Ironically, we spend very little on one of the few public goods that I support, asteroid detection and deflection. Even among the strange group that I interact with, this predilection of mine about avoiding asteroids is considered a little odd. But consider that the probability of being killed by an asteroid collision is about the same as being killed in a commercial airplane disaster – small, but all of humanity is aboard that plane.

Assuming there are enough of us around after a hit, I can just see the commission now.

Q. Why was our government woefully unprepared to prevent the deaths of millions of citizens and world-wide devastation?

A. We had only vague, historical information.

Q. What about 2002 EM7?

A. That was a previous administration.

Q. What about 2004 FH

A. NASA did not provide us with a specific threat.

Q. Didn’t you know about Tunguska?

A. That was a foreign threat.

Much more information, with plenty of references, comes from Randall Parker, the far-seeing Future Pundit, who actually works on things like asteroid detection.

China fact of the day

Latest research shows that every day in China at least 300 people are killed in traffic accidents, ranking the country top in the world for both the death toll and the death rate. And the figure is accelerating by 10 per cent every year.

Here is the full story

Peter Gallagher points out the following:

That’s a huge rate of slaughter: 110,000 deaths and 560,000 injured on China’s roads last year. It’s more than 200 times the death rate from SARS (for example) which killed 349 people in China in the eight months from November, 2002 to July 2003 (WHO data), creating a much higher level of anxiety.

The Chinese have fewer cars on the road and drive at slower speeds. Nonetheless “driver negligence” catapults them to the top [bottom] of these rankings.

Nauru goes bankrupt

Remember Nauru? That small Pacific island that got rich off phosphates? The BBC narrates:

Nauru’s rich reserves of phosphates – an ingredient for high-grade fertiliser – created enormous wealth during the 1970s and 1980s.

The island’s 10,000 inhabitants enjoyed one of the world’s highest standards of living, as well as exemption from tax and immigrant labour to perform all menial jobs.

But the phosphates have run out and things have turned sour. Amanda Butler tells us that the government faces foreclosure on 5 May if it does not pay a debt of 230m Australian dollars (US$169m; £94m).

What does it mean for a government to face foreclosure? Well, this government owns the Mercure Hotel in Sydney, a shopping center in the suburbs, and a “derelict” Melbourne tavern. But heck, why not close up the country altogether?

There have been reports that the island’s inhabitants could be given Australian citizenship as a reward for their help with asylum [seekers].

Alternatively, there have occasionally been proposals to move Nauru’s population to another unoccupied Pacific island.

The politically incorrect question: Why do these very small countries exist in the first place? Before answering that question, check out some photos and a short travelogue of Nauru. Or look elsewhere. New Zealanders claim that there are more Tongans in New Zealand than on the mainland of Tonga. Does either the world, or the islanders, still reap a positive cultural externality from maintaining these small groups? If all these islanders simply moved to Australasia, wouldn’t everyone be much better off within a generation? Those are questions, not answers. But I, for one, would not mourn the disappearance of Nauru. Or as the philosophers would say “Nauru as we know it.”

Addendum: Here is some radio narrative. Thanks to Nathan Fong for the pointer.

The future of American education?

Once he [Weinstein] gets to college, he’ll be told to relax, go slow and enjoy learning for its own sake.

Colleges are offering a range of services for stressed students, says the New York Times.

There are now free massages and dogs to cuddle in exam seasons, biofeedback workshops and therapists available to help students work through their first C [TC: what about grade inflation? haven’t we gotten rid of C’s?].

At Harvard, the training given to graduate students who live in the undergraduate houses has in recent years expanded to include ways to help students fight perfectionism — a theme on many campuses — as well as negotiate matters involving race, class and sexual identity.

…Washington University in St. Louis has established stress-free zones during finals, where students can get chair massages and listen to New Age music.

Here is the full story, most of which concerns the difficulty of getting into a top school.

Robert Barro vs. Paul Krugman the conservative

Here is the debate, the link includes a streaming video as well.

The exchanges are an odd mix of agreement about many positive facts and squabbling over the rhetorical gloss. Their core disagreement concerns a value judgment about how much government should be spending:

Robert Barro: The reason I like the tax cuts is twofold. One is that I think it improves the incentives for the longer run economic performance for growth. And secondly, that I favor a smaller size of the government and I learned from the Reagan period that a way to accomplish that is to starve the government of revenue and I look at this as further going in that direction.

Paul Krugman: But that’s where we get to the nub of the matter. At this point talking about what looked like long-run deficits of 4% or 5% of GDP, 25% of the federal budget. You can’t close that gap. If you’re talking about a smaller government, what you mean is major cuts in the level of benefits provided by social security and Medicare. There’s no way to do it without that. Now that–if you favor that, then you favor tax cuts that lead the government to that kind of financial hole because it provides you the reason to cut these programs.

Here is more:

Robert Barro: Milton Friedman asked me once to name a program I thought that people were getting their money out of in terms of a government program. So I answered national defense. And then he said, well give me another example.

Paul Krugman: Well, there we are. Look, if George W. Bush wants to run in 2004 on the program that we don’t need Medicare and we don’t need Social Security and we don’t need Medicaid and we don’t need the Parks Department, and you can go on down the list of everything that isn’t national defense and I intend to cut taxes so that we can’t afford anything except national defense, I’d be happy [sic] if the American people were to give him a majority of the votes on that basis by all means, but that’s not the way that they’re campaigning. They’re campaigning on the basis, you get these tax cuts and we’re going to give you all of these programs we take for granted without any constraints and that’s a lie. [TC: Hey, wasn’t Social Security sold on a misrepresentation in the first place?]

Here’s a takeaway quotation:

Paul Krugman: I’m a conservative. I want to preserve these programs we have and that unfortunately requires more revenue than we’re collecting after the Bush tax cuts.

Hayek is blossoming in the blogosphere

Two new Hayekian blogs started this week. Taking Hayek Seriously is a group blog with an Austrian and free market orientation. Cafe Hayek is run by Russ Roberts (he guestblogged for us a few weeks ago) and Don Boudreaux. Don is my chair and boss at GMU. I am glad to see he has the blogging bug. I like their subtitle: “Where Orders Emerge”.

Here is a humorous site comparing the two Hayeks.

What’s wrong with perfection?

That’s the self-appointed topic of philosopher Michael Sandel. What if we could genetically engineer ourselves to be far “better” human beings? What would be wrong with that? Here is his answer, writ short:

A lively sense of the contingency of our gifts–a consciousness that none of us is wholly responsible for his or her success–saves a meritocratic society from sliding into the smug assumption that the rich are rich because they are more deserving than the poor. Without this, the successful would become even more likely than they are now to view themselves as self-made and self-sufficient, and hence wholly responsible for their success. Those at the bottom of society would be viewed not as disadvantaged, and thus worthy of a measure of compensation, but as simply unfit, and thus worthy of eugenic repair. The meritocracy, less chastened by chance, would become harder, less forgiving. As perfect genetic knowledge would end the simulacrum of solidarity in insurance markets, so perfect genetic control would erode the actual solidarity that arises when men and women reflect on the contingency of their talents and fortunes.

Here is the longer argument.

In other words, Sandel is saying that if we bring about a world where everything is the result of genes, people will be less caring. Social solidarity will diminish.

I doubt this. If you want to drum up sympathy, hold up a picture of a young child with birth defects.

And at what margin is contingency good for us? Would it also increase social solidarity to have our lives “contingent” upon diarrhea, malaria, and tuberculosis?

Going out on a limb:

The future of solidarity may be up for grabs, but for different reasons than Sandel recognizes. The real question is whether parents will prefer to genetically engineer children with more or less social solidarity. I’ll predict more. The benefits of sexual selection (attracting a quality mate) will outweigh the shorter-run benefits from greater selfishness. Don’t parents already scold their children to have a stronger social conscience? Wouldn’t caring kids also be more…obedient? Now you might try to breed a kid who loves only his spouse and children, and cares about no one else. How good a job will this person get? Remember, this future world may also allow us to test for what genes people have. What better for a job interview than to take a piece of hair and see how much the person is a cooperator? I expect genetic engineering to increase the gains from trade. As for politics, imagine if candidates had to reveal their genetic profiles.

Genetic engineering also will accelerate the pace of evolution. Given that birth control is cheap, the women on the future will love children more than do the women of today.

Which country does the most to help the world’s poor?

Foreign Policy magazine will tell you it is the Netherlands. If you click on the link, you will see their rankings. (Note that the paper edition has more detail and less confusing visuals.) Denmark and Sweden are next in line, the U.S. comes in seventh. Japan comes in last among the developed nations. The metrics are adjusted to per capita terms.

Unlike many other studies, this metric goes beyond foreign aid payments. It also considers immigration policy, trade, and investment as means of helping the world’s poor.

Looking at the index, the aid component is too heavily weighted and the immigration component is underweighted. I find the issue-by-issue scores most informative. Canada has the best immigration score, the U.S. is a close second. The U.S. has the best trade score. The Netherlands and Germany have the highest investment scores. The Scandinavian countries have the highest aid scores, by far. Norway has the lowest trade score, largely because of its high agricultural tariffs. By the way, here is an earlier MR post on the importance of remittances.

The bottom line: OK, I am an American. But it is hard for me to resist pushing the United States into the top slot. Can we look at all of history since the 1930s? If you consider military and cultural influence over the long haul, I think we have it clinched.

Yellow Pages

Aside from the obvious, such as big and colorful, what Yellow Page ads work best?

People who go to the pages often feel uncertain and vulnerable (think car repair, plumbers, florists etc.) It’s important, therefore, to send a reassuring, optimistic message, like “We care,” “Our family serving your family,” or “Pain Free.”

Consumers also don’t seem to like much text; they do like interesting images or graphics and an identifiable difference between one company and its competitors.

“People don’t like to see pictures of the problem,” said Larry Small, director of research for the industry trade group. “If you’re selling auto insurance, and you show a wrecked car, people don’t like that. What they want to see is a car that looks new, a person smiling because his problem has been taken care of.”

My conclusion: Bush will win the election.

The marginal product of NBA players

Most of you have read Moneyball by now, so why not measure the marginal products of NBA players as well? After all, playoff time and the MVP award are just around the corner. Wayne Winston, professor of decision sciences at Indiana University, has tried to crack the numbers:

“Basketball’s a team sport, and lots of things aren’t tracked,” Winston says. “Like taking the charge, going through a screen, tipping a ball to your teammate, saving a ball from going out of bounds. That’s where our system comes in. All these little things should translate into points.”
One problem: Traditional plus-minus systems tend to overrate average players on good teams and underrate good players on lousy ones. After all, a zero plus-minus rating on the Los Angeles Lakers is not the same as a zero rating on the Los Angeles Clippers, mostly because one team has Kobe Bryant and Shaquille O’Neal and the other has Marko Jaric and Chris Kaman.
To compensate, Winval’s ratings are weighted to take into account every other player on the floor. For every time segment a player is in a game, the system tracks the other nine players on the floor, the length of the segment and the score at the start and end of the segment.”

In other words, he tries to measure marginal product in terms of points, adjusting for the values of the other players. The system is called Winval, here is the article, the paper version has more information. And who comes out on top? Please sit down, the five best players in the NBA, according to this measure are:

1. Hedo Turkoglu (who? he plays for San Antonio but doesn’t even start)
2. Vince Carter (a well-known star, but universally considered soft and a choker)
3. Kevin Garnett (the likely MVP for this year)
4. Brad Miller (very good player, but not elite)
5. Manu Ginobili (very good player, perhaps headed toward elite status)

Shaq, Kobe, and Tim Duncan are not in the top ten. None of the five, except for Garnett, crack a recent USA Today straw poll for NBA mvp. (By the way, here is last year’s Winval list.) Now maybe these rankings are right and conventional wisdom is all wet. Marginal product is, well…marginal product. But what are some other options?

1. A player with a high rank could have a really bad replacement, thus boosting his measured marginal impact.
2. Some players are “momentum” players, they are put in when the tide is turning.
3. Some players are wonderful for the time they play but could not keep it up for the whole game. They look great when you see them, but they are not worth very much overall.
4. The econometric model is somehow misspecified, but of course you can always say this.

The bottom line: I’m still puzzled by how much the measurements diverge from common sense. The NBA offers gobs and gobs of measurable information. Yet intuition remains indispensable when we try to estimate marginal product. By the way, Winval predicts that Mitchell Butler (who?, 13.4 minutes per game) is the best Washington Wizard.

Trump this

I found this clever paper, amusing.

Flights of Fancy: Corporate Jets, CEO Perquisites, and Inferior Shareholder Returns (SSRN)

Abstract: This paper studies perquisites of major company CEOs, focusing on personal use of company planes. For firms that have disclosed this managerial benefit, average shareholder returns under-perform market benchmarks by more than 4 percent annually, a severe gap far exceeding the costs of resources consumed. Around the date of the initial disclosure, firms’ stock prices drop by an average of 2 percent. Regression analysis finds negative associations between CEOs’ personal aircraft use and their compensation and percentage ownership, in accord with Jensen-Meckling (1976) and Fama (1980), but both relations have small magnitude.

Is the universe everywhere the same?

Maybe not. According to some recent research it is shaped like a funnel or a medieval horn. The link offers a useful picture. This would be big news indeed:

This model would force scientists to abandon the “cosmological principle”, the idea that all parts of the cosmos are roughly the same. “If one happens to find oneself a long way up the narrow end of the horn, things indeed look very strange, with two very small dimensions,” says Holger Then, a member of the team.

At an extreme enough point, you would be able to see the back of your own head. It would be an interesting place to explore – but we are probably too far from the narrow end of the horn to examine it with telescopes.

Ponder that if you want some distraction from your taxes. The universe would be finite as well. This might eliminate the paradoxical notion that I have a near-double out there somewhere, writing a blog called MarginalCounterRevolution.

But are we sure of the result? Of course not:

Both of the crucial observations are still ambiguous, however, and may be statistical flukes. Over the next year or so, WMAP and other experiments will test whether large blobs really are lacking and whether small ones really are elliptical.

The bottom line: When I hear more on this, I’ll let you know.

Fact of the day

In 2001, the United States collected more in import duties from Bangladesh than it did from France, despite importing 12 times as much from France.

We’re importing 12 times as much from France as from Bangladesh, in case you find their grammar confusing. The fact is from Foreign Policy, May/June issue, p.50.

Where Your Money is Going

The federal government is projected to spend $21,671 per household in 2004…$3,500 more than in 2001. Tax revenues will reach $16,981 per household through a combination of the income tax, payroll tax, gas tax, estate tax and assorted business taxes typically passed on through higher prices and smaller investment returns. The remaining $4,690 represents the deficit per household, which will be dumped in the laps of our children.

Here is a breakdown of where that $21,671 goes:

Social Security and Medicare: $7,165. The 15.3 percent payroll tax, split evenly between the employer and employee, covers most of these costs.

Defense: $4,240. Lawmakers drastically cut defense spending throughout the 1990s. The September 11 attacks reversed this trend, and the $1,300 per household increase since 2001 has returned defense spending to its historical levels.

Low-income programs: $3,479. Nearly half of this spending subsidizes state Medicaid programs that provide health services to poor families. In line with economywide health-care trends, Medicaid costs are rising 10 percent per year. Other low-income spending includes: Temporary Assistance for Needy Families (TANF), food stamps, housing subsidies, child-care subsidies, Supplemental Security Income (SSI), and low-income tax credits.

Interest on the federal debt: $1,460. Washington is $7 trillion in debt. It owes $4 trillion to the public that owns its bonds and the rest to other federal agencies. Record-low interest rates have reduced the interest payments by $1,000 per household over the last six years. As interest rates climb back to normal levels, so will these costs to taxpayers.

Federal employee retirement benefits: $835. This funds the retirement and disability benefits of federal employees, including the military. Interest from federal trust funds covers part of this spending.

Health research and regulation: $619. Health-research spending has doubled since 1998, and nearly all of that spending growth has been concentrated in the National Institute of Health. This category also includes the Food and Drug Administration and dozens of grant programs for health providers.

Education: $583. Primarily a state and local function, 8 percent of education spending comes from Washington. Federal education spending has surged 76 percent since the 2001 enactment of the No Child Left Behind Act. Most federal dollars go to low-income school districts, special education, and college student financial aid.

Veterans benefits: $565. The federal government provides income and health benefits to veterans. Spending is up 34 percent since 2001.

Unemployment benefits: $451. Unemployment costs fluctuate based on the number of unemployed Americans. Recent costs have ranged between $220 per household in 2000 (when unemployment was low) and $526 per household in 2003 (when unemployment was higher). This year, unemployment costs are decreasing as job growth continues.

Highways and mass transit: $400. Most highway and mass transit spending is financed by the 18.4 cent per-gallon federal gas tax. Per-household costs have increased from $254 in 1998 to $400 this year, and the current highway reauthorization bill in Congress would boost them substantially.

Justice administration: $389. Justice spending includes federal attorneys and prisons, as well as law enforcement grant programs. New homeland security costs have added $100 per household to justice spending.

International affairs: $320. This includes foreign economic and military assistance, operation of U.S. Embassies abroad, and contributions to organizations such as the United Nations. International spending has doubled since the terrorist attacks of September 11, 2001.

The programs listed above cover $20,506 per household. The remaining $1,165 is allocated to all other federal programs, including farm subsidies, environmental programs, space exploration, air transportation and community development.

Here is the full story, I’ve added the bold face. Here is a Charles Murray proposal to let taxpayers choose which parts of government they will finance. You can’t lower your tax bill but you can direct your funds to one department rather than another. The obvious problem is that everyone will wish to send their money to the glamorous programs, but still the sentiment is a good one.

P.S. Don’t forget to send in your check. That’s today’s bottom line, no matter what else I have to say.