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.