Someone who sounds like Megan McArdle

If we cannot discount the interests of the fetus simply because it is not yet with us as a person, then how can one morally justify legal abortion as a coherent national policy?…I find it hard to construct a really compelling argument in favour of abortion which does not rest in some way on discounting the utility of the fetus-as-future-person.

There is much more at the link.  This is a real ouch, her barbs are directed at left-liberals but they do not stop there.  In my view we should subsidize births, keeping in mind that the long-run is the relevant time horizon.  I also believe a free and wealthy society will, at some point, have many more people than the alternatives, and on an ongoing basis.  As for what kind of restrictions on abortion are a good way to subsidize births, that is a very tricky question, especially keeping in mind I am not a pure utilitarian but rather a pluralist…I am not in Chicago to debate it with all the other economists as we are celebrating Yana’s 17th birthday in Miami…

A Culture of Corruption

Any new visitor to [Nigeria] is bound to notice the odd phenomenon that literally thousands of houses and buildings in cities and towns bear the message "THIS HOUSE IS NOT FOR SALE," painted prominently near the front door.  Ask any Nigerian the purpose of the message and they will quickly tell you that it is to prevent 419 [scamming].  Apparently, one popular method of 419 is to assume the identity of a real estate agent or simply a property owner trying to sell one’s house.  In Nigeria’s cities and towns, where the real estate market is tight, buyers can be induced to make down payments to secure a later purchase, and in some cases entire transactions have been completed before the buyer discovered that the deal was a scam.

That is from Daniel Jordan Smith’s informative and entertaining A Culture of Corruption: Everyday Deception and Popular Discontent in Nigeria.  Here is the book’s home page.

China fact of the day

Top 10 collections of translated poetry, from a single Chinese store:

  1. Paul Celan, Selected Poetry and Prose
  2. Rainer Maria Rilke, Selected Poems
  3. Dylan Thomas, Selected Poems
  4. Jorge Luis Borges, Selected Poems
  5. Emily Dickinson, Selected Poems
  6. Allen Ginsberg, Selected Poems
  7. Friedrich Hölderlin, Poems
  8. Constantine P. Cavafy, Collected Poems
  9. Federico Garcia Lorca, Selected Poetry
  10. The Eddas

Not a bad list, I would like to know more about their clientele.  The top four "General Titles in Poetry" are:

  1. Friedrich Hölderlin, Collected Prose
  2. Martin Heidegger, Elucidations of Holderlin’s Poetry
  3. Wang Zuoliang, History of English Poetry
  4. Susan Sontag, Against Interpretation

Thanks to Yan Li for the pointer.

Did the New Deal prolong the Great Depression?

Brad DeLong is overreaching when he argues "A normal person would not argue that the New Deal [TC: parts of, or "on net"] prolonged the Great Depression."  HedgeFundGuy, who may or may not be normal, responds:

A 2004 paper at the SSRN by Chari, Kehoe and McGratten argues that increased labor rigidity from the New Deal was primarily responsible for prolonging the Great Depression. Cole and Ohanian wrote a similar piece for the Minneapolis Fed in 1999.

Further, the 1937 recession was most probably due to a tax over-reach by anti-business Democrats.  Unemployment rose from 5 million to almost 12 million in early 1938.  Manufacturing output fell off by 40% from the 1937 peak; it was back to 1934 levels.  What caused the plunge in taxes was the tax on retained earnings…

I had thought that bad monetary policy in 1937-8 (arguably not "the New Deal", though we tread close to semantics) was at fault more than fiscal policy; I have never studied that question in depth.  The earlier attempted cartelization of the economy through NIRA and NRA didn’t help either.  Deposit insurance, and a move toward automatic stabilizers for aggregate demand, stand on the more positive side of the ledger.

I disagree with much of Gene Smiley’s book on the Great Depression, but he has many more reasonable arguments about the negative economic consequences of the New Deal and their connection to the magnitude and length of the Great Depression.  I do not know if he is normal.

China fact of the day

Casual conversation and commentary lead most Americans to think that this accumulation of reserves corresponds to a large trade surplus in China, achieved by holding the value of their currency down.  In fact, the Chinese trade surplus is not that large.  It is well under 5% of GDP, smaller in percentage terms than the U.S. trade deficit.

That is from A. Michael Spence, in today’s Wall Street Journal; here is more.

Financial liberalization: risk vs. growth

We present a new empirical decomposition of the effects of financial liberalization on economic growth and on the incidence of crises.  Our empirical estimates show that the direct effect of financial liberalization on growth by far outweighs the indirect effect via a higher propensity to crisis.  We also discuss several models of financial liberalization and growth whose predictions are consistent with our empirical findings.

Here is the paper.  Here are non-gated versions.

The scariest sentence I read today

The parents of a severely mentally-disabled girl defended their decision to use medical treatments
to keep her child sized for the rest of her life.

Here is more scary stuff, and it is scary whether or not you think this is justified. 

Addendum: Here is a picture.  Here is the parents’ treatment blog.  They write:

Unlike
what most people thought, the decision to pursue the “Ashley Treatment”
was not a difficult one.  Ashley will be a lot more physically
comfortable free of menstrual cramps, free of the discomfort associated
with large and fully-developed breasts, and with a smaller, lighter
body that is better suited to constant lying down and is easier to be
moved around.

Why do colleges run football teams?

Over at Free Exchange Isaac Bickerstaff poses a good question:

…why are America’s institutions of higher learning also operating
semi-professional sports franchises?  Especially since overall, the
athletics department is a money-losing proposition for most schools. 
They also bring down the value of the university’s core "product", as
schools offer places and often lavish scholarships to academically
unqualified student athletes.

The evidence is mixed, but some papers find a connection between athletic achievement and student quality, or athletic achievement and alumni donations.  I suspect the donor connection is the key, but we also must ask what exactly colleges and universities seek to maximize. 

Under one view, there is some local market power, a surplus from tuition and endowments, fairly passive boards, and a faculty-driven governance structure which gives Presidents considerable discretion over non-instructional projects.  If I were a University President, I would spend money on the library, a very good music school, a concert hall, and — if they would abolish the NCAA and the zone defense — a basketball team.  Basketball is The Queen of Sports, and what better way to entertain local bigwigs and receive favors in return?

Are we predisposed to be excessively hawkish?

Daniel Kahneman and Jonathan Renshon argue we are too quick to pick a fight:

Social and cognitive psychologists have identified a number of predictable errors (psychologists call them biases) in the ways that humans judge situations and evaluate risks.  Biases have been documented both in the laboratory and in the real world, mostly in situations that have no connection to international politics.  For example, people are prone to exaggerating their strengths:  About 80 percent of us believe that our driving skills are better than average.  In situations of potential conflict, the same optimistic bias makes politicians and generals receptive to advisors who offer highly favorable estimates of the outcomes of war.  Such a predisposition, often shared by leaders on both sides of a conflict, is likely to produce a disaster. And this is not an isolated example.

In fact, when we constructed a list of the biases uncovered in 40 years of psychological research, we were startled by what we found:  All the biases in our list favor hawks.  These psychological impulses–only a few of which we discuss here–incline national leaders to exaggerate the evil intentions of adversaries, to misjudge how adversaries perceive them, to be overly sanguine when hostilities start, and overly reluctant to make necessary concessions in negotiations.  In short, these biases have the effect of making wars more likely to begin and more difficult to end.

Since the first-best, optimal number of wars is zero, this is correct.  The more difficult and also more important question is whether "the good guys" fight too many or too few wars, given this strong martial propensity of "the bad guys," and treating the bad guys as the first movers.  Another bias is that some "just wars" (but can they succeed?) remain unfought, usually when we do not care much about the slaughter of "out-group innocents," as evidenced by Timor, Rwanda, Darfur, etc.  The U.S. entered World War II too late rather than too early, and did too little to limit the Holocaust.

Of course we need to adjust any estimate by the probability that we are sometimes "the bad guys" rather than "the good guys."

Here is one critical comment, here is Matt Yglesias.  Dan Drezner offers commentary.

Comments are open, but the discussion will be better if we consider the biases rather than debating the merits of particular wars.