Month: February 2010
Douglas Krupka refers me to the following:
Although in discussion of the imperative clause type it is routinely denied that it could ever feature a past tense, imperatives in the past tense do exist. Specifically, past imperatives can be found in (Northern) Dutch and Frisian, many speakers of which can produce and understand sentences like (1) and (2).
(1) At liever eens wat minder! (Dutch)
ate rather once somewhat less
The English equivalent seems odd to me, but you would think it is hard to translate into a language which does not have imperatives in the past tense. Best to put the English out of your mind and focus on the:
At liever eens wat minder!
You can do a Google search on the concept here.
Gary Gorton has a new and excellent paper on this question. It is called "Questions and Answers About the Financial Crisis." Here is one excerpt:
Q. Why doesn't the repo market just use Treasury bonds for collateral?
A. A problem with the new banking system is that it depends on collateral to guarantee the safety of the deposits. But, there are many demands for such collateral. Foreign governments and investors have significant demands for U.S. Treasury bonds, U.S. agency bonds, and corporate bonds (about 40 percent is held by foreigners). Treasury and agency bonds are also needed to collateralize derivatives positions. Further, they are needed to use as collateral for clearing and settlement of financial transactions. There are few AAA corporate bonds. Roughly speaking (which is the best that can be done, given the data available), the total amount of possible collateral in U.S. bond markets, minus the amount held by foreigners, is about $16 trillion. The amount used to collateralize derivatives positions (according to ISDA) is about $4 trillion. It is not known how much is needed for clearing and settlement. Repo needs, say, $12 trillion.
…to get a sense of the magnitudes, suppose the repo market was $12 trillion and that repo haircuts rose from zero to an average of 20 percent. Then the banking system would need to come up with $2 trillion, an impossible task.
One bottom line is this: the repo market funds the banks and there isn't enough "safety" to ensure the repo market is always working well. We ended up using synthetic securities, including those backed by mortgages. So every now and then we get a run on our banks. Gorton predicts the crisis was not a one-off event and it could happen again.
One implication of this (my inference, not found in the paper) is that most (all?) major current proposals for banking reform don't get at the real problem. You might wish to go back to "old banking" but according to Gorton that stopped being profitable during the 1980s. There's always an uninsured place to put your money, regulation can't stop that, and such money can find its way back to help fund the banking system, right? The systemic implications of that can prove scary.
I read all the same material that you do about "shrinking the banking system" or "decreasing leverage." This paper makes you realize just how far we are from making those recommendations work.
Gorton's short paper is one of the best essays on the crisis so far. Here are earlier posts on Gary Gorton and the crisis.
…the Greek Finance Ministry had warned of "complete collapse" if the whole system…was not rethought…"Prices and value move in an atmosphere of imminent catastrophe," he wrote. "In Greece for a while now all the foundations of a healthy economy have been overturned. There can be no stability, neither in economic equilibrium nor in monetary or financial affairs."
…While the Italians…were genuinely worried by Greece's financial crisis, it was the Germans who needed to be persuaded. Initially, Altenburg's advocacy of the Greek position was not well received even in his own Ministry. But then the political stakes were suddenly raised…
…In Athens people expected the Finance Minister to win substantial concessions from the Germans. In actual fact he was in a very weak position.
…It was not that the Greek financial crisis could be ignored; nor that the Greek Finance Minister lacked the wit or intelligence to present his case. It was simply that no Greek politician carried enough weight to be heard seriously in Berlin.
That's from yesterday's Financial Times, no…whoops, sorry! That's from Mark Mazower's Inside Hitler's Greece: The Experience of Occupation, 1941-44. It's a good book.
Eric Crampton emails me:
Why don't we see more of this? I went to the only Ethiopian restaurant in New Zealand last night. It runs one day a week – Mondays – in a Burmese restaurant that otherwise was closed on Mondays.
I can understand that this kind of arrangements would have risks for the host restaurant. Ideally, you'd want it from a non-competing cuisine style. But this is the first instance of it I've ever seen. Have I just not been paying attention? The story from the Dominion Post on how the place opened is very nice. The woman running the Burmese restaurant was an immigrant from Burma who later started volunteering with an NGO that helped new migrants acclimatize. She met a guy there who wanted to open an Ethiopean restaurant but had no capital; her restaurant was closed Mondays.
The other 6 days a week the Ethiopean restauranteur drives a cab.
There's not a lot of policy news in the president's new health-care plan. The changes are pretty much what we expected: more money going to subsidies (which are now being referred to as "the largest middle class tax cut for health care in history"), an excise tax that kicks in later and affects fewer plans, a new Health Insurance Rate Authority to oversee premium increases and reject them if they're unfair, the elimination of the Nebraska deal, and so on. There's no public option, nor any significant retrenchment. In fact, the cost of the bill has increased by $75 billion, the result of more generous subsidies.
What I'd like to see — if this is going to pass — is a tougher penalty for not signing up. Ezra also discusses the politics of where it is headed.
Addendum: Megan McArdle says it won't happen.
Tyler Cowen and Alex Tabarrok, Modern Principles of Economics (UK) – well-written, interesting, and some material not normally covered in econ. textbooks. I’ll try to find time to write more about this textbook, but guess students and professors will be the judges.
Ben Goldacre’s Bad Science. I’m a bit embarassed not to have read this until now, but the first few chapters are exceeded even my high expectations. Really very good indeed. Apparently a US edition is in the works – I’ve just been asked to blurb it. Will be a pleasure.
Jonah Lehrer’s The Decisive Moment (now republished as How We Decide). A nice science-and-stories approach to neuroscience, psychology and behavioural economics. I finished the book wanting to put it into action – not as easy as Lehrer makes out – and learned plenty I didn’t know I didn’t know.
All three are recommended.
I'm confused by the recent discussions emanating from the Obama administration. If something like the current proposals pass, and those proposals "work," low-risk individuals end up subsidizing the health care of high-risk individuals. Prices for insurance won't need to go up at outrageous rates, or so we are told.
If current proposals fail to pass, insurance companies can still just dump people. Forcing them to lower their prices will induce them to dump even more people and to have a tighter definition of preexisting conditions.
It seems to me this announcement is either just headline-seeking or an admission that, after the plan is passed, premia will continue to rise at high rates. The latter case runs contrary to the narrative of how the plan will contain "the health insurance death spiral of the status quo."
Perhaps forthcoming details will clarify this matter. (Is it for the transition period?)
1. Who manages best?
4. Rules for being a writer (make sure you click through to the second part).
6. At what age do we learn to be sarcastic? 9 or 10, it seems.
The article is here. We learn that Krugman and his wife like St. Croix, they have cats named Doris Lessing and Albert Einstein, and there is an interesting discussion of how his wife edits his work. Excerpt:
Last August, Krugman decided that before he and Wells departed for a bicycle tour of Scotland he would take a couple of days to speak at the sixty-seventh world science-fiction convention, to be held in Montreal. (Krugman has been a science-fiction fan since he was a boy.) At the convention, there was a lot of extremely long hair, a lot of blue hair, and a lot of capes. There was a woman dressed as a cat, there was a woman with a green brain attached to her head with wire, there was a person in a green face mask, there was a young woman spinning wool. There was a Jedi and a Storm Trooper. Those participants who were not dressed as cats were wearing T-shirts with something written on them: “I don’t understand–and I’m a rocket scientist,” “I see dead pixels,” “Math is delicious.” Krugman has always had a nerdy obsession with puns. (He is very proud of a line in one of his textbooks: “Efforts to negotiate a resolution to Europe’s banana split had proved fruitless.”) He also likes costumes. Once, he and Wells gave a Halloween party where the theme was economics topics–two guests came as Asian tigers, several came as hedge funds, one woman came as capital, dressed as a column. Sitting up onstage at the science-fiction convention, Krugman looked happy to be there. It seemed that these were, in some worrying sense, his people.
Krugman is not a keen traveller. After the fall of the Berlin Wall, many of his contemporaries set off for Eastern Europe–every economist wanted his own personal country to transition. Jeffrey Sachs, in particular, was all over the place, but Krugman was never tempted. “I know what Jeff does and I couldn’t do it,” he says. “Taking transport planes, living on yak meat for days–no. But I do write faster than anybody. You’ve got to figure out what you should be doing.”
Overall I thought this profile had a lot of substance in it.
Formaldehyde is a known irritant poison, capable of causing severe internal damage, and formic acid is equally destructive, best known to scientists as an essential part of the venom in bee stings. People poisoned by methyl alcohol would often seem to recover from that first bout of dizzy sickness, feel better while the alcohol was being metabolized, and then ten to thirty hours later by poisoned again by the breakdown products.
First, their vision would blur. The optic nerve and retina are acutely vulnerable to formic acid salts. The nerve, with its continual processing of images, runs in a high metabolic state, causing blood to circulate through it rapidly — which causes poison to be delivered there continuously. Autopsies often revealed a startling atrophy of the optic nerve area, the surrounding tissue swollen, bloody, and spongy. Methyl alcohol and its by-products caused similar damage in the parietal cortex, a region of the brain essential in processing vision. It concentrated as well in the hardworking lungs — the breakdown of pulmonary tissue was what usually killed people.
That is from the new and consistently interesting The Poisoners' Handbook: Murder and the Birth of Forensic Medicine in Jazz Age New York, by Deborah Blum. Although she has won a Pulitzer Prize, she remains an underrated author.
Athina Tatsioni, Effie Vavva, and John P. A. Ioannidis have an interesting new paper:
Funding is important for scientists’ work and may contribute to exceptional research outcomes. We analyzed the funding sources reported in the landmark scientific papers of Nobel Prize winners. Between 2000 and 2008, 70 Nobel laureates won recognition in medicine, physics, and chemistry. Sixty five (70%) of the 93 selected papers related to the Nobel-awarded work reported some funding source including U.S. government sources in 53 (82%), non-U.S. government sources in 19 (29%), and nongovernment sources in 33 (51%). A substantial portion of this exceptional work was unfunded. We contacted Nobel laureates whose landmark papers reported no funding. Thirteen Nobel laureates responded and offered their insights about the funding process and difficulties inherent in funding. Overall, very diverse sources amounting to a total of 64 different listed sponsors supported Nobel-related work. A few public institutions, in particular the U.S. National Institutes of Health (with n=26 funded papers) and the National Science Foundation (with n=17 papers), stood out for their successful record for funding exceptional research. However, Nobel-level work arose even from completely unfunded research, especially when institutions offered a protected environment for dedicated scientists.
I thank Michelle Dawson for the pointer.
3. Trying to sell doughnuts to the Chinese; T-Bills are easier.
4. U.S. spending on health R&D, compared to other countries.
6. Woman leaves 2,000 living descendants; a great story.
Medicare was introduced 1965 in the US. Public health coverage for the elderly existed by 1950 in Sweden, but full universal coverage dates to 1955 in Sweden (a public health insurance was founded in 1891, and public municipal public health existed for even longer).
In 1950, before Medicare, and before Universal coverage in Sweden the difference was +2.6 at birth and +0.3 at 65. In 2001-2005 the difference between the Sweden and US was +2.7 at birth and +0.3 years at 65. Identical!
First, regarding the life expectancy at birth we can note that 50 years of different health policy, labor mark policy, welfare state coverage seems to have had zero effect on total outcome.
Last note: around 1900, before the expansion of the welfare state, the estimated life expectancy at birth was 54.0 years in Sweden and 47.3 years in the US, a difference of 5.3 years, twice the current gap.
If you scroll through Tino's blog, you will find various critiques of The Spirit Level. On the health care point, I would stress that Hansonian results also can be used to argue for the extreme exercise of monopsony power, so don't think the policy implications of this are so simple.