Sunday, August 28, 2011

reporters report gaffes to fit their narrative

Nice Washington Post article, on something I've been ranting about since the days of Dan Quayle. People love telling stories about stupid things politicians say, but the reportage is highly skewed. In short, reporters suffer from confirmation bias. There are too many facts in the world that could possibly fit into an article, so reporters (as the nytimes motto goes) chooses all the facts they deem fit. This choice inevitably means choosing facts that fit their pre-conceived narrative. So when people like Dan Quayle, George W Bush and Sarah Palin say something dumb (like we all do all the time), then that story gets repeated. It doesn't mean there isn't truth in these narratives have no truth to them, just that they distort the magnitude of the difference. There's some nice footage here of Obama talking about campaigning in 57 states, that no one reported on at all. I remember one analysis of the Palin-Biden debate where Biden made more factual errors, but of course Palin was already painted as dumb. And finally, Al Gore has built this image as the Nobel Prize winning genius who invented the Internet, although his GPA in college was worse than Bush, and Gore failed out of two different graduate schools with C's and F's.

Saturday, August 27, 2011

Our Sorry Paper in the WSJ

Our paper was mentioned in the Wall Street journal Week in Ideas

using political economy to sell insurance

a very convincing subway ad that uses political economy to sell insurance

Tuesday, August 23, 2011

Restaurant reviewlet: Mission Chinese

waiting in line for the foodie destination du jour, the elevated but respectful take on Chinese food at Mission Chinese, a pop-up restaurant cohabiting the space of a traditional chinese take-out joint.

we put our name down on the list with a crowd of people out front and 15-20 tables ahead. the estimate was 3-5 min per table and sure enoug we were seated about 70 minutes later.

kinda curious why sf tolerates waiting, walking around we saw long lines for ice cream joints (humphrey slocum, birite) and bakeries (tartine), and even organic vegan mexican (gracias madre), a contrast to nyc where such lines are rare, (except maybe at magnolia, which is mostly tourists, since locals all seem to agree their cupcakes mostly suck).

the food was quite yummy. definitley not fusion, and definitely not contempo, but also not quite chinese. mostly a healthy respect for the original recipe and no fear of szcecuan peppercorns.

the tea-infused eel was yummy, wrapped in cheung fun, and with a nice duck fat crunch.

the egg custard was a tofu clone, a play on textures with exploding salmon roe, but a bit odd flavor wise.

the mapo tofu and salt fish fried rice and mustard greens and garlic were all fairly chinese, the rice nicely dry and separated, the mapo nicely ma as well as la, the greens nicely cooked but mostly traditional.

the only real failure with the lamb noodle soup, with flavor profile much like the taiwanese beef noodle soup i grew up but over reduced so very very salty. the lamb tho was incredibly tender.

anyway, good food, worth the wait and much of the hype, and we got to contemplate the sf foodie caste amiably chatting on the sidewalk outside, and compare and contrast with the ny scene.

Wednesday, August 10, 2011

the purpose of the debt ceiling

A lot of people have complained that politicians have been using the debt ceiling to debate long term budget issues when instead, we should just have a "clean" bill that simply raises the ceiling. But this view demonstrates a fundamental lack of understanding of what the debt ceiling is. The ceiling is a self-imposed rule that Congress put on itself. If it wanted, with a simple majority vote it can get rid of it. But it doesn't. Why? Because the purpose of the rule is to force Congress to debate long term priorities before taking on more debt. This is a useful debate because it helps control long term debt, which should give lenders more faith in the US government not less. It is reasonable to question the outcome of the debate, but totally nonsensical to question the debate itself.

Monday, August 08, 2011

S&P ratings and the Sovereign Ceiling

One feature of the S&P rating adjustment is that it defies one of the old rules I learned on the Fixed Income trading floor in my brief banking days. That a company's bond rating can never be better than the bond rating of the country it is based in, because if the country defaults, chances are the economy in that country will go to crap causing all the companies within to likely defualt as well.

Thus Pr[company default] = Pr[country default] + Pr[company default | ~country default ] > Pr [country default]

The recent downgrade of the US seems to violate that precept. I suppose the rule was absolute, and US companies are global enough that you could imagine situations where the US defaulted but Microsoft or Exxon did not. It just struck me as odd and notable that no one has mentioned it.

Thursday, August 04, 2011

Planet Money: The State of the Economy is Strong

R- once asked, if you know so much about fixing the economy, why aren't you out there fixing it? The answer is that I don't need to be because the ideas I have are already represented because pretty much all economists think very much like. There is more unanimity in economics I feel than in any social science. NPR's Planet Money often reminds me of this, most recently by airing an episode that echoes something I rant about often. I really respect the show for doing the best job in all media of airing the economists viewpoint.

This episode's premise: the state of the US economy is strong. For educated America, even in the recession, unemployment is under 2%. That US manufacturing is still the strongest in the world, its just now powered by machines, and the educated people who fix the machines.

That the rest of the economy can be fixed if we just fix education, the deficit, and healthcare, and that these are easily fixed. That most of the deficit (except Medicare/medicaid) can be made to go away through simple cuts like raising the retirement age to 70.

On all this I very much agree although  a couple quibbles--e.g. head start hasn't worked, and while I agree employer driven healthcare is dumb, and I was there for the big Bush push to get rid of it, it probably isn't the main problem with healthcare costs.

R- cleverly followed up her question with a tougher one, if all economists know how to fix the economy, why are things in the economy still broken. Much to her pique, I had an answer for that too: which  can be found in the field of political economy and the class I used to teach.

Tuesday, August 02, 2011

The professor and the policy maker

This video was not especially funny but very true.

I've been on both sides of this. A week or so before No Child Left Behind was to be re-authorized, I asked a friend who I had seen present perhaps one of the the most carefully done evaluations of the educational impact a year before for the latest draft of her findings. She said sure, let me just clean up a few things and I'll send it next week. Next week became next month, which became next month, I got it about 6 months later, long after Congress was done with the issue.

Also quite true that your paper having 20 citations (meaning maybe 10 people read your paper) is probably more helpful to tenure than actually helping to change policy.

And finally, I am often reminded, especially reading papers written by students but also articles in the popular press, that people outside the field can't tell the difference between good work and bad, so that a white paper published on the website of the Center that Advocates Whatever, is treated as equal in value to a paper published in the American Economic Review.

Monday, August 01, 2011

Debt Deal and the Presumption of Decency

The problem I have had with lots of the anti-republican commentary on the budget crisis (all the budget related posts on my facebook feed are anti-republican)  is what Ed Glaeser called in his npr this I believe note, a belief in the presumption of decency. A belief that while the other side may hold different opinions, they are still decent people. A belief that we should empathize with those we disagree with. A belief that if the same tactics were employed by people you agreed with, they would be seen as courageous. And finally, these commentaries all bothered me for buying into the histrionics, that this crisis may precipitate the end of the world, when not a single person with money on the line actually thinks so if you look at US interest rates which have largely been falling.