To Infinity and Beyond

This is a bit of a followup to the Dracula post from earlier this year. 

Foundations and endowments DO NOT have infinite time horizons. Technically speaking, nothing does. But I would argue they don't even have extremely long time horizons. 

These types of entities have no reason to believe they will exist into the long, far future. At the very least they will transform so dramatically the future them is not the current them--donors, beneficiaries, and employees will all be different as will its mandates, goals, and mission. Over very long periods of time slight changes to average inflation or average rates of return very significantly affect the purchasing power of assets. These are highly uncertain variables where the difference between phenomenal growth and permanently impaired capital is almost imperceptibly small to a current observer. The tax structure governing these entities over the long-term future is also highly uncertain. A related but independent threat is if the powers that be and the powers that will be even allow the entity to exist . . . forever.

Perhaps despite all of this they should act as if they have infinite time horizons? Let's assume a few conditions: 

1. Foundations and endowments in at least some cases are the best available option to serve a desired purpose. (If you simply take this for granted, you probably are not thinking hard enough. These entities may not be the best way to accomplish the goals they ostensibly are designed for.)
2. It is desirable for foundations and endowments in some cases to exist into perpetuity. 
3. It is possible to design and implement an external and internal governing structure and to craft a mission statement conducive for the first two conditions. (This might be where this entire process deviates too far from reality.)

For those entities where a perpetual time horizon is appropriate, we obviously do not want them to engage in behavior that unreasonably jeopardizes that goal. One quick and tempting way to jeopardize it is to spend too much money.* Another is to invest poorly. Notice that this bad behavior is a bit murkier. Investing could qualify as being done "poorly" in a number of contradictory ways. Defining it as taking the wrong risk(s) in the wrong way(s) doesn't provide any clarity other than to suggest how complex and complicated the error can be. 

Tying this back to the question at hand, should they act as if they have infinite time horizons, begs the question: what exactly does that mean? How would they be different as compared to acting as if they had long, but limited time horizons? Let me describe the difference in terms of a couple of problems I can foresee:

• Doing too little good now (spending too little!) so as to safeguard sustainability. Yes, this cuts a bit against the grain of what I've said and implied above. But it is a real risk especially for a perpetuity mindset. Doing more now might solve a problem that wouldn't otherwise exist in the future--keep in mind that our descendants are very likely to be extraordinarily wealthier than us with entirely different problems (even if they aren't that much richer). 
• Investing in a manner that jeopardizes near-term access to sufficient capital. If you have an infinite horizon, what do you care that your 5-year or 10-year or even 20-year returns are very bad as long as the long-term expectation is high enough? In fact, let's tie that money up in illiquid assets if that is the trade-off for above-market performance. Unfortunately, simple beats complex in almost all categories but not in the competition of hope. Which is why a perpetual outlook fosters an esoteric investment strategy. I think these entities should push back against this natural inclination to invest in opaque, illiquid, and non-benchmarkable assets. Any investment that is not accessible (lock-up periods), marketable (secondary market discount), or verifiable (Internal Rate of Return (IRR) is a useful fiction) for a period of time longer than the expected tenure of the investment staff recommending it is highly suspect. I would suggest the same evaluation against the average board member's remaining term. And this is all before we begin a discussion of manager selection and dispersion risk--alternative investing is not about asset allocation; it is about finding the best and avoiding the worst. Good luck with that. 

What about governments? Should they act like they will be around forever? Again, let's consider what this means by jumping to potential problems:

• A government that behaves as if it cannot fail to be or should not cease to be risks being way, way to aggressive--both to its own people as well as others. 
• This encourages disruptive experimentation since the government can simply outlast any temporary ill effects. Normally, disruptive experimentation is my jam, but not for government. Government lacks the proper incentives and the rightful decision makers. 
• Paradoxically this perpetuity outlook also encourages extreme neglect as any problem today will either be solved tomorrow or be some future government administrator's problem.

I think the assumption that foundations, endowments, governments, et al. should behave as if they have unlimited time horizons is sloppy at best and dangerous at worst. Long time horizons are appropriate and very useful for these entities, but there is a big gap between a long time and forever. 

My thoughts for this were spurred in part by listening to this episode of Macro Musings. 

*I will leave for another day further discussion on the well-debunked conventional wisdom that a 5% or even 4% spending rule is likely sustainable in real terms. 

Another Newspaper Makes Its Inability to Turn a Profit an Asset

I was recently asked my opinion on the announcement of the Salt Lake Tribune being granted approval to become a nonprofit by the IRS. Specifically, the question was "What do you think of this model for newspapers?"

My quick answer:

For newspapers it is a lost cause—like all you can drink water for someone drowning in a river. Newspapers are a dead medium. Journalism is potentially a different story.

This is an old idea as indicated in the story. I think Tampa [Bay Times] went this route about 10 years ago. The Poynter Institute has advocated this for longer than that. On the one hand I like it from the standpoint of independence; however, I don’t think pragmatically it can be sustainable. It is just too expensive to fund journalism without advertising. And it doesn’t sound like they have any intention of giving up advertising.

On the other hand I don’t like it because I don’t think we should have a tax system that plays favorites (non-profit versus for-profit).

Here is a little more coverage from Nieman Lab. Unlike previous versions, this move to non-profit status is somehow more completely nonprofit. I am not quite clear if there is a material difference. I do find the appeal for charitable donations interesting in a kinda gross sort of way. Remember that every time you grant one entity tax-favored status, you increase the burden on all other tax-paying entities. Undoubtedly, many find this to be just fine.

In the religion of journalism, newspapers are a metaphorical holy land. There is a great sense that without them we cannot have credible news. Within this belief is a zealotry proclaiming local newspapers as the glue binding local society together. This like so many things in religion is not based on fact.

Our access to vacuous gossip and shallow conjecture is greater now than ever--we just don't have to pay so dearly for it and wait for it to be hand delivered to our doorstep. Newspapers like most of "professional" journalism have always delivered an array of facts that deserve more scrutiny and a biased narrative. That bias comes in one of three varieties: intentional slant to protect a powerful interest, unintentional slant repeating mistaken conventional wisdom, or simple ignorance introducing the ailment knowing enough to be dangerous.

I'm not saying non-professional journalism is better in any of these regards. I'm just pointing out that the only difference by and large is that being a professional really just meant you could (in some cases still can) get paid for it.

It Ain't What You Know . . .

Partial list of conventional wisdom that is completely false yet very hard to change closed minds on:

• Plastic bags are bad for the environment and reusable bags are a good alternative (the trend of using paper straws is another stupid step in this direction). But maybe I shouldn't be so pessimistic?
• Public companies are too short term focused and private companies have the ability to take a greater long-term view. 
• The younger generations are significantly worse with respect to (fill in the blank) than prior generations.
• (Perpetually) the upcoming election is the most important one in our lifetime. 
• You shouldn't end a sentence with a preposition (like I did at the start of this post).
• The critical problem in education is a lack of funding, and more money would have a meaningful impact on improvement. 

We're on a Highway to Hell

And we're paving our way there with good intentions of course.

Incentives matter. A key hallmark of higher-level thinking is understanding this and understanding the true implications behind certain actions looking beyond the good intentions.

Partial list of cases in point:

• Anti vaping = pro cigarette smoking
• Minimum wage = worse labor conditions for low-wage workers 
• Taxing income = less work
• Taxing capital = less investment 
• Rent control = housing shortages 
• Zoning = higher real estate cost & more inequality
• Drug prohibition = large profit to smugglers and gangsters 
• Anti prostitution = pro pimp
• Industry regulation = protection for incumbent firms 
• Prohibition on organ donation compensation = more death and suffering
• Forced recycling = environmental harm

The Rational Fan: Managing Hopes and Constantly Adjusting Expectations

(I love the mirror image below the bars hinting at the symmetrical negative to any observable outcome.)

Consider the analogy of graphic equalizer meters on a old 70s-80s-era stereo--the ones that would show the recent high-point marks. I think this is a good symbol of the high-water-mark thinking that commonly clouds the judgment of sports fans. Specifically, an irrational (typical?) fan mistakes the best performance for the expected performance. The rational fan thinks in realistic terms where future expectations are influenced by past achievements but not set by them and mean reversion is always expected (eventually).

This would include updating for new information (e.g., a recent trend of wins or losses) when projecting the long-term expectation of winning. (i.e., Is recent performance simply an aberration and regression to the historic mean should be expected? Alternatively, has a new plateau been reached and future expectations must be appropriately adjusted?)

Consider also the emotional impact of a team's performance on a fan. The rational fan must contend with and accept the great irony that the more one's team wins, the more the wins tend to run together and the losses stand out, and vice versa. This is simply the law of diminishing marginal utility (not to be confused with the law of diminishing returns).

Irrational fan foresight is almost always myopic as they only see one side of what could be and probably do so in a vacuum. When an irrational fan imagines a play executed, he imagines an outcome determined by his conviction of the play’s potential success or failure. His judgment is probably additionally clouded by the play's potential excitement. If he would like to see a particular play call, he envisions a successful, if not the perfectly successful, outcome. If he disagrees with a play, he conceives of only its failure. A coach doesn’t get that luxury. Coaches should rationally weight the probability of success and the degree of success with the probability of failure and the degree of failure—what could be and how likely it is. Fans are allowed to dream, coaches are required to calculate. For coaches, magnitude matters.

So on any given play fans are liable to be deeply unsatisfied while coaches see the outcome as satisfactory toward a larger goal. But as should be expected, this is subject to error and unintended consequences. The error can be that coaches have bad incentives leading them to take less risk than they should (another example). The error can also be that fans expect too much. Back to the equalizer analogy, setting expectations on the abnormal high point causes fans to demand an unreasonable level of success. Fans can also be subject to what I would term conventional-wisdom bias--the primary source driving coaches to be overly conservative.

Also, when is a fan a true fan? Consider a convert. As opposed to religion, there is no long process filled with sacrifice and commitment culminating in a grand ceremony to becoming a team's fan. But perhaps there is such a process for becoming a "true" fan. Hence, the concept of bandwagon fans as illegitimate. It is only those who have been there through the tough times who can claim righteousness. For my teams I certainly feel this way.

Perhaps another way to look at it is that to be a true fan you have to feel physical pain when your team loses. Alternatively, you're not a team's true fan until the opponent's pain is your pleasure.

One more nostalgic image:

Highly Linkable - Q&Q Edition

Nat Eliason asks: How many of these psychology myths do you still believe (or did until reading this post)? There are several I want to be true and perhaps they are at some level--just not to the extent originally purported or popularly presumed.

Scott Alexander asks: Is science slowing down?

Arnold Kling asked for readers to share their favorite Klassic Klingisms: They did not disappoint.

Scott Sumner asks: How should we think about the theft of intellectual property? and Can we handle the truth?

Bryan Caplan asks: How is immigration like nuclear power?

Highly Linkable: Counter-Conventional Wisdom Edition

Trying to get back into the swing of blogging and just beating the 90-day hiatus limit . . .

Looking through my saved articles for future linking, I notice that just about all of them can be labeled "counter-conventional wisdom". Here are a few that, yes, have some age on them in the world of "that's so yesterday's Twitter", but I think they have value enough to be shared.

David Friedman, whose latest book is on my to read list, wrote about attending a Jewish wedding which got him thinking about what I would call modernity-biased myths about the past. I particularly like the Columbus myth.

You can't go very long discussing cryptocurrencies with a skeptic before they bring up the supposed Tulip Mania of 1600's Netherlands. But as I believe I've posted (or intended to) before, this is a myth. Hat tip to Tyler (of course).

I know I've posted before regarding our new puritanical age. I'm in good company with Matt Ridley who makes the case for today's "Millennials" being new Victorians. Yet again the young kids these days are not fitting their own (or the perennial young kids these days) stereotype.

This example of all common sources being wrong by Scott Sumner is a great example of a common view that unfortunately does not get scrutiny or challenge by the watchdogs or fact checkers.

Economics as a discipline itself needs more heresy (and reversals such that the heterodox becomes the orthodox). Arnold Kling, never shy to challenge along these lines, offers four contentions.

Sticking with Kling, he outlines five myths clouding health-care policy in the U.S.

Highly Linkable - How Are *We* Doing?

This links post is comprised of several items I believe are linked together in theme or subject matter. See what you think...

First Don Boudreaux points to a great website and corresponding TED talk by Anna Rosling Rönnlund. The project is a photographic-based exploration of how people compare. The within-country and among-country comparisons highlight what wealth and poverty look like. Notice the similarities, notice the differences, and notice on what factors these things do and do not seem to correlate.

Steven Pinker makes a strong case that The Enlightenment Is Working--"Don’t listen to the gloom-sayers. The world has improved by every measure of human flourishing over the past two centuries, and the progress continues." Let's suppose you conducted a survey every year for the past two centuries asking people simply, "Are you better off today than last year?" My guess would be the average and very typical response would be hard to distinguish from 'basically no improvement'. YET, the improvement over that time span for all of humanity (not just the average but for EVERY cohort) is dramatic and undeniable (once you look at the evidence). Why might this paradoxical result occur?...

Part II of Russ Robert's The Numbers Game is an examination of economic progress which suggests answers to the prior question above. The subtle yet very dramatic, counter-intuitive lesson, Simpson's Paradox, is awesome. To be sure, Simpson's Paradox would not answer my hypothetical, but it relates to how we misperceive small but compounding change and growth. Also, don't miss the first installment of Russ's video series.

But wait, aren't there too many people (or soon will be) for all this good news to continue? Steven Landsburg explores this issue in this video. He starts where everyone should start but often does not by asking "How would we know?" I believe he makes a very strong case that the answer is 'NO' we don't have and will not have "too many" people.

Tyler Cowen pointed to a couple of posts by Katja Grace who ponders 'Why did everything take so long?' The first and second both cover how and why progress is so difficult.

Highly Linkable - Food and Health Myths

As you know, one of my soft spots is counter-conventional wisdom. Here are a few recent ones in the health and nutrition and food spaces.

From Vox, the science is in: exercise won’t help you lose much weight. Count this (that exercise helps weight loss) among the many things I adamantly believed up until few years ago.

In this James Altucher podcast Dr. Aaron Carroll explores some of his book The Bad Food Bible: How and Why to Eat Sinfully. Quit looking for magic food. Quit worrying about toxic food. Eat what works for you. Stay away from processed foods and too much (i.e., added) sugar.

Slate explores the implications of the junk science used to ban smoking on grounds of secondhand dangers. I believe we are in an age of rising puritanism. Tobacco is the drug in the cross hairs. It is low brow. Interestingly alcohol and marijuana are higher and rising status. Once again, mood affiliation and out-group shaming guides public policy. (HT: Robin Hanson)

On a more upbeat note, here is a great guide to finding a restaurant. Lots here about correctly interpreting the signals being given--both intentional and unintentional. (HT: Tyler Cowen)

Saving Enough for Retirement? - New Year's Resolution fulfillment post

It is time again to report on my perpetual New Year's Resolution - to change my mind about a belief I hold strongly. Happy to report that I was again successful achieving it some time last spring. As I read and reflected upon this argument against increasing Social Security expansion and this counter-conventional wisdom post (HT: Don Boudreaux), I realized I needed to challenge myself against assuming I know what "you" or "we" need to save for retirement.

Formally presented: I have overturned my long-held and thoughtlessly repeated mantra that "typical Americans are not saving 'enough' for retirement". I should have had strong reservations about this mantra as it is a bold affront to my principles to presume that I know the correct amount people should be saving (or consuming).

The heart-breaking stories of the poor not having adequate if any savings for retirement is as misleading as looking at the Forbes 400 as a barometer of retirement preparedness. We do not and should not expect a household that finds itself in the rare but tragic condition of always being in the lowest income deciles to have retirement savings. Those are the households for which Social Security, private charity, et al. are supposed to be the safety net. To analyze the potential problem, one must look at much deeper data and analysis concerning aggregates and focusing on where households actually stand. Andrew Biggs at AEI does that exceedingly well as indicated by this post (HT: again Don Boudreaux).

Make no mistake: there is government-induced crowding out and misleading, many examples of individuals with unrealistic expectations, and bad financial decisions aided largely by government-protected culprits. But the basic belief I formerly held is not substantiated.

I'll Have What She's Having

This email from Marco Bresba to Tyler Cowen on food versus music as social status signature really resonated with me.

I have always been out of step with music culture. Growing up I was 1-2 decades behind my peers enjoying music from my parent's generation and the 1/2 generation between us. Because I never liked kid's music, though, I was an outsider in kindergarten (listening to adult music) and then an outsider in junior high and high school for the same reason. My horizons have very much broadened in the past two decades and I have friends, lovers, and (mostly) the Internet to thank for that.

People think of me as a foodie, a title I cringe at a bit when assigned to me. I am definitely 1+ standard deviations to the right on food knowledge, experience, and willingness. But at the same time, I know what I don't know and don't do.

My relationship with food and my fellow man is a perfect microcosm for how I see most issues. I agree with no one. On the one hand I try to hold back a knee-jerk, mocking disdain for those to the left of me on the distribution (to abuse that analogy a bit more). The complacency (and that is the perfect methaphor) aggravates my less-charitable self. Eventually I come around to my higher principles--de gustibus non est disputandum--and I seek to accept their mockery of my choices leaving an open door to help guide them along the journey should they choose enlightenment. And yes, I am being sarcastic about my arrived status because . . .

On the other hand I have a hard time hiding my inner-eye roll at those reaching mightily for ultimate food nirvana. My knee-jerk reaction to those demonstrating their fringe and elite status is to assume it is not genuine. I keep waiting for them to rediscover the hot dog, but only concede that it is a desired food once deconstructed from a food truck or simply for the sake of irony. This extreme is its own version of complacency. Rather than make choices for themselves, we have a group looking to peers for the next best (and approved) thing.

This is me at any dinner party. I am either the most avant-garde among a group of conventional wisdom followers (whose motto might be "Choose Sliced Bread, the best thing from here on out!) or I am the most conventional (small-c conservative) among a group of would-be trend setters. Like I say, my food tastes are a microcosm. For once conversation starts I will find myself uneasily choosing how much to politely disagree and hoping the others will appreciate that true respect comes not from acquiescence but from honest/divergent/challenging discussion.

Highly Linkable

First of all, it is settled--I will be inviting Alton to my Super Bowl party next year.

But I'm not inviting Adam because he ruins everything--in this case debunking 13 things that aren't true.

Carol Anne, they're out there.

Speaking of scary things, the news isn't so calming. I find Bryan Caplan's advice to be a sound counter to the tide of common opinion. 

The most I'll allow myself to speculate is that the supposed momentum issue in today's politics of a desire to look inwardly to protect what we have and regain what we've lost will be soon enough revealed as a chimera based on delusion. As Scott Sumner says, absolute poverty dwarfs relative discomfort as a material issue. (BTW, thanks again to Scott for his time in OKC and his nice comments at the bottom of that post).

If you want evidence of how phony the President's argument is and the unlikelihood of lasting "reforms" brought by his administration, look to this illustration of just one widget's journey through a supply chain that spans all of the NAFTA countries. (hat tip: David Henderson)

Alas, fear of Trump ruination continues to grip many. I recommend more advice from Bryan Caplan--embrace limited government!

Trump's own ruination appears more likely to me. I am just surprised by how fast it seems to be developing (perhaps this is wishful thinking). In fact I fear it will all be but wishful thinking that meaningful, good reforms will come from this Republican government. Perhaps Congress will be compelled to tell The Donald "You're Fired!" in short order and a President Pence can then be the signator to healthcare reform, corporate tax reform, and perhaps even major tax reform that can be bundled with climate change (externality) reform. It is amazing how simple and achievable these solutions can be--and accessible when presented by John Cochrane.

Highly Linkable - Pure Economics Edition

We continue catching up on links with three on economics. Every one of these contains a large degree of counter-conventional wisdom. Something for which I am a sucker.

First is John Cochrane being interviewed by Russ Roberts on Economic Growth and Changing the Policy Debate. I very much like the way Cochrane's perspective and approach to this topic is hopeful, straightforward, and wise.

And I could say the same about George Selgin's strong rebuttal to the conventional wisdom that the fed has been holding down interest rates.

Mike Munger challenges the assumptions many might make about how a free-market thinker would approach an issue of business interest versus a group that technically doesn't own an interest--I say "technically" and probably should say "by being robbed".

Highly Linkable

Thank God they don't make 'em like they used to.

Watch this and be sure to watch the last "magic" point about a 52-card deck which starts at the 14:06 mark.

Tucker Max offers great advice on why he stopped (and you should stop or not start) angel investing.

This is not a top ten ranking for a university to aspire to.

Steve Landsburg brings his always valuable counter-conventional perspective to Serial: Season One. It is as hard for me to argue with his logic as it is to accept his conclusion. I believe he is right, but I also believe he has introduced an implied simplifying assumption(s) that ignores principles of justice and that may reduce or even reverse his conclusion. I think these principles could impact the model in both a practical sense (given the iterative and complex/diverse nature of the world of crime and punishment, including these principles might get us to better outcomes) and an ethical sense (it seems problematic to have low thresholds for high severity crimes). I might also quibble with his standard of proof and his philosophical position that a juror should be trying to reach a state of belief rather than my philosophical position that a juror should be trying to validate that the prosecution "undoubtedly" proved its case.

Let's look in on how the nation's first experiment with a $15 minimum wage is going--"Look Away . . . I'm Hideous!" Wonder how the guy who wants to take this model nationwide would react? And keep in mind Seattle's cost of living index is about +20% above the national average. How would this minimum wage sell in Peoria, Illinois, to name just one low-cost-of-living place?

Finally and while we're mentioning The Bern, don't miss Reason's take on Charles Koch's friendly letter to Bernie.

Highly Linkable

Let's begin with a few on immigration (I've been saving these; hence, the late dates on some):

Alex Tabarrok made the case for completely open borders in The Atlantic.

Bryan Caplan continues to fight the good fight. Here are some points he didn't have an opportunity to make at a workshop but did get to share with us, fortunately. And don't miss his speech at the Open Borders Meetup. 

Found this advice on idling cars in the cold helpful and attractively counterintuitive.

Let me take a moment to sing the praises of Comedy Central's "Drunk History". If you haven't watched it yet, start now before finishing this sentence . . . too late. I can think of three ways it is awesome:

1. It is a better way to learn history than traditional approaches because you remember and enjoy it; therefore, you stick with it longer. In that sense learning is a lot like exercise--the best method is the one you will stick with and the one that will stick with you. 
2. It tells stories that our traditional, state-driven history instruction won't tell. 
3. While it is uproariously hilarious to listen to the various drunk narrators describing history, it is also a pretty insightful take on history in a meta sense. Namely, history is vague and uncertain. We should be careful not to be too confident that we've got it figured out precisely.

Tyler Cowen's interview with Chris Asness is extremely rewarding. A few of the money quotes:

"There’s no investment process so good that there’s not a fee high enough that can’t make it bad."

"High frequency trading [which he doesn't engage in] has made the world more just and fair, particularly for small investors."

"This is not Lake Wobegon. We can’t all beat the index. It’s actually a precise mathematical identity."

On superheros: "Even the most insane billionaire cannot afford a hundredth of what frigging Tony Stark or Bruce Wayne have. It’s infuriating. ... I’ve done well. I’m not the most insane out there. But if I wanted to go build a Batcave at my house, it would take approximately 600 times my wealth, and everyone would know about it."

Speaking of rewarding, George Will always delivers as he does here on Michael Bloomberg's potential entry into the presidential election.

And lastly, Scott Sumner on economists who lack an imagination. (I agree in all four cases, and there is no contradiction between that and my other strongly held views.)

Highly linkable

I'm back from the dead . . . been watching from the hollow moon, as they say.

Detroit is beautiful and mesmerizing. Chicago is pretty damn awesome. The whole series (Little Big World) is hypnotically good.

Angus Deaton won the economics Nobel. Alex Tabarrok sums up his work nicely.

It is (past) time to recycle our thinking on recycling.

Just like so many of us want to believe recycling works, many want to believe in alternative medicine. Too bad some of those believers were in government.

Closing out a trifecta of wishing that things were not as they are, Steve Landsburg shows more folly in minimum wage policy.

And here is something way too few know or believe.

Highly Linkable

Aziz Ansari says we're lookin' for love in all the wrong places and in the process channels his inner economist.

This is an awesome new project on Hayek by Don Boudreaux. Be sure not to miss the short videos.

Life is getting better, one thread at a time . . . Project Jacquard by Google.

Alberto Mingardi argues that locavorism is anti quality and anti quantity of life.

Charles Murray wants us to fight (federal) city hall. Arnold Kling dissents insisting exit rather than voice is the answer.

"Scott Alexander" breaks down the California water problem very well and offers some good ideas for solutions.

John Cochrane takes to task Richard Thaler and behavioral economics.

"Minimum wages are great . . . except for us," says LA County union leaders.

Scott Sumner explains how people get confused about monetary policy thinking of it as credit policy. No matter how much cash Apple acquires, it cannot conduct monetary policy.

Bryan Caplan has a simple request: unlock the school library.

I find counter-conventional wisdom delicious--in this case literally so. As illustrated in this Bloomberg article, barbecue impresario Meathead Goldwyn can tell you everything you are doing wrong on the grill (for me it was several things and counting). And he applies science and logic to the process. Bon Appetit!

Highly Linkable

We begin with some short videos:

• Don Boudreaux's latest addition to MRUniversity - An Orgy of Innovation
• Alex Epstein offers in honor of Earth Day Why You Should Love Fossil Fuels

The NFL Draft was last week. Brian Burke re-examined Massey and Thaler's landmark paper "The Loser's Curse: Decision-Making & Market Efficiency in the NFL Draft" applying the new CBA. The findings are interesting in that there continues to be little to no surplus value at the top draft picks with a lot to be had in the second and third rounds. This is not what the typical football fan (or GM) wants to think. Just to illustrate, look at what the Buffalo Bills did.

The supply of land (like all resources) is not fixed in the long run (and the long run does not mean a long time from now)--so explains Don Boudreaux.

Warren Zola asks, "What IS the NCAA's mission?"

Arnold Kling has a new meme: Teaching Emergent Economics. Don't miss the first one on trade as a technology.

Sumner argues that investing is not like guessing the winner of a beauty pageant as suggested famously by Keynes.

I love this technique, The Mellow Heuristic, Bryan Caplan argues using for adjudicating intellectual disputes when directly relevant information is scarce. I discovered it for myself and have used it since late childhood. 

Never shy of asking the tough questions, Robin Hanson asks us to rank the sacred.

Would you/should you/could you pay for a dinner reservation--so asks Tim-I-am Harford.

Finally, some counter-conventional wisdom (AKA, stuff people are getting wrong):

• Alex Tabarrok exposes what business journalists and some economists don't understand about efficiency wages--their idea that paying workers more works magic.
• Terry Burnham empirically challenges the idea born of Kahneman’s Thinking, Fast and Slow and echoed by Gladwell's David and Goliath that simply making problems harder to read improves test taker results.
• Ken Popehat White breaks down what an emblematic McClatchy column on free speech gets wrong.
• Alex Tabarrok appears again to show how Jon Stewart is wrong on many levels about education in Baltimore.
• Scott Sumner says basically NOBODY understands the concept of "currency manipulation".

Warriors And Hero-Labeling

Sheldon Richman makes a compelling case that The American Sniper was no hero. 

Some questions regarding war, warriors, the military, and support for it all:

• At what point does a soldier become a hero? 
• Are any soldiers (of one's own military) not heros? 
• Can you be a hero if you're on the "wrong" side (a hero in the eyes of the enemy while remaining an enemy)?
• Are all heros equally heroic?
• Are all villains equally evil?
• At what point is a war unjust?
• Can a originally just war become unjust?
• If so, how does this change the status of those fighting in it (on both sides) and their supporters?
• At what point do participants in an unjust war or those using unjust tactics or those engaging in unjust operations bear responsibility for their actions?
• Are any or all acts unjust if done in support of evil and just if done in support of good?
• Are any or all acts unjust if done in support of the enemy and just if done in support of one's own side?
• At what point is a soldier responsible for the moral/ethical intentions or de facto results of the soldier's own actions or the actions of the soldier's own  side?
• Same question but replace "soldier" with "citizen" and then also "government official".
• Is it ever justified or morally required that a soldier actively switch sides in a conflict? 
• Again, same question but replace "soldier" with "citizen" and then also "government official".
• Can a soldier be held morally culpable for failing to abstain from fighting or for failing to switch sides?
• If so, under what conditions?
• Yet again, same questions but replace "soldier" with "citizen" and then also "government official".

Highly Linkable - economics, et al. edition

The eagle has landed--at Jardins du Trocadéro?

We want to believe, Charles Murray included, that we can raise our children's IQ, but the case against it keeps growing.

BI has 9 more math facts people have a hard time accepting.

Speaking of mathematics, Steven Landsburg has two wonderful passages on the recent passing of math colossus Alexander Grothendieck (read here then here).

Speaking of passings, economics giant Gordon Tullock died earlier this month. Tyler Cowen had a nice, short tribute. Perhaps more than anyone, Tullock taught us that the correct comparison to market failure is government failure.

Leaving the somber topics, here is some good news. Be sure to check out the "Browse Data" tab at the top.

In more good news, the health/wealth benefits of self-driving cars have enormous promise. Not to be a Debbie Downer, but here is a predicted summary headline of the near future (the second sentence is the scary one) :

Family of four dies in fiery crash as self driving car refused to recognize and decelerate as it quickly approached a crowded intersection. Regulators question technology that saves over 30,000 lives per year. 

Continuing on a theme of counter-intuitive thinking (from one of my favorite counter-intuitive thinkers), the workers of Amazon (commendably) want foremen who push them hard.

I agree with Noah Smith that we need to rethink how economics is taught to MBAs (and so many others).

We could start with this simple, true, and so often misunderstood economic lesson from Scott Sumner.

This one on antidepressants is long, but interesting and thought provoking. (HT: Bryan Caplan)