Tax Policy

Mark has been discussing the concerns about the hardship that tax increases would inflict on those with an income exceeding $250,000 per year. In part I think that this line of discussion began with Greg Mankiw trying to use himself as an example of a person who might do less labor if the marginal tax rate increased. There were a number of great points brought up as to why this example had issues: see here, here, and here.

There was a second economics professor who also made similar claims although I found them a bit harder to evaluate as the example was not as clear. This argument seemed to be more about how hard this person would find it to make cutbacks rather than a specific example of how he would become less productive.

Yesterday,Noahpinion linked to a great article by Karl Smith that went to the heart of this discussion. The argument was whether tax increases (at the sort of marginal rates we currently have) really depress productivity. Karl Smith made a number of arguments that were worth considering, including:

Third, high income people don’t seem to be working that much more than low income people despite the fact that a natural propensity towards work can make one high income.

Indeed, the data show us that low income folks used to work a little more, but now they work a little less than high income folks. Yet, if the income and substitution effects were balanced for each person we would still expect higher income people to work more.

That’s because working hard can lead to more education, more experience and more promotions. Being hard working is also associated with having a conscientious personality type which is itself more valuable.

So if someone was simply born with a stronger propensity to work, we would expect that person to earn more income per hour. Thus we when look at the data we should see that all these high income people are working lots of hours.

Yet, we actually don’t see that. We see only a mild effect and even then that effect is not robust over time. Sometimes, high income folks are working less.

But the piece is a must read in the entirety. The key argument here, though, is whether the extremely small tax increases that are under discussion (a raise in the marginal tax rate for the highest income bracket from 36% to 39.6%) is really likely to make high income Americans less productive. Because if these tax increases don't disincent work and we accept that government finances really are a mess then the tax hikes seem to be a logical way to "share the cost of these increases".

But I also think that these points don't necessarily go far enough. Are we really convinced that a small decrease in productivity among the wealthy will be that devastating? What is the source of productivity in the American economy? Is it highly paid CEOs, hedge fund managers, lawyers and medical doctors, or is it the majority of workers who drive productivity?

I think it is essential to get this correct. A top down model of an economy (where the people at the top make the key decisions and are responsible for the output) did poorly in Soviet Russia. A bottom up theory of economic gains seems to make a lot more sense and that suggests that small productivity losses among the wealthy are not a serious concern.

It is worth emphasizing that, at this time, I am aware of two proposals to increase the tax rates of the wealthy: increasing the amount of wages on which FICA can be charged and returning to Clinton-era tax rates. Neither of these increases is a vast change in the marginal tax rate of this group. Clearly there are tax increases that would cause issues, but we can handle those when they show up and not now when all of the possible rates under discussion are sane.

The last example that people tend to bring up is innovation and how important it is to reward innovators. Now, as part of a first principle I would like to point out that the innovator is not always the person who profits the most from an invention (consider Nikola Tesla). But it is also worth noting, as Mark points out, that copyright law already provides enormous rewards for intellectual property holders.

So I think we should look to balance harms. Recent events have included layoffs of government workers into a economy with an extremely high unemployment rate. Are we sure that the consequences of a large body of long term unemployed workers will be better than that of small increases in tax rates?

"This really isn't about the hunting, is it, Bob?"* -- more on just scraping by on a quarter mil

Comments to my recent post on getting by on $250,000 (which was itself basically a comment on this excellent piece by Felix Salmon) picked up on the fact that, for people making a little over 250K in taxable income, the actual increase in taxes paid under the Obama plan would be remarkably small. This raises an obvious question: why do we keep hearing about the hardship on people making less than 300K when hardly any of the increase falls on this bracket?

The answer I suspect has less to do with math and more to do with marketing.

Sympathy for financial hardship is almost always inversely related to wealth and income. It's hard to feel all that sorry for someone who makes more money than you and yet has trouble keeping the bills paid.

For most of us, a quarter million in income takes you to the far outer edge of the sympathy zone. It seems like a lot of money but you might be able to convince some people (particularly, say, well-paid Manhattanites) that it was possible for a non-extravagant family to have a combined income of 250K and still not have much of a buffer at the end of the year.

Unfortunately for people lobbying to keep the Bush tax cuts, that 250K family wouldn't actually pay any additional taxes if the cuts expired. Neither would a 260K family or a 270K family (assuming those numbers are gross). Because we're talking about taxable income and marginal rates, a family's gross would have to be closer to 400K than to 250K in order to see anything more than a trivial increase.

If you're trying to make an emotional pitch for the Bush tax cuts this creates a problem: the only people significantly affected by the increase are those well outside of the sympathy zone. You can't expand the zone (the suggestion that many families making a quarter of a million were just getting by was met with considerable derision. Upping the number by another hundred thousand is a no starter). The other option is to focus on families making between 250K and 300K while downplaying the actual magnitude of the increase on these families.

Of course, that second option does require an overly compliant press corps that will simply parrot the releases of various think tanks without attempting to correct the false impressions they give. Fortunately for the tax cut supporters, that doesn't seem to be a problem.

* punchline to an old and very dirty joke.

What Rick Santorum had to say about fiscal responsibility in 2003

From the Hill via Krugman:

“I came to the House as a real deficit hawk, but I am no longer a deficit hawk,” said Sen. Rick Santorum (R-Pa.). “I’ll tell you why. I had to spend the surpluses. Deficits make it easier to say no.”

It's important to remember these things.

"The Problem with Biomass, Part 1"

I'll be referring to this in a future post.

From James Kwak:

Did you know that my wife is a “high-paid consultant” for the shadowy anti-biomass movement? Neither did I — and I’m the one who handles all of our finances, so I should know.

Last night she testified at a hearing held by the Springfield City Council, which is considering revoking the permit of Palmer Renewable Energy (PRE) to build a biomass plant in Springfield. PRE was granted a special zoning permit to build the plant in 2008. Since then, PRE has increased the amount of fuel it intends to burn (meaning, among other things, that more diesel trucks will have to drive in and out to deliver the material) and changed the type of fuel from construction and demolition debris to “green wood chips” (which matters because the plant was initially permitted as a recycling facility).*

My wife, a professor of environmental economics and econometrics, testified about the link between emissions (from power plants and diesel trucks) and illness, particularly asthma. At the hearing, one of PRE’s witnesses claimed not to know where my wife was “getting” the idea that air pollution can cause asthma. (In a newspaper article, PRE had this to say about asthma: “Valberg said there are many theories on the causes of asthma, and that indoor air quality in homes and schools is actually more of concern than outdoor air. For opponents to state that the project will worsen asthma rates ‘is just not scientifically accurate,’ Valberg said.”)

Well. Many, many studies have linked outdoor air pollution to asthma incidence or morbidity (Mortimer 2002, McConnell 2006, Ho 2007, Islam 2007, Loyo-Berrios 2007, Halonen 2008, O’Connor 2008 (summary here); Islam 2008 reviews studies of traffic-related asthma; Patel 2009 reviews studies of childhood asthma) and to bad cardiopulmonary health in general (Samet 2000, Pope 2002, Vedal 2003). I could come up with lots more citations, but you get the point.

...

Recently, the biomass developers have been arguing that they are the victims of a high-paid, high-powered, shadowy network of environmental activists. See for example this Springfield Republican article that largely repackages PRE’s talking points; its lead is “The developers of a proposed 35-megawatt wood-burning plant in East Springfield say the opposition to their project is well-organized, determined and well-funded.” (The Biomass Power Association blames a “small, vocal, extreme minority.”)

Well, I can tell you that my wife drove down to Springfield after work, spent four hours at the meeting, came home late at night, missed dinner, and didn’t get paid a cent.

* There is a legal issue about the standard necessary to justify revoking a permit that has already been granted, but that’s not relevant for this blog post.

Sympathy for the financially inept

Felix Salmon does a great job dismantling the latest wave of "how can I possibly get by on a quarter mil" stories (Jonathan Chait also has a suitably snark-filled take on the subject, though unfortunately it's behind the TNR paywall). Salmon takes apart the bad math, the poor reasoning and the general offensiveness of these articles so thoroughly that there's not much to add on the general level but I do have this one locale-specific observation.

I've lived in LA for a number of years with an income that has bounced from low (parochial school teacher) to high (corporate statistician) to really low (writer and board game designer), so I can tell you from experience that any individual who can't live well in this town on 100K is either incredibly extravagant or ridiculously bad with money. I can also say from experience that you can get by on thirty (barring the unexpected) and be quite comfortable at sixty.

If you're an Angelino and you're a individual who makes six figures or a member of a household with a combined income of over a quarter of a mil and you still find yourself in the red at the end of the year (barring special circumstance like a sudden drop in income, major illness, or the birth of a special needs child), you should admit to yourself that you have a problem and either seek financial counselling or consider finding someone to make your money decisions for you.

Back to the future

I don't know if this has anything to do with Blogger's recent wave of weird glitches but my post comparing satiric views of the future somehow reverted to an earlier version that omitted one of the two primary examples -- the 1967 film The President's Analyst. I've restored it so if you have any interest in the subject or if you read the screwed-up version and would like to know what I was trying to say, take a look and let me know what you think.

Alternatives to Social Security

Matthew Ygelesias tackles the difficult question of what is the alternative to a government run universal pension plan. After all, if we want to replace the current system of government run pensions then it makes sense to have an alternative.

The results are pretty dismal.

So where else does the money come from? Well:

— Defined benefit pensions.
— Labor income.
— Private savings.

These three alternatives are all deeply problematic. The problems with defined benefit pensions in the public sector (chronic underfunding, etc.) are well-known, and in the private sector those problems are even more severe. Labor income is not a realistic option for people over a certain age. And private savings are, frankly, a disaster. As a country, we’ve tried to deal with the decline of defined benefit pensions by encouraging the mass middle class to engage in private retirement savings with 401(k) plans, IRAs, etc. And it doesn’t work. On the one hand, people don’t save enough. On the second hand, the tax policy is deeply regressive. On the third hand, virtually 100 percent of the management fees extracted from customers through these vehicles are value-destroying rents. On the fourth hand, it’s extraordinarily difficult for a middle class person to properly diversify his portfolio. And on the fifth hand, widespread ownership of index funds and mutual funds undermines corporate governance.

I think the drawbacks to the first two approaches are well known. But the concerns about the government savings vehicles are very thought provoking. Instead of a single (fatal objection), like the first two options, he lists a series of smaller problems that add up to a big issue. That being said, the issue of people not saving enough is always a concern.

I'd say that there is one more issue, though, that we should consider. Older adults are more easily subject to fraud on the part of either third parties or their money managers. It's not always clear that they have strong advocates. So even if people saved enough, the third option has the sixth downside of being vulnerable to theft in a way that pensions and labor income are not.

It's too late tonight to do it justice...

But this post is another reminder why Dana Goldstein is probably the most important education blogger currently on the beat.

More weirdness from Blogger

A few days ago I was playing around with the idea of writing a post about the dangers of economists trying for cool, so I copied this link into a new post and saved it as a draft. I had pretty much forgotten about it until a few minutes ago when it showed up with a new time stamp claiming I had created it this afternoon.

This is starting to make me nervous. Does anyone know a good way to make a hard drive back-up of a blog?

I can think of some exceptions

But I suspect Donald Knuth was excluding books like Light in August and Huckleberry Finn when he said this.

For years I tried to make calculus interesting

And yet I never considered this (via Andrew Gelman):

Those who forget the future are doomed to repredict it

Mr. SHTEYNGART: There's no present left. This is the problem for a novelist, is the present is gone. We're all living in the future constantly. How I envy...

GROSS: What do you mean by that? I'm not sure what that means.

Mr. SHTEYNGART: Well, look, back in the day, Leo Tolstoy, what a sweetheart of accounts and [transcription error?] a writer. He wanted - in the 1860s he wanted to write about the Napoleonic campaign, about 1812. If you write about 1812, you know, in 1860, a horse is still a horse, and a carriage is still a carriage.

Obviously, there have been some technological advancements, et cetera, but you know, you don't have to worry about explaining the next killer app or the next, you know, Facebook or whatever, because right now things are happening so quickly.

Gary Shteyngart talking about his novel Super Sad True Love Story on Fresh Air.


Gary Shteyngart is a ludicrously credentialed writer, but the part of his interview that caught my attention had little to do with his fiction or his approach to writing. Instead it ... Well, maybe it would just be simpler to show you.

In 2010, here's what Mr. Shteyngart's near-future satire looked like:

A half-dozen of my fellow citizens were seated behind their chewed-up desks, mumbling lowly into their apparati. There was an earplug lying slug-dead on an empty chair and a sign reading: Insert earplug in ear. Place your apparat on desk and disable all security settings. I did as I was told.

An electronic version of John Cougar Mellencamp's "Pink Houses" - ain't that America, something to see, baby - twanged in my ear, and then a pixilated version of the plucky otter shuffled onto my apparat screen, carrying on his back the letters A-R-A, which dissolved into the shimmering legend: American Restoration Authority.

The otter stood up on his hind legs and made a show of dusting himself off. Hi there, partner, he said, his electronic voice dripping with adorably carnivalesque. My name is Jeffrey Otter(ph), and I bet we're going to be friends.

Feelings of loss and aloneness overwhelmed me. Hi, I said. Hi, Jeffrey. Hi there yourself, the otter said. Now, I'm going to ask you some friendly questions for statistical purposes only. If you don't want to answer a question, just say I don't want to answer this question. Remember, I'm here to help you.

OK, then, let's start simple. What's your name and Social Security number? I looked around. People were urgently whispering things to their otters. Leonard or Lenny Abramov, I muttered, followed by Social Security.

Hi, Leonard or Lenny Abramov, 205-32-8714. On behalf of the American Restoration Authority, I would love to welcome you back to the New United States of America. Look out, world, there's no stopping us now. A bar from the McFadden and Whitehead disco hit "Ain't No Stopping Us Now" played loudly in my ear.

And here's what near-future satire looked like almost forty-five years ago:



The inescapable communication device, the cheerful tone covering the ominous totalitarianism, the cute cartoon icon. All in a big budget movie made five years before Gary Shteyngart was born.

Go back a few more years to 1953 and you can find antecedents for Shteyngart's satiric take on corporations and consumerism in the Space Merchants * (where mergers were actually resolved through armed conflict) and in any number of books and movies since then. And as for the jokes about the decline of books and reading found in Shteyngart's story, the challenge is finding a science fiction book that doesn't have them.

None of this is meant to imply any kind of plagiarism or even to suggest the book is derivative. Shteyngart is a sharp and funny writer and though I haven't read it, there's every reason to expect Super Sad True Love Story to be a terrific book.

It is, however, a book that approaches the topic of the future in a way we've seen before and that fact leads to an interesting observation: for over half a century, people have seen themselves as being at that point in history where the world was about to undergo radical and unimaginable changes. What's more they've discussed these approaches using much the same language and often similar jokes.

I suspect that it was initially a reaction to the explosive technological and social changes from around 1875 to 1945. If one man could have witnessed the first phonograph, telephone, light bulb, airplane, radio, movie, television, and an atomic bomb (not to mention two world wars, enfranchisement of half the population and too many literary and artistic forms and schools to count), just imagine what the next few decades would hold. (It is probably not a coincidence that during this period, the time travel genre was introduced by Twain and Wells and became an established part of popular fiction.)

Once established it's easy to see why the idea of the hurtling future proved so popular. There is a natural tendency to underestimate the contemporary impact of what we think of as antiquated technology. Check out Shteyngart's quote about Tolstoy that seems to imply that the development of photography, telegraphs and locomotives changed the world less than Facebook and Angry Birds.

Besides, most people like the idea of an exciting future (particularly since so few of us alive today have actually had to live through one).




* You'll notice that some seniors have had no trouble keeping up with the future.

Sure $172,200 sounds high but you do get room and board

I wish I had time to give this the treatment it deserves:

For all the hand-wringing over the cost of a full-time MBA, it turns out that the most expensive graduate business degrees in the world are not the highly publicized two-year, full-time experiences at places like Harvard and Stanford. Instead, the bulging price tags are on elite part-time programs designed for mid-career executives.

The most costly Executive MBA in the world? It's Wharton's 24-month MBA for executives at its West Coast campus in downtown San Francisco. At a cost of $172,200, students are effectively paying nearly $250 an hour for the pleasure of sitting in a class with 50 other people. That's nearly $100 more per contact hour with faculty than the regular full-time MBAs at Wharton pay. For every one of the roughly 700 hours a Wharton professor teaches Executive MBAs, the school is collecting a tidy $12,300.

Wharton Rakes It In

The second most expensive? It's also Wharton's Executive MBA program, this time on the East Coast, where the tuition and fees now come to $162,300. Those considerable sums compare with the $108,000 in total tuition and fees forked over by the full-time students back on the main Philadelphia campus. Wharton's Executive MBA business alone now brings in more than $35 million in annual revenues, with little more than 400 total students.

Why the Difference In Cost

Why is there such a big difference in the cost of these top-ranked EMBA programs over those at other schools? "It's like anything else, whether you're talking about buying Pepsi or Sam's brand of cola," says Michael Desiderio, executive director of the Executive MBA Council, the trade group representing EMBA programs. "There is a value inherently tied to a brand."

In fact, the average cost of an EMBA program, says Desiderio, is only $65,655. "So it's a huge continuum, ranging from a low of $30,000 to a high of $170,000."

Anjani Jain, Wharton's vice dean, MBA Program for Executives, obviously thinks Wharton programs are worth the premium. "The cost of the program, when normalized with respect to the number of contact hours and the inclusion of room and board during program weekends, is actually comparable to that of peer institutions," Jain insists. "Many other EMBA programs have substantially fewer contact hours, or don't include room and board in the base tuition."

Of course, at the high end, as Jain points out, Wharton's program is a premium experience that includes meals, accommodations, and professors who are among the best business faculty in the world. In Philadelphia, execs stay on alternating Friday nights in Wharton's fairly plush executive education residence facility, while in San Francisco, they're put up in at the upscale Hotel Le Meridian in the financial district within walking distance of Wharton's West Coast campus. For another, many business schools believe there is less price sensitivity in a market catering to already successful executives in their mid-to-late 30s who don't have to quit their jobs to get the executive version of the MBA degree.

Executive MBA Programs Tend to Be Costly

No wonder there are now nearly two dozen Executive MBA programs around the world that cost six figures. Increasingly, the most expensive programs feature international excursions for which meals and accommodations are covered (though airfare is not). Duke University's Global Executive MBA program, for example, boasts five residential sessions, with 60% of the classroom time in Asia, Europe and the Middle East. It carries a $146,600 price tag that includes lodging and meals. Or there is Trium, a three-way collaborative program among New York University, the London School of Economics, and HEC Paris. That program costs $140,000.

Noah Smith leaves out an important distinction

There's a good post at Noahpinion wondering where the opposition to high-skilled immigration is coming from. I suspect Smith is too quick to dismiss the role of xenophobes who see any increase in immigration as the first step down the slippery slope toward an open border, but it was this paragraph that really bothered me.

What about high-skilled native-born Americans? Are American-born computer programmers, engineers, and entrepreneurs afraid that high-skilled immigrants will take their jobs? I guess this is conceivable. I've heard some low-level grumbling from American-born engineers about the low wages and long hours that immigrant engineers are willing to accept, but I know of nothing even slightly resembling an organized movement or lobbying effort. And my guess is that smart Americans are smart enough to know that it's a positive-sum game - that the positive impact of the businesses started by smart immigrants vastly outweighs the effects of wage competition.

I may be opening myself up to an obvious insult here but having worked as a statistician in companies that used highly skilled immigrant labor, I'm not sure that this is automatically a positive-sum game.

At least not without one important caveat.

When we talk about naturalized citizens, students and green card holders,* it really does tend to be a net gain when we bring smart, highly-educated people into this country. Putting aside students (whose contribution is a topic for a different post), the positive impact of these highly skilled immigrants is due in large part to a labor market that does a reasonably good job matching employer and employee and setting compensation levels that reflect skills and productivity.

For H-1B visas, however, the labor market is severely distorted. Though the situation seems to have improved somewhat,** employees still face significant hurdles when changing jobs and limitations on what sort of jobs they can take, a situation sharply satirized by John Oliver in the clip below.

Having said all that, there's still a strong case to be made for increasing our H-1B quotas and this country could certainly use a good, healthy debate on the subject, but the specifics make a difference. You could argue that every time we bring someone smart and creative into the U.S.A it's a win for us, but the win is bigger when that person is allowed to participate in a more efficient labor market.

The Daily Show - Olivers on the Strike
Tags: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

* Green cards are a bit more restricted than many people realize, but probably not to the extent that it affects this conversation.

** See the American Competitiveness in the Twenty-First Century Act of 2000

Again with the comic books

And again from Mippyville.

Admittedly, it's the three cents figure in this ad from a 1950 comic book that grabs the attention of the Twenty-first Century reader, but when you actually get into the text you may be surprised at how little things have changed.

I guess we were just collateral damage

Brad DeLong explains what really happened to Blogspot.

Taxes and Growth via Yglesias

This entire piece is worth reading. In particular:

The other mechanism that seems to be on offer is labor supply. This makes a lot of sense to me as applied to low-income people. If you work at McDonald’s or drive a taxi then you face a real choice about whether or not to increase your hours worked at the margin in exchange for more money. Driving a cab at 2AM is obviously a huge pain in the ass and not especially lucrative. To the extent that cab drivers face higher income taxes, they have even more reason not to work so late since it becomes even less lucrative. And the availability or non-availability of late night cabs has a variety of downstream impacts on bars & restaurants, drunk driving, etc.

But it’s a lot harder to see this at the high end. A very large share of high-income professionals basically have a marginal wage of $0. The CEO of WalMart can’t cut back his hours by 5 percent in exchange for a 5 percent pay cut. What’s more, a lot of high-end work is characterized by zero-sum competition. It’s plausible to imagine higher income tax rates making veteran NBA players more likely at the margin to retire rather than play one more season at the minimum. But what are the downstream economic implications of Mike Bibby retiring? There overall quantity of NBA players is fixed and there are plenty of other people willing to step up and do that job. The average quality of NBA talent might decline, but so what? The players just play against each other. And it’s not just athletes. Fancy lawyers and high-frequency traders are playing against each other. Marginal changes in average quality don’t matter. If anything, reducing the average quality of America’s lawyers and finance guys would be beneficial if it inspired more people to do something else with their time.

Last, of course, one of the main reasons for taxing the rich is precisely that the utility of a rich person’s marginal dollar is so low. Giving the dollar to someone else will increase overall well-being.

I think that this is a very strong argument and one that we really need to give more thought to. The empirical data for the effects on growth for taxing high incomes is mixed (at best) and the consequences for accelerating our current recession are non-trivial. After all, we are firing people from government jobs at the same time as there is tepid growth in private sector employment. The stated reason is to try and prevent our budget deficit from growing out of control.

However, if restoring the Clinton-era tax rates did not have a direct mechanism to retard economic growth then perhaps we could fire fewer public sector workers? That would help with the large unemployment rate that we have in the United States and the culture focus of self-worth via paid employment.

I think that the question of higher marginal tax rates on very high income earners does bear some thought.

Lending an air of authority to any argument

From Cvltvre Made Stvpid via Krugman:

Weekend Gaming -- the greatest board game series ever?

I was never entirely clear on why 3M decided to get into the board game business, but for more than a dozen years they put out 3M's Bookshelf Games (so called because the boxes were designed to look like large hardcover books when placed in their slip covers). The line-up was a mixture of traditional games like chess and go and new games designed by freelancers like the incomparable Sid Sackson (Sackson's classic Acquire was a 3M game). The weakest of the series were still pretty good while the best have become, as mentioned before, classics.

Software developer Dennis Matheson has a detailed and affectionate website devoted to the series, Wikipedia has a good write-up as well, and, if your bookshelf has more space than mine, you can buy most of the games on EBay.

"It wasn't our fault... Honest"

But we'll apologize anyway.

We're sorry about the lack of posts. Google's Blogger was down all day yesterday and managed to lose the posts from the day before (perhaps they objected to the Oedipus joke).

To add injury to injury, yesterday featured both the most blatant how-to-lie-with-statistics graph and the most embarrassing education-reformer-hypocrisy story of the year.

We'll be back up to speed soon.

Thanks for your patience.

Update: the missing posts are back but I'm afraid the comments may be gone for good. Once again, sorry.

Yes, they actually do have a "Best Illusion of the Year contest"

First watch the video, making sure to stare at the white spot in the center.



It probably looked like the dots stopped changing color when the image rotated. Now watch it again but keep you eye on one of the colored dots. See the difference?

I'll let Scientific American's James Matson provide the details:

The illusion, titled "Silencing awareness of change by background motion," won top honors May 9 at the 2011 Best Illusion of the Year contest in Naples, Fla. The event, which is in its seventh year, is an offshoot of the annual Vision Sciences Society meeting, also in Naples. Jordan Suchow, a Harvard University graduate student, and George Alvarez, an assistant professor in Harvard's psychology department, created the winning entry.

The contest draws all manner of illusory entries. The 2011 first and second runners-up were also animations, one an illusion of contrast and one an illusion of visual aftereffects induced by motion, respectively. (See all 10 finalists here.) Last year's winner, on the other hand, was a video of an actual physical object that seemed to defy gravity—balls rolled right up inclined ramps as if pulled by magnets.

For a more in-depth take on the science behind this year's winning illusion, check out a study (pdf) Suchow and Alvarez wrote in the January 25 issue of Current Biology.

A defense of Star Wars

This parody was amusing but it has one key problem. Obi-wan Kenobi was a reluctant fighter who constantly tried to avoid killing people. Notice how a helpless Darth Vader survived their duel when Kenobi could easily have killed the helpless Vader. Or the way that Kenobi earned the nickname the negotiator for trying to minimize casualties in the clone wars.

I think that this makes the parody much less effective given the likely reference (who was clearly a callous mass murderer).

Another argument for Social Security

From Felix Salmon:

A lot of people have signed up for Wikinvest and handed over access to their brokerage accounts. I spoke briefly to SigFig founder Parker Conrad, who explained that it’s incredibly easy to flick through those accounts and come up with examples like the one he pulled up, of a man with $2.3 million in his Merrill Lynch account.

This guy probably knows that he’s paying his Merrill broker an annual management fee of 1.75%, which alone is more than $40,000 a year. But he doesn’t know that other Merrill clients in his position are paying far less — that Merrill brokers basically charge as much as they can, and the average Merrill client on Wikinvest pays less than half that, just 85 basis points.

And there are other things this guy doesn’t know, as well, because they’re buried in his statements — things like the fact that Merrill charged him $5,763 to make 24 trades last year, over and above that $40,000 management fee. That’s about $240 per trade.

Other fees are even higher. The Merrill broker bought something called the Fidelity Advisor International Capital Appreciation Fund, which charges 1.45% per year on top of a 5.75% fee payable when you buy the thing in the first place. The fund is substantially identical to the Fidelity International Capital Appreciation Fund, which has a 1% management fee and no front-loading at all. Why would any advisor with his client’s best interests at heart put that client into FCPAX rather than FIVFX? He wouldn’t — FCPAX is simply a vehicle invented by Fidelity for advisors which allows them to skim off hefty commissions.

Given these tricks, one can easily imagine how older adults (as they get less sharp over time) falling victim to all sorts of tricks of this sort. In that sense, the Federal Government can act as a disinterested party and act as a responsible agent in terms of managing pension savings. Given the risk of an older adult being rendered impoverished by these kinds of practices, I am unsure of why a program like social security is not universally popular. There may be some funding issues that require tweaks, but the basic idea is genius.

Three education stories -- two interesting and one important

Matt Yglesias and Brad DeLong have an interesting exchange about competition in higher education. I'm not sure either nails it but both make some good points.

Another qualified recommendation for this Salon piece. There's not much here that hasn't occurred to almost everyone who ever taught high school English or freshman comp. For everyone else, though, it's a useful glimpse into the reality of these classes.

And a recommendation without qualifiers for Dana Goldstein's 'The History of "LIFO."' Goldstein shows how a term that was up until recently an obscure piece of accounting jargon has become a powerful rhetorical tool in the reform movement.

It's okay to call Oedipus a...

As I suspect everyone has noticed by now, mainstream media journalists love pox-on-both-their-houses stories, stories where they can point to both parties committing the same offense, thus allowing the journalists to appear both impartial and morally superior.

Journalists love pox stories so much that they often equate very different offenses. Here Jonathan Chait finds an excellent example at the Washington Post:

After a recapitulation of some basic facts, the editorial arrives at the only other portion that can be called an actual argument:

Health and Human Services Secretary Kathleen Sebelius told a House panel that seniors would “die sooner.” The Democratic National Committee proclaimed in an ad: “Their leaders have called for cutting Medicare, and now for killing it.”

This is false, inflammatory and, as we said, useful — for winning elections, that is. When it comes to solving the government’s most pressing problem, it threatens to set things back.

Are these claims false? No, they aren't. Let's take the democratic claims in reverse order. The current Medicare system is a commitment to cover health acre expenses for the elderly. The Republican plan would end that commitment and replace it with a limited and rapidly shrinking subsidy toward that end. It's somewhat tantamount to replacing public education with a system of limited vouchers for well below the average cost of public school tuition. Would you describe that as "killing" public education? I would -- the design of the program would be so altered as to no longer constitute the same thing.

It is true that both sides of the debates have accused the other of attacking Medicare, but only on one side were those accusations accurate.

"This is an egregious example of a public university being willing to sell itself for next to nothing."

Yeah, 'egregious' is what I'd go for (from the St. Petersburg Times via Chait):

A foundation bankrolled by Libertarian businessman Charles G. Koch has pledged $1.5 million for positions in Florida State University's economics department. In return, his representatives get to screen and sign off on any hires for a new program promoting "political economy and free enterprise."

Traditionally, university donors have little official input into choosing the person who fills a chair they've funded. The power of university faculty and officials to choose professors without outside interference is considered a hallmark of academic freedom.

Under the agreement with the Charles G. Koch Charitable Foundation, however, faculty only retain the illusion of control. The contract specifies that an advisory committee appointed by Koch decides which candidates should be considered. The foundation can also withdraw its funding if it's not happy with the faculty's choice or if the hires don't meet "objectives" set by Koch during annual evaluations.

David W. Rasmussen, dean of the College of Social Sciences, defended the deal, initiated by an FSU graduate working for Koch. During the first round of hiring in 2009, Koch rejected nearly 60 percent of the faculty's suggestions but ultimately agreed on two candidates. Although the deal was signed in 2008 with little public controversy, the issue revived last week when two FSU professors — one retired, one active — criticized the contract in the Tallahassee Democrat as an affront to academic freedom.

Rasmussen said hiring the two new assistant professors allows him to offer eight additional courses a year. "I'm sure some faculty will say this is not exactly consistent with their view of academic freedom,'' he said. "But it seems to me it would have been irresponsible not to do it."

The Koch foundation, based in Arlington, Va., did not return a call seeking comment.

Most universities, including the University of Florida, have policies that strictly limit donors' influence over the use of their gifts. Yale University once returned $20 million when the donor demanded veto power over appointments, saying such control was "unheard of."

Jennifer Washburn, who has reviewed dozens of contracts between universities and donors, called the Koch agreement with FSU "truly shocking."

Said Washburn, author of University Inc., a book on industry's ties to academia: "This is an egregious example of a public university being willing to sell itself for next to nothing."

Over the past few years we have seen the undermining (often deliberate) of the independence and credibility of a number of important institutions -- universities, research labs, government agencies, think tanks. It has been done through funding with increasingly less subtle strings attached, through attacks on academic freedom and independence (anyone for tenure reform?), and through a full court press on a media that has been all too willing to play the toady and the fool.

It's easy to see the short-term benefits of this erosion for people who, say, are trying to ignore evidence of climate change or the relationship between tax rates and budgets over the past twenty years, but in the long-term, when we lose our sources for reliable information and analysis, there are no winners.

p.s. I'm opening the floor for nominations. Can anyone suggest a more weaselly phrase than "I'm sure some faculty will say this is not exactly consistent with their view of academic freedom''?

Pop culture resources -- you may never leave the couch

Another advantage of studying old pop culture is that it has never been so accessible. When you think about how difficult it was to find some of these works just ten or twenty years ago, the abundance is truly amazing.


Project Gutenberg

National Jukebox

Internet Archive

Digital Comic Museum

While on the subject of old pop culture

This is a big deal:

The Library of Congress is one of the most splendid resources in the country--which is terrific, if you're in DC. For those who aren't (and even who are!), the Library's putting a massive audio archive online, for free.

The "National Jukebox," available on a streaming-only basis, unfortunately, is a massive trove of audio recordings. Music, speeches, humor readings--spanning decades of American history. The original words of Teddy Roosevelt. "Rhapsody in Blue" with George Gershwin on piano. Serious national gems. And, due to some cuddling with Sony, the label's entire pre-1925 catalog will be accessible, encompassing a significant (and widely forgotten) musical past.

In terms of popular art, the first quarter of the Twentieth Century may be the most important and creative twenty-five years... period. New genres. New media. Gershwin. Keaton. McCay. Wodehouse. To study this period is to realize just how much of what we still read, watch and listen to is built on a framework that's almost a century old.

One of the advantages of studying old pop culture...

...is that it provides a useful reality check against the conventional wisdom around an era. If you spend some time leafing through old comics and pulp magazines, watching old movies and listening to old radio shows, you will inevitably run across ideas and opinions that seem anachronistic.

Take attitudes towards smoking and health. It's easy to think that people in the Fifties thought of cigarettes as healthy. After all, didn't all those doctors in the ads insist that smoking was good for you, that it soothed your T-zone?

But of course, the tobacco industry didn't run those ads because people thought cigarettes were healthy; they ran them because by 1950 it had become clear that cigarettes were anything but. The purpose of those ads was to throw some dust in the air to help people ignore the obvious and, failing that, to at least convince customers (who were, remember, already addicted to nicotine) that the brand being advertised was a bit less unhealthy than its competitors.

This ad from the inside cover of a 1953 comic book (courtesy of Mippyville) tells the other side of the story.

Great quote on the value of brand

APM's Marketplace has a good take on Millward Brown's annual brand survey, including this memorable soundbite:

Andrew Zolli: Someone famously said of Coca-Cola that if you burnt down every one of their factories, they'd be back in business in a quarter. If you knocked everybody on earth over the head and gave them amnesia, they'd be out of business in a quarter. And the reason for that is that their brand really exists in all of our minds.

p.s. While you're there, check out this account of how certain Silicon Valley companies help repressive regimes keep tabs on their citizens.

Why do libertarians not hate geoengineering?

It would seem to be a check list of everything that offends libertarians -- a large, expensive, centralized program that makes no use of market forces, instead working under the assumption that only the government can solve your problems.

By comparison, carbon taxes (under which I'm including cap and trade approaches) would seem to be the ideal libertarian solution to an acknowledged externality -- you let prices reflect the true costs and benefits then let market forces do the rest. Even regulation would seem more acceptable -- banning certain products and practices certainly wouldn't be a libertarian's first choice but there is at least some room left for choice and innovation in the search for substitutes.

With geoengineering, the government dictates an exact and inflexible solution and asks us to have faith that secondary effects will be anticipated and accounted for. I am not what you would generally call a libertarian, but I do have a healthy respect for market forces and worry about the unintended consequences of large government initiatives so, in this case, I support the libertarian position.

What I don't understand* is why so many libertarians (like John Tierney) and advocates of market forces (like Steven Levitt) wax rhapsodic over an idea that violates pretty much all of their stated core beliefs.

Anyone out there have any thoughts on the matter?



* 'Don't understand' might have been a bit of an overstatement. I do have a theory on this (I pretty much always have a theory), but it's the subject for another post.

Clarity Has A Well-Known Liberal Bias

Paul Krugman:

Because it is, you know, a plan to dismantle Medicare. When you transform a program that pays seniors’ medical bills into a program that gives them a voucher that almost certainly isn’t enough to buy adequate insurance, you can call the new scheme Medicare, but it isn’t the same program.

I think it is possible to have a discussion about the future of Medicare, as it is pretty clear that the current program involves some compromises. But I also think that it is really important that it be an honest discussion about what we are planning to do.

Altered Oceans

I'm working on a post about the larger context of global warming. One of my sources is this Pulitzer Prize winning series from the LA Times on the frightening changes taking place in the world's oceans. It's a few years old but it's still an extraordinary and highly relevant piece of journalism. Take a look and we'll talk later.

The Culture that is Britian

A quote from the last David Tennant Doctor Who episode:

The Doctor: You had that gun in the mansion. You could have shot The master there and then.
Wilfred: Too scared, I suppose.
The Doctor: I'd be proud. If you were my dad.
Wilfred: Don't start. You said you were told, he will knock four times and then you die. Well that's it then. The Master. That noise, in his head. The Master is going to kill you.
The Doctor: Yeah.
Wilfred: Kill him first.
The Doctor: That's how The Master started. It's not like I'm an innocent. I've taken lives. I got worse—I got clever. Manipulated people into taking their own. Sometimes I think the Time Lord lives too long. I can't. I just can't.

In the previous episode, the character Wilfred (a former soldier) is told he has never killed anyone. He takes it as a point of pride and not shame.

I think that this really is something that we (as a species) could use more of. A ideal that the use of violence is a last resort rather than the opening gambit. This moral code (admittedly from a TV show) doesn't rule out the use of violence, but it sure makes it seem sad and tragic.

I was similarly impressed with the morality in Harry Harrison's The Stainless Steel Rat (which i think competes with any science fiction series for best ever). Consider:

Cold-blooded killing is just not my thing. I've killed in self-defence, I'll not deny that, but I still maintain an exaggerated respect for life in all forms. Now that we know that the only thing on the other side of the sky is more sky, the idea of an afterlife has finally been slid into the history books alongside the rest of the quaint and forgotten religions. With heaven and hell gone we are faced with the necessity of making a heaven or hell right here. What with societies and metatechnology and allied disciplines we have come a long way and life on the civilised worlds is better than it was during the black days of superstition. But with the improving of here and now comes the stark realisation that here and now is all we have. Each of us has only this one brief experience with the bright light of consciousness in that endless dark night of eternity and must make the most of it. Doing this means we must respect the existence of everyone else and the most criminal act imaginable is the terminating of one of these conscious existences.

Once again, violence is never ruled out but always deeply tragic.

I was thinking about the way organizations find to avoid acknowledging the obvious

...and this well-traveled but still amusing piece of fax-machine satire came to mind.

Enjoy.

Indian Wisdom

The tribal wisdom of the Dakota Indians, passed on from one generation to the next, says that when you discover you are riding a dead horse, the best strategy is to dismount. However, in modern business, because of the heavy investment factors to be taken into consideration, often other strategies have to be tried with dead horses, including the following:

* Buying a stronger whip.

* Changing riders.

* Threatening the horse with termination.

* Appointing a committee to study the horse.

* Arranging to visit other sites to see how they ride dead horses.

* Lowering the standards so that dead horses can be included.

* Appointing an intervention team to reanimate the dead horse.

* Creating a training session to increase the riders load share.

* Reclassifying the dead horse as living-impaired.

* Change the form so that it reads: "This horse is not dead."

* Hire outside contractors to ride the dead horse.

* Harness several dead horses together for increased speed.

* Donate the dead horse to a recognized charity, thereby deducting its full original cost.

* Providing additional funding to increase the horse's performance.

* Do a time management study to see if the lighter riders would improve productivity.

* Purchase an after-market product to make dead horses run faster.

* Declare that a dead horse has lower overhead and therefore performs better.

* Form a quality focus group to find profitable uses for dead horses.

* Rewrite the expected performance requirements for horses.

* Promote the dead horse to a supervisory position.

Noahpinion on Public Goods

One explanation of why the narrative on taxation has become toxic in the United States:

Well, I think conservatives (and not a few liberals!) have really fallen into the rut of thinking that all government spending = redistribution. Part of this may be a simple failure to recognize that America's gravy days are over, and that arresting the rapid shrinkage of our national pie is more important than squabbling over who gets which slice.

I think that this insight is entirely correct. Without public goods, a country inherently weakens (imagine no roads, rule of law or sewage). That being said, I do think that redistribution is also an important function of taxation. High income individuals gain a lot from a fully functional society and it is not unreasonable to share the benefits with other members of the society.

California's Choice

Steve Lopez writing for the LA Times:

In 1990, Linscheid said, the Cal State budget and the state prison budget were roughly the same. Today, the state prison budget is only about 10% less than the Cal State, UC and community college budgets combined. Meanwhile, the number of inmates has shot up from 25,000 to 175,000 over the last 20 years, thanks largely to law-and-order initiatives backed by the prison guards union. The union bankrolls politicians like Gov. Jerry Brown, too, and reaps huge benefits, but they come at the expense of school funding.

UCLA Chancellor Gene Block recently wrote in The Times that of the 42 Republicans in our state Legislature, 29 are products of California's public system of higher education. They got a great bargain, but not a single one of them has supported a Brown proposal — balance the budget half with cuts and half with a temporary extension of existing tax increases — that would maintain a barely acceptable level of quality in the Cal State system and help students avoid crippling tuition hikes.

I can vouch for the bargain part. A couple of years ago I took a grad course at a UC school to get caught up on the latest developments in Bayesian networks. The course was excellent, the paperwork was reasonable, the cost was still remarkably cheap for what you got.

Of course, my isolated experience doesn't mean much but it is consistent with pretty much any system of college rankings you can find. By almost any measure, California has arguably the world's best university system (according to the ARWU rankings, four of the world's top twenty universities are in the UC system).

But California also has a sentencing system that can give you 25 to life for cheating on a driving test and a legislative system that makes it easier to amend the constitution than to pass a budget. We can certainly keep one of these three systems, we might even manage two but at least one will have to go.

If you made this an explicit choice, few Californians would choose to sacrifice our universities, but in the implicit choice we've been given, that's exactly what we've decided to do.

p.s. If you're not depressed enough, check this story from NPR.

Charlie Stross summarizes the latest report on the Fukushima Daiichi accident

From Charlie's Diary (via DeLong):

The main highlights seem to be:

* The accident wasn't the result of a single disaster, but of two, and arguably three: earthquake, tsunami, and subsequent hydrogen explosions.

* The plant survived the earthquake (which exceeded its design requirements) quite well, and the reactors scrammed correctly. However, scrammed reactors continue to need power to run their cooling systems. The earthquake tore down the cables connecting the plant to the rest of the grid, forcing them onto backup power.

* The tsunami struck 15 minutes later, and was roughly five times higher than the plant had been designed for. A review of disaster preparedness in 2002 recommended raising "the average wave height they needed to be designed to cope with to about double the height of the biggest waves in the historical record" — 5.7 metres, for the FD plant. In the event, the tsunami that struck had 15 metre waves. It washed right over the plant and wrecked the seawater intakes, electrical switchgear, backup generators, and on-site diesel storage.

* The 2002 severe accident review that increased the tsunami wave height estimates recommended installing hardened hydrogen release vents, to prevent a build-up of hydrogen in event of a similar accident. These are standard on American and other reactors, but had not been retrofitted to the FD BWRs. Were such vents fitted, the explosions would not have occurred. (The explosions compounded the difficulty of bringing the plant under control.)

* Despite all this there appears to have been no public health impact due to radiation (stress and fear are another matter), and no plant workers were exposed to more than 250 millisieverts — the raised limit for emergency nuclear responders, equal to five years' regular working exposure, but insufficient to cause a serious health risk.

So: serious accident, yes — but it's no Chernobyl. ...The main take-away seems to be that, like a plane crash, it takes more than one thing going wrong to cause an accident — in this case, two major natural disasters, each of which exceeded the plant's design spec, occurring within the space of an hour, compounded by failure to implement a safety system that is standard elsewhere. Despite which, they managed to dodge the bullet (for the most part: it's still going to take billions of dollars and several years to clean up the plant).

A lot depends on how you frame the question but if it comes down to a choice between coal and nuclear, I don't have a hard time deciding.

Why companies do the things that they do -- sports sponsorship edition

Do the people running companies act to optimize profits? Or are they trying to push up stock price? Or could they just be trying to advance their own careers, reputations and social standings? Usually these things are pretty well correlated, making it difficult to separate out the drivers -- a company introduces a successful new product, the stock price goes up and the CEO gets his or her picture on the cover of Fortune.

Sometimes, though, these interests diverge and in these cases, it's always interesting to see how things break.

Take Yum! Brands' sponsorship of the Kentucky Derby.


Sometimes it's fairly easy to justify a sponsorship in terms of a business's bottom line. You can, for example, see why Frito-Lay would want viewers to associate Tostitos with the Fiesta Bowl. Other times the case is more difficult to make, as with AT&T and the Cotton Bowl. And then for some sponsorships, there is simply no case at all.

Yum owns KFC, Taco Bell and (for the moment) a number of smaller chains. There could certainly be a case for Yum sponsoring the "KFC Kentucky Derby" or even the "KFC/Taco Bell Kentucky Derby," but not the "Yum Kentucky Derby." Yum is not the relevant brand here. No one has ever said "Honey, you've had a hard day. Instead of cooking, let's load up the kids and head out to one of the many fine restaurants in the Yum! family."

You might possibly argue that sponsoring the Derby raises the profile of the company and therefore helps the stock, but there's a simpler and more logical explanation. Yum is based in Louisville, a town where much of the social season is based around the Derby. I suspect that the sponsorship has less to do with the company's stock price and more to do with its executives' social standing.

William Goldman once observed that one reason studio executives prefer to greenlight big-budget movies over smaller projects is that major films with big name casts give the executives something to talk about at parties.

You may not hear much about this in business and econ courses, but you certainly encounter it in real life.

Occam's barbershop -- Hollywood edition

I was intrigued when I read the following blurb in Felix Salmon's Counterparties:

Did quantitative analysis and movie modelling algorithms kill Anchorman 2?

The feeling of intrigue faded quite a bit when I followed the link and read this:

I was doing a short interview with Ferrell on Friday about his new movie, the indie drama "Everything Must Go," and toward the end Anchorman came up. I was excited to talk about the movie a bit with Ferrell -- especially since rumors of an Anchorman 2 have been circulating. Ferrell deflated my hopes on that score, however, at least for the time being: "We keep trying to explain to Paramount that there’s a lot of interest in a sequel, but they don’t seem to want to listen," Ferrell told me. "I’m not kidding, to the point that I’m openly talking about it with the press. At first we tried to be deferential but now we’re like, 'Yeah they don’t get it.'" This surprised me. With an $85 million domestic gross on a $26 million budget, the first Anchorman was hardly a cult hit. (The Paramount-Anchorman 2 beef is long-festering, it turns out: Deadline wrote a bit about the situation last year, and Adam McKay tweeted that the studio, which owns the rights to the film, "basically passed.") "They say when they model it and run the numbers, it doesn't add up for a sequel," Ferrell explained, "even though we have Steve and Paul and everyone on board to make it, and even though Steve" -- who recently left the cast of The Office -- "is free to make movies now."

Let's do a really quick back-of-the-envelope run of the numbers and see what conclusion we reach.

1. Thanks to the deadline link we know that AM grossed 85mil domestically but only 5 overseas;

2. From the same source, we know that Ferrell, McKay and company are looking at a 70mil budget this time;

3. There is reason to question what side of the career parabola Ferrell is on, at least when he has to carry a movie. The last two films that were clearly Ferrell vehicles (thus excluding Megamind, the Other Guys and Step Brothers) were Land of the Lost (Budget $100 million, Gross revenue $68,777,554) and Semi-Pro (Budget $90 million, Gross revenue $43,884,904);

4. And we haven't even talked about marketing costs which have grown substantially in recent years, often exceeding production costs. The Hangover cost $35 million to make and $40 million to market. Assuming a similar push for Anchorman 2, we're talking a combined budget of around $110 million;


I have no doubt that the studio used various sophisticated models when looking at Anchorman 2. I suspect that's where they got the $40 million budget mentioned in the Deadline post. But it's worth noting that $40 million is awfully close to the number we derive from this decidedly unsophisticated formula:

Conservative Sequel Budget = Gross of first(90) - Marketing(40) - Overruns(10)

Given that (according to Wikipedia) no film starring Ferrell has ever grossed $200 million domestically, his biggest hit (Elf -- $173 million US) was back in 2003, his second biggest ( Talladega Nights) was five years ago and that no live-action film* starring Ferrell has broken $120 million domestically since then, it's not hard to see why a studio might be nervous about committing to $110 million in production and marketing.

Though people tend to talk about models in business with hushed, Oracle-of-Delphi tones, running the numbers usually gives us intuitive, common-sense answers -- often very close to our rough estimates. That's often the key to the models' greatest value -- by reminding us of the obvious, they keep us from building castles in the air using stockholders' money.



* Animated films are a bit of a special case. Megamind did good business, though not as the Incredibles, Up, Ice Age, and no one concluded from those films that Craig T. Nelson, Ed Asner, or Ray Romano could open a big-budget picture.

A conservative view on health care reform

I usually read Outside the Beltway to get smart opinions that I am also likely to disagree with. It is one of my ways to avoid being trapped in an “echo chamber” and to get a diversity of views. Today, however, I have to admit that this piece by Steven L. Taylor is very much on point:

Ultimately, all I want is some honesty in the public discourse on these issues, starting with three facts:

a. Yes, Medicare needs reforming,

b. Magical thinking about market forces is not going to work.** I have simply come to the point in thinking about all of this that I believe this assertion to be a dead end.

c. If all other OECD countries do a better job than we do in terms of cost and service, then perhaps we need to be realistic about that fact and look outside for viable models.***

By the way, I don’t pretend to have the answers to this conundrum, but I do think that the debate had to take place within logical parameters that address the actual situation at hand.

[some bridging text deleted to include the relevant footnotes. ed.]

**Understand: there was once a time when I, too, believed that markets in all things was the way to go. Empirical observation, and recognition of the reality around me, has altered my view on this. I still fundamentally believe in markets, but recognize that one size does not fit all.

***This is something else I have changed my view on over time. Indeed, I am not alone. See, for example, the following post from Reason‘s editor-in-chief, Matt Welch: Why I Prefer French Health Care (and yes, the libertarian magazine, Reason).

Now I am sympathetic to the argument that true free market health care hasn't been tried anytime recently. It has some issues that would have to be overcome. Externalities due to antibiotic overuse, for example, are not trivial to handle outside of regulation. Nor is it clear precisely how one would handle fraud in a way that would not be a legal nightmare.

But there are health care models that are both more and less functional than the current United States model. Why would we not look more closely at, for example, the German model before assuming that a massive social experiment makes sense?

Weekend Gaming -- special video edition

This is starting to hit a little close to home.






My first thought was that he shouldn't have made this a game of imperfect information.

My second thought was that I really need to get out this weekend.

An actual quick one on broadcast TV

My last post on the topic went a bit longer than I had planned so I'll keep this one brief.

From the New York Times:

The Nielsen Company, which takes TV set ownership into account when it produces ratings, will tell television networks and advertisers on Tuesday that 96.7 percent of American households now own sets, down from 98.9 percent previously.

There are two reasons for the decline, according to Nielsen. One is poverty: some low-income households no longer own TV sets, most likely because they cannot afford new digital sets and antennas.

Of course, you don't need 'new digital sets and antennas.' You need a forty dollar converter box (thirty if you shop around. Closer to twenty used). Any antenna that's UHF compatible will work (in other words, any antenna). I've used one from the 99 cents store -- worked fine.

Here are some more details:

Nielsen’s research into these newly TV-less households indicates that they generally have incomes under $20,000. “They are people at the bottom of the economic spectrum for whom, if the TV breaks, if the antenna blows off the roof, they have to think long and hard about what to do,” Ms. McDonough said. Most of these households do not have Internet access either. Many live in rural areas.*

I'm sure that some of these people can't afford a thirty dollar converter or a thrift-store TV, but there are certainly others who went without because they were misinformed about the costs. misinformed in part because reporters increasingly feel like it's their job to protect consumption rather than consumers.

* Having grown up in the Ozarks and taught in the Mississippi Delta, I can tell you from experience that rural areas face extraordinary challenges that are generally ignored if not openly mocked. For some of these people, the switch to digital really did end their access to free TV, greatly compounding problems with isolation. I'd like to respond to this with a major push to get high speed internet access to rural areas but that's a topic for another column.

A False Dichotomy

In a lot of discussions about health care systems, the Americans point to the Canadians and say "we don;t want that". Curiously, the Canadians point to the Americans and say "we certainly can't imagine that system being a good idea". But merely looking at these two (fairly extreme) examples is a fundemental failure of imagination. A lot of countries have developed health care systems and it would be remarkable if we couldn't learn a lot from them.

Consider a Libertarian's view of the French health care system:

What’s more, none of these anecdotes scratches the surface of France’s chief advantage, and the main reason socialized medicine remains a perennial temptation in this country: In France, you are covered, period. It doesn’t depend on your job, it doesn’t depend on a health maintenance organization, and it doesn’t depend on whether you filled out the paperwork right. Those who (like me) oppose ObamaCare, need to understand (also like me, unfortunately) what it’s like to be serially rejected by insurance companies even though you’re perfectly healthy. It’s an enraging, anxiety-inducing, indelible experience, one that both softens the intellectual ground for increased government intervention and produces active resentment toward anyone who argues that the U.S. has “the best health care in the world.”

The anecodates as to the efficiency of the system are pretty interesting as well. I can tell you from personal experience that the Canadians are unlikely to have the author's happy experience with universal short wait times.

So maybe we should be looking more broadly for examples?

"Teaching. You keep using that word. I do not think it means what you think it means."

Excellent post from proflikesubstance:

Like many in my position, I have about as much formal teaching training as I do formal gardening or cooking training. That's not to say that I can't cook a mean meal from stuff I've grown myself, but I've learned through seeing what works for others and trial and error. Teaching is no different, but I've been doing it formally (as in, full control over an entire course) for a shorter period of time. And whereas I see teaching as important, there also remains the fact that it can't be a priority for me at this stage of my career.

That said, for a variety of reasons (most notably, Broader Impacts, yo) I have gotten involved in a program aimed at producing teaching modules for grade 6-12 science classes. For each module there is a team of one person who teaches at a university and one person who teaches at either the middle or high school level. Nearly everyone involved has a formal background in education and is well-versed in the jargon that goes along with that training. In addition, the 6-12 teachers have an array of state requirements and testing that they have to conform with, creating a new layer of complexity.

The meetings we have as a group often make me feel a bit like I do when traveling in a country where I have a semi-decent grasp on the language - I know enough to follow the conversation and can clumsily contribute, but spend much of the time just trying to keep up. It's a fascinating experience for me seeing the approach to teaching that is taken at the 6-12 level and there's no shortage of elements that I could see employing in my own teaching. For that reason, I really think that I'm going to be taking as much or more out of this experience than I will be contributing, which is not necessarily what I thought when I agreed to join in.

I started out as a high school teacher, then went to grad school (in part to escape the worst principal I've ever run across), then did a four year stint as an instructor at a large university (making around 18K -- and yes, that's full time), then went back to high school teaching (and a 10K raise) then took advantage of the late Nineties economic boom and jumped to industry.

My experiences at the university (lecturing to 150 students at a time, covering more advanced material, helping to supervise TAs) definitely made me a better high school teacher but I'd still have to say that teaching high school is better preparation for teaching college than teaching college is for teaching high school. In high school, you have to deal with students of widely varying abilities, most of whom have short attention spans and many of whom don't want to be in school at all.

This experience would be valuable to any teacher (even on a graduate level), as would the teacher training classes I took. There was, of course, an element of bullshit to some of those courses (though apparently not that different from what you get in Teach for America and far less pungent than much of what you encounter in the corporate world), but there were also a number of useful ideas, techniques and resources.

As Andrew Gelman observed, most people who teach college courses have never been formally introduced to any of these concepts. With luck they pick them up from other teachers or figure it out on their own.

You could make a case requiring some kind of teacher training for professors and TAs. Instead many in the reform movement seem determined to move in the other direction, dismissing the value of professional training for teachers and instead promoting a model of mass firings and high turnover in the search of 'natural teachers.'

You can probably guess what side of that debate I'm on.

A kindness by omission

I was doing some preliminary research for a post on the business of movies prompted by this piece (which I found via Salmon) and I noticed something interesting about Mike Myers' IMDB page (hint: look at 2008). I can think of an innocent explanation for the anomaly, but I wouldn't completely rule out the possibility that some hacker out there is a Myers fan.

Actor (38 titles)

2012 Untitled Keith Moon Project (in production)
Keith Moon

1989-2011 Saturday Night Live (TV series)
Various / Wayne Campbell / Dieter / …

– Dana Carvey/Linkin Park (2011) … Wayne Campbell / Himself

– John Goodman/Jewel (1997) … Ron Wood

– David Hyde Pierce/Live (1995) … Various

– Jeff Daniels/Luscious Jackson (1995) … Various

– George Foreman/Hole (1994) … Various

See all 124 episodes »

2010 Scared Shrekless (TV short)
Shrek (voice)

2010 Shrek Forever After
Shrek (voice)

2010 Donkey's Caroling Christmas-tacular (short)
Shrek

2009 Inglourious Basterds
General Ed Fenech

2007 Shrek the Halls (TV short)
Shrek (voice)

2007 Shrek the Third
Shrek (voice)

2006 Shrek: Smash n' Crash Racing (Video Game)
Shrek (voice)

2006 Night of Too Many Stars: An Overbooked Event for Autism Education (TV movie)
Donald Q. Cashington

2004 Britney Spears: Greatest Hits - My Prerogative (video)
Austin Powers (segment "Boys")

2004 Far Far Away Idol (video short)
Shrek (voice)

2004 Shrek 2
Shrek (voice)

2003 The Cat in the Hat
The Cat

2003 Nobody Knows Anything!
'Eye' Witness

2003 Shrek 4-D (short)
Shrek (voice)

2003 View from the Top
John Witney

2002 Austin Powers in Goldmember
Austin Powers / Dr. Evil / Goldmember / …

2001 Shrek
Shrek (voice)

2001 Shrek in the Swamp Karaoke Dance Party (video short)
Shrek (voice) (singing voice) / Blind Mouse (voice) (singing voice)

2000 The Thin Pink Line
Tim Broderick

1999 Mystery, Alaska
Donnie Shulzhoffer

1999 Austin Powers: The Spy Who Shagged Me
Austin Powers / Dr. Evil / Fat Bastard

1998 Pete's Meteor
Pete

1998 54
Steve Rubell

1997 Austin Powers: International Man of Mystery
Austin Powers / Dr. Evil

1997 Austin Powers' Electric Pussycat Swingers Club (TV movie)
Austin Powers

1993 Wayne's World 2
Wayne Campbell

1993 So I Married an Axe Murderer
Charlie Mackenzie / Stuart Mackenzie

1992 Wayne's World
Wayne Campbell

1989 Elvis Stories (short)
Cockney Man

1987 It's Only Rock and Roll (TV series)
Wayne Campbell

1987 Meet Julie (TV movie) (voice / as Mike Meyers)

1985 John and Yoko: A Love Story (TV movie)
Delivery Boy (uncredited)

1980 Bizarre (TV series)
John Byner's nephew/Timmy Byner/Various Characters

1979 The Littlest Hobo (TV series)
Tommy

– Boy on Wheels (1979) … Tommy

1977 Range Ryder and the Calgary Kid (TV series)

1975 King of Kensington (TV series)
Ari

– Scout's Honour (1975) … Ari (as Michael Meyers)