Monday, December 23, 2013

Steven Brill represents everything wrong with economic reporting...

His big expose on the health care industry has gotten a lot of play, and yet it is based on two baseless premises. 1) That the list price matters. As in college prices, the list price really has little to do with the actual prices people pa y, and while there are some effects due to list price, they are 2nd order. 2) That hospitals have excess profits. A lot of the examples that he cites are non-profit hospitals. So to say a non-profit organization has excess profits is non-sensical. Profits are zero. What he calls profits, is basically spending on investment, and typically we think investment is a good thing. It is possible that the investment is wasted, but he provides no evidence for that.

His recent follow up is just as bad, accusing the Obama administration for being slow to implement the regulations from Obamacare. Claiming that they could have been issues the day after the law was signed. But regulations never happen that way. They always tend to take 3-7 years, because regulations are always challenged in court, and any regulation issued hastily will be more likely to be overturned. Much of the environmental regulations that Obama touts and takes credit for were based on laws that I worked on in 2007.

It's just wilful ignorance to not acknowledge that.

Elizabeth Rosenthal of the NY Times has written basically the same story and makes the same mistakes. She is on the radio right now ranting about all the tax breaks non-profits get. Although most taxes are only levied on a company's profits. And again, since non-profits don't have any profits, that too is moot.

It just pains me that this idea of hospital list price has captured so much of the national conversation and that pundits like Rosenthal and Brill speak nonsense with such confidence. There are real problems in the economics of the health care system, but the media has focused on one of the most irrelevant ones.

Monday, December 09, 2013

Avengers vs X-men

I've been watching the new Marvel Agents of Shield show which I so much want to like, and so much want to be the resurrection of Firefly that Whedon clearly intended it to be, but I'm still waiting for it to get into its groove, but worried it will be cancelled first. In the mean time, I was inspired to take advantage of the kindle's new comic book versions (a little cheaper than the trade paperback and comixology versions, and less shelf space) to catch up on some comics on the kindle app on my ipad during my train commutes.

I made my way to the Avengers vs Xmen cross over (inspired it part since its written by Bendis one of my favorite pop comic writers, like Ellis and Whedon, all a tier below thought the more middlebrow likes of Moore and Gaiman and Miller), and also inspired by the Avengers movie, since I never really read any Avengers growing up at all.

Some have called the story derivative and just an excuse to setup epic fan service fight scenes between avengers and x-men characters. Still, it may be derivative but it derives from the best. The Phoenix returns (the classic x-men storyline) giving the x-men ultimate power, and forces them to confront how to maintain humanity given infinite power (like Alan Moore's Dr Manhattan) and the nature of just government in either a life is a Hobbseian nasty brutish and short justifying autocratic rule sense, or a Kantian perfectibility of rational man in the image of God that Miller (and later Nolan) explored in Batman the Dark Knight Returns.

I read a recent interview with Picard and Gandalf, talking about their appearance in the X-men franchise, and both made some gesture about how the tremendous influence of X-men and how it deals with some of the big issues of our time in thoughtful ways. The Marvel Civil War Cross Over from a few years back had debates about privacy and homeland security that seem especially relevant today. Oh yea, and also lots of men and women in tights beating each other up.

Saturday, November 23, 2013

Economics Lessons at Lenscrafters

Somehow, got suckered into paying $500 for glasses (gee I saved 40% off the list price of $850) when you can get pretty much the same pair online for $170 from Warby Parker free shipping free returns. Mostly put up with it because stupid regulations required me to go to Lenscrafters to get a new prescription every year to order online even though my eyes haven't changed in 20 years, and the fact that Vassar has excellent vision insurance, which eliminates my incentives to shop around.

Lessons Learned:
  1. Monopoly power and the limits of arbitrage
  2. The costs of government regulation
  3. The Moral Hazard from having insurance

Sunday, November 03, 2013

Presidents are all the same: presidential lying edition

NPR's On the Media this week had a nice sequence of stories detailing the lies of the Obama administration and Obama himself, in terms of selling its Obamacare, as well as justifying NSA activities. It also goes on and details the administration's continuing war against reporters, and a follow up on its continuing coverage of the unprecedented secrecy of this administration.

I personally don't have strong opinions on the rightness or wrongness of any of these policies except that it supports my long time contention that presidential policies tend to be the same, determined more by institutions and situation and the median voter theorem rather than dispositional differences. People that call Bush the evilest president in history should acknowledge that Obama's polcies are largely similar.

One might say that the deception to sell the Iraq war was bigger somehow, (bigness is a relative and subjective measure of course) but I would say that pushing a healthcare overhaul is arguably one of the biggest domestic policy shifts in half a century, and the expansion of NSA powers is an unprecedented shift in expectations of privacy.

Wednesday, October 30, 2013

Who's war on science?

"I would avoid them. I would avoid them until there's more science that actually, you know, really says if it's safe or not. Right now there's a lot of contradictory information out there as to whether it's safe or it's not safe."

Sounds a lot like a republican complaining about some climate change policy, but in fact its a food activist in California campaigning against genetically modified (GMO) food. The NPR article points out (citing Michael Pollan of all people) that the scientific consensus is in fact that GMOs are safe.

Yes conservatives often find it convenient to ignore scientific consensus when it suits their purposes. but there are plenty of examples of liberals doing the same thing.

Monday, October 21, 2013

Big Data Travails

Lots have been said recently about Big Data. So I figured I'd try it out. If anyone wants to commiserate, I've spent the last few months wrestling with a dataset that has 47 billion observations. Simple tasks like downloading the data took time to learn Amazon's s3 interface to program, weeks to run, and then, just transferring the files to a different computer has caused me to curse that the only compatible file system between macs and windows is fat32 which can't possibly handle the number of files I have. And simple zipping and unzipping requires shell and perl and python programming and days to run, and fault tolerant code that can handle the inevitable crashes that comes with running things that take days to complete. Doing all that while keeping the data encrypted and secure. Anyway, all that said, if anyone needs help with Big Data questions, I may have some relevant experience.

Monday, September 23, 2013

Unpacking the LA public rail conspiracy

A nice story on the nice NPR design podcast 99% invisible unpacking the conspiracy that public transit and general anti-corporate advocates like that the car companies bought up the trolley cars in LA just to dismantle it in order to force people to buy cars. The sad truth is that mass transit systems tend to lose money, and most cost-benefit analyses for mass transit expansion, even ones that account for all the externalities, find that they just aren't cost effective.

Sunday, September 22, 2013

Reviewlet: Of Dice and Men

A surprisingly riveting book about the history of D&D. One of the neatest parts is he intersperses dry history with snippets of game play from his actual games, just like the old 2nd edition books. It was so sad when they got rid of those.

Nice to learn that D&D is more popular than ever as all the kids of my generation who used to play, now are old enough to play again at least in secret, and to convert their kids. I'm still amused that my friends are still embarassed to admit it (even though the author [a self professed giant nerd and editor at Forbes magazine] likens going to play D&D with the same embarassment as if he were seeking out drugs or strip clubs) even though the legacy of D&D now dominates pop culture, at least summer blockbusters [with frequent references by the likes of Conan O'Brian, Steven Colbert, Neal Stephenson, the writers of Community].

Also, neat to see the history of the game, from the war games that HG Wells helped write, to the identity of luminaries like Murlynd, Bigby and Tenser (of floating disk fame) the PC name and anagram of Gygax' 10 year old son Ernest, who along with his daughter Elise were the games first play testers.

He takes a detour into the uber-nerdom of LARPing mentioning the Lightening Bolt meme (which along with the Apatow movie Role Models is two mainstream references to LAIRE, the NJ larp group I used to do in high school).

Anyway, fun read. Final Review: A

Monday, August 19, 2013

The Media Bias On On The Media

This NPR story on possible bias in an NPR story sums up my views of mass media bias really well. I remember hearing the story over a year ago, about how the state of South Dakota is "kidnapping" Native American children through their foster children programs in order to collect federal money, and being annoyed. Not that the bias was overt, but just the typical journalistic biases that attributes human intentions to the workings of bureaucracies (in this case attributing evil intentions to republican bureaucracies), and the human need to connect various facts with narrative based reasoning (i.e. needing to fit facts together into a story even if no story exists). These biases are pervasive and thus I was incredulous when Ira Glass and On the Media were trying to argue a couples years ago that NPR was unbiased, but ultimately agreed with their take, that bias exists but it is subtle, based on human psychology, the institutional makeup, mostly unintended and not overt (On the Media's co-host has a nice comic book I just finished reading that summarizes all of this). Anyway, what I do appreciate, is that it is NPR itself that owns up to these biases (at least partially and over a year later), and thus I still tend to trust the system as a whole.

Thursday, August 15, 2013

My network TV debut

My network TV debut. (I never did find the footage from my BBC appearance). They happened to film at the coffee shop that I work at. I'm on for about half a second. I'm also shocked that people I know still watch network news and saw me on it. For the record, this is one of those awful correlational studies that seem mostly useless.

Monday, August 05, 2013

The Art of Ingratiating

NPR's on the media has a recent piece on the debate about unpaid internships suing their employers for wages. For me, the debate is not very interesting. My basic view is that interns should be paid what the market will bear, and if there are people willing to work for free, forcing employers to pay will just reduce the number of positions and increase unemployment.  (with all the usual caveats from the minimum wage debate).

But the more interesting line was their interview with one intern who says the key skill in an internship is "this process of figuring out how to sort of ingratiate yourself with the people with whom you are doing the internship, without being really annoying. That's a fine tightrope to walk."

Which is an important skill that is too rarely discussed or acknowledged. Something I have been working to perfect ever since I was 10 and teachers told me to stop raising my hand in class, to today, when its more about selling my research to the big names in my field without being annoying about it. I see people do both poorly all the time, whether its the pestering assistant professors crowding around an editor at a conference, to the students in class that probably raise their hand more often than they should. 

Friday, July 26, 2013

This American Life Nostalgia

The 500th episode and clip show for This American Life made me remember my first memory of my favorite NPR show. I was still in high school, and I realize now it was one of the first This American Life shows. Back then, I wasn't even aware of NPR's existence (a little sad given that I've listened to it obsessively ever since I discovered it), radio meant music, and the only alternative to music was conservative talk radio. I guess the local NPR stations were always staticy in my home town so it was only when I was driving somewhere, and happened to flip to to This American Life, and I had that moment, that this was something transcendent. The show was backstage at some high school musical. And it was so lovingly reported, taking such great care to listen hard to the stories of the everyday, of the mundane, somehow elevating it, like a Hopper, to the sublime. I've been an addict ever since.

Thursday, July 25, 2013

The Economic Consensus - Mankiw edition

I often remark that one nice thing about economics is that all economists (left and right) are trained to think alike. That's also a bad thing about economics too I suppose. But in any case, I just like this line from Makniw's recent ny times article on this subject. "It forever sets you apart — for better or worse — from mere muggles."

Adverse Selection in Action

This article attributes the steep decline in health insurance prices in New York to "competition" when the far bigger effect is simply adverse selection. Before Obamacare, insurers had to sell to anyone who wanted to buy in NY, but not everyone was required to buy, so only the least healthy would buy individual insurance, driving the prices up. The real change was requiring healthy people to buy insurance as well.

Monday, July 15, 2013

The origins of Obama's climate policy

Another recent column applauding Obama's energy policy made me start several conversations pointing out the origins of Obama's policies. I'll discuss the big ones, his CAFE fuel economy standards for cars, and his pledge for renewable electricity and curtailing coal. The main themes is that most of his policies are simple continuations or implementation of past policies, or otherwise simply taking credit for trends that were happening anyway.

Many (like Thomas Friedman) call Obama's Cafe standards for cars Obama's defining climate policy. It probably is the one that has the biggest impact, but really, the CAFE update was passed in 2007, based on a proposal by the Bush administration (that I helped write)  If you follow the trend line, you find the Obama regulations are pretty much right on the exact same trend line as the Bush proposal and subsequant energy policy act passed by Congress in 2007. Though I'm not saying Bush is responsible either, our policy came about due to pressure from a democratic congress, and from various supreme court rulings, based on laws written 40 years ago, and based on public pressure from high gasoline prices, and tensions in the middle east, all factors that probably would have led to roughly the same policies regardless of who happened to be sitting in the president's chair.

As for the policies on coal powerplants, the authority to use executive power is based on a 2007 supreme court ruling that carbon can be regulated under the clean air act of 1970. The bush administration threatened to use that authority to regulate carbon in 2007 but said that it would be better to do so through legislation (which we got) since executive power is controversial and subject to more litigation. (it is notable that Obama campaigned against Bush era executive overreach but like every president happily embraces it himself).

Also, the main provisions in the new Obama plan for electricity are the ones that basically ban conventional coal power plants, but that's disingenuous because coal power plants became uneconomic with the advent of natural gas fracking, so the regulation mostly has no teeth unless natural gas prices somehow reverse themselves (a possibility but unlikely).

This is similar to Obama's pledge to double renewable electricity by 2020. These were the federal government projections back in 2008 before Obama was elected: (see page 70) The doubling was projected for 2020 even then. We played the game too when I was in the Bush administration. Look at the projections (like oil imports or emissions) and take credit for the trends that were already happening anyway.
It's also worth noting that doubling a very small number is still a very small number.

Sunday, July 14, 2013

Obama's Climate achievements?

Grunwald argues in Time Magazine that Obama deserves more credit for his climate achievements..

I agree the climate debate rarely troubles itself with facts, but Grunwald's commentary in Time doesn't help at all. Many of the grand achievements for the Obama administration he claims (like vehicle and appliance standards) are based on the Energy Policy Act of 2007 (a bill proposed by Bush and passed with bipartisan support that I happened to help write). And yet Obama deserves the credit? It's also fair that the greens aren't impressed by Obama's climate actions, a rough calculation of the other policies you mentioned might reduce global emissions by a quarter percent?

Tuesday, June 18, 2013

Economic Science: objective guidance or articles of faith.

"I wanted to understand the extent to which empirical economic research can provide objective guidance for policy — and at what point even brilliant, highly trained economists resort to articles of faith"

Pretty great quote from my favorite economics reporter using a amicable debate btween Larry Summers and Glenn Hubbard to answer pretty much the above question. I do think most of economics research is objective and non-partisan. The problem is on the really big macro questions, about what causes long term unemployment or entrepreneurship or debt crises or growth, the economics research just doesn't know. And at that point, all that is left is judgment and faith.

Saturday, June 15, 2013

Joel Stein on the Economics and Potential of AI

This article is likely behind a paywall, but it's a nice summary by my favorite humor columnist Joel Stein on the economics and potential of artificial intelligence.

A nice discussion on the limits and potential for artificial intelligence that conforms nicely to my view of things. The question of consciousness if a tricky one and even confounds very smart friends of mine (with PhDs in AI even) who want to believe there is something inherently special about human brains relative to a computer when really there isn't. It also takes a fairly reasonable view of a future AI economy, where basic economics suggests that AI is simply another type of capital K, that should on the whole enhance the value of labor (wages), and allow us to specialize in other pursuits like art and human services. I like the line about how art requires the possibility of loss and death (like in Brave New World or Bicentennial Man) and therefore while AIs would in theory be able to produce it, why would you bother programming loss death into an AI.

Monday, June 10, 2013

The end of irony

I've been thinking about the end of irony for some time.

13 years ago, my cousins and I coined the term post-cynicism to herald the coming post-ironic age. I wrote about it on epinions, declaring Mallrats as the exemplar of a post-ironic age. 5 years ago, I helped organize a conference where MIT researcher Judith Donath declared that in a high-speed online age, irony is the key to cool, because of the in-group signaling value irony imparts, in an era where traditional money based status structures have slowly been deconstructed. Perhaps today we're at an end. There's been a spate of articles denouncing hipsterism, which as this n+1 article argues is defined by its ironic consumption.

So I like this paragraph from a recent Time review of the upcoming Superman (the first Superman movie I've ever been excited about), where the irony is.. the lack of irony... How meta... (Although meta feels so 90's)
Watchmen essentially dismantles the great Western myth of the Superhero--it's about exposing superheroes as tights-wearing neurotics and alcoholics and sociopaths--whereas Superman is the most ingenuous, unironic, unreconstructed, un-self-aware franchise of them all. But here Snyder was, in a parking lot in Vancouver in the rain, earnestly trying to breathe life back into the big blue Boy Scout. "All the movies I've made, I've made with a slight bit of irony," Snyder said. "Not even a slight bit. A fair amount. But the ironic part of this movie is that it's not ironic. You know what I mean? No tongue in cheek, no winking at the camera, no apologies. It's Superman. He deserves that."

Monday, May 27, 2013

An alternative look at the poverty line

An alternative anecdote to life making minimum wage at the povety line. As always, planet money does a good job at representing the typical economist view, using potent anecdotes. Her life includes carribean vacations, disney world trips (ok i took that from a previous planet money story about the eitc), access to free credit through credit card teaser rates (that regulation is destroying), an nyc apartment with washer-dryer (a luxury even we can't afford), much of it made available by her savvy navigation of the resources available, but also the tremendous government in-kind transfers (one blogger put the value of government transfers at up to $50,000 per household if you add in medicaid, housing allowances, food stamps, eitc, etc., the negative consequencs of which is that someone at the poverty line has a higher standard of living than someone above, disincentivizing work). Anyway, this view is clearly just an anecdote and doesn't necessarily imply any particular policy, but its a nice counterpoint to the typical poverty line narrative.

Wednesday, April 03, 2013

On the resilience of economies: npr on coney island

One heartening thing about modern economies is that negative shocks (super storms, tsunamis, fukushimas) don't seem to have lasting effects. The long term trend line will show a momentary dip, but economic activity tends to return to the same trend line as if nothing had happened. Planet Money covers this nicely through the metonymy of Coney Island.

Tuesday, April 02, 2013

"I don't do shows with dragons" NY Times on Game of Thrones

"i don't do shows with dragons" - a quote from a recent NY Times article on Game of Thrones. It still surprises me how popular Game of Thrones is. But I guess in an era where geek genre fiction has dominated the box office, it shouldn't be. Still, for me, the strength of the books back when I started reading in college was that it mostly operated without dragons and magic, and I lost interest precisely when dragons and magic started playing a greater role. 

Sunday, March 31, 2013

This American Life on Disability Insurance

It's rare that I find myself more liberal than NPR but I don't feel the outrage they seem to at the current disability payment system. Yes it is a huge amount of money and yes it is unfair and yes it disincentives work. But that's something you learn in Econ 101 so I guess I'm used to the idea. Plus I don't see an obviously better way. At least not one that is politically feasible (I suppose a large lump sum transfer coupled with a flat marginal tax is a good idea but would require a huge revamp of the tax system and is prettier in theory than practice )

Wednesday, March 13, 2013

Give Microsoft Word a Chance, Please?

So I've gotten into recent wrangles with a three different co-authors over writing three different papers in Tex versus Word. I even hired some Indian econ major through oDesk for $70 to convert a paper from Tex to Word. This is just my plea to give Word a chance.

Honestly, I should love TEX. I've been programming since I was in kindergarten  In terms of the hours needed for expertise, I probably put in my 10,000 programming and debugging hours before I finished high school. I love typography, and I love the beauty of Knuth's original vision of TEX. A senior thesis written in Tex was required of all math majors at MIT, and I still use Vi with its arcane key commands perfect for the tex environment for most of my text editing.

Still after trying all its incarnations as a grad student, from raw Latex using Vim to, to Scientific Word and Workplace, to WinEdit. And after struggling for hours just debugging an equation or figuring out how to double space, I deciding wrangling a word processing task just wasn't an efficient use of my time. And the profession is slowly shifting. At the last conference I attended, I noticed even theorists using powerpoint. Nature's preferred submission format is Word. And with a bit of wrangling, and proper use, you can make Word just as pretty as Latex, just few use Word properly, with headers and labels things.

The biggest hang up everyone always notes, is equations. People still remember the old Microsoft Equation editor that always crashed my computer and corrupted my files and was a pain to use. Ever since Word 2007 though, the new Equation editor works quite well, even better than Tex IMHO, taking most of its best features but simplifying, and since it's internal to Word, it doesn't create a million embedded objects that used to crash the document.

As an avid mouse hater, I tend to use keyboard shortcuts for everything. I still use old grandfathered in shortcuts like Alt-E-E for replace. Sadly, there is no shortcut for "Insert New Equation." But that's easy to add to the Quick Access Toolbar on top, so for me, its the second thing I have up there, so its just Alt-2 to insert an equation. Then just like latex, equations inserted on its own line will be centered, while inline equations will be formatted for inline.

When you insert a new equation you can just type as in latex, something like (x+e^x)/(1+\alpha) and after hitting a space it will render it correctly. Or \int_0^\infty x=x^2/2

The main advantage over latex is that fractions are handled as just (blah)/(more blah) instead of the clunky \frac{blah}{more blah}
Unfotunately, most of the language Word uses (based on PlainText Math) are not well documented, but you can find a pretty close summary of Plaintext in a pdf here.

The biggest flaw I will admit is that Word for some dumb reason still doesn't number equations automatically  There are macros that I found on microsoft's website that are somewhat clunky but they work.

Wednesday, February 27, 2013

Time Magazine's wrong on the cost of healthcare

Time magazine devotes an entire issue to the economics of healthcare, and while I appreciate the effort, and it gets somethings right, its written by someone who makes really basic fundamental mistakes in terms of the economics of cost benefit analysis, and focuses on a really minor part of the problem, which is the difference between list price and actual price.

It makes for shocking anecdotes to look at the markups hospitals charge for things like asprin (10000%), but since the only people who pay the list price are the handful of patients who don't have insurance but are rich enough to pay the list price, it is hardly a fundamental problem. Lots of industries have odd markups and strange pricing (like airlines or government contractors or consultants), and yes this is problematic, but I'm not sure this is fundamental.

His larger point that we should have price competition is a popular solution by conservatives, it was big under the W. Bush administration, but hardly any other country in the world relies on price competition to set prices. Also his other proposed solution of using medicare to set prices is a popular solution amongst marxists, but is also problematic. The distorting effect of government set pricing has been shown to create huge costs.

The article also to make this more dramatic, talks about the large profits for non-profit hospitals. So this is odd since non-profit hospitals are by definition zero profit companies. So in perhaps the only footnote i've ever seen in a magazine, it defines profit as revenue minus operating cost and depreciation. What he calls profits, is the money spent on expanding the hospital. The author defines this as pure waste and spends most of the article talking about how to get rid of it, but usually when its measured, most healthcare spending does seem to yield real returns. So getting rid of these "profits" really means getting rid of future healthcare services.

The fundamental flaw is he makes the freshman mistake of conflating cost and price. The cost of something is the opportunity cost of producing it. A real cost. The price represents a transfer. There's a difference. Transfering $1 from me to you, by itself represents no real cost to the economy. I lose $1, you gain. The net is zero. The cost occurs only from the distortions that occur.

Wednesday, February 13, 2013

My Sorry dissertation as an SMBC comic

The economics of apologies. Actually the comic is more a reflection of Aaker Fournier and Brasel (2004) who actually did this experiment by creating an online photo company, and then losing people's pictures. My model and experiments (2012) suggests that this is an out of equilibrium outcome. as mistakes can never generate a net benefit if players have rational expectations.

Tuesday, February 12, 2013

Amazon Auto-Rip

Well this is super neat. The frustrating thing for me is having bought songs in different formats, and being forced to buy them again. Amazon is automatically moving any physical CD purchased from amazon onto their cloud player system and available for mp3 download. The next thing I'm wishing for is to find some way to convert all the mp3s i've purchased from itunes and convert that as a down-payment for  some kind of spotify type subscription, which to me is the most sensible way to listen to music.

Sunday, February 10, 2013

Arbitrariness of Aesthetic Judgment

Sabbatical has allowed me to finally make a dent on my pile of unread economists. Finally nearing the bottom of the stack, that are just over a year old. Found this article today...

As in the wine trial, where experts prefer New Jersey wines to the top French vintages in blind trials and think wine tastes better when they have a higher price tag, in blind randomized trials, experts prefer modern violins to the 17th centuray Stradivari that are typically coveted.

Friday, February 08, 2013

Energy Density is Inconsequential Comic

This is the comic I need to put up whenever someone makes an energy density argument to defend their favorite pet fuel. For whatever reason, one of the most common argument scientists or engineers in the field of energy make in favor or against any particular fuel is always about energy density. Ethanol's not as good as gasoline as it has lower energy density. Gasoline's not as good as diesel. Plants have a very low energy density so biofuels are dumb. Honestly, after net energy balance (something almost as useless) you hear this argument second most often. But that's only because as scientists its one of the only numbers they can grasp but its about as consequential to choosing a fuel as the color. If energy density really mattered, we'd only use uranium.

What really matters is an accounting of ALL the costs and ALL the benefits. Uranium may be a viable alternative fuel source but its costs and benefits have very little at all to do with the energy density. Just saying plants have a very low energy density doesn't mean it might not be cost effective. Sure, it takes 4.2 bushels of corn to make one gallon of ethanol based gasoline, but if it costs less (including all the externalities) of making energy that way compared to say getting an equivalent amount of power from building a solar power plant, shipping in materials, accounting for depreciation, building  a billion new electric cars, then ethanol is a better fuel source. The energy density is irrelevant.

Saturday, February 02, 2013

Reviewlet: Steve Martin's Object of Beauty

Just had the best dentist appointment of my life (friendly, clear prices, online booking, neat video technology, efficient cleaning by the dentist instead of a hygeneist) on the 7th floor of the Gallery building in midtown Manhattan chock full of little art galleries selling both contemporary art but also niches like Duchamp and Picasso sketches. Walked into one, where a gallery girl (like the eponymous awful Bravo reality show) was listening to a live art auction, which was appropriate since I just finished Steve Martin's Object of Beauty, about the contemporary art world over the past 20 years that starts off in the back rooms of Sotheby's.

The title refers to a line about when a painting goes from being an object of beauty to an object of value, or if you want to be fancy, the commodification of art. Though the title could be read also as the Objective of Beauty, or equally as a reference to the main character, Lacey Yeagar, an eager ruthless bright pretty young object, a gallery girl who is compelling and irresistible but ultimately empty and flat. She stands in contrast to the paintings that she sells the best of which pop and come to life. The book follows Lacey's career from art world debutante in the 1990s (like HBO's Marni) to running her own gallery in the present day (like HBO's Charlotte).

Calling it a novel is misleading, because there is no plot, no conflict, the characters don't change. The characters are mostly as lifeless and empty as a Popper street scene, a Chardin stil life, or a Warhol silk screen (perhaps intentionally), the book is more like what Sophie's World did for philosophy, or Atlas Shrugged for Objectivism, a portrait of the world of art commerce that hangs on a novel-like frame.

Given what I do for a living, its perhaps surprising that I know far about the aesthetic side of art rather than the commercial, so I was fascinated about the "insider's perspective" of art gallery careers, art patrimony from Russia to China, art criticism, art crime, art auctions, and the manufacture of value for something as inherently valueless as a dollar bill. All while bouncing around what are still fashionable Manhattan locales.

The book contains beautiful reproductions of a dozen or so paintings that does fairly well much of mostly American art (rendered beautifully in the kindle App), and does a nice job in helping appreciate these paintings through the mind of a collector.

While an enjoyable read (you can occassionally here Steve Martin's voice in the narration), it wasn't quite a rich experience, and I probably would have gained just as much from a long form New Yorker article on the same subjects.
Final Grade: C+

Wednesday, January 23, 2013

Economic Heresy: Carbon Prices are Useless

My policy views tend to align pretty close to the economic consensus. Especially on the many issues where the profession is close to 100% in agreement. One where I disagree a bit (perhaps due to the cognitive dissonance of spending a year defending Bush Era climate policy) is that carbon prices are useless. The problem is that most cost-benefit analyses suggest relatively small carbon prices (that would say increase the price of gasoline or electricity by about 10-20%). However, the major externality is not the carbon externality, it is the technology externality. Such small carbon prices have had (in Europe where they have been in place for a decade) and likely will have minimal impact. This recent economist article on coal notes that despite Europe's carbon pricing, they have moved in the wrong direction on climate while the US's carbon price free economy is getting significantly more carbon free. The reason is largely due to shifts in technology (mostly natural gas related) that far swamp out any small carbon price effect. Which is why R&D focused policies (like the nearly identical policies under both Bush and Obama) may be far more important than carbon prices. Especially because technology has a better chance shifting behaviors in places like China and Africa, than political wrangling will.

Wednesday, January 16, 2013

Food for Fuel Schizophrenia

A common mantra in the biofuel debate even by respected people is that using food (like corn, soy, etc.) to make gasoline and diesel is inherently wrong because food should be for eating. Fundamentally, using food for fuel is a shift in the demand for fuel, and raises the price of fuel for everyone else. We agree that this has negative consequences as is well documents by numerous ny times articles. What struck me though about that particular article is that it acknowledges that activists for the past 20 years have been campaigning for the opposite, an end to agriculture subsidies (in the US, Europe and Japan) because such subsidies shift the supply curve out, and lower the price of food, hurting poor farmers (which is still the majority of the developing world. and most of the poorest).

You can't have it both ways. You can't complain at the same time that food prices are too high and that food prices are too low. Honestly, the net effect of both policies on food prices has been shown to be quite small (at least when I did the calculation at the White House though I think its still true), so its all a lot of noise about nothing.

Tuesday, January 15, 2013

The means of production are democratized

A recent npr planet money story discussed 3-D printing and how it is bringing to means of production to anybody with a personal computer and a desktop 3-D printer that are already as cheap as 2-D printers were a decade ago. Noting that Karl Marx said "power belongs to those who own the means of production [capital]" it pained an optimistic view of a more equal future.

Of course this really isn't new. As my economic history prof/adviser Avner Greif noted, Marx' revolution never came because even though he's right that capital is the road to wealth, right as he died, human capital began to supplant physical capital as the most important capital in the economy. And human capital is harder to concentrate.

Already 70% of the US economic is from services. 3-D printing may help democratize the shrinking sliver of the economy that is about making things, and that is a good thing, but its not that new.

Wednesday, January 09, 2013

Reviewlet: Les Miserables

Agree with nytimes curmudgeon Manola Dargis, Anne Hathawawy's performance was absolutely breathtaking, and the rest of the movie, just felt a bit too long and exhausting. Interesting to compare the movie format to theater. The movie took the extreme close up to an even more intense level, with every solo having the actor's face take up full screen, sometimes even partially cutting off the face, this was especially imposing on imax. this worked intensely well for some (notably Hathaway, but also for Marius and surprisingly Seyfried), but less well for the others (notably Jackman who just didn't work for me). Not generally a fan of Amanda Seyfried, but aside from Hathaway, she really was a standout, elevating the normally boring forgettable role of Cosette and, walking the fine line for those high soprano runs between fluttering and shrieking.

Also interesting coming back to les mis, its been over 15 years since last seeing it, and new things resonate, from the wasted energies of the student, to how universal some things are with echoes of Tienanmen and student revolutions today, to the relationship between Valjean and Cosette.
Final Grade: A-

Thursday, January 03, 2013

Game of Thrones: Romance of the Three Kingdoms and Kindle X-ray

Just finished volume 4 of this epic long series. Not looking forward to volume 5. I liked Volume 4 because he left out all the characters I didn't really like (Jon Snow, Stnanis, Melisandre, Danerys, Davos), but unfortunately volume 5 is just about them. Also near the end I discovered the new Kindle X-ray feature that identifies all the characters on the current page and shows you all the previous times they were mentioned. Which is crazy useful here since X-ray notes there are over 500 characters. It also occurred to me that these books remind me most of the Three Kingdoms period of Chinese history (which I know most about from nintendo games) rather than European, in the rapid dissolution and reformation of many alliances and mini-kingdoms after the central empire fell, all in the span of a single lifetime.I can't think of a comparable period in Western history, (maybe the Germanic states and Prussia) but likely just because my European history is lacking. I suppose late 19th century Europe might be closest (the setting of the board games Castle Risk and Diplomacy) but I suppose the difference is that the natural state of Europe seems to be many states, and unified Europe ephemeral, whereas in Westeros as in China, the opposite was true.