What is not right in this picture?
How might you improve access to scientific research? Write an editorial calling for greater access…and then put it behind a paywall.
Hat tip goes to Michelle Dawson on Twitter.
Addendum: Registration suffices, you don't need to pay, my apologies!
Speech Balloons
Here from Maya Sen are speech balloons illustrating the importance of various words from the majority and then dissenting/concurring opinions in Citizens United v. FEC (more frequently used words are larger). It's interesting to me that just looking at the balloons I can tell which side was more concerned with the Constitution and which side was more concerned with a particular view of the ideal polity.
See Bainbridge for a much more complete roundup of the issues.
The “health care betrayal” and Waxman-Markey
If there's one lesson from the health care debacle, it is that Waxman-Markey was and is a dead end. Many of us objected to the bill on the grounds that it supports a lot of phony offsets for twenty years, imposes lots of costs and regulation in the meantime, and then never really does much to help climate change, given the difficulties of political precommitment. I believe that people with these objections, such as myself, were viewed as "obstructionists" by many or as people who were simply looking for an excuse not to support the bill. But the idea that Congress was just playing around, and had no real will to address the problem, should now be much, much more credible. For all the talk about Waxman-Markey as a "framework," I see plenty of reasons — all the more now — to think Congress never meant to follow through.
The advantage of a carbon tax is that it forces Congress (and others) to demonstrate a certain amount of seriousness up front. A good rule of thumb for a climate change bill is whether a representative voting for it can and will say: "This will raise the price of gasoline in the next six months and that's the whole point."
Megan McArdle predicted all along, even after Ben Nelson folded, that the health care bill will fail because Congress isn't very interested in enacting unpopular policies. That's very good prophecy. It's no accident that she also is skeptical of Waxman-Markey, for reasons related to those expressed above.
I believe the health care debacle should cause all of us to rethink our positions on preferred paths, sequences, and strategies. No matter what your opinion of the health care bill, it's not a pretty picture.
Education in Haiti
…education is the single most important determinant of an individual’s potential to escape poverty in Haiti. The non-state sector has been crucial in making this progress despite formidable economic and political constraints. The Haitian state’s role in primary education is uniquely low from a global perspective. Of the world’s poorest countries, Haiti is the only one in which more than 50 percent of children are enrolled in non-state schools. The country has a total of 14,424 private schools and 1,240 public schools. Non-state schools therefore comprise 92 percent of all schools, the vast majority of which do not receive public subsidies. Some 82 percent of all primary and secondary school students attend private, fee-based schools…Public schools are mainly in urban areas.
The source document is here. People, how do you interpret those figures? I see a few possible takes:
1. Private sector education works well, because they are high returns to receiving it. The problem is on the demand side.
2. Private sector education doesn't work well, because it is prevalent and yet most of the country is not well-educated.
3. Haiti is a mess, in part, because education isn't much subsidized by the state.
4. Whatever causes a weak interest in publicly subsidized schooling also makes private education less than effective.
5. Private education doesn't work well at low levels of income, especially when educational expenditures compete against spending on survival.
6. Private education maybe doesn't actually bring such high returns, once you adjust for unobserved heterogeneity.
What do you think?
“Why is there so little money in U.S. politics?”
That's the title of a famous paper by Stephen Ansolabehere, John de Figueireido, and James Snyder. The abstract of the non-gated version (other versions here) reads as follows:
Thirty years ago, Gordon Tullock posed a provocative puzzle: considering the value of public policies at stake and the reputed influence of campaign contributions in policy-making, why is there so little money in U.S. politics? In this paper, we argue that campaign contributions are not a form of policy-buying, but are rather a form of political participation and consumption. We summarize the data on campaign spending, and show through our descriptive statistics and our econometric analysis that individuals, not special interests, are the main source of campaign contributions. Moreover, we demonstrate that campaign giving is a normal good, dependent upon income, and campaign contributions as a percent of GDP have not risen appreciably in over 100 years – if anything, they have probably fallen. We then show that only one in four studies from the previous literature support the popular notion that contributions buy legislators' votes. Finally, we illustrate that when one controls for unobserved constituent and legislator effects, there is little relationship between money and legislator votes. Thus, the question is not why there is so little money politics, but rather why organized interests give at all. We conclude by offering potential answers to this question.
The bottom line is that today's Supreme Court decision probably matters less than you think. You should see my Twitter feed.
A simple theory of political jobs, with respect to the health care debate
Political jobs would be torture for most people. You have no freedom. You are underpaid and over-bugged. You lose a lot of your privacy. You have to stop writing emails or saying what you think. You don't get to read many good books or go for many quiet walks. It's hard to be a non-conformist. And so on.
Yet it's really hard to get top political jobs. So who gets them? People who truly, deeply love the power.
Plus "doing what the voters want" very often feels like, or can be described as, "doing the right thing."
So what happens when those people perceive their power as threatened? You see it.
One implication is that paying politicians more, and giving them more privacy, would lead to less craven behavior. (Although I personally don't like the current bill, the D. refusal to pass it is sheer cowardice.) There would then be less selection for the "power addiction" and perhaps more principled behavior.
Excellent blog on how to help poor countries
Good Intentions are Not Enough.
Here's an excellent post on why you should not judge charities by their "administrative costs."
This is a very good and very useful blog.
Assorted links
1. Paul Collier: Haiti needs sweatshops, a UN report.
2. Haitians and Hasidim share a town, Spring Valley, NY.
3. New paper on how music works on us (by the way, I'm not convinced).
5. Japanese publishers collude against Kindle.
7. What works in dating profile photos, a very interesting post.
The Volcker banking plan?
Obama proposes a new banking plan and everyone is commenting for instance here is Simon Johnson. The plan seems to involve limits on bank size and limits on proprietary trading. Some time ago I decided not to "chase around" all the different banking plans on tap. First, it would make me dizzy, and second it is hard to evaluate the plans in their early forms. But here are some general questions you should ask about any plan:
1. Do its restrictions apply to subsidaries, affiliates, and holding companies in a meaningful way? Can they apply?
2. How do the restrictions apply to off-balance sheet activities, if at all? Keep in mind the various lessons about the construction of synthetic asset positions.
3. How will Congressional oversight committees apply and interpret the plan? This is a big one.
4. Can a financial institution avoid or sidestep the restrictions by changing its status as a commercial bank, legally speaking?
5. If you cap bank size, are the new and smaller banks still "too big to fail" by prevailing standards?
6. How does the proposal treat bank leverage, including implicit forms of leverage through off-balance sheet activities? Does leverage get redistributed elsewhere?
7. How does it affect the political economy of bank lobbying?
I don't pretend to know the answers to these questions for the new Obama plan nor do I expect such answers to be announced on day one.
How is Chinese web use different?
There was a good (not on-line) FT article on this topic yesterday. It suggested the following:
1. Chinese tend to "roam the web like a huge playground," whereas Americans and Europeans use it more as a giant library.
2. Chinese users are more likely to use the web for entertainment and less for business, relative to Europeans.
3. Chinese users are younger and less educated.
4. Chinese users don't like to type ("Typing is a pain in Chinese") and thus they use the mouse much more for navigation.
5. "Most portals have reacted by filling their pages with hundreds of colourful links competing for attention — creating a cluttered and disorderly view to the western eye but making life easier for Chinese users."
The article may come on-line eventually, if so you can find it by googling that last quotation.
Addendum: Daniel Lippman finds the link.
Is this a big uh-oh for neuroeconomics?
Here's a new abstract:
Reward processing is a central component of learning and decision making. Functional magnetic resonance imaging (fMRI) has contributed essentially to our understanding of reward processing in humans. The strength of reward-related brain responses might prove as a valuable marker for, or correlate of, individual preferences or personality traits. An essential prerequisite for this is a sufficient reliability of individual measures of reward-related brain signals. We therefore determined test-retest reliabilities of BOLD responses to reward prediction, reward receipt and reward prediction errors in the ventral striatum and the orbitofrontal cortex in 25 subjects undergoing three different simple reward paradigms (retest interval 7-13 days). Although on a group level the paradigms consistently led to significant activations of the relevant brain areas in two sessions, across subject retest reliabilities were only poor to fair (with intraclass correlation coefficients (ICC) of -.15 to .44). ICCs for motor activations were considerably higher (ICC .32 to .73). Our results reveal the methodological difficulties behind across-subject correlations in fMRI research on reward processing. These results demonstrate the need for studies that address methods to optimize the retest reliability of fMRI.
Hat tip goes to the excellent Vaughn Bell. Here are related criticisms. Here is a related paper, possibly gated for you, "Is There a Method for Neuroeconomics?"
U.S. economists on the Euro, Econ Journal Watch
That's a forum in the latest issue of the new Econ Journal Watch, now on-line. It's entitled "It Can’t Happen, It’s a Bad Idea, It Won’t Last: U.S. Economists on the European monetary union and the euro, 1989-2002" and contributors include C. Fred Bergsten, Charles Goodhart, Steve Hanke, Roland McKinnon, George Selgin, and Roland Vaubal, among others. There are several other notes and comments in the issue as well.
Health care: where to go from here?
Megan McArdle recommends:
Raise the Medicare tax by half a percentage point, and eliminate the tax-deductibiity of health insurance benefits for people making more than $150K a year in household income, $100K for singles. Then make the federal government the insurer of last resort. Any medical expenses more than 15% or 20% of household income, get picked up by Uncle Sam.
Ezra Klein recommends:
Medicare buy-in between 50 and 65. Medicaid expands up to 200 percent of poverty with the federal government funding the whole of the expansion. Revenue comes from a surtax on the wealthy.
And that's it. No cost controls. No delivery-system reforms. Nothing that makes the bill long or complex or unfamiliar.
My earlier thoughts are here.
Competing currencies, sort of
South Korea has decided that virtual currency is the equivalent of real-world money bringing to light some very real ramifications for users not just in Korea but in other countries as well.
The ruling allowing "cyber money" is the first in Korea and was based on the acquittal of two gamers indicted on charges of illegally making money by selling goods earned in the game Lineage.
The full story is here and I thank Daniel Kent for the pointer.
Addendum: Read the fourth comment for a different take on this story.