable point.  The "should" stuff is more tenuous.  Not wrong, but unproven and beyond the scope of the current discussion.

That said, if we are going to have redistribution — and as long as we have nation states populated by people, we are — I would much rather have it be along the sorts of lines Sumner advocates than the absurd disaster we have now.

"Good Defensive Patents Are Bad Patents"

Julian Sanchez | Good Defensive Patents Are Bad Patents

But now think about how defensive patents work. Companies aren’t buying them—or buying into the services of companies like Intellectual Ventures—because they provide otherwise unavailable technical insights. The point, rather, is to acquire (or have access to) a bundle of patents that any potential litigant who sues you is likely to be “infringing” in their own products. Like nuclear weapons, the point is not to actually use them—but only to be able to threaten to use them if anyone else should deploy theirs against you.

This only works, however, if other companies are almost certain to have independently come up with the same idea. A patent that is truly so original that somebody else wouldn’t arrive at the same solution by applying normal engineering skill is useless as a defensive patent. You can’t threaten someone with a countersuit if your idea is so brilliant that your opponents—because they didn’t think of it—haven’t incorporated it in their technology. The ideal defensive patent, by contrast, is the most obvious one you can get the U.S. Patent Office to sign off on—one that competitors are likely to unwittingly “infringe,” not realizing they’ve made themselves vulnerable to legal counterattack, because it’s simply the solution a good, smart engineer trying to solve a particular problem would naturally come up with.
This is an excellent point. It's so obvious in hindsight, but I had neither thought of it nor seen someone else express it.

To be honest, I tend to resist thinking about IP issues because I find the whole thing a muddled wreck.

The more I do think about it, the more I'm beginning to believe that our patent system works only within the particular context of the early Industrial Revolution. I have no idea what to do about it, but the system as it stands is a complete mess.

"The new Commanding Heights"

Marginal Revolution | Tyler Cowen | The new Commanding Heights:

That’s Arnold Kling’s phrase, here is the fact:
…close to 98 percent of the 27.3 million new jobs in the American economy in the last two decades were created in the nontradable sectors, led by government and health care in first and second place."
This sounds eerily reminiscent the way one of Greece's former finance ministers described their economy. The state wanted traditional protectionist policies, but they were too difficult to enact due to European agreements or too obvious in their cost, so they shifted workers into non-tradable sectors. Rather than populist sops like price floors and import restrictions on agricultural goods, they tilted the scales to get more people working in bureaucracy, healthcare, education, etc. It's easier and less obvious to set a price floor on the wages of unnecessary, unproductive government clerks than it is sugar or wheat, and these workers' output is already 100% non-tradable so you don't need to worry about bothering with import restrictions, tariffs, and such.

On a related note, what is the single least tradable job?  Let's exclude politicians and bureaucrats.  My off-the-cuff guess is barbering & hair styling.  I can not conceive of any amount of technological, legal or social change which makes it possible to import hair cutting services, within, say, one hundred years.  It is also resistant to replacing labor with capital.

28 July 2011

Lebowski Studies

Miller-McCune | Tom Jacobs | Scholars and The Big Lebowski: Deconstructing The Dude

Although its political message is far from overt, The Big Lebowski is a highly subversive film. At least, that’s what Paul “Pablo” Martin of Grossmont College and Valerie Renegar of San Diego State University argue in a 2007 article in the journal Communication Studies. Referencing the work of Russian philosopher Mikhail Bakhtin, they call the film an example of “carnivalesque humor,” a genre that encourages audiences to “reflect on, and ultimately reject, their fears of power, law and the sacred.”
I knew I liked this for a reason.

The Year's Work in Lebowski Studies seems like a good way to blow $10.  I thought I was aware of all the books which take The Big Lebowski too seriously, but this one is new to me.

I meant this post to be a break from all the fiscal hullabaloo, but then I read this line:
In contrast, his best friend Walter, played by John Goodman, has “a line-in-the-sand mentality of picking fights over the broaching of more or less arbitrary boundaries and working himself up into apoplexy simply to prove his intransigence.”
Apoplectic fits as demonstration of intransigence? Sounds like debt limit negotiations to me.

Spending Problem

Kevin Drum tries some chart-based jiggery-pokery and Warren Meyer fires back with this, asking "Hmmmm. Revenue or spending problem. You make the call."



PS Drum begins his post with "'We have a spending problem, not a revenue problem.' This is the usual Republican mantra, but is it true?" This is not only true, it is trivially true. All spending entails taxation, be it now or in the future. Spending is the problem because revenue is contingent upon it, while the reverse is not true. (And I say this as someone who is willing to see increased revenue.)

[I wrote this days ago but it got lost in the drafts folder and I forgot about it.  That happens more than I am comfortable with.]

Stomping the gas pedal less hard

Reason Magazine | A. Barton Hinkle | Is the Tea Party Crazy or Just Nuts?

At this point it might be useful to clarify precisely what the dispute concerns. The question is not whether the federal government should grow. As Reason's Nick Gillespie pointed out a few days ago, nearly nobody in Washington has actually proposed shrinking the leviathan. To the contrary, the dispute is whether to raise federal spending from the current $3.8 trillion to $4.7 trillion over the next decade (the Paul Ryan plan)—or to $5.7 trillion (the Obama plan).

Bear in mind that those increases would come on top of one of the fastest expansions of federal spending in U.S. history. When President Obama took office, the budget stood at $2.9 trillion. Two. Point. Nine.

Spending has risen 30 percent in the past three years. It is quite a feat to grow federal spending faster than the Bush administration: Under Bush, domestic discretionary spending rose faster than at any time since the Lyndon Johnson administration.

If Bush floored the accelerator, then Obama lit the afterburners. And nobody in Washington (except Sen. Rand Paul and perhaps Sen. Tom Coburn) has suggested applying the brakes. For the most part, the cuts being discussed are reductions in the rate of future growth. What does that mean? This: (a) your rent is $10,000 this year; (b) you thought you were going to spend $15,000 next year; but (c) you've decided to spend only $12,000—therefore, (d) you've 'cut' your housing expenses by $3,000.
This is why people should learn some calculus or physics. If I've been reading the summaries of these plans right, Congress and the White House are debating adopting a negative second or even third derivative, depending on the plan.  That's not "cuts" in any way that means something to me.  (It's better than nothing, but it can't be called a "cut.")

See also: "Military Spending's Uninterrupted Rise"

Amateur College Athletics Aren't

SI.com | Michael Rosenberg | Star college players like Reggie Bush, Cam Newton should be paid

The 2010-2011 NCAA manual says the 'Principle of Amateurism' is important because college athletics are an 'avocation' and ... hang on, here comes the punchline: 'student-athletes should be protected from exploitation by professional and commercial enterprise.'

Really? When an athlete sells his jersey so he can pay rent, and the NCAA suspends him, is the NCAA really protecting him? Who is the NCAA kidding?
You don't help anyone by not letting them be paid, be they college athletes, interns, apprentices, or organ donors.  It is the height of moral arrogance to think that preventing people from engaging in voluntary transactions is helping or protecting them.  You can talk till you're blue about preventing exploitation, but it all boils down to "I know better than you what is good for you."
If major college sports did not exist, nobody would try to create them -- not as we know them today. The entire enterprise is preposterous. If there were no college sports, 100 school presidents would never issue the following press release:

"We have decided to create sports teams to represent our universities. We will have to admit a lot of students with inferior academic records solely because they can play football or basketball, but hey, we're cool with that. Anyway, what matters here is that we can make billions of dollars doing this, and we're not going to let the players have anything beyond room, board, meals and a few other sundries. Not only that, but we will not allow ANYBODY to give them money. We have decided money is bad for them. It ... uh ... corrupts! Yes. It corrupts. Now: Who wants to buy a personal-seat license?"
Testing for historical coincidence is a good sanity check.

I don't see the logic in this, though:
That NCAA manual devotes 16 pages to amateurism. We can cut it down to one, with one principle:

Athletes may not be paid directly with university funds.
Why not? Why pay people to lead tours, analyze lab data, sell concert tickets, or shelve library books, but not play sports?  Schools can pay the students who hand out the commemorative foam hands, or sweep the stands after a game, but not the students on the field?

And let's be very clear about this: college athletes are already paid.  In waived tuition, fees, and room & board, as well as in gear, training, access to facilities, media exposure, and acceptance letters (which are themselves valuable, make no mistake).  They're paid in goods and services, not cash, but they are paid.  That's probably inefficient and certainly non-transparent.

So they are paid, but there's this odd ceiling on the amount they can be paid, and most of it is determined not by how good the athlete is, but by what their school's sticker price is.  (And the wage premium from getting a degree from that school.)  The question isn't "should we pay college athletes?" but "should we pay college athletes cash in addition to their other payments?"
I once had a remarkably circular conversation with former NCAA president Myles Brand about the NCAA's amateurism rules. One of his chief arguments was this:

"The fact is we don't pay students in other areas when they are engaged in activities as part of their education."

That may be (mostly) true. But colleges don't prevent their students from making additional money either. If a student at the University of Southern California School of Cinematic Arts is offered $2 million to direct a major-studio movie, that student would still be allowed to take his film classes. USC wouldn't say "Hey, that's no good. Give us your money so we can pay a professor seven figures."
I agree with his point, but I don't think the original claim is even "(mostly) true." I was paid — fairly well, for a student — to do research by Notre Dame. That was certainly part of my education. And they wrote me checks to do it.

The Hurricane Club



Twitpic | Gas station offering a Hurricane Express Access Pass for gas

Interesting. Because of various (foolish) laws and legislation, even though gas is scarcer after a storm you can't sell it any dearer.

Possible solution: have people pre-commit to buying gas and pay before the storm. Whoever posted the above sign is pursuing one way of doing that.

I can imagine an entrepreneurial gas station owner skipping the frequent-buyer system and offering to let people pay a membership fee to join a "gas club" for the duration of storm season. Pay $X up front for the right to buy gas after a storm.  Members get to buy as much as they want during weather-induced shortages; non-members only get to buy a gallon at a time.

There are bound to be other ways of increasing the revenue from a gallon of gas sold after a storm without taking the very visible action of raising the advertised prices in the wake of the storm.

26 July 2011

I hope my future children never see this comic, or I'll be toast.



I'm adding "Che Guevara shirt" to list of disqualifying apparel for romantic interests, right under "Yankees hat."

If women want to date tall men but aren't allowed to say so short men won't get more dates.

The Economist: Free Exchange | R.A. | Labour markets: Long-term unemployment is a sticky situation

Catherine Rampell tells the troubling story of the long-term unemployed in America, who often find that even their job applications are unwelcome:
A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.

The practice is common enough that New Jersey recently passed a law outlawing job ads that bar unemployed workers from applying. New York and Michigan are considering the idea, and similar legislation has been introduced in Congress. The National Employment Law Project, a nonprofit organization that studies the labor market and helps the unemployed apply for benefits, has been reviewing the issue, and last week issued a report that has nudged more politicians to condemn these ads.
Let me first say that my heart goes out to the long-term unemployed. That is a very difficult situation to be in.

But — and there must always be a but, for this is blogging, and that is the way of things — this is idiotic legislation. Assuming Rampell describes it correctly (it is still legal to have a policy of not hiring the long term unemployed but illegal to say so) this is nothing better than show-we-care lawmaking which puts intentions and emotions about outcomes and results.

Of all these states and congressmen considering introducing such legislation, do any of them know if it actually works?  Or have they just decided that we must do something, and this is something, so we must do this?

Let's say employers don't want people who have been unemployed for more than six months. Maybe that's reasonable and productive, and maybe it's evil and mistaken and maybe it's somewhere in between. One thing they could do to act on that belief is to say so openly and transparently, right up front at the point of contact with potential hires.

But let's say they're barred from doing that. They continue not wanting to hire those people, but now they can't say so. What do they do? Change their minds? Or accept their applications and then trash them?

Actually these laws are wrose than useless. If my application is going to be summarily turned down, I'd like to know. I'd want to be spared the false hope. I'd want to be able to more accurately assess my chances. And I'd want to be spared the time of writing another cover letter or filing another application. But no, because some legislators want to demonstrate how big their hearts are, I have to operate in an environment with less information where people pretend their opinions aren't their opinions.

~ ~ ~ ~ ~

PS This is an important point R.A. makes: "One of the weird things about the American labour market is that most or all wage negotiation is done after an employer decides whether it wants you or not."

PPS From Rampell's article: "'We may be seeing what’s called statistical discrimination,' said Robert Shimer, a labor economist at the University of Chicago. 'On average, these workers might be less attractive, and employers don’t bother to look more closely to pick out the good ones.'" Statistical discrimination? You mean making decisions based on trends in data? Hrrrrrrrrrrrrrrr.

25 July 2011

Netflix

I'm late commenting to the hubbub about Netflix's new pricing scheme, mostly because despite all the hue and cry this strikes me as a "nothing to see here" news item.  Nonetheless, I will spill some words about this:

(1) Aren't most of the people complaining about a la carte pricing for the streaming and disc services also people who complain about having to pay for their cable in bundles?  A little consistency, please.

(2) If the service, with the new pricing model, doesn't provide you consumer surplus anymore then don't buy it.  If you still find it worth it, then do buy it.  The end.  You are not being "held hostage."  Yes, that is a phrase I have heard used without irony to describe a private company's monthly pricing of what is clearly a luxury good (e.g.).

(3) Netflix's unlimited instant streaming has only been available for three years.  It's amazing how fast people get attached to things and begin to treat the possibility of losing them either a violation of their rights, a mortal insult, or an insurmountable change to their lifestyle.

(4) I think there is a lot of asymmetry here.  If Netflix had introduced streaming back in 2008 as a separate plan and charged $8 for a one disc plan and $8 for streaming, no one would have thought it was unreasonable to divide the services this way.  But because they rolled them out as a bundle people are grievously insulted that they would change the status quo.  It's not that the new deal is a bad one, it's that it's not the old deal.

(5) I've had a streaming-only plan for about nine months now to save some money.  Do I wish I could get access to a lot of the disc-only material?  Of course.  But there is an insane amount of stuff to watch on their streaming service.  More great content than anybody could reasonably get through.  Ip Man 2, Carlos, Shutter Island, Gomorrah, Oldboy and Let the Right One In are all high in my queue.  If TV is your thing Netflix has recently added the entire runs of Cheers and Top Gear.  Not to mention Firefly, No Reservations, Mythbusters, MI-5, Fawlty Towers, Black Adder, and 24.  So yes, I wish I could get Cedar Rapids, but it's not like I'm hurting for things to watch.

~ ~ ~

PS I actually have one complaint with Netflix's UI when it comes to TV shows.  They keep track of each available episode and check off the ones you've seen to make it easy to figure out which one to watch next.  It's very helpful.  But you can only check off an episode if you watched it through Netflix.  I've seen a lot of No Reservations and Mythbusters episodes in reruns.  I'd like to be able to check those off as seen.  It would make finding unwatched episodes easier, and that would make me more likely to use Netflix to watch those shows.

Does anyone know of a way to do this, perhaps through some service using their API?

PPS I'm afraid something might have gotten lost in the shuffle.  Allow me to repeat — Netflix lets you stream every episode of Top Gear and Cheers.  That needs to be said plainly and clearly for the benefit of mankind.

24 July 2011

Ratios

venomous porridge
seoulbrother

I guess I don’t know how this works. For example: how do you determine where the 8-circles go. Oh, I see, three of them rest on each other at the top. But what about the 8 that intersects with the other 8 to form the leaf? What’s going on there? It looks like it’s bisected by the pink rectangle but not by the green and the circumference doesn’t rest on any of the lines. Do you just move it along the pink line until you’re happy with the way the leaf looks?

And what’s going on with 13 there? Is it supposed to define the height of the apple? If so, why is it a little taller than the height-through-center? Maybe it’s the guide by which to align the 1, 2, 3, 5 and 8-circles around the… and where did those two blue lines come from? [...]
It isn’t entirely bullshit. The sizes of the squares in the golden spiral (the pink thing) are elements of the Fibonacci sequence: 1, 2, 3, 5, 8, 13. And the radii of some of the circles from which the apple is constructed follow this sequence, apparently. Looks like the 13-circle was fudged a bit, but it’s close.

But the pink overlay in this diagram makes no sense whatsoever. It doesn’t circumscribe or bisect or in any way relate to anything else. The green rectangle is a golden ratio, but I guess you’re supposed to ignore the fact that it doesn’t match the width of the image. And the blue lines don’t serve any purpose at all.

No, this is just a minor observation about a few carefully selected proportions in the Apple logo dressed up to look profound. Sorry to disappoint.
Was it one of the Dirk Gently novels or Foucault's Pendulum* which talked about the cosmic secrets hidden in the dimensions of a common tool shed? This is like that.

This is why those stories you see about how the ratio of the length of some hallway in the Great Pyramids to the width of the Sphinx's Nostril being equal to the ratio of years between Jesus being born and Napoleon dying are bullshit. Given enough numbers you can always pick out some ratios that seem profound.


* When was the last time anyone thought "wait, was that Douglas Adams or was it Umberto Eco?"

PS I bugs me that that footnote doesn't end with two question marks, one inside and one outside the quotation mark. English orthography is lacking.

22 July 2011

Arabic. It's a language. With words in it. Some of them signify useful concepts. Now grow up.

Via Adam Serwer and @popehat:
New York Times | Marc Lacey | ‘Haboobs’ Stir Critics in Arizona

The massive dust storms that swept through central Arizona this month have stirred up not just clouds of sand but a debate over what to call them.

The blinding waves of brown particles, the most recent of which hit Phoenix on Monday, are caused by thunderstorms that emit gusts of wind, roiling the desert landscape. Use of the term “haboob,” which is what such storms have long been called in the Middle East, has rubbed some Arizona residents the wrong way.

“I am insulted that local TV news crews are now calling this kind of storm a haboob,” Don Yonts, a resident of Gilbert, Ariz., wrote to The Arizona Republic after a particularly fierce, mile-high dust storm swept through the state on July 5. “How do they think our soldiers feel coming back to Arizona and hearing some Middle Eastern term?”
Guessing how other people feel is a dangerous game, but I'll bite anyway.  Seeing as how they just got back from a war zone, I think they feel like you need to calm the hell down and find better things to worry about than petty bullshit like what the local news calls a dust storm. These are people who have had bullets flying past them while leading convoys over wadis or patrolling souks. They're adults; I think hearing foreign words are the least of their worries.
Diane Robinson of Wickenburg, Ariz., agreed, saying the state’s dust storms are unique and ought to be labeled as such.

“Excuse me, Mr. Weatherman!” she said in a letter to the editor. “Who gave you the right to use the word ‘haboob’ in describing our recent dust storm?"
Excuse me, Ms. Diane Robinson. From now on everyone will run all their vocabulary choices by the most easily offended person in the community. All lexicons will be determined by the person with the thinest skin.

Who gave him the right? Who gave him the right? James goddamned Madison, the fifty some members of the Second Continental Congress, and most importantly the Laws of Nature and of Nature's God.  That's who.  He's a free man, he can use whatever words he wants.  Even words like "shut up, you miserable wowser hag."

(Oh yeah, that was a loanword too.  Deal with it.)

Roll back

rantings of a random scrub | Why I don't Understand the Current Debt Ceiling/Budget Debate

The US Federal expenditures for 2007 were a total of $2.8 trillion. The US Federal expenditures for 2010 were $3.55 trillion. This is a more than 25% increase. Where has all of this increased spending gone, and why are the programs it went to fund so critical that cutting them is not a serious option? It's not like 2007 was the dark day of anarchy, lawlessness, and starving seniors. Originally the increase was 'stimulus spending' of various kinds, but it seems to have morphed from 'temporary increase' into 'permanent budget baseline,' and any talk of serious cutting is treated as beyond the pale by the media and the Democrats alike.

I'm of the opinion that going back to the 2007 budget (adjusted to account for population growth) should be a viable option, and would save something like $5-6 trillion over 10 years. It sounds (to me) both simple and feasible. What am I missing?"
This is exactly what I have been asking myself.

Two Healthcare Charts

From Reihan Salam, via PE Gobry:


That is frightening.  There is no point in a federal health care reform ("reform") policy that does not deal with this trend.

Related:



Fixing this trend is how we fix the one in the first chart.

(Via MJ Perry)

Bad Decisions

I think people are capable of awe-inspiring heights of achievement.  But I also think that most people, most of the time, are pretty mediocre.

In general, I don't trust people to make good decisions, and I think that underlies a lot of my political philosophy.

But there are two very, very different directions you can go from this starting point.

One is to conclude that because people are bad at making decisions we should make decisions for them.  Either for my own good, our collective societal good, or for these bad decision makers' own good, other, smarter people should decide for them.

The other is to conclude that because other people are bad at making decisions, other people shouldn't be making decisions for me.  And by extension we shouldn't be making decisions for them.

I find the second much more palatable, not to mention humble.  But the former is much more popular, and obviously they think my approach is wrong.  What causes people to reach opposite conclusions from the same premise?

21 July 2011

Stuffed Sharks

I am about to return Don Thompson's The 12 Million Stuffed Shark: The Curious Economics of Contemporary Art to the library and wanted to make one quick comment.

The overall theme of the book is "How is it possible that contemporary art is selling for as much as it is?" And a fine question that is.

One parallel I see is housing. I think you can explain the high prices in contemporary art with many of the same explanations you could have used in housing circa 2006. (And still can, to a degree.)

  • No two houses or two pieces of art are exactly the same. (Yes, Warhol for instance would make several identical screen-prints of the same image, but each one has a different provenance, etc.) This makes pricing hard.
  • Both are often sold under high pressure scenarios. There is another buyer making an offer on the house you like, or there are other buyers either at an auction or in the opening hours or minutes of an art fair competing for the same pieces.
  • Both houses and works of art trade hands rarely, adding psychological pressure. Who knows when another item like this will be available.
  • No one is sure what a Damien Hirst is "really" worth in the same way no one knows what that three bedroom over on Elm is "really" worth since they aren't productive assets. It's not like they churn out a cash flow you can measure and compare to a purchase price.
  • As a result people are much more likely to pay what they can, not what they see the true value as being.
  • Works which enter museum collections are very unlikely to ever leave. This puts pressure on the supply of art in the market. This looks like an analog to household formation, but I would need to think about it more. Certainly the new museums opening in China and the Middle East are equivalent to new households.
  • People are led into being overly optimistic about prices rising. Realtors and many financial "gurus" on the one hand and dealers and auction houses on the other play into this misapprehension. Furthermore big increases in sales prices are widely reported, but failed sales and decreases in value are not news.
  • Like a house, many owners of art would prefer not to sell at all rather than take a loss. Dealers are far more willing to drop an artist from their stable entirely rather than reduce prices on their work. This leads to ratcheting.
  • Prices are highly based on neighboring prices. Either literally neighboring, in the case of housing, or in the case of art, neighboring in an abstract space. The pricing of a work is highly dependent on recent prices by the same or similar artists, genres, periods, mediums, etc. This creates positive reinforcement which is destabilizing.
  • Some of the most fascinating sections of the book were those that dealt with auction houses.  They are in an interesting position of representing the seller, but also being an advisor to the buyers.  They want to maximize price for the seller, but also insure the buyer is willing to come back for more auctions in the future and is willing to consign art to them when he is ready to sell.  There is a complicated commission structure which is variable depending on the deal  Throw in many other complications that arise when there are price guarantees and reserve prices, or complications when art is consigned by a divorcing couple, or when there are privately negotiated sales in addition to auctions, and you get a right game theoretic mess.  Furthermore there is competition between Christie's and Sotheby's but also a pretty cozy duopoly.

    I would be interested to see some examination of this agency problem and that for realtors in housing.

15 July 2011

Under Pressure



No, it's not in your head. They are playing this with a disorienting celerity. Matches how I feel right now: everything is too quick by half. I need Monday afternoon to not show up for at least 120 hours if I'm going to get this draft done.

Anyway, rock and roll.

13 July 2011

Klosterman

It appears Chuck Klosterman is now writing for Grantland, which is an extremely good thing. My life has been seriously lacking in Klosterman since he bounced off to Germany a couple of years ago to ... do German things? I'm not quite sure.

Here's a video recorded at a 1979 Led Zeppelin concert which he breaks down in this post.



(Side note: why single out his column on Led Zeppelin? (1) It's Zep. What excuse do you need? (2) It's a good example of Klosterman's skill at taking an innocuous starting point, in this case a mediocre performance at a mediocre show, and milking some good discussion out of it. A lot of journalists/commentators try this (Hell, all of them try this) but few do it well.)

Here's one Klosterman column in which he interviews Bill James, one on North Dakota JuCo basketball, and another praising Breaking Bad for its unusual representation of morality and Good vs Evil.

You can find his collected archives in the sidebar of this page, but for some reaosn only his three most recent pieces come up in the main text.

I don't know if this is intentional or accidental, but the Grantland layout gives Klosterman plenty of room to flex his footnote muscles. With the passing of David Foster Wallace, Klosterman is my favorite living footnotist.

Knits

Let's step back from all this politics and economics and take a moment to appreciate two of my nominees for Best Knit Thing of the 2011:

Baby Yoda Beanie:


TARDIS Socks:

Tax Spending

Greg Mankiw's Blog | Spending Hidden in the Tax Code


The blue line is total discretionary outlays of the federal government, and the brown line is the sum of tax expenditures. Both are in constant dollars. Note that these two categories of spending are about equal in magnitude. It is just as important to focus on stealth spending implemented through the tax code as on explicit spending.
This is a good chart.

I would like to see a "compromise" solution to this mess which raises revenue by eliminating these sorts of tax provisions. I don't think I'll ever get one, but sometimes it's nice to dream.*  Team Blue gets higher taxes (sort of) without Team Red having to raise tax rates (essentially). Team Red made a mistake in drawing their line in the sand at "no tax increases." The line should have been "no increases in tax rates," thereby leaving the door open to increased revenue.

(* Also from the files of Sensible Solutions to the Debt Ceiling Debate That Will Never Happen, see Tim Carney's proposal.)

Politics aside, eliminating these sorts of provisions is a good move, for reasons I don't feel like elaborating on.

I do worry about the rhetoric surrounding these issues though. "Tax expenditure" is a slippery phrase. Often appropriate and accurate, but slippery nonetheless. I see it used too often from a perspective that assumes all income belongs to the State, and any dollar not paid in taxes is therefore an expense for the fisc.

(For instance, the source of this chart lists lower capital gains rates as a tax expenditure.  Here is a good example of why I think this is incorrect, with a more complete example here, both from Steven Landsburg.  Here is Megan McArdle on the difficulty of measuring how much tax expenditures cost.)

11 July 2011

The Long Run

The Economist: Free Exchange | R.A. | Long-run growth: A two-hundred year rising tide

My colleague responds to Karl Smith (and by extension to my previous post) on the constancy of the long-run growth trend. Regarding this chart:


He writes:
Mr Smith thinks the Depression and the second world war are merely bumps here deviating from the long-term average, but this graph doesn't tell us that because it doesn't show what long-term growth was before 1929. Essentially the graph shows that annual GDP growth didn't deviate much from its average during the Great Moderation from 1947 to 2007. But we knew that. That's why it's called the Great Moderation. [...]
Well, it turns out there are estimates going back further:


The variation in government policy over this time period was remarkable. And yet the long-run growth rate was almost absurdly constant.

Of course, this line would look very different in some cases. A similar chart for Argentina would not show a more or less unbroken upward line. Policy can make a big difference. But could policy return the slope of the line to its 1950s-60s level? As much as I'd like to believe it could, I'm sceptical.
True, this is spookily constant. But...

(1) How constant is it really? A very small difference in that constant rate of growth is very important over a long horizon. Let's say our productive capacity is $1 right now, and grows at exactly 4.0% annually for 100 years. At the end of the century we'll be producing $50.50 of stuff. If that growth rate falls to just 3.9% then in 2111 we'll be making $45.87 of stuff, or just short of 10% less than we would have with 4.0% growth. If we nudge that growth rate up one tenth of one percent, then we'll be making $55.59, or over 10% more than the baseline.

(1a) That may not seem like a big deal since the people of 2111 will still be so much richer than we are. But I would be pretty pissed at the people of 1911 if we could be 10% richer than we are right now but they said "Eh, who cares about long term growth? It's practically constant! Those 21st century people will be rich anyway."

(1b) If the difference between $45.87 and $55.59 does seem like a lot, then think about it from a temporal perspective. A century or so from now, the people of my "high" 4.1% growth scenario will have access to the same productive capacity about 6 years earlier than their "low" 3.9% growth counter parts. Would you have like to get iPhones or fMRIs or antilock brakes six years earlier than we did? Of course.  And I'd sure rather have nanobots that eat tumors or algae that shit diesel fuel in 94 years rather than 100.

(2) Don't take mean reversion for granted. Just because a trend is consistently stable does not mean that it is automatically stable. When growth drops under trend one reaction is to take a deep breath and remind yourself that growth is stable on the long term, so let's not concern ourselves with long-term growth. The other, in my opinion equally justifiable reaction, is to decide that sub-par growth is a signal that its time to work like the dickens to get it back up to trend.

Tabarrok on The Great Fiction

I wanted to talk about the problems with this Matt Yglesias post, but Alex Tabarrok says it too well for me to attempt it. A 529 plan or the MID or veteran's benefits are simply not the same thing as food stamps.
Marginal Revolution | Alex Tabarrok | The Great Fiction

Catherine Rampell, Bruce Bartlett, and Matt Yglesias are all pushing the chart below from a paper by Suzanne Mettler. According to this gang, people who use, for example, the mortgage interest deduction or who have a 529 college savings program are willfully ignorant about how they benefit from government (Rampell’s terminology).

As Bastiat said, “Government is the great fiction through which everybody endeavors to live at the expense of everybody else.” What Rampell et al. want to do is to make people believe in this great fiction. But there are always taxpayers and taxeaters, even though government has so wormed its way into every organ of the body politic that it is sometimes difficult to tell which are which. (Indeed, part of Mettler’s point is that the government shell game of ‘hide the subsidy, hide the tax’ is often designed to obscure taxpayers and taxeaters.)

Nevertheless, there are dividing lines. In a laissez-faire world we don’t get rid of 529 programs, instead all savings, not just savings for college, become tax-free. A 529 program is not a government program like food stamps, it is the absence of a government tax. (N.B. I am not taking a position here on the best tax structure.)

People who use 529 programs and who think that they have not used a government social program are not willfully ignorant, they are demonstrating a healthy if fading appreciation of the distinction between civil society and government. What Rampell et al. implicitly imagine is that the natural state is slavery and any departure from that state a government benefit. Thus, if the government taxes your saving for a college education less than your other savings, you should be grateful for how government has benefited you and your children.

And if the government doesn’t jail you today, you should be grateful for how government has granted you the benefit of liberty.

This is the attitude of a serf not an American.
One thing I will add is that presenting evidence of the irrationality or ignorance of voters in order to support one policy agenda or another can be a pretty useless thing to do. "People don't understand how many government benefits they get" doesn't convince me we should have more government benefits because people also don't understand what the costs are. I don't have time to track it down now, but I saw a similar survey of Americans that reported a majority of them thinking getting a refund check from the IRS meant they hadn't paid any taxes that year, not that they had just given the government an interest-free loan.

Furthermore reminding me how ignorant voters are only makes me think we should leave fewer things up to democratic, political decision making. If voters are really this ignorant (and I think they are!) why should we expand the scope of our lives that is reliant on voters making good decisions about who to elect?

07 July 2011

Sandberg

There is a terrifying (but true) idea expressed very casually in this week's Babbage podcast from the Economist.

Sheryl Sandberg is a good choice for Facebook's "adult supervision" COO role in advance of their IPO in large part because she has experience and influence in Washington. When that's the primary concern when choosing corporate leaders we are in serious trouble. It's not good for the market, or for governance.
"In a way she's perfect for that role at Facebook, because she's a good manager and operator and has been at Google and now at Facebook but also she has worked in DC, in Washington and knows the Beltway inside out."
(Nothing against Mrs Sandberg. She seems competent and accomplished.  But this is a scary way to organize a society.)

What a racket

Coyote Blog | Warren Meyer | Wal-Mart Thought for the day

Wal-Mart’s profit to shareholders is about 3.6% of sales. This means that for the majority of the country, on the items you buy at Wal-Mart, they are earning less than half of what the government takes in sales tax on the same item.
This is shocking and simultaneously not at all surprising.

A similar story:

Exxon's profit margin last year was 5.7%. Based on the current national average gas price of $3.579/gal, they would make 20.4 cents per gallon. The government's profit, for comparison, is 48.1 cents per gallon, or 13.4% of each sale at today's prices, or almost two and a half times what the producer makes.

My belly is rejoicing

HuffPo | Joe Satran | Eataly To Open DC, LA Locations As Early As 2012

Eataly is big. The 40,000-square-foot Italian food-and-drink emporium already comprises a wine store, a beer garden, a bakery, a grocery store and six restaurants, all on 23rd Street in Manhattan. Eataly is so big that Little Italy's merchants have been complaining that it's stealing business from Mulberry Street. But by the end of 2012, if all goes according to plan, it will get bigger.

That's when Joe Bastianich says he and Eataly's co-owners (who include superstar chef Mario Batali) hope to have opened their second of three American branches of Eataly they currently have planned—in Los Angeles and Washington, DC.
This is great news.

When Mrs SB7 and I went in to New York last Christmas we made two stops: the Metropolitan Museum of Art, and Eataly. Such are our priorities.

Lending Experiments

Via Arnold Kling:
John Caskey | Payday Lending: New Research and the Big Question [PDF]

In an ideal experiment, one would randomly grant payday loans to a group of applicants and randomly deny the loans as well as close substitutes to a similar group of applicants. One would then track indicators of financial stress over time across the two groups.
This is true not just of payday lending, but all lending.

Predicting who is a good credit risk for a mortgage is devilishly complicated by the fact that your training set is highly skewed. You have for more examples of people who got loans and paid them back than you do people who defaulted. We could have much better models of credit risk if there were as many of the latter as the former, but who's going to give bad credit risks money just for the sake of better data analysis and machine learning?  And of course you have no way of knowing the difference between people who were turned down and would have paid and people who were turned down and would have defaulted, so there is no way of differentiating the true negatives from the false negatives.

04 July 2011

Happy Independence Day

... aka "The Day of the Dissolution of Political Bands," aka "Telling Despots to Shove Their Crowns Where the Sun Don't Shine Day."

Please note this is not the anniversary of the establishment of a new American government. It is the anniversary of telling the old one its involvement is no longer desired.

Everyone knows how the "We hold these truths..." part goes. But the next sentence should not be lightly overlooked:
That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Good bye, Jerry Weast. Don't let the door hit you on the way out.

EconLog | Arnold Kling | Difference-Makers in Education

On the topic of educators making a difference [referring to the Yglesias post I discussed earlier], the local paper compares the state of our schools before and after the tenure of our rock-star superintendent, Jerry Weast.
Per Pupil Spending (just Operating Budget Divided By Enrollment):

Fiscal 2000: $8,460 [note: translates to $11, 475 in 2011 dollars]
Fiscal 2011: $14,580

Graduation Rate (using Maryland Leaver Rate):

1999: 91.49%
2010: 90.01%
So, basically, Weast raised per-pupil spending by 25 percent more than inflation, and got pretty much no results to show for it.

It seems to me that it is relatively easy to get people to come around to the view that more health care spending does not necessarily improve health outcomes. But it is really, really hard to get people to come around to the view that more education spending does not necessarily improve education outcomes.

And I don't believe people want to think through their beliefs. I had a Matt Yglesias moment when I asked an incumbent of the school board what he thought accounted for the huge disparity in college attendance between the high schools in Potomac and those in my area. He gave me a litany of factors having nothing to do with schools. Yet he was all about increasing school spending.

Robin Hanson famously says that spending on medical services is all about "showing that you care." I believe that the same holds for spending on education. It's about showing good intent, not about obtaining results.
(1) Yes, education spending is largely about Doing Something! Doesn't matter if that something works or not, because intentions are all that matter in this game. Outcomes are for jerks.

(2) These numbers probably understate per-pupil spending because (I believe) there are a lot of dollars spent out of separate funds which are not included in the official "operating budget." For instance, I think "independent activity funds" — managed (or mismanaged) by each school independently of HQ — don't count in the operating budget. I believe debt service is also handled by the county directly, and doesn't count towards the school system's ongoing expenses.

Here's the Examiner on some of MCPS's very recent "budgetary legerdemain."

(3) I used to think Weast was an insufferable, insulting, self-aggrandizing, prevaricating, stuff-shirted cretin who needs a weather man to know which way the wind blows. Now I know he's all that and an unaccomplished wastrel as well.

It's a good time to be alive

The Economist: Daily Chart | Two thousand years in one chart

The chart below shows a population-weighted history of the past two millennia. By this reckoning, over 28% of all the history made since the birth of Christ was made in the 20th century. Measured in years lived, the present century, which is only ten years old, is already "longer" than the whole of the 17th century. This century has made an even bigger contribution to economic history. Over 23% of all the goods and services made since 1AD were produced from 2001 to 2010, according to an updated version of Angus Maddison's figures.


Staggering.

03 July 2011

Where's Tribonian when you need him?

The number of pages in the current US tax code? 72,536.

"The power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them"

Cafe Hayek | Don Boudreaux | An Empirical Question

How many people today – especially professional pundits, professors, and politicians – believe simultaneously in both of the following propositions: (1) raising taxes on imports reduces the amount of importing activity significantly enough to cause noticeable increases in activities that are substitutes for importing (such as producing more of the high-tariffed goods domestically); and (2) raising taxes on incomes does not reduce the amount of income-earning activity significantly enough to cause noticeable increases in activities that are substitutes for income-earning activity (such as taking more leisure)?
Future work: re-do the same empirical study, but replace (1) with people who believe raising the price of beer or plastic shopping bags or gasoline will incentivize people to consume less of those things, and (2) with people who simultanesouly believe raising the price of low productivity labor in the form of increased minimum required wages does not incentivize buyers to consume less of such labor.*


* Count the "Center for American Progress" in group #2:

The Center for American Progress, often called the think tank for the Obama White House, recently recommended another increase in the minimum wage to $8.25 an hour. Though the U.S. unemployment rate is 9.1%, the thinkers assert that a rising wage would "stimulate economic growth to the tune of 50,000 new jobs."

02 July 2011

Pack your Facebook bags and go home

Twitter | @ezraklein

Feel like the killer app of Google+ is the ability to start your social network over with the benefit of years of Facebook experience.
All social networks thus far have collapsed under their own bloated weight. Here's what I said about this back in 2009:
I took a course on social network analysis with Jen Golbeck a couple of years ago. She had a theory about social network websites that they all eventually stagnate and collapse under the weight of the social flotsam and jetsam they generate. The obvious solution for people is to de-list all the 2nd and 3rd string "friends" they have, but because that's so awkward people will just leave their accounts to whither and start over on a new system with a new, more selective group of friends. Eventually that new list grows bloated and unmanageable, and the cycle repeats.

I'm not sure (nor, do I think, was she) that this cycle is bound to continue forever, especially since Facebook and MySpace are in many respects more mature and less novel than their predecessors.* Nonetheless the weight of even my moderately sized "friend" list has made the service pretty much useless for me.


* More mature technologically and as social artifacts, not more mature in terms of their content.
People assume Facebook is mature enough to beat the cycle of decline, and — who knows? — maybe they are.  But note that two years ago it was still legitimate to think that MySpace was mature enough to survive.  This week they were sold for a paltry $35 million.

So yeah, it's possible that Facebook survives over the long-term, but I'm not convinced. My money is still betting (metaphorically) that people will feel that the Facebook experience is bogged down by a bunch of "friends" they don't know and notifications they don't care about and decamp elsewhere. Maybe not to Google+, but somewhere.

The rank is but the guinea's stamp / The Man's the gowd for a' that.

Hometown Annapolis | Elisha Sauers | Supreme Court Justice Sotomayor comes to Annapolis

Some tourists don't have any trouble finding parking downtown when they come to visit Annapolis.

Two days after the U.S. Supreme Court's term ended, Justice Sonia Sotomayor's motorcade of five hulking black vehicles pulled into prime spots on Market Space, right in front of the Hard Bean Cafe, around noon yesterday.

The availability of the spaces wasn't a fluke. Each meter had had a paper sign taped to it since early in the morning stating that it was reserved for the Supreme Court. [...]

Sotomayor's staff had contacted the state Department of General Services, requesting that spaces near Buddy's Crabs and Ribs be reserved for the entourage. Paper signs were posted. But the obstructed parking meters probably made the visit a little more conspicuous than the judge's security detail had hoped.
Via Radley Balko, who comments, "there’s the political class, and then there’s everybody else."

This kind of story makes me angry way out of proportion to the actual harm. I know, I know, I should reserve the real righteous anger for things like undeclared wars, or at least on a smaller scale violent bullshit like this:
Coyote Blog | Warren Meyer | Contempt of Cop

The point of this story seems to be to criticize cops for tasering, beating, pepper-spraying, and incarcerating a handicapped boy who apparently did nothing wrong.
Dayton police “mistook” a mentally handicapped teenager’s speech impediment for “disrespect,” so they Tasered, pepper-sprayed and beat him and called for backup from “upward of 20 police officers” after the boy rode his bicycle home to ask his mother for help, the boy’s mom says.
But the larger issue is the culture that seems to exist among many police that disrespecting them is somehow a crime. Sorry, but it is not, anywhere in this country, a crime to disrespect a cop.
I see these stories as related though.

This is by the grace of God a republic. There is no ruling class, and citizens don't owe anyone any damn respect because of their badge or their robes or their titles. You want to take the office out to lunch then you look for a parking space like everyone else.  You want people to respect you, you need to act in a respectable way.  People don't have to bow and scrape and defer and give you their damn parking spaces just because you have some legally-sanctioned power.

I know I come back to this point again and again, but for me it's that important: Do we expect the people we vest with authority to behaive better than the rest of us, or worse? What standards do we want to hold our leaders to?

~ ~ ~

PS Meyer commented further on the second story:
As an aside, the three words that are always a big flashing warming light for me are “he disrespected me.” I am amazed when I hear this on the news all the time as if it justified whatever bad behavior that was to follow. In investigating customer service problems in our company, any employee of mine whose explanation of an incident with a customer that includes the line “he disrespected me” is not going to be an employee very long. Nothing gets in the way of good customer service faster than an employee trying to save face or protect his or her ego.
"He disrespected me" are a warning sign for me too. I went to middle school in some unsavory parts of the county, and every little wannabe thug was always going on about being "dissed." It wasn't an excuse for them to start a fight, and it's not an excuse for a cop either. I wonder if cops know how similarly they're acting to the shitbirds they despise when they proffer this lame excuse.

Missing Missy

It's time to back off the seriousness a bit.

Check out this email exchange Mrs. SB7 found a few days ago. The funniest thing you will ever read about lost cat fliers, I promise.


01 July 2011

"Do Incentives Shape Teacher Behavior Or Don’t They?"

ThinkProgress | Matthew Yglesias | Do Incentives Shape Teacher Behavior Or Don’t They

Here, again, I run into what I think is a huge consistency problem in the messaging coming out of teachers unions. Sometimes I hear from union-affiliated folks that it’s unfair to attribute differences in student learning to differences in teacher skill, because everyone knows that socioeconomic and home environment factors drive a lot of this. Other times I see the American Federation of Teachers building a messaging program around the idea that its members are Making A Difference Every Day. To me this leads to the obvious conclusion that while socioeconomic and home environment factors do drive a lot of student learning, teachers are also making a difference every day. And it makes a lot of sense to ask which teachers are making the most difference. The teachers who are in the top 20 percent of difference-makers are playing a vital role to the future of America, and we ought to pay them more money and make sure they don’t leave the profession. But the teachers who are in the bottom percent of difference-makers are doing us little good, and we should try to replace them with other people.
This is a very good post.

Mrs SB7 has been in the process of interviewing for teaching jobs, and it's caused me to notice another, related inconsistency.

I'm told that we need teacher tenure and pay based only on credentialism and years-in-service because we can't trust principals or department heads to make subjective decisions about who to reward and who to fire. But those are the same people making the decisions about who to hire in the first place. Why would we trust a principal to hire someone on their merits, but not trust the same principal retain someone strictly on their merits?  They're either trustworthy or they aren't.

Furthermore, we've built a system that assumes, explicitly, that these subjective hiring decisions are always correct since they can't be reversed.* That's a bad assumption to make about any decision making process. The operating assumption is that if it was the correct decision to employ a certain teacher when they started, then it must be the correct decision to continue to to employ them forever. After all, every day you don't sell you're making the implicit decision to buy. Even ignoring any dynamism in the situation, there's simply no way you can hire a hundred thousand teachers and be right about all of them. Some of the teachers you retain will be worse than some of the teachers you could hire but are forced not to for lack of open positions, but we've set up a situation that forces us to pretend that isn't so.



* True, there is typically a short period (two years in my county) before a teacher gets tenure. But I always hear — and I think reasonably and rightly — that it takes new teachers several years to get their legs under them, and it's unfair to evaluate them on their rookie performance. I happen to think that's exactly right, but if you put that belief together with a pre-tenure trial period of only two years, you end up in a situation where hiring decisions are set in stone and can not be reevaluated down the road.

~ ~ ~

PS Yglesias' concluding paragraph strikes me as a little off:
My own take is that talk of incentives is massively overrated. Baseball teams don’t pay a premium to guys who hit lots of home runs in order to create “incentives” for people to hit home runs. If that worked, we’d all be major league sluggers! Baseball teams pay a premium to guys who lots of home runs because home run hitters are valuable contributors to baseball teams. Hitters who perform worse are less valuable. And hitters who perform very poorly are drummed out of MLB. That’s not really about incentives; it’s about attracting and retaining high performers to your organization.
Sports analogies are always going to be a little wonky, because the market for professional athletes is not like the market for other workers. For one, the you're operating way, way, way over on one side of the distribution of talent for all people who play baseball, and that leads to some weird effects we don't observe in a market for something like teachers where there are millions of paid participants. More importantly, a player is working for his team which is ostensibly competing with other teams, but he also works for an organized, legally sanctioned cartel in the form of the league, and that skews things a lot.

I also think it's weird to say that paying superstars to motivate others to want to be superstars is "not really about incentives." Why not? It's not about the incentives for the people getting the paychecks, perhaps, but it's still about incentives. I can't put my finger on a reference, but I remember seeing a very persuasive paper arguing that paying corporate executives truckloads of money isn't to motivate them to do a good job. Rather, it's to motivate all the people in the rungs under them to keep busting their butts to get the top job. That's still incentives.

I think there's a very different world view lurking under Yglesias' idea that paying home run hitters is just compensation for contributing to the team rather and not an incentive. I don't see payment as a moral reward for doing your part, I see it as a way to compensate people for trade, and in doing so provide the information signals necessary for the organization of interaction.

Risk

I was listening to the WSJ radio podcast while getting some dinner ready, and one of their reporters said, in the context of discussing Fukushima, that some of the engineers at the plant "knew there was a risk" in the plant's older design and could conceivably face charges for not doing something about said risk.

This kind of talk really grinds my gears.  In any engineering situation there is always some risk.  You can have less risk, or more risk, but risk is not something you either have or do not have.

Now perhaps the older designs used for the reactors were indeed too risky to continue operation.  I don't know the specifics of their plant, it's been a long time since I've studied nuclear reactors, and even then it was only in passing.  If you want to claim that the engineers involved knew there was unacceptably high risk then make that case.  You might be right.  But just claiming they knew risk existed is a worse than useless story to run.

I honestly should have skipped past this story, because as soon as I heard the intro I knew they were going to make some not-even-wrong types of errors about engineering risk analysis.  Few things are more frustrating than hearing journalists report on things you know about.

fprintf('Principal %4.3f',numPrincipals)


That's from one of Montgomery County Public Schools' fact sheets about a particular school Mrs SB7 is applying to.  I love the precision of knowing this school has 1.000 principals, no more and no less.

Now I know that their part-time teachers are measured in fifths of a full-time equivalent, so it makes sense to tot up, say, 0.6 of a teacher. But three decimals places is silly, right?


* And yes, non-geeks, this is the second time in as many days that I've titled a post using code.

Stack Exchange

A couple of days ago I mentioned Instapaper getting stepped on by the FBI for having the gall to be guilty of Inconveniencing an Officer.

A couple of weeks before that Instapaper founder Marco Arment was the guest on a very good episode of the Stack Exchange podcast. It's worth a listen.

Even better was the most recent episode, featuring Greg Wilson. Definitely listen to that one. I think they make a very good point about how difficult it is to learn to program without having read other people's programs. Also some very good discussion about programming trends (fads?), statistical measures of coding productivity, predicting bug rates, and more generally applying machine learning and other quantitative methods to software engineering practice. All very good stuff.

I wish I had time to dive in to more of the topics they covered, but I want to wrap this up before the round of experiments I'm currently running finishes. One thing I do want to weight in on briefly is the idea that programming is and will always be more of a craft than an engineering discipline.  I see why people say that (we rarely (never?) write the same program twice, we're guided to much by anecdote and habit and not enough by evidence and quantification, ...) and I agree that right now it's pretty far along the spectrum towards craft and away from the platonic ideal of engineering.

But on the other hand, we've only been creating software half a century. We've only had academic departments devoted to it for half of that. And many of those still haven't figured out whether they're applied math departments, or electrical engineers who don't like bothering with all the soldiering and other messy stuff, or whether they want to teach students how software works so the students will be good at their future jobs, or because knowledge is its own reward. We haven't been making software or training programmers very long, so let's not throw in the towel on making coding into engineering yet.

Koh

Coyote Blog | Warren Meyer | On War

Harold Koh on what does and doesn’t make for a war:
Koh, a former Yale Law School dean who wrote about the War Powers Resolution during his academic career, said the “narrow” role of U.S. warplanes in the mission doesn’t meet the definition of hostilities.

The circumstances in Libya are “virtually unique,” he said, because the “exposure of our armed forces is limited, there have been no U.S. casualties, no threat of U.S. casualties” and “no exchange of fire with hostile forces.”

With a “limited risk of serious escalation” and the “limited military means” employed by U.S. forces, “we are not in hostilities envisioned by the War Powers Resolution, Koh said.
As an outsider to the political process, it has been absolutely hilarious watching a White House full of children of the 1960′s retroactively justifying Nixon’s Christmas bombings of Cambodia. It’s not a war, they claim, as long as our soldiers are safe and we are mostly just killing citizens of other nations from the air. Of course, by this definition, the Japanese attack on Pearl Harbor was not an act of war.
(1) Harold Koh, meet Scott O'Grady. Tell him that air strikes guarantee "limited exposure and threat of casualties."

(2) What are we doing when we stop dropping bombs? Seriously, what happens next? We're going to pack it in and go home? Or are we going to do some more of this "nation building" BS? And how is there supposed to be "limited exposure" at that point?

(3) If we believe Koh, it doesn't count as "hostilities" as long as its sufficiently one-sided. So if Viking maradaurs sail up the river and burn your monastery to the ground, it's not really hostile, because the berserkers only had "limited exposure." And if Mike Tyson kicks down my door and beats the bejezus out of me, it's not hostile because he had "limited exposure." That is bullshit on toast.