Month: June 2009
How to do stimulus, Thailand style
Of the total loans, Bt500 billion will be earmarked for mega projects under the jurisdiction of the Bhum Jai Thai Party. The remaining Bt300 billion will be shared by the Democrat and the Chart Thai Pattana parties.
How's that for a way to break through parliamentary logjams? Just give the money to the parties themselves, they'll find ways of spending it. The full story is here and for the pointer I thank Air Genius Gary Leff.
Assorted links
1. Charles Kenny on development vs. growth (intro plus 184 pp.); Felix Salmon summarizes.
2. Ethicists aren't especially ethical.
3. Reinterpreting Alan Blinder on outsourcing.
4. Titlenomics.
Wow, that was quick
Democrats on three House panels continue to meet privately to seek consensus on a single plan. Democrats on the House Ways and Means Committee said they were trying to decide whether to finance coverage of the uninsured with one broad-based tax, like the value-added tax, or a combination of smaller taxes.
The article is here. I wasn't expecting that for years to come. From my distant perch out here in Fairfax (and Arlington), I believe this means health care reform is falling apart. It means the unions won't let them tax health insurance benefits and the CBO won't let them punt on the issue of finance.
Some notes on energy policy
Bob Murphy asks whether I have changed my mind. I say no, although I have gone from discussing it in the abstract to commenting on the particular policy developments of the day. Let me restate a few of my views:
1. We do have an acceptable means forward and it is called oil at $145 a barrel, combined with restrictions on dirty coal as a substitute and a more favorable regulatory treatment of nuclear power and other energy alternatives. We had one plank of that platform as recently as last year, and while it was painful it was not the end of the world.
2. It is worth debating how to get to higher energy prices but the bigger question is how much we are willing to go there at all. "Cheaper energy" is the one issue that had traction for the Republicans last fall at the polls.
3. Regulatory changes are an essential part of the way forward and that is often underemphasized by environmentalists, who are allergic to the word "deregulation." Yet if we had to build today's energy infrastructure under the 2009 regulatory regime, it would not be possible. NIMBY is a huge obstacle to future progress in this area.
4. I view Waxman-Markey as like a failed dieter pledging to go out and buy lots of diet books. It's easy enough to defend the diet books as a "first step," or a "framework." I would feel better if the book purchases were accompanied by a credible promise — or even a "cheap talk" lie — to lose weight. How many politicians in favor of the bill have stepped forward and promised to deliver higher energy prices?
I predict and fear that Waxman-Markey, if it passes, will deliver a more politicized energy sector without real progress on #1. I know all about the apparently impressive quotas for the out years. I also know how easy it will be for Congress to hand out more permits, perhaps in return for phony yet rent-seeking laden carbon offsets. That's what the political equilibrium looks like.
5. Here is a very good blog post on carbon offsets.
6. It is easy enough for someone to complain: "But he doesn't even favor buying the diet books!" but that is missing the point. The problem with Waxman-Markey is not the mechanics per se but rather how few politicians will emphasize or even admit that it will, in its working versions, significantly raise energy prices.
7. You can argue: "If we buy the diet books today, we will be ready to diet [raise energy prices] in a few years' time." I don't dismiss this argument, but I doubt it and I don't think that enough W-M proponents admit that their case largely rests upon it.
8. Energy prices have been rising with economic recovery. I am waiting for the first person to have the stones to argue that rapid and permanent economic growth is the only way (by raising the price of oil at a disproportionate pace) to limit greenhouse gases. You won't find those stones in my pocket (I don't think the argument succeeds), but sooner or later they will turn up. There is a more modest version of the argument which simply notes that in equilibrium politicians are likely trying to lower rather than to raise the price of fossil fuel-based energy.
9. I'm not going to restate my views on international cooperation but in general the quality of discussion on this issue is low, from both sides. That doesn't augur well. It is easy to see what won't work. It is much harder to see what might work. Very few of us actually expected Mr. Gorbachev to tear down that wall.
Matt Yglesias and Ezra Klein have a request
They ask that I direct more messages to Republican Congressmen (here and here); Kevin Drum discusses related issues. They have a point and I'll state it more clearly: Republicans should support and indeed applaud Obama's attempt to cut some Medicare costs. Republican Congressmen also should stand ready to make a "grand bargain" on health care, again provided that it puts Medicare on a sustainable cost basis.
If I don't write more "for Republican politicians," it is for two reasons. First, I view their incentive as to make Obama fail, not to find an acceptable compromise that will move the nation forward. Second, I view the future of Medicare as the President vs. Congress, not one party vs. another. Democratic Congressmen will, ultimately, require persuasion as much as the Republicans or maybe more so. I still think the real danger is not recalcitrant Republicans but rather that we will get a health care plan without plausible mechanisms for fiscal responsibility.
Assorted links
1. Testing the Schelling tipping point segregation model, done by Bill Easterly.
2. Markets in everything: Ms.Taken, false engagement rings.
3. More on Zeke Emanuel, from TNR.
4. New developments on the origin of life on earth.
5. The Kennedy plan, as seen by the CBO.
Are generational traits cyclical?
I haven't looked at any of the underlying research but I found the following claims to be very interesting:
In the end, however, much of what my research uncovered was inconsistent with Strauss and Howe’s theories. At least in terms of psychological differences, generations do not occur in cycles; instead, the changes are primarily linear, with each generation taking the previous generations’ traits to the next level. There is no sudden shift in personality for someone born before or after 1982 (Strauss and Howe’s cutoff for what they call the “Millennial” generation). Thus generational labels such as Boomers, Xers, and GenY are of limited use. What’s more important is the number of birth years separating two people – e.g, 20 years or 40 years. Although I occasionally use generational labels (such as Generation Me or GenMe to describe today’s young people), I primarily rely on labels such as “older” and “younger” generations; those in the middle in terms of age (today, the GenXers in their 30s and 40s) will typically fall in the middle in terms of traits and attitudes.
One particular implication is that individualism and indeed narcissism have been increasing steadily with each generation. I find that the most plausible models of intergenerational learning support the author's "linear accretion" view rather than cycles of rebellion and counterreaction. There is a niche effect for siblings, but I think less of such an effect for generations per se.
Hat tip goes to BPS Research Digest.
How to follow current events
On Iran, Andrew Sullivan > Σ MSM.
Megan McArdle offers some reasons why. I would add that MSM is unwilling to rely much on information aggregators such as Twitter and they are reluctant to report things in the uncertain, hanging narrative kind of way that blogs (sometimes) excel at. MSM needs the definitive-sounding soundbites for people who are tuned in for only a few minutes and don't come back or don't come back with any memory of what was said before.
We're seeing a revolution in coverage of current events right before our very eyes.
The Singularity is Near
Tom Vanderbilt, author of the excellent Traffic, has a very good piece in the latest NYTimes Magazine on data centers.
The specter of infinitesimal delay is why, when the Philadelphia Stock Exchange, the nation’s oldest, upgraded its trading platform in 2006, it decided to locate the bulk of its trading engines 80 miles – and three milliseconds – from Philadelphia, and into NJ2, where, as Thomas notes, the time to communicate between servers is down to a millionth of a second. (Latency concerns are not limited to Wall Street; it is estimated that a 100-millisecond delay reduces Amazon’s sales by 1 percent.)
…It seemed heretical to think of Karl Marx. But looking at the roomful of computers running automated trading models that themselves scan custom-formatted machine-readable financial news stories to help make decisions, you didn’t have to be a Marxist to appreciate his observation that industry will strive to “produce machines by means of machines” – as well as his prediction that the “more developed the capital,” the more it would seek the “annihilation of space by time.”
I like the quote but doubt that Marx is the best guide to this new world. try Charlie Stross instead.
How to disappear
Tips from a teacher (markets in everything):
There are three key steps to disappearing. First, destroy old information about yourself. Call your video store or electricity company and replace your old, correct phone number with a new, invented one. Introduce spelling mistakes into your utility bills. Create a PO Box for your mail. Don’t use your credit cards and the like.
Then, create bogus information to fool private investigators who might be looking for you. Go to one city and apply for an apartment. Rent a car in another one.
The next, final step is the most important one. Move from point A to point B. Create a dummy company to pay your bills. Only use prepaid mobile phones and change them every month. It is nearly impossible to find out where you are unless you make a mistake.
Is that last sentence so reassuring? What is his success rate?
Usually, I don’t hear back from my clients. It would be too dangerous.
I occasionally wonder that if I had a) a new identity, b) enough money to live on, and c) a willingness to live abroad and no family for them to threaten, how long would it take a team of ten professional hit men to find me. What would be their optimal strategy of pursuit?
For the pointer I thank Henry Farrell. Here is Henry's interesting post on the surprising success of smoking bans.
Addendum: Bruce Bartlett refers me to www.escapeartist.com.
Interview with Paul Krugman
From The Guardian, lots of detail. Excerpt:
It's Germany on a global scale that is the concern. We worry about the
drag on world demand from the global savings coming out of east Asia
and the Middle East, but within Europe there's a European savings glut
which is coming out of Germany. And it's much bigger relative to the
size of the economy.
Iran links
1. Iran's free market reformer economist.
2. Better than CNN: Twitter feed for reports on Mousavi.
3. I can think of two important econbloggers of Iranian origin.
4. The Persian Night, by Amir Taheri, an excellent new book for background on current events.
Assorted links
1. Markets in everything: strange beds.
2. Lawrence H. White joins our faculty. In addition to his economics savvy, Larry is an expert on surf music and Bollywood.
3. Will England lead the recovery due to its monetary policy? I hope you're all still reading Scott Sumner.
4. Secret Ballot: an excellent satirical movie on whether Iranian democracy is savior or farce.
5. $134 billion in bearer bonds; trying to get to the bottom of the story, via Chris Masse.
Medicare and the new voodoo economics
The new voodoo economics is the claim that because we can (will?) make cuts in Medicare spending, we can afford to spend lots of money elsewhere. I explain this in my latest column. Excerpt:
Drawing upon the ideas of the Harvard economist David Cutler, the
Obama administration talks of empowering an independent board of
experts to judge the comparative effectiveness of health care
expenditures; the goal is to limit or withdraw Medicare support for
ineffective ones. This idea is long overdue, and the critics who
contend that it amounts to “rationing” or “the government telling you
which medical treatments you can have” are missing the point. The
motivating idea is the old conservative chestnut that not every
private-sector expenditure deserves a government subsidy.
Nonetheless,
this principle is radical in its implications and has met with
resistance. In particular, Congress has not been willing to give up its
power over what is perhaps the government’s single most important
program, nor should we expect such a surrender of power in the future.
There is already a Medicare Advisory Payment Commission, but it isn’t
allowed to actually cut costs.
Obama, to his credit, has very recently proposed to change this. But will the fiscal story have a happy ending? Probably not:
If we are willing to take comparative-effectiveness studies
seriously, we could make significant cuts in Medicare costs right now.
We could cut some reimbursement rates, limit coverage for some of the
more speculative treatments, like some forms of knee and back surgery,
and place more limits on end-of-life-care.
Those cuts alone will
not solve the fiscal problem, but if we aren’t willing to take even
limited steps to conserve resources, we shouldn’t be spending any more
money elsewhere.
Of course, we have not made such Medicare spending cuts yet, and there are few signs that we will. A Kaiser Family Foundation poll
found that 67 percent of Americans believe that they do not receive
enough treatment and that only 16 percent believe that they have
received unnecessary care. If the Obama administration covers more
people with government-supplied or government-subsidized insurance, the
political support will broaden for generous benefits, their
continuation and, indeed, expansion of current expenditures.
Read the whole thing.
How to think about Iranian food
Sadly, I've never been to Iran, though I would love to go. Here are a few tips for the Iranian food I've had elsewhere:
1. A good koresh (stew) almost always beats a good kabob. Ghormeh sabzi and bademjan are national treasures.
2. The choice of rice is a central decision. Get zereshk polo — barberry rice — as much as you can. Or get cherry rice, rice with pistachio, etc. All those choices are winners.
3. Lamb shank can end up being dull in a Persian restaurant. If served with dill the dish is often too dry.
4. Fesanjan, fesanjan, fesanjan. In Iceland I once ate fesenjan guillemot. The fesenjan in a can that you find in Persian groceries is actually pretty good.
5. Don't be afraid to smear mast-o-moseer (or musir; the spellings and transliterations vary, as with many of these dishes) into your rice. Always order mast-o-moseer.
6. Soups are excellent, especially if they are fragrant and have noodle-like entities. Soups without barley are usually better than soups with barley.
7. In this country Westwood, Los Angeles has the best Iranian food overall. Check out Westwood Ave. and also Pico.
8. If you are in a country where you do not expect to see Persian food, and you see Persian food, it is usually very good. As a partial exception to a rule of good eating, a single Persian restaurant can be very good even if there are not other Persian restaurants around.