Month: September 2010

Department of Unintended Consequences

Here's Stanley Fish:

Commentators who explain smugly that O’Donnell’s position on masturbation (that it is a selfish, solitary act) is contradicted by her Ayn Rand-like attack on collectivism, or who wax self-righteous about Paladino’s comparing Sheldon Silver to Hitler and promising to wield a baseball bat in Albany, or who laugh at Sharron Angle for being in favor of Scientology (she denies it) and against fluoridation and the Department of Education, are doing these candidates a huge favor. They are saying, in effect, these people are stupid, they’re jokes; and the implication (sometimes explicitly stated) is that anyone who takes them the least bit seriously doesn’t get the joke and is stupid, too.

Sometimes I think of the political blogosphere as a huge commons.  An individual blogger can gain in readership or influence by attacking or ridiculing some enemy, but at the cost of making that enemy stronger in the world as a whole.

I also believe that every time the words "stimulus" or "fiscal policy" are blogged it helps the electoral prospects of the Republican Party, no matter what the content of the blog post.

*Listen to This*

She [Mitsuko Uchida] tells of how she once tried to get [Radu] Lupu to visit Marlboro.  "I got every excited, describing how people do nothing but play music all day long.  But he said no.  His explanation was very funny. "Mitsuko," he said, "I don't like music as much as you."

That's from the new book on music by Alex Ross.  It's not a comprehensive tour de force like The Rest is Noise was, but it is smart and well-written on every page and if you liked the first book you should buy and read the second.  The portraits cover, among others, Radiohead, Bjork, John Luther Adams, Marian Anderson, Lorraine Hunt Lieberson, and Uchida.  The chapter on Bob Dylan is especially good and it eclipses Sean Wilentz's entire recent book on Dylan.

Why is the suicide rate rising for baby boomers?

Julie A. Phillips, Ashley Robin, Colleen Nugent, and Ellen Idler report (partially gated):

Our analysis of suicide rates among the middle-aged for the period 1979–2005 showed a substantial increase in suicides by men aged 50–59 years and women aged 40–59 years between 1999 and 2005, following a period of stability or decline in rates for these groups. Suicide rates also increased for younger middle-aged men between 1999 and 2005, but we found that this increase was better characterized as a continuation of previous, ongoing trends for this group. The post-1999 increase for all cohorts was found among both married and unmarried members, although the risks were higher for unmarried people. The rise was particularly dramatic for those without a college degree, while those with a college degree appeared largely protected from the trend. The timing of the increase coincided with the complete replacement of the U.S. population’s middle-age strata by the postwar baby boom cohorts, whose youngest members turned 40 years of age in 2004.

Here is a related press release and it mentions substance abuse and chronic disease (more of a rude awakening for them?).  Here are some speculations about the rising rate; one possibility is that regulatory warnings have to some extent discouraged anti-depressant drugs.  Here is a related paper, on measurement and considering a few possible explanations.  It seems there is no comparable rise for African-Americans.

No Religion, Know Religion

From a recent Pew Survey on U.S. Religious Knowledge, atheists and agnostics know more about religion than most religionists.  Atheists and agnostics score particularly well on knowing something about world religions but also do better than most on Christianity.  The effect remains even after controlling for education.

Take a short version of the quiz here. Graphic from the NYTimes.

Addendum: The Atlantic has a good run down on commentary. I was especially amused by religion scholar Stephen Prothero's line "those who think religion is a con know more about it than those who think it is God's gift to humanity."


Structural Unemployment in South Africa

Unemployment in South Africa is now running at 24% overall with significantly higher rates for blacks.  A shift away from low-skill labor combined with minimum wages and strong trade unions, however, has meant that it is very difficult to lower wages and reduce unemployment.  From a very good piece in the NYTimes:

The sheriff arrived at the factory here to shut it down, part of a national enforcement drive against clothing manufacturers who violate the minimum wage. But women working on the factory floor – the supposed beneficiaries of the crackdown – clambered atop cutting tables and ironing boards to raise anguished cries against it…

Further complicating matters, just as poorly educated blacks surged into the labor force, the economy was shifting to more skills-intensive sectors like retail and financial services, while agriculture and mining, which had historically offered opportunities for common laborers, were in decline.

The country’s leaders invested heavily in schools, hoping the next generation would overcome the country’s racist legacy, but the failures of the post-apartheid education system have left many poor blacks unable to compete in an economy where accountants, engineers and managers are in high demand….

Last year, as South Africa’s economy contracted amid the global
financial crisis, unions negotiated wage increases that averaged 9.3
percent [inflation is 5.1%, AT]….

Eight months ago, Mr. Zuma proposed a wage subsidy
to encourage the hiring of young, inexperienced workers. But it ran
into vociferous opposition from Cosatu, the two-million-member trade
union federation that is part of the governing alliance [insiders v. outsiders, AT], which
contended that it would displace established workers.

Hat tip: Brandon Fuller.

Will social networks boost good political change?

Malcolm Gladwell says not so much:

Shirky considers this [web-based] model of activism an upgrade. But it is simply a form of organizing which favors the weak-tie connections that give us access to information over the strong-tie connections that help us persevere in the face of danger. It shifts our energies from organizations that promote strategic and disciplined activity and toward those which promote resilience and adaptability. It makes it easier for activists to express themselves, and harder for that expression to have any impact. The instruments of social media are well suited to making the existing social order more efficient. They are not a natural enemy of the status quo. If you are of the opinion that all the world needs is a little buffing around the edges, this should not trouble you. But if you think that there are still lunch counters out there that need integrating it ought to give you pause.

The point is well-taken but still activism of some kinds should go up.  Loose ties favor campaigns to get out the vote and sign petitions; those developments can bring about many positive changes.  Most unsettled issues in American politics today would not be well-served by organizing less cooperative confrontations, even if you perceive a great injustice.  I believe that "making the existing social order" more efficient, to use Gladwell's phrase, is positively correlated with many desirable reforms, as are the qualities of "resilience" and "adaptability."  If we look at the recent experience in Iran, web mobilization seems to have encouraged — not discouraged — people from risking their lives for a cause.  Is the web doing much to help the worst African dictators or the totalitarians in North Korea?  Not so many data are in, but so far I score this one for Shirky.

Ireland estimate of the day

So in those parts of Irish economy where our Leaders had a say…[non-exports, mostly]…we have suffered a decline in domestic income of cumulative 34.35% since 2007.

The full blog post is here.  I wouldn't use language in the way that this post does (can "Leaders" much control the non-export sector when defaults are pending or even in normal times?), but I think you get the point.

How Much Has the Fed Lost?

The Federal Reserve has spent over one trillion dollars buying mortgage backed securities, so-called toxic assets.  How much are these assets worth?  It's a simple question but one that is exceedingly difficult to answer not the least because the Fed has resisted being audited in defense of its so-called independence. One might say the Fed's actions have been hidden behind a veil of independence.     

We do know that the Fed purchased many of its mortgage securities from the GSEs, especially Fannie Mae and Freddie Mac.  We also know that these GSEs have cost the taxpayers at least $148 billion so far and may end up costing $400 billion in one "worst case" scenario.  How much larger would the GSE losses have been if the Fed had not taken these mortgages off their books?  The Fed also bought toxic securities from the banks and one imagines that the Fed got the short end of that stick.  How much larger would bank losses have been without these purchases?

The Fed has been a financial empath, it has taken on other people's financial pain and put it on its own books.  But all of this shuffling of losses–perhaps not coincidentally from more to less transparent forms–has obscured the fact that when the shuffling stops it's the taxpayers who are the ultimate empaths, whether they volunteered or not.  The taxpayers deserve more than a shell game, they deserve a proper financial accounting which explains where the losses came from and how much ended up on different books, including those of the Federal Reserve.

Adam Smith is usually smarter than you think

In passing, Jacob T. Levy effectively scores the point and fills us in:

Adam Smith, generally thought of as the first systematic analyst of the market economy, was in my view the first major analyst of the modern state who saw it more or less completely: its permanent system of taxation and debt, its permanent expenditures on public works, its standing army, its bureaucratic structure, its colonial and imperial ventures, its complicated relationship with economic growth and prosperity, and in general the inevitability of a system of “police” or policy. This is not wholly distinct from his work as an analyst of the market; standing armies and professional bureaucracies are aspects of the division of labor, and the wealth of nations is a key determinant of their ability to fulfill their state projects. But it is partly distinct.

Amish arbitrage

We live in a community where the Amish are buying a lot of land. They sell their land in Pennsylvania for $20,000 an acre and then move to our region of Wisconsin and buy land for $5000 an acre. So I’m living amongst the yuppie Amish.

That is from Penelope Trunk.  What I find interesting is that I, as an outsider, cannot easily judge whether the Amish should be paying more for high-amenity land, or paying less for low-amenity land.  (Near high-amenity land they can trade more with wealthier people.)  You can make an argument either way that it should be obvious, except it's not.  This is the socialist calculation debate all over again — it's only through a market process that we find out where the Amish should be living.

Opinion warning signs

Robin Hanson makes a list of "Signs that your opinions function more to signal loyalty and ability than to estimate truth:"

  1. You find it hard to be enthusiastic for something until you know that others oppose it.
  2. You have little interest in getting clear on what exactly is the position being argued.
  3. Realizing that a topic is important and neglected doesn’t make you much interested.
  4. You have little interest in digging to bigger topics behind commonly argued topics.
  5. You are less interested in a topic when you don’t foresee being able to talk about it.
  6. You are uncomfortable taking a position near the middle of the opinion distribution.
  7. You are uncomfortable taking a position of high uncertainty about who is right.
  8. You care far more about current nearby events than similar distant or past/future events.
  9. You find it easy to conclude that those who disagree with you are insincere or stupid.
  10. You are reluctant to change your publicly stated positions in response to new info.
  11. You are reluctant to agree a rival’s claim, even if you had no prior opinion on the topic.
  12. More?

I would add: You feel uncomfortable taking a position which raises the status of the people you usually disagree with.

Strange prices at Johnny Rocket’s

Ben Daniels writes to me:

Seen at Johnny Rocket's near LACMA:

Pancakes. Delicious buttermilk pancakes, served with bacon or sausage & warm syrup.

Two pancakes 4.99  

Three pancakes 4.99

Error aside, how might we account for this?  One option is that the company wants to give the "three pancake consumers" the sense they are receiving a bargain.  I suspect, by the way, that the marginal supply cost of an extra pancake is quite small.  The extra pancake may also increase your demand for high-margin beverages.  What else might be the explanation?