Words of wisdom

by  Tyler Cowen in

Some people I know will hate it when I say this, but as written by E.J. Dionne, this seems to me true, true, true:

The right wing has lost the election of 2012.

The evidence for this is overwhelming, yet it is the year’s best-kept secret. Mitt Romney would not be throwing virtually all of his past positions overboard if he thought the nation were ready to endorse the full-throated conservatism he embraced to win the Republican nomination.

…The right is going along because its partisans know Romney has no other option. This, too, is an acknowledgment of defeat, a recognition that the grand ideological experiment heralded by the rise of the tea party has gained no traction.

There is more at the link.

Anthem: Ayn Rand’s Dystopian Masterpiece

by  Alex Tabarrok in

Rod Long offers a very insightful reading of Ayn Rand’s Anthem:

The book’s most striking feature, both stylistically and in the substance of the story, is the absence of the first-person singular. The idea of a totalitarian state suppressing subversive ideas by banning or distorting the language needed to express or even formulate it has been made generally familiar by George Orwell’s Nineteen Eighty-Four, with its fictional language, “Newspeak”; but Rand’s treatment precedes Orwell’s by more than a decade (and may possibly have influenced it).

In Rand’s dystopia, the first-person singular pronoun — the word “I” — has been abolished in order to prevent people from thinking of themselves as individuals with identities distinct from that of the collective. The struggle of Equality 7-2521 (Rand modeled her characters’ names on telephone exchanges of the “Pennsylvania 6-5000” form) to discover his own individuality is mirrored in his, and the text’s, struggle to move from “we” to “I.”

…If the book’s linguistic center is the first-person pronoun, its imaginal center is light — the guttering candlelight of the collectivist dystopia, contrasted with the electric light that the protagonist reinvents, the latter symbolizing the fire that Prometheus of Greek myth stole to give to the human race, and, consequently, symbolizing as well the creative fire of the unfettered individual mind.

…Rand was a dedicated Aristotelian and a lifelong critic of Plato, and many of the features of Anthem’s dystopia, such as government assignment of professions, state regulation of breeding and reproduction, and abolition of private property and the family, seem drawn from the recommendations in Plato’s Republic. The prohibition of the word “I” in favor of “we” is likewise a natural development of Plato’s dictum in the Republic that all citizens should say “mine” and “not mine” about the same things — a proposal criticized by Aristotle, who warns in his Politics that the attempt to give a community the same degree of unity as a single individual is doomed to disaster.

…Moreover, Equality 7-2521’s journey down into an abandoned subway tunnel to discover an artificial light source turns on its head Plato’s allegory of the cave, in which the wise man ascends from the cave of physical reality, lit by the artificial light of the senses, to discover the “real” world of abstract Forms, lit by a sun of pure ineffable intellect. By reversing Plato’s parable, Rand, in Aristotelian fashion, reorients the pursuit of knowledge away from the supernatural and back to this world, to empirical reality.

Read the whole thing.

Will Ohio State’s football team decide who wins the White House?

by  Tyler Cowen in

Here is my recent Slate.com piece with Kevin Grier, excerpt:

Just how irrational are voters? It is statistically possible that the outcome of a handful of college football games in the right battleground states could determine the race for the White House.

Economists Andrew Healy, Neil Malhotra, and Cecilia Mo make this argument in a fascinating article in the Proceedings of the National Academy of Science. They examined whether the outcomes of college football games on the eve of elections for presidents, senators, and governors affected the choices voters made. They found that a win by the local team, in the week before an election, raises the vote going to the incumbent by around 1.5 percentage points. When it comes to the 20 highest attendance teams—big athletic programs like the University of Michigan, Oklahoma, and Southern Cal—a victory on the eve of an election pushes the vote for the incumbent up by 3 percentage points. That’s a lot of votes, certainly more than the margin of victory in a tight race. And these results aren’t based on just a handful of games or political seasons; the data were taken from 62 big-time college teams from 1964 to 2008.

The good news, we suppose, is that sports really can cheer us up and make the world seem like a brighter place. The sports fan is left happier and more satisfied all around, not just on the gridiron. When you are feeling upbeat and happy, you feel more satisfied with the status quo in general. And feeling satisfied with the status quo makes you more likely to vote for the incumbent politician, even if that’s totally irrational.

The study’s authors control for economic, demographic, and political factors, so the results are much more sophisticated than just a raw correlation. They also did a deeper analysis that took into account people’s expectations. It turns out that surprise wins are especially potent, raising local support for incumbent politicians by around 2.5 percentage points.

The nature of UK austerity

by  Tyler Cowen in

Veronique de Rugy sums up many points I continue to be thinking:

When I looked at the data back in June, we saw that of the roughly £40 billion that was shaved from the deficit during the 2010–2011 budget cycle, for every £3 of new tax revenue, U.K. taxpayers got £1 in cuts — exactly the reverse of what was promised.

What’s more, the evidence indicates that U.K. has, at best, slowed down the growth of spending, but it has not engaged in actual spending cuts. I documented the trend in British spending earlier this year:

A look at the data in Her Majesty’s Fiscal Year 2012 Budget shows (see table 2.3) that total managed expenditures will increase from £696.4 billion in 2011–2012 to £733.5 billion in 2014–2015, and further to £756.3 billion in 2016–2017. Adjusted for population growth, this is slow growth, but not a savage cut. That table also shows a “projected” drop in Public Sector Gross Investment between 2012–2013, but if it ever materializes, it will be contained to that year alone.

Spending cuts in the UK can’t be blamed for the weak growth path the country is on. On the other hand, tax increases can. Here is a list:

(For more, go here.) The bottom line is that the U.K. is another case of private-sector austerity (i.e., tax hikes) without public-sector austerity (i.e., spending cuts).

For more detail, here is a new and very good paper by Anthony Evans.  Here are some interesting remarks from Nicholas Crafts.

There is a great stagnation

by  Tyler Cowen in

Singapore Airlines Ltd. (SIA) will end non-stop services to Newark, the world’s longest commercial flight, next year as it phases out the aging planes used on the route.

The all-business-class flights will end in the fourth- quarter of next year, along with similar services to Los Angeles, the airline said in a statement yesterday, as it announced an order for 25 Airbus SAS aircraft. The Toulouse- based planemaker will acquire the five four-engine A340-500s used on the non-stop routes as part of the deal.

The end of the almost 19-hour service to Newark will lengthen Singapore travelers’ trip by more than three hours as they will have to change planes in London.

Here is more, and note that the new aircraft are designed to serve the budget market in the future.

*The Bretton Woods Transcripts*

by  Tyler Cowen in

That is the new eBook edited by Kurt Schuler and Andrew Rosenberg.  I cannot open the file they sent along to me, but Amazon summarizes:

The Bretton Woods Transcripts is the confidential, verbatim record of meetings of the historic conference that established the International Monetary Fund and the World Bank. The Bretton Woods conference, named after the New Hampshire town where the conference was held in July 1944, began a new era in international economic cooperation that continues today. Delegates from 44 countries attended the conference. The best known then and now was John Maynard Keynes, the most influential economist of the 20th century.

A companion Web site for the book contains extensive background material, including photos of the original transcripts and previously unreleased conference documents: http://www.centerforfinancialstability.org/brettonwoods.php

The culture that is Denmark

by  Tyler Cowen in

Some of them he slept with more than once, but most were one-timers. In all, he earned just over 24,000 kroner, or $4,150.

Henrik only paid 6,300 kroner ($1,090) in taxes, or 24.2 percent, because he was able to deduct 11,000 kroner ($1,900) for expenses, including his Macbook. He had sex with a client in Croatia when he was there on vacation, and when he returned, he called the tax authorities to ask if he could deduct the cost of the holiday. Flights yes, came the answer, hotel no.

I asked Henrik why his spreadsheet listed the distance he cycled to each client.

“Bike rides,” he says, “are reimbursed half a kroner per kilometer.”

Here is more.

Assorted links

by  Tyler Cowen

1. Broken windows in Afghanistan.

2. Imaginary markets in everything.

3. Karl Smith responds to Scott Sumner on fiscal policy, Scott responds in turn, and good Amir Sufi slides on monetary policy and why it may not be so powerful.

4. The adaptive house.

5. Cass Sunstein on how to fix the mistakes of the impatient.  (Is he at this point a Bloomberg columnist?)

6. Academics are moving further to the left.

Medicare cost control in action

by  Tyler Cowen in

Tens of thousands of people with chronic conditions and disabilities may find it easier to qualify for Medicare coverage of potentially costly home health care, skilled nursing home stays and outpatient therapy under policy changes planned by the Obama administration.

In a proposed settlement of a nationwide class-action lawsuit, the administration has agreed to scrap a decades-old practice that required many beneficiaries to show a likelihood of medical or functional improvement before Medicare would pay for skilled nursing and therapy services.

…Neither she nor Medicare officials could say how much the settlement might cost the government, but the price of expanding such coverage could be substantial.

The story is here.  Without knowing the cost, it is difficult to say whether this coverage expansion is a good idea.  But that is exactly my point.  I see a good deal of cognitive dissonance when I read discussions of plans for Medicare cost control.