Wednesday, September 29, 2010

Which Public Figure Is This Describing?

He is acutely conscious of his personal safety. He feels targeted. Security guards trail him on the street. He wears bulletproof vests at public events.
Answer here, quote from page three of the article. Interesting throughout.

Tuesday, September 28, 2010

Too Many Heads

It's hard to imagine an industry with a natural monopoly (when the costs of running a business decrease per unit sold to the point that you can sell to the good's whole market). Small businesses can out compete the big guys because the management costs increase so much as you expand. Mass coordination is very, very hard which is why large companies often seen incompetent and CEOs appear grossly overpaid.

Take a simple example of the coordination problem from hot water heaters. From Inertia Wins!:
“If you turn your water heater down to 120 degrees Fahrenheit; you will cut your water-heating costs by 6-10 percent,” says EPA. Doing so also uses less energy.

But 120 degrees is not hot enough to kill the Legionella pneumophila bacteria. Legionnaire’s disease causes both flu-like and pneumonia-like symptoms. The disease is most often caught by inhaling the spiral-shaped bacteria via water mist, such as in the shower or near a lake or stream. That’s why OSHA recommends setting your water heater hot enough to kill the bacterium – 140 degrees.
This is a small example of why I'm not convinced by the argument that taxes are payment "for what you use up."

Monday, September 27, 2010

Great Sentence on Development

Lant Pritchett at AidWatch:

The MDGs are correctly interpreted as what will be accomplished when there has been development–not vice versa.

Friday, September 24, 2010

Stranger in a Strange Hobby

Robin Hanson wonders why people don't try new things:
It seems we see far larger costs than the time for a trial. My guess: we value our current identity, integrated as it is into our job, hobbies, friends, etc. We fear that if we try new joys, we will like them, and jump to practicing them, which will change us. We fear that by jumping to juicy joys, we won’t be us anymore.
Relatedly, it's more of an issue of being a stranger. Trying a new thing means you're surrounded by a strange world, something that humans find very uncomfortable (which is why tourist traps are some of the most American parts of a foreign country). Having someone familiar with us, especially if they are close to us and share the strangeness, blurs that outsider feeling. For example, a couple of months ago I went to a baseball game with my girlfriend who shares my apprehension about sporting events. I would not have gone without her (and not just because we were attending an event hosted by her firm).

This runs counter to the common intuition, that going with an insider makes it easier because you have a "guide." But if the guide's more associated with the surroundings than with you, you're still just an outsider but now find it socially awkward to escape.

Friday, September 17, 2010

New Smoking Bans

If anyone you know dismisses the "slippery slope" argument as paranoia, point to smoking. First, it was no smoking in enclosed areas or places where people with poor health concentrate: e.g. airplanes and hospitals. Then came the public buildings. Then offices. Then the restaurants. Then the bars. Now John Stossel reports Mayor Bloomberg is taking on the outdoors. Yes, the outdoors.
To protect the public from the health effects of tobacco smoke, the new law will go a step further and not allow smoking in parks, beaches, marinas, boardwalks and pedestrian plazas.
That this measure has 65% approval underlines that smokers have become New York's second class citizens.

Cause and Effect

This graph from small business surveys (btyb the National Federation of Independent Businesses) has been going around the blogosphere. Matthew Yglesias and Paul Krugman comment.

Take a close look. See what I see?

The graph is nonsense.

First, the obvious: what exactly is the difference between "poor sales" and "competition from large business?" Isn't the latter just a subset of the former? I have a hard time believing there's a business owner out there saying "Well, I've encountered a lot of competition lately, which is a problem, but my sales haven't gone down." That's why competition's a problem for small businesses: they reduce their sales.

Second, really all problems are sales problems. Any expense that seems too large can be fixed with more sales. No one cares about a high cost of insurance if you're making money left and right nor more than I would care about the savings from generic brands if I made six figures a year.

What the survey really measures is what disappointing economic news is popular. In the late 1990s, during the boom, good labor was hard to come by so labor quality was a concern. During the 80s to the mid 90s, anti-government rhetoric was at its peak so the culprit was regulations. Health care costs dominated the discussions during the 2000s. Now, all the talk is about how people aren't buying things so they focus on sales.

If a business is struggling, the owner will focus first on what's being talked about. There's nothing wrong with that as long as they check it against their own business (reasonable assumption). But the "sales" option pollutes the data. If taxes were lower, wouldn't the sales problem go away? If there were fewer requirements or cheaper insurance, wouldn't that increase your bottom line just like sales would? Essentially this survey asks:
How do you increase X?


1. Increase A
2. Decrease B
It's both!

Update: Russ Roberts and Arnold Kling weigh in.

Monday, September 13, 2010

Quote of the Month

For the month not just because of the words, but because of the unexpected source.
The American experiment was based on mutual respect, acceptance of differing religious beliefs and common decency. Burning anyone's sacred scripture is an affront to all of these.

The world needs more voices not fewer. More faith not less. It is not God that tells man to hate, kill or stifle thought. It is a fringe understanding of religion. God beckons us to seek His face. I refuse to believe that a loving Father would punish honest and bold questions. But I do believe there must surely be eternal consequences for those who hate or kill in his name.

Let us not fail to recognize that this week we witnessed Christian extremists behaving in ways made infamous by a monster fascist. The reactions by Muslim radicals only mirrored the minds of those in Iran who currently stone people to death for what they call the "sin of homosexuality."

The world has once again come to a point where it cowers at best and, at worst, appeases crazy and dangerous men of all philosophies of God and man. We must again link arms and unite despite our differences against evils that only wish to destroy or enslave no matter the god they hide behind. "The truth shall set you free" is more than a phrase -- it is a universal principle that cannot be changed by a bonfire or suicide vest.

History teaches us what happens to those who not only burn books, but also to those who do not respect freedom of speech -- especially when most find it vile and offensive
HT: Megan McArdle

Sunday, September 12, 2010

Kling on Experts

Arnold Kling explains when to trust and when to dismiss experts:
I have faith in experts. Every time I go to the store, I am showing faith in the experts who design, manufacture, and ship products.

...Expertise becomes problematic when it is linked to power. First, it creates a problem for democratic governance. The elected officials who are accountable to voters lack the competence to make well-informed decisions. And, the experts to whom legislators cede authority are unelected. The citizens who are affected by the decisions of these experts have no input into their selection, evaluation, or removal.

A second problem with linking expertise to power is that it diminishes the diversity and competitive pressure faced by the experts.

Read the whole thing.

Sunday, September 05, 2010

A Tale of Two Frances

Measuring GDP per hour worked, adjusting for purchasing power, France ranks very high in terms of productivity:


This is surprising given their laws making it difficult to fire existing workers. But there's another way to look at the data. Suppose a firm is pretty good at estimating worker productivity which occur at low (L), medium (M), and high (H). But the firm is not perfect and sometimes one level off: L can be mistaken for M, H can be mistaken for M, M can be mistaken for L or H, etc. If you know that getting an L will lock you into that person, and since the Ls can make the Ms and Hs worse, you refuse to hire anyone that's an L or an M just be sure. Therefore, French companies are chuck full of Ms and Hs while the unemployed are all Ls and Ms. There may not be two Americas, but there just might be two Frances.

Wednesday, September 01, 2010

Someone Should Have Gone to My Last Micro Lecture

When I taught micro this summer, I ended the class on an optimistic note: a growing world population is not an inherent problem. In fact, it is often a boon as more people translates into more active minds at work. We might consume more resources, but we also have more people solving the increasingly scarce resource problem. "People are more than mouths and stomachs," I say. "They are also hands and heads."

A man named James Jay Lee took hostages at the Discovery Channel HQ in Maryland today, demanding that, among other things, the Discovery Channel have prime time programming where
Focus must be given on how people can live WITHOUT giving birth to more filthy human children since those new additions continue pollution and are pollution. A game show format contest would be in order. Perhaps also forums of leading scientists who understand and agree with the Malthus-Darwin science and the problem of human overpopulation. Do both. Do all until something WORKS and the natural world starts improving and human civilization building STOPS and is reversed! MAKE IT INTERESTING SO PEOPLE WATCH AND APPLY SOLUTIONS!!!!
It gets stranger from there.

I'm not sure what's stranger about this man. That he believes people are pollution or that he believes Discovery Channel programming will encourage Africans to stop having children (fertility rates in most other areas are quite low). I wonder how many people in Niger get cable?