Monday, February 25, 2013

Highly linkable

Been too busy to blog, but I've had some thoughts for upcoming posts--I haven't forgotten about you, dear readers. Here are some links to tide you over:

Let's start out with a controversial one. Reason has a great piece on The War on Sex Workers. A quote:
If we are going to call attacks on reproductive and sexual rights a “war on women,” then let’s talk about a war on women that has actual prisoners and a body count. It’s a war on the women engaged in sex work, waged by women who will not hesitate to use their opponents’ corpses as political props but refuse to listen to them while they are still alive and still here to fight. 
Megan McArdle discusses the trend toward elitism, college-bias, test-taker/certification-bias, et al. (Hat tip: Arnold Kling.)

Ronald Bailey at Reason lists and details the top 5 biotech crop lies.

There continue to be great posts fighting the good fight on the minimum wage nonsense. I'm impressed by how varied are the approaches taken in these generally short posts. This might be the best of this bunch. But see this and this and this. They keep going and going and going. And yes, I'm a sucker for posts slaying fire-less dragons.

Joel Best at Cato Unbound captures a good example of how magnitude matters.

Two more from Scott Sumner: one on how we lie in undergrad econ and one on how reports of the death of the Chinese economy have again been greatly exaggerated.

The thermostat in Hell must have just edged under 32F because the NYTimes is making sense on health care.

On the lighter side, check out this fake Guy Fieri menu (Hat tip: Jason Kottke).

Sunday, February 17, 2013

Highly linkable

Roger Pilon offers a strong critique of the most recent State of the Union address.

This interview with Steven Landsburg shows how not all economics is dismal.

I've refrained from writing directly on Obama's call for a $9.00/hour minimum wage because I've felt it was a political ploy hoping to bring distraction, and I didn't want to fall for his banana-in-the-tailpipe trick. But thinking more about it, there are two reasons it should be discussed: One, it is a bad idea founded on horrifically bad economic theory, and we must fight the good fight until this kind of nonsense no longer is a political option. Two, I believe his political strategy is to bring up an emotional issue in which the common man feels aligned with Obama at first blush. Through this demagoguery, he strengthens his public-opinion standing heading into the debt ceiling/sequestration debate. Rather than avoid this battle, I think the better position is to engage so as to Obama on the defensive. Therefore, I offer Mark Perry and Bob Murphy.

Updated: On the lighter side, I wanted to include two pics that among many caught my eye browsing Minteriors. Enjoy.

Saturday, February 16, 2013

Obama's confusion about "wise" investment

In his latest State of the Union address, President Obama referred to investing, investors, or investment 13 times. Here are a few of those references:
So let's set party interests aside, and work to pass a budget that replaces reckless cuts with smart savings and wise investments in our future.
It's not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth.
If we want to make the best products, we also have to invest in the best ideas.
Unfortunately, making wise investments isn't as easy as asking Mr. Obama how many licks it takes to get to the cash-flow center of a public equity fund. The track record of government investment is abysmally poor. And we shouldn't expect it not to be. The government lacks the vital characteristics necessary for successful investment decision making. Most importantly the necessary incentives are not only absent; they are in reverse. Government does not have a profit motive properly aligned with success (consider this the front-end of good investment incentives)--that is not to say that individuals and groups within government lack a profit motive. Government also does not have the correct feedback system whereby success is rewarded and failure is punished. Consider this the back-end of good incentives, and this is the reversed incentive part. Government tends to reward failure at the expense of success.

Another vital component largely and effectively absent from government is talented investors. Rather than attracting and nurturing creative, entrepreneurial innovators and risk takers, government tends to attract and nurture assembly-line bureaucrats and rent seekers.

Government is the wrong process for "wise" investment. Obama doesn't seem to understand this. His administration's malinvestments into solar, et al. are clear evidence of this. Aside from the fraud, there is a key problem with these types of investment. For the investment to be wise, it isn't sufficient to know what the actual technology of the future will be. As very difficult as that part of the task is, an equally challenging feature is getting the timing right.

Being too early to invest in even the right technology can still destroy resources; i.e., not be a wise investment. Imagine travelling in time to 1980 to invest in teaching HTML coding, manufacturing Boeing 787s or Airbus 380s, or building contemporary Whole Foods grocery stores in mid-western cities.

A famous investor adage is, "In the end I was right, I my timing was just too early." Another is that, "The market can stay irrational longer than you can remain solvent." We seem to be testing those two adages via government "investment" at an alarming rate.

Wednesday, February 13, 2013

What do you mean a multi-billion $ gov't program has problems?!?

How could this be? Back in the 80s a government program was hatched with the explicit goal of ensuring the poor had access to telephones and the implicit if originally unintended goal of making some firms profits while politicians felt good about themselves. Somehow it went awry. Well, the implicit purpose got out of hand enough that the program has crossed over into waste, fraud, and abuse land.

I asked how can this be? Exhibit 1 (the Baptists):
The Lifeline program—begun in 1984 to ensure that poor people aren't cut off from jobs, families and emergency services—is funded by charges that appear on the monthly bills of every landline and wireless-phone customer. 
Exhibit 2 (the Bootleggers):
The program, which is administered by the nonprofit Universal Service Administrative Co., has grown rapidly as wireless carriers persuaded regulators to let people use the program for cellphone service. It pays carriers $9.25 a customer per month toward free or discounted wireless service.
That's how.

I have personally seen this program in action from both sides: Poor consumers on a street corner under a tent signing up for a phone, and a newly rich entrepreneur rent seeker whose company signs up said consumers and then passes them on to a carrier or administers the telephone plan himself. And still somehow the program's illusory value carried it passed the media's suspicion for some time. I really don't know what it takes to sufficiently raise media suspicion--that would be valuable information.

This problem has more than just some good lessons in incentives including the classic B&B example. I think it also tells us something about how we think based on our reaction to the story (i.e., who we blame and who we pity).

If asked to list out the victims and culprits, who would go in which category? To me the victims are the people taxed to pay for this program and the poor consumers who the program intended to help--more on this second group shortly. The culprits are government officials who created the program especially those who helped craft its evolution to the current mess and the private firms who participated in the fraud--this extends to lobbying to expand/continue the program and encouraging or failing to properly discourage fraud.

Notice how I don't include the poor consumers in the culprit category. Not broadly at least. While certainly there were many who knowingly abused the system, I find it hard to put much blame on people in very difficult situations responding to incentives. In fact, programs like this can be a victimizing force in the lives of those it is designed to help. There are consequences to welfare programs, poorly designed or otherwise, and those consequences can include dependency. People in tough situations do not have the luxury of always taking the ethical high road. Just evaluating what is the ethical high road may be out of their reach.

Monday, February 11, 2013

Highly linkable

Robin Wiblin presents a strong challenge to the idea that most of us are moral realists.

Scott Sumner explains a bit about the multiverse and quantum mechanics using an economics framework.

Steve Landsburg picks up on a little deception by P-Kroog.

John Papola, the great rapper, offered a critique on the state of economics, which I generally agree with, and  Arnold Kling gives some additional thoughts.

Sunday, February 10, 2013

Justifying torture

A recent discussion at work regarding the movie "Zero Dark Thirty" (I have yet to see it) brought up the subject of torture. Specifically, the discussion centered on if it is justifiable and if so, under what circumstances. Having thought about this a bit before, I was able to offer my view on it. Basically, I believe it boils down to a four-pronged test:

  1. Immediacy of Need/Imminence of Threat
  2. Certainty of Material Knowledge held by the tortured
  3. Certainty of Success in Averting Threat with Material Knowledge
  4. Exclusivity of Foreseeable Alternatives
The only conceivable circumstances under which torture could be justifiably used are basically analogous to a peace officer shooting a threatening hostage taker when it is highly likely that the hostage taker is immediately about to commit a grievous wrong and when there are no reasonably foreseeable alternatives to prevent the grievous wrong from being committed. Thus, it does not seem realistic that all or even two of the criteria could be met.

It is amazing to me just how simplistic, naive, and morally shallow some perhaps many can be on this issue. Yes, this is the natural and generally rational position for us to take in most circumstances, but that defense is weakened on this issue because of its general importance combined with its relative straightforwardness--emotional baggage usually used to rationalize torture aside. Unfortunately this is not too surprising given that we live in a world where the President of the United States can unilaterally order "targeted killings" of both foreign nationals and Americans he deems an imminent threat. It seems to get to a convenient theory of justice we have started with ethics and taken away reason and accountability.

In a relative-ranking sense America should strive to have the highest human rights standards in the world, and the absolute level of those standards should be quite high in its own right.

Monday, February 4, 2013

I want to go to there.

This past week the sitcom "30 Rock" aired its final episode. I believe I saw every one. I'd rank it on my favorite list in the top 50 but not the top 10. I was a fan. Some thoughts:

  • Though I'm sorry to see it go, it had run its course. It is good to see a show end in stride rather than jump the shark. And of course some jump the shark, get up, and jump the shark again. Another show still on the air that comes to mind is "How I Met Your Mother". HIMYM is dangerously close to getting on a surfboard. It is also a show in my top 50 if not in my top 10. It definitely has had top 10 moments as did "30 Rock". Put in that same category "The Office". I still like it and watch it, but I believe the shark may have been jumped some time around the departure of Michael Scott.
  • While most of the shows I like tend to have multiple very good characters that nearly stand on their own, I felt like this show was dominated by two: Liz Lemon played by Tina Fey and Jack Donaghy played by Alec Baldwin. These characters were brilliant. Their lines were consistently laugh-out-loud funny and clever and their delivery was tremendous--not surprising given the quality of those actors. Tracy Morgan's character Tracy Jordan, Jane Krakowski's character Jenna Maroney, and Jack McBrayer's character Kenneth Parcell were at a few times awesome but at most times only good. Probably the design of the show to have them and so many others as extreme caricatures limited their reach. 
  • The extreme caricatures was fine for most characters, but I found it problematic in one respect. I thought that Jack Donaghy versus Liz Lemon was a bit of unequal caricatures. Jack was generally all knowing and a step ahead, but he was portrayed in a way that was less charitable to his supposed political group, rich Republicans, than Liz's supposed political group, progressive Democrats. Of course, Alec Baldwin and Tina Fey are both rich Democrats. Perhaps the unbalanced approach was intentional. If so, I think it was unwarranted. But my hypothesis is this treatment where a more disdainful side comes out in one character is what I would expect if I asked a person not well versed in opposing viewpoints to create a satirical portrayal of two politically opposed characters. For a more thoughtful approach, I point to "Parks and Recreation" where the libertarian Ron Swanson is equally shown against the progressive Leslie Knope. These characters are truer to their represented group and the comedy and satirical exaggeration does not show contempt for either's group.
  • I was always impressed by how far they could go on the show toward satirizing if not denigrating GE and NBC. This was to the parent company and the network's extreme credit to allow such self-deprecating comedy. I believe FOX gets credit for breaking this barrier back in the early days of "The Simpsons".
Expect more on this topic of TV shows. It seems that many of my shows are ending and several are getting up there in age, but I have started very few in the past few seasons and none in the current season going back to the fall. Perhaps I will find more time to read . . . and blog.