Andrew Gelman: Hoisted from the Comments

This is Joseph

This comment from Andrew Gelamn showed up on an earlier post:

Joseph:

A related issue came up a few years ago regarding Mankiw's views on taxes: he seemed to think that the state should only tax things that are “unjustly wrestled from someone else.”

This seemed a bit odd to me, given that when you consider sales taxes, income taxes, import taxes, etc.: presumably almost none of these are taxing things that are unjustly wrested.

I think the usual view is that taxation is, from the government's perspective, a way to raise revenue; and, from the taxpayer's perspective, a cost of doing business. But Mankiw seems to view taxes as a sort of punishment or fine.

I actually don't think Mankiw has fully thought these ideas through, which seems strange given that his field is economics and his specialty is public communication.

Or maybe he just hasn't communicated well enough. Here's what I wrote in that earlier discussion:

"I realize that [Mankiw and his collaborator] are trying to be provocative, but I think they're being provocative in the context of an argument among economists that I don't fully understand. It's sort of an academic version of those all-black paintings in the Museum of Modern Art that can only be understood as responses to earlier paintings (as described, for example, in Tom Wolfe's book, The Painted Word)."

I rather liked this comment because it made me think that it was possible that I was missing the major thrust of the argument.  I am quite familiar with the "taxes are theft" line of thinking and I'd rather assumed that this was just a dressed up version of that argument.

But maybe there is a big piece that I am missing.  Given that, what I think would be the most useful thing would be for the defenders of this orthodoxy to insert some context.  Even if it is hard to grasp, saying something like "It's hard to grasp if you don't have a sense of the arguments that this is in response to" would be very useful (maybe with a couple of these arguments.

Immanuel Kant wrote the almost unintelligible (at least in English translations at the time I was in graduate school) critique of pure reason and followed it up with the (far more understandable)  Prolegomena to Any Future Metaphysics, that I had not trouble following.  I still never quite managed to connect it to what was in the critique, but at least I had an idea of what the whole thing was about.

Does nobody read primary sources?

This is Joseph.

I get confused about whether people read sources or just rely on summaries of them a lot in modern discourse.

For example, Niccolo Machiavelli is famous for saying that it is better to be feared than loved (with the codicil "if you cannot be both").  But nobody keeps reading and notices that he then puts several paragraphs (and then Chapter 19) pointing out that it would be even worse to be despised and hated.

So being tough only works (in his formulation) if it generates fear but does not give rise to hate.  That suggests a rather different balance of strategy, that looks like:

• Feared and Loved
• Feared
• Loved
• Hated or Despised

Yet I often see that quote used to justify tough actions and to avoid appeasement.  But being both feared and loved is the best possible outcome, and being hated is definitely worse than being loved.  So, in an odd sort of way, he is actually pushing moderation in action (not too soft, not too nasty) which I would never of picked up on without actually reading the book again.  Even the Wikapedia page doesn't really make this hierarchy clear.  

[The discourses, where he talks about how to make a republic work, are also of great interest and likely a lot more topical than how to be a tyrant]

The welfare state

This is Joseph

Matt Yglesias talks about the issues regarding opposition to the welfare state:

This is why thoughtful opponents of the welfare state have generally avoided making the argument that capitalism is good because it promotes human well-being. Since capitalism does promote human well-being, "capitalism promotes human well-being" sounds like a good argument in its favor. But it turns out that capitalism plus a large welfare state promotes human well-being even more. So you either need to embrace the welfare state (the correct answer) or come up with another justification of capitalism. One that frequently arises is what Greg Mankiw has referred to as the "just deserts" perspective in which "people should receive compensation congruent with their contributions" and we should aim for a society in which public policy ought to ensure that "every individual would earn the value of his or her own marginal product."

So if, for example, you are blind and inability to see makes it hard for you to earn a living in an unregulated market that's too bad for you. Your vision impairment means your ability to contribute to market production is limited, and therefore it is morally appropriate that your living standards be limited as well. By the same token, if a combination of genetics and childhood living conditions have left you with an IQ that is 2 standard deviations below average (this is about five percent of people) then, again, it's just the case that you deserve to have a much lower standard of living than society could provide for you if it were willing to do more redistribution.

Mankiw's moralized capitalism seems bone-chilling to me but I don't really think I can prove him wrong. It is, however, pretty trivial to see that Mankiwism isn't a Christian worldview.

This is really the major challenge of neo-conservative or libertarian thought.  You can argue that government is inefficient, but that is an argument for good government and not an argument for trying to create a self-fulfilling prophecy.  Proponents of the welfare state can easily argue that the focus should be on improving the role of government -- improving both efficiency and accountability. 

The only argument for the just desserts argument that I can think of (as absolute adherence to economic efficiency as the main determinant of human value seems like a dead end) is that it produces more economic efficiency on the long run.  The problem is that areas of very low levels of government do not create vast periods of economic growth.  You can have growth flourishing despite great conflict (see the American Civil War or the War of the Roses).  But when the state actually collapses (see the English Civil War or recent events in Syria), you end up with people like Hobbes arguing for more government. 

Nor have experiments with lesser versions of this worked out well.  The data is inconclusive with respect to tax cuts for the wealthy, but the trend is not supporting this mechanism. This makes it hard to figure out why this viewpoint is so generally popular.  After all, nobody is arguing that we should have a French Revolution or even massive taxes.  Instead, the current argument is whether we should redistribute wealth to look a little bit more like other industrialized nations.

Are we all missing an argument? 

"So long and thanks for all the fish"

I've fallen into this trap before.

I'm driving down the road channel surfing the radio and I come across a snippet of something that sounds interesting on one of the NPR stations. I stop and listen long enough to start to get into the topic before I realize that this is RadioLab.

Now I am faced with a difficult choice:

I can change the station despite having become curious about what's going to happen;

Or I can continue to listen until the inevitable annoyance and disappointment kicks in.

I have been in this situation often enough to know that these are the only two possibilities. No matter how promising the opening or how intriguing the subject, I will regret it if I listen to the whole thing.

RadioLab beautifully illustrates the somewhat counterintuitive principle that if you're going to imitate someone, you are often better off imitating the mediocre than the great. The show is clearly trying to be the next This American Life. All of the cute touches and distinctive mannerisms are aped, but without any sense of taste, proportion, style, or restraint. The result is an overproduced, painfully self-satisfied show narrated by two grown men who can't get enough of each other.

All of this might be forgiven if the people behind the show were anywhere near as smart as the TAL crew and had something of interest to say.

One of the reasons that This American Life works is because what might otherwise tip over into excessive production on another show is supported by a foundation of extraordinarily solid journalism. No one is better at bringing clarity and insight to a big story like patent abuse or the financial meltdown of 2008. The chatty tone, the sound montage and all of the other potential distractions only serve to enhance the story because the reporting is so good.

RadioLab specializes in even bigger topics like the nature of language. Unfortunately, this added ambition only highlights the producers' limitations. Instead of clarity we get oversimplification; instead of insight we get lots of TED talk style geewhiz pseudo-profundities.

Which brings me to today's show ("today" being a relative term but anyway...).


When I tuned in, a researcher was discussing her work with dolphins in the sixties. I stuck with it through the discussion of giving the animals LSD, but then they got to the weird part...

When I turned the radio back on, the story featured a different researcher had moved to the present day. The methodology was more conventional but the annoyance factor was just as high.

Putting aside an enthusiasm level that would have been slightly excessive had the reporter been the first astronaut to land on Mars, the approach to the underlying scientific questions was awful.Even Malcolm Gladwell would've thrown up.

The big payoff also contained the most unintentionally telling part of the program, but first a little bit of background: according to the program (and I have no reason to doubt this), each individual dolphin has a distinct signature whistle. The reporter (who was also the producer of the segment) and the hosts consistently discussed this in anthropomorphic terms as the dolphins' names.

As an experiment, the researchers had come up with something like a voice recognition system for dolphins that categorized certain sounds as "words" and would also "speak" certain new words that represent, among other things, individual divers.

The big climactic moment came when one of the divers "spoke" her name, at which point one of the dolphins turned and "spoke" his signature whistle. This is where we hit the unintentionally revealing part. One of the hosts asked if this represents a major linguistic breakthrough, at which point the reporter suddenly switches to conscientious mode and tells us how rigorous the researcher is. We are told this would have to happen 35 times before... Then we literally get the sound cue from Close Encounters of the Third Kind and a discussion of all of the deep philosophical conversations we might have with dolphins in the future.


This is what thirty plus years of TED Talks leads to, an entire generation of journalists and writers who think this is what science is about: take some isolated study or statistic, ignore the context and previous body of research, and instead start drawing sweeping inferences and telling elaborate narratives.

Preferably with lots of cute banter.

We have little evidence that our approach is effective, but at least it's inhumane -- UPDATED

Children deserve an opportunity to play. If you deny them that opportunity, you'd better have a damned good reason.

This excellent article by Tim Walker (a former teacher in the U.S. now based in Finland) illustrates a couple of points we've been making about the education reform movement over the past few years.

The first is just how tough on kids many of these policies are, from crushing workloads to harsh discipline to attrition practices that routinely discard kids who can't handle the strain. The underlying (and sometimes explicit) assumption of the movement is that what matters is optimizing certain metrics that appear to correlate with future earnings. Even if the policies perform as promised, that doesn't mean we should ignore the other costs kids have to pay.


But what if these new policies aren't actually better than the more humane ones they're replacing?

As with the education reforms of the sixties, the major precipitating factor of our current reforms was fear that we were falling behind other countries, particularly, in this case, Finland, but if you look closely, you'll notice a strange contradiction: arguments that start out with the premise that we need to be more like countries such as Finland and Canada,  often end with the conclusion that we need to employ the opposite educational approaches.

“The changes to kindergarten make me sick,” a veteran teacher in Arkansas recently admitted to me. “Think about what you did in first grade—that’s what my 5-year-old babies are expected to do.”

The difference between first grade and kindergarten may not seem like much, but what I remember about my first-grade experience in the mid-90s doesn’t match the kindergarten she described in her email: three and a half hours of daily literacy instruction, an hour and a half of daily math instruction, 20 minutes of daily “physical activity time” (officially banned from being called “recess”) and two 56-question standardized tests in literacy and math—on the fourth week of school.

That American friend—who teaches 20 students without an aide—has fought to integrate 30 minutes of “station time” into the literacy block, which includes  “blocks, science, magnetic letters, play dough with letter stamps to practice words, books, and storytelling.” But the most controversial area of her classroom isn’t the blocks nor the stamps: Rather, it’s the “house station with dolls and toy food”—items her district tried to remove last year. The implication was clear: There’s no time for play in kindergarten anymore.

...

But Finland—a Nordic nation of 5.5 million people, where I’ve lived and taught fifth and sixth graders over the last two years—appears to be on the other end of the kindergarten spectrum. Before moving to Helsinki, I had heard that most Finnish children start compulsory, government-paid kindergarten—or what Finns call “preschool”—at age 6. And not only that, but I learned through my Finnish mother-in-law—a preschool teacher—that Finland’s kindergartners spend a sizable chunk of each day playing, not filling out worksheets.

Finnish schools have received substantial media attention for years now—largely because of the consistently strong performance of its 15-year-olds on international tests like the PISA. But I haven’t seen much coverage on Finland’s youngest students.

So, a month ago, I scheduled a visit to a Finnish public kindergarten—where a typical school day is just four hours long.

* * *

Approaching the school’s playground that morning, I watched as an army of 5- and 6-year-old boys patrolled a zigzagging stream behind Niirala Preschool in the city of Kuopio, unfazed by the warm August drizzle. When I clumsily unhinged the steel gate to the school’s playground, the young children didn’t even lift their eyes from the ground; they  just kept dragging and pushing their tiny shovels through the mud.

At 9:30 a.m., the boys were called to line up for a daily activity called Morning Circle. (The girls were already inside—having chosen to play boardgames indoors.) They trudged across the yard in their rubber boots, pleading with their teachers to play longer—even though they had already been outside for an hour. As they stood in file, I asked them to describe what they’d been doing on the playground.

“Making dams,” sang a chorus of three boys.

“Nothing else?” one of their teachers prodded.

“Nothing else,” they confirmed.
...

And there’s no such thing as a typical day of kindergarten at the preschool, the teachers said. Instead of a daily itinerary, two of them showed me a weekly schedule with no more than several major activities per day: Mondays, for example, are dedicated to field trips, ballgames, and running, while Fridays—the day I visited—are for songs and stations.

Once, Morning Circle—a communal  time of songs and chants—wrapped up, the children disbanded and flocked to the station of their choice: There was one involving fort-making with bed sheets, one for arts and crafts, and one where kids could run a pretend ice-cream shop. “I’ll take two scoops of pear and two scoops of strawberry—in a waffle cone,” I told the two kindergarten girls who had positioned themselves at the ice-cream table; I had a (fake) 10€ bill to spend, courtesy of one of the teachers. As one of the girls served me—using blue tack to stick laminated cutouts of scoops together—I handed the money to her classmate.

With a determined expression reminiscent of the boys in the mud with their shovels, the young cashier stared at the price list. After a long pause, one of her teachers—perhaps sensing a good opportunity to step in—helped her calculate the difference between the price of my order and the 10€. Once I received my change (a few plastic coins), the girls giggled as I pretended to lick my ice cream.

...

“Play is a very efficient way of learning for children,” she told me. “And we can use it in a way that children will learn with joy.”

The word “joy” caught me off guard—I’m certainly not used to hearing the word in conversations about education in America, where I received my training and taught for several years. But Holappa, detecting my surprise, reiterated that the country’s early-childhood education program indeed places a heavy emphasis on “joy,” which along with play is explicitly written into the curriculum as a learning concept. "There's an old Finnish saying,” Holappa said. “Those things you learn without joy you will forget easily.”

After two hours of visiting a Finnish kindergarten, I still hadn’t seen children reading. I was, however, hearing a lot of pre-literacy instruction sprinkled throughout the morning—clapping out syllables and rhyming in Morning Circle, for example. I recalled learning in my master’s degree courses in education that building phonemic awareness—an ability to recognize sounds without involving written language—was viewed as the groundwork of literacy development.

Just before lunch, a kindergarten teacher took out a basket brimming with children’s books. But for these 5- and 6-year-olds, “reading” looked just like how my two toddlers approach their books: The kindergartners, sitting in different corners of the room, flipped through pages, savoring the pictures but, for the most part, not actually deciphering the words. Osei Ntiamoah told me that just one of the 15 students in her class can currently read syllable by syllable. Many of them, she added, will read by the end of the year. “We don’t push them but they learn just because they are ready for it. If the child is willing and interested, we will help the child.”

...

Meanwhile across the Atlantic, kindergarten students like that of the Arkansas teacher are generally expected—by the end of the year—to master literacy skills that are far more complex, like reading books with two to three sentences of unpredictable text per page. “These are 5- to 6-year-olds!” the Arkansas teacher wrote in disbelief.

More than 40 states—including Arkansas—have adopted the Common Core State Standards, which contain dozens of reading expectations for kindergartners. In the United States—where 22 percent of the nation’s children live in poverty (more than 16 million in total)—the Common Core’s emphasis on rigorous language-learning in kindergarten could be viewed as a strategy for closing the alarming “Thirty Million Word Gap” between America’s rich and poor—holding schools accountable for having high expectations for their youngest students.

Furthermore, unlike the reality of teaching kindergarten in Finland where the poverty rate is 10 percent and the student-teacher ratio is typically 14:1 (based on national guidelines), most American kindergarten teachers don’t have a choice whether or not they teach reading. Under the Common Core, children should be able to “read emergent-texts with purpose and understanding” by the end of kindergarten. Ultimately, they’re expected to, at the very least, be able to decode basic texts without the support of a teacher.

“But there isn’t any solid evidence that shows that children who are taught to read in kindergarten have any long-term benefit from it,” Nancy Carlsson-Paige, a professor emeritus of early childhood education at Lesley University, explained in a video published by the advocacy group Defending the Early Years.

Research by Sebastian Suggate, a former Ph.D. candidate at New Zealand’s University of Otago studying educational psychology, confirms Carlsson-Paige’s findings. One of Suggate’s studies compared children from Rudolf Steiner schools—who typically begin to read at the age of seven—with children at state-run schools in New Zealand, who start reading at the age of five. By age 11, students from the former group caught up with their peers in the latter, demonstrating equivalent reading skills.

“This research then raises the question,” he said in an interview published by the University of Otago. “If there aren’t advantages to learning to read from the age of five, could there be disadvantages to starting teaching children to read earlier?”

[note: I fixed a couple of garbled sentences shortly after posting this. -- MP]

P.S. Thoreau points us to this relevant story from Minnesota:

Two Edina elementary schools hire recess consultant

Playworks reports that its partner schools boast drops in disciplinary incidents and increases in participation and focus in class.

The aim is to build skills that would make kids “incredibly successful adults,” said Shauna McDonald, executive director of Playworks Minnesota. “It’s about creating opportunity.”

Mathematica Policy Research and Stanford University studies found that Playworks resulted in less bullying and more learning focus in schools.

Playworks has offered its services or had its staff in elementaries around the metro area — including schools in the Minneapolis, St. Paul, Anoka-Hennepin and Minnetonka school districts — and across the country.

...

Edina school officials say that data collected through the fall will determine whether Playworks will eventually be rolled out at all schools. Its implementation wasn’t spurred by any extreme uptick of behavioral issues, but rather a desire for quality playground experience, said Susan Brott, district communications director.

After kids have a lot of fun playing outside, it can be difficult getting them settled down and focused on classwork. Everybody knows this and has known this since we introduced the concept of a classroom. What has always been in dispute is whether these difficulties warrant the elimination of unstructured play.

The supporters of Playworks are using an old rhetorical dodge: starting out with a universally accepted premise and a highly questionable conclusion, they focus all of their arguments and evidence on A andd hope that people don't notice its weak connection to B.

Three from Marketplace, presented almost without comment

I'm trying to prioritize my blogging, both in terms of reducing total time and focusing on finishing up some of the massive backlog in the draft folder. I've even been avoiding sites like Mike the Mad Biologist because each visit tends to add to the to-write pile.

I should probably add Marketplace to the do-not-visit list, but life in LA means a lot of time behind the wheel and that's one place where I can't seem to kick the news habit.

As a compromise, here are brief descriptions of three stories and one series that I'd like to write more about:

In perhaps the ultimate in past-posting, the latest slot machine fad has people betting on historical horse races.

On the class stratification front (insert Eloi/Morlock reference here)...
   Similar credit scores = true love

The Marketplace website (which I'm not a fan of) hadn't put up a link last time I checked but Kai Ryssdal closed a recent show by mentioning an app that cancels your Comcast subscription for you.

And finally, I definitely want to blog in the future on this exceptional series on gentrification.
   York & Fig

New York Times definition of the week: "full-fledged investigation" = one Google search UPDATED

Brad DeLong has a very good overview of the ethical train wreck surrounding the New York Times review of Niall Ferguson’s Kissinger biography, but there's one aspect of the story that I think deserves more attention.

 Here's a quick recap (pay close attention to the dates).

Things started with the NYT assigning the review of conservative historian Ferguson's book to the remarkably like-minded Roberts, thus making a positive review quite a bit more likely.

Niall Ferguson’s ‘Kissinger. Volume I. 1923-1968: The Ideal­ist’
By ANDREW ROBERTS SEPT. 30, 2015

That would probably been enough to raise some eyebrows, but it turns out that the connection between Ferguson, Roberts and Kissinger went a bit deeper than that. The outcry prompted the paper to append this to the review:

Editors’ Note: October 2, 2015

After this review of the first volume of Niall Ferguson’s authorized biography of Henry Kissinger was published, editors learned that the reviewer, Andrew Roberts, had initially been approached by a publisher to write the biography himself; he says he turned the offer down for personal reasons, and Ferguson was eventually enlisted to undertake the task. In addition, Roberts and Ferguson were credited as co-authors of a chapter contributed to a book edited by Ferguson and first published in 1997 (Roberts describes their relationship as professional and friendly, but not close). Had editors been aware of these connections, they would have been disclosed in the review.

It was also the subject of a column by the New York Times public editor.

Conflicts and Kissinger: A Tale of Two Book Reviews

By MARGARET SULLIVAN
October 2, 2015

In the italic identification line appearing with his review of a new biography of Henry Kissinger, Andrew Roberts is described only as “the Lehrman Institute distinguished fellow at the New-York Historical Society.” And that is true.

But Mr. Roberts also seems to have what many reasonable people would consider a conflict of interest as a reviewer: He was Mr. Kissinger’s earlier choice to write his authorized biography, according to an interview with a United Kingdom newspaper, The Scotsman.

The Times Book Review editor, Pamela Paul, told me Thursday that she was unaware of this before the publication of a Gawker piece that makes much of that relationship and of Mr. Roberts’s acquaintance with the book’s author, Niall Ferguson.

...

She made the point that Book Review editors cannot realistically open full-fledged investigations into their reviewers’ backgrounds. If Mr. Roberts had told editors that he had turned down the chance to write the book himself, Ms. Paul said that it might not have disqualified him as the reviewer but that she would have had him acknowledge that information in the review.

There's a lot to discuss here, but let's just focus on the part about "full-fledged investigations." Exactly how much time would it have taken to uncover this particular issue? If I wanted to check for potential conflicts of interest between two public figures, my first thought would be to do a Google news search of both names. Obviously, search results are a moving target, but you can get a pretty good idea of what the results would have looked like by setting an appropriate date range.

When I tried this search, here was what I found in the fourth result:

Londoner's Diary: Niall Ferguson’s struggles with Kissinger’s life

    Monday 10 August 2015 15:30 BST

Ferguson, a professor at Harvard, was first mooted back in 2004 but only after Andrew Roberts backed out (and in doing so returned a £400,000 advance).

PS While most of us are familiar with Ferguson (see Andrew Gelman's comments below), Robert's record, though remarkably similar in style and substance, is less well-known. This will give you some idea why the New York Times decision to assign him the Ferguson/Kissinger review was so questionable.

From Wikipedia:

Although Roberts's 2006 work A History of the English-Speaking Peoples since 1900 won critical acclaim from some sections of the media,[20][21] The Economist drew attention to some historical, geographical and typographical errors,[22] as well presenting a generally scathing review of the book. The news-magazine referred to the work as "a giant political pamphlet larded with its author's prejudices".[22]

One claim made by Roberts in A History of the English-Speaking Peoples since 1900 was that Harvard historian Caroline Elkins had committed "blood libels against Britain" in her Pulitzer prize-winning book Imperial Reckoning: The Untold Story of Britain's Gulag in Kenya.[23] Elkins was subsequently vindicated when files released by the National Archives showed that abuses were described as "distressingly reminiscent of conditions in Nazi Germany or Communist Russia" by the Solicitor General of the time.[24] The Foreign Secretary William Hague subsequently announced compensation for the first round of victims with statements that the British government "recognises that Kenyans were subjected to torture and other forms of ill-treatment" and "sincerely regrets that these abuses took place" during the Kenya Emergency.[25][26]

Controversial journalist Johann Hari alleged that Roberts' writings defended the Amritsar massacre, the concentration camps for Afrikaners during the Anglo-Boer War and mass internments in Ireland. Hari also wrote that Roberts addressed the expatriate South African Springbok Club that flies the pre-1994 South African national flag and calls for "the re-establishment of civilised rule throughout the African continent".[27] Roberts responded by saying that he did not realise the Springbok Club was racist when he took on the speaking engagement.

Occam's Razor

This is Joseph.

I know Mark is often lukewarm about Kevin Drum.  But he has been asking some pretty good questions lately, and I think this one about Hillary Clinton is quite good.  I find, in practice, that people tend to assume that others know about he things that they do.  Many of my most geeky friends who are good with coding also tend to not be the biggest fans of the Clintons. 

I wonder if much of the email and server issues are about what they could know that one could do with such a set-up if they were intending to be nefarious.  But it seems, from the emails, that Hillary was not especially adept with technology, asking to be taught how to use an iPad. 

So I am starting to side with Kevin Drum -- the private server is looking more like an idea that seemed cool at the time, and nobody thought that it would ever look bad.  After all, people are still not attacking Colin Powell over exactly the same practice when he was Secretary of State.

Ken Levine shows us how NBC shows get on the air

 A rocket scientist I know once observed the fundamental similarity between LA's two defining industries: entertainment and aerospace. Both exist from deal to deal, lining up risky, hugely expensive projects. Each of these projects require much of the work to be done from scratch, so much so that it's often like setting up a new business every time a deal goes through.

There are, of course, limits to the analogy. In business terms, perhaps the biggest is the nature of the customer. For all the talk of a private age of space exploration, aerospace is still a business driven by government contracts. This entails a certain level of craziness, as Ben Rich spells out in his memoir (just look up 'navy' in the index)...

... but those issues pale next to coping with the unpredictability of the viewing public. As screenwriter William Goldman famously put it "Nobody knows anything." Studio executives have to decide whether or not to spend a hundred million dollars based on only a rough idea of what the customer might want. The good executives like Moonves, Silverman, Tartikoff or, in the cable world John Landgraf (all of whom may have been worth their enormous compensation packages) can be both derivative and original, quick to jump on trends while they're still hot but also willing to try something or someone untested but promising.

At the other extreme, you have executives who are so overwhelmed by the uncertainty that every decision has to be based on precedent, not so much because to maximize profit as to minimize blame. Once again, Goldman has lots of smart observations on this topic.

Another smart observer who's made perhaps as many pitches as Goldman is Ken Levine. Levine regularly satirizes the networks and his favorite target is probably NBC which, for at least fifteen years, has been the home of the worst executives in the industry. Here's the beginning of Levine's take on what the pitch for the new NBC show Blindspot might have gone.

WRITER/CREATOR: We got this totally cool idea. It’s like a mix between the Bourne movies, PRISON BREAK, MEMENTO, the old game show CAMOUFLAGE, and what shows do you like?

NBC: BLACKLIST.

W/C: It’s also like BLACKLIST.

NBC: We’ve been looking for another BLACKLIST. And another HEROES.

W/C: Ours is that too.

NBC: That’s okay. We’re remaking HEROES.

W/C: Well, if you ever want to remake THE BIONIC WOMAN ours is also like that show.

NBC: THE BIONIC WOMAN was a bomb.

W/C: Wait. I forgot. We took out THE BIONIC WOMAN elements.

NBC: So what’s the series?

W/C: Well, we don’t actually have a concept yet – what’s it about, what happens every week, who all the characters are – we still need to tackle those details.

NBC: So what are you bringing us?

W/C: An opening scene.

NBC: An opening scene? That’s it?

W/C: Yep. Something with sizzle that you can promote all summer. Who cares if it has legs?

NBC: Well, like I said, we’re looking for another BLACKLIST. And that’s BLACKLIST. We’re sort of hoping they’ll figure something out this season.  What’s your first scene?

W/C: We’re in Times Square. It’s night. Crowded. And someone discovers a duffel bag. Just sitting in the street. And it has a tag that says CALL THE FBI.

NBC: Wouldn’t they call the FBI anyway?

W/C: You know that. And I know that. But NBC’s audience doesn’t know that.

NBC: You think they’re that dense?

W/C: BLACKLIST.

NBC: Good point. Go on..

It goes on in this vein for quite a while, leading to a very funny if predictable pay-off. You should check it out. There is, however, one point Levine doesn't mention that I like to stress. Good studio executives can make their companies lots of money; bad ones can cost them even more, but both the good and the bad take home huge paychecks, and the truly awful usually manage an obscene golden parachute on the way out.

The Daraprim story

This is Joseph.

The drug Daraprim jumped in it's cost from $13.55 a pill to $750 per pill after it was purchased by a new company:

“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.

“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”

Aaron Carroll is skeptical:

“Trying to stay in business”? If the company couldn’t make money at the same price the old company was, then why did they buy the drug? And asking people to pay WAY more to fund other drug development seems like gouging sick people with no choice. I’m having trouble understanding the optics of this. 

The ability to boost the price dramatically was certainly a way to maximize profits, but it does so at the cost of increasing health care costs.  And because the drug is infrequently used, it is unlikely you will see a lot of competitors manufacturing the drug. This is especially true, here, with a closed distribution system being used.  If you can't get enough drug to do a bioequivalence study, then you can't enter the market.

How we navigate these issues is tricky . . .  That said, there is something to be said about competitive market failure if the barriers to entry allow one to increase the price by so much and yet you don't immediately lure competitors to get their share of the $749 per pill (or so) in profit. Similarly, blocking the proof of equivalence between two agents is also a complete barrier to entry and not necessarily helping matters at all.

EDIT: The company has dropped prices from the $750/pill level.  However, the underlying issue of market failure remains, unless we think that social media should be a way of enforcing market discipline on companies.  Usually, this only influences the most egregious cases. 

Cliches so hoary it hurts to type them

From Space.com

"Star Trek: Renegades," the 90-minute first installment of a planned Internet series, was released on YouTube Monday (Aug. 24). The film is not a part of the official "Star Trek" universe — it was financed primarily by three crowdfunding campaigns over the last several years — but it does feature characters and actors familiar to Trekkies.

...

"Together, they assemble a new elite strike force, consisting of rogues, outcasts and criminals, led by the fearless yet haunted Lexxa Singh (Adrienne Wilkinson). ... The Renegades’ mission is simple: take on an army and stop their leader, Borrada (Bruce Young), from destroying the Earth," the website adds. "Outnumbered and outgunned, the ragtag crew is in an adrenaline-pumping race against time and space. But they soon find their foes are the least of their concerns: the real trouble may be coming from within!"

I watched about a half hour and...

I really dislike punching down. It's seldom funny and never pretty and, even when it's well done, it raises the question "Can't you find anything better to make fun of?" Criticizing a fan film, even a fan film with professional aspirations, would seem to be the essence of punching down. The weaknesses of this particular film, however, are a very good fit with another of our ongoing threads. So...

I watched about a half-hour and, other than some well done prosthetics, it was every bit as bad as you might expect, from the clumsy exposition to the uneven acting to the endless stream of cliches.

It's that last one I want to focus on. The producers raised nearly $400,000 on Kickstarter and Indiegogo not only to make yet another film in the over-explored Star Trek universe, but to make one with perhaps the most overused premise imaginable, a pitch that wasn't all that fresh when Robert Aldrich made it fifty years ago. Even if the final film had been well executed (and it wasn't), there was little chance of it being anything more than competent hack work.

My concern here isn't that Renegades is a bad film, but that it's bad in a way that suggests bigger problems in the way we fund projects these days. By some accounts, this is supposed to be something of a golden age for new ideas. Between venture capital and crowd funding, you might assume that it has never been easier for creative and innovative people to get money, but the assumption behind that assumption is that there's a strong positive correlation between how creative and innovative a proposal is and how likely it is to get funded. What if the correlation is weak? Hell, what if it's negative? That may seem like a strong statement, but between this and Soylent and numerous other examples, you have to wonder.

Revisiting Nate Cohn -- Scott Walker edition

I was going back and forth on whether or not to revisit this critique of the New York Times' Nate Cohn in the wake of the Walker implosion. If you remember, little over a month ago, Cohn made the argument that:

In the end, Mr. Trump almost certainly won’t win the Republican nomination; the rest of the party will consolidate around anyone else. He can influence the outcome only if his support costs another candidate more than others. But for now, he seems to be harming all candidates fairly equally.

This was never a convincing claim (at the time I called it "strained and convoluted"), and it has gotten even less defensible in the light of recent events, but that's not necessarily enough reason to dredge things up. There's a difference between keeping score and piling on (and the last post on Cohn was a bit on the harsh side).

I was leaning toward dropping the thread until I read Cohn's piece on the collapse of the Walker campaign and again saw things that bothered me. It was better than the Trump pieces, but it was improvement without progress.

[Yeah, I know, it sounds garbled but let me unpack the oxymoron. If the most recent outcome is better than the previous one, that's an improvement; if conditions change so that we can expect future outcomes to be better than previous outcomes, that's progress. (My blog, my definitions.)]

Over the past three months, Nate Cohn and many of his colleagues have not only failed to anticipate major developments; they've also made a string of predictions that haven't come to fruition. This wouldn't be worrisome if it were leading to a critical examination of the analogies and assumptions that led to these errors, or at least a little less self-assurance.

What we don't want to see is yet is yet another simple narrative presented as the explanation. Which brings us to..

Mr. Walker faltered so quickly because he simply was not skilled enough to navigate the competing pressures of appealing to the party’s establishment at the same time as arousing its base. It was much like the story of Rick Perry.

Though the entry of Donald Trump into the race made things harder for all the Republican candidates, Mr. Trump can’t be blamed entirely for Walker’s troubles. Mr. Walker was tied with Mr. Bush for second place in national polls heading into the first debate, long after Mr. Trump took a lead in those polls. By the time he dropped out, Mr. Walker had the support of less than one-half of 1 percent of Republican primary voters, according to the most recent CNN survey.

The Walker campaign — or perhaps the candidate personally — felt pressure from the rise of Mr. Trump on his right, especially once Mr. Walker started slipping a bit in the polls. This sort of pressure isn’t unusual and was inevitable — he would have felt it at some point, if not from Mr. Trump, then from Ben Carson or Ted Cruz.

Mr. Walker, to put it gently, did not handle this pressure well. His instinct was to move to the right as fast as possible at any point of vulnerability. He staked out a conservative position on birthright citizenship and a fringe position on considering a wall at the Canadian border. These moves alienated party elites and weren’t credible to conservative voters. He quickly reversed positions; in the end, he reassured no one.

First off there's the argument itself. It seems to be a reasonable, if not all that convincing, little story (not all that different than the one Nate Silver tells, but more an that in a minute) until you consider magnitude of the event being discussed. Walker did have notable missteps (to use Silver's term) but they were relatively minor. If we were talking about a campaign losing momentum or dropping a few points they might make sense as a possible cause, but we're talking about a complete implosion with a well-funded candidate going from near the top of the field to less than one percent support in shockingly little time.

The important part here is the speed of the collapse. Cohn himself was discussing Walker's weaknesses as a campaigner back in July, but he also said Walker had "plenty of time to assuage these concerns."

We now know Walker didn't. A month later, he would already be in free fall.

Scott Walker has sought to reassure jittery donors and other supporters this week that he can turn around a swift decline in the polls in Iowa and elsewhere by going on the attack and emphasizing his conservatism on key issues.

And, if you check the dates, you'll notice that the donors got jittery before Walker started talking about that Canadian wall.

Furthermore, probably Walker's most high-profile move to the right was the anti-labor position. I suppose this could have alienated the party elites (though we are talking about Koch brothers here) but if Scott Walker can't make an attack on unions credible to conservative voters, I honestly can't imagine anyone who could.

But the argument itself isn't what really bothers me. What's troubling here is the way that Cohn deals with the failure of his predictions. Even those with a good track record on the GOP race, such as Josh Marshall, admitted to being surprised at just how rapidly the collapse transpired. As a good rule of thumb, if you did not expect something, you should be careful about offering explanations about how it happened. As far as I can tell, Marshall and company are doing their best to follow this rule.

Cohn, by comparison, has perhaps the worst track record of any of the analysts I've been following when it comes to the GOP primary. After calling a premature end to the Trump surge a number of times and making the just-another-Herman-Cain analogy on no less than five separate occasions, he then made the previously mentioned claim about Trump not having any effect on the race.

Despite this, Cohn appears to be one of the most confident commentators when putting forward his theories about the causes of the implosion. The comparison to Nate Silver here is instructive. Silver actually opens his piece by acknowledging just how wrong he and his team were on Scott Walker. In addition to caution, Silver also offers a great deal more in terms of complexity and counter arguments. Cohn actually uses the word "simply" to describe his version of events.

But what's important here is not just the unwarranted confidence. We all have our moments. What merits attention is what Cohn's confidence in this situation tells us about his process. Anyone who works with data long enough will have occasion to see their models break down and their predictions go so far awry that they are no longer even directionally accurate.

When journalists looking in from the outside describe these disasters, they almost invariably use the phrase "go back and check your numbers," but in complex situations that is relatively seldom the source of the problem. More likely and far more difficult to catch are problems with robustness and modeling assumptions.

I realize I may be making too much of this, but there's a bigger issue here that has been bothering me for a long time. When Nate Cohn says this is what happened to Scott Walker, he is displaying a this-is-how-the-world-works tone and mindset that is very common in places like the Upshot, even when it is not at all appropriate. If you read carefully the work of journalists inspired by Nate Silver (though not so much Silver himself), you pick up the implicit belief that the standard methods and assumptions being employed are as true and as reliable as the laws of mathematics , that they have always worked and will always work.

This is a dangerous way to approach the social sciences, particularly when you start running into range of data issues (and between Trump, Carson, and the rise of the tea party, I think we are definitely in new territory now).

As mentioned before, I strongly suspect that the theory that Walker collapsed because his move to the right offended the elites and yet was not credible to the base is wrong, but I would be much more comfortable with it and would certainly have not written this post if it had been clearly framed as a theory.

The magic of markets

This is Joseph

Dean Dad on buying shares in students:

Of course, Salerno elides entirely issues of equity and inclusion.  For example, nationally, white students graduate at higher rates than African-American or Latino students.  Should the market respond accordingly?  High-income students graduate at higher rates than low-income students.  Should the market respond accordingly?  Assuming that investors act to maximize returns, we should expect to see the student body get much smaller, richer, and whiter than it is now.  The market has spoken!  

 This is just one of the many reasons that this approach is a bad idea.  Markets do poorly when they are being used to provide public goods and the issues with higher education are not exclusively a lack of economic incentives.

Nor does this even touch on how you would police such an agreement.  How do you make sure that a student who doesn't succeed (but owes a percentage of income for life) doesn't hide out in a cash business?  Or leaves the country?

The idea doesn't seem great once the practical pieces get thought about.

Papering the house -- 21st Century style

Equal parts interesting and annoying. This another one of those stories where the reporters (and possibly founders)  are so fixated on buzzwords and new economy BS that they don't realize how the new technology actually solves a business problem.

Surkus [pronounced 'circus' -- MP] calls it "crowdcasting" — providing clubs, restaurants and events in New York and Los Angeles with bodies to fill the room, order drinks, and liven the place up. Promoters and bar owners tell the company how many people needed — what age, sex, lifestyle, and what you'll pay — and they hook you up with people like Chuli Joy:

"Going out and getting to talk to the pretty girls, that's cool, you know?," said the 28-year-old actor. "But to get paid to talk to pretty girls? I'm like, hey, you can't beat it."

"I only thought celebrities got paid to party," said Myriah Klingler, a 23-year-old production assistant. "But nope, anyone can. I guess that's part of L.A."

Some of these so-called "Surkus-goers" say they've made as much as 30 to 50 bucks at other events, just by being there. But what about the clients? Paying people to come and drink free booze seems like a good way to go out of business, fast.

"People find crowds interesting," said Robert Menendez, the company's president and co-founder. "Why is that crowd there? What is happening there? This is just human nature. I mean, nobody walks by a crowd and goes, 'eh.' People are curious."

Surkus pitches its value also as a matter of timing. People who show up right when the doors open keep the place from feeling dead. Their presence is a kind of kindling for the raging party bonfire to come.

Jin Yu has been running Jazz Night at the W for five years with a fashionably-late arriving crowd in attendance. Surkus changed that, he said.

"Most of my guests get here around 11 p.m. Surkus-goers get here at 10 p.m. and it's an immediate energy burst right before all my guests get here," said Yu. "So the moment they walk in they say, 'Wow! This is amazing!'"

Yu was so amazed by Surkus, he said, he joined the company—Yu is Surkus' Chief Creative Officer now.

...

Surkus says more than 30,000 people have downloaded the app, and the company is looking for investors to expand that number. Potential "Surkus-goers" are asked to fill out a personal profile and then give the company access to some of their Facebook data — how else will you know if someone would enjoy a hip-hop event if you don't know what they publicly like?

Surkus also looks at how many followers its users have have, on Twitter, or Facebook, or Instagram. Surkus says it sells more than just bodies to its clients, it sells influence, too—what Surkus-goers Instagram, their followers see.

Of course, this sort of thing has been going on since at least the end of Prohibition. Clubs have always brought in ringers to create the impression that the establishments were popular and exciting and frequented by the right sort of people. The main problem was that, while theaters could simply give away tickets, clubs had to spend considerable time and/or money and/or ingenuity to get the sort of people they wanted in the club when they needed them.

The combination of mobile computing and social media has made this problem orders of magnitude simpler. With social media the number, location, and demographics of followers allow you to easily quantify the desirability of your plants, while smart phones allow you to bring them in at literally the last minute (or at least the last ten minutes).

In the full article, Menendez drops various trendy references to big data and behavioral economics, but not in a way that suggest a strong grasp of the concepts. This might indicate that the company's founder doesn't have all that solid a grasp on his own business model (these things have been known to happen) but I suspect it's more a matter of wanting to downplay the actual nature of the service.

Under our radar

This is Joseph

Mike Konczal has been quietly doing some great analysis about student loans and their implications for financing higher education costs.  One thing that has been quite interesting is how he points out that no such market can be designed without government intervention.  He even points out the main free market solution actually increases government oversight:

You’ll be happy to note that Kelly is against any kind of usury regulation and bankruptcy protections for ISAs. That would interfere with the market. The thing where he describes building a joint government–creditor surveillance state, where the IRS uses its extensive power to consistently feed all of your personal information to debt collectors in real time to assess the earnings they need to collect? That’s just normal for markets.

The exact quote is:

An ISA servicer cannot efficiently verify a recipient’s income, particularly in real time, without the involvement of the recipient’s employer or the involvement of a governmental agency that can withhold wages. The former is difficult because of privacy concerns and confusion with prohibitions on the assignment of wages. With data from the Internal Revenue Service or Social Security Administration, the Department of Education could provide ISA servicers with the information they require. 

This tends to reinforce my view that there is no such thing as a completely unregulated market.  Even a place without formal enforcement mechanisms (e.g. medieval Iceland) had the strength of convention and informal rules of conduct. 

Generally speaking, something has to act to create markets and large markets (with a high potential for fraud) really need that to be something that looks like a government.  So there is no question that the government will be interfering in markets (e.g. to prevent fraud) and the real question is how extensive will this involvement be.