Month: December 2009

Condom Law: NSFW

The AIDS Healthcare Foundation is lobbying California to require the use of condoms in porn movies. Their argument is that this is an employee safety issue–like requiring workers to wear hard hats–and so should fall under the Cal/OSHA laws.

But in an op-ed at Alex Padilla points out that to fall under the law will require classifying porn stars as employees rather than as performers and that has surprising consequences. 

…the adult film industry would have to make every performer an employee to satisfy the California's Division of Occupational Safety and Health, better known as Cal/OSHA, laws. This would be detrimental: California's anti-discrimination laws prohibit requiring an HIV test as a condition of employment; therefore the adult film industry's current testing process, in which every performer is tested for HIV monthly, would be illegal. Nor would adult film producers be allowed to "discriminate" by refusing employment to HIV-positive performers. As a result, untested and HIV-positive performers would be able to work in the industry, raising the risks of HIV outbreaks–particularly since condom breakage or slippage can occur.

My suspicion is that the AIDS lobbyists are not really so concerned with the performers but they do want to increase condom use by the general public and they think seeing more condoms in porn movies will help with that goal.  A legitimate goal perhaps, but more likely the industry will move to Nevada or will further go online amateur.

Hat tip to Ed Lopez at Division of Labor.

Meta-list for fiction, best books of 2009

I've read through the lists of many other sources, and these are the fictional works which recur the greatest number of times, in my memory at least:

1. Lorrie Moore, A Gate at the Stairs.

2. Colum McCann, Let the Great World Spin.

3. Dan Chaon, Await Your Reply: A Novel.

4. David Small, Stitches: A Memoir.

By the way, via Literary Saloon, here is a French best books of the year list.  They pick Let the Great World Spin as the book of the year, non-fiction included.  I will be reading it soon.

My favorite works of fiction this year were the new Pamuk, Gail Hareven's The Confessions of Noa Weber, and A Happy Marriage, by Rafael Yglesias.

Online Education and the Market for Superstar Teachers

I have argued that universities will move to a superstar market for teachers in which the very best teachers use on-line instruction and TAs to teach thousands of students at many different universities.  The full online model is not here yet but I see an increasing amount of evidence for the superstar model of teaching.  At GMU some of our best teachers are being recruited by other universities with very attractive offers and some of our most highly placed students have earned their positions through excellence in teaching rather than through the more traditional route of research.

I do not think GMU is unique in this regard–my anecdotal evidence is that the market for professors is rewarding great teachers with higher wages and higher placements than in earlier years.

The online aspect, which enhances the market for superstars, is also growing.  Here from a piece on online education in Fast Company are a few nuggets on for-profit colleges which have moved online more quickly than the non-profits.

Today, for-profit colleges enroll 9% of all students, many of them in online programs. It's safe to assume they'll soon have many more….for-profits are the only sector significantly expanding enrollment — up 17% since the start of the recession in 2008….the University of Phoenix, which with 420,000 students is the largest university in North America.

Interesting explanation for why for-profits still lag:

Since there are no generally accepted measurements of learning in traditional higher education, the proxy for the value of a diploma on the job market is prestige. Rankings like those of U.S. News & World Report depend on reputation; spending per student, including spending on research; and selectivity — a measure of inputs, not outputs. On all these measures, for-profits come up short.

But how long can we expect the inability to measure to protect academia when there are big profits to be made?  Robin Hanson would argue that most of what is going on is signaling, i.e. that prestige is what is being bought and sold and not prestige as a proxy for some other measure of quality.  No doubt there is some truth to that but there are plenty of fields, dentistry, engineering, computer science where measurable quality matters as well.

It's true that the university equilibrium has lasted a long time but that doesn't mean it can't break down very quickly.

Addendum: Bryan Caplan laughs but Arnold Kling has the right idea.

Pirate credit, pirate collateral, and pirate price discrimination, in Somalia

Pirates don't even have to pay upfront. Those holding ships hostage that haven't yet received ransom can buy goods on credit — at elevated prices — and settle up their debts when the ransom money comes in, villagers say.

Here is evidence of price discrimination:

When villagers think the price of a cosmetic is too high, their reply is "we are not pirates," said Abdullahi.

The closer to the pirate dens one gets, the higher the prices go. In the nearby town of Eyl, a cup of tea costs three times as much as in Bossaso. In Eyl, pirates pay $5 for a shoeshine, compared with 50 cents in Bossaso, said Hashim Salad, a store owner.

The article is interesting through and I thank Cyril Morong for the pointer.

The power of arbitrage: ask Mr. Pickles

Enthusiasts of frequent-flier mileage have all kinds of crazy strategies for racking up credits, but few have been as quick and easy as turning coins into miles.

At least several hundred mile-junkies discovered that a free shipping offer on presidential and Native American $1 coins, sold at face value by the U.S. Mint, amounted to printing free frequent-flier miles. Mileage lovers ordered more than $1 million in coins until the Mint started identifying them and cutting them off.

Coin buyers charged the purchases, sold in boxes of 250 coins, to a credit card that offers frequent-flier mile awards, then took the shipments straight to the bank. They then used the coins they deposited to pay their credit-card bills. Their only cost: the car trip to make the deposit.

The story is interesting throughout.  There is this (unconfirmed) report:

One FlyerTalker, identified by his online moniker, Mr. Pickles, claims to have bought $800,000 in coins. He posted pictures of the loot on FlyerTalk.

He says his largest single deposit was $70,000 in $1 coins. He used several banks and numerous credit cards. He earned enough miles to put him over two million total at AMR Corp.'s American Airlines, giving him lifetime platinum-elite status — early availability of upgrades for life and other perks on American and its partners around the world. He also pumped miles into his account at UAL Corp.'s United Airlines and points into his Starwood Preferred Guest program account.

Project Cybersyn

Cybersyn was a project of the socialist government of Salvador Allende (1970-1973) and British cybernetic visionary Stafford Beer; its goal was to control the Chilean economy in real-time using computers and "cybernetic principles."  The military regime that overthrew Allende dropped the project and probably for this reason when the project is periodically rediscovered it is often written about in a romantic tone as a revolutionary "socialist internet," decades ahead of its time that was "destroyed" by the military because it was "too egalitarian" or because they didn't understand it.

Although some sources at the time said the Chilean economy was "run by computer," the project was in reality a bit of a joke especially in retrospect, albeit a rather expensive one, and about the only thing about it that worked were the ordinary Western Union telex machines spread around the country. TheIBM 360 two computers supposedly used to run the Chilean economy were IBM 360s (or machines on that order).  These machines were no doubt very impressive to politicians and visionaries eager to use their technological might to control an economy (see picture at right.)  Today, our perspective will perhaps be somewhat different when we realize that these behemoths were far less powerful than an iPhone.  Run an economy with an iPhone?  Sorry, there is no app for that. 

Indeed, you don't have to read far between the lines of Andy "socialist internet" Beckett's account to get a flavor of what was really going on:

Beer's original band of disciples had been diluted by other, less idealistic scientists. There was constant friction between the two groups. Meanwhile, Beer himself started to focus on other schemes: using painters and folk singers to publicise the principles of high-tech socialism; testing his son's electrical public-opinion meters, which never actually saw service; and even organising anchovy-fishing expeditions to earn the government some desperately needed foreign currency.

(Note the classic, 'the visionary failed because others lacked idealism' storyMeanwhile the visionary is off on an anchovy-fishing expedition.)

Recently, Jeremiah Axelrod and Greg Borenstein have put together an excellent video essay (fyi, 25 minutes) which gets to the heart (perhaps head would be a better word) of Cybersyn by focusing on the legendary "control room," which they delightfully call the "inverted panopticon." 


It is no accident, say Axelrod and Borenstein, that the control room looks like the bridge of the Starship Enterprise because the whole purpose of the room was to exude a science-fiction fantasy of omniscience and omnipotence.  The fantasy naturally appealed to Allende who had the control room moved to the presidential palace just days before the coup. 

The control room is like the bridge of the Starship Enterprise in another respect–both are stage sets.  Nothing about the room is real, even the computer displays on the wall are simply hand drawn slides projected from the other side with Kodak carousels.

Ironically, when rumors of the project began to circulate, the illusion of omniscience and omnipotence that Beer had created, the same illusion that so appealed to Allende and that had funded Beer's visions and experiments, this illusion caused fear that an all-knowing big brother was on the way–and such fear may even have encouraged the coup.

After the coup, rather than destroying the project because of its "egalitarian" nature, the military regime was more likely to have been disillusioned and disappointed to discover project Cybersyn's impotence.

Hat tip to Boing Boing.

Cato dialog on Tom Palmer’s new book

Here is a YouTube of Tom Palmer presenting his new book, with yours truly commenting, at the Cato Institute.  David Boaz summarizes part of my comment.  Here is my previous post on Tom's new book and the book, Realizing Liberty, is available for purchase on-line,  Tom points us to this podcast of him criticizing me; his comment reflects some of the differences in our points of view.

One question in the dialog was to what extent an adherence to liberty — at the level of an entire polity — is likely to be culturally specific.  I see pro-liberty ideas as more likely to be Anglo-American than Tom does or at least more northwestern European.  It is for this reason, I think, that he favors free immigration whereas I, although very pro-immigration relative to the political debate, favor legal limits in many cases, including the United States, Switzerland, and Iceland.  

A second question is to what extent ideas about liberty can be supported without encouraging "the paranoid style" in American politics.  Too often advocacy of individual liberty ends up bundled with the paranoid style of reasoning and overly simple good vs. evil narratives.  I have yet to see a good explanation for why.

Overall I am more suspicious of "ideology" than is Tom.  He sees ideology as having driven many very beneficial social movements, such as the abolition of slavery.  I accept that point but still fear that ideological reasoning is likely to end up biased away from an emphasis on abstract concepts.  That will mean ideology is often useful for ending very concrete social injustices, but that ideology is unlikely to bring people to a deep understanding of "better economics," especially when the distinction between the seen and unseen is important.  The strongest ideologies also tend to be nationalistic.

Markets in everything China contract of the day

She is now only allowed to beat him once a week:

The 32-year-old man, who was named by the Chongqing Evening News as Mr Zhang, took the unusual step after suffering intense abuse from his wife, who studies kung fu.

"I don't want to beat him, but arguments are inevitable and I can't help myself," his wife told the newspaper. She added that in the week before they signed the deal, she had beaten him up three times.

If she breaks the contract she has to return home to her parents for three days.

I thank Nathanael Minarik for the pointer.

Least Convincing Argument of the Day

Here is James Caruso, the chief commercial officer for drug maker Allos, defending the price of cancer drug Foltyn:

Mr. Caruso also said the price of Folotyn was not out of line with that of other drugs for rare cancers. Patients, moreover, are likely to use the drug for only a couple of months because the tumor worsens so quickly, he said.

In other words, our drug isn't so expensive given how poorly it works.

*What Works in Development?*

The subtitle is Thinking Big and Thinking Small and the editors are Jessica Cohen and William Easterly.  Usually essay collections are of low value but this is the single best introduction (I know of) to where development economics is at today.  Contributors include Dani Rodrik, Simon Johnson, Michael Kremer, Lant Pritchett, Ricardo Haussmann, and Abhijit Banerjee, among others.  Even better, there are two published (short) comments on each essay, a practice which should be universal in every collection, if only to establish context.  My favorite piece was Banerjee's on why development economics should "think small" rather than just doing macro issues.  Recommended.

Assorted links

1. The British Roissy is in fact Speaker of the House.

2. Charles Rowley's blog.

3. A cloud shaped like a UFO.

4. How starfish eat a seal (video).

5. The Arabs, by Eugene Rogan; a superb book which somehow I had forgotten to review this year.  It's especially good for showing how their response to Western imperialism has been conditioned by their Ottoman experiences.

6. Jared Diamond on the greenness of large corporations.

What I’ve been reading

1. The American Civil War, by John Keegan.  Maybe I was prejudiced by the early reviews, but I didn't think there was much substance here.  Like all of Keegan's work it is very well-written but if you have basic knowledge about the events it doesn't hold your interest.

2. In Other Rooms, Other Wonders, by Daniyal Mueenuddin.  The Indo-Pak quaint narrative tale is an overexplored genre these days, but still I enjoyed this very much.  It is "full of life," while sidestepping the cliches of other books that are described as such.  Or were all those cliches enjoyable in the first place?  Recommended, surprisingly.

3. The Soul of the Age: A Biography of the Mind of William Shakespeare, by Jonathan Bate.  This book offers plenty of good information but it didn't bring Shakespeare to life for me.  Should I prefer the less reliable yet more Shakespearean Stephen Greenblatt book?  

4. Stitches, by David Small.  By now I've concluded that I'm not good at reading graphic novels, except for the Sandman series for some reason.  This much-heralded story of a sick child, mistreated by his parents, struck me as professionally done but pointless. 

5. Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789-1815.  Is "magisterial" simply a fancy word for "boring"?  Since I won't read past p.100 in this book, I guess I'll never find out.

6. Why This World: A Biography of Clarice Lispector, by Benjamin Moser.  I loved this book.  She's an interesting writer with a fascinating biography, plus the book doubles as a history of Brazil and a history of Judaism in 20th century South America.  This is one of the sleeper books of the year.  Here is Wikipedia on Clarice Lispector, with a good entry.  This is one of the sleeper books of the year.

Will Medicare cost reductions stick?

The graph above, which portrays Medicare as a percentage of gdp, is from this SSA piece.  In contrast, Matt Yglesias, Kevin Drum, and others have touted a new short essay as evidence for the claim that the Obama health reform plan will succeed on the cost control front, or at least offer a reasonable chance of succeeding, or at least offers some components which will not be reversed.  Here is one key paragraph:

Virtually all of the Medicare cuts enacted in 1990 and 1993, which accounted for a significant portion of the savings in those large deficit-reduction packages, were implemented. And most of the savings enacted in 1997 other than the SGR cuts – nearly four-fifths – were implemented as well.

Given that Medicare spending growth slowed significantly more than was anticipated after 1997 – in 1999, for the first time ever, it was actually lower than the previous year’s level – and the budget was balanced in 1998 for the first time in 28 years, it is surprising that Congress did not scale back even more of the savings enacted in 1997. There is little likelihood that the positive budgetary outlook that encouraged some easing of the 1997 cuts will return in coming years.

See also Box 2 in the piece (which starts slowly, so skip ahead to the meat I am citing).  If you're wondering about discrepancies between these numbers and the SSA graph, the latter is as a percentage of gdp.

My view is this: the aggregate data show that Medicare expenditures, as a percentage of gdp, have expanded at a healthy clip for every medium-run period you can find since 1973.  I don't doubt that the future — like the past — may well show some shorter periods which look better than others but cost control has never worked in the past on anything but a temporary basis.  Citing a bunch of short periods of time doesn't convince me; they didn't stick!  And only one three-year batch of cost controls showed up, as a success, in the aggregate historical data at all.  (Would you believe a worsening alcoholic who pointed to many days or even weeks where his rate of drinking was declining and also mentioned that he drank less for a few years starting in 1993?  Or maybe this reminds you ever so slightly of the debates over recent global cooling and short vs. long-term trends?  Most progressives recognize that a few years of cooling do not contradict the evidence about the long-term trend and yet here is an odd flip of emphasis on a few short-term improvements.)

In Figure D you'll also see that the savings from the 1993-1996 partially period are offset by later, more rapid increases in Medicare spending as a percentage of gdp.

Three additional points are worth consideration:

1. The period of Medicare cost savings, in the early to mid 1990s, coincides roughly with a more general period of cost savings in health care, due to managed care.  This was soundly rejected by the American public, both in their roles as consumers and voters.

2. There will be more and more older voters in the years to come.

3. We should give at least some consideration to a "mean reversion" theory, by which current cost savings increase the pressure for future splurges.  I don't want to push this view too hard, but the aggregate data, as I eyeball them, seem to imply "do not reject" for this hypothesis.

On the other side of the ledger, you might argue, pro-Obama, that the very act of passing the legislation represents a countervailing force against this long-run trend of rising costs.

You can still argue for the bill on this basis: "Congress will increase future spending on Medicare as much as it can.  Any other expenditures in the meantime serve a "stuff the beast" function and slow down the future rate of growth on Medicare expenditure.  We'd rather spend the money on extra coverage now, realizing that the threat of future fiscal crisis will force later Medicare cuts."

That's not my point of view, but it's what I think the debate on cost control boils down to.  The best case scenario for the bill is that it won't much help cost control, may not hurt it, but by pre-emption will result in more money spent on coverage and less money spent on old people.