Month: October 2009

*Superfreakonomics*, chapter five

by  Tyler Cowen in

Here is a link to the chapter which is causing all the controversy.  Out here in Edmonton I haven't been following the blog debates, although at every meal I am asked about carbon taxes and tar sands.  (By the way, I believe the Alberta strategy is to pay any forthcoming tax and be profitable enough to keep on producing fossil fuel energy.)  My view is to be skeptical of geo-engineering as a solution, for reasons outlined here.  In any case it's a question I'll be thinking more about.  Among the questions I need to think through more are how bad is it to control global temperature but keep the CO2 in the air, how much acidification of the oceans matters, how geo-engineering affects the variance of global climate, and what the long run looks like if the world becomes "addicted" to the eighteen-mile hose or whatever is used.  For a start on the current brouhaha, here is a link to Krugman and Levitt.  Mark Thoma offers up other links.

Addendum: This post seems to imply the chapter reproduction is not authorized, so I've taken down the link to the link.

The Rationalizer

by  Alex Tabarrok

In an update of the mood ring from the 1970s Philips has produced an EmoBracelet and EmoBowl recommended–so they say–for online stock traders to monitor their own emotional responses.

The Rationalizer system consists of two components – the EmoBracelet and the EmoBowl. The bracelet measures the arousal component of the user’s emotion through a galvanic skin response sensor. This arousal level is rendered as a dynamic light pattern on either the EmoBracelet itself or on the EmoBowl. The higher the arousal level, the more intense the dynamic light pattern becomes: the number of elements increases, the speed increases and the color shifts from a soft yellow, via orange, to a deep red.

Philips says the product is for analyzing your own emotions but note that the bowl could be halfway around the world!  Thus, I can see employers requiring real-time monitoring of employees, people on a date might monitor the responses of their partners and perhaps we should require politicians to wear these bracelets before every vote.

Engadget has more. Hat tip to Knowing and Making.

Mirror-of-emotions-teaser-rm-eng

Facts about airline water

by  Tyler Cowen in

Fact 1:

In the United States, drinking water safety on airlines is jointly
regulated by the EPA, Food and Drug Administration (FDA), and Federal
Aviation Administration (FAA). EPA regulates the public water systems
that supply water to the airports and the drinking water once it is
onboard the aircraft. FDA has jurisdiction over culinary water (e.g.,
ice) and the points where aircraft obtain water (e.g., pipes or
tankers) at the airport. In addition, air carriers must have
FAA-accepted operation and maintenance programs for all aircraft, this
includes the potable water system. (EPA)

Fact 2:

…the news carried stories that the US EPA had determined that 15% of
water on a sample of 327 aircraft flunked the total coliform standards
and inspections showed that all aircraft were out of compliance with
the national drinking water standards.

Rest assured, the EPA has crafted new rules to address the problem.

Higgs on Leviathan

by  Alex Tabarrok in

There are excellent writers and there are excellent economists and in that intersection there are none better than Bob Higgs:

Until more people come to a more realistic, fact-based understanding of the government and the economy, little hope exists of tearing them away from their quasi-religious attachment to a government they view with misplaced reverence and unrealistic hopes. Lacking a true religious faith yet craving one, many Americans have turned to the state as a substitute god, endowed with the divine omnipotence required to shower the public with something for nothing in every department – free health care, free retirement security, free protection from hazardous consumer products and workplace accidents, free protection from the Islamic maniacs the U.S. government stirs up with its misadventures in the Muslim world, and so forth. If you take the government to be Santa Claus, you naturally want every day to be Christmas; and the bigger the Santa, the bigger his sack of goodies.

Assorted links

by  Tyler Cowen in

1. Can complex financial assets be booby-trapped?

2. Jon Chait makes the case against prizes.

3. Bruce Bartlett opposes cutting the payroll tax.

4. Which countries produce the most beef? (put the cursor on the balloons)

5. Metaphors: people mostly describe their lives in terms of a "journey"; is this just our tendency to impose false or misleading narrative on events?  Poorer people, however, are more likely than richer people to describe their lives as a "battle."

6. John Nye on inequality and positional goods (read the whole symposium).

Obama’s bribe for seniors

by  Tyler Cowen in

$250 for each senior or $13 billion in total.  It's bad precedent to go around a COLA calculation, even on a one-time basis, but you can construct a partial defense of the policy (here is Matt's semi-defense).  Think of it as a helicopter drop of money, a'la Scott Sumner.  If the helicopter drop substitutes for (part of) a second fiscal stimulus, that's a net gain.  The drop of money stimulates aggregate demand, limits deflationary pressures, and, by the way, you're giving it to a lot of people who are not stuck in a liquidity trap.  They'd love to buy more stuff in The Dollar Store.

How will the expenditure be financed?  Obama was vague on that, but as usual the Fed moves both first and last in the monetary policy game.  All Obama has to do is make the second stimulus $13 billion less than it otherwise would have been, wink and nod to Ben B., and it is all (or mostly) for the better.

What I’ve been reading

by  Tyler Cowen in

1. Ulysses and Us: The Art and Everyday Life in Joyce's Masterpiece, by Declan Kiberd.  He argues that Ulysses is a fun book, a popular fiction, and easy to read.  I won't give away my copy to anyone, which you can take as an endorsement.

2. David Byrne, Bicycle Diaries.  The former member of Talking Heads, and compiler of Brazil Classics 1, bicycles through ten cities and reports on them.  Most of the pages have something interesting.

3. Alain de Botton, The Art of Travel.  I found this a difficult book to get a grip on.  To my eye, most of the pages were a kind of empty.  Can you explain to me what made this book good?  The first page has a sentence like: "Any sadness I might have felt, any suspicion that happiness or understanding was unattainable, seemed to find ready encouragement in the sodden dark-red brick buildings and low skies tinged orange by the city's streetlights."  That's not, to my ear, an ugly sentence, but what's in it?

4. The Thirty Years' War, by Peter H. Wilson.  I read about one-third of this lengthy and clearly written Belknap Press book.  After a while I realized I was learning what the War wasn't (not the beginning of religious toleration, not the beginning of the modern nation-state, etc.), but not what the War was.  I guess I'll never know.

5. Danube, by Claudio Magris.  Now this is a splendid travel book.

I'm also enjoying A.S. Byatt's The Children's Book, which has beautiful language and creates its own world; still, I can't find the thread of the plot at p.100.  And the new Pamuk (which I'm still reading, very slowly) remains sublime and it is becoming one of my favorites.

Insurance company update

by  Tyler Cowen in

Pelosi said the House may adopt a Senate provision that would assess a
flat fee on insurance companies that is expected to generate about $40
billion over 10 years, as a way to pay for its reform bill.

Here is more.  The WP reports:

The blunt admonition echoed a round of harsh statements Wednesday from
senior Senate Democrats, and came in response to the insurance's
lobby's aggressive campaign to block reform legislation from advancing.

Austin Frakt and Ian Crosby on the insurance antitrust exemption

by  Tyler Cowen

He writes:

Taxpayers will be best served by insurers with sufficient market
power to bargain down provider rates, but with not quite enough power
to keep the savings (“rents“)
for themselves. That is, we want low provider rates to translate into
low premiums. Though liberals may be skeptical that this balance is
achievable, it is not at odds with their objectives in principle. After
all, one of the arguments for the public option is that it would be a
large insurer with commensurately large negotiating power but would use
that power on the behalf of consumers.

How to balance the power of insurers and providers is far from
simple. Many have pointed to the alleged dominant market position of
insurers as a substantial source of high health care costs. However,
the health economics literature
supports the notion that recent increased market power of insurers does
not lead toward monopolistic pricing, but rather it provides a
counter-balance to the power held by hospitals and provider groups.

Moreover, insurance companies are partially exempt from federal
antitrust law for an important reason: so they can share rate-making
data. This function actually benefits small insurers who would not
otherwise have sufficient data to properly adjust premiums.
Paradoxically, removing the legal cover for data sharing would harm
small insurers more than large ones.

Read his whole post, which also has a good public choice analysis of the recent threat to repeal the exemption.