Month: November 2013

U.S. life expectancy in perspective

by  Tyler Cowen in

From Avik Roy:

A few years back, Robert Ohsfeldt of Texas A&M and John Schneider of the University of Iowa asked the obvious question: what happens if you remove deaths from fatal injuries from the life expectancy tables? Among the 29 members of the OECD, the U.S. vaults from 19th place to…you guessed it…first. Japan, on the same adjustment, drops from first to ninth.

Here is more.  Arnold Kling comments.

Did Obama Spy on Mitt Romney?

by  Alex Tabarrok in

Did Obama spy on Mitt Romney? As recently as a few weeks ago if anyone had asked me that question I would have consigned them to a right (or left) wing loony bin. Today, the only loonies are those who think the question Daniel_Ellsberg_psychiatrist_filing_cabinetunreasonable. Indeed, in one sense the answer is clearly yes. Do I think Obama ordered the NSA to spy on Romney for political gain? No. Some people claim that President Obama didn’t even know about the full extent of NSA spying. Indeed, I imagine that President Obama was almost as surprised as the rest of us when he first discovered that we live in a mass surveillance state in which billions of emails, phone calls, facebook metadata and other data are being collected.

The answer is yes, however, if we mean did the NSA spy on political candidates like Mitt Romney. Did Mitt Romney ever speak with Angela Merkel, whose phone the NSA bugged, or any one of the dozens of her advisers that the NSA was also bugging? Did Romney exchange emails with Mexican President Felipe Calderon? Were any of Romney’s emails, photos, texts or other metadata hoovered up by the NSA’s break-in to the Google and Yahoo communications links? Almost certainly the answer is yes.

Did the NSA use the information they gathered on Mitt Romney and other political candidates for political purposes? Probably not. Will the next president or the one after that be so virtuous so as to not use this kind of power? I have grave doubts. Men are not angels.

The Nixon administration plumbers broke into the offices of Daniel Ellsberg’s psychiatrist in order to gather information to discredit him. They busted into a single file cabinet (pictured). What a bunch of amateurs.

The NSA has broken into millions of file cabinets around the world.

Nixon resigned in disgrace. Who will pay for the NSA break-ins?

The actual arrival of autonomous vehicles: pod-like, self-driving buses

by  Tyler Cowen

Milton Keynes, a town north of London, has announced that it will be deploying 100 driverless pods (officially known as ULTra PRT transport pods) as a public transportation system. A similar system has been running for two years at Heathrow airport. The plan is to have the system up and running by 2015, with a full rollout by 2017. The move marks the first time that self-driving vehicles will be allowed to run on public roads in that country.

The  look like very small metro rail cars, with sliding doors for exit and entry. Passengers can call (and pay £2 per trip) for a pod using their smartphone. The pods travel using rubber wheels on a special roadway, not a track, between curbs that help in guidance. Each pod is computer driven by independent onboard systems, though humans () can take over if there is a problem. Each can hold up to two people and their luggage and travels just 12mph. Plans call for the pods to carry passengers between the downtown area, the business district and the train station.

There is more here, via Nathan Weideman.

What are humans still good for? The turning point in Freestyle chess may be approaching

by  Tyler Cowen in

Some of you will know that Average is Over contains an extensive discussion of “freestyle chess,” where humans can use any and all tools available — most of all computers and computer programs — to play the best chess game possible.  The book also notes that “man plus computer” is a stronger player than “computer alone,” at least provided the human knows what he is doing.  You will find a similar claim from Brynjolfsson and McAfee.

Computer chess expert Kenneth W. Regan has compiled extensive data on this question, and you will see that a striking percentage of the best or most accurate chess games of all time have been played by man-machine pairs.  Ken’s explanations are a bit dense for those who don’t already know chess, computer chess, Freestyle and its lingo, but yes that is what he finds, click on the links in his link for confirmation.  In this list for instance the Freestyle teams do very very well.

Average is Over also raised the possibility that, fairly soon, the computer programs might be good enough that adding the human to the computer doesn’t bring any advantage.  (That’s been the case in checkers for some while, as that game is fully solved.)  I therefore was very interested in this discussion at RybkaForum suggesting that already might be the case, although only recently.

Think about why such a flip might be in the works, even though chess is far from fully solved.  The “human plus computer” can add value to “the computer alone” in a few ways:

1. The human may in selective cases prune variations better than the computer alone, and thus improve where the computer searches for better moves and how the computer uses its time.

2. The human can see where different chess-playing programs disagree, and then ask the programs to look more closely at those variations, to get a leg up against the computer playing alone (of course this is a subset of #1).  This is a biggie, and it is also a profound way of thinking about how humans will add insight to computer programs for a long time to come, usually overlooked by those who think all jobs will disappear.

3. The human may be better at time management, and can tell the program when to spend more or less time on a move.  “Come on, Rybka, just recapture the damned knight!”  Haven’t we all said that at some point or another?  I’ve never regretted pressing the “Move Now” button on my program.

4. The human knows the “opening book” of the computer program he/she is playing against, and can prepare a trap in advance for the computer to walk into, although of course advanced programs can to some extent “randomize” at the opening level of the game.

Insofar as the above RybkaForum thread has a consensus, it is that most of these advantages have not gone away.  But the “human plus computer” needs time to improve on the computer alone, and at sufficiently fast time controls the human attempts to improve on the computer may simply amount to noise or may even be harmful, given the possibility of human error.  Some commentators suggest that at ninety minutes per game the humans are no longer adding value to the human-computer team, whereas they do add value when the time frame is say one day per move (“correspondence chess,” as it is called in this context.)  Circa 2008, at ninety minutes per game, the best human-computer teams were better than the computer programs alone.  But 2013 or 2014 may be another story.  And clearly at, say, thirty or sixty seconds a game the human hasn’t been able to add value to the computer for some time now.

Note that as the computer programs get better, some of these potential listed advantages, such as #1, #3, and #4 become harder to exploit.  #2 — seeing where different programs disagree — does not necessarily become harder to exploit for advantage, although the human (often, not always) has to look deeper and deeper to find serious disagreement among the best programs.  Furthermore the ultimate human sense of “in the final analysis, which program to trust” is harder to intuit, the closer the different programs are to perfection.  (In contrast, the human sense of which program to trust is more acute when different programs have more readily recognizable stylistic flaws, as was the case in the past: “Oh, Deep Blue doesn’t always understand blocked pawn formations very well.”  Or “Fritz is better in the endgame.”  And so on.)

These propositions all require more systematic testing, of course.  In any case it is interesting to observe an approach to the flip point, where even the most talented humans move from being very real contributors to being strictly zero marginal product.  Or negative marginal product, as the case may be.

And of course this has implications for more traditional labor markets as well.  You might train to help a computer program read medical scans, and for thirteen years add real value with your intuition and your ability to revise the computer’s mistakes or at least to get the doctor to take a closer look.  But it takes more and more time for you to improve on the computer each year.  And then one day…poof!  ZMP for you.

Addendum: Here is an article on computer dominance in rock-paper-scissors.  This source claims freestyle does not beat the machine in poker.

What banking union looks like

by  Tyler Cowen in

Few people probably realize that the Federal Deposit Insurance Corporation, which insures bank deposits in the 50 states, also insures billions of deposits in Puerto Rico. So if a bank in Puerto Rico goes under, customers are protected.

And this:

At least three of Puerto Rico’s banks — Eurobank, R-G Premier Bank and Westernbank — are operating under cease-and-desist orders from regulators, restricting their ability to make new loans. They had been given until March 31 to raise new capital or combine with healthier banks.

Now that the deadline has come and gone, regulators have been working on a confidential plan to auction off the lenders, according to several people involved in the situation. It is known as Project Themis, after the Greek goddess of divine law and order.

Regulators are hoping to strengthen the territory’s banking system by forcing its consolidation, while also weaning lenders from the high-cost deposits they obtain from the mainland to make loans, these people said.

Even as the government ends other support programs, they said, the agency is expected to make temporary financing available to the acquirers to help replace those more expensive deposits. Bids were due this week, they added.

We’ll see if the Eurozone ever gets there.

That is from a 2010 report, here is a more recent update.

Average is Over for public sector investment too

by  Tyler Cowen in

Medicare spending continues to rise, but in other areas we are seeing significant cuts:

Kirk Dale, the township supervisor of Marlette, Michigan, has first-hand experience of what it means to spend less on infrastructure. Thirty years ago, he felt his small town was on the rise when Cooper Road, a local residential street, was first paved. But today, Marlette cannot afford the maintenance and has joined a number of small communities that have pulverised their streets and gone back to gravel.

“You make a calculated, rational decision on which mile to do,” said Mr Dale, the township supervisor. “And then you look long-term down the line saying ‘Hey, even if we were to pave this, how are we going to repave this 10 or 15 years down the line?’”

Is that good news or bad news?  By the way:

Gross capital investment by the public sector has dropped to just 3.6 per cent of US output compared with a postwar average of 5 per cent, according to figures compiled by the Financial Times.

The FT article is here.

The Sad Losers of Politics

by  Alex Tabarrok in

Pierce, Rogers and Snyder find that political partisans are more upset about an election loss than a random sample of parents were upset by the Newtown shootings.

Partisan identity shapes social, mental, economic, and physical life. Using a novel dataset, we
study the well-being consequences of partisan identity by examining the immediate hedonic
impact of electoral loss and victory. We employ a quasi-experimental regression
discontinuity model that minimizes many of the inferential biases associated with surveys.
First, we find that elections strongly affect the well-being of partisan losers (for about a
week), but minimally impact partisan winners. This is consistent with research on the goodbad
hedonic asymmetry. Second, the well-being consequences to partisan losers are intense.
To illustrate, we show that partisans are affected two times more intensely by their party
losing the U.S. Presidential Election than both respondents with children were to the
Newtown Shootings and respondents living in Boston were to the Boston Marathon
Bombings. We discuss implications regarding the centrality of partisan identity to the self
and its well-being, and the methodological contribution.

The authors suggest that the happiness effects of political losses are surprisingly large but they would have done better to compare elections with something people really care about, sports (and here). Sports and politics share the same irrational attachment to a team, the only difference being that the rivalries and hatreds of the former rarely lead to as much death and destruction as the latter.

I feel fortunate to have never been emotionally invested in the winner of any election. It’s all a carnival of buncombe to me–a giant robbers cave experiment for the amusement of those in the know.

Addendum: the authors make one error, on the eve of the election the Iowa political markets were not predicting a close election but a strong Obama win (the authors confuse the vote share market with the winner take all market.)

Hat tip: Paul Kedrosky.

Boonton defends ACA on Hayekian grounds

by  Tyler Cowen in

This one is from the comments:

This illustrates what I think is an advantage the ACA has, it’s remarkably flexible and dynamic. Most people who complain about it being too complicated, or too radical, neglect to consider just how complicated and radical their own pet solutions would be. From the left perspective, a national single payer system entails abolishing all insurance and having gov’t set payment levels for all existing and new medical services. You can argue back and forth whether this is a good idea, but clearly it would radically disrupt how almost every American pays for their health care. Likewise even though such a bill may be ‘less complicated’ as measured by some stupid metric like # of pages, it’s not less complicated in its implementation. Just consider the transition to single payer along would probably entail thousands of pages of regulations and multiple court cases. Now single payer advocates can argue that on net it will eliminate the complexity of having doctors billing multiple insurance companies, navigating numerous payer systems etc. But whatever the merits of that argument the system itself would not be free of complexity.

Now consider right wing proposals. Abolish employer based insurance? You’re talking disrupting how nearly 50%+ of working people have had insurance for generations now. Huge voucher schemes to buy private insurance? Err hello the exchanges are only expected to be covering 7M people, and they want to cover 300M+ with vouchers including the entire Medicare population?!!!!

While both types of ideas seem simpler when reduced to some talking points and powerpoint presentations, they really aren’t. They both consist of risky gambles, betting the entire system on a single model and throwing away all other models the economy has on the assumption that they will not be needed anymore (if you abolish employer insurance and discover you screwed up big time, getting it back is going to be hard, so is pulling back Medicare-Voucher, or a single payer system).

Now consider the idea quoted above. It basically sets a cap on subsidy growth at slightly above GDP over the long run. If that results in people being very price conscious about medical expenses and ‘bending the curve’ downwards, that’s fine. But what if people don’t want the curve bent downwards? What if they find that they are willing to spend a larger share of income on healthcare because health care innovations are more worthy than other types of innovations (i.e. such as ’3-d tvs’ or the next generation of ipads)? Then they can. What if they think gov’t should fund additional subsidies? Well that question can be taken up in the future and debated in light with what our budget situation looks like in the future. In the ACA you have a lot of flexibility for the system to evolve because it essentially let’s the multiple systems we have in the US work and allows the ones that work best to expand and the ones that work less to contract. It may very well be that one set of systems is so great that they come to dominate the market (liberals are betting private insurance can’t work in the long run, conservatives that the single payer-systems like Medicare/caid have to eventually convert to private insurance). The ACA could evolve in either of those extremes but it can also evolve into a mixed system (the elderly are on Medicare, the very poor on Medicaid and everyone else is in a robust private market where employer based coverage competes with individually purchased policies)

You also will find a response there from John Thacker.

*The Rebirth of Education*, by Lant Pritchett

by  Tyler Cowen in

The subtitle is Schooling Ain’t Learning, and it is excellent, as one might expect.  Here is one excerpt:

In 1976, in Nicaragua, the government tried out broadcasting lessons over the radio.  This innovation was evaluated using a randomized, controlled trial to scientifically test the learning gains of students exposed to the radio-based instruction versus those who were not.  The study, published in 1981, proved conclusively that radio-based instruction was more effective in absolute terms than traditional classroom-based pedagogy and was wildly more cost-effective

So the end of the story was widespread adoption of broadcasted lessons, followed by improved average test scores in Nicaragua, followed by adoption and adaption for other places in the world, right?  Wrong.  Radio-based instruction did not meet the standard of isomorphic mimicry — it didn’t look cool.

You will find some of the underlying research papers on Nicaraguan radio education here.