Straussians and Randians

Joseph and I have a recurring argument about who presents the greater threat, Straussians (my choice) or Randians (Joseph's). This post by James Kwak on the Republican push to tax the lower 47% definitely has me rethinking my position:

The other, even-more-disturbing explanation, is that Republicans see the rich as worthy members of society (the "producers") and the poor as a drain on society (the "takers"). In this warped moral universe, it isn't enough that someone with a gross income of $10 million takes home $8.1 million while someone with a gross income of $20,000 takes home $19,000.* That's called "punishing success," so we should really increase taxes on the poor person so we can "reward success" by letting the rich person take home even more. This is why today's conservatives have gone beyond the typical libertarian and supply-side arguments for lower taxes on the rich, and the campaign to transfer wealth from the poor to the rich has taken on such self-righteous tones. 

This just goes to show how pathological the Republican Party has become. It would be so much simpler, more logical, and more politically appealing if they would just draw a line against higher taxes for anyone. That's what the Taxpayer Protection Pledge does, and it makes a certain amount of sense, even if I think it's bad policy. The fact that Eric Cantor feels compelled to go out of his way to talk about raising taxes on the poor shows how the nasty instinct for class warfare is undermining what should be a simple, small-government agenda.  on the Republican push to raise taxes on the bottom 47% did a good job making me question my position.

The whole thing is worth checking out. While you're at it, take a look at the Bruce Bartlett post Kwak cites:

Once upon a time, Republicans were more concerned about the number of rich people with no income tax liability.

On Jan. 17, 1969, just days before Richard Nixon’s inauguration, the departing treasury secretary, Joseph Barr, disclosed that in 1967, 155 Americans with an income of more than $200,000 had no income tax liability, including 21 with an income above $1 million.

This was considered such a scandal that Nixon sent a tax package drafted by the Johnson administration to Congress with his endorsement. When the Tax Reform Act of 1969 was enacted, including a minimum tax to force rich people to pay something, he praised that provision.

As Nixon said in his signing statement:

A large number of high-income persons who have paid little or no federal income taxes will now bear a fairer share of the tax burden through enactment of a minimum income tax comparable to the proposal that I submitted to the Congress, which closes the loopholes that permitted much of this tax avoidance. 

Ronald  Reagan defended his tax reform proposal on the grounds that it would reduce the number of nontaxpaying rich people. In a June 6, 1985, speech, he said:

We’re going to close the unproductive tax loopholes that have allowed some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary, and that’s crazy. It’s time we stopped it. 

Among the specific measures Reagan supported to increase tax fairness was an increase in the tax on capital gains to 28 percent from 20 percent.

The next time you hear about hedge funds' sophisticated risk management algorithms...

A couple of great posts over at Felix Salmon's blog. First a sardonic take on the SALT conference in Vegas:

Well, yes. This is why SALT will always be in Vegas, and why Vegas will always welcome SALT with open arms. I’m sure the casinos made very good money on SALT even after accounting for Geismar’s winnings, and they’ll probably make money from Geismar too, on net, over time. If nobody ever won big money, no one would gamble at all. But in the end, the house always wins — and all of these hedge-fund managers are smart enough to know that. And still, left to their own devices, what they do is gamble, and they even layer on silly “risk management” techniques which don’t reduce risk at all — in this case, after a losing hand, Geismar would bet a little less, reckoning that somehow “laws of averages” would help him as a result.

And then from guest blogger Jonathan Adler, a nicely written explanation of just how silly this "risk management" was.

The ever-popular broccoli-is-bad-for-you story

Andrew Gelman points us to a New York Times article by Gina Kolata that bears this provocative title:

For Some, Exercise May Increase Heart Risk

I don't want to go too deep into an analysis of the study. Gelman's post and the accompanying discussion do a good job exploring the issue and it's too late in the evening to cover old ground. There are, however, a couple of points from the post and comments that are particularly pertinent:

1.Gelman --  "Each person is an individual, and I would not be surprised at all to learn that a treatment that is effective for most people can hurt others. Once you accept the idea of a varying treatment effect, it’s natural enough to think that the effect could be negative for some people."

2, There are other, not-so-mysterious ways that exercise could indirectly cause these adverse effects. Soreness and injuries can cause stress and interfere with sleep, carb-loading, sports drinks and energy snacks can be surprisingly unhealthy, and it's not unusual to hear someone excuse a big meal with the line "I worked out today."

The effect described in the article is both weakly supported and unsurprising but it's getting extensive coverage because it falls into one of journalism's most beloved genres, the it's-not-really-good/bad-for-you story, a type of article that allows reporters to pander to their readers and be counter-intuitive at the same time. If you can come up with a study which suggests that seat belts are dangerous or that bacon prevents colon cancer you will be swarmed with microphones.

Here's a an example we discussed earlier:

... (reported by the ever credulous NYT under the headline Bicycle Helmets Put You at Risk) was that of Ian Walker, a psychiatrist at the University of Bath. Walker, an opponent of helmet laws, put a sensor on his bike and rode with and without a helmet until he had been passed 2,500 times (see the curse of large numbers). To control for potential gender effects he sometimes donned a long wig (to get the full comic effect, check out Walker's picture below).Walker found vehicles came on average 3.35 inches closer when he was wearing a helmet (for context, the average passing clearance was over four feet).

If you carefully read all the way through Kolata's exercise article you can find all of the required caveats (New York Times writers are generally pretty good at cover-your-ass journalism), but even a thorough perusal could leave you with a wrong impression while those who skim the piece or simply read the first paragraph are almost certain to be mislead.

You might expect journalists to require a higher standard of proof for stories that might encourage dangerous or unhealthy behavior. Instead we get the exact opposite.

Medicare for all?

From Aaron Carroll: 

I don’t think I’d be betraying any confidences if I reveal here that my father is no great fan of the ACA. That said, he could not have been happier the day he turned 65. He loves his Medicare. Before that time, while he was somehow able to find insurance for himself, the plan cost somewhere around $15,000. That was before the $5000 deductible. I think I could heal the cheers all the way across the country the day he became eligible for Medicare. My mother, on the other hand, still hasn’t hit 65. She’s counting the days.

I think maybe my Canadian background is betraying me here, but why are we so scared of universal medicare in the United States?  We have already covered the most expensive portion of the population (the elderly, the disabled, and impoverished children).   Is it really the case that a higher rate of spending drives innovation more than it drives rent-seeking and low productivity? 

I think that the answer to this question gets more critical as time goes on rather than less.  But I simply do not get what the resistance to universal health care is based on.  It would do wonders to make mobility higher (moving without health care is a scary thing) and do a lot to increase competitiveness in sectors like manufacturing. 

Why is this so hated?  Can it really just be a war of the old versus the young? 

To understand obesity, genetics is essential/irrelevant

Both or the following statements are true:

1. Genetics is a major factor in understanding obesity

2. Genetics has no significant role in obesity

The trick is the framing of the question. If we are talking about the factors that determine why person A is obese while person B isn't, genetics should certainly be considered. If we're talking about the rise in obesity nationally and internationally, genetics has no significant role. This is one of those cases where the level of aggregation can completely change the validity of conclusions but you'll seldom hear the distinction made explicitly and you sometimes won't be able to tell even from context.

Making subtle changes in the way we frame a question can, and often does, make huge differences in both the way we approach the question and the inferences we can draw from it. Unfortunately, these fine points are often overlooked even in technical discussions and almost never make it to the popular press. The result is that intelligent people of good faith are often sucked into pointless pseudo-arguments. Worse yet, people of bad faith can produce dishonest but deceptively persuasive arguments by reframing questions mid-discussion.

Still my favorite Krugman quote

“There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.” -- Paul Krugman

Ironically, a lot of the people I know who enjoyed the Lord of the Rings went on to have a lifetime love of learning and an interest in history or mythology. That seems to be a positive social good, despite the very reactionary message of the book (Michael Moorcock rightly notes that a lot of the book is mourning for the loss of a more innocent age due to the industrial revolution). But I think what makes it work to motivate people is the message that the actions of everyone (even the little people) count -- a message that was perhaps over-hyped in the films.

In contrast, Atlas shrugged is an extreme example of the great man theory of history.  The special and gifted people carry society forward, eternally on watch for the parasites that comprise the common herd. 

One brings people together and the other tears them apart.  It’s an important difference. 


EDIT: See the comments... it looks like I mis-attributed this quote.  Sorry, all

Back on the agricultural beat

As mentioned before, I'd like to see us do this with every agriculturally important species.

LONDON (Reuters) - An international team of scientists has cracked the genetic code of the domesticated tomato and its wild ancestor, an achievement which should help breeders identify the genes needed to develop tastier and more nutritious varieties. 

The full genome sequence of a tomato breed known as Heinz 1706, and a draft sequence for its closest wild relative Solanum pimpinellifolium, were published in the journal Nature on Wednesday.

Researchers who carried out the work said that together the sequences provide the most detailed look yet at the functional parts of the tomato genome and show order, orientation, types and relative positions of all of its 35,000 genes. 

The sequences should help researchers find the links between certain tomato genes and the characteristics they determine, and will also extend scientists' understanding of how genetic and environmental factors affect the health of a crop. 

"Tomatoes are one of the most important fruit crops in the world, both in terms of the volume that we eat and the vitamins, minerals and other phytochemicals that both fresh and processed tomato products provide to our diets," said Graham Seymour, a professor of biotechnology at Nottingham University, one of 300 scientists involved in the Tomato Genome Consortium (TGC).
...
"For any characteristic of the tomato, whether it's taste, natural pest resistance or nutritional content, we've captured virtually all those genes," said James Giovannoni from the Boyce Thompson Institute for Plant Research at Cornell University, who was part of the U.S. tomato sequencing team. 

Tomatoes represent a $2 billion market in the United States alone, while in Britain the market for tomatoes is worth around 625 million pounds ($980 million) a year.

The twice-wrong analogy

Paul Krugman has been hammering away at the economy as household analogy for ages now, pointing out that the idea of belt-tightening becomes problematic when applied to groups that include both debtors and creditors. I'm wondering, though, if he's wrongly conceding a comparably serious point.

Let's assume we have a household that is running in the red because one of the breadwinners has been laid off. Also assume that the household has been offered a line of very cheap credit, virtually zero interest in real terms. Consider the following purchases:

1. Long deferred car maintenance;

2. Having some cavities filled;

3. Taking a career-relevant training course;

4. Buying a new suit for interviewing;

5. Getting a really big TV;

6. Vegas.

Let's group these in twos and think about the following choices:

A. Take a loan to cover 1 and 2;

B. Take a loan to cover 3 and 4

C. Take a loan to cover 5 and 6

D. Don't take a loan.

I could imagine a heated argument over the merits of A (the cost of putting these things off is far more than the interest) and B (If these purchases lead to a job they will have paid for themselves many times over), but I can't imagine a good argument for D.

It is certainly possible to find government purchases that resemble C but most of the proposed spending we've been talking about recently (infrastructure, education, research, public safety) seem to fall alongside A and/or B. Advocates of austerity could try to argue that these things don't have the potential to save money in the long run, but that's not what we've been hearing. Instead we simply get the argument that, even with essentially zero-interest loans, a household in the red should never borrow money.

What's worse, people take this seriously.

Along these lines, check out the following from Frank Rich via Thoma:

... The most important single step toward a brighter future is to repair our economy as soon as possible. And one of the surest ways to do so is a large and immediate infrastructure refurbishment program.

This path would not require Republicans to concede the merits of traditional Keynesian stimulus policy. Nor would it require them to abandon their concerns about the national debt. In short, the philosophical foundation for an agreement is already firmly in place.

If it doesn’t happen, the coming political campaign will provide a golden opportunity to learn why. At the inevitable town hall meetings, voters who are tired of gridlock should ask candidates when they think that long-overdue infrastructure repairs should begin. The only defensible answer is “Right now!” Candidates who counsel further delay should be pressed to explain why.

Subway cars and shipping containers

A quick thought, inchoate and probably none too original, but here it is.

I took the subway earlier today. I do that about once or twice a month when I'm out and about on the weekend and I don't feel like messing with traffic. I considered heading over to East LA for burrito at Al and Bea's but I decided against it because I didn't feel like waiting through multiple stops and changing trains. I never even considered a destination that would entail getting transferring to a bus -- that's only worth the trouble when there's a large cost to driving and parking (traveling to the airport is the only example I can think of)

That's the real hassle of public transportation, not the business of actually getting people from A to B, but the waiting, the loading, the unloading, the transferring and repeating the process. And that's just for a simple there-and-back trip. If you have multiple stops what would be a couple of hours of errands by car can take a day.

I got to thinking about the analogy between that and shipping before the advent of intermodal freight containers. Back then much of the time and most of the cost of shipping came from transferring items from ships to trucks then from trucks to trains then from trains to trucks. It was the innovation of putting all those items in a big, reusable metal box that made the modern age of cheap trade possible.

It struck me that we're still waiting for an analogous innovation (or set of innovations) in transportation, not just in buses and light rail but in trains and even air travel (what percentage of your last trip was actually spent moving from A to B?). Why we haven't seen more progress is question for another post (trying to avoid hydra blogging here).

Hydra posts

I'm working on a post about this NPR story (take a look here and here and let me know if you have any reactions*). It started out as a post on kids and reading, then it became a post on kids and reading and the way we frame research questions, then it became a post on kids and reading and the way we frame research questions and the Hawthorne effect, then it became a post on kids and reading and the way we frame research questions and the Hawthorne effect and...

I assume I'm not alone in struggling with Hydra posts. They've always been a problem but since my schedule's gotten busier with contract work they've really  been coming fast and furious thanks to the double whammy of having less time and suffering from a strange ailment that reacts to tight schedules by coming up with more things to do.

The sad part is that the most substantive posts are the ones most likely to keep sprouting heads. It's the trivial ones that are easy to finish. I wonder if, in general, the unimportant writing in the blogosphere tends to drive out the important, sort of a Gresham's Law of blogging. 

* One of the points I'm curious about. I always assumed that the rationale behind reading to young children was to model the behavior, create positive associations and cultivate an appetite for stories and the written word. Did anyone else have a similar take on this?

Mixed Markets

Hoisted from the comments over at Dean Dad's blog:

This is also the core of the social security privatization movement. SS is a visible example of government helping people, it's very popular, and it's highly efficient.

(Well, the ideological affront of it all, plus what a sudden, massive infusion of taxpayer cash into the stock market would do for people who already have large holdings. Ahem.)

Gov't does a lot of things poorly, but social security, like higher ed, isn't one of 'em.

 Is there a reason that we are allergice to the idea that different approaches work better for different problems?  A screwdriver is a very useful tool but sometimes you need a saw instead.  I would think that adaptability is the most important feature of a society or an economy.  But for some reason we refocus adaptability to be entirely framed as competition between private firms without asking hard questions about where different approaches might have a comparative advantage.

I find it mystifying that efficiency is so under-rated in the discourse. 

"Wesleyan University offers a three-year bachelor's degree"

It's not exactly the way I'd do it, but on the whole I'd say this is a good idea.

Dual Class shares and free markets

Andrew Gelman weighs in on dual class shares: 

Now I’m just confused here. Who’s supposed to be “concerned” here? As a New Yorker subscriber, am I supposed to be concerned that dual-class firms underperformed the market? I just don’t get it. Why should I care? If the shares underperform the market, people can buy a piece of Facebook for less. That’s fine too, no?

I think that Andrew would be completely correct in a perfect market (one in which all of Mark Thoma's issues are not present).  If some financial products give a piece of the return while others give ownership plus return then people could choose which ones to purchase. 

However, the modern American economy has fallen in love with the 401(k) as an investment vehicle.  This leads to two problems.  One, investors are generally not free to switch to a different fund because they dislike the investment decisions of the fund that they are in.  Since the individual investor bears all of the losses of bad decisions but the employer has control of the fund (and has an incentive to cut costs) you have a classic principal agent problem.

This problem is made worse by giving a limited group of people control over a group investment.  One can easily imagine the small group making decisions that benefit them at the expense of the majority of shareholders.  Again, not necessarily a problem in an open market.  But with the constraints that individual investors are under this could be problematic as they lack the freedom to enter or exit the market. 

This is why I wax poetic about Social Security (or the Canada Pension Plan): they shift the risk from small investors (who generally can't bear it) to large entities (that can).  I totally get that there are total social resources constraints, but I would rather that they be dealt with openly.  Instead I see the stock market becoming a worse and worse deal just as a large American cohort (the "Baby Boom") is about to retire. 

I am not sure that this is a good thing. 

See also Matt Ygelasis and Felix Salmon.

The other (non-Shakespearean) thing I learned in my college Shakespeare class.

I've already mentioned that the tests in this class were unusual; the way I studied for them was a bit odd as well and though it wasn't a method that I'd recommend for wide usage, in this context it worked well.

I was, in my younger days, something of a procrastinator (a trait I've outgrown, of course, -- ask anybody). Papers were generally started at the last minute but I did, at least, make an effort to keep up with my reading (I was earning a BFA in creative writing so writing and keeping up with my reading was pretty much all that was asked of me).

Shakespeare was the exception with reading assignments being pushed back to marathon sessions the weekends before the tests. I wasn't that I didn't enjoy the material -- I did -- but the plays required a commitment and a focus that made them easy to put off.

I would therefore find myself with three or four plays that I had to know in considerable detail forty-eight hours after I cracked open my copy of the Riverside Shakespeare (which I still have, by the way). It's difficult to imagine a worse approach to studying but in this case it worked out surprisingly well.

I would spend the first couple of hours cursing myself for being an irresponsible moron and calculating how much sleep I'd be able to get if I continued reading at that glacial pace. After that, though, something changed: the rate at which I was reading increased; it became easier to focus; the characters became more vivid and the stories more coherent.

It wasn't until after the second test that I realized what was going on. Shakespeare is one of the most and least accessible writers most of us will ever read. He wrote in language that hasn't been used for centuries but if you can get past those centuries of linguistic drift, you find someone who could hold the interest of intellectuals like Ben Jonson while keeping what we would now call the cheap seats cheering and stomping instead of throwing rotten eggs.

If I would have shown some discipline and diligently put aside an hour a night to study for that course I would have devoted more time to it but I strongly suspect I would have done worse and gotten less out of it. I doubt that an hour, even an hour every night would have been enough time to acclimate myself to the language; I would have spent my time translating instead of reading. It took two or three hours to forget the plays weren't in the everyday vernacular.

It's important to note that waiting till the weekend before a test then doing a marathon study session would have been, in almost every other context, a horrible idea. Even in cases where language is a barrier (which includes math), you'd generally be better off working your way through in bite-sized chunks, but the plays were written to be experienced in a single sitting (or standing) and that's probably still how they work best.

So my experiences in that one class shouldn't suggest a general approach to studying but it is another reminder of the often made point that the "best" pedagogical methods are context sensitive, varying from student to student, teacher to teacher and subject to subject to subject. Beware of blanket solutions.

If we're going to discuss education, we need to make sure everyone's heard this one

From Bullfinch's Age of Fable:

Several similar contests with the petty tyrants and marauders of the country followed, in all of which Theseus was victorious. One of these evil-doers was called Procrustes, or the Stretcher. He had an iron bedstead, on which he used to tie all travellers who fell into his hands. If they were shorter than the bed, he stretched their limbs to make them fit it; if they were longer than the bed, he lopped off a portion. Theseus served him as he had served others.