Wednesday, December 31, 2008

Financial Reporting and the "$62 trillion" securitization market

I do have to say that economic reporting on the financial crisis has been amazingly good. Sure I've had my gripes but venues (especially This American Life's Planet Money) have done on the whole pretty well.

One failure though is the failure to note the winners along the way. The millions of people who were able to purchase a home who otherwise wouldn't have.

The other failure is just accounting, making the $62 trillion notional value of the credit default swap market sound like a big deal. It is a meaningless number.

Two reasons in particular.

1) Many of the trades are double, triple, etc. counted. It's like if I sold a pen to R- for $1, who sold it back to me for a $1, and then we repeated this 1 trillion times. That would create $1 trillion of notional value, but no real value. The swap market is counted this way.

2) The trillion is the notional value, but it is not representative of how much money is changing hands. You can think of these as insurance contracts. Taking out $1 million in life insurance doesn't mean $1 million is changing hands, far less. Just the premium. The insurance company is not taking up a $1 million obligation.

Tuesday, December 30, 2008

Two Tiered Teacher Contract

An interesting "innovation," separate high ability teachers from low ability teachers by offering a choice of two contracts, one with low powered incentives that low ability folk take, and one with high powered incentives that high ability teachers will select into. Something you learn in day 1 of a (econ) contract theory class (contract theory means very different things in poli sci and different again in law). And then you spend the rest of the semester learning far more complicated contracts. So it amusing that actually using that day 1 invention is considered novel enough to be an idea of the year.

Amusing, but not surprising.

Sunday, December 28, 2008

Tv in 2008 Sucked

After what many were calling the best season for tv ever, we now seem to have the worst. I thought maybe it was just the shows I watch but others and magazines seem to confirm heroes has gotten off track, house has gotten tired, grey's anatomy has gotten eh, entourage as well.

New shows also. the first episode of hbo's much new touted perfect for my demographic, Trublood was awful. the new shows (half with the premise about talking to dead people) haven't really been interesting. i tried watching fringe, but it was eh. mentalist was ok, but again, just a new take on Numbers which is just a minor variation from the standard police/detective drama. all of the new stolen from UK shows seem to have flopped.

Of course, it could just be the end of the season. bsg and lost have not made an appearance.

Or it could be the aftermath of the writer's strike. or just a simple reversion to mean after a great year. or the economy?

Saturday, December 27, 2008

Ny Times Food Article from May 16, 1909

Found this ancient nytimes article randomly googling. Fascinating stuff. The writer (Laura Smith) writes to explain to ny times readers what a Menu is. Apparently the concept of menu was freaking people out, as something french and newfangled. Whereas previously, I guess patrons had no choice in what food they got. She also was defending the adoption of french food in US restaurants and hotels, which many Americans apparently were taking offense at. To think of a time when French was new-fangled. Yet, the author is still impressively cosmopolitan. She is familiar with Chinese and Japanese food. And expects the reader to know what curry is.

She also makes the interesting/good point that we find it natural to use italian for music terms (We still do today) why not french for food terms.

Even the title is interesting: "Why the French Menu Has Become So Universally Popular; American Woman Tells Why They Should Continue in Favor. Easy to Understand Even If One Does Not Know French."

I remember reading the Jan 1, 2000 nytimes, which reprinted the front page from Jan 1, 1900. Which had a front page story about a poor manhattan women who got lost across the brooklyn bridge and spent an afternoon lost in brooklyn before a nice policeman helped her find her way home.

Tuesday, December 23, 2008

A visit to the Museum of Modern Art: van Gogh and Miro

So I've been in New York City every week for the past 6 months or so, but haven't been to MOMA once. I guess once it is so accessible, the urgency of seeing all the sites goes away. But I had to get my car fixed, so I had a couple hours to kill in midtown, so I wandered over to see the new Van Gogh show and Miro show. It's nice, I've missed it.

It was also neat that they now have free Wifi access to their audio guide, coupling pictures to the recordings, that integrates perfectly with the iPhone. A neat tech-y addition.

Shows are nice, because they provide a nice narrative. My art history prof in Paris did his dissertation on how museums put together exhibits, and especially for shows, they really do a nice job. The Van Gogh was about the genesis of Starry Night. Interesting to see all the other styles that Van Gogh played with before developing the style (weird perspective and insane brush stroke) that museums have decided define Van Gogh. Nice to see his older work which is more traditional like Lorraine, or more standard impressionist like Monet, or more Urban like Renoir or Cassatt or graphic like Toulouse Lautrec, or the Matisse cutouts or the Nabis. And nice to see such a diverse range of styles over just a couple years. Also nice to come back to older paintings, after having been focused on more modern art. Was especially neat to see his letters, where he describes his thoughts behind the paintings. And his quest to capture starlight on canvas.

The Miro show was nice too. I've long used Miro as my answer to favorite artist, though I've mostly known his work purely only for its aesthetics and childlike whimsy. It was nice to see his work put into an (art) historical context, on his 10 year quest to destroy painting. In some ways you can dismiss Miro for just being derivative of 70's style Hallucinogenic psychedelic whimsy (like Yellow Submarine) except he predated by half a century, and it is a testament to his craft (as noted in the audio guide) that he gets such clean geometric lines and colors using the traditional oil medium, to properly capture otherworldliness. A highlight was his collection of paintings that derived from collages. He made collages from catalog diagrams (much like DuChamp) but it was neat to see how those collages inspired the weird organically abstract magical forms for which he is famous.

Friday, December 19, 2008

I programmed today and it was glorious: Musings on a road not taken

I had some data work on my medical malpractice project that needed to be done today. I probably should have delegated the work. The guy from our statistics office even offered to do this. But I have learned that delegation often takes more work than doing it yourself, due to transaction costs (moral hazard, sticky information, delays). It was about 2 hours of repetitive manual data manipulation and I decided to write a perl program to do it myself: it was glorious.

I haven’t written any code in years. I had forgotten how satisfying it was. It made me consider the road not traveled. I could have been a programmer. I really love it. And I used to be damn good. Which sounds awful to say, but there’s that 10,000 hour theory, that it takes 10,000 hours to get really good at something. And my mom started me programming when I was 5. So sure, it was mostly print statements and for loops and copying programs out of the back of Boy’s Life magazine for years, but by 9th grade I was taking college level classes, and by college, I was getting commendations and breezing through graduate classes almost as an afterthought. I had gotten three calls from google over the years for interviews each of which I turned down.

In the end, writing the program took two and a half hours, but I have no regrets. It was far more fun than repetitive data manipulation and I am left with more capital that can be used in the future (a working computer program and programming human capital). And even if I had gone the programmer route, it probably wouldn’t have lasted. It seems like most programmers spend much of their career resisting the pull into management, a battle that inevitably they lose. So no regrets. But just fun to ponder.

(I also wonder if I would start my kids on programming at age 5. In some ways, the ability almost seems antiquated like buggy whip making. Though so is geometry and we still teach that.)

Tuesday, December 16, 2008

Heroes (somewhat) Redeemed

So Heroes, as part of the tepid Fall 08 tv season just ended its 3rd volume on an up note. Still not great, but reasonably rounded up the theme of volume 3, that there is a very fine line between good and evil, much better explored in Batman: the Dark Knight, and Frank Miller's original Batman Dark Knight Returns. Volume 4 looks to be a tepid rehash of the perennial X-men plot line of mutant registration == japanese internment / holocaust.

One upside is Ando's power is pretty cool. A meta-power. Aside from Sylar (which I've already said has a pretty genius power and perfect for the villain), Ando's is the only other power where I can't immediately name an X-men counterpart. It fits his personality, and augments in fundamental ways the power of others, like the crystals in Final Fantasy, but gives the writers a whole new set of powers to explore without needing to introduce new characters. Nifty.

(wow, I just passed my 200th post on blogger. though there were probably 50-100 more before I started using blogger and here, plus all the photoblog stuff)

Monday, December 15, 2008

High School Drama on 20/20: A This American Life Knock Off

Watching 20/20’s Drama High: the making of a high school musical on ABC, which is the behind the scenes story of real high school musical. It is a blatant knock off of an early This American Life show, and not as good, but still such a great idea that I’m watching it anyway.

Reminded me though that that was the show that got me hooked not just on This American Life, but also on NPR. I hadn’t heard of either at the time (this was sometime in college), and my knowledge of talk radio was limited to bloviating talk show hosts like Rush or Imus. When I first accidentally flipped to the channel, the story telling style was totally foreign, but the honest portrayals of the little unheralded life stories that make life wonderful, the hallmark of This American Life has kept me hooked to this day.

(wow, that was from the first season of the show, which was I guess my freshman year back in 1996.)

Friday, December 12, 2008

Celebrity Sighting: Noxema Girl

From Celebrity Sightings
A spate of celebrity sightings these past couple days. Happened upon celebrity chefs Ina Garten (Barefoot Contessa) and Marcus Samuellson (of Aquavit) yesterday, we happened to visit crate and barrel and zabar's where each was doing a book signing.

At lunch at Sarabeth's (reputedly best brunch in New York, though I'm not so sure) I overheard the conversation at the table next to mine, where someone was talking about how she got the giggles on stage recently, so I looked over, and saw "noxema girl" (aka Rebecca Gayheart)

Noxema has had many spokes-people over the years, but only one "noxema girl." She dropped off celebrity radar shortly afterwards, with a brief stint on my radar in the very shortlived sci-fi show Earth 2. She starred in a lot of noxema commercials in the early 90's, and everyone I knew just called her "noxema girl" years before I ever saw it in print. And that was back in the day when hardly anyone used the Internet (kind of hard to imagine today) so pretty neat how the meme of her nickname spread somehow.

I always wondered about meme spreading in the pre-Internet age. Like childhood games like Wall-ball and all the variants of tennis ball and wall that kids played during unsupervised time, the same way in the many elementary schools I went to. Or "circle circle dot dot, now I got a cootie shot" which also someone seemed universally known.

This, I was pondering after surreptitiously taking a photo, while pretending to check e-mail on my phone. Afterwards I turned back to my New York Times magazine, where a few pages later I found this quote in a Jennifer Aniston interview:

Q: How much do you hate cameras on phones?

A: My favorite move is when people pretend that they’re on the phone and they kind of dial and take the picture at the same time. You hope they’re doing it for themselves — that they’re not thinking, I’m going to dine out on you.

Wednesday, December 10, 2008 The Brightest Are Not Always the Best

An interesting and somewhat potentially ironic column by Frank Rich, on the rise of the technocratic meritocracy in Obama's economic team. Rich warns that Obama's choice of the technocratic elite may not be the best for the country, as the elite may be out of touch with the concerns of everyday folk.

The contrarian in me has long made that argument in defense of Republican politicians, including Bush amongst others. The latest and perhaps most extreme example being Sarah Palin whereas everyone around me (even the McCain supporers) seemed to hate her, despite the fact that nearly half of americans thinks she's great.

It is ironic that Rich, who undoubtedly hates Palin, now raises the same argument to attack Obama's economic team.

It may be odd for me to be suspicious of the meritocracy, when I am a product of that system, and a highly ranked player in that game. But the skeptic in me has to ask whether it is the best way to run a country.

Saturday, December 06, 2008

Starbucks Redeemed

I was always of the opinion that Starbucks was a last option. Another chain, I associated with McDonalds, that was on my avoid list. That was precisely the attitude that Starbucks in the past year has set out to change in their much advertised new corporate strategy. And at least for me, it has worked. I have been forced back into Starbucks for a few reasons. 1) Amazingly, the most comfy coffee shop in Ithaca is a Starbucks. By comfy I mean clean, bright, open, with comfy chairs. Believe me, I refused to believe that a college town like Ithaca wouldn't have a better one, but having tried many, I finally conceded Starbucks the victory. Gimme! still has much better coffee, but Starbucks was still nicer. 2) That from the front door of our apartment in the Upper West Side, you can see at least three Starbucks, but basically no other coffee shops exist. I searched long and hard, and didn't really find any. So I gave in. 3) The free wifi with purchase is a nice touch.

And having gone there, I am generally impressed. Service is nice, one day they offered a free coffee tasting of different beans, and the guy was very knowledgeable. Other times, free samples are nice. Their new House blend is actually quite good, both regular and decaf. Though their espresso is still dull. I started thinking about this in a quite nice Starbucks in Buffalo, where I got a free coffee for filling out a survey, which asked how they were doing. And I had to say, they were doing quite well.

(my one complaint is that a couple of the Starbucks in my neighborhood in New York smell unpleasant from time to time, though the smell I discovered is always correlated with the arrival of a couple of their unwashed regular patrons, which I guess you can't help in New York City)

Thursday, December 04, 2008

Obama's Economic Miracle

I made this call on my facebook page on election day, but figured I'd elaborate on it here. Obama will get credit for both the inevitable economic recovery and the end of the Iraq war (both of which would have happened regardless of who is President), which should likely guarantee a second term.

It is annoying that president's get credit for just standard movements along a business cycle that are out of their control. Reagan won re-election because of it, Carter lost for largely the same reason.

More broadly, Obama like Clinton will benefit from a large peace dividend. Clinton likes to claim credit for balancing the federal budget, but more credit should go to an intransigent Newt Gingrich led Congress, balanced budget laws passed under his predecessor, and military spending (as % or GDP) that had halved in the past 10 years.

Tuesday, December 02, 2008

Greg Mankiw's Blog: The Sociology of Economics

Greg Mankiw's Blog: The Sociology of Economics

This is an awesome post. Basically, it was a letter by a medical resident at Harvard noting that at interdisciplinary conferences economists are

0) Always has something to say regardless of discipline of talk, present better papers, and are less likely to be caught off guard by questions.

1) The most aggressive. (Probably responsible for part 0)

2) The most willing to engage with statisticians.

3) Will readily attack other disciplines on questions of causality and selection bias.

4) Economists are smarter

5) Economists have more rigorous training

6) Economist believe more in science than advocacy. They are less likely to base opinion on preconceived priors.

7) The economics job market is more efficient.

I think this is stuff that every economist secretly believes but has enough humility not to say it aloud. At least I've certainly noticed it, but maybe that's because I hang out in other disciplines too much.

I think people outside economics don't appreciate that basically half of an econ phd is essentially Stats, whereas in other disciplines, from Sociology to Medicine, you tend to take one maybe two classes on stats and that's it. And usually the stats they take is helpful for experimental designs, but useless and in fact misleading for cases where you don't have experiments.

Though I wouldn't say economists are "smarter," but better at math, certainly. But as Mankiw admits, perhaps worse at social skills and other dimensions.

As my advisor liked to say, economists are better at answering questions, but that's cause they massively limit the scope of the questions they ask. (i.e. they only look for their keys by the lamp post)

And I agree very much of the fact that economists are not advocates. It is much easier for one economist to convince another to agree with you, or to conclude that "it remains an empirical question" whereas in other disciplines, people spend their careers making ad hominem attacks on opponents to make their point. Within the White House, the CEA was known as the most conservative group, because all the economists advocated essentially consensus economic opinion, even though nearly everyone at CEA was a Democrat.

Saturday, November 29, 2008

One Degree of Kevin Bacon (and Gossip Girl folk)

one degree of kevin baconI wandered into a Verizon store to check out the touch screen Blackberry, intrigued by the fact that the screen clicks, but the interface was totally befuddling, even to a former computer guy/blackberry devotee like myself, agreeing with Pogue that this was an epic fail in interface design on RIM's part. The upside of this jaunt was that as I was fiddling, the girl next to me who was equally befuddled by the phone, whispered "hey, do you know who Kevin Bacon is?" Having no idea where this going, I just said yes. "he's right over here. gossip girl photo shootSure enough there he was in baseball cap and sunglasses, huddled with phone, trying to look inconspicuous. I surreptitiously snapped a photo, feeling somewhat guilty, but I openly admit to the standard weakness that celebriy inspires.

See also, my Bobby Flay run in, as well as the random sighting of Penn Badgley and Blake Lively of Gossip Girl fame, getting photographed in Central Park.

Tuesday, November 25, 2008

Another transcendent iPhone moment: a new musical instrument

The iPhone still annoys me, it crashes all the time, and the long litany of annoyances goes on, but it still more than makes up for it with transcendent experiences. One recent one was the latest app, Smule's Ocarina, the top selling app for $0.99.

I remember the summer I spent in Paris, six weeks of glorious travel, but there was a dull emptiness, that I came to appreciate when I walked into a music store, on one of my random excursions perambulating about (flanning) Paris (or perhaps it was Reims), where I picked up a tin whistle, and realized I missed music. I had still been playing clarinet/saxophone regularly back then (something I managed to continue up until mid grad school) but had left it behind on my trip, and realized I missed it. Thereafter, I would pick up flutes (tranverse and otherwise)/recorders and other instruments whenever I traveled. That has something I've mostly left behind but now with my iPhone, I will never be without one.

The Ocarina is an ancient primitive medieval flute, that they have recreated faithfully on the iPhone a real musical instrument, not a game like guitar hero, but an instrument that replicates a classic medieval arcane fingering scheme that you play by blowing into the microphone. Like a real instrument, it responds to subtle shifts in breath and tonguing, and changes timber based on how phone is positioned.

The really magical part of it though is the interactive part of it. It uses the gps to get your location and then broadcasts whatever you are playing around the world. You can switch to a 3-d model of the world, and from points on the globe, you can see streams of music flying into into space which you can zoom into and hear, real people around the world playing their ocarina, magically broadcasting. Some are fumbling like myself, but some are playing recognizable tunes, and I'm sure with time, you will find virtuosic performances, broadcast into the ether, like Link's ocarina of time.

Sunday, November 23, 2008

Clinton Foreign Policy = Bush Foreign Policy = Obama Foreign Policy

I have long argued here (and here) that Bush Foreign Policy is not that different from Clinton Foreign Policy. Here is someone else who agrees. I hate Ithaca's NPR station, mostly because they play the most left show (on an already liberal station) I've ever heard on NPR, Democracy Now, which I often wake up to many mornings as my clock radio goes off. It is useful for the different point of view.

In a recent episode, the author is arguing that Bush merely continued the policies of the Clinton administration (extraordinary rendition, unilateral nation building) and it appears that esp with a Clinton under Obama, those policies are likely to continue. Argument again that it is the situation and environment that matters more than president him/herself.

Friday, November 21, 2008

Connoisseurship: Wine, Cheese, Fish, but not Coffee and Beer

Just randomly noted recently that after many years, I have gotten to the point where I can actually start telling different wines apart. What they don't tell you when you start getting into wine is that really, without practice, most wine tastes pretty much the same. A random dinner table factoid I was told was that in a taste test, people couldn't tell the difference between red wine and room temperature white wine. After many years of diligent experimentation, with the help of the habit of earnestly trying to describe each wine, as encouraged by R-, I feel I'm starting to get there. Where, can replicate the tasting notes, a non-random amount of the time, can guess the grape, a statistically significant amount of the time, and can even have a guess as to what country the wine is from, or at least what continent. Of course, not really enough to justify the vast variety on the market, but getting there.

Thinking about it, I've come along way with Cheese and Fish too. Cheese, used to be cheese. It was either flat squares of processed American, or it was random unidentified cubes, or goat or blue. So now, starting to learn obvious ones, cheddar, and gouda, and monterray jack. Still lots to learn, but making progress.

Fish, even more so. Not too long ago, fish used to be either Salmon or not-Salmon. Now actually, I have a pretty good sense of most of the fish in the fish counter. I guess it comes from enough experimentation and experience.

Though I must say that on at least two fronts, Beer and Coffee, I haven't made much progress at all. Working on both, but still by and large, they all taste the same to me.

(Addendum, steak is something else I've started to figure out, with fillet vs porterhouse vs rib-eye vs flank vs chuch vs short rib having meaning for me)

Wednesday, November 19, 2008

The Economics of Ethanol

A friend of mine asked me to write a guest post for his blog. Here is it reproduced here.

Ethanol is an immensely complicated issue that requires a detailed institutional background to fully appreciate, and those with a little bit of knowledge often jump to wildly wrong conclusions.

On the Benefits of Ethanol

The environmental benefit of ethanol has been hotly disputed over the years. Various studies have found various things over the years as is typical in science (a recent study finds that 1/3 of the most cited publications in a top medical journal are refuted in just a few years). A meta-analysis of all of these papers shows a clear time trend. Newer studies show greater benefits. The reason for this is simple. While the environmental benefits from corn-based ethanol are arguably small today, they will only grow in the future. Corn yields have been increasing steadily for decades, and there is every reason to expect that to continue. Thus we should get more ethanol per environmental cost each year. Furthermore, new enzymes are being developed again to get more ethanol from the same amount of corn, thereby further increasing the amount of ethanol per given input.

All of this also does not account for the possibility of more dramatic technological shifts that subsides make possible. Current car engines are tuned for gasoline from oil. However, engine tuned for gasoline from ethanol could lead to 25-30% increases in engine efficiency. Furthermore, the infrastructure being developed is helping to pave the way for new biofuels, like biodiesel and cellulosic ethanol that have substantial and already demonstrated environmental benefits.

Finally, environmental analyses ignore the other benefit of ethanol, which is a diversification away from oil consumption. Much of the problem s in the oil markets comes from the monopoly power of the oil industry given the lack of substitutes for oil. By helping develop a viable substitute, there are immense gains beyond just the environment, for example, dampening the geopolitical power of OPEC, and alleviating the resource curse in the Middle East.

On the Ethanol Subsidy.

Many people wrongly assume that the government specifically subsidizes only corn based ethanol. In fact, regular ethanol gets a 51 cent per gallon subsidy, biodiesel gets around 80 cents, cellulosic ethanol gets over $1. Other fuels get subsidized in their own way. And in fact a system of mandates and other tax credits makes total subsides substantially higher and substantially more complicated.

This is not an ideal system. A carbon tax would be much simpler that would replace this myriad of complicated and overlapping policies. But we do not live in an ideal world. So on the simple question of whether we should repeal the ethanol subsidy, we go back to the tools of cost benefit analysis (something I used to teach back at Stanford).

What are the costs of a subsidy? The subsidy is effectively just a transfer from one American to another, so the cost is only the cost associated form the distortions to the economy from raising that 51 cents. A large literature estimates the cost of raising 51 cents to be around one quarter of that, or around 12.5 cents. Is that worth it?

It is first worth noting that mathematically, a subsidy on a good works exactly the same way as a tax on a bad. So if you believe we should increase gasoline taxes by 51 cents, then you should support a 51 subsidy for ethanol.

The benefits of an extra gallon of ethanol are hard to quantify, but if you add it up (the small environmental benefit, the impact of geopolitics, the fostering of technological innovation, the support of an agricultural lifestyle) it is actually fairly easy to find benefits far outweighing 12.5 cents.

Again, subsides for ethanol is messy ugly kludgy policy. But absent a comprehensive gasoline/carbon tax, repealing the subsidy could be even worse.

On the Ethanol Tariff

Many people (including free-market economists) decry the 54 cent tariff on imported ethanol, without really understanding the institutional background for the tariff. First of all, most imported ethanol falls under various free trade agreements that makes them exempt from the tariff. Second of all, while it is true that we place a tariff on Brazilian ethanol, Brazilian ethanol also enjoys the 51 cent subsidy, hence leaving Brazilian ethanol producers no better or worse off than in a free market environment. The main purpose of the tariff is just to make sure only American ethanol producers get the subsidy.

Whether this is fair from a global justice perspective is debatable but from a standard economic cost-benefit analysis, it is eminently reasonable. Recall that a transfer between two Americans is not considered an economic cost from the point of view of America since it has no net effect on American social welfare (only the dead weight loss of raising the taxes is considered a cost). However, a transfer from American tax payers to a Brazilian producer is considered a cost.

On Ethanol and Food Prices:

It is incredibly difficult to estimate the impact of biofuels on food prices. This is why most respectable economists decline to give exact numbers. I was asked to do such an analysis for the White House in 2007, and found that drought and crop failure combined with rising energy costs (a major input in production) and increased meat consumption in places like China, account for a far larger share of the price increase. This may have changed in 2008 (though I doubt it), though either way, the argument seems strange to me.

I find it incredibly odd that the same economists (like those at even Oxfam) who have for years been decrying farm subsides for depressing food prices and therefore hurting developing world farmers are today decrying biofuel subsides for increasing food prices. It is hard to say whether the developing world would prefer lower or higher food prices, though one would think that since developing countries tend to have a comparative advantage (note I said comparative, not absolute advantage) in agriculture (seen by the fact that they devote most of their labor force to agriculture), then increasing food prices leads to a favorable shift in their terms of trade, which means it should be good for developing countries overall (yes it hurts the non-farmers in these countries, but it helps all of the farmers who tend to out-number the non-farmers, leading to a net gain).

Sunday, November 09, 2008

Time magazine and Abe Lincoln on Attribution Bias

Time magazine had a good article last week.
They only look as if they inhabit our galaxy. In truth, the men who would be President have been running for months in a parallel universe, a place where a Chief Executive changes laws by waving a hand and reorders society at the stroke of a pen. "When I am President," the candidates declare — and off they go into dreamspeak, describing tax codes down to the last decimal point and sketching health-care reforms far beyond the power of any single person to enact. In their imaginary, reassuring cosmos, America is always a mere 10 years — and one new President — away from energy independence. And the ills of the federal budget can be cured simply by having an eagle-eyed leader go through it line by line.

Then one of them wins the election.

In an instant, the winner is sucked through a wormhole back into the real world. A world in which Congress, not the President, writes all the laws and gets the last word on the budget. Where consumers decide which cars to drive and how many lights to burn. And where the clash of powerful interest groups makes it easier to do nothing about big problems than to tackle them.
It's good to see this message get out, because though I've been complaining about attribution bias on this blog (e.g. here and here), it's something the media rarely considers.

The article also had this nice quote by Lincoln: "I claim not to have controlled events, but confess plainly that events have controlled me."

Later in that issue, they quoted a seemingly non-partisan pundit (he attacked both sides) who gives another reason to worry about Obama's campaign promises. Obama promised to abide by campaign financing limits, but reneged on that promise as soon as it was expedient. In fact, Obama has had no history of sticking up against his party for his own principles. Doesn't give much confidence that he will follow through with any of his promises now.

Saturday, November 08, 2008

Worries for a new administration

A friend of mine used Krehbiel's Pivotal Politics model to analyze the implications of a Democratic Congress and Presidency. He finds the scene is set for substantial policy change.

That was a good time to reflect on the perils of an Obama administration.

Higher trade barriers (which will mostly hurt the poor in developing countries and the poor Walmart customers in the US), more frivolous lawsuits (something the current administration has been fighting behind the scenes), more wasted bureaucracy, less school choice and school reform, slower growth (see QJE paper by a former classmate of mine), regulation that leads to less home ownership, higher minimum wage (which hurts the poor through more unemployment and increases the prices at places they shop most like walmart). Could be good as well, but I worry. could be quite bad for the people who need help the most.

Wednesday, November 05, 2008

Confronting Prejudice: A message to Obama supporters

The two McCain voters I talked to yesterday both expressed concern that they were uncomfortable revealing their vote to their friends, and probably wouldn’t do so. I know the feeling. I wrote about it in the Stanford Daily in 2004. Back then, I declared that one of my main reasons for voting for Bush was to use it to confront people with their own anti-Republican prejudices.

Voting is 99.9999% symbolic anyway (there is a tiny percent chance you influence the election, but essentially zero). So it is the symbolism that matters most.

This time, I voted for Obama, because ever since I outed myself as a Republican sympathizer (partly by my CEA job, though that really shouldn’t count since most of my colleagues were Democrat), no one could believe that it is possible to be both a Republican sympathizer and an Obama supporter. I’d really like to advocate the position that both sides deserve sympathy and respect. And that it’s awful that people should feel uncomfortable discussing how they feel.

Of course, I’m not saying this is the only form of prejudice out there, or even amongst the more important ones, but it is one that people rarely talk about.

Why I like Bush. Why I like Palin.

In response to comments from elsewhere as to why anyone could like Bush, my answer reposted here: “long 7 year economic expansion (which the president really has minimal control over, but just to counter Clinton's claims to his economic record). no terrorist attacks on American soil for the past 7 years (unlike under Clinton). fundamental reform of US education. expansion of free trade. continued unprecedented growth in productivity. converting two autocratic regimes into democracies. (unlike Clinton's attempts at nation building by unilateral invasion which are largely forgotten), tremendous funding for addressing AIDS and malaria, more spending on alternative energy than the manhattan project, higher emissions standards for cars and trucks (the fruits of both will pay off in the next 8 years, and hence Obama will get the credit). Europe has pretty much elected all pro-US heads of state, so arguably stronger ties to Europe.”

In response to comments on how anyone could like Palin: “she has more executive experience than Obama, is less prone to mistakes than Biden, and has social policy preferences which I don't necessarily agree with but matches the majority of Americans.”

Sunday, November 02, 2008

Bush's staffers and the kool-aid

The New York Times ran a mostly touching (and rare) piece about the positive parts of Bush's legacy. One quote rang true:
Then she looked directly at me and said, “But it’s all worth it, because I so believe in the president.”

It would have been easy for me to dismiss Ms. Perino as a bright and likable but ultimately Kool-Aid-stricken peddler of talking points, were it not for two things. First, my interviews with current and former Bush staffers constantly veered off into similar testimonials. Their belief in Mr. Bush transcended ideology: as much as anything else, they just loved the guy.
I also often use the kool-aid line myself, when people ask what I thought about the President (a friend of mine remarked that it was odd that I call him "the President" as opposed to Bush, or Dub-ya, habit I picked up while there I guess).

But I generally say that I didn't know him really well personally, but I respected the opinions of the people who interacted with him every day, and they all respected the guy. Of course, maybe they had "drank the Kool-Aid" but that must count.

And it wasn't just staffers, it "transcended ideology." I remember talking to a Washington Post White House correspondant (and Democrat) after a talk she gave when I was in grad school who also said she respected the President's abilities quite a bit.

Anyway, just my two cents.

Saturday, November 01, 2008

Our insignificance in the Cosmos

The New York Times reported a student at Dartmouth asking: How do you keep from despairing at the immensity of space and the smallness of us?

I remember having the exact same question back in high school, learning about cosmology, the age and shape and size of the universe, thinking about space-time (roughly 15 billion light years wide in at least 4 dimensions) and how insignificant any one life is (whose theoretical limit of one light-lifespan). And indeed I did despair for a time.

My answer at the time was that while one human is mortal, humanity is potentially immortal, and information and knowledge, would outlive even the life of the last man. As was the theme of the Shakespearean sonnets I had to memorize back freshman year. "So long as men can breathe, and eyes can see, so long lives this, and this gives life to thee."

So my answer to the vastness of space back in high school, was to become part of the cloud of knowledge achieved by humanity.

Haven't thought about that in a while. I used to think about it more. Even used it on my first date with R-. Not sure if that helped or hurt.

Friday, October 31, 2008

Ha, I'm not the only one who doesn't believe in voting

From the current issue of The Economist's Voice

As the election approaches, please
remember to be kind to any economist
you know. Economists feel
on election day a little like Jews
feel on Christmas. Participating
makes them feel like a traitor to their kind but
boycotting the extravaganza makes them feel
estranged from the rest of society.
Like everyone, economists have a choice on
election day, but to an economist neither option
seems good. We don’t mean the choice of voting
for a Republican or a Democrat. We mean
the choice of whether to vote.
An economist who votes commits an irrational
act, and to an economist irrationality is
a sin. Why bother spending half an hour or
more going to the polls and waiting in line
when the chance is infinitesimal that your vote
will affect the outcome?
Yet, what is the other choice? Not voting.
But, an economist who doesn’t vote must
squirm when others ask that day: “Have you
voted yet?” Any explanation about the irrationality
of voting will be scorned.
There is no winning for an economist on
election day (unless he or she is running for office,
and probably even then).

Thursday, October 30, 2008

More evidence that Gore = Bush

I have long noted here that people commit the fundamental attribution error when evaluating the Bush administration. Over attribute outcomes to disposition, and not accounting for situation. Most say that had Gore won, he would not have reacted the same way to 9/11 (though his VP, the wife of the president he served under, and that president's British doppleganger were all strong supporters of the war in Iraq).

In a recent economist book review, they find the following Al Gore quote:
IN 1993, Bill Clinton was pondering whether to authorise what is now called an “extraordinary rendition”, when American agents snatch a suspected terrorist abroad and deliver him to interrogators in a third country. The White House counsel warned that this would be illegal. President Clinton was in two minds until Al Gore walked in, laughed and said: “That’s a no-brainer. Of course it’s a violation of international law, that’s why it’s a covert action. The guy is a terrorist. Go grab his ass.”

Tuesday, October 28, 2008

Obama is one of "us" and indeed "we" are not "real" and "we" are not "pro-American"

A problem I’ve had with this election is that I actually identify with Obama quite a bit. But as I’ve elaborated on at length in this blog that doesn’t mean I’d vote for him (e.g. because I dislike many of his supporters, because I dislike the policy of the median Congressional Democrat).

The media has recently taken a lot of umbrage at the suggestion by the McCain campaign that Obama is not “pro-American” and that he is out of touch with “real” America (e.g. Time magazine). But I think those accusations are fair.

First of all, by “us” I am talking about well-off highly educated coastal elites. Although Obama often evokes the language of unity, when talking about tax policy Obama talks about people like “us“ meaning Obama and McCain and other well off elites, which implicitly creates the “other” of people not like “us."

Pundits are happily making the point that the real “Joe the Plumber” makes well less than $250,000 a year, but the point of the McCain campaign is that that doesn’t matter. Because in his world view Joe and McCain are part of the same “us.”

But Obama’s “us” is different. Saying that we are anti-American is too far, but that’s not what the McCain campaign’s been saying. The most extreme way to see this is the number of my friends who (jokingly, but still) threaten to move to Canada. Or, I bet if you poll my friends and ask them if they had to choose between wearing a Canadian flag or an American flag on their bag while traveling, I bet nearly all would choose Canadian. I bet most people in the pro-American states that Palin is talking about would never do that (admittedly, I’m not sure what I’d pick, but probably I’d still put an American flag). It’s not a bad thing to not be “pro American.” It represents a different cosmopolitan ecumenical humanist world view that I like. But it is different.

This is an old notion of course, the different ways of defining identity. Democrats try to create identity along economic divisions, whereas Republicans do so along social divisions.

Sunday, October 26, 2008

I might support Obama but will never be an “Obama supporter”

There are various reasons to describe how people vote given in the political economy literature. A few are:
  1. You vote for who you think will be best for you.
  2. You vote for who you think will be best for the country.
  3. You vote for symbolic or expressive purposes.
  4. You vote for who you think is going to win.
  5. You vote for the candidate you identify with.
  6. You vote to be affiliated with others who vote for that person.
I’ve already said in this blog that I am largely indifferent between Obama and McCain on the first two points. Points 3 and 4 and 5 are pushing me toward Obama. It would be cool to vote for the first black president (as a fellow political economic thinking friend of mine who is similarly indifferent to voting pointed out), and I have long identified with Obama’s post-partisan rhetoric (though he basically abandons bipartisanship whenever it is expedient, which is basically always).

My problem, is point 6, which is actually the point I focus on in my current research. And on this point, I really really don’t want be associated with Obama supporters. And that is making me not want to vote for Obama. A recent New York Times column is a case in point which has the audacity to blame Republicans alone for being condescending and derisive. They probably are, but I’m rarely exposed to Republicans, or Republican media, so that doesn’t bother me as much. But I’m constantly exposed to the condescension and derision of “Obama supporters” and liberal newspapers (as measured by Groseclose and Milyo) who think that McCain supporters “cling to their guns and religion” or that Palin supporters are “frightening” and “delusional” and don’t give voters in Alaska any credit for overwhelmingly voting her into office, and assume that mistakes she gives during interviews are signs of incompetence, whereas the numerous mistakes and fabrications that Joe Biden makes are merely signs of eccentricity.

I agree that Palin is really bad at handling herself on the national stage. Unlike Obama, she hasn’t had 4 years doing nothing else but campaigning for president. But that doesn’t make her incompetent, and doesn’t make her unfit. Bloomberg gave probably the worst speech I ever heard for his inaugural but has proven to be a very well respected mayor. It’s fine to disagree with Palin’s policies, and it’s fine to disagree with her view on the world, but please, as Obama would advocate, do so with respect.

Another reason to ignore the Issues when picking president

Pretty much exactly 4 years ago, days before the election, I argued in my Stanford Daily column that Americans (myself included) are too stupid/ignorant to pick the President. That really understanding the correct policies a president should take, requires years of study, that people don't really take the time for, but shouldn't, given that in an economy where people specialize, it doesn't make sense for everybody to be a policy wonk.

That is why I advocated basing decisions on character rather than the "issues" journalists and pundits are always blathering on about.

Another reason issues don't matter, is that whatever issues Presidents promise is rarely what they deliver (usually because circumstances change). Bush ran on a campaign for a humble foreign policy and against nation-building, though 9/11 forced him to change all that.

Kinsley, in Time magazine this week made the point "Even more miraculous (though troublesome for democracy), both Lincoln and F.D.R. were elected by promising more or less the opposite of what they did in office. Lincoln said he'd preserve the institution of slavery. F.D.R. said he'd balance the federal budget."

Thus when the fact checkers all bristled and got all indignant at McCain's accusation that Obama would raise taxes, even though Obama's "plan" said he wouldn't. I think pish posh. Since when do campaign promises have any bite. McCain's point that Congress will likely push for higher taxes, and Obama will be more likely to accede is perfectly valid.

Thursday, October 23, 2008

A Kristof column I agree with?!

I had this discussion with myself some time last year, even before Obama won the primaries. Obama would have a huge effect on world perception of the US. As a semi old-school Marx style materialist/realist, I am not convinced that perception matters, but it is still nice when it shifts to what I think is a more accurate image of America.

A friend of mine said recently, it'd be nice to tell your grand kids, that you voted for the first Black US President. But otherwise, he like me is still mostly unmotivated to vote.

I also decided, when I had this thought some time last year, the same sentiment Kristof ends with: "Look, Mr. Obama’s skin color is a bad reason to vote for him or against him."

That logic takes away the main reason I have for voting for Obama. So I am still largely indifferent.

(Amusingly, in Kristof's list of countries led by minority presidents, he left out Peru's Fujimori, perhaps because Fujimori fled in ignominy.)

Wednesday, October 22, 2008

Even a Stopped Clock is Nouriel Roubini

I’m a little bugged by all the attention and credit Nouriel Roubini has been getting for predicting the crash. I normally like contrarians, but I’m also generally an optimist, and pessimistic Bears bug me. I was always annoyed by the credit the Morgan Stanley economist, Stephen Roach, got for predicting the end of the dot-com boom in 2001.

The problem is that the fact of business cycles means that every expansion will end in recession. And people like Roach and Roubini started predicting the crash many years before the crash actually happened.

If I start predicting that there will be another crash, I will be right eventually. It doesn’t mean it’s useful.

There’s an expression, even a stopped clock is right twice a day. Just because a clock that happened to have stopped at 7:56 is accurate when it is 7:56 doesn’t mean it is useful.

I have the same problem with people who complain that there was someone at the FBI who predicted 9/11 before it happened. In an organization with 30,000 people, you probably have 30,000 predictions being made every single day. Anything that could possibly happen is probably predicted by one of them. It doesn’t mean there was anything useful about that prediction, any more than a stopped clock.

Monday, October 20, 2008

Reviewlet: Man of the Year

Sometimes movies surprise you.
Movies that you hate as insipid drivel somehow pull it together in the closing scenes of the last act.

I can't think of a complete list off the top of my head.

Skeleton key was definitely one. (pap. airplane fodder. drivel.) But the last 10 minutes made it all worthwhile. the first 90 were all there to lower expectations.

Deterrence is another. Which is also all the pap and drivel except for the end of the last act, which not only excuses the rest of the movie but at least partially justifies the earlier crappiness. (domino and contender and matchstick men and euro trip have this quality to a lesser extent)

Man of the year is certainly another.

I spent the first hour not just thinking it was bad (despite its impressive cast), but actively hating it, at how it glorifies the mockery of the political system, taking cheap and dumb shots. The premise--amusing given Al Franken's true story--is that a comedian in the style of Bill Mahr or Jon Steawrt, but played by Robin Williams, decides to run for president. And while commercials had led me to expect something that glorified the everyman as president (like Bullworth or Dave) and while i'm fine with that concept, this movie made the premise of Robin Williams as president both disgraceful and disgusting.

And so i was actively hating it, handling e-mails, playing with my phone, until I realized, that the disgust was intentional. That everything I hated about it was intentional. That explained how they managed to attract such a stellar cast (laura linney, christopher walken, and tons of cameos from news anchors and comedians from chris mathews to tina fey).

So at the end, still not a great movie, but I respect it.

Final Grade:

Monday, October 13, 2008

Krugman and Asimov and Me

So Paul Krugman received a well deserved Nobel Prize today. Despite my political differences with his Ny Times column that I have commented on many times here, I still respect his models of international trade (I went to grad school wanting to expand on his models to understand development) and his popular books before the New York Times.

Watching him on News-Hour today, interesting that he said it was Asimov's sci-fi Foundation novels and psycho history that made him want to be an economist. I, somewhat embarrassingly, said exactly the same thing in my grad school essays. The idea that you could use mathematics to not only understand but also to shape society. In some ways, its amazing how far we've come toward achieving Asimov's vision, on the other hand, it's also notable how very far away we are as well.

The intro to my essay:
Issac Asimov, the science fiction writer, once envisioned a world where a mathematician invented a science called psychohistory that allowed him to foretell and therefore improve the course of human events. When I was younger, this fascinated me. However, it was not until I took freshman economics in college that I realized this was not all fantasy. By studying economics, I could apply my training in abstract math and theoretical computer science to something beyond the world of academia. The field of economics provides a window where my interests and abilities could be applied to research that has direct impact on the lives of so many people.
Heh, also gratuitously mentioned "such as those from Paul Krugman’s graduate International Economics class which I audited." Interesting to read these old essays, made readily available by Vista search.

Neel Kashkari: the $700 billion man, and bailout czar

Interesting. This is the guy i used to wrestle with at the white house over the details of the white house energy policy of 2007. I think we were probably the only ones who really saw all the details. and we often clashed on them. He's a smart competent smooth talking guy, though there were times he played things a bit fast and loose.

The stock photo all the news articles are using is kinda funny.

nytimes article

usa today article

Friday, October 10, 2008

Digging Vista

The New York Times has an article on living with vista. Having used vista as a clean install on two new machines, I've had no problems. Yeah, upgrading an old machine sonds problematic, but I've been happy. For the most part, no substantive differences except one: integrated search.

Now, the file explorer has fast integrated search (something you could do with google desktop, but integrated), and that's nice. Let's me adopt the google philosophy "search don't sort." After decades of experience in carefully organizing my files into directories, I don't have to so much anymore. And that is a good thing.

Wednesday, October 08, 2008

what happened to tackling the root causes of terrorism?

Watching the debate last night, to Obama especially, it sounds like people believe that the way to handle terrorism is to find this Osama Bin Laden guy and the Taliban, and then the problem will be solved.

That was the attitude that was roundly derided by the media once upon a time. Terrorism is like a cancer of different cells, and killing any one is hopeless. Focusing on Afghanistan is pointless, most of the 9/11 terrorists came from Saudi Arabia. Many are now coming from Europe.

There was a time when liberals advocated somehow reforming the root causes, by spurring economic development. Though now the middle east is awash in petrodollars, you don't hear that any more.

Plus, decades of foreign aid spending and quiet diplomacy hasn't worked.

What isn't easy to say, is that the war in Iraq was an attempt to get at the root causes of terrorism. There was a time in 2005 when it looked like the crazy experiment might work. Democratic movements spreading across the middle east and arabic world, in Libya, Egypt, Jordan, Syria, Lebanon, Iran, Iraq, Afghanistan. I used to have the cover of the Economist magazine from this time. It didn't work, but that doesn't mean it wasn't worth a try.

Monday, October 06, 2008

Capping CEO Pay - why Golden Parachutes save firms money.

There's been a lot of talk about capping CEO pay--which is included in the last bailout bill--and pretty much all of it has been ideological; no one has asked an economist what it all means.

So yes, from an "optics" view as they say in Washington, paying CEO's huge bonuses when they are forced to leave a failing company looks awful.

But from an economic point of view, the point of Golden Parachutes is to transfer risk from the risk averse potential CEO to the risk neutral firm. It is not something you give to reward a CEO for leaving, it is something to promise at the beginning to get him to join. What basic contract theory says is that by reducing the risk to the CEO for taking the job, you actually have to pay him/her less overall. Thus a ban on Golden Parachutes should lead to increased overall CEO compensation.

Of course a more likely and better outcome is that if a ban is in place, companies will come up with contracts to replicate golden parachutes, but don't look like golden parachutes. Perhaps a loan that is paid out of future wages. (Which I guess is already done and still looks bad, but less bad.)

Thursday, October 02, 2008

Doctors as Titans

R- often describes the founders of modern medicine as Titans, superhuman, looming over mere mortals with their larger than life presence. In some ways cultivating the exalted status the medical profession enjoys (doctor was the highest status job in some New York Times article some years ago, college professor was down around the 75th percentile).

Flipping through an issue of Hopkins medicine, there was one article about the passing of someone they literally described as a “towering international figure.” It was also interesting. The cover story was about work-life balance. It is funny, that most civilians think the 80 hour restrictions with the 30+ hour shifts every 4 days is insanely too high, and leads to tired doctors and needless mistakes. Instead, in this article, nearly every quote is of a Hopkins doctor talking about how working ONLY 80 hours, and ending a shift at ONLY 30 hours demonstrates a disgraceful lack of commitment to their patients, and anyone who wouldn’t happily put in those hours is a disgrace to the profession.


It seems like the profession is changing. And the younger doctors interviewed didn't feel that way. But Wow.

Tuesday, September 30, 2008

NyTimes Op-ed: Drill Baby Drill

Not related to the financial crisis, but have been meaning to post this nytimes op-ed.

I made this point in a debate I did for the incoming freshman class at Cornell. Nice to see the same point find a larger audience.

Basically, silly that there's so much debate on off-shoring drilling. It is basically a no-brainer.

To be clear, it will not reduce gas prices in any significant way. Oil is a global market, and the US while big cannot move it by itself.

But it will add $1.7 trillion to the economy. Must of it to government coffers. (Easily paying for any costs of the proposed bail out.)

This holds even after taking into account costs due to greenhouse gas emissions.

Green advocates like Thomas Friedman who oppose offshore drilling like to point to Brazil and Denmark as paragons who are energy independent (a stupid goal btw). And while it is true that Brazil and Denmark do have programs for alternative fuels like ethanol, they both get most of their domestic fuel from offshore drilling, a fact green advocates conveniently like to ignore.

Obama and McCain have both reached the same policy conclusion on this (given it is a no-brainer).

My opponent in the debate asked, if it is such a no-brainer, why is there still so much opposition. My (perhaps too flip answer) was to quote Hillary Clinton and Barack Obama. When they were both asked why they supported policies that essentaily all economists thought were a bad idea (Clinton on ABC News re: tax holiday; Obama on NPR re: windfall taxes), they both replied that listening to economists is Elitist.

Nice to see reporters on the ball in these cases. Frustrates me to no end when economic consensus is ignored.

It's fine to ignore economists on subjects on which the profession is essentially clueless (like the sub-prime bailout) but on basics like optimal taxes, economists have a pretty good consensus idea of what's right.

Wednesday, September 24, 2008

Finance Schadenfreude

About the only time I ever feel like I need more money is when reading the New York Times Magazine architecture issue. Typically my wants are such that money is not a problem, but in that issue, every ad is for beautiful yet reasonable apartments, with sub-titles like "Studios starting at just $2 million!" At those times, I ponder what could have been had I stayed in finance, instead of dropping out for grad school. As I saw friends and friends of friends, rolling the hedge fund life style, with 7-figure incomes within reach, I often thought that could have been me. I have no regrets at my choices, but still it makes you stop to think.

The economist in me also always knew the salaries in finance couldn't last. At least that's what I used to tell myself. In efficient labor markets, all jobs that require the same level of skills/abilities and the same level of risk should pay roughly the same salaries (more or less). Sure, some factors like market imperfections and compensating differentials may justify some differences, but not the factor of ten difference seen between finance and other fields. That should not be sustainable.

And sure enough, it seems like that era is coming to an end. Risk and regulation are conspiring to realign salaries. And so while the financial realignment sucks, not just for those in finance but for all of us, who will face a slower growing economy as a result, it does make me feel better about my own career choices, in a perverse way.

Sunday, September 21, 2008

Political Bias

I have been reading lots of polemical political articles, mostly anti-republican, because I get most of my news from liberal sources like NPR and NYTimes, I hear tons of outrage and condescension dripping from every word. And for each and every fault of the Republicans they list, I automatically can name two or more equivalent faults of the Democrats.

Half of republicans think Obama may be Muslim?
(First, not entirely crazy, by definition, his father is Muslim which makes him Muslim. And he did attend Muslim schools in Indoensia.)
But agreed, it is mostly crazy. But half of democrats hold the crazier idea that Bush may have helped plan 9/11.

Sexual impropriety and potential tit-for-tat at the Dept of Interior?
But wasn't that the same behavior happily overlooked in the Clinton White House. It also annoys me that most of the mistakes that led to billion dollar windfalls for Big Oil occurred in 1998 during the Clinton administration, a fact neglected in every nytimes article on the subject.

Poor grades by Palin and McCain?
But Kerry and and Gore had worse grades than even George W Bush, but nobody cared then. (Gore failed out of grad school twice, getting F's in a majority of his classes the first time)

Anyway, I can go on. But makes me wonder if anyone really can hold an unbiased view. The most important paper I've ever read was by Lord Ross and Lepper which found that people are really good at seeing the flaws in arguments that go against their preconceived beliefs, but tend to overlook the flaws in arguments that support their own. Hence the value of adversarial systems.

So, just as the flaws in the NYTimes are so clear to me, a bit further reflection makes me know that there are probably just as many flaws in my own thinking.

Which I suppose just implies a need for greater humility (and why I think people really aren't qualified to judge candidates). Greater dialog. Greater openness and greater respect.

Sunday, September 14, 2008

Review of the non-geek geek novel: The Brief and Wonderous Life of Oscar Wao

I haven't read fiction in ages, heck, I havne't read a book for pleasure in years, but I was inspired to pick up The Brief Wonderful life of Oscar Wao by an NPR story on finding a new book for the American high school english class canon. I was impressed that this book--which I only knew for its associations with Dungeons and Dragons and sci-fi and fantasy--would get so much acclaim, not only winning the Pulitzer and critical raves, but with some going as far as calling it a classic of our time.

The Brief Life of Oscar Wao by Junot Diaz uses a series of flashbacks to give an epic yet intimate portrait of the life and lineage of Oscar Wao, a geeky Domincan kid, from Patterson New Jersey. The story of Oscar's tribulations as a social outcast in high school and in college at Rutgers, is so believable in that his affected speech patterns (like the heroes in cheap sci-fi) and penchant for using SAT words in everyday conversation, is easily identifiable to anyone who has traveled in such circles. The book also details the life of his family--Oscar's sister, his single mother, his grand parents in the Dominican Republic (DR)--and the curse that plagues their household. Delving into three generations of Oscar's life, we get a picture not just of a troubled boy, but also of a troubled DR.

I wish I could say I loved it, but the book dragged at times despite the prose style which was brisk and excellent. Part of what worked is how the conversational narrator references something from geekdom on nearly every page (weird to see something part of my 'childhood' identity that always labeled me as outsider has become high brow mainstream). The narrator casually drops obscure allusions to comics (Watchmen, X-men, Stan Lee, Fantastic Four; the narrator refers to himself as The Watcher), Dungeons and Dragons (the narrator describes a girl losing her virginity as taking 4d10 points of damage), Sci-fi (Oscar calls his sister a Bene-Gesserit witch), Fantasy (Lord of the Rings comes up incessantly; many characters are described as Saurons or Ringwraiths or Orcs). Diaz drops obscure references to genre fiction like Eco or Stoppard reference ancient Greek poets.

Despite its odd unique narrative voice, the book is quite conventional in its subject matter: an immigrant coming of age struggle and the family seeds that led there. Swap out the sci-fi references, and replace the excellent primer into Dominican recent history with Chinese recent history, and this book could have been written by Amy Tan. The book thus drags at times (at least for me) as we follow the tragic lives of Oscar's family and Oscar's own quixotic (a favorite word of mine from SAT prep days) quest for love, and more prosaically his quest to lose his virginity.

However, though the book is not as tight as it could be, I will say that after 300 pages, the payoff (with slight epic magical realism tinge that requires a reading of the comic The Watchmen to fully appreciate) makes the reading worth it.

Final Grade:B
Please rate my review here.

(random connections to the author Junot Diaz, he did his MFA at Cornell, and now teaches at MIT, who manages to attract top notch fiction writers. One of my favorite sci-fi books from high school, the Forever War, was written by another MIT lecturer)

Friday, September 05, 2008

Recording Memories Using Implated Electrodes

Nifty article in the New York Times on new research recording human memories using electrodes.

I remember my friend working on this project back as an undergrad in 1999, when they recorded the memories of rats as they ran mazes, and showed that rats dream about running mazes. I guess it took 10 years for them to replicate for humans. But I remember being blown away by the idea that you could "see" memories. Back then, a bunch of us were excited about the prospect of recording memories (a la the movie Strange Days), and that neuroscience would be the biggest thing in the 21st century, and the youthful hubris that we could help made it happen.

Krugman out does himself

Sigh, and to think I used to admire Paul Krugman. I read many of his pop books in college, took his graduate class for a while as a junior though it was way over my head. Appreciating his even-handedness in explaining economics.

Politics really does bring the worst out of people. After reading perhaps one of the most contemptuous articles I've seen in a while--an anti-Palin screed by Judith Warner in the NY Times, I come across Krugman's equally contemptuous disdainful resentful anti-Republican screed, which paradoxically complains that Republicans have imagined this contempt from Democrats, when you just have to read anything written by Krugman in the past few years to see it.

See I really do like Obama, because it seems like (at least from his rhetoric) that he's better than that. He really doesn't seem to be contemptuous about the other side and he rightly chastised the McCain campaign for questioning Obama's patriotism. It's just much of his party I can't stand. At least around election time when people seem to make things so personal.

(Of course there are Republicans who are just as contemptuous about liberal elitists I'm sure, but I guess since I mostly read NY Times and NPR I'm never exposed to them)

(And for the record, much has been made about Bush's C average in college, but what is often forgotten is Nobel Prize winner Al Gore had a worse college record)

Thursday, September 04, 2008

On Sarah Palin: Tina Fey, David Brooks and Gossip Girl

Watching coverage of Palin's speech today, I couldn't help but think, Sarah Palin looks just like Tina Fey.

More seriously, David Brooks renewed my faith in him with an excellent analysis of the Sarah Palin pick. I too would have preferred someone with better domestic policy experience.

But my own first thought though was that she is more symbol than substance (like Dan Quayle, but also like Obama). I like the fact he picked a woman, but was hoping for maybe Christy Whitman (former NJ Governor) though she is pro-choice, and been out of the picture for some time) so that rules her out. Though as a tactical move, I see it as genius. Though newspapers initially says this ruins the original message, that Obama doesn't have enough experience, in my view, it does the opposite. It has made all the Democrats look ridiculous for attacking Palin's lack of experience (she has more executive experience than Obama and Biden combined), and every time a Democrat decries Palin's lack of experience, it highlights even more for public attention, Obama's own lack. Genius.

As an aside, and without a hint of sarcasm, I really love how pretentious her kids names are (Bristol, Trig, Track, Piper, Willow). They're like the names of the stars of Gossip Girl (Blake, Leighton, Penn, Chace). The new Muffy and Bunny of the current generation. I know these names are snooty and elitist, but I happen to like them.

Wednesday, August 27, 2008

on obama- the fundamental attribution error, median voter theorem, and my pick for president

Watching the Democratic convention now, reaffirmed my general attitude toward presidential elections. I like Obama, I just don't like the Democrats.

This is consistent with some basic political economy. Downs' median voter theorem argues that in order for a candidate to win, they must position themselves at the center.

I think that has been true in past elections. I think it is true the current one.

The first counterexample people point out is that Gore would not have invaded Iraq. My counter to that assertion is that Tony Blair (a Clinton clone) and Joe Lieberman, Gore's VP were staunch supporters of the war as were 79% of the Senate and an even higher percent of Americans. Not to mention Hillary, a partial proxy for Bill Clinton, also supported the war. It is easier for Al Gore to stand outside and claim he would have done something else, but I disagree.

People commit the fundamental attribution error and assume that a president's actions depends on his disposition rather than the situation he is in.

On the issues, Obama and McCain have predictably converged:
  • get out of iraq as expedient
  • close guantanamo and stop torture
  • invest in alternative energy
  • drill off shore
  • reduce carbon emissions
  • provide money to expand health insurance
  • etc.
I think by themselves, I would give Obama the slight advantage for the symbolic value.

The problem is that policy depends not just on the president, but also on Congress (and the Judiciary).

Imagine a continuum
(long readers of the blog will recall the same analysis 4 years ago)
1 25 50 75 100
  • Where 1 is the most left wing policy.
  • 100 is the most right wing policy.
  • 25 is the median Democrat.
  • 75 is the median Republican
  • 50 is the median American policy

I see Obama and McCain at 50. Which is roughly where I am. So I like both their policies.

My preferences are: 50 > 75 > 25

But the problem is that an Obama presidency coupled with a Democratic Congress would lead to policy outcomes closer to 25 than 50. And that I can't accept.

You saw this during the primaries, as Obama renounced his bipartisan rhetoric in favor of debating Clinton on who thinks Republican ideas are worse. The biggest attack each had on the other was that the other once said that Republicans might have good ideas.

Specifically, I remember when Obama gave into the teacher unions by renouncing his previosu position up on merit pay that best exemplified this move.

So that's where I stand.

Monday, August 18, 2008

Globalization and the Olympics

Kinda neat the intermingling of nationalities on display at the olympics. Also heartening to see the mixing on the US team. Shows that the US is still capable of attracting the best talent and hopefully in integrating it. For example:

  • gymnastics, women. winner looks the all-american texas girl, but was born in moscow. 2nd place from iowa has a chinese coach
  • men's gymnastic team, us captain looks Chinese. and the team also has the first south-asian athlete i've seen outside of cricket at an international event
  • us volleyball head coach is a chinese woman
  • in swimming, less so, from what I see. except that it seems that athletes from around the world (like Zimbabwe) all trained in the US. one black swimmer.
  • the distance runner from kenya

Also, nice public diplomacy (the euphemism for propaganda) for the US. Despite the anti-immigrant sentiments that politicians bandy about.

The related amusingstat is that 70 of the competitors in ping pong are either Chinese or Chinese hua-qiao (of the Chinese diaspora)

Though probably the Brazilians play volleyball for Georgia is a bit much, if it is true that they've only spent 2 days in Georgia before hand.

Thursday, August 14, 2008

One of the neatest graphs I've seen in a while

I think principal component analysis is one of the cooler applications of linear algebra (which I learned to analyze corporate bonds), but this is the coolest graph of principal components that I have ever seen. By simply using a matrix manipulation of a dataset based on the genomes of European citizens, you get a representation of the European genetic data based only on genetic data that looks remarkably like the geographical map.

See NYTimes article for more info.


Wednesday, August 13, 2008

Notes to a High School Senior

I did a career day recently for a high school summer program I did eons ago. I got the question afterward, about what major to pick for someone interested in "mainly math, physics/chemistry, and economics" and interested in graduate studies maybe in economics. I hadn't thought about picking majors in a long time. These were my thoughts, but if anyone else has thoughts...

At the end of the day, it doesn't matter too much what you major in, and you really don't need to know what you will major in, until sophomore or even junior year.

I do think that math is probably a good baseline though, as it gives you a lot of flexibility in the future. Esp if you want to do graduate studies in economics, a math degree with a few econ classes, is probably a good solid flexible preparation (you can take that in a lot of directions, including law school even or finance, which is a typical route people find themselves taking to make a lot of money). But major doesn't really matter.

To do grad studies in economics, you just need a few econ classes and a strong math background (either from a math minor, or a physics degree, or an engineering degree), and then your major can be whatever you discover you like. In high school, it is really hard to know. College is a good time to explore, and consider weird things like cultural studies, anthropology, political science, philosophy, sociology, history, education, etc. I think if you do wind up pursuing economics, or whatever, it's nice to have a solid foundation of different ideas for inspiration.

As for which programs, that's hard to say. I think what you'll learn will be pretty comparable anywhere you go. Heck, all the professors went to the same few grad schools. So I would pick that based on ranking (I do think ranking matters in that it affects the quality of your peers), geography, size of school, etc.

College visit might be important, but don't put too much weight on your gut feeling. There is some evidence out there that the weather the day of your college tour is a big determinant of how much you like it there. People like schools much more on sunny days than on rainy days. So things like weather could easily bias your decision.

Hope that helps.

Monday, August 11, 2008

More Energy Insanity: this time from Thomas Friedman

Friedman, never one to let facts get in the way of his argument, says in his latest column the US should follow the example of Denmark, who is energy independent, and has high taxes (sometimes a good idea but probably excessive here) and a lot of senseless regulation (no driving on Sundays, at least once upon a time). (He's also easily impressed by the two button toilets, which I've had in my bathroom for the past year or two).

He says we should follow their example, instead of pursuing dumb ideas like drilling for offshore oil.

Of course, what he neglects to mention is that Denmark produces about 5 times more oil per person than the US, nearly all of it from off shore drilling. If the US had the same amount of off shore oil drilling per capita, it could supply the oil needs for roughly half the world.

Similarly, in Brazil, held up by NPR as the model of using biofuels for energy independence, still produces 7 times more oil than ethanol, and has achieved energy independence largely because of new offshore oil discoveries. (The story also mistakingly fails to account for the energy content of ethanol.)

Saturday, August 09, 2008

Obama on Energy: Justified hypocrisy?

Ugh. The current Democratic sound byte on Energy is that drilling is bad because drilling takes 3-10 years. Therefore we should invest in Renewables.

While that may well be sound policy. The logic is insane. Drilling may take years, but renewables at any significant scale will take decades.

I'm not saying renewables are bad policy. In fact it is good policy and in fact current policy. Just the sound bytes are obnoxious.

At the end of the day, energy policy is fairly simple, and I have little doubt that regardless of who wins, will look for all intens and purposes identical. Once you drill into it, both politicians propose basically the same thing, and once policies are vetted by the bureaucrats (to take out the stupidities both sides are proposing) and pushed through the Congressional process (who will add in their own stupidities), my current take is that they will basically be identical.

Wednesday, August 06, 2008

Slate on Cinematic Fight Scenes

There is a pretty awesome rundown in Slate magazine on fight scenes in movies, complete with youtube clips. Illustrates nicely the historical development, and chooses some nice exemplars.

From a charmingly quaint scene in Big Country from 1958:
  1. to Bruce Lee and Chuck Norris in Return of the Dragon
  2. to the amazingly honest, Rangin Bull
  3. to the perfunctory action scenes of 80's style action ala Die Hard
  4. to the introduction of hong kong cinema
  5. to the "weightless acrobatics" of the Matrix, whom I have often cited.
  6. to the creative use of film making, without resorting to cheesy cgi of Bourne Ultimatum.
Also makes me want to see Oldboy (totally an 8-bit shooter homage)

Amusingly, the writer also calls Batman pop-Nietzchean. So it's not just me (my Wanted Review, my post on Batman Begins). And also overuses/misuses Platonic ideal like me (my review of Firefly, Diamond Age, Legally Blonde)

I love these Slate slideshows (often on architecture or art). Unlike NYtimes which just copies a print segment to the web, Slate really after so long, does demonstrate its original intent (back when it was founded by Microsoft), to really create a new kind of news, a multi-media news that is made possible only by the Internet. (Though to New York Times credit, their recent take on Google Maps Style mashups are pretty cool, like their review of Flushing eats for example.)

Sunday, August 03, 2008

The Bush Administration's (non)War on Science

A colleague of mine recently asked my thoughts on the recent reports that the administration is suppressing EPA science. Here was my response:

On the suppression of the EPA report, I don't know the details of the current case, but from my experience, regardless of how it looked from the outside, it was never some anti-science conspiracy, but usually a case where economic and political realities of what most people would say is the common good, trump scientific considerations. Most of the CEA are academics, and hence all Democrats, and yet, I don't think any of us ever felt we were asked to do anything we felt was unethical or goes against economic principles.

So one example I do know of, was when we were trying to suppress an EPA finding that CO2 is a pollutant. Various scientists wanted to, but if we were to accept that, the Clean Air Act, says that emissions of all pollutants that might harm humans have to be reduced AT ANY COST. It would be illegal to take cost into account. Conceivably, lawyers could use such a finding to make driving illegal. Heck, breathing produces CO2, and lawyers could then sue to prevent you from breathing too heavily.

Another example was when the EPA wanted to increase regulations on particulate matter. Again, the regulation failed every conceivable cost benefit analysis, but according to the Clean Air Act, costs couldn't be taken into account. Even the statistics the EPA did to show that the regulations would have any benefit whatsoever (in this case, for asthma reduction), would not have been allowed past any referee in a decent economics journal. They used correlations, and had no instrument for causation. They used data sets with maybe 100 observations, and arbitrarily tossed out outliers.

Again, maybe it was the best science that was available, but it didn't seem like it justified a regulation that would have billions of dollars in actual costs.

So the reporting on this, was probably along the lines of "anti-science bush administration blocks regulation favored by EPA scientists. Curries to big business over the poor asthma sufferers"

But things aren't so clean cut from the inside.

So I'm probably biased on this. But I don't think excessively so.

Monday, July 28, 2008

A Wager on the Future of Japanese Cultural Influence

So duvall and I recently went to see the Murakami exhibit at the Brooklyn Museum. Murakami is a Japanese manga-style cartoony pop artist who earned his place in the art world by

1) In a Duchamp/Dada/Warhol fashion had the audacity to put it there.

2) Further, had the audacity to embrace crass commercialism to the extent of putting a Louis Vuitton handbag store not just at the gift shop, but within the exhibition itself.

To his credit Murikami's work are beautiful examples of excellent manga-style craft, and beautiful to see.

Our debate was what this exhibit signifies about the future of Japanese manga influence on Amerian pop culture.

Duvall contends that this is only the beginning. As the current generation of American tweens obsessed with mangas grows up, they will be the culture creators and mangas will ascend, just as comic book super heroes have recently dominated summer movies.

My contention is the opposite. That cultural influence tracks economic influence. That what Japan inspired culture exists today is merely the aftershock of the '80's Japanese economic powerhouse, and that with Japanese economic power on the wane, so too will its cultural icons. Instead, we should look to Bollywood and China to rise.

Of course, only time will tell. Our 10 year wager begins now.

We will reexamine in July 2018.

Friday, July 18, 2008

Wow: An Impressive amount of BS about the Dark Knight

So i have an annoying penchant for writing superhero reviews with excessive amounts of philosophizing bulls#@$ and grandiose grandiloquence and veritable verbiage. I tend to over-cite Nietzche and Plato a lot in my movie reviews.

As in my recent review of Wanted, or my use of the Hegelian dialectic while deconstructing Mallrats.

But I figure that's ok to be a bit mas@#$#@^tory in my writing, after all I'm only writing for myself.

So it was shocking to read MANOHLA DARGIS's new york times review of The Dark Knight which totally outdoes me in its bombastic self-indulgence (which says a lot).

Tossing around references to the Black Dahlia, Heat, Cirque du Soleil, 9/11, Zodiac,

And terms like "antiqued dystopia," "pop-Wagnerian," "postheroic" and "plesureably moody ressurection"

I must say, I was impressed.

And despite the review (or perhasp because of) I do indeed really want to see the movie.

Wednesday, July 16, 2008

bryaNt PaRk project: RIP

NPR is canceling their new show, the Bryant Park Project

To add my two cents. This sucks. I just got hooked on the podcast. I would definitely donate money to save it, if there was a way to target my donations to this show. Instead, I'm left in this limbo, of wanting to donate money to npr but having no venue, since they only accept money by radio station, and until moving back to New York City, there was no station I'd really donate to. (The Ithaca NPR is rabidly marxist, and I only tune in to podcasts anyway. I don't listen to WNYC directly either, but do listen to radio lab on On the Media).

As an avid listener to npr podcasts, I already listen to hours each week. But as soon as I started listening to BPP, it quickly became part of my daily routine.

I was skeptical when I heard about NPR's efforts to innovate and target a "younger" demographic with more unedited fare. Their new show, the Takeaway, is boring. I thought I liked the normal ultra-polished NPR style. But I was impressed that BPP actually worked for me. Basically, it has the banter of the typical rock station morning show (which I like), but on npr topics. Good stuff.

Sad to see it go.

Friday, July 11, 2008

Review: Wanted - or A Nietzschean uber-mensch shoots people in satisfying ways

Bullets that curve. This could be the tagline and the recurring motif of this Assassin action thrill fest starring James McAvoy and Angelina Jolie, in this Timur Bekmambetov film (director of Russian runaway phenomenon, Night Watch) based on a Mark Millar graphic novel. Bullets that curve (fired by a gun slinger who slings a gun with enough angular momentum that the bullet curves like a curveball) represents a movie filled with action that bends the rules of physics to the point of breaking, but allowing just enough reality to suspend disbelief on the thinnest of thread, in order to spin ridiculous action into sublime bullet ballet.

In a dense field of action movies filled with Matrix inspired imitators, it is hard to innovate, but Wanted managed to provide three “Oh $#!^” moments in just the opening two scenes, moments where I couldn’t help but laugh at the beautiful absurd awesomeness (for the record, the first three for me were: assassins flying through glass, picking up passengers and driving on buses). And the rest of the movie lived up to that innovation using bullet-time action in new creative ways. It’s no longer enough to freeze bullets on screen, and actors in midair—bullets must fly with style, colliding in mid air, curving gracefully, cars must drive through the air with agility, and a gunman spars with a knife wielding butcher with panache.

Plot and acting are easy to evaluate. They do the job. The story begins with boring mundane ineffectual accountant Wesley discovers—in the classic Cinderella story—that his father is the best assassin in the world, and he is to be trained to avenge his father’s death. The story hangs together reasonably, if not grippingly. Acting is adequate by not being distracting. All are just incidental to provide a skeleton for more action awesomeness.

Along the way, there is some exploration of Nietzche’s concept of Will to Power (inspiration for much of Nazi propaganda), of the uber-mensch, the superman who imposes his will on his environment, as opposed to the mundane lives of most of the world’s sclubs who let the environment impose its will on them (a theme often explored in superhero stories such as most of Frank Miller’s, e.g. Batman: Dark Knight Returns). There’s also some nice loom imagery that simultaneously hearkens back to the Greek Fates, as well as to the invention of punch cards and binary code.

But all of that is just high-minded fluff for a movie that’s really just about wowing its viewers. And at that, it eminently succeeds.

Final Grade: A-

Click here to rate review or comment.

Tuesday, July 08, 2008

Watch this for a good time.

I remember seeing this sometime a year or two ago when he had just started. There really is something beautiful in its goofy earnestness and simplicity. And somehow uplifting. Makes the world seem like a smaller place, by having him unchanged each time, but the world flashing around him. It's a nice image, of the world dancing together.

This is a good quote from today's New York Times "However you interpret it, you can't watch "Dancing" for very long without feeling a little happier."

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