Yes, society is gendered

I've had about ten requests from men to explain the phrase "winning the cocktail party". None from women.

A male friend, who spends a not inconsiderable time cruising feminist sites, was one of those who asked what it meant. I find it odd to realize that most men don't observe something that is obvious to every woman I know: that there is a competitive male dynamic to groups that is completely different from the way female groups act. They don't know, of course, because unless the group is overwhelmingly female, the dynamic of any mixed group always defaults to male, with women fading back into supporting conversational roles. Maybe it's the kind of thing you can only observe by contrast to the extremely anti-competitive nature of female groups.

The easiest way to put it (and this is hardly original) is that men in groups are focused on their role within the group. Women in groups are focused on the group. Men gain status by standing out from the group; women gain status by submerging themselves into it--by strengthening the group, often at the expense of themselves.

Both these styles have advantages and drawbacks. I'm not trying to establish that one is better than the other. But I'm kind of shocked, though I shouldn't be, to realize that men don't even see it, the way they don't see catcalling, because it never happens when they're around.

A pack, not a herd

Commenter Freddiemac asks me whether the vicious pack behavior displayed by girls is nature or nurture. Given its universality, and how young it appears, I'd bet mostly nature with an able assist from the surrounding culture. I expect this also explains the visceral pleasure that most women get from gossip, which most men really don't seem to enjoy nearly so much--the perhaps sad truth is that I feel closer to my female friends when we have gotten through a really good round of "what's wrong with everyone else". Though I don't actually find what seems to be the male equivalent, "who's winning the cocktail party?", any more attractive.

But saying "nature" doesn't tell us the thing is inevitable. Lots of behaviors are natural, like rape and murdering strangers, that we struggle mightily to overcome--and mostly succeed. Even if my gender has a preprogrammed tendency to self-define through the people we can exclude from the group, we can rise above that. Feminists who use the phrase "anti-feminist" to describe anyone who disagrees with them are choosing to view the world as composed of two mutually exclusive groups: feminists, us; and the bad people who have not joined the group and are therefore our sworn enemies. They are choosing, too, the nastiness that tends to result from giving into our baser primate instincts.

Question of the day

Is it really possible that the Large Hadron Collider is going to accidentally end the universe? CERN says no, but every organization has a tendency to believe its own press releases. Discuss.

Summer cooking: raspberries

Up in Western New York, where my mother's from, people grow purple raspberries. These are a cross between red raspberries and black raspberries (black raspberries themselves being a cross between red raspberries and blackberries). Purple raspberries make, quite simply, the best pie on earth. Indeed, if I had to pick one food to live on for the rest of my life, it would be purple raspberry pie. And I don't have much of a sweet tooth.

Sadly, purple raspberries don't travel well, so the only way to get them is to live quite close to a farm that's growing them. So I've been experimenting with ways to get something close to that flavor.

I haven't managed to quite crack it--but I have produced an exceptionally delicious pie using 2.5 cups of red raspberries to 1.5 cups of blackberries. Remember, kids, unless you're picking them up at a farm stand, always use frozen--unlike the berries in the supermarket, frozen berries were picked ripe and flash frozen immediately, which will give you superior results to all but the very freshest local produce. 7/8 of a cup of sugar, a few tablespoons of flour, a sprinkle of cinnamon, put it in a pie crust, and if you're feeling decadent, dot the top with butter or margarine. Summer eating just doesn't get much better than that.

Incidentally, almost any basic pie crust recipe can be veganized with Crisco, which doesn't quite have as much flavor as butter, but produces a much flakier, finer textured product. I never buy pie crust--if you really don't want to fuss with it, I vote for making an impromptu strudel out of frozen puff pastry sheets or phyllo, which are really quite decent. Sadly, the same cannot be said of store bought pie crust. If you're afraid to make one, the important thing to remember is this: your first pie crust is going to be awful. It will fail to hold together, be too thick or too thin, and almost certainly not resemble anything like the perfect circle so lovingly pictured in your cookbook. That's all right. It will still taste better than your store bought pie crust. And four or five crusts later, you'll have gotten the knack of it, and friends will be swooning over your homemade pies.

An even easier way to do berry tarts is to bake up some of those frozen Pepperidge Farm puff pastry shells. Boil down a bag of frozen mixed berries with about half a cup of sugar until it forms a moderately thick sauce. (This is not an exact science: pick the thickness you like, keeping in mind that it will thicken as it cools.) Then fill the shells with a layer of the sauce or some lemon curd, a layer of fresh berries, and another layer of sauce. Add whipped topping if you roll that way. Super easy and really, really lovely to eat.

More guns, more libertarian video

Matt Welch and I have a new bloggingheads up about guns, politics, and other matters of interest. If you are Freddie, Mindles Dreck, Brian Dougherty, Julian Sanchez, or my ex-boyfriend, you should watch it just for the name check. The rest of you should watch it for Matt's dreamy eyes.

Fit!

I bought a Wii Fit a little while back, in part simply because I was fascinated by the demographics of it. The product is aimed at middle aged women (urp!), probably a first for a video game. The launch was handled very differently from the normal run of highly hyped new electronic product--there was very little advanced advertising, no attempt to generate long, splashy lines to be filmed for the news at eleven. Their target demographic doesn't have time to spend standing on line for five hours, and (they think) would have been turned off by that sort of ubergeeky atmosphere.

It seems to have worked; the product is doing well enough to be selling on Amazon at several times what I paid for the one I pre-ordered shortly before the launch. And I have to admit, it's pretty great. With good evolutionary reason, I loathe exercise; I can't say that the Wii fit makes it as much fun as, say, an afternoon at King's Dominion, but it's vastly more bearable while playing a video game. Moreover, the Fit focuses on four areas--aerobics, strength, flexibility, and balance. Since I'm the least flexible person on the planet not suffering from Fibrodysplasia Ossificans, and my balance is if anything worse, I feel like it's actually making a notable improvement in my physical abilities.

I am very interested to know why Nintendo ramps up these launches so slowly. The Wii has been an astoundingly successful product, but it took over a year for them to get enough to market to get the standard price down to the MSRP. Now the Fit seems to be following the same trend. I would have thought that this was exactly the sort of thing they were trying to avoid--making women feel as if they were running after a children's toy. On the other hand, if it's selling at $172, I guess it's hard to argue with success.

Statistics are a feminist issue

Prominent feminist blog #4 to jump on the horrible gun statistics round robin.

Is it possible to consider yourself a feminist, and be at odds with a site that calls itself "Feministe" or "Feministing"? Let's find out.

For all that Feministe, in particular, is fond of labelling me "anti-feminist", I think the feminist movement is doing something important. Society treats men and women differently in ways that it shouldn't. I'm glad that there are people who focus their lives on changing that--even when I disagree with them; even when I think many of the battles they have chosen can't be won.

There are three things I really dislike about the feminist movement, all of them sadly reinforcing stereotypes about women.

1) The way that thinking women should be equal is assumed to be necessarily equated with a left economic agenda, and disagreement is treated as a betrayal.

2) The practice of labelling anyone who doesn't share their agenda as an "anti-feminist". Anyone who has gone to an all girls institution has probably noticed what I did at my girl's camp: every year, every single cabin broke down along the same lines. In the group of five or six, there was one girl who was picked on, one girl who was neutral--and the rest ganged up on the "out" girl. The need to shore up group solidarity by labelling someone as the enemy is probably the least attractive feature of feminine life in America, and it's pretty disappointing to see it so widely reproduced in a movement that's supposed to be liberating us from tired gender roles. I understand wanting to say that people who disagree with you shouldn't use a label you think is important. But I hate the term's implication that anyone who disagrees is an enemy.

3) The practice of handing around bad statistics like Grade Z Oaxaca Ditch Weed on the last night of Senior Week. It's bad enough in itself, but it also hideously supports stereotypes that women can't cope with real math. This is certainly not a practice limited to feminism--any political movement does a lot of it. But many of the worst statistics come out of women's study and feminist advocacy. There are the appallingly shaky statistics on the number of rapes based on badly designed surveys manipulated with statistical methods so crude that Bayes must be spinning in his grave fast enough to power a high-speed monorail between New York and LA. The confident assertions that abortions have not increased significantly since legalization, when the pre-Roe figure is obviously unknowable, and the data we do have--on pregnancies--points firmly in the other direction. The various numbers on domestic violence that are thrown around with abandon even though a moment's thought is enough to dismiss them as ridiculous--the infamous Super Bowl claims being only the worst of the breed. And, of course, the silly assertion that we know how many women are helped with guns vs. hurt by them, when the data needed to decide such a claim are unavailable, and the coding problems enough to make Jesus weep.

Having written a follow-up posts on exactly why you can't infer from flat tabulations of shootings that guns hurt women more than they help, it's pretty discouraging to see four feminist sites link the original with exactly those sorts of ham-fisted statistics.

More thoughts on childcare

A reader (gender unknown) says something I've heard a lot of guys say: that I have the good fortune to have a career where I can work from home.

Well, sure. As long as there are no children in it.

Having small children and writing is no more compatible than having small children and being a lawyer. For the first five years, childcare is constant. I might be able to freelance an article here and there provided my husband cared for the children while I wrote. But when a child is in the house, and you are responsible for it, you don't do a damn thing that requires more concentration than running a load of laundry. I always laugh at the men I know who entertain fantasies that their wives will bring in the major salary while they stay home with the kids and write. If you are of this class, take a daytime babysitting job for a day and bring some work along with you. Report back on how far you got. My bet is that you didn't even get a paragraph finished.

The SAHMs in my comments thread seem to think that I am under the delusion that their jobs are easy. Far from it. It is precisely because your job is so hard that I think you will have to pay a fortune to get someone else to do it with even half your dedication.

Being a stay at home mom is hard, cont'd

There are a couple of commenters and emailers who declare that I have no idea what's involved in being a stay at home mom--not merely the childcare, but the cleaning, the laundry, the bills, the scheduling, arranging for repairs, and so forth. These people seem to be under the impression that I have a staff of ten or twelve, or perhaps live in the magical fairy world of single people where my air conditioner has not just broken, and the bill-paying gnomes show up once a month to organize my personal finances and regrout the bathtub. Sadly, I too do laundry, cook meals, pay bills, get the car serviced, repair broken appliances, wax the furniture, wade through accumulated mountains of paper, wash the dog, clean the drool off the walls, and so forth.

Moreover, I come from a pretty large extended family, and have put in my time as both a remunerated and an unpaid childcare worker. I am familiar with the operations involved, and rest assured, I can do all of them except breastfeed (right now, anyway). And just to put everyone's mind at ease, I do know at least enough to put the formula in the bottle and the strained peaches in the dish that your child is about to throw onto the floor.

I have, believe you me, endless respect for the fantastic amount of labor required to care for a child, and my hat is off to each and every one of you who has voluntarily undertaken this herculean task. But it is not "skilled" labor in the sense of "something comparatively few people know--or can quickly learn--how to do." It is particularly not "skilled" when we are talking about childcare, rather than parenting. Their job is to tend to your child's physical needs and keep him or her occupied. You still have to do the trickiest part of raising a decent human being.

Let me put this another way: Childcare Q&A

The basic argument is that we should have highly skilled, quality childcare available for every child under the age of five in America. We should ensure this by paying a high wage and good benefits to those workers.

Let's unpack this a little.

Let's call skilled childcare workers someone with a degree in early childhood education. Those degrees currently pay pretty well, actually--north of $35,000 a year, according to the best estimates I can find on the web.

There are about 20 million children between the ages of 0 and four in the United States--call it 4 million in each year group. According to the Bureau of Labor Statistics:

Child development experts generally recommend that a single caregiver be responsible for no more than 3 or 4 infants (less than 1 year old) and toddlers (1 to 2 years old) or 6 or 7 preschool-aged children (between 2 and 5 years old). In before- and after-school programs, workers may be responsible for many school-aged children at a time.

Say we pop the little beauties into daycare at six months and leave them there until they're five. By my math, we'd need the following:

650,000 people caring for the nation's infants.
1 million people caring for the nation's toddlers
2 million people caring for the nation's 2-4 year olds.

Call it 3.5 million people, conservatively. The pricetag on just their wages would be $140 billion a year. You generally estimate 30-50% on top of salary for payroll taxes, training, and a decent benefits package, so call it $200 billion a year. That's before you do anything like heat the daycare center, buy insurance, pay rent, put someone in charge of handling the administrative work, and so forth.

But of course, at the current price, we don't have anything like 3.5 million women* with early childhood degrees scrambling to work in daycare centers. In order to get those women, I presume we will actually have to raise the price of their labor. Why? Well, ask yourself why you want this fabulous childcare. Answer: you do not want to spend your entire day in the company of one or more toddlers. That's your fascinating, adorable toddler. Presumably even less do you want to spend your entire day in the company of someone else's snotty nosed brat, getting sick every month from whatever the children are passing around, changing forty diapers a day, toilet training seven or eight children at a time, and so forth.

There is something truly odd to me about highly educated people who simultaneously believe that they have something better to do than employ their degree in singing "The Itsy Bitsy Spider" seventy times a day, and also that there should be a large supply of bright, educated people who choose to do just that. There are very special people in the world who genuinely long to spend the rest of their days caring for small children. They are very rare. Most people do it because they have to, or think they ought to, not because it's their first choice of lives. I'm not talking about caring for your own children--even though I have yet to meet anyone under the age of sixty who has uttered both these sentences to me:

"I really loved my job."

"I decided to stay home with the kids."

But nature prepares you for the difficulties of caring for your own child by flooding you with neurochemicals that make you fiercely interested in its life. Very few people experience that same feeling for any random group of very small children. Childcare is extremely tedious. Bright, educated people rarely voluntarily seek tedious work. This is why even most people with degrees in early childhood care do not actually provide day-to-day childcare. You will have to spend a phenomenal amount of money on salaries to attract these high-quality workers you believe your children should have--indeed, in most cases, much more than either mother or father makes.

I love children, and wouldn't mind having some of my own, circumstances permitting. But the very mothers flooding my comments with angry dissertations on the appalling state of American childcare also dwell quite lovingly on all of the insane tedium of doing nothing but provide it to their own children. There is a pretty deep disconnect here.

* Since society is not going to magically alter overnight, I assume basically all these new workers will be women.

Update I should say I know a few people who chose to leave jobs they loved: the parents of special needs children. But as they certainly know, caring for a single very needy child is a full time job that commands an enormous wage premium, and arguably cannot be purchased at any price.

What's in a skill?

But isn't childcare skilled labor?

In some trivial sense, all work is skilled. Walking is a skill that takes years to master. So is carrying items from point a to point b. But when the majority of the population has your skills, we do not refer to the employment of them as "skilled labor".

Childcare is hard. I would far rather do almost anything else than care for someone's baby full time (I am told I will probably feel differently about my own, in the event that any arrive). That doesn't make it skilled. Cleaning houses is also incredibly difficult. But assuming that one has had a semi-normal upbringing, one can master the tasks involved in well under a week. After that, the main skill is not jumping off a bridge on the walk home.

There is a lot of talk about the way that traditionally "women's" professions are devauled, and I think that there is something to that, but those women's professions also have odd characteristics--like flexibility in hours, and the ability to take long periods of time off without suffering much of a wage setback--that make direct comparisons somewhat more difficult than most people quoting those statistics take into account. We can have a long, elegant discussion about whether all professions should offer such perks, but the fact remains that those benefits have economic value, and you have to pay for them by accepting something less elsewhere.

The economics of childcare

Why don't babysitters make much money?

Supply and demand.

Supply side: it's not skilled labor. It make take talent (like the patience of a saint), but the actual skills of doing laundry, spooning formula into one's mouth, and changing a diaper are not hard to learn.

Demand side: The ratio of childcare workers to small children is necessarily very low--we don't want 20 infants being cared for by one stressed out woman. The economies of scale in toddler care are low, at least if we want the toddlers in one piece at the end of the day. Say you want to pay your childcare workers 40K plus bennies and payroll taxes, a nice but not extravagent salary. Even before any overhead, at a tax rate of 25%, an eight-to-one ratio of children to workers means that you need to earn about $10,000 a year pre-tax per child to cover just the salaries of your daycare workers.

Needless to say, day care facilities do, in fact, have overhead. Given the other expenses, almost any average family with two small kids would be better off having Mom stay home.

The government could subsidize it, of course. But then you'd have to bump all the salaries of those who teach older children, to cover the skill gap. This would be very pricey. It would be pricey even without the bump, because America has a lot of childcare workers. And you still wouldn't attract all that many higher quality workers, because wiping noses is not the sort of thing most women go to college for.

By request: those crazy kids with their hip hoppety music and their baggy chinos

Reader bcg asks me to discuss "Why pop music got so terrible after illegally downloading became easy and accessible."

Did it? I mean, I have been known to express this opinon myself, of a sunny Sunday afternoon. On the other hand, the belief that music today just isn't what it used to be has a long, not to say tiresome, pedigree. Frederick Lewis Allen, on the contemporary reaction to that noise the jitterbuggers like to jive to:

Among many of the jitterbugs--particularly among many of the boys and girls--the appreciation of the new music was largely vertebral. A good swing band smashing away at full speed, with the trumpeters and clarinetists rising in turn under the spotlight to embroider the theme with their several furious improvisations and the drummers going into long-drawnout rhythmical frenzies, could reduce its less inhibited auditors to sheer emotional vibration, punctuated by howls of rapture. Yet to dismiss the swing craze as a pure orgy of sensation would be to miss more than half of its significance. For what the good bands produced--though it might sound to the unpracticed ear like a mere blare of discordant noise--was an extremely complex and subtle pattern, a full appreciation of which demanded far more musical sophistication than the simpler popular airs of a preceding period. The true swing enthusiasts, who collected records to teh limit of their means and not only like Artie Shaw's rendering of "Begin the Beguine" but knew precisely why they liked it, were receiving no mean musical education; and if Benny Goodman could turn readily from the playing of "Don't Be That Way" to the playing of Mozart, so could many of his hearers turn to the hearing of Mozart.

There is a model by which music gets awful as soon as copyright becomes unenforceable--the French experience with abolishing copyright around the time of the Revolution does offer some evidence for the notion of a race to the bottom in an IP-less world. Certainly, it's fair to say that pop acts are focusing less on catchy songs and more on catchy performers, the better to sell concert tickets.

On the other hand, I'm not sure that musical talent is eroding so much as being dispersed. The rise of cheap distribution means there are more genres and sub-genres than there used to be--and also that acts don't need to broaden their appeal so much as they once did. If you don't need to get on a top forty station to make it big, you will lose the elements you once might have added to attract that audience. Conversely, the pop acts will stop trying to appeal to the genre fan base, so their music will sound worse to those of us who didn't much like top forty in the first place.

A few months ago, I was hanging out with a friend who's about six years younger than I am. We were idly looking at Billboard's Top 100 songs for various years. I was unsurprised to find that I stopped recognizing many of the names on the list after the early-to-mid nineties. What was surprising is that his recognition stopped around the same time mine did--the era when our demographic embraced indie music and stopped paying any attention to what was playing at the top of the charts.

Overall, I think that fragementation is a good thing. Though I do worry what happens if the downloading generation fails to transition to paying for their music. Concert revenue does not actually seem like a very good substitute for CD sales--people only have so many nights a week to stand around in bars.

How much influence does the west have in Zimbabwe

My liberal arch-nemesis has some characteristically smart thoughts:

I think the great majority of non-Africans do not in fact believe that Robert Mugabe is entitled to rule Zimbabwe because he is black. But the opinions of non-Africans on this question do not matter much, and didn’t really even in 1979. The UK and US could no more have held a weaker, more democratic and capitalist government in place in 1979 than they could have held the Kerensky government in power in Russia in 1918.

However, the apparent belief by Thabo Mbeki that Robert Mugabe has the right to dispossess and slaughter the Ndebele because he is a Shona, has the right to dispossess, exile or kill whites because he black, and has the right to impoverish his entire country and beat his political opponents to death because he was a hero of black anti-colonialism — that has certainly empowered Robert Mugabe. Mbeki is a very strange figure; despite running Sough Africa for eight years, he seems still not to really deeply grasp that he is actually running a country and bears responsibility for what happens to it. But other African leaders seem equally incapable of intervening against Mugabe. The question is really to what extent non-Africans can influence the attitudes of Africans on these kinds of issues. Does it matter what we think of Robert Mugabe?

As always, read the whole thing.

By request: dating games

Reader Esther asks me what I think about this. I guess I think of it the way I think of The Rules. Does it work? Sure, sexual manipulation often works; pick your favorite economic or neurobiological model, it will probably be effective.

I had a friend in college who was an A1 expert at manipulating men (still was, the last time I saw her; she was married and nonetheless had half a dozen men fighting to bring her drinks and light her cigarette even though as she herself once said, "On a very good day, I'm an 8.") I never really understood the point.

There's a phase most women probably go through in high school or college, when they realize that they have extraordinary power to get men to do things, and they see how many people they can get to chase them at once. Most of us, though, I think quickly realize how pointless it is. There's something terribly lonely about interacting with someone when you know what's really going on, and they don't.

Men go through the phase a little later, but the result is the same: anyone worth dating soon leaves it. Dating three or four men at a time isn't fun for more than a few months; it's exhausting. Of course, I have a high need for personal time and few people have ever described me as "enigmatic".

Like most women in New York, I've dated guys who thought that they were major players. Luckily for me, I got out early, because the average actual amusement to be had in the company of such a man is about 36 hours. (Cumulative, and get your minds out of the gutter, please.) The performance is briefly fascinating, and then you realize that there is much better theater to be had Off Broadway, where they won't waste hours of your time and lip gloss.

If you want casual sex, why go to so much trouble? It's freely available in most urban bars; what's the great need to take it from someone who doesn't really want to give it to you?

In a cosmic sense, the punishment for getting stuck in permanent adolescence is not, unfortunately, some theatrical denouement; it's that you are someone with the emotional life of a teenager. They may never realize what they are missing. Mostly, they do, of course, and it's sort of tragic to watch. They gain weight, the face sags (or slowly tightens into skeletal thinness), the men's hair erodes, jobs make it harder to keep up with wardrobes and bands. If they catch themselves in time and marry, their marriages are brittle and unsatisfying--it's hardly surprising that one of the authors of The Rules got divorced not long after publishing the book.

The awkwardest experience in the entire world is being macked on by a guy who is just past it, but hasn't yet gotten the message. It always makes me think of Mr. Skeffington, which gives me the cold crawlies.

Sadly, of course, not everyone gets out early, and a lot of innocent, if silly, people get caught up in these games. All I can say is, only suckers play games where they don't quite understand the rules and the percentage seems to be running strongly to the house. If you suspect you're the sucker, no matter how much fun you think you're having, it's time to cash out your chips and close your house account.

By request: Who is worse, Freddie or Mugabe?

Commenter Freddie asks the question.

My instinct is to say Robert Mugabe. On the other hand, I do not know Freddie personally. More importantly, to my knowledge, we do not have well controlled data on the question. Who is willing to install Freddie as the dictator of a moderately prosperous African nation in order to provide the empirical study we need? My money is still on Mugabe, p>.95, or thereabouts. Tyler Cowen would probably say I am overconfident.

By request: FISA bill

My expertise on national security law is nonexistent. My interest in byzantine political scheming is, if possible, even lower. I have hence outsourced my opinion on the matter to trusted friend and neighbor Julian Sanchez; if it pleases you, imagine that everything he writes on the subject has spawned a short blog post reading "What he said".

Creative capitalism

I'm participating in this site, in which economics superstars (and, gulp, me) comment on Bill Gates' theory of philanthropy. The results, including some of the comments, will ultimately be turned into a book.

By request

What do you guys want to talk about?

Gun statistics

Now the gun controllers pour out of the woodwork to claim that you're more likely to kill yourself or a family member with a gun than a criminal.

Some of the people deploying this statistic really ought to know better. Composition fallacy, anyone?

These are not double blind experiments. Guns may be the weapon of choice for all sorts of crimes; that does not mean that they cause the crimes.

Men like to kill themselves with guns. (This is not culture-specific; women tend to choose poison everywhere, presumably because of some deep fear of disfigurement). Gun suicides tend to be successful. But this does not mean that if you took away the guns, people wouldn't commit suicide. There are many other near-surefire ways of killing yourself, like jumping off a high bridge, gassing yourself with carbon monoxide, driving your car at high speed into a piling, hanging yourself, etc. Think of it this way: most people who choose to wear high heels are women. That doesn't mean that if I threw out my Manolos, I would turn into a man.

Similarly, (a small number of) men like to murder their families with guns. But they also like to murder their families with knives, baseball bats, and their fists. Taking away the guns might somewhat reduce the number of homicides (it might also increase it; you're more likely to recover from a fatal-looking gunshot wound to the stomach than from having your head banged against the floor 80 times). But spousal murder is plenty easy without a gun.

Now compare this to the actions of people who are not looking to commit homicide or kill themselves. What are they likely to do with a gun? Brandish it or fire a warning shot. If they do shoot someone, they are likely to stop as soon as that someone is disabled, and call for an ambulance.

Most importantly, almost no homicides or shootings go undetected. On the other hand, many people who wave a gun at someone threatening, and thereby cause that person to go away, don't report it. How many? We don't know, because they don't report it. But I didn't report the mugging I foiled last January through strategically hunting for my keys in a well lighted portion of the street. I doubt I'd have been any more likely to do so if I'd waved a gun at him.

Now, it is possible that having a gun is actually on net dangerous to you and your family. But we have no evidence to support this notion, because all the statistics on the subject are crap. The denominator is what criminologists call a "dark number": one where there is no way to arrive at any reasonably credible estimate of its value.

Indeed, there is a thesis to be written, somewhere, on why so many of the most famous works on guns involve statistical malpractice, deliberate distortion, or outright lying.

Look at the good longitudinal data we do have: liberalizing concealed carry--the right to have a hidden gun on you at all times--hasn't resulted in the predicted rash of deaths. It turns out that suicides and would-be homicides weren't paying much attention to the legality of their actions. It also turns out that having a gun in your hands does not seem to turn a previously law-abiding citizen into a spur-of-the-moment killer. It wasn't totally unreasonable to fear that guns might turn altercations into homicide, but the evidence from states that have moved to shall issue models shows that they didn't.

Don't listen to me, gun nut that I am; listen to liberal crime policy professor Mark Kleiman. People who shoot other people, or themselves, are not ordinary folks whose gun let them vent a moment of madness. They're mostly people with long histories of all sorts of violence towards either themselves, or others.

Blast from the past

A reader reminds me that Mark Kleiman and I talked about possible compromises on gun rights a while back; possibly worth watching again.

Why not the death penalty for child rape?

I'm against the death penalty as a state sanction, though perhaps for rather odd reasons. I think people have a perfect right to shoot robbers--once someone has implicitly threatened you, they've forfeited their right to the protection of the law. But I think that a state which commits cold-blooded murder is a brutalized state, and I have a visceral horror at the idea of putting a man in a cage and declaring to him the day that he will die. The process of executing criminals damages the moral fiber of all who are engaged in it, including the voters, a cost far in excess of the benefit to be gained from either deterrance or retribution. The former is dubious; the latter cold comfort. We strap a man to a gurney, pump corrosive chemicals into his veins, and then stand watching, awkwardly, while his life ebbs. All we get out of it is one more corpse.

But if we are going to have the death penalty, I don't see any particular reason to limit its application to murder. I can imagine much worse things than a quick, clean death.

Guns are a feminist issue

I'm hardly the first person to make this observation, but I don't know why it isn't noted more often: guns are the only weapon that equalizes strength between attacker and attacked. It's the only time when men's greater speed, strength, and longer reach make no difference; if you pull the trigger first, you win.

This is an enormous social advance. I am all for strengthening the social contract (and law enforcement) so that fewer men commit rape, assault, or robbery. But until human nature has improved so radically that grievous bodily harm has passed from living memory, I don't understand why more feminists don't push for widespread gun ownership.

Lord, grant me a gun and self restraint . . .

. . . but not yet, Oh Lord, not yet. Apparently, it will be a little while before we can actually have guns in the district.

The problem with Africa

Ta-Nehisi Coates takes to task those who enjoy spectacles like Zimbabwe as evidence that Africa can't govern itself and was better off under colonial rule. I quite agree. This argument seems to be generally advanced by people who think that the entire continent is composed of Zimbabwe, Congo, Angola, Rwanda, and Sudan--i.e., the places they've seen in the news. Africa has dozens of countries. Most of them are poor. They were also poor under colonial rule.

Nor is the fact that the places where whites stayed were unusually prosperous evidence that Africa sucks weasels. The whites stayed there because they were unusually prosperous--they went to those places with the highly arable land, the natural resources, and the navigable rivers.

I also take a moment to brush aside the notion that Africa is poor because they have naturally low IQs. Theoretically, such a thing is possible--there's no reason to believe that cognitive ability couldn't cluster more tightly in some populations. But you can't prove it by Africa, because African poverty is in the range that indisputably causes low cognitive ability: malnutrition and disease in early childhood permanently retard cognitive development. People who rely on small surveys of a few hundred people in each African nation to draw sweeping conclusions about the continent's future are engaging in the exact opposite of science.

I'm not trying to pretend that Africa's decolonialization has not involved some colossal screw-ups, or that most of Africa's political and economic institutions couldn't be a whole lot better. But African poverty and political culture is complicated; there is no simple theory that Explains It All, neither colonialism nor eugenics.

So why am I defending colonialism? As I said earlier, I'm not; the fact that most Zimbabweans might have been better off under Smith doesn't mean that they didn't deserve to be even better off under a government that didn't think blacks were not quite human. However, on any metric I can think of--ethnic violence, political rights, economic prosperity, social cohesion--ordinary Zimbabweans were probably better off in Old Rhodesia. It doesn't seem to be widely known that Mugabe went on his own reign of terror against other tribes he thought were political enemies; the current opposition battle is in part a tribal conflict, as I understand it. Mugabe hasn't been about empowering Africans; he's been empowering his tribesmen and especially his cronies.

But this just makes the point: Mugabe is not Africa. He is Robert Mugabe. He is not automatically better than the loathesome Ian Smith merely by virtue of being black, any more than his blackness is the problem with his government. He's a vicious thug who has destroyed a once prosperous country in order to hold onto power for a few more years. Surely, a quick reading of history should tell anyone that this is not some specially African problem.

I think that the assumption that any black leader was definitionally better than the Smith government is part of what enabled Mugabe. I don't mean on the part of Zimbabweans--you can hardly blame the subjects of a colonial regime for wanting one of their own in charge. But Western governments enabled him in part. And they did so because practically their only criteria was blackness--they didn't look, say, at the different ethnic groups within the country, because aren't all Africans the same? Nor did they look very hard at how he might rule, so long as he managed to be black. This is a way of infantilizing Africa--acting as if Mugabe is really the best they're capable of. Nearly every government in Africa is better than Mugabe's. We should have expected better.

Heller affirmed!

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

I have no idea what the Supreme Court ruling means yet, exactly, because I am waiting for the legal scholars to explain it all to me. Apparently, they want to read the opinion first. And the television talking heads are saying it is not a good idea to run right out and buy a gun before we find out what the new law will look like. So instead, a couple of associated thoughts:

1) At least one good thing has come out of the Bush presidency. Let's hope this blow for individual rights outlasts the executive power grab. I think the Bush administration genuinely believes that the executive should have more power. I also think they're desperately, hopelessly wrong. But of course, since I think all government officials should have rather less power, I would say that, wouldn't I?

2) It's a little sobering to reflect what this decision might have looked like if Michael Bellesiles' work hadn't been so humiliatingly and thoroughly unmasked as a fraud. As it is, the dissenters apparently argue that this is overweening judicial activism, even though everything I know and have read about the crafting of the amendment makes a collective right interpretation pretty untenable.

3) The lack of a court ruling on the question of an individual right to bear arms has been a gaping hole in American constitutional jurisprudence for too long. Thankfully, it's settled. Double thankfully, it's correctly settled.

4) There is a distressing lack of attention to the female market in gun companies. I want something with accuracy and stopping power, but also, an attractive exterior casing that easily integrates with my other accessories. This doesn't seem unreasonable.

The vast neo-con conspiracy turns its eyes to Europe

The vast neocon conspiracy lives!

WHO KNEW? The French Europe minister, Jean-Pierre Jouyet, has declared that American neo-conservatives bear much of the blame for the Irish no vote to the Lisbon Treaty. Speaking to a pro-European jamboree in Lyons on June 21st, Mr Jouyet (a former aide to Jacques Delors recruited by Mr Sarkozy for his knowledge of the corridors of Brussels power), offered the following thought:

"The fight for Europe is not over, Europe has powerful enemies with deep pockets, as we have seen during the Irish referendum. They come not from Europe, but from the other side of the Atlantic."

"The role of the American neo-conservatives in the Irish referendum was very important," he went on, to applause.

According to a French news agency report of his remarks, Mr Jouyet (normally rather a sober, technocratic type), called on pro-Europeans to keep up their "courage" in the face of such financial pressures.

The Economist sums up the many problems with this theory:

There are a number of problems with his thesis (which was picked up by Le Monde in France, Der Spiegel in Germany and other press outlets).

The original allegation came from an Irish member of parliament, Lucinda Creighton, in a statement attacking two businessmen, Declan Ganley and Ulick McEvaddy, who had poured considerable time and money into part of the no campaign. In Ms Creighton's analysis, they were opposed to Lisbon because it would make Europe stronger, which was against American strategic interests, and would threaten their contracts with the American military. But let Ms Creighton's words speak for themselves:

"Messrs Ganley and McEvaddy have major business interests in the US (Omega Air - McEvaddy; Rivada - Ganley). US foreign policy has traditionally been opposed to EU integration. The US supports the EU as an economic bloc but nothing more. The idea of a politically strong EU, acting as a check or counterbalance on the US does not sit well with our transatlantic friends. This policy has long been evident in NATO, where the US has consistently opposed the expansion of NATO to the new EU member states. And now as stronger political union becomes likely, these two figures with close links to the US military are trying to derail the process.

"The businesses of both Ulick McEvaddy and Declan Ganley are heavily dependent on contracts from the State Department, the Pentagon and US Government Agencies. I believe that these men are a lot less concerned about Irish sovereignty and the wording of the Lisbon Treaty than they are about the potential hit to their own personal business interests."

Leave aside the question of whether Mr Ganley and Mr McEvaddy are linchpins of the American military industrial complex (Mr McEvaddy supplies mostly rather old Boeing airplanes to clients including the military, and Mr Ganley sells communications kit to bits of the military, including the national guard).

Leave aside the question of whether a secret band of "American neo-conservatives" still holds sway in Washington DC, steering American foreign policy (and communicating via the fillings in their teeth, no doubt). Others might argue that this rather disparate ideological faction has been weakened and scattered by the failure of their big centrepiece policy, namely the invasion of Iraq.

Leave aside the painful question: have most American neo-conservatives ever heard of the Lisbon treaty, and if they have, do they care? It is possible that they might be conserving their dwindling political capital for a push against Iran's nuclear programme, say, rather than Lisbon's plans to extend co-decision to the European Parliament in the domains of asylum and migration policy, or to merge the external relations services of the European Commission with those of the secretariat of the Council of the European Union.

Leave aside the fact that when your reporter met an American official heading to Washington a couple of days ago, and asked if he expected to be asked about the Irish no vote, he laughed loudly, and said: "I can guarantee that is the one thing I will not be asked about."

Examine instead the simple factual nonsense that is Ms Creighton's claim: "the US has consistently opposed the expansion of NATO to the new EU member states", and her related claim that America opposes more political integration in Europe. The Americans could hardly be keener on NATO expansion, indeed the last NATO summit saw President George Bush energetically pushing the candidacies of Georgia and Ukraine against strong opposition from European leaders. It is also a long-time source of chagrin to British conservatives that their American counterparts do not share their deep Euroscepticism.

I am reminded of PJ O'Rourke's comment that America is like the most popular (and hated) girl in the class. Canada and Europe, particularly, seem to be prone to the illusion that we spend all of our time thinking up ways to make them feel bad, when in truth we barely think about them at all. Probably we should, more. But it's hard to imagine a situation in which our first thought would be: "Let's make Irish voters reject the . . . what was the name of that treaty again?"

P(A|B)!=P(B|A)

As predicted by a friend over IM this morning, the remark about Timothy McVeigh wannabes probably being in Afghanistan or Iraq right now was wildly misinterpreted as an attack on our troops.

I am second to none in my admiration for the military. I do not think that being in the military makes you more likely to be a nutty, militia-style potential home-grown terrorist. At a guess, there are perhaps a couple hundred people in the United States who would like to take violent action against our government in a frantic attempt to ward off the New World Order. There are about 3 million members of the active and reserve military right now. Even if every single one of our homegrown nuts was a service member, the probability that any member of the military was a potential terrorist would be entirely negligible. Most people who are serving in the military do so for honorable, or at the very least respectable, reasons like wanting to serve their country, or get money for school.

But the probability of A, given B is not the same thing as the probability of B, given A. That's what the notation in the title means. To put it more concretely: the probability that you are Jewish, given that you are a rabbi, is 100%. The probability that you are a rabbi, given that you are Jewish, is a small fraction of 1%.

So even though almost no one in the military is a raving nativist loon, many of the raving nativist loons may be in the military. My understanding is that many serial killers are attracted to law enforcement; similarly, people with fantasies about striking a violent blow against the forces of evil may be seeking vocational education in the armed forces. This is no more a smear against the military than it is a smear against firemen to note that many arsonists seek to join their ranks.

Financial fire sales

More banks try to auction off pieces of themselves with varying success:

Barclay's:

Oh lucky shareholders. Barclays believes investors should be grateful for the fact that its writedowns on credit securities were just £1.7bn this year. It also wants them to focus on the superior performance of Barclays Capital at a time when, on both sides of the Atlantic, investment banks are warning of tougher times. Sure, Barclays swore blind for months that it did not need extra funding. But now that it has decided to raise £4.5bn, it wants applause for avoiding a nasty rights issue while still managing to give pre-emption rights to existing shareholders.

These are the same investors, though, who have watched Barclay’s market capitalisation halve over the past 12 months. That share price performance is barely better than rival Royal Bank of Scotland, whose credit losses and ill-timed purchase of ABN Amro forced the biggest rights issue in UK history. It is also 25 per cent worse than the European banking sector average. Now existing shareholders are being asked to buy 3 shares for every 14 they already own, or be diluted by 24 per cent. In that context the lack of humility shown by senior management at Barclays – and for that matter at other UK banks – is troubling. Executives in the US have fallen on their swords for less.

UBS:

Investors seem to think UBS has something up its sleeve — and it may be a sale of some kind.

Shares in the troubled Swiss bank have risen 9.7 percent over the past two days, as analysts began speculating that it had hired an adviser to explore strategic options. On Wednesday, The New York Post reported that UBS has hired Lazard as an adviser to review its businesses.

UBS has already faced pressure from shareholders, including the activist fund Olivant Advisers, to hive off its flourishing wealth-management unit from its considerably more troubled investment banking business.

The lesser of two incredibly awful evils

Yesterday, when I pointed out that ordinary Zimbabweans were probably better off under Ian Smith than they now are under Mugabe, I received the horrified accusation that I was defending Rhodesia's racist regime. Hardly; a baby is better off having its throat cut than being burned to death, but this is not a good reason to kill babies. We shouldn't have to choose between racism and riots, and I deny that these are the only two possible equilibria.

But Timothy Burke says it better than I do:

There remains little that most outside interests can do. Even most sanctions don’t strike me as being potentially effective. I had to really stifle a thunderbolt of rage at one posting on a scholarly listserv that I read when one scholar proferred the argument that although Mugabe is a tyrant, it’s really the fault of the United States and Great Britain, and that the real political challenge is to keep them from interfering. That’s a tragic case of stupid addiction to old dogma, dogma that was analytically wrong-headed in the first place. If I could think of a way for the US and UK to usefully interfere beyond what they’re doing already, I’d encourage them to do it. Western intellectuals and scholars concerned with Africa often still treat sovereignty as an obsessive and magical political objective, as if its mere fact insures a better world.

Or more dubiously, treat some African states today as if they have yet to achieve sovereignty. I think it’s perfeclty fair to say that there are postcolonial states in Africa who have never had a functioning government, nor have ever achieved any kind of central control over the territory marked for them on the map. Zimbabwe is not one of those states. The people in power now, who have been in power for twenty-eight years, have long had a great measure of control over their territory. Zimbabwe is the opposite of the conventional “failed state”: its rulers have very significant capacity for violence and political control across most of their national territory, even with the economy in tatters. It’s demonstrates perfectly that the mere achievement of sovereign power and strong governmental authority guarantees nothing, improves nothing. When some contemporary Zimbabweans mutter that the last twenty years or so of Rhodesian power were preferable to the last decade of independence, it’s hard to disagree. That this statement alone is more likely to horrify concerned Western liberals than any number of ghastly utterances by Zimbabwean authorities in the last decade says a lot about the limited perspectives of those liberals. It’s not that we should have to choose between Smith’s Rhodesia and Mugabe’s Zimbabwe: the former was forever stunted, the latter an unending disaster. The problem is with those who believed and sometimes continue to believe that the mere fact of succession by Mugabe over Smith was progress in its own right.

Update these comments are taking an ugly turn. People concluding from their sketchy reading of news articles about a handful of African countries that the entire continent is therefore incapable of self rule need to do a lot more reading.

What makes a terrorist?

If you're looking to find out what causes terrorism, particularly suicide attacks, I highly recommend Alan Krueger's book on the topic. What predicts terrorism is not education level, nor poverty, nor religion; rather, it usually has to do with ethnic conflict and, most importantly, a perceived lack of political means of redress. Islam currently ties Pakistans and Arabs together, but without Israel and America to unite them, they'd fall apart.

To Heller and Back

The excitement is in the air here in DC, where rumor has it that the Supreme Court is about to hand down a decision on Heller. Finally, hopefully, we'll have an answer: does the Second Amendment protect an individual right, or not? If so, we can then get down to wrangling about whether that right is incorporated against the states.

I confess, I'm as nervous as a long-tailed cat in a room full of rocking chairs. I have no particular desperate longing to own a gun, but I have a big jones for more personal liberty.

Morality is a luxury good

Don Boudreaux notes:

Reading this morning these opening words in a report at Yahoo Sports -- "Wimbledon came under fire from animal activists on Tuesday for using marksmen to shoot down dive-bombing pigeons" -- reminds me yet again that our society is extraordinarily wealthy. That ordinary people are sufficiently and securely fed, clothed, shod, and sheltered to enable some of them to devote substantial stores of their emotional energies to the care of pigeons is a sure sign of deep and widespread prosperity.

This sort of observation is presented as a would-be gotcha against me in my comments on veganism. I don't understand why. I am sure there are some animal-welfare types who do not understand that their concerns are an artifact of wealth, but I am not among them. Of course my affluence enables me to be concerned more about animal welfare than about obtaining sufficient calories. Isn't it fantastic that I am affluent enough to care? If it were a choice between feeding my kids and letting a cow live--well, steak's on! This is one of the many, many reasons I am happy to live in a prosperous and successful society.

I think Robert Nozick is useful here (he so often is . . . and where the heck is my copy of Anarchy, State and Utopia, anyway?):

We can illuminate the status and implications of moral side con­straints by considering living beings for whom such stringent side constraints (or any at all) usually are not considered appropriate: namely, nonhuman animals. Are there any limits to what we may do to animals? Have animals the moral status of mere objects? Do some purposes fail to entitle us to impose great costs on animals? What entitles us to use them at all?

Animals count for something. Some higher animals, at least, ought to be given some weight in people's deliberations about what to do. It is difficult to prove this. (It is also difficult to prove that people count for something!) We first shall adduce particular examples, and then arguments. If you felt like snapping your fingers, perhaps to the beat of some music, and you knew that by some strange causal connection your snapping your fingers would cause 10,000 contented, unowned cows to die after great pain and suffering, or even painlessly and instantaneously, would it be per­fectly all right to snap your fingers? Is there some reason why it would be morally wrong to do so?

Some say people should not do so because such acts brutalize them and make them more likely to take the lives of persons, solely for pleasure. These acts that are morally unobjectionable in them­selves, they say, have an undesirable moral spillover. (Things then would be different if there were no possibility of such spillover— for example, for the person who knows himself to be the last per­son on earth.) But why should there be such a spillover? If it is, in itself, perfectly all right to do anything at all to animals for any reason whatsoever, then provided a person realizes the clear line between animals and persons and keeps it in mind as he acts, why should killing animals tend to brutalize him and make him more likely to harm or kill persons? Do butchers commit more murders? (Than other persons who have knives around?) If I enjoy hitting a baseball squarely with a bat, does this significantly increase the danger of my doing the same to someone's head? Am I not capable of understanding that people differ from baseballs, and doesn't this understanding stop the spillover? Why should things be different in the case of animals? To be sure, it is an empirical question whether spillover does take place or not; but there is a puzzle as to why it should, at least among readers of this essay, sophisticated people who are capable of drawing distinctions and differentially acting upon them.

If some animals count for something, which animals count, how much do they count, and how can this be determined? Suppose (as I believe the evidence supports) that eating animals is not necessary for health and is not less expensive than alternate equally healthy diets available to people in the United States. The gain, then, from the eating of animals is pleasures of the palate, gustatory delights, varied tastes. I would not claim that these are not truly pleasant, delightful, and interesting. The question is: do they, or rather does the marginal addition in them gained by eating animals rather than only nonanimals, outweigh the moral weight to be given to animals' lives and pain? Given that animals are to count for something, is the extra gain obtained by eating them rather than nonanimal products greater than the moral cost? How might these questions be decided?

We might try looking at comparable cases, extending whatever judgments we make on those cases to the one before us. For ex­ample, we might look at the case of hunting, where I assume that it's not all right to hunt and kill animals merely for the fun of it. Is hunting a special case, because its object and what provides the fun is the chasing and maiming and death of animals? Suppose then that I enjoy swinging a baseball bat. It happens that in front of the only place to swing it stands a cow. Swinging the bat unfor­tunately would involve smashing the cow's head. But I wouldn't get fun from doing that; the pleasure comes from exercising my muscles, swinging well, and so on. It's unfortunate that as a side effect (not a means) of my doing this, the animal's skull gets smashed. To be sure, I could forego swinging the bat, and instead bend down and touch my toes or do some other exercise. But this wouldn't be as enjoyable as swinging the bat; I won't get as much fun, pleasure, or delight out of it. So the question is: would it be all right for me to swing the bat in order to get the extra pleasure of swinging it as compared to the best available alternative activity that does not involve harming the animal? Suppose that it is not merely a question of foregoing today's special pleasures of bat swinging; suppose that each day the same situation arises with a different animal. Is there some principle that would allow killing and eating animals for the additional pleasure this brings, yet would not allow swinging the bat for the extra pleasure it brings? What could that principle be like? (Is this a better parallel to eat­ing meat? The animal is killed to get a bone out of which to make the best sort of bat to use; bats made out of other material don't give quite the same pleasure. Is it all right to kill the animal to obtain the extra pleasure that using a bat made out of its bone would bring? Would it be morally more permissible if you could hire someone to do the killing for you?)

Such examples and questions might help someone to see what sore of line he wishes to draw, what sort of position he wishes to take. They face, however, the usual limitations of consistency arguments; they do not say, once a conflict is shown, which view to change. After failing to devise a principle to distinguish swing­ing the bat from killing and eating an animal, you might decide that it's really all right, after all, to swing the bat. Furthermore, such appeal to similar cases does not greatly help us to assign precise moral weight to different sorts of animals. (We further discuss the difficulties in forcing a moral conclusion by appeal to examples in Chapter 9.)

Prosperity allows us to have things that we all now regard as moral requirements. It permits us liberal democracy, a form of social organization that doesn't much work in hunter-gatherer tribes. It enables us to forgo infanticide, a necessary form of population control when Mom has to carry the babies everywhere and an extra unnecessary mouth might doom the whole tribe. It lets us reserve the death penalty for the most heinous violent crimes, because stealing a loaf of bread no longer threatens its owners own nutritional health. We don't have to stone adulterers, because we have enough breathing room that such behavior no longer poses an existential threat to the tribe. Wealth enables charity in the deeper, older sense of the word.

That this is true in no way undermines the decision to be charitable. Morality lies in doing the best you can with what you have. Given that I do have the luxury of finding delicious vegan food and non-leather shoes, I believe I have an obligation to do so. If that should change, I will go back to eating and wearing animal products without moral regret--though with a fair amount of digestive distress.

Existential threats

Why isn't terrorism an existential threat to the US? Or rather, why don't I believe it is?

Several reasons.

Conventional terrorism is not an existential threat to the US because there aren't very many people here who want to be terrorists. Let's list the potential resident nutjobs who might commit such acts:

1) Tim McVeigh-style racist scumwranglers: small in number. Their most terroristically useful members are probably in Iraq or Afghanistan right now.

2) Arabs/Pakistanis/Chechens affiliated with Al-Qaeda: also small in number. The Chechens tend to be focused on Chechnya. Most of our Arab citizens are Christians, who are not fond (she said, with elegant understatement) of the Osamamaniacs; most of our immigrants from the subcontinent are not Pakistani.

3) Converted muslims: even smaller in number. Hard for them to win the trust of Al-Qaeda and make it into a cell.

4) Crazed suicide cultists: even tinier. Twelve people do not pose an existential threat to the United States unless they gain control of the Blossom syndication rights.

Moreover, in any immigrant group, the number of people even theoretically prone to carrying out terrorist acts, rather than tacitly agreeing with them, is tiny. Israel has millions of angry Arabs on its border with nothing to do but seethe as their economy falls into ruin. Even during the height of the infitada, pre-wall, you're talking about a handful of aimless young men.

Terrorism is not, as many have pointed out, a product of poverty; it is a product of lack of opportunity + limited political rights. Immigrants here have full political rights and plenty of economic opportunity. The United States does not, as France does, ban their hijabs; nor deny them citizenship like "guest workers" in any number of countries; nor deny them employment like Scandinavia; nor does it (AFAIK) wink, as Britain does, at practices like fourteen-year-old cousin marriage that prevent assimilation. We just don't seem to have a critical mass of disaffected immigrants with extreme religious views. It's telling that 9/11 relied on visitors, while bombings in Europe and Bali tend to employ local talent.

It's also harder for Al-Qaeda to get here. North Africa is very close to Europe. Most Arabs or Pakistanis trying to make their way up through Mexico would attract quite a bit of notice before they got there.

But what about nuclear terrorism?

Well, a bigger worry. But prime targets like New York and DC are, or so I am given to understand, now fairly well covered with radiation detectors. The kind of primitive bomb that terrorists are likely to be able to get their hands on is low yield; they aren't going to be able to wipe out a city with a suburban ground burst, and they'll have a hell of a time getting such a bomb into the air.

Also, the countries they might get bombs from--North Korea, Pakistan, possibly Iran in the future--don't have that many of them. How likely are they to give a precious nuke to a group they don't control? It's not inconceivable. But it's not very likely either.

At this late date (oh famous last words) I think it's unlikely that the infamous missing Soviet suitcase nukes exist. First of all, these bombs require expert maintenance; you're now talking about an armament that is 20 years old. Second of all, if someone had one, and had sold it to a terrorist group, my guess is that it would have gone off somewhere by now.

But even if there were a nuclear blast, it would be an unimaginable tragedy, but not an existential threat. The Soviet Union was an existential threat to the United States. Even 200,000 dead in a horrific tragedy is not.

Obviously that is an unacceptable cost that we should take steps to avoid. But I consider the probably of such an outcome extremely low, at least in the next ten years or so. I very much doubt that Al Qaeda or its brethren will manage to achieve anything as big as 9/11 again in the foreseeable future. Not because Homeland Security is protecting us, but because anyone who tries to hijack a plane will face a mob of passengers who believe they are already dead. Even a machine gun probably wouldn't be an adequate weapon in that case, and the difficulties of getting a machine gun onto a plane, then deploying it without explosively decompressing the plane, are very large.

Udpate A friend points out that the line about racist crazies being in Iraq and Afghanistan could easily be taken the wrong way. I was not in any way trying to imply that the military is full of Aryan Nation types; only that such groups probably can't stage an attack without members who are ex-military, like McVeigh himself. Those members have probably been called back to the Guard and sent to Iraq. Or so I mote. I do not think that these are a sizeable portion of the military; only that the military, like any group that contains millions, is likely to have a few rotten apples scattered in there.

Vegan shoes: the decidedly non-definitive buyer's guide

There's a grassroots movement in my comments on science fiction interested in a post on vegan shoes. This post is for vegans, please; it is not for people who want to tell us we're moralistic prigs who are going to die young from some horrible vitamin deficiency.

Anyway, I've had very good luck at Target. Cheap shoes, with their pleather uppers and synthetic soles, are the vegan's friend. I walked out of there a month ago with three pairs of shoes for $40, all of which have attracted favorable compliments from strangers. You have to be careful, however; not all of their shoes are faux leather. The box should say; if not, the internet has full descriptions of which shoes contain leather.

A lot of upscale places are selling canvas shoes right now. Don't get too carried away by a nice-looking upper; a lot of them have leather soles. On the other hand, a lot of them have wood, plastic, rubber or rattan soles, and they're hella handsome. Canvas takes a little care--don't forget to scotch-guard--but it looks awfully summery, and it's cool and comfortable. Espadrilles are the old standard, but I'm currently in the market for a pair of linen peep-toe flats, which I'm seeing all over--so far, unfortunately, all with leather soles.

I haven't attempted to order vegan shoes over the internet yet, though I may be reduced to it; right now I'm still working my way through my back stock of leather shoes, even though every once in a while I have a creepy re-realization that I'm wearing an animal's skin wrapped around my feet (something that I felt was creepy before I became a vegan, before I am accused of moralizing). The problem with internet shoes is that some vegan shoes are quite uncomfortable, and you really want to make sure you're a good fit. Plus if you're like me, you never really know whether you need a nine or a ten until you try them on.

However, if you get to New York (I know at least one of the discussants does), stop in at Moo Shoes, which has some decent looking shoes at reasonable (at least for New York) prices; once you've bought there and get a feel for their sizing, it may be okay to buy some through mail order.

If you are willing to drop A LOT of money on vegan shoes, Stella McCartney makes beautiful shoes, though the collection is very small. And Natalie Portman has a gorgeous collection with Te Casan. If you buy all your other shoes at Target, perhaps you can afford a pair or two of these a year. They all seem to be selling quite well, so presumably there will be a second collection.

Handbags are actually much harder; if you find something that's not leather (hell, if you can find something that will actually tell you whether or not it's leather), and looks decent, buy multiples. Summer's all right, but come fall, you're going to look a little odd with that canvas or straw bag.

Home, sweet home

The Case-Shiller housing index has dropped like a rock. Contrarians are calling a bottom. I am still of the opinion that as long as there is a sizeable minority saying that the market has capitulated, the market has not capitulated.

Gadgetblogging

It's been a while since I did any kitchen blogging, largely because I haven't needed much in the way of new equipment. However, the timer on my giant Cuisinart coffee maker died after only four years (grrrrrrrrrrrrrrrr), so time for a replacement.

I actually bought two replacements, both of them manual to minimize the possibility of future such incidents.

For individual use, I bought an AeroPress, which makes one or two double espressos (just dilute with hot water for American coffee). It's a tad fussy: you heat the water to exactly 175 F and then press it down through a microfilter.). It's sort of like a cross between a french press and a vacuum brewer, takes about 30 seconds from water pour to coffee, and makes one of the most delicious cups of coffee you've ever had.

For larger groups, I now have a Chemex. This makes regular drip coffee; you pour a little hot water over the grounds to make them blossom, then fill the filter with water. Five minutes later, beautiful drip coffee.

Explaining science fiction to women

Reader KevDog says:

Sweet Lord in Heaven, you have got to be every tech boy's dream come true. As I remember, you like Battlestar Galactica, Dr. Who, and several other Sci-Fi shows.

Can you, perchance, teach my wife the allure of such things? I have to watch BSG when she's not home. Let us not even speak of attempting to watch the Good Doctor.

In all things there are trade offs, I suppose. But make it happen and I will find a way to get you a Dalek. I'm not above bribery.

I'm afraid I'm not quite the dream girl I sound like: I also have an unfortunate addiction to designer jeans and expensive kitchen equipment, do spend more time than the average science fiction fan thinking about window treatments, and have only pared down my shoe habit by dint of becoming a vegan and thereby limiting my shopping selection to Target.

But yes, I love me some Doctor Who, some Firefly, just caught up on BSG, own two copies of the Oxfor Book of Science Fiction Short Stories, have four first edition Sandmans, and really haven't emotionally come to grips with the fact that I am never going to have superpowers.

What I'm saying is, there's hope. A love for feminine frippery can be, and frequently already is, paired with a love of laser guns. But even if it's not already there, I think it can be awakened. You just have to explain it right.

Those of you who pitch science fiction to wives and girlfriends who do not enjoy it are probably saying something along the following lines: "Space ships! Alien monsters! Men in tights!" Instead, for women who find that sort of thing distasteful, talk about it as a fairy tale--only a fairy tale with science instead of magic. The basic emotional space it taps is the same.

You might also try to ease her into something with a little more human emotion and a little less space opera--I'm very fond of George R. R. Martin's current gigantic series. As far as television goes, start with Firefly, then maybe BSG, and then slowly work your way up to Dr. Who. Do not, under any circumstances, unveil Sliders until you're sure she can handle it. Same with movies: Gattica before Blade Runner. Graphic novels: Sandman, not V for Vendetta. You get the idea.

Of course, to be fair, my father bought me all the Robert Heinlein juveniles and Isaac Asimov when I was about eight, so I am perhaps not the exact perfect person to ask. But I think science fiction is a habit that can be acquired if you go about it the right way. Every genre has its language, and the longer you've inhabited that genre, the more comfortable it feels. Try to make sure her first exposures are to primary readers, not college texts.

I assume this also goes for women paired with SF hating men. But I feel like that's a rather rarer combination.

Drilling deep into energy efficiency

Rising prices of--well, everything--are causing food processors and distributors to take a long, hard look at their operations:

Since 2007, Papa John's has been able to reduce inventory levels by 17% and decrease the amount of outside warehouse space it needs to rent by 33%. "The more the costs go up, the more important it becomes," Ms. Larner says.

This isn't the first time that businesses have had to take a closer look at their supply chains. In the late 1990s and early 2000s, many companies in the food industry bought large software systems from the likes of Oracle Corp., SAP AG, i2 Technologies Inc, and Ariba Inc., as well as more-targeted systems from smaller vendors, to give them better insight into inventory levels and demand.

But during the last few years, "many businesses said, 'We've squeezed the supply chain as hard as we can,' " says Bill Bishop, chairman of Willard Bishop, a consulting firm that advises food companies. Instead of investing in new supply-chain systems, businesses are using the technologies they bought earlier in the decade to look for further improvements.

Industry analysts expect that this will soon change. They predict that rising commodity costs will make it easier to justify buying new software that can help plan manufacturing cycles and optimize delivery routes.

AMR Research forecasts that spending on supply-chain software will rise to $3.9 billion by 2011 from $2.7 billion in 2007. Technology-research firm Gartner Inc. predicts that the subset of this software focused on transportation management will expand from around $500 million in 2007 to nearly $800 million by 2011.

Few businesses have managed to get new technology in place in order to deal with the current commodity-price crisis. So they are taking the same systems they have bought and enhanced since the late 1990s and early 2000s, and rethinking how they operate with them.

That is the case at Hannaford Bros. Co., the supermarket chain that is a subsidiary of Belgium-based Delhaize Group. Hannaford stores used to receive two shipments a day, a load of fresh groceries such as dairy products and meat first thing in the morning, and a load of nonperishable items like canned soup and boxed cereal at night. The split delivery made it easier for store managers to process fresh items before the store opened and let them restock the rest of the store after closing.

Rising fuel prices has made the grocer "reconsider all the rules," says Gerry Greenleaf, the company's vice president of distribution.

Hannaford used its transportation-management system and other planning software to analyze how much the split-delivery schedule cost the company and to see if there was a more cost-effective way to make deliveries. Earlier this year, Hannaford began combining the two deliveries for some of its 160 stores. It is less efficient for the store managers, but the added expense at the stores is offset by the savings on fuel, which the company says will be between $500,000 and $1.5 million chainwide this year.

Hannaford has also made other changes with the aid of supply-chain technology, such as a system that helps drivers maximize fuel efficiency that is says should save the company $500,000 this year.

Nestlé USA Inc., a subsidiary of Nestlé SA, is also changing established practices. Previously, it was cheaper for the food company to purposely overfill some bottled beverages than to spend money on the machinery, computer systems and staffing necessary to ensure that a 16-ounce bottle was filled precisely. Rising sugar, cocoa, dairy, and other food prices have convinced the company to "wage a war on waste" and make many of those investments, says Jeff Kurtenbach, Nestlé USA's vice president of supply chain.

This is what OPEC has to fear--these kinds of improvements last. If there's a dip in the global demand for oil, prices won't just recede; they'll crash.

This is why Saudi is trying to ease things off a bit by adding an extra 200,000 barrels per day to the mix. But in a world that's pumping about 85 million barrels per day (bpd), this is not super-helpful--and it's not clear Saudi can pump much more.

The good news is that we have information technology that people in the 1975 couldn't even have dreamt of, which is grinding away at the problem of making our economy incrementally more efficient. If the price of oil does come down, we'll emerge from this substantially more productive--good for us, good for our descendants, good for the planet.

I want! I WANT!

For all your Time Lord killing needs:

Pay no attention to the economic policy behind the curtain

I have to agree with Kevin Drum that John McCain's saying that terrorism is the gravest long-term threat to the US economy is pretty silly. For starters, it's non-responsive; in that sense, death by asteroid is probably the gravest long-term threat to the US economy, but that's not really very helpful in telling me what someone's domestic policy is going to be like. But more than that, it's not even vaguely true. Terrorism is just not an existential threat to the United States, even in the very unlikely event that a terrorist group gets a nuke. I can think of half a dozen more realistic candidates for causing mass economic suffering, like energy shortages, central bank malfeasance, environmental degradation of the food or water supply, resurgent global economic nationalism, or good old-fashioned overregulation. This is just an attempt to wave the bloody shirt and thereby avoid discussions of his economic policies. What makes this especially galling is that he has some pretty okay things to say about issues like trade.

Please, sir, I want some more

The losses at major banks recently have tended to be accompanied by announcements that the bank was going to seek fresh capital. This is sort of reasonable--the banks desperately need to relever--and sort of not, because right after you've announced that you took a bath on gigantic overinvestments in mortgage bonds is not really the best time to ask people for more money to lose on the market's next fur-bearing trout farm. I certainly wouldn't be rushing to hand over my hard-earned savings.

Turns out investors feel the same way I do.

Dozens of Wall Street firms and commercial banks have raised capital, and many more financial institutions are expected to follow the same path in coming months, particularly as regulators clamp down on these institutions to ensure they have adequate capital levels to withstand the credit crunch.

That is particularly the case for small, regional banks and mom-and-pop lenders just starting to be hit hard by losses in their real-estate and construction-loan portfolios. With so many banks already having gone hat in hand to shareholders, these financial institutions ultimately may be forced to deal with a limited pool of investors who still would be willing to pump in money.

Investors have good reason to be skittish. Most of the banks that issued new securities in recent months have continued to see their share prices slide, some by 40% or more. That means investors who bought into those transactions are far underwater. And existing investors who didn't bite have had their holdings diluted by the issuance of piles of new shares.

"Investors are tired of trying to catch a falling knife," says one investment banker who specializes in the financial-services industry.

Weirdly, smoking crack is not good for you

Amy Winehouse apparently has emphysema.

The Sunday Mirror quoted Mitch Winehouse as saying that Amy has an irregular heartbeat, and has been warned that she will have to wear an oxygen mask unless she stops smoking drugs.

"The doctors have told her if she goes back to smoking drugs, it won't just ruin her voice, it will kill her," Mitch Winehouse was quoted as saying. "There are nodules around the chest and dark marks. She has 70 percent lung capacity."

The 24-year-old soul diva collapsed at her north London home Monday after signing autographs for a group of fans and was taken to a London hospital for tests. She remained there all week.

This is not actually quite as awful as it sounds--I have about 70% lung capacity, and I not only stand, but belt 'em out at Karaoke. However, emphysema is degnerative; asthma isn't.

This is your brain on Alzheimer's

The brains of Alzheimer's patients accumulate beta-amyloid plaque. For a long time, there's been a controversy over whether the plaque is a cause or a side effect. This is tremendously important, because it will direct treatment research for a horrendous disease.

Well, now it looks like we may have resolved the chicken and egg problem:

Now, researchers have caused Alzheimer's symptoms in rats by injecting them with one particular form of beta-amyloid. Injections with other forms of beta-amyloid did not cause illness, which may explain why some people have beta-amyloid plaque in their brains but do not show disease symptoms.

Outrage is cheap

Do I put too high a value on comity and politness?

I dunno, maybe; my mother grew up in a small town, and bequeathed to me a small town horror of doing things like arguing with other peoples' religious beliefs.

But too, I have a fervent belief in the benefits of examining both sides. It would be nice if I were right about absolutely everything--so right that anyone who disagrees with me must be doing so from vicious ulterior motives. But I have friends across the political spectrum, and frankly, I haven't noticed any clustering of personal virtue. Not among the liberals, nor the conservatives, nor even the libertarians so dear to my own heart. Life is complicated; we're all groping in the dark.

There are places where outrage is appropriate. But the level of outrage in the blogosphere has made outrage meaningless. Someone disagrees with me about national healthcare, the fascist monster! Someone thinks that women shouldn't have to carry babies to term if they don't want to--baby-hating sadists! What's left when people actually do horrible things for awful reasons? First, kill all the fascist-baby-hating-monster-sadists!

Sorry, I fell alseep during the global warming hate-olympics. Um, 8.7! What were you saying?

People who are perpetually outraged do not blow me away with their moral fervor. They kind of make me giggle, like crazy old Uncle Ted who insists on silver fillings because the new compounds are a communist plot. It's hard to generate intellectual respect for someone who believes that life is an exam composed entirely of multiple choice questions.

Cry, the beloved country

Mugabe wins really dirty:

Opposition leader Morgan Tsvangirai, who won the country's presidential elections in March but fell short of the majority needed to avert a runoff with Mr. Mugabe, said Sunday that it wasn't worth asking Zimbabweans to risk their lives in the vote, which is scheduled for Friday.

Morgan Tsvangirai, speaking at a news conference, said he was pulling out of this week's presidential runoff because of mounting violence and intimidation.

"We will no longer participate in this violent, illegitimate sham of an election process," Mr. Tsvangirai said.

Mr. Mugabe's party, counting the decision as a victory, said Sunday he would assemble a new government that excluded Mr. Tsvangirai once the opposition's withdrawal was official.

The opposition's decision came amid pressure from battered supporters and foreign diplomats, who encouraged it not to participate in a vote that was almost certain to bring more violence and possibly a defeat orchestrated by supporters of the 84-year-old Mr. Mugabe, who has ruled Zimbabwe for 28 years.

The opposition is calling for members of the African Union, regional neighbors or even Western powers to intervene and broker some kind of transitional government that can govern the crumbling nation until free and fair elections can be held. But such a move appears unlikely, given Mr. Mugabe's wariness of foreign powers and African nations' reluctance to act thus far.

There were signs over the weekend of growing international impatience with the Mugabe regime, but it wasn't clear if they would translate into any concrete steps.

Huh?

Matt Steinglass joins the chorus of liberals telling me that no one will care if American public officials are arrested for official actions.

This strikes me as--farfetched. American public opinion was pretty solidly against Singapore's caning of Michael Fay, who got four strokes with a rattan cane for acts of local vandalism he'd confessed to. There was, to be sure, a vocal minority that favored it, and I myself was not overly sympathetic to the obviously troubled teen. But if you can get a majority against corporal punishment of a teenage criminal at a time when lots of schools in the south still had corporal punishment . . . well, what will you see when another country decides that their laws get to judge our policy?

I quite agree that in Manhattan, where both Matt and I were raised, there would be quite a bit of support for the action. My assessment of my relatives living outside of dense city cores, however, suggests a vehement antipathetic reaction. And there are still a lot more of them than there are of us.

As I told another reader who wrote with similar objections, maybe the thing to do is measure our relative confidence levels. I have $1,000 I'm willing to put down at Longbets that if a US official is arrested by a foreign power for acts committed in his official capacity, the majority reaction will be a vicious backlash against said foreign power, not "ho-hum". Now, of course, I could simply be overconfident, or biased by the fact that I indeed have relatives who boycotted the French. On the other hand, those relatives hate Bush and usually vote for Democrats.

Bleg

Speaking of music, I have a conundrum. My living room is an odd shape, forcing me to put the television in the corner, slightly across the kitchen. I'd like to put in a receiver and a decent pair of speakers, but I can't figure out where the hell to put them. So I'm throwing it open to y'all: what sort of sound system could I put in here that would provide sound from my television, etc.?

I'm not desperate for surround sound; I just want a fairly high quality player to hook up my DVD, Tivo, etc. to. Also, there's not really anywhere to hide wires, and it's a rental, so I'm not replastering. I can't figure out how to do anything without pushing the speakers too far into the kitchen door. The single speaker systems need to bounce off flat walls, which I don't have, and won't work with the glass in the bay window anyway. Can my audiophile readers apply their collective intelligence to this vexing problem?

Music notes

Girl Talk has become the next artist to release an album on a "Pay whatever you want" schedule. The album is fantastic. I just paid $5.00 for the thing. Was this too much or too little?

Speaking truth to power

This is cute. And incredibly stupid. Leaving aside the issue of what constitutes a war crime that should be prosecuted in international courts--you heartless fiend! my liberal readers cry, we knew all along that you loved torture!

No, really, leave it aside, because the moral question is irrelevant to the practical one. What will be the effect of this? Will it build the credibility of international justice institutions by proving that even the powerful US can be brought to heel?

Ummm . . . no. Can a Barack Obama administration sit by while this happens? The liberals who think it can have spent far too much time in the Bat Cave telling each other that justice will soon be restored to the universe. Seizing US officials and trying them for war crimes will be perceived by most of the American public as an act of war. An Obama administration that became complicit in this would find itself wistfully hoping that they could, perhaps someday, get their approval ratings up to those enjoyed in the later Dubya years. There would be not inconsiderable pressure to invade Spain to get them back.

That we would do so seems farfetched. What does not seem so unlikely is that the US would almost have to pull out of any organization that supported this action, up to and including the UN. We are still the country of Monroe and Roosevelt.

I know that at this point you are itching to argue that in the long run we'd all be better off if we submitted to international justice. Well, first of all, this won't be international justice, in that sense; it will be the justice of whatever court system seizes our officials. And second of all, it doesn't really matter if we should; we won't. American politics is not behind that kind of internationalism.

The result, therefore, seems almost certain to be some sort of horrific blow to the power of all these international institutions, which become fundamentally irrelevant if the United States does not participate. America provides most of the military force that supports those institutions; even when they are not our troops, it is our air support, our logistical support, our sea power that stands behind the boots on the ground. The public political pressure in Europe will undoubtedly be just as strong for these actions as the pressure here will be against them. It will only be after the damage is done that Americans will realize it is sometimes convenient to have allies, while Europeans belatedly discover that internationalism doesn't just run on solemn conferences and soft power. Not to mention how cute they'll all look trying to hem in Russian expansionism without the implicit threat of the American troops now stationed in their countries.

It might be nice if international justice were like a real national legal system, where everyone, rich and poor, submits themselves to the impartial will of the courts. But it is not. This is not fair--life isn't, you may have noticed. When the gap between the real and nominal power is as wide as it is in institutions like the UN, the institutions survive by not testing the boundaries--by defining deviance down rather than reveal that the institution does not have the actual ability to rein in its most powerful members.

I know that I have a lot of seething war opponents reading this, their souls screaming that the practical considerations are secondary to the moral ones. But the US flatly cannot be brought to heel in this manner, while other nations can. Shall we enjoy the righteous satisfaction of expressing our moral outrage, at the cost of severely eroding the international community's ability to encourage peace in the rest of the world? Only if you think that American politics is so overwhelmingly important that it overrides trivial considerations like dead Bosnians.

My politics

Yes, I know, this blog is starting to resemble one long mash note to Ta-Nehisi Coates. I can't help the way I feel.

Anyway, he has a long post on his politics. This made me think about my own. Some random thoughts:

* I think most people think that they have good reasons for believing as they do. It is rare that they are simply malicious.

* I think most people try about as hard as everyone else to be good people.

* I think there is no way to derive a comprehensive moral or legal framework from a few first principles. In some situations, some values will be incommensurable; you need to pick one. And the choice is rarely obvious.

* I think the world would be a vastly better place if people recognized that the right response to disagreement is debate, not rage.

* I think things are usually more complicated than they look.

* I think actions interact in complicated and often unpredictible ways.

* I think incentives matter.

* I think almost no one adequately appreciates how much heavy lifting hidden cultural norms do in our political and economic systems.

* I think that no system is perfect, and the fact that something has gone wrong is not evidence that change is desireable.

* I think people are biased towards affirmation and action, with often unfortunate results.

* I think most people, undoubtedly including me, give themselves too much credit.

* I think the knowledge that you might be wrong is the most valuable asset a human being can have.

* I think that speaking of one culture as "better" than another is a meaningless statement. Culture gives you the preferences by which you evaluate it.

* I think that too many people in political debate are looking for reasons to be angry.

* I think that it is kind of creepy when everyone in a room, or a comment thread, agrees with each other.

* I think that we have a moral obligation to, as the bumper sticker says, be the change we want.

No exceptions

I was just rereading this excellent piece by Jeffrey Rosen on what would happen if Roe toppled, and wondering about the 15% of people he says support no-exception bans on the practice, even when the mother's life is in jeopardy. Is this really true? I know that there's controversy over mental health exceptions, but how many pro-lifers would actually support, say, forcing a woman with severe pre-eclampsia to roll the dice?

Share and share alike

Ross defends the notion that viewing hard porn is somewhat equivalent to adultery. Julian Sanchez dissents. I want to know this: if you watch the porn together, are you both cheating? Or are you swinging?

On a related note, the debate for some reason strongly reminds me of this:

Down with the FDA?

Reader Malignant Bouffant emails the following question:

Heard a guy from the Ayn Rand Institute on the radio this a. m. stating that the FDA is no good, & that liability suits & accountability are really what's needed in a true free market to lessen the possibility of outbreaks of salmonella from tomatoes, for example. Do you agree w/ this, or do you think that a certain amount (certainly more than we have now) of gov't. regulation/inspection is necessary in the food chain? I know "Send in Your Questions Day" is over, but I wondered about your approach to this when I heard it discussed.

First of all, "Send in Your Questions Day" is never over here at AI; I may not answer all of them, but I welcome requests at any time.

Onto the actual question.

The idea of strict liability is a popular one in libertarian circles--many more hard core libertarians support the stripping of limited liability from corporations.

I am not a fan of this latter idea. Lawsuits are expensive and inefficient; medical malpractice, probably the best model we have for this idea, does a pretty terrible job of allocating awards to people who have been harmed by doctor malfeasance--there's only a very loose relationship between who is harmed and who sues, and who is harmed and who wins. Juries in obstetrics cases are particularly notorious for giving awards to parents of congenitally deformed babies on thin evidence, but the problem is not limited to OB/GYN. On the other side, disliking your doctor is probably a better predictor of whether you will sue than actual malfeasance.

Moreover, the harm is not necessarily proportional to the size of the company. A small farm with a bad salmonella problem could make a lot of people sick, but have few assets to take. Again, there is a flip side to this--lawyers often go after the people with the biggest pockets, rather than the people who have caused the most harm. The current asbestos debacle is a good example of this.

In my opinion, the government has a valuable role in providing transparency. The USDA meat grading system is pretty valuable, for example. I think the food and drug industries tend to be badly regulated, and overregulated, but I do not think we would be better served without an FDA. Rather, I think we would be better served by focusing on a certification model rather than an "everything not compulsory is forbidden" model. I don't think the government has any business telling people they can't drink unpasteurized milk, but I think it can play a valuable role in deciding what constitutes pasteurization, and forcing companies to honestly tell their customers whether or not they meet those standards.

Now, these functions are often ably served by private organizations--FASB, which sets accounting standards, is both private and the best accounting body in the world (IMHO). Similarly, the ASPCA and the Humane Society are doing great work with their Certified Humane program, which sets farming standards and inspects farms that want the coveted certification to ensure that they meet these standards. But where there are gaps in the market for standards and transparency, I think it's desireable for the government to step in.

Update The lawyers in the comments point out that I have used strict liability incorrectly. The correct phrase is probably unlimited liability.

By request: hiring convicts

Ta-Nehisi Coates has asked for a post on the economics of hiring felons.

The obvious common-sense fear is that ex-convicts will steal from you. But a conviction also signals other undesireable traits. Criminals tend to be poor, yes, and have bad educations. But they also tend to have appalling impulse control, often accompanied by substance abuse problems and/or mental illness. The hourly wage of most criminal enterprises is extremely low; with the possible exception of the drug trade, if they could do something else, it's likely they would. Criminals clearly display a certain lack of respect for others. And prison doesn't improve them.

Mark Kleiman has done some sterling work on ways to deal with the impulse control problem--close monitoring of parolees with small immediate punishments, rather than rare but severe punishments. In this way, you try to move groups of felons to a new, lower crime equilibrium, and then switch monitoring resources to the next group.

However, it's very hard to prevent crime if criminals have no other way to support themselves, and it's devastatingly hard to get a job with a prison record. One way to look at hiring ex-felons is as a collective action problem. The individually rational decision is not to hire a felon. But as a group, this makes us worse off, because when you have no future outside of prison, inside doesn't look so bad.

There's also the moral dimension. I don't know about you, but I've made a fair number of spectacular moral and economic mistakes in my life. Middle class kids, though, have margin for error. It's all very well to talk about how poor kids could pull themselves out of it if they did X, Y and Z, and I happen to believe that this is correct. The problem is that the first slip a poor kid makes is usually his last--as John Scalzi said, "Being poor is having to live with choices you didn't know you made when you were 14 years old." One of the really, really great things about America is that more than almost anywhere in the world, you get to start over. But that's not true for idiots who committed crimes more serious than drinking too much and flunking out of school.

But it's pretty hard to ask individuals to lean into the strike zone and take one for the team. Collective problems do require collective solutions. These aren't perfect, but here are a few off the top of my head:

1) Reduce the number of crimes to things like assault, so that poor kids have as few opportunities as possible to make those sorts of permanent mistakes.

2) Less prison. Prison is awful for us as well as the prisoners. I'm not saying we shouldn't punish kids who rob liquor stores, but we could try to think of ways that don't involve shoving them into a metal box with a lot of other criminals. Here's where Mark Kleiman's ideas have a lot of merit--use intensive monitoring instead of warehousing. There's a lot of garbage that needs picking up on the streets of American cities; this is one example of something that would be a better use of low-level criminal time then staring at bars.

3) Tax breaks for hiring ex-felons, say for the first two years of employment. It will cost us more money up front, but less money if the felons stay out of prison--prison is extremely expensive, not only in the direct cost, but also because it makes criminals about as socially and economically unproductive as possible. Add a bonus for anyone who gets a sizeable promotion/raise, or skills training. Yes, this will be in part a boondoggle. So are prison building projects ardently supported by the prison guard's unions.

4) Small bonuses for the criminals themselves (or perhaps a reduction in monitoring) for things like getting their GED or staying clean for a year.

This is not perfect; the poor, and the criminals, we will probably always have with us. But it would be a hell of a lot better than what we have now.

Emendation to Railroad post

My father writes to point out that I have confused Detroit and Cleveland. This is a very common mistake, at least among those of us who have never been to either city. Please open your textbooks and cross out "Detroit", substituting "Cleveland". That is all.

Another possible reason American rail sucks

Government accounting. From a commenter:

I read an interview with an Amtrak exec in the early 80's, I think it was the CEO of the time, Graham Claytor, but can't be sure. In any case, at the time, Amtrak was doing reasonably okay, and there was demand for more new routes that could have been profitable. But Amtrak, being a good government agency, didn't see them as profitable. Why?

The explanation had to do with that old bugaboo, marginal accounting. Any private business would look at an opportunity, calculate that if it would cost X dollars to run a train, and generated X+Y dollars in revenue, that would be profitable. Not Amtrak. They insisted on including a percentage of the corporate overhead in assumptions for any new business. If Amtrak were to run 50% more trains, they would want to cover a 50% increase in administrative overhead.... before even considering whether to run the route.

Of course, this accounting artifice eventually leads to no investment at all, and the lack of service is the true shame of having rail run by a government agency, not the money wasted.

In any case, our rail system is obsolete at this point, and there's no way to run true high-speed trains on the existing infrastructure. Even the Acela trains only beat the 1930's steam schedule by about 10%-15%. Any new solution has to built from the ground up. There's plenty of private capital out there, the political challenge is figuring out how to unleash it.

Obviously, I don't have the interview to hand, but this sounds right. Government accounting is ridiculous. Harken back to PJ O'Rourke detailing how the forest service accounts for the lumber it sells (as far as I know, this hasn't changed since the 1980s, but even if it has, the point stands). The forest service got to keep any revenue from selling its lumber as extra, on top of its budget. Thus a tree that cost $100 to grow might be sold for $2. In a private entity, this would be a $98 loss. For the Forest Service, it was a $2 profit.

Again, this is not a necessary feature of "government"; it is a pernicious feature of our government.

Not a government--the government

Chris Lawrence, among others, points out that "government" is not what has screwed up American rail; it's the American government. Yes, this is true, which is why I used the definite article. The American government's infrastructure process is pathological for a number of reasons, chief among them the endless public review process and the log-rolling needed to build a coalition for anything in the fractured US legislature.

But these are features of the American political system that are not, in my estimation, going away. As long as they dominate, it will be very hard to make state-owned rail work in this country. Private efforts seem more--if just barely more--likely to bear fruit. Obviously, I also think that things should be private wherever possible, but I am not denying that state-owned rail works well in other countries; I just don't think that it will ever do so here.

So as not to keep you in suspense . . .

The particular graduate student under discussion was not any of the graduate students that have so far been suggested to me by avid readers, and I'm certainly hoping does not read this blog. Further deponent sayeth not. However, if you think you recognize a graduate student near and dear to your heart in this description, you should probably email them about it, not me.

By request: growth in the Middle East

Another reader asks:

How much growth in the mideast is attibutable to the rise in the price of oil, how much to normal growth, and how much to the removal of the Saddam regime?

This is of course hard to calculate, but in my opinion the positive value of the second derivative is entirely due to oil.

Reader Graeme asks:

Do other nations outsource their military support operations to such as Halliburton and KBR? If so, do they pay as much? What is the war in Iraq costing by comparison to erstwhile engagements when troops mostly did their own KP? Are we getting a deal, or is this privatized arrangement as much of a rip-off as it seems?

1. This would only be a useful question if other nations had anything the United States would recognize as a military. No other country in the developed world can project force much beyond their borders without US transport and logistical support, which is the sort of thing KBR provides. They "outsource" to us.

2. The modern military costs more because we've subsituted expensive capital for cheap labor. We lose a lot fewer people, and a lot more (in dollar value) equipment. This seems like a good tradeoff to me.

3. I don't have any way of assessing whether Halliburton's prices are reasonable. But keep in mind that such arrangements often make non-cash economic costs explicit, which makes them seem more expensive.

By request: consumption taxes

Reader Scott asks:

Why isn't your tax plan consumption based? (IRA's without restrictions)

Because with a decent tax code, there's no reason for the government to artificially bias peoples' choices towards savings and away from consumption. The bourgeois moral affection for savings is a socially useful cultural belief, but it is not actually a moral law. Savings is just time-shifted consumption. I see no moral difference between consumption now and consumption later. As Anatole France said, "If the hangover preceded the inebriation, drunkenness would be a virtue."

By request: why does rail suck?

Reader Aaron asks:

How about, given that flying is much more direct, is rail still more efficient? Cost effective?

Once, I looked into taking the train from Detroit to NYC. The price was higher than the plane ticked, it required several changes, and would have required an extra day off of work.

Well, our rail doesn't have to be the way it is. At current fuel prices, my father--who is my go to guy on transportation issues--estimates that any journey of under 500 miles is probably more cost effective by rail. A high speed train like the TGV to Chicago could make the trip from New York in under six hours, at which point it probably becomes efficient.

I am about to blame--you will perhaps be unsurprised--the government. Why isn't there a high speed train from New York to Chicago? Well, first of all, this would greatly anger legislators from New York and Michigan, who like the fact that the Chicago train must pass through Buffalo and Detroit, even if this assures that almost no one with a job will actually use it.

There's also the problem of the Federal construction process. The high speed train between DC and Charlotte was first conceived in the early 1990s. The EIS for this project will be completed probably sometime in 2010. Then we have to get final legislative authority. Then we have to put out the project for bids. By the time the thing is actually built, we'll probably all have evolved an extra leg and be able to run faster than the high speed train.

There are budding private rail initiatives--rumor has it that one of the freight companies that Amtrak runs on is considering taking back the passenger service on that route, because Amtrak is such a scheduling disaster that it's costing them huge amounts of money. But Amtrak can't be even partially privatised, because then who would run trains from New York through Buffalo and Detroit to Chicago in a speedy eighteen hours? Or half-empty tourist trains through Montana?

Half-empty trains are not environmentally efficient; they are pork. American rail needs a combination of higher carbon taxes to price in the mobile transport externalities, and a government that isn't determined to mess things up. I'm skeptical that we'll get either any time soon.

By request: 20/20 hindsight

Reader Scott asks:

With 20/20 hindsight now available what is the one, easiest, thing to have avoided the current crisis in the banking system.

Outlaw any financial transaction more complicated than a simple equity purchase. This, however, would have created more problems than it would have solved.

As I've said elsewhere, I can think of a lot of very complicated and extremely socially costly ways to have avoided the current crisis, but I'm not sure there is a simple solution--higher capital requirements are probably the best bet, but it's not clear how much this would have helped, since we still don't know whether Bear was insolvent or merely illiquid. They wouldn't even have helped us, the taxpayer, since JP Morgan bought them out at fire sale prices. There's a lot of talk about forcing originators to keep a portion of their securities, but from what I understand some of the toxic instruments on the books at Merrill and Bear were in fact originated in-house.

Probably the best way to avoid the problem is to keep financial professionals in the game longer. The money and stress of banking means that its titans tend to retire early. Bubbles seem to be a natural feature of asset markets, from tulips to houses, and the only known cure is repeated experience of them. Having more guys around in their sixties and seventies who remember the last few disasters would probably do a lot to mitigate the phenomenon. Unfortunately, I don't see any way to legislate this--and even then, if the current crop of elder statesmen actually did manage to mitigate bubbles, they would only create a future class of elder statesmen who have never seen them, and are thus even more vulnerable to their seductions.

The fact that there is a problem does not always imply that there is a solution. I think there are a number of sensible regulations being proposed right now: giving mortgage brokers fiduciary obligations to buyers rather than sellers; stiffer capital requirements; having originators keep a portion of their loans. I'm just not very confident that this would have actually prevented the current problems.

Note to readers

Thanks to the readers who wanted to know who the least attractive celebrity is that I'd be willing to hook up with. This is a fascinating question, one I had not previously considered. It is not, however, a question that I will answer for public delectation.

Inherit the wind

Bryan Caplan points to a study showing that the cognitive effects of upbringing evaporate over time.

If the only result from this study had been the "IQ is heritable," it would have been just another study. But its special methodology - studying adoptee's development from birth to adulthood - confirmed a shocking finding: As children grow up, the heritability of IQ rises, and the influence of family environment on IQ literally vanishes. . . .

We naturally think about the effects of family as cumulative: The longer you're in a family, the deeper the impression. At least for IQ, though, this "natural" thought turns out to be wrong. Family affects the very young, then fades out.

In hindsight, should this pattern really have been so surprising? Yes and no. Consider the parallel case of church attendance.

For a young child, family has near-absolute control over church attendance (unless you're Damien in The Omen, of course!): If your parents go, so do you; if they don't, you don't. As you get older, though, you gain some independence - and with it, a chance to show your true colors. By the time you're an adult, you only go to church if you want to. So it's not surprising that family matters less over time.

Even so, though, you would expect attending church to be at least somewhat habit-forming. Adults only go to church if they want to, but what they want has something to do with what they've experienced. The surprising thing about family influence on IQ is that the effect actually goes to zero. As you grow up, you find your own cognitive level, and the cognitive level you're looking for has nothing to do with the cognitive level you grew up with.

This is pretty well replicated for both home environment and early childhood education. There are lots of things that early childhood environment does affect: the Perry Preschool Project, for example, produced significant reductions in criminality, while improving high school graduation rates and modestly increasing future income. But we're talking about moving from Popeye's to a steady job in a warehouse or at the Post Office, not mass movement into the professional class.

I confess I still don't understand it--if IQ is so heritable, why is it ever plastic? But I'd say that dealing with this problem is the biggest social policy problem America has, whether we're dealing with true heritability or some masking factor.

The perils of graduate education

It's expensive. It often leaves you, on net, worse off financially than you would have been without the degree. And it makes you stupid.

The stupidity, thankfully, is only temporary. But while it lasts, it sure is painful to watch.

This post grows out of a conversation I had recently with someone who deals regularly with graduate students. I was relating an exchange I'd had with an interviewer, a PhD economist, who'd asked me about my MBA. "Well, while I was getting it, I thought I knew everything," I told him. "Sadly, that turned out not to be the case."

The interviewer laughed. "Everyone thinks they know everything when they're in graduate school." He paused. "You're lucky you got over it. A lot of people never do."

To judge from the number of people who think that their PhD makes them an expert in, well, everything, he's absolutely right.

Anyway, this led my friend, also a PhD, to diagram the predictible course of a graduate student in a social science program. The first few years are a heady experience, particularly in a PhD program--as a lowly MBA, I had sort of the cowpox version of the deadly disease.

For the first time in their lives, the students are treated like adults. They are in the outer circle of an intellectual elite, treated slightly more like members of the club than time-consuming nuisances. Their classes are smaller, and offer actual conversation with some big name professors. Instead of textbooks, they start reading academic books written for academics, delving deep into the insider language of their craft. They start to feel like members of a special elite, privy to secret knowledge, cleverer than the normal run of people. They get not merely the feeling that they have learned things others haven't mastered, but that they are the possessors of knowledge that others can't master unless they, too, are initiates. They develop an amused contempt for anyone who is not in a PhD program. Oddly, they are more easily convinced of the competence of people with advanced degrees in entirely unrelated fields than, say, policy professionals.

There's an additional effect in a lot of social sciences; graduate students tend to drift towards schools and professors whom they find ideologically sympathetic. They read some books that agree with them, and listen to their professors confidently smiting the arguments of people they didn't like in the first place. After a year or so of coursework, they feel like able masters of a difficult body of material which proves, scientifically, that they were right all along.

Meanwhile, those professors are constantly challenging them--forcing them to jump a series of ever-higher hurdles, exposing their logical mistakes, breaking them down and building them up again in the mold of their school. At the end of this process, they are like movie Marines coming out of boot camp--they feel ten feet tall, tough as nails, and hungry for some action. This is generally when they start making total, and all-too-often extremely public, asses of themselves.

The new graduate student's lack of humility is a stunning thing, perfect, seamless, and unbreakable. They begin issuing their opinions to anyone who will hold still on the assumption that the benighted masses have just been waiting patiently for a clever graduate student to explain How Things Really Work. This is humiliating enough to watch when they are boring people who agree with them. But when they start getting into arguments, other people begin shuffling uncomfortably in empathetic shame--particularly those of us who have weathered this delayed adolescence ourselves.

The new graduate student, bolstered by the opinions of their professors, tends to become extraordinarily indignant at the notion that anyone would challenge them. Since no one without a graduate degree could possibly have mastered the requisite knowledge, disagreement becomes a sign of willful malice. They stride forth confidently into arguments with professionals armed with the three books they have read on the topic, the opinions of their professors, and enough arrogance to power a high speed monorail between Moscow and Vladivostok. That's when they get their asses handed to them. Even worse, they are often too dumb to recognize this has happened; at the nadir of the disease, they are simply constitutionally incapable of recognizing that a slot at a good school is not the same thing as omniscience.

The problem is that the professors whose ideas they are parroting, the authors of the books they have read, have honed their beliefs against the harsh grindstone of academic and political debate. Their professors thoroughly understand the canonical works of the other side, and can defend, at length, the subtle judgements that led them to reject their conclusions. The graduate student can usually only walk through one or two rounds of a lengthy rehash of these arguments before they are forced to fall back upon "My professor says that Mr. A is right and Mr. B is wrong."

Unfortunately, there are few topics of great interest in which all the authorities are on one side. In economics, the subject with which I'm most familiar, trade and asset price controls are among the very few topics of which this could actually be said. So even if Professor Z is extremely eminent and smart, the odds are very good that at least one Nobel laureate holds exactly the opposite view. If the graduate student is unfortunate to be talking to someone who has read the views of that Nobel Laureate, the precipice of humiliation yawns before them. Watching someone go through this, even if they agree with you--perhaps especially if they agree with you--is the emotional equivalent of fingernails on the world's largest chalkboard.

The question we debated is: is it worth talking to graduate students in this stage? Can one take the ones who share one's ideological convictions quietly aside and advise them to wait a few more years before unleashing their newfound brilliance upon a waiting word? Can one, through gentle and respectful argument, convince the less ideologically congenial ones to behave like adults? Can one save them from the usual course of disillusionment, which is repeated humiliation at the hands of people who are not quite as dumb as they had assumed?

We were unsure. So I am throwing the question to my readers, many of whom have either been graduate students, trained same, or worked with them in the immediate aftermath. Is there hope? Or must everyone suffer as I did when I discovered, with brutal shock, that there were still a surprising number of people in the world who knew more than I did?

By request: growing your own

Another reader asks for a post on the economics of keeping chickens, or a goat; and/or having a vegetable garden.

Hmm. Well, the most valuable concept you need here is that of opportunity cost. The opportunity cost is the next best alternative use of an asset--in this case, your time. Say you are offered two jobs, one that pays $100,000 and one that pays $60,000. That $60,000 is the opportunity cost of taking the higher paid job.

So if you're going to have a vegetable garden or stock, you want to carefully consider the opportunity cost of your time. You could be taking on extra work to pay for food. Unless you make a very low wage indeed, you will probably spend less time earning the money to buy the food than you would growing it yourself.

Yes, you may say, but I can't find a decent job for only a few hours a week at my convenience. But wait! Don't forget that your leisure is also an important opportunity cost. After all, if you didn't value it pretty highly, you'd already have another job. If you wouldn't trade that hour of leisure for fresh vegetables in a straight-up barter deal, you probably shouldn't garden. And critters are even more demanding. Also, they smell quite a bit, so if you don't like farm smells (it happens I do), you should never keep stock.

Did I mention that if you get chickens/goats/pigs, the neighbors will almost certainly complain?

On the other hand, animals are a lot of fun to watch, and pretty rewarding to feed. And lots of people, through some sort of tragic congenital failure, actually enjoy gardening. And unless you live in farm country, your own tomatoes will be vastly superior to anything you can buy--they are literally priceless.

Carefully weigh all those considerations, and then decide what's right for you. Me, I've got a dog and a window box, and that's about enough.

Iraqification

Reader Ann asks me to comment on progress in Iraq, and the media's coverage, or lack, thereof.

I'm not really qualified to assess progress in Iraq; I know little about their political system, and less about military matters. I think economic progress is underreported; their infrastructure has either returned to, or exceeded, prewar measures, and by all reports is still rapidly improving. This matters a great deal, not only for quality of life, but because the more there is to destroy, the more stake people have in peace.

I can comment a little on the severe difficulties of news coverage in a war zone, particularly Iraq. It isn't safe, so reporters are limited mostly to Baghdad or embeds, which are not the whole story, and probably dramatically skew their perception of the situation; Baghdad is in the Sunni triangle. Also, someone recently pointed out something I hadn't thought of: most of the people who speak English in Iraq are Sunnis, privileged in the previous power structure. That is going to skew what people see. There's also the fact that bombings are dramatic, easy to see, instant; progress is slow and often hard to measure.

I don't think it's some sort of conspiracy. Journalism, like most things, is harder than it looks; without great care, it can go very wrong.

By request

Okay, all the cool kids are doing it: what do y'all want to talk about this sunny June afternoon?

And now for something completely different

The last post reminded me of an econometrician joke!

Three econometricians went out hunting, and came across a large deer. The first econometrician fired, but missed, by a meter to the left. The second econometrician fired, but also missed, by a meter to the right. The third econometrician didn't fire, but shouted in triumph, "We got it! We got it!"

More economist jokes on this site. Which, incidentally, features a new addition to the infamous "Politics explained" joke email that we've all gotten approximately one million times:

ANARCHY: You have two cows. Either you sell the milk at a fair price or your neighbors kill you and take the cows.

Everything I needed to know about econometrics, I learned from Arnold Kling

Correlation. Is. Not. Causation. Write that on your forehead 1,000 times. I give you Mr. Kling:

I received an email from a reader who was very excited to find that over the past 70 years the correlation between excess health care inflation (the price of health care relative to the overall CPI) and the proportion of health care spending paid for by third parties was 0.92 (out of a maximum of 1.00)

I wrote back saying that correlation does not imply causation. He replied that he understood that, but still, with a correlation that high there must be something.

I'm sorry, but the inability to infer causation from correlation has nothing to do with the size of the correlation coefficient. It reflects the process generating the data. In a controlled experiment, you often can say something about causation. When you just observe some data, you cannot.

In addition, time series data (data that cover long time periods) are very subject to spurious correlation. Over time, data tend to follow trends. Any two trends are automatically correlated, whether there is a causal relationship or not.

When you look at data over time, it is important to ask yourself how many data points you really have. With a strong trend, you probably should just think of yourself as having two data points--the beginning and the end point. If there are a few sharp swings in the data, then you might have three or four effective data points. The fewer the number of effective data points, the harder it is to distinguish among alternative sources of causality.

That is why most macro-econometrics is junk science. That is one reason I would tend to suspect that Larry Bartels' work on Presidential party and income inequality is junk science.

Correlations are, at best, suggestive. They are not by themselves evidence--nay, not even if you cross your arms, scowl at your opponent, and say "Well, then give me another explanation for this astonishing correlation!" Until you've got something better than a simple correlation, the burden of proof remains upon you.

Bling!

Ta-Nehisi Coates rips into a fairly stupid piece by Mary Battiata on the hope that Obama offers the black community--a hope of a future filled with snugly-fitting jeans:

Lately I've been wondering what an Obama White House might mean for the future of bling. For the fate of heavy gold, medallions, below-the-butt denim, the whole hip-hop gangsta fashion habit. What if January 20, 2009 turned out to be not just a cultural and clothing pivot point for adults -- a return to the minimalism of sleek, 60s-era sharkskin suits, the containment of golf-ball sized Barbara Bush costume pearls -- but a watershed fashion moment for teenaged boys? Picture it. On Inauguration Day next year, thousands and thousands of young men and boys from city street corners to suburbs, look up from their X-Boxes and catch a glimpse of the impeccable President Barack and First Lady Michelle Obama climbing the steps of the Capitol and suddenly feel... unfashionable. Out of it. Old. What if they are overcome by the same stunned, something's-happening-here feeling that teenagers in the early 60s, their closets full of sock hop regalia, felt when they first laid eyes on The Beatles in 1964, on the nationally televised Ed Sullivan Show. For adults, this kind of moment is, at most, something to take note of. To a teenager, it's a gale force warning of imminent social tsunami, an urgent prod from the eyeballs and the amygdala that to everything there is a season, and now is the time to change, change, change. Ask not what you can do for your closet, but what your closet, if ignored, can do to you.

This week in the nation's capital, Washington Post's Metro columnist Courtland Milloy wrote about the street scene in the mostly African-American, inner-city neighborhood of Trinidad, where D.C. police have set up a Balkans-style traffic checkpoints in and out of the neighborhood in an effort to stem a recent spate of drug related murders. Sitting on the front porch of 67-year-old Willie Dorn, a retired corrections officer, Milloy noted the antics of a group of teenaged boys "shirtless, pants below their behinds," who, as Milloy and Dorn watched, launched a plastic bottle at a passing scooter, nearly causing an accident. "Maybe a President Obama could help restore some pride in the black community," Dorn said.

The relationship of clothing to behavior is real. Clothes may not "make the man," but they shape the mind in ways large and small. Ask any stay-at-home parent, freelance writer or invalid who has spent one too many days in baggy sweats and stained T-shirts and begins to notice (in a semi-alarmed, detached sort of way, of course) a dwindling of discipline and energy. The well-known Rx for this condition is a shower and a change into grown-up clothes, the kind with seams that may pinch the body, but can help focus the head.

One doesn't even know what to say. Start with the bizarre assumption that black teenagers have never seen a black man in a suit before--as Coates aptly notes, suits are even a part of the degenerate hip-hop culture that Battiata is worried about. Then ponder the equally bizarre idea that teenagers want to dress like the president. Obama inspiring suits among black teenagers seems about as likely as McCain inspiring Goth kids to scrape off the black nailpolish and put on a cardigan.

I don't know where Battiata grew up, but in my high school, anyone who had come in dressed like Barbara Bush would have spent the next few years ruing this decision at their very own cafeteria table. I wore . . . well, baggy jeans. Also ratty sneakers, tentlike t-shirts, and flannel shirts about eight sizes too large that used to flap around my girlish figure like a shroud. Nonetheless, I seem to have managed a rich and fulfilling life.

The freelance effect that she notes is real, but that's not some magical property of the clothes--I felt perfectly stylish and adult in baby doll dresses in the early nineties. It's a reflection of the fact that all of your friends are dressed differently from you. If pajamas were the new work uniform, you'd feel like a natty professional even in the privacy of your own couch-cave.

Teenagers don't want to be like adults. If that's a fault of society, it's a general fault of all America, not some special, pernicious feature of inner-city culture. But frankly, I'm kind of creeped out by sixteen year olds who dress like adults. A nervous breakdown must lurk somewhere in the not-too-distant future. Put down the purse and stick some anarchy stickers on that jacket, young lady.

Even the "bling" phenomenon has a considerably more benign explanation than that attributed by moralizing whites. As Erik Hurst has shown, members of groups with low average socioeconomic status tend to spend much more of their income on visible signals--cars, houses, jewelry, clothes--than members of higher-status groups. This is not unique to blacks. Poor southern whites do it, people who live in poor neighborhoods do it, single mothers do it, hispanics do it, etc. And it makes perfect sense for them to do this; otherwise, they get whatever unkind treatment society metes out to the poorest of the poor. Assuming arguendo that "bling" is bad, it will take much more than a black man in a suit to eliminate the phenomenon. That will only come when blacks fully join whites in the economic mainstream.

How inefficient <i>is</i> our current system?

Arnold Kling links Ben Bernanke saying:

From the economist's perspective, the question of whether we are spending too much on health care cannot ultimately be answered by looking at total expenditures relative to GDP or the federal budget. Rather, the question, whatever we spend, is whether we are getting our money's worth. In general, good information and appropriate incentives are necessary to allocate resources efficiently.

Most economists conclude that we are not. But here's a thought experiment. Say someone offered you a health insurance policy which will give you the net present value of money saved on life extending procedures, if you agreed in turn to forego expensive end-of-life care, and to forfeit your right to any procedure that health care eonomists estimated was not cost-effective in terms of life years saved. How many of you would take it? Not many, I'd wager. Which argues that the current allocation of health care resources is, in some sense, efficient, in the sense that we prefer it to the alternative.

What we'd really like, of course, is to prevent everyone else from taking advantage of "useless" end of life care and procedures. In a democracy, however, each everyone is also a we.

The web time forgot

Belgium was into the internet before it was cool. Way before. Myself, I'm still holding out for the vast network of pneumatic tubes I was promised in a thousand science fiction stories.

Natalism fatalism

There's also an interesting debate in Will's comments over whether social security systems actually depress fertility by encouraging people to free ride on the fertility of others. Contra Will, the evidence for this phenomenon is pretty strong, and also fits pretty well with expected models of human behavior.

But arguing, from this, for natalist policies is depressingly like the social democrats who say, "Well, we need national health insurance, and now that we have national health insurance, we need the state to tell you what to eat and drink so that you won't cost the national health system so much money." The cure for bad incentives from government regulations is not more regulations.

Culture matters

Kerry Howley has a fascinating piece in Reason on fertility panics. Let me make a few points I consider obvious: entitlements are not a reason to have more children, natalist panics often have an unpleasant flavor of racism to them, and ever-increasing populations are neither sustainable nor desireable. The transition we are currently facing will be moderately difficult, but as I wrote for The Atlantic, it will not be a disaster, and at the end of the transition, we will still be a wealthy society with a lot to live for.

That said, I think Will Wilkinson goes too far when he says

The way I see it, those obsessed with fertility are people who think the culture they desire cannot possibly win the argument against competing cultures. So, they conclude, it’s down to brute baby-making force: the culture that wins the fertility war wins the culture war. In contrast, I think liberal market culture has such immense, salient rewards (wealth, longevity, happiness, etc.) that it is not only possible to win the argument, but that we are in fact winning it. Of course, part of the winning is dynamist cultural synthesis. So if you’ve got a conservative, zoological view of cultural preservation which fixes on the importance of high-fidelity copying of inessential aspects of a culture’s history (costumes, holidays, rites, cuisine, skin colors etc.), you’re going to have a hard time of it. But if you care about the essential core of liberal modernity, you should be delighted with how things are going. You’ll eat your szechuan taco pizza and you’ll love it.

Cultures don't have "arguments". The most important core beliefs most people have are transmitted not through dialogue, but through inheritance. It is extremely likely that you share the political views of your parents, their religious affiliation, and at a less obvious level, their beliefs about things like what constitutes stealing and lawbreaking, and what are justified evasions of petty laws. My mother is the one who would make us turn around and drive twenty miles back to the store if it turned out we'd forgotten to pay for things, and I now have the same attitude.

The overwhelming evidence is that when it comes to culture, numbers trump ideas. in the successive invasions of England, for example, the locals always won unless they were wiped out; the conquerors assimilated. Or look at America. More people here claim descent from the Irish than the English; numerically, Irish Americans are the largest single-country ethnic group. Yet our culture is much more heavily derived from English Prostentantism than from Irish Catholicism. That's because the earlier waves of assimilated immigrants had adopted the fundamentally British culture of America, and outnumbering the Irish, forced them to assimilate. Successive waves of immigrants have each left their cultural mark, changing (I devoutly believe) us for the better, and also to something that cannot be called British. But the dominant strain remains English. Cultures that "win" the argument in territory outside their own do so by killing, swamping, or removing the previous inhabitants.

Food is awesome, but it is culturally trivial. A little while ago, I said that I thought that liberals underestimated the extent to which the welfare state is spending down cultural capital accumulated in an era before safety nets. Similarly, I think libertarians tend to vastly underestimate the extent to which liberalism and free markets are sustained not by proclaimed belief or legal institutions, but by unobserved cultural norms that are transmitted slowly, if at all. Mexico can see all the things that are better about the US, none of which are particularly difficult to reproduce at the institutional level, but enforcement depends on things like a visceral indignant reaction to policemen who take bribes, rather than an attempt to work the system by developing friends in the police force. Tyler Cowen now believes that returning immigrants are shifting those norms, but we're talking about a process of decades, if not centuries. I deeply enjoy having access to world music, world art, world food--but none of them improves my life as much as living in a country with robust cultural support for individual freedom, democracy, capitalism, and liberalism.

Countries that have a real natalist problem--not America or most of Europe, by the way--are right to worry. If Israel is demographically swamped by the Arabs in the occupied territory (as they will be if they don't reach a two-state solution pretty quickly), the character of the country will change dramatically. You'll still be able to get kosher sausage, but the way the government and civil society work will change dramatically, and in many ways not for the better. Likewise, the Protestants in Northern Ireland were perfectly correct to be concerned that if the Catholics reached a majority, their country would change a great deal.

I don't think natalism is the right way to deal with this problem; I think the answer is to handle immigration in a way that allows the immigrants to be easily assimilated into your culture. To the extent that Europe does face a threat from immigration, it's because their policies flatly discourage assimilation. On the one hand, they lavish welfare benefits on immigrants and often make extensive accomodation to their interest groups; on the other, their employment system discriminates, their culture does not consider immigrants to be real members of society, and when they do attempt to encourage assimilation, they do so through ham-fisted authoritarian measures like the French ban on headscarves. America does very well with a policy of benign neglect: no one's going to force you to assimilate, but you'll have a hell of a hard time staying here unless you do.

I'm enough of a cultural relativist to believe that other cultures have a perfect right not to adopt American values, but enough of a cultural hegemonist to know that I want my country to maintain the dominant American culture. I will be thrilled to have new generations of immigrants contributing their music, their food, their religion, their community life--but I do not want them contributing their ideas about the rule of law, or indeed, what constitutes acceptable behavior in a queue. I think it is possible to achieve this happy balance without having nine kids--and without freaking out at the thought that future Americans will not share my green eyes, snub nose, and near-flourescent albedo.

Pieces

I believe I've mentioned that you ought to be reading the blog of my lefty arch-nemesis, Matt Steinglass. If not, well, consider it mentioned. Anyway, he's got a good post up today about piecework rates. I agree with him completely--journalists are most productive on a combination of salary and piecework. Or, in the case of bloggers, when we effectively have our own P&L.

A welcome move from Obama

How can you like that raging lefty, Barack Obama, my readers cry?

There are many things I don't like about him, I reply.

But as far as lefties go, he has the right sort of left-wing ideas; he wants to model America on Denmark, not Germany or Italy.

Today he's announced new details of his economic plan. They include an infrastructure plan which will undoubtedly do approximately nothing to increase the rate of economic growth (though it probably won't much harm it, either). But they also include a cause near and dear to my heart: simplifying and lowering the corporate income tax. Obviously, I'd be happier if he'd pledge to eliminate it entirely; I think what taxes we need should be raised through a simple, progressive income tax with few deductions, or Pigovian taxes. Nonetheless, it's a step in the right direction. And a rather brave step. American politicians find it politically nearly impossible to cut the thing, even though it's a stupid, wasteful tax. In the "Only Nixon can go to China" sense, probably only a politician like Obama can do something about it.

Isn't there a better way?

A commenter asks an interesting question:

You're a long way from establishing your critical point, focusing only on the downsides of unionism to productivity. What about the downsides of focusing only on the next quarter's return? Any individual corporation would be best served by a return to servitude (company towns, anyone?). The system as a whole may well be better served by having a systematic counterweight to maximizing short-term profits.

Just curious. Are you paid on a piece-work basis or do you draw a salary? Given what you do here, shouldn't you be paid on a piecework basis?

As you think about that, remember that there are other values in this world than maximizing short-term productivity, like treating people with dignity. Who knows, maybe the people who get paid a little more can actually afford to buy the products that the economy generates.

Actually, this is a series of interesting questions. I was going to respond in the comments, but then many of you would miss it.

So, first things first: alleged corporate "short-termism". There's very good evidence for certain kinds of managerial abuse that might fall under this heading. Earnings manipulation. Unnecessary mergers. Internal empire building. At a stretch, insider trading.

But the idea that companies maximize short term profits at the expense of long-term returns is, to put it mildly, unproven. Undoubtedly there are some companies that eat their seed corn, just as their are companies that could use a better focus on current performance--well-funded start-ups generally fall into the latter category. On the whole, though, companies pay attention to both long-term profits and short-term performance.

That's because everything these companies do is public. And the public--or at least the part of the public that managers care about, the investment class--is not completely moronic. Pfizer could maximize its short term profit by slashing its R&D to zero and firing its sales force. But investors would hammer the stock, because they can recognize that this means the stock will soon have no cash flow.

This is not to say that some companies do not err on the side of too little investment; only that as far as we can tell, there is no systematic bias towards doing so. Most research on mass layoffs focuses on the workers rather than the firms, but what little data there is suggests that on average, productivity rises after them. This is unsurprising unless you actually buy into the notion that companies have absolutely no idea who produces and who doesn't.

Companies are not the omniscient revenue maximizers that some conservatives like to claim, but neither are they the venal buffoons of liberal legend. Which should be obvious from the fact that much of the stuff we have works pretty well, and better every year.

On the second question, there's a pretty rich body of literature on when piecework rates make sense. I highly recommend the chapter on the subject from Tim Harford's thoroughly excellent book, The Logic of Life. Piecework makes sense when quality is readily observable and monitoring costs are low. The Atlantic wants me to maximize the quaity and readership of the blog, not the number of posts; that's why I don't get paid on piecework. Though of course I do, when I'm writing for other publications. But the question of compensation structure is not a matter of business being mean; most low-wage workers don't get paid on piecework, and plenty of highly paid workers do--solo lawyers and consultants, for example.

On the third point--well, sure. This is an empirical debate about productivity, not a philosophical debate about income redistribution. But biased reading of empirical data is one of the ways that people try to delude others into following their philosophical choices. I think lower taxes and less government spending are a good idea. That doesn't mean I can pretend, as some conservatives do, that lowering taxes raises revenue to the government.

On the fourth point, this is a silly canard. On an economy level, we cannot produce more by paying workers more, any more than you can increase the height of your house by calling the basement the first floor. The amount of stuff everyone has is determined (more or less) by the productive capacity of the economy. You can redistribute that stuff between people, and you can change the mix of stuff that gets made. But you cannot make more of it by changing the nominal price of labor. The only way to get more stuff as a society is to improve our productive capacity, mostly by research and capital investment.

Even redistribution is tricky, because the rich consume stuff with relatively high prices, because of scarcity and fashion. But those things consume fewer resources to make than the mass produced items that most people buy. You cannot turn a $20,000 Hermes handbag into 1,000 $20 Target handbags. Nor can you give everyone 1/1,000,000 of Donald Trump's awesome view. Our ability to redistribute is limited, at the very outside, by the number of resources put into the high price items that the wealthy consume.

I do not think that word means what you think it means

TNR's PR folks emailed me a link to this article with the note that he thinks my readers and I would enjoy this article. Because there's nothing my readers and I enjoy more than poorly written articles making fun of libertarians.

The LP convention is, of course, a freak show. But it's our freak show. And the things that make it funny and a little inspiring are not the things the article captures. Reading it kind of reminded me of Matt Labash's review of Saved.

Asteroids!

The Atlantic has a cool interview with Greg Easterbrook on the topic. Here's the teaser:

Bubblicious?

One doesn't like to hear that oil is hitting new intraday highs even as there are reports that the Saudis are preparing for a production increase.

I'm still trying to pin down in my mind how much of this is speculative. Obviously, part of it is simply the fall in the dollar, and part of it is demand, but prices shouldn't be climbing this quickly with essentially no new information. When changes in prices last a long time--upwards or downwards--they start feeding on themselves; people begin to think of rising or falling prices as a permanent new norm. That makes bull marketers willing to pay higher prices now, on the assumption that prices will be higher still in the future. But I don't need to tell you this; you all know someone who's bought a house in the last five years.

Ultimately, of course, this is folly. It is not enough to think that prices are going to rise; you have to think that they will rise more than everyone else thinks they will. Otherwise, the future appreciation should already be fully priced into the current asset. Failure to understand this--the belief that you can actually make a profit based on a certain rise--is the root of all bubbles.

On the other hand, sometimes the speculators are right. Perhaps we've simply been underpricing oil for too long, and this is the correction. Only time will tell. Which is why you won't catch me investing in the commodity markets any time soon.

Do unions cost productivity?

Ezra says no, citing Kathy G. The problem is that, as her own commenters point out, the empirical research doesn't quite says what she says it says. If you do a simply analysis of firms and compare productivity, you may see no productivity shock in the average. The problem is, firm unionization is not a double-blind random experiment. There's a serious composition problem: the firms that unionize are likely to be the firms that are more productive, because they are more profitable and have more surplus to be captured by the union. Failing plants don't unionize. So if you look at unionized plants/firms/industries and see no productivity difference between them and their unionized counterparts, then probably the unions are actually exerting significant drag.

The other problem is that what positive effects we can posit unions having on productivity only work at the firm level, not the economy level. For example, as Ezra says, if you pay people better, you may get better workers. This is actually kind of dubious, since the union's other main job is preventing you from firing the old workers. But say it's true. Those workers do not actually vanish into the void. Jobs must be found for them elsewhere. Meanwhile, the better workers you do have have come from another firm, which now has fewer excellent workers.

There's also the possibility that by paying workers better, you make them more worried about keeping their jobs, and therefore ensure that they will work harder. Again, it's hard to see how this wouldn't be dwarfed by the union's seniority preferences, featherbedding, and job security measures, but say it's true. This only works as long as there are a substantial number of non-union jobs that don't pay as well, into which the unionized workers fear being forced.

There are other, more nebulous effects that have been posited, such as the psychological benefits of job security, but there isn't a terrific amount of empirical evidence for these. And the German experience belies the notion that "cooperative management" actually makes plant operations productive enough to compete with non-union shops; German companies are relocating east as fast as their hot little feet can carry them.

So even if you argue that unionization won't cost productivity at the level of the individual firm, once you get up to the industry or economy level, a policy of encouraging broad unionization will still reduce overall productivity.

The problem with Amazon Unbox

In the last week, including last night and this morning, I have watched a season and a half of Battlestar Galactica. And I just discovered that the very first season of Doctor Who is available--I've never seen anything before The Baker Years. My friends may never see me again.

RIP Tim Russert

Like everyone else, I'm shocked at the sudden death of Tim Russert. When I was living at home, my father and I watched Meet the Press every Sunday morning. He did a great interview, and he seemed like a genuinely nice person. He'll be terribly missed.

The price of freedom

Tyler Cowen has some perceptive comments on my posts on financial regulation. As he says, the social cost of leverage is higher than the private cost, so regulation makes sense. But there are limits to this observation. The social cost of my murder is probably higher than the private cost too, but I nonetheless have all the incentive I need to avoid it. It's probably better to ensure that the private cost of over-levering is very high than to develop ex-ante regulation to prevent it.

Is it high enough now? Well, the CEO's of Merrill and Bear are out, but the CEO of Lehman is still in. Yes, they are still rich, but at that level of performance, the money is not important of itself; it is a way of keeping score. How much money would compensate Paul Krugman for being drummed out of his profession in disgrace?

Just a fraction . . .

Winterspeak, meanwhile, responds to my post on duration-matched banking:

1. It would involve a massive, massive credit contraction. Hello, Great Depression.

2. Actually matching pool credit to particular loans would be a much more expensive business than the current banking system.

3. The expansion of credit has historically enabled a lot of things we like, such as homeownership and entrepreneurship.

4. How many people want to pay the bank to hold onto their money?

5. A smaller credit system will not ultimately prevent inflation/deflation. Without interest bearing accounts, savings become a wasting asset.

6. To the extent that it does prevent inflation, this is not necessarily a good thing--a little inflation greases the labor market, mitigating the effects of demand shocks.

1. It sure would. That said, the US$ has lost over 90% of its value in just three generations, and if that's a feature of the system, how great is that system?

2. Matching pool credit would be more expensive than maturity mismatched accounting as you would switch to, essentially, a multiple year cash accounting system. Other costs would be lower though -- no more FDIC. Other costs would be much lower, remember the US taxpayer is on the hook for almost $1T (yes, T) shoring up bad housing loans and the shadow banking system via recent Treasury and FNMA intervention.

3. Entrepreneurship would go on unimpeded. Remember, VC funding (a key driver of entrepreneurship) *is* maturity matched. Speculation would be less well supported though, and that is a feature, not a bug.

4. Suppose money did not lose value such that it became near worthless in three generations? Suppose you were hiring someone to protect gold? If we lived in a world of mild deflation (zero currency dilution + technological improvement) then paying a modest fee to have our cash stashed someplace safe would be fine.

5. You are correct that a smaller credit system will not, in and of itself, impact inflation/deflation. Monetary dilution (or concentration) is what drives inflation/deflation. Credit is part of this, and a bank's ability to extend credit (print money) via brittle maturity mismatched instruments is certainly dilutive. But there is also the government's dilutive ability to run the presses, and that element is quite independent of whether maturity mismatching is allowed or not.

6. The standard line is that some inflation makes it easier to cut wages, which has beneficial impacts on the labor market. I used to believe this also, and I still think it has some truth. I also think that, in an environment of mild deflation, over time people would make their peace with nominal wage cuts in the face of demand shocks.

There is no such thing as a perfect system. The question is whether the current credit system is better than a system without fractional reserve banking. Observationally, societies without banks didn't have great capital systems, but of course, that generally involves societies at a low level of economic development, or Muslim countries.

On the specific points:

1. We both agree that while fractional reserve banking is the current vehicle of inflation, since the invention of the Federal Reserve that is more a matter of convenience than a necessity. If the government wanted to inflate the currency under a full-reserve system, it could simply run the printing presses. So I don't see that this objection holds. Moreover, I don't see why this is such a terrible thing. The Great Inflation of the 1970s was terrible, but the central bank is unlikely to let that happen again. A long, slow erosion of the dollar didn't do anyone much harm--financial assets are priced to cover the erosion, and non-financial assets generally rise along with the broader price index.

2. The bad housing loans are duration matched--they were all securitized. As long as trading firms need working capital, there will never be perfect duration matching in the financial system as a whole. In addition, the US taxpayer is not going to pay anything like $1 trillion; that would require every single borrower to default. The cost to the taxpayer is the default risk plus the opportunity cost of the funds; this is probably pretty small.

3. Lots of businesses get their start on credit cards, mortgages, and bank loans. Moreover, the VC pool of funds is "extra" money. Fractional reserve banking lets us tap the short money pool for longer term projects. Without it, there would be less funding for new businesses.

4. Psychologically, hiring someone to protect your gold is different from loaning it to them at a low interest rate. Many people would store their money in their homes, which would, among other things, up the returns to robbery.

5. We agree.

6. Look at the trouble even industries in deep trouble have securing nominal reductions in benefits, much less wages. Even collective bargaining agents accept plant closures rather than broader nominal wage cuts. Nominal wage cuts would also produce heavy political pressure for government interventions.

Mostly, it's simply not clear to me what the giant problem is that duration matching is supposed to solve. Over time, the banking system has produced a lot of growth and a great deal of convenience. The cost to the taxpayer has been pretty small--even the S&L Bailout had a relatively minor effect on real growth. If it ain't broke, don't destroy it.

One site to rule them all

Suddenly, I've begun to appreciate the genius of Amazon's digital media strategy. With a Kindle, a TiVo set up for Amazon Unbox videos, and a sizeable MP3 downloading habit, I've used pretty much all their download services. And today I just realized that I have a central media library, where all the books, movies, television shows, and music I've purchased are stored. If I lose anything, I can re-download from their central server (unlike iTunes, which made me buy again). I can retrieve them through the device, or push them from Amazon.

The convenience of the thing is already a big selling point over places like Netflix (though with the selection still somewhat skimpy, I'm holding onto the subscription). The lack of DRM is a big advantage over iTunes. But the central storage is a killer app. It doesn't cost Amazon much--they only need one copy on their servers--but it saves me a hell of a lot of room and annoyance in arranging backups. And being able to browse your whole library in one place--as well as share it with others--is pretty damn useful.

Amazon still has a ways to go on accumulating content, but that seems like their smallest challenge, given their already powerful distribution relationships. The other stuff needs some UI tweaks, but it's already basically there. This may save TiVo. And force Apple to step up their game.

The singular of "headline news story" is not "data"

Alex Tabarrok catches Paul Krugman making an ass out of u and me both.

The color of money

Often, people who favor a policy change will claim that this change has no cost, because the existing policy doesn't work anyway. Opponents of torture claim that it never produces usable intelligence; opponents of high taxes claim that they don't raise any additional revenue.

Usually, these claims are ultra-premium high-test piffle. However, I am happy to report that in this case, I think I actually can make such a claim:

When we approached the agency we offered to pay the full fee and take whatever baby came our way. The social workers told us that we had to choose a program and that given that we were open to “any race,” we would be placed with a black child because there were fewer waiting parents in that program.

“You may as well get the fee break,” one told us. “Because if you are open to adopting a black baby, you will get a black baby.”

"Black babies are worth less than white babies" is a signal that society shouldn't send. Luckily, it doesn't have to. The main cost of adopting a healthy American baby of any race is non-financial; it is the queue. A couple determined to have a white baby will wait years. Babies of other races are in bigger supply, a side effect of black poverty and white affluence. It's unlikely that lower fees result in much shift in peoples' willingness to adopt transracially, so eliminating the fee break would have little cost.

On the other hand, getting rid of the fees entirely would probably be a good idea. If we want to take more money from affluent people, we should do so through the progressive income tax, not through charging people for the privilege of adopting babies that the state would otherwise have to care for. And there's no reason to set up financial barriers to adoption by loving parents of limited means.

Wrong questions

Zimbardo makes another interesting flip point. We often hear about the banality of evil, but this also means that heroism is banal. Disobeying evil orders is not something that requires special, amazing personal characteristics; it simply requires a willingness to honestly attempt to assess what the right thing to do is, and the will to do it even when everyone else is going the other way.

Will Wilkinson, meanwhile, points out that our very attitude about evil is something of an anomaly. In his amazing book, The Elusive Quest for Growth, William Easterly points out that development groups usually ask the wrong question: Why are people (or countries) poor? Poverty is the normal state of humanity. It is our current wealth that is an amazing anomaly.

Similarly, why do people do horrible violent things is perhaps the wrong question. Brutality is pretty much the norm for most of human history; as we've gotten richer, we've gotten less violent in all sorts of ways--we've stamped out (mostly) once common practices like infanticide, torture, wife beating, and the stoning of adulterers. Hunter gatherers are vastly more likely to die from homicide than people living in the developed world. Goodness is, in some sense, a luxury good. The most valuable luxury good we have.

Oh, the humanity

We often hear that in order to wreak evil, we have to dehumanize the enemy--hence the political propaganda that painted the Japanese and Germans as inherently degraded races, fundamentally different from and less moral than ourselves. Zimbardo, however, makes an interesting point: in order to do evil, we also have to dehumanize ourselves. He points to research showing that warriors in tribes that kill, mutilate, and torture their opponents almost all change their appearance substantially before they go into battle. Tribes where the warriors go into battle in their day clothes, so to speak, are considerably gentler.

There are a lot of ways to depersonalize the relationship between attacker and victim. In experiments, people who are anonymous are more willing to administer aggressive treatment, such as electric shocks, to "victims". Another way is to disappear into the group. That's why there are firing squads, rather than a single bullet to the head. When you collectively commit atrocities, as the Germans did under the Nazi rule, it is easy not to think about what you are authorizing. The camps, after all, are very far away. And you are only one one-millionth of the decision to send Jews and Gypsies there.

Update One of the interesting things that I meant to mention, but didn't, is that there is one way of predicting which groups will succeed in Vernon Smith's cooperation experiments: the groups that talk to each other cooperate. The experiments are done on computers with a chat system. People who talk a lot, especially random chit chat, are much more likely to cooperate with each other.

More on evil

I think that perhaps one of the things that makes us believe that the problem is "bad apples" rather than the situation is that problematic situations don't always produce problematic behaviors. Vernon Smith's team is doing fascinating experiments on the emergence of cooperative behavior and property rights in anarchic systems. It turns out that in most of these systems, there are two possible equilibria: cooperative systems in which everyone gets richer, and systems that stay autarkic, where people stay poor. There's not any particular way of predicting in advance which groups will succeed, no particular awesome people who will obviously make things work. Instead, the outcomes emerge from the interactions between people in the various groups. But even though some groups do develop cooperation, the initial lack of cooperative rules is a "bad" situation--many groups fail to develop cooperative systems.

The fact that some groups succeed and some fail, though, focuses us on the characteristics of the people in the group, rather than the context in which the group operates. Yet in Zimbardo's famous prison experiment, the students were selected for their apparent healthiness on psychological tests, and the researchers decided which would be prisoners, and which guards, by flipping a coin.

A herd, not a pack

I'm at a Cato talk by Philip Zimbardo, who has a new book out called The Lucifer Effect on the psychology of evil. He has just finished showing pictures of Abu Ghraib, which are horrifying. The really horrifying thing is that my first instinct is not to weep, but to laugh, in the same way that I wanted to laugh when I first learned about slavery. The idea of owning another human being is so fundamentally repellant that it sounds like a joke--no one could possibly really think that this is okay. Similarly, my brain refuses to believe at first that the photographs are real. I can't even imagine how you would think up the idea of forcing prisoners to get into a naked pyramid, much less actually execute it, so the photos feel like some sort of elaborate internet hoax, showcasing the wacky imagination of some crazy prankster.

Then the rational part of my brain says "No, really, American soldiers did this" and I feel physically sick.

This all sounds very morally superior. The point of Zimbardo's lecture, of course, is that even though I can't imagine even imagining these things, much less doing them, these things were nonetheless done. And probably done by ordinary people who did not, in their ordinary lives, evince any particular sociopathic tendencies. Zimbardo says that when we asked of Abu Ghraib "Who were the bad apples?" we were begging the question--assuming that the problem was the people and not the system. Or rather, the situation. If you give people a terrible amount of power over others, you need strong safeguards to keep that power from being abused.

We all sort of believe that we'd have been hiding Jews in our basement during the Holocaust. But of course we have never been afraid that our government would put us in a dungeon and rip our fingernails out while sending our families off to forced labor camps. Worse than that, most people probably didn't even go along because they were afraid. They went along because everyone around them seemed to think it was all right.

Wine whine

A propos of yesterday's post on kosher wine, a reader pointed me to this article on the Olive Garden's attempt to increase its wine profits:

The present purpose of the Olive Garden is to sell you their wine. That's it. The food and the commercials exist to get you there to sell you wine. The chairs are there so you have a place to sit while you buy their wine. The tables are there so the wine has a place to be. The air-conditioner is there so the wine doesn't go bad. (They don't want the wine to go bad, because they would sell less. If it still sold, they wouldn't care if it went bad. The point is to get you to buy it.)

I don't know why a fairly inviting restaurant chain chose to transform itself to a hard-sell restricted-selection liquor store. Perhaps the "kindly grandpa" in the commercials owns a winery and is Connected. Or, more likely, this conversation took place:
CEO of DARDEN RESTAURANTS: Things are going well. Our "Red Lobster" restaurants are doing well. Our "Bahama Breeze" restaurants allow people to experience the delights of visiting the Caribbean without having to worry about interacting with Caribbean people. And our "Olive Gardens" are successfully matching a dinner-house concept against the independently-owned restaurants that used to be the mainstay of Italian dining. But if only we could make more money...

GUY WITH MBA: Well, you have a huge mark up on your wine. Right now you have a bunch of customers who will never buy wine. You can't do much about them. You have a bunch of customers who will order wine no matter what, because they like it. We are fine on that front. But there are a few people who are so incredibly suggestible and stupid, that they wouldn't normally buy wine, but they will if you badger them about it. So I say that you change your restaurants from a "pleasant dining experience" to an "annoying as bugfuck we will get you to buy our god damn wine sellfest." You may make some more money that way.

CEO of DARDEN RESTAURANTS: Okay.

I have an acquaintance who is a serious alcoholic. As soon as you walk in the door, he is waving a bottle at you, trying to get you to have a drink with him so he has an excuse to have several. Even at his worst he is not as obnoxious as the Olive Garden is. As I said, I am not a good enough writer to properly convey the cheesy hard-sell atmosphere of the new Olive Garden.

Oh, Zimbabwe

Mugabe is back to detaining opposition party officials. This seems like an actually hopeful sign--his electoral prospects must be pretty grim.

Egotistical bias

Alex Tabarrok nails the problem with Dani Rodrik's post on why people oppose globalization. Rodrik says:

Suppose that I am an experimental psychologist instead of an economist and the person Harvard hires in my place is someone who has accumulated a long vita by virtue of not having to abide by human subjects review standards. (You can find out a lot about human behavior through torture.) Would I not feel treated unfairly? You bet I would.

The international trade counterpart of this hypothetical is the worker who loses his job because his company decides to move to a country where, say, labor rights are routinely violated. So the "us" and "them" characterization that Tyler attributes to irrational nativism perhaps has more to do with the absence of a common set of international rules on labor standards, environment, consumer safety, and so on.

By overlooking the problems created by trade in instances where regulatory arbitrage does play an important role, we miss the opportunity to celebrate the kind of globalization where such arbitrage doesn't play a role. The latter type of trade probably constitutes the bulk of world trade. But because economists do not make this important distinction, they have no language or ability with which they can respond appropriately to the uneasiness out there--except for calling it irrational.

Alex responds:

Rodrik has a very Ivory-tower view of what people care about. Rodrik may be upset that people in other countries have poor on-the-job safety but (for the most part) workers who lose their jobs to foreigners really don't give a damn. What U.S. workers are upset about is losing their job and if asked to name the problem the U.S. worker will almost certainly say it's the low wages of foreigners not their poor working conditions. Moreover, the worker's diagnosis of the problem (problem to him or her that is) is correct and Rodrik's diagnosis is wrong. Why? Because higher safety standards in foreign countries would cause foreign wages to fall and thus would not much reduce competition from abroad, which is what the worker cares about. I assume that Rodrik knows this even if the worker does not.

Rodrik's deeper argument is also peculiar, especially for a liberal economist. A liberal economist should understand that for the most part labor, environmental and consumer safety standards are chosen not imposed (not always, of course, but for the most part in the long run). In the United States we have a lot of job safety because we are wealthy and are willing to pay for job safety with a reduction in our (already high) wages. In other words, Americans buy a lot of on-the-job safety for the same reasons we buy a lot of smoke alarms and DVD players. (OSHA has very little effect on job safety.) Job-safety is thus a choice Americans make about what to consume - we use some of our wealth to buy safety both at home and at work and some of our wealth to buy DVD players. Thus, to argue that we shouldn't trade with foreigners because they don't have the same job safety as Americans makes about as much sense as arguing that we shouldn't trade with foreigners because foreigners don't buy as many DVD players as Americans.

It is a vast, and pervasive, cognitive mistake to assume that people who agree with you (or disagree) do so on the same criteria that you care about. I have flirted with the idea that the World Bank should be abolished. But if so, I want it abolished because its institutional ossification has made it incapable of carrying out its mission, not because I believe, along with a certain class of right-wing extremists, that it is some sort of tool for the vast global conspiracy to destroy America. As Tyler points out, Americans were just as paranoid about Japanese competition. The problem is competition from foreigners, not embeddedness in an unfair system. Moreover, paranoia about globalization is growing, even though labor and environmental standards are getting better in most of those countries.

It is true that many people, especially labor unions, adopt the language of unfairness. But at least in my experience, they are more likely to complain about low wages than lack of union representation or local pollution. If the foreign workers got unions, OSHA, and stricter environmental standards, but wages fell to keep their work product competitive, how many people complaining about globalization would stop? Indeed, in the Rust Belt one does hear a fair amount of muttering about unfair competition from Alabama.

A blow to the permanent income hypothesis?

Retail sales jump as people spend their tax rebates. However, the rise is less impressive if you exclude gasoline.

Bring me the head of an investment banker!

Lehman has forced out its COO and CFO in the continuing fallout from the firm's massive losses. The CEO, however, still remains in place.

It's not theft, it's an homage

A friend spotted this on a journalism job list:

----------------------------------------------------------------------

Editor to Monitor Blogs for Dow Jones Newswires.
Location: Jersey City NJ

----------------------------------------------------------------------
Dow Jones Newswires is seeking an editor to join its equity markets
team and mine publishable scoops and intelligence from the world of
blogs. The successful candidate will be aggressive, self directed and
interested in blogs and their proprietors, but must also possess the
news judgment and high standards needed to separate the mean spirited
and the overly speculative from the insightful and the useful. The
editor's main responsibility will be funneling short, spirited and
well-written items into "Market Talk" - effectively Dow Jones
Newswires' running blog on corporate and market developments. There
will also be the opportunity to write about developments at prominent
blogs and trends in blogging.

"Is it just me," asks my friend, "or is Dow Jones advertising for someone whose job will be to steal blog posts?" Quick answer: yes. Only please to call it "research".

Why not force banks to duration match?

A popular solution for the credit crisis in right wing circles is forcing banks to duration match their assets and liabilities--i.e., do away with interest bearing demand deposits (aka savings and checking accounts). Why is this a bad idea?

1. It would involve a massive, massive credit contraction. Hello, Great Depression.

2. Actually matching pool credit to particular loans would be a much more expensive business than the current banking system.

3. The expansion of credit has historically enabled a lot of things we like, such as homeownership and entrepreneurship.

4. How many people want to pay the bank to hold onto their money?

5. A smaller credit system will not ultimately prevent inflation/deflation. Without interest bearing accounts, savings become a wasting asset.

6. To the extent that it does prevent inflation, this is not necessarily a good thing--a little inflation greases the labor market, mitigating the effects of demand shocks.

That smarts . . .

This piece from liberal arch-nemesis Matt Steinglass is fairly typical of the responses to my post on financial regulation:

The point of regulators is that they are different from investors because they approach markets as neutral arbiters, who don’t stand to profit from any proposed instrument. They counterbalance banks not because they are smarter than banks, but because they don’t stand to personally or organizationally make any money if an instrument turns out to generate money, so their assessments are not colored by the tint of hypothetical lucre. Of course banks’ desires (to roll around in piles of freshly minted bills) are partially counterposed by their fears of risk (ending up standing on the corner wearing a pickle barrel selling pencils), but that’s still not the same as being impartial and financially uninterested. Judges are not smarter than lawyers, and basketball referees are not smarter than players or coaches. They’re necessary not because they’re smarter but because they are unbiased.

It is my understanding that judges do, in fact, tend to be picked from the top of their profession, but leave that aside. This somewhat misunderstood what I was saying. The point is not really that regulators are dumber than bankers--though in fact, government salaries simply will not allow financial regulatory agencies to get top talent. The people there tend to be young, getting experience for the next job (often in the regulated industry); people who cannot get jobs in the private sector; and a handful of extremely committed idealists (or ideologues, as you prefer).

But assuming arguendo that the regulators are every bit as smart and well-trained as the analysts they regulate. This is adequate only for certain kinds of regulation: the kind where the goals of the regulators are fundamentally different from those of the regulated.

If they could get away with it, some companies would lie in their advertising or sell adulterated goods; we want regulators to catch them at it. Companies have an incentive to present an inaccurate picture of their financial well being to investors; that's what auditors are for. Depositors in an FDIC-insured bank have no incentive to check on whether the bank is sound, so we put regulators in charge of doing it for us.

But what happened in the markets was not a case of fraud. It was a case of the systemic mispricing of credit risk. More importantly, it was a case of the systemic mispricing of credit risk on the buy side: Bear Stearns didn't fail because it had originated too many dodgy securities, but because it had bought too many. The banks have just as much incentive to price risk correctly as the regulators do--probably more, actually, because the regulators are unlikely to get fired if they miss one. It's hard to make a clear case for managerial moral hazard as a result of the Bear Stearns bailout--they all lost their jobs.

The FDIC does a pretty good job at what it does--ensuring capital adequacy and providing for rapid and orderly wind-up of the affairs of insolvent banks. But commercial banking is relatively uncomplicated. Consider something like a proprietary derivative pricing model--how will a regulator deal with this? And how do you walk an institution with an active trading book through insolvency? The Fed basically dodged these questions by selling Bear to Morgan, which has the ability to maintain trading operations. You can't run a trading desk if every order has to go through the receiver.

So if we say "Give a regulatory body broad powers", we are inherently stipulating that the regulator will have a better risk pricing model than the banks do. As of now, however, no one has a good pricing model for these risks. The regulator will probably be more conservative than the banks--but what reason do we have to think that the regulator's conservatism will be closer to the ideal balance than whatever incentive the banks have to substitute beta for alpha? The socially optimal level of credit risk--even systemic credit risk--is very far from zero.

I guarantee that merely by writing this post, I will get at least one angry blogger or commenter ranting that I am a libertarian moron who doesn't understand the difference between PROFIT and POLITICS. Au contraire. Both are incentives that work well in some contexts, not in others. Political incentives are not a good way to organize, say, one's agricultural output. They are a very fine way to organize one's wars--or at least, better than the alternative.

You cannot simply assume a priori that regulatory incentives will be more socially optimal than the profit motive. Profit, in this case, a pretty strong motive for doing what we want them to do: avoiding catastrophic failures. That's why I think that a powerful regulatory body is only an unquestionable win if you have some reason to think that it will be smarter than the banks.

Financial tracking

This article on credit card debt self-help groups is interesting, and also, incredibly hilarious in parts:

Last month, 26-year-old accountant Shawanda Greene says she joined "Girls Just Wanna Have Funds," a recently created Washington, D.C., support group of mostly younger women. Ms. Greene's goal: to figure out why, despite an annual salary of $82,000, she had only $54 in her savings account.

The Girls kicked into action, encouraging Ms. Greene to track her spending. While some of her income was going to pay down debt, including $14,500 in student loans, Ms. Greene realized she was also spending too much on extras, like her $400 Cole Haan boots and her hungry boyfriend, who she says would consume much of her food when he came over. "Things were particularly bad when it came to produce," she says. "He'd eat like four tangerines at once....Sometimes I'd cut up some watermelon, pineapple and strawberries. He'd eat a good 75% of that."

So, Ms. Greene says she dumped him, after frequent arguments about grocery bills and other money matters. The former boyfriend, a 36-year-old engineer named Lindon Fairweather, says he shared grocery costs but acknowledges he did munch a lot of fruit at Ms. Greene's. "I'll eat more than four tangerines, absolutely....I can eat 18 mangoes in two days," he says. "That's just me."

I'm very much enjoying picturing the expression on his face when a reporter from the Wall Street Journal called him to check on his daily fruit consumption. But he must be a very easygoing man. If my boyfriend was counting the tangerines I consumed at his house--and putting them in the same mental basket as $400 shoes--he wouldn't have to worry about breaking up with me. I'd take care of the problem for him.

Kosher wine--it's not just a good idea. It's The Law.

One of the formative experiences of growing up in New York City is the abortive attempt to get drunk off filched Manischewitz. This is not actually possible, because the sugar coma gets you long before the alcohol does.

Apparently, all that is changing, however; with a lot of artful dodging, non-Jewish winemakers are producing high quality kosher wines that are supposed to be, in many cases, indistinguishable from non-kosher vintages.

I wonder if this won't lead to more extremely high-end kosher restaurants in New York. There are a lot of kosher restaurants in the city, but not really at the Lutece level. I have a theory that this is because high end restaurants don't make their money on the food, even though it's really expensive--ingredients and the intensive labor eat up the margin. Those restaurants cash in on the wine that accompanies the food, and without a lot of high end kosher vintages, that wasn't really possible.

Of course, the low number of Jewish alchoholics remains an obstacle to obscene wine profits. But as kosher wine hits the big time, I'd expect to see at least a few expensive kosher restaurants come into their own.

Out of touch

So it looks like I'm going to be living without a cell phone for a month. I can't find the damn thing, and since I'm going to buy an iPhone on July 11th, it doesn't make sense to replace it.

The experience has already been interesting. I'm working around the absence with Skype, IM, and Twitter, and a modest amount of piggybacking on friends cell phones by getting them to text other people.

It triggered and interesting conversation this morning with the ever-brilliant Tim Lee of Cato and Ars Technica, who is staying with me for a few days. The old landline networks were designed to be extremely robust and keep working during emergencies. The new technologies are nowhere near so reliable--the New York cell phone network was overloaded to the point of uselessness during both the blackout and 9/11 (not helped by the fact that most cell phone networks had big antennas perched on the roof of the World Trade Center). Even the internet, with its fault tolerant distributed architecture, is vulnerable, because so many people get their service through their cable provider, and until now no one has focused on making sure that people have uninterrupted access to Law and Order reruns during a crisis. Though perhaps we should. It certainly soothes me to know that at any hour of the day and night, I can see Sam Waterston using morally ambiguous coercive tactics to secure a conviction.

With so many people in my generation off the land line network, what happens to us in a big emergency? One possibility is that I have to wander around northwest DC making sure everyone I know is all right--even my Mom has Vonage rather than a traditional land line. On the other hand, the fact that we have so many channels of communication may actually make us better off--even when the WTC collapse had severed New York's major phone trunk, and the cell phone networks were out, email kept all my graduate school classmates in touch.

More thoughts on the cell-less existence as I have them.

Obamcainia

Ezra Klein and I are doing a dialogue this week at the New York Times on the campaign. The first installment, on McCain and Obama, is here.

Update Yes, I am an idiot. LA Times. It's so easy to get the two cities confused . . .

Two, four, six, eight . . . how we gonna regulate?

A number of readers have emailed me to ask what I thought of this:

Austan Goolsbee, an economics professor at the University of Chicago and one of Sen. Obama's closest advisers on economic issues, said the senator believed strongly in enhanced regulation of any financial institution that has access to the Fed's discount window.

"If you can borrow money from the U.S. taxpayer at a moment of crisis, that is a very sacred insurance policy underwritten by the U.S. taxpayer," said Mr. Goolsbee in an interview last week with Dow Jones Newswires. "We have the right to oversee anyone who is accessing that insurance policy."...

Mr. Goolsbee said that an Obama presidency would ensure that investment banks are regulated as closely as commercial banks.

Greg Mankiw asks: "Can an investment bank avoid such regulation if it promises never to use the discount window? Or is this insurance-regulation combo a mandate?"

I'm not sure that's the right question. As Matt pointed out yesterday

My first read on this was that a "promise" would be no good. A bank can't "promise" not to fail. Nor can a bank promise not to be bailed out if it does fail. A bailout, when justified, isn't a favor you do for the bank. It's something you do because it's necessary to avoid larger negative consequences throughout the economy. So a promise to avoid the discount window would be valueless. But if the public is going to need to guarantee that financial institutions that grow "too big to fail" don't fail, then the public is going to need to regulate those institutions.

Bear Stearns wasn't bailed out for the good of Bear Stearns; it was bailed out because it was the counterparty to vast numbers of trades, and the Fed was worried that markets would lock up. No bank can credibly commit not require government assistance, so in some sense, they're gambling with our money. Once you take the King's Shilling, you also take the King's orders.

The question I have is this: what regulations? Over the past few months, I have been to a dozen or more events sponsored by various think tanks that together represent most of the American ideological spectrum. Most of them think that investment banks need "more regulation"; it's a pretty strong consensus. The problem is, there are precious few ideas as to what that regulation might entail.

Here is, as far as I can tell, a comprehensive list of all the regulations that most economists could probably agree to:

1) Increased capital requirements for investment banks
2) Cracking down on fraud in the mortgage brokerage market
3) Less off-balance sheet activity
4) Requiring originators to keep a piece of the loans they package

The problem is, it's not really very likely that these four would have prevented the current crisis. If you borrow short and lend long--and all banking is some variant on this--you will at least occasionally be caught out. There's no real evidence that the problem in the housing market was supply-side, rather than demand-side, fraud. Bear Stearns wasn't taken down by its SIVs. And it's not really clear that the originators would have behaved much differently had they been keeping a piece of the loans they packaged.

The housing bubble created a powerful illusion: that low income lenders with bad credit were actually quite profitable to lend to. That's because the rising housing prices allowed borrowers in trouble to refinance rather than default. There's no reason to think that the originators were any less deluded about the credit risks than the investors. The no-doc, option and negative amortization ARMS were not a secret; everyone knew what was going on. People bought mortgage bonds anyway in what now looks like a stunning piece of idiocy.

When I try to get people to specify, beyond those four rather anodyne suggestions, we should do, there's a lot of hemming and hawing. Even the left-wing think tankers sort of look at their shoes and whisper "We need a better regulator". At which point even the left-wing journalists in the audience start asking "Where are we going to find regulators who understand this better than the guys at Goldman Sachs--and are willing to work for, say, a GS-13 salary?" The only people who confidently state that they have a surefire master plan to fix the problem are, not to put too fine a point on it, morons with very limited understanding of financial markets. These people generally start by talking about how the Bear Stearns crisis can really be traced back to the repeal of Glass-Steagall, then almost immediately reveal that they know nothing of Glass-Steagall other than its name.

I have tried all sorts of ways to ask these questions. Nor am I engaged in "libertarian gotcha"; though the game is hours of fun, I am not actually against better or even more regulation of investment banks*. I just want to know what sort of regulation we are going to have; I am against doing something for the sake of doing something.

Which financial instruments should be illegal, I ask, but few are willing to name one. How should we arrange the orderly winding-down of an investment bank with complicated business lines and massive counterparty exposure? Rueful shrugs. What business lines should investment banks be forced to divest? Ummm . . . . Should we limit the percentage of a market that one bank can control, at the risk of lowering liquidity in ordinary times? Welllllllllll . . . Should banks have broader distribution of their capital across business lines, or fewer business lines, and is either even possible to arrange without financial disaster . . . good question. Do we give the regulator broad powers, to make them more flexible, or narrow powers, to make them more accountable? Let me think about that . . .

But the fundamental question that no one ever answers is simply "How will the regulatory agency be any smarter than the banks?" The political process and existing regulatory infrastructure did about as well at anticipating and preventing the current problems as the banking system did. As I say above, this question usually gets asked by liberal journalists. And its usually answered by an honest and intelligent liberal policy wonk forthrightly saying, in essence, "I have no idea."

Now, it's certainly very possible that Austan Goolsbee has answers to at least some of these questions; he's forgotten more about finance than I'll ever know. But I'd really like to hear what they are.

* Though I am slightly taken aback by the fact that it is the already fairly heavily-regulated investment banks, rather than basically unregulated hedge funds, that have caused the problems.

Give me a big enough lever . . .

The front page of the Wall Street Journal today is chock a block with good stories, so you're getting posts on all of them.

Lehman reports a big loss, tries to raise money Just when you thought it was safe to go back in the markets.

Lehman's larger-than-expected loss was accompanied, as anticipated, by word that the firm will seek to raise $6 billion in fresh capital. On Wall Street, the loss underscored the challenges Lehman and its rivals must face as they dramatically reduce their reliance on borrowed money. The use of debt, which helped fuel record profits when markets were booming but also led to excessive risk-taking, has come back to haunt them.

As Lehman and other securities firms now curtail their use of borrowed cash, it will be much harder for them to generate the kind of profit growth investors had become accustomed to.

This inevitably puts me in mind of a wonderful passage from John Kenneth Galbraith's A Short History of Financial Euphoria, which I highly recommend, if for no other reason than the amusing stories. Galbraith notes:

Uniformly in all such events, there is the thought that there is something new in the world. It can be, as we shall see, one of many things. In 17th-century Europe it was the arrival of tulips in Western Europe . . . later, it was the seeming wonders of the joint stock company, now known as the corporation. More recently, in the United States, prior to the Great Crash of 1987 (often referred to more benignly as a meltdown) it was the accomodation of markets to the confident, free-market vision of Ronald Reagan with the companion release of the economy from the heavy hand of government and the associated taxes, antitrust enforcement, and regulation. Contributing was the rediscovery, as reliably as before, of leverage . . .

As to new financial innovation, however, experience establishes a firm rule, and on few economic matters is understanding more important, or frequently, more slight. The rule is that financial operations do not lend themselves to innovation. What is recurrently so described and celebrated is, without exception, a small variation on an established design, one that owes its distinctive character to the aforementioned brevity of financial memory. The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version. All financial innovation involves, in one form or another, the creation of debt, secured to a greater or lesser adequacy by real assets. This was true of one of the earliest seeming marvels: when banks discovered that they could print bank notes and issue them to borrowers in excess of the hard-money deposits in the banks' strong rooms. There was no seeming limit to the amount of the debt that could thus be leveraged on a given volume of hard cash. A wonderful thing. The limit became apparent, however, when some alarming news, perhaps the extent of the leverage itself, caused too many of the original depositors to want their money at the same time. All subsequent financial innovation has involved similar debt creation leveraged against more limited assets with only modifications in earlier design. All crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.

This is, as is often true of Galbraith, slightly too pat. But there's a pretty deep truth in his assessment.

New iPhone

With GPS, 16GB and a lower price point. In stores July 11th. Time to find my cell phone.

Safety dog

Unfortunately, my dog is more likely to lick a burglar to death. But hopefully articles like this will scare them away from mastiff-ridden homes before they find that out.

The new new new thing

James Joyner has excellent thoughts on the evolution of the blogosphere. I've now been blogging for almost seven years, and the blog world is certainly a differnt place than it was when I started. In some ways it was a lot more fun when it was smaller (and friendlier) place. But thinking about all the great blogs that have started since then, I can't miss it.

Mr. Warhol, I'm ready for my close-up

Chalk up another success for Chris Anderson's The Long Tail. Any doubts I might have had about this theory (not that I would ever dare doubt Chris Anderson!) were utterly dispelled when I realized that the internet is the reason I have, for the first time in my life, access to pants made for tall women. There aren't enough of us almost anywhere to support stocking a Banana Republic or a J. Crew with long pants, but on the internet, We Are Legion. The internet is the Freak Liberation Front.

The latest piece of long-tailed brilliance is from the Tribeca Film Institute: a website called re:frame. The idea is to provide an aggregation place for independent and alternative filmmakers, making distribution of their stuff (one light-heartedly hopes) somewhat commercially viable. As a minor film buff with a penchant for falling hopelessly in love with things that are a mite hard to get, this is lovely, lovely news.

Commodity meat

Erik Marcus has been podcasting Oprah's 21-day vegan challenge. Today's segment is on staying motivated, and commodity animal products. After a little while, it's really not that hard to stay motivated: the non-vegan food is out of your house, your friends know, and you have a stable of vegan restaurants where you can get good food. (Particularly recommend, in the vicinity of U Street, Queen Makeba Ethiopian, Rice (thai food), Asylum, Sticky Fingers bakery, and Meiwah chinese. But there is a hump when the novelty has worn off, but the routine is not yet comfortable. That's when a little motivation helps a lot.

Environment: what can we do?

The great, great Tom Lee on the ineffable problems of trying to lower your environmental footprint:

Doing this stuff is impossibly difficult, as is amply demonstrated every time someone tries to figure out the comparatively narrowly-defined problem of biofuels' net energy balance. This is the first problem: literally every human endeavor consumes energy — and of course, it's very hard to reduce any action in civilization to just one step. It's tough to figure out how much energy something took, very tough to accurately guess, and nearly impossible to know how much carbon it took to generate that energy.

This came up when I was out in San Francisco for work (a trip that was unambiguously environmentally awful, I'll be the first to admit). Over beers Michael told a story about a passenger on his flight jealously guarding his trash, refusing to surrender it to the flight attendants unless they promised it would be recycled.

But it's not that easy, right? Last I heard, metal is unambiguously beneficial to recycle; glass takes more energy to recycle than it's worth; and plastic — well, who knows? It probably depends on the type of plastic and where the recycling plant is.

Or take the great coffee cup debate: if a given ceramic mug is likely to get less than a thousand uses, you're better off drinking from a styrofoam cup. Probably, anyway. I'm sure it depends on your dishwasher, or its settings. Or if you don't have a dishwasher. Or the detergent you buy. And probably how far you are from the water pumping station, right? Maybe how much rain your area gets, or has gotten this year, or what floor you live on.

Which is the other problem: as individuals it seems like we all pretty much live within the margin of error on these questions. It adds up over the population, of course, but for one person it's nearly impossible to know what the right thing to do is. There are unambiguous things, of course: don't leave the water running when you brush your teeth, and minimize electricity use, and don't leave your car idling. Although sometimes even those wind up ambiguous: I've heard that restarting a car takes about as much gas as running it for a minute.

But then, I probably heard that from someplace like Wired. So who knows? This is the real problem, the meta-problem: while the only people with an incentive to really figure this out are academics, the only people with an incentive to talk about it are those who sell ad space to people targeting an audience that likes green content or an audience that likes counterintuitive content (both detestable in their own ways). And the press is more than comfortable enough with their anecdotes and innumeracy to continue publishing hunches they had while shopping at Whole Foods, as if a half-day's worth of googling and algebra was sufficient to untangle the world's unimaginably complicated economic and energy-use web (a pursuit that I admit I've indulged in myself — but at least nobody paid me for it).

Oh, no, seasoned readers are already saying to themselves; I see a Hayek fit coming. Yes, my friends, you are right, like those dogs that can sense an epileptic seizure minutes before it actually appears. It is too late to force the pills down my throat; you'll just have to hang on and hope I don't hurt myself. Hayek on why prices are so, so great compared to command-and-control:

Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coördinate the separate actions of different people in the same way as subjective values help the individual to coördinate the parts of his plan. It is worth contemplating for a moment a very simple and commonplace instance of the action of the price system to see what precisely it accomplishes. Assume that somewhere in the world a new opportunity for the use of some raw material, say, tin, has arisen, or that one of the sources of supply of tin has been eliminated. It does not matter for our purpose—and it is very significant that it does not matter—which of these two causes has made tin more scarce. All that the users of tin need to know is that some of the tin they used to consume is now more profitably employed elsewhere and that, in consequence, they must economize tin. There is no need for the great majority of them even to know where the more urgent need has arisen, or in favor of what other needs they ought to husband the supply. If only some of them know directly of the new demand, and switch resources over to it, and if the people who are aware of the new gap thus created in turn fill it from still other sources, the effect will rapidly spread throughout the whole economic system and influence not only all the uses of tin but also those of its substitutes and the substitutes of these substitutes, the supply of all the things made of tin, and their substitutes, and so on; and all his without the great majority of those instrumental in bringing about these substitutions knowing anything at all about the original cause of these changes. The whole acts as one market, not because any of its members survey the whole field, but because their limited individual fields of vision sufficiently overlap so that through many intermediaries the relevant information is communicated to all. The mere fact that there is one price for any commodity—or rather that local prices are connected in a manner determined by the cost of transport, etc.—brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process.

This, of course, leaves us with the problem of setting a price. But as long as we are sure--and I think we're pretty sure--that the price of greenhouse emissions ought to be higher than it is, a modest start will be adding valuable new information to a system that is very good at handling information.

But individual efforts are probably quixotic, and even more centralized regulatory efforts are doomed to failure. Organic is not a net energy/environment saver, and neither is a carbon trading regime that allows widespread use of offsets. Eating local seems to be a bust (only a few percent of the total energy emissions come from transporting the food to its final resting place.) Private offsets are even stupider than government offsets. This is one of those rare moments when it's probably best for the government to do something--as long as that something is raising the price of carbon--rather than rely on individual guesses.

There is one thing you can do, if you care about global warming: eat lower on the food chain. More plants and less meat is a pretty sure-fire winner, because it takes so many pounds of grain to make a pound of meat, and because animal methane is itself a significant source of greenhouse gasses. But will you do it? In most cases, no you will not, because chicken legs are tasty. (Or at least, they were before I apparently lost the enzymes to digest meat). About all you can do right now is not complain so much about gas prices.

Periodic facebook reminder

I have, at this moment, 155 outstanding friend requests. It's not you, it's me. I use facebook to conduct my private life, and so I restrict membership to those who are nominally a part of it. If I haven't met you, I won't friend you, not because I don't love you, but because thanks to three different schools I already have 200 facebook friends and I can't keep track of any more.

What do you do with your old iPhone?

Well, today's the day that Jobs is supposed to unleash his new creation on the world--and not a moment too soon, as I seem to have lost my old cell phone. For those who are still in full possession, however, this presents a problem, at least if they are iPhone owners. The new phone will have better data speeds, probably better call quality, and several new features like GPS. This suddenly renders the price of their old phones--well, probably you can still trade it in that currency composed entirely of gigantic stones.

The word on the street from my shadowy hipster associates is that the thing to do is jailbreak the phone and then ebay it internationally to some country where the iPhone is not yet sold through a carrier. In those fabled lands, a jailbroken iPhone 1.0 is probably worth almost as much as you paid for it.

Election blues

Listening to Hillary's speech, and was feeling sorry for her until she complained about sexism. Even if it's true, Obama ran a very strong campaign, and it's churlish to say that he just got it because he was a man, especially when he has his own considerable barrier of prejudice to overcome. Meanwhile, the long awaited Democratic Primary Memorial Mixtape.

Queen - We Will Rock You
Frankie Valli & The Four Seasons - Big Girls Don't Cry
Julie Andrews - I Feel Pretty
James Taylor - Carolina In My Mind
Radiohead - Electioneering
Ethel Merman - Anything You Can Do (I Can Do Better)
The White Stripes - Black Math
Annie Lennox - Walking On Broken Glass
Dan Hicks & The Hot Licks - How Can I Miss You When You Won't Go Away
Gloria Gaynor - I Will Survive
Queen - We Are The Champions
Paul McCartney & Stevie Wonder - Ebony And Ivory

Where can I trade my blood for oil?

Oil hit nearly $140 a barrel today. Was it really only a few years ago that I was writing articles for The Economist questioning whether oil could stay above $40 a barrel for any length of time?

Unsurprisingly, the Dow did not like this news; it closed down nearly 400 points today, thanks to the combined oil/jobs whammy. Tonight we're going to party like it's 1979 . . .

Someone just emailed "If I had even an ounce of spine, I'd be shorting oil like crazy now." My reply: "The market can stay irrational longer than you can stay solvent." At these prices, though, we should be seeing broader exploitation of new sources like shale oil, the Alberta tar sands, and Venezuela's ample supply of oil-like sludge. They are not nearly as energy efficient as Saudi crude--the ratio of energy expended to energy produced is something like 1:2 or 1:3 on these types of projects. But at $140 a barrel, the finances look pretty appealing.

Where have all the Amazon . . .

Amazon's site is down.

TAP, hacked

I fully condemn this. While laughing so hard that I nearly fell off my couch.

In theory, theory is the same as practice. In practice, it's different . . .

Apropos of McCain's apparent vendetta against Amtrak, Matt says:

That's just one piece of the larger, somewhat odd, McCain puzzle on climate change. He's adopted a cap-and-trade proposal, but not really one that's far-reaching enough according to most scientists. And he doesn't flesh out his vision of a low carbon America very much -- there's nothing about increased transit ridership or any other explanation of how emissions will be reduced. Nothing, that is, except a love of nuclear power.

I'm still digging into the two proposals, but on first glance, the major differences between them are more apparent than actual. The extent of the political compromise required is going to lock such a scheme into a pretty narrow range, no matter who pushes it. Obama's probably more committed to cap-and-trade, but in the "Only Nixon can go to China" sense, McCain probably would be able to push his plan through with fewer changes.

More summer games

A lunchtime conversation has generated interest in discovering the winners in the following categories:

1) Worst well-regarded film

2) Most overhyped film (note that this is slightly different from above; the first measures the absolute badness level, while the second measures the delta between reputation and actual quality)

3) Worst film to win a best picture Oscar

4) Most disappointing film (ie should have been good but wasn't--Godfather III, Phantom Menace, the latest Indiana Jones atrocity)

5) Worst movie, full stop. (Must have been a major motion picture release--no direct-to-video, or film festival torture tactics, please)

6) Worst movie with good direction (ie terrible script, awful acting, producer interference, etc)

7) Biggest unknown treasure

Currently I have only a nominee for the last category: The Americanization of Emily, written by Paddy Chayefsky and starring James Garner and Julie Andrews.

Bonus discussion: is it time to declare a moratorium on DVD buying pending switchover to Blu-Ray, as one friend has already done, and if so, should it apply to things like 1930's films or grainy made-in-Italy postwar black and white flicks?

Morbid echoes

Speaking of political assassinations, I'm actually surprised that I haven't heard more fears about Barack Obama. With his echoes of both MLK and Robert F. Kennedy, it's not exactly a far-fetched worry, and we're a little overdue for a lone wacko with a gun. I know the Secret Service is very good at these things, but long distance weapons keep getting better.

What happens if Obama (or McCain) dies before the convention? What about the election? There are all sorts of political implications--if it's before the convention, do you go with Hillary or the VP selectee? Would Obama's supporters rally around her? Would voters chuck a McCain sympathy vote to his second in command?

Let's hope we don't find out.

Cool question

Survival tips for those who find themselves suddenly transported back to 1000. Mine: your biggest comparative advantage is the ability to read and write, and your knowledge of modern sanitation techniques. However, given that you don't speak the language, or know how to do any of the basic manual labor careers open to you, you may have a hard time surviving long enough to employ these. Do not be tempted to do nifty things with modern technology, as this will probably cause people to suspect you are a witch or similar. Go to church regularly and mumble in fake Latin; no one will know if you're getting it wrong anyway. Do not walk into a village until you have managed to acquire some local clothes. Don't sleep with anyone. And lay off the honey; modern dentistry is a millenium away.

Dude, where's my job?

What to say about the stunning jump in the nation's unemployment figure from 5% to 5.5% in one month? Well, the most appropriate sentiment cannot actually be printed on a family blog. We will suffice to note that this is doubleplus ungood.

However, it's not quite as bad as it sounds, because this is the season when all the young people come onto the job market; the number of lost jobs reported was around 275,00, but about 850,000 people entered the workforce. And the payroll survey shows a rather less dramatic decline of 50,000, though previous monthly figures were also revised.

Still, not good news; those people entering the workforce kind of need jobs. I imagine John McCain will be looking for more ways to substantively distance himself from Bush's economic policies. Let's hope more pharma-bashing isn't the first thing that springs to mind.

It's in the constitution . . .

A majority of political activists, but libertarians especially, have the habit of labeling any law they think is really bad as "unconstitutional". I tried to avoid that sort of thing with the DC police cordon, because that's not really the point: lots of morally outrageous things are legal, and some laws are moral outrages.

But Orin Kerr at Volokh argues that in fact, the law isn't constitutional under current reading:

The Post story suggests that DC is relying on the Maxwell case as authority for legality of the checkpoint. And if the law were today what it was in 1996, I would say their legal case is certainly plausible.

The difficulty is that four years after Maxwell, the Supreme Court took a different turn in its cases in City of Indianapolis v. Edmond, 531 U.S. 32 (2000). In Edmond, the City of Indianapolis set up vecicle checkpoints to search for drugs. The city was worried that people were bringing narcotics into the city, and they figured that they could set up reasonable checkpoints to deal with the drug problem much like the earlier checkpoints had dealt with the problems of drunk driving and immigration. The Supreme Court disagreed, concluding that the check points were unconstitutional because the government interest was a traditional law enforcement interest rather than something else like public safety.

Even if it is constitutional, it's a rotten idea. But if it isn't, even more reason it should be scrapped.

Don't cry for me, Zimbabwe

The more you tighten your grip, Tarkin, the more star systems will slip through your fingers. ~ Princess Leia

Tsvangirai has apparently been released from custody with no word on why he was arrested in the first place. Mugabe is now limiting himself to a more tasteful and restrained strategy of shutting down opposition rallies and making not-really veiled threats on Tsvangirai's life if he continues to campaign.

This seems very likely to backfire if the election is actually run fairly. The regime must be getting desperate indeed--or, they're just actually planning to take Tsvangirai's life.

It's actually pretty stunning when you think about what an immense and novel achievement peaceful political opposition is.

Odd side note

The IMDB memorable quotes page for Star Wars consists of, basically, the entire movie.

Okay, new best line of the day

Move over, Paul Krugman. My former co-blogger describes Boston's City Hall as "a poured-concrete Vogon love poem".

Update A commenter suggests that the new Scottish Parliament building makes Boston's city hall look like Browning. We report, you decide:

Scottish Parliament building

Boston's City Hall

Railroaded

The campaign policy blogging starts now: apparently, McCain wants to shut down Amtrak. Liberals are predictibly (and understandably) outraged. I'm not sure, however, that this is such a terrible idea, even environmentally. The lines that actually run at a profit--those in the Virginia-Massachussetts corridor--would still be profitable, and presumably operated by some private company. The other lines are a mixed bag, environmentally; it isn't really good for the environment to run trains at low capacity. And the federal government, because of the EIS process, other procedural barriers, and a great deal of logrolling, has so far not succeeded in making sensible upgrades to the system. The Acela was announced in 1994, actually went live six years later despite the really rather minor infrastructure improvements required, and at lavish expense now gets passengers to Boston one half-hour quicker in slightly comfier seats.

Moreover, if oil prices stay high, the math changes substantially for passenger rail, making new routes more profitable. People will probably never take the train en masse from New York to Los Angeles, but a direct train from New York to Chicago could start looking good, particularly when you factor in the drive to out-of-the way airports, delays, and time spent removing your shoes in security lines.

America's freight rail system, while it needs a lot of work, is world-class. Its passenger rail should be too. But it's so far proven pretty much impossible for the government to make it that way--and not merely because we don't have enough liberal politicians who like rail. Most politicians like rail. But they like a lot of other things better, like getting re-elected.

Summer Games

Every summer, I like to do one or more contests to help readers pass the time. This month's offering was inspired by a conversation with colleague Ross about people who randomly string together the names of completely unrelated left- or right-wing authors who do not collectively agree with one another on anything, and then claim to have divined support for some position. So: write a coherent and unironic blog post using one of the following opening phrases:

1) As Hegel and Dorothy Day both tell us . . .

2) There are four primary reasons that America should consider nationalizing the farms . . .

3) There are many important insights to be found in the work of Dale Carnegie, but the most important is this . . .

4) It is impossible to understand the music of Barry Manilow without first developing a working knowledge of Richard Wagner's major works . . .

5) I know it is unfashionable to say this, but the whipping post could be a humane alternative to prison . . .

6) Few financiers appreciate the fantastic investment opportunities in today's Zimbabwe . . .

7) Joseph Stalin was right about many things . . .

8) Lately, I've been thinking that what America really needs is another Great Depression . . .

9) Velveeta is the unsung hero of American cooking . . . .

10) It seems completely obvious to me that the logical second-best choice for Hillary's supporters in the general election is Bob Barr . . .

11) I have recently decided that there is only one way for America to really fight terrorism: force everyone to fly naked and without baggage . . .

12) Forget hybrids; let's bring back the horse as the primary means of urban transportation . . .

13) We had over 100 years as a nation without female suffrage. Turnabout is fair play; it is time to try female-only suffrage . . .

Awesome prize, to be named at a later date, to the author of the best blog post on this topic. You must, however, actually argue in favor of the proposition; you cannot pose the first sentence as a foil for some other agenda.

Your weekly music blogging

These New Puritans at DC9. Second the implied Sanchez endorsement. Also, have been listening to Celeste Starchild (her actual name--thanks, hippie mom!) and becoming something of a fan. Particularly like "Apple of My Eye".

Update Julian has deleted the video, so you'll just have to take my word for it that they were good.

Line of the week

From Paul Krugman:

But in the long run, we are all the Grateful Dead.

Sweden: paradise or purgatory?

I know, I should link more. I tend to forget that my readers don't know everything I know--that they haven't written a couple dozen stories about European disability and pension systems, growth rates, unemployment, immigration, and so forth. That's the hazard of blogging--print journalists have editors there to remind them what other people don't know.

So sorry that I didn't provide links on my Sweden post about disability, unemployment, and so forth. I just sort of assumed that Sweden's amazing rates of disability, "true" unemployment rate that may top 20%, and so forth were common knowledge. They certainly aren't particularly controversial. But if there is anything less common than common sense, it's probably "common knowledge".

That, presumably, is how this got written. It's a compendium of extremely weak Google-fu that betrays a pretty fundamental lack of knowledge about Sweden's economic problems.

Let me be clear: Sweden is not by any means a dystopian hell on earth full of morose workers standing in endless queues for Yugoslavian shoes. It's a lovely place to live, full of people who are about as happy as genetics and the weather permit them to be. However, Sweden is wrestling with a lot of big issues. I was going to write a post about them to correct some of Ms. G's more bizarre misperceptions, but I was beaten to the punch by the inimitable Michael Moynihan, who has lived in Sweden, is married to a (lovely) Swede, and has spent far more time on the subject than I have, explain. Luckily for you, he's done a far better job than I would have. I won't excerpt, because it should be read in its entirety.

One other point I should make, though: the subject of cultural homogeneity and welfare states is complicated, delicate, and by no means settled. But there are a few things we think we do know. First, the more ethnically diverse a population is, the lower the political support for lavish safety nets (the subject of Robert Putnam's recent anguished paper). We also know to a pretty high degree of certainty that social solidarity plays a big role in keeping down free riding--most people don't refrain from shoplifting because they're afraid of a minor court case, but because Mom would cry and the neighbors would snicker. When you have multiple, somewhat mutually suspicious communities, you have to rely on other, harsher measures, like fraud police--or see public support erode even further. Most people don't mind paying taxes for people they think can't work. But very few want to support people who won't work. Cultural norms about what constitutes "can't", "won't", and "shouldn't have to" matter a great deal.

And even with a small country with a single culture that defines these categories pretty much the same, if those norms change, as seems (from both anecdotal and empirical evidence) to be happening in Sweden, it may be that the change will make welfare programs either fiscally or politically untenable. I don't know that this is true, and indeed don't know of any way to prove it. But I think it's worth exploring.

The more you tighten your grip, the more economic growth will slip through your fingers . . .

There's been a sort of rough consensus among American, British, and ECB central bankers about what levels of inflation are acceptable. Suddenly, however, we're looking like the profligate wastrels on M1 Street. Even during the big German and French slowdown, and the Italian recession (these are Europe's three biggest economies), the ECB held a hard line on inflation. Britain, too, has kept interest rates quite, er, bracing. Right now, the Bank of England is holding stat despite growth worries, and the ECB is talking about a rise next month. Bernanke, on the other hand, is tolerating quite a bit of core inflation in order to stave off recession.

It's rather a delicate question of monetary policy. The inflationary seventies gave rise the the conviction in the 1980s and 1990s that only an iron fist on the throat of inflationary expectations could hold back the beast. But Japan's experience proved that inflation isn't the worst thing in the world, and since the 1990's, the US has been inching towards more focus on growth. In a couple of years, we'll be able to look at US inflation and growth and see whether Bernanke managed to skirt recession without any worrying entrenchment of inflationary expectations, or rekindled an inflationary sentiment that will have to be ruthlessly and painfully extinguished.

Right now, all we--and the central bankers--can really do is try not to bite our fingernails all the way down to the quick.

More insomnia and iTunes

I am soliciting suggestions for a tribute mix to the soon-to-be-ended Democratic primary.

Sticker shock

Pity poor Ford. They were just turning things around, when high gas prices started decimating their highly profitable truck business. Now they're having to pare their white collar salary budget by 15% as their expected return to profitability in 2009 evaporates.

I was talking to a cab driver the other day about gas prices; much of the DC fleet is made by Ford. These cars get, according to the driver, only 10-12 miles a gallon, presumably because they spend so much time in stop-and-start traffic. The cab drivers are extremely worried about gas prices. At what price point did that worry kick in, I asked. He said $3.50--that was when it really started hurting. The problem is that with prices so high, it's hard even to make up the lost profit by driving more.

The airlines are suffering too, of course; Continental just became the latest to announce massive cutbacks. The next hit will be to parts and airframe makers, followed by their suppliers . . .

Supply shocks are not happy occasions. But if the seventies are any guide, at least this one will leave our economy less driven by oil than it was before.

RIP Harriet McBryde Johnson

She apparently died suddenly yesterday. I first encountered Johnson, a very vocal disability rights activist, in the New York Times, confronting Peter Singer as to whether she should have been killed. I found her often politically desperately wrongheaded, but I greatly admired the courage and character it took to fight so passionately, and personally, for what she believed in.

No deal

Via Vegan.com, a great article from the New York Times on "recipe deal breakers". One note: glove boning is not so much difficult as it is fussy and pointless. I spent one weekend morning mastering the technique under the tutelage of a foodie friend, and then thought, "When the hell am I going to want do this much work just to serve a stuffed chicken without bones?" The answer being "never", I abandoned my newfound knowledge. I never missed it, even before I stopped eating animals.

My recipe dealbreakers:

1) Prep time over one day
2) Active prep time over four hours
3) Anything that calls for shaving garlic with a razor blade
4) Discussions of mortars and pestles, or a chinois
5) Excessive chopping of onions, which leaves me crying for hours
6) Olives. I hate olives. (though I love olive oil)
7) Cherry pitting
8) The words "serves 12" unless I am having a huge party
9) Hours of stirring
10) Deep frying. My apartment is just too small.

Erik says this recipe is a deal breaker: too many ingredients. But most of that is just measuring, and stuff you should have anyway if you're going to cook Asian food. It actually looks pretty easy and delicious; I may try it this weekend.

In the event of Rapture, this bank account will NOT be empty

Markets in everything:

Surely we’ve all faced this scenario when making plans for our future and the safety of our loved ones: What if we are summoned to heaven by God while our loved ones are left behind to face the armies of the Antichrist as they spread out across the earth? Now, registered Republicans are fairly safe in this scenario, because they’ll either be raptured or else they’ll earn a good living as KBR contractors providing supplies to the Antichrist’s armies. But for the rest of us, this is a real fear that we face.

Fortunately, some good Christians have the perfect solution: A website that will let you store information to be emailed to your loved ones in the event of the rapture. The website will only send the information to your loved ones if the site proprietors fail to log in for 6 days. You can use your data storage on their site to store all sorts of information that might save their souls, including entreaties to accept Jesus.

Needless to say, as an agnotheist, I am not expecting to be swept up in the Rapture. But it really is a tribute to the triumph of the market that people work through these problems in advance and find innovative ways to solve them.

Insomnia and iTunes

Having had difficulty sleeping, I put my energies into building a playlist following my readers' suggestions. It is probably overheavy on well known songs from my formative years, but there you are: baby steps.

If you make fun of it, I will cry.

The beginning of the end

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning. ~Winston Churchill

We pledged to support her to the end. Our problem is not being able to determine when the hell the end is. ~Charles Rangel

The Hillary Clinton campaign deathwatch is officially on; the Cheyne-Stokes breathing has commenced.

Senator Hillary Rodham Clinton will endorse Senator Barack Obama on Saturday, bringing a close to her 17-month campaign for the White House, aides said. Her decision came after Democrats urged her Wednesday to leave the race and allow the party to coalesce around Mr. Obama.

No word on whether she has cut a deal with Obama in exchange for not dragging this out until Denver.

Border breach

In a welcome turn, Israel is letting four out of the seven blockaded Gazan Fulbright scholars through the border. No word, however, on why they are holding up clearance for the other three.

Technicolor

Even if you don't like Barack Obama, I think you should be happy that the country has, with really very little fuss, nominated a black man with a very good shot at the presidency. (I didn't support Clinton, but I would have been glad to know that we could nominate a woman--not that I'm saying this is the reason we didn't nominate her.) Ezra Klein puts it rather better:

Towards the end of the 1967 movie "Guess Who's Coming to Dinner," Dr. John Wane Prentice, played by Sydney Poitier, sits down with his fiance's white father, played by Spencer Tracy. "Have you given any thought to the problems your children will have?" Tracy asks. "Yes, and they'll have some...[But] Joey feels that all of our children will be President of the United States," replies Poitier. "How do you feel about that?" asks Tracy, looking skeptically at the black man in front of him. "I'd settle for Secretary of State," Poitier laughs.

Written in the late-1960s, the exchange was, indeed, laughable. The Civil Rights Act had been passed three years prior. Two years before, the Watts riots had broken out, killing 35. Martin Luther King Jr. would be assassinated a year later. But here we are, almost exactly 40 years after theatergoers heard that exchange. The last two Secretaries of State were African-American and, as of tonight, the next president may well be a black man. John Prentice's children would probably still be in their late-30s. They could still grow up to be cabinet officials or even presidents, but they would not necessarily be trailblazers.

I think we're still, though perhaps asymptotically, moving towards a time when worrying about someone's race will seem almost charmingly quaint, like debating how many petticoats a decent woman wears to church. Until then, it's a happy improvement that people seriously wonder whether Obama's race gave him an unfair advantage in many quarters.

Happy, happy, joy, joy

At long last, I can start covering policy again. There was no point in covering candidate policy while the main race was between Hillary Clinton and Barack Obama; other than foreign policy, there's really very little daylight between them. Stand by as I joyfully stop watching vacuous cable news coverage on the primaries, and instead dig into campaign platforms.

Thinking thin

More and more, the evidence on diet is showing just how effective your appetite is at putting your weight where your body wants it to be. From Tyler Cowen comes this on a new paper:

Matsa and Anderson next looked at data on individual eating habits from a survey conducted between 1994 and 1996. When eating out, people reported consuming about 35 percent more calories on average than when they ate at home. But importantly, respondents reduced their caloric intake at home on days they ate out (that's not to say that people were watching their weight, since respondents who reported consuming more at home also tended to eat more when going out). Overall, eating out increased daily caloric intake by only 24 calories.

Appetite is an evolutionarily wired signal on par with pain; urging obese people to just eat less is like urging someone to tough out root canal surgery without anaesthesia. Every day.

I am pretty convinced by Seth Roberts' theory that the hyperpalatability of modern processed food is kicking up everyone's set point. (Well . . . almost everyone). But another of the paper's findings, that closeness to fast food doesn't seem to make you fatter, does seem to cast a little doubt on this.

It certainly casts doubt on the effectiveness of labelling, or a "fat tax". I'm not against putting calorie counts on fast food; I just don't think it will do any good. Peoples' calorie consumption is dictated by their appetite. Which makes sense, if you think about it; it only takes a swing of ten calories a day (about five tic-tacs) to gain or lose a pound over the course of a year. If our appetites weren't doing a surprisingly good job of regulating our weight, we'd all be bone thin or morbidly obese.

Conundrum

Why would Hillary Clinton be holding out for the VP spot? It's a terrible place for her to run from. If Obama's a success, she can run on his cottails in 2016; if he's a failure, she can mount a primary challenge in 2012 without the taint of a failed administration. She doesn't need the name recognition, or the "experience" waving at crowds in global backwaters. In the Senate, she can push for bills to build a record.

Besides, Hillary is not a good fit for the ticket. Obama doesn't want Bill around, but leave that aside. She just doesn't bring many new voters to the table. About all you can say is that she'll placate some of her Democratic supporters. But Obama needs a lot more than her primary voters to win.

Zimbabwe continues to decay

Morgan Tsvangirai, the opposition leader, has been arrested for . . . well, nobody knows really, but it looks like the crime may be "campaigning".

The government is getting increasingly desperate, as the economy continues to decay. That it is still decaying seems somewhat miraculous in itself, since given the previous damage you wouldn't think there was anywhere to go but up. How long can Mugabe continue to hold on?

The good news, the bad news, and the worse news on the economy

The good news is that US quarterly productivity figures just got revised upwards. The bad news is that this is pretty standard for slowdowns/recessions, because companies tend to cut their least productive operations and employees first. The worse news is that the OECD just cut its US forecast for the next two years, to 1.2% and 1.1%, down from 2.0% and 2.2% in its December estimate. That's expected to seriously erode the performance of the OECD as a whole, which is now expected to grow at a sub-2% rate through 2009. Time to start brown bagging those lunches.

All hail Comrade Fenty

I am speechless. Where the hell am I living?

Can you say Police State? The Examiner has the scoop on a controversial new program announced today that would create so-called "Neighborhood Safety Zones" which would serve to partially seal off certain parts of the city. D.C. Police would set-up checkpoints in targeted areas, demand to see ID and refuse admittance to people who don't live there, work there or have a “legitimate reason” to be there. Wow. Just, wow.

DCist aptly captures the zeitgeist:

Interim Attorney General Peter Nickles actually said that measures of this sort have "been used in other cities.” Which cities are those, Mr. Nickles? Warsaw?

Let's not forget Fallujah. An update press release says this will only apply to people in cars, which is very slightly less offensive, but also infinitely more pointless.

DC has had a spate of violence recently, and I applaud the police department's urge to do something. However, this something seems to follow the logic outlined by Bryan Caplan:

1. Something must be done
2. This is something
3. Therefore, this must be done

Crime tears the fabric of society, but so does a government which believes that it may at any time control the movements of its citizens like so many (presumptively suspicious) sheep. It's fun to call Rudy Giuliani a crypto-fascist, but he and Bill Bratton managed a stunning drop in violent crime without setting up checkpoints.

I hope that when the police ask for their papers, people will hand them a copy of the Bill of Rights too. It might prove instructive. If not, at least we'll all have the grim pleasure of saying "Here are my civil rights. Please take them."

EXCLUSIVE TO THE ATLANTIC: Preview of Hillary Clinton's AIPAC speech

Did I just hear that?

It really sounded like Obama was echoing George Wallace's "Segregation now . . . segregation tomorrow . . . segregation forever" speech in his big talk to AIPAC. Tell me I'm imagining things.

Telephonemania, Day 3

People are worrying about what to name the next generation iPhone. I think I'll call mine "Aloysius".

Capped!

Ryan Avent has been doing some great posting on cap and trade versus carbon taxes. With all information known, the two are theoretically identical. But in the real world they will differ; the question is how much.

One way to think about it is that we are choosing between two kinds of transparency: transparency to regulated companies, and transparency to voters. Politicians like cap and trade because the connection between the plan and higher energy prices will be less obvious to the voters. For that reason, a libertarian should generally prefer a direct tax.

On the other hand, cap and trade provides more certainty for companies, and a more direct relationship between their actions and profits. So the tax is not always a perfect slam dunk.

On balance I prefer taxes to cap and trade. However, politically, no one is going to enact a carbon tax with gasoline at $4.00 a gallon. Cap and trade is what we're going to get. In practice, that will mean that companies get subsidies to get them to go along (liberals who want cap and trade should concede on this issue to make it easier to pass), while prices rise somewhat. It's not clear to me how big a difference it will make in the long run.

The color of food

I genuinely don't understand this. I'm pretty comfortable with the concept of privilege, but I fail to see how my choices in foodstuffs contribute to it. I'd order the book to find out, except that it sounds very, very silly.

Conservation=conservative country?

Matt on American energy usage:

. . . using less energy is probably the cleanest energy option out there. One way to achieve that would be for our country to become much, much poorer, but there's a lot of variation among countries of comparable wealth.

Denmark, for example, consumes 3832.8 kilograms of oil equivalent per capita, whereas Germany consumes 4203.1, France consumes 4518.4, Belgium consumes 5703.4, Finland consumes 7218.1, and the United States consumes 7794.8 over twice as much as Denmark. And the Danes and Germans aren't living in circumstances of abject poverty or anything.

It is true that life is still very much worth living in Europe, but I think we urbanites also have to recognize that people buy big houses in the suburbs because there are attractive features to living in a large house in the suburbs. (She said, half an hour after wondering where she was going to put all those books). It's also key to remember that it's harder to go back than to stand pat. In The Moral Consequences of Economic Growth, Benjamin Friedman argues pretty convincingly that people feel good when their circumstances are improving relative to their peer group, or when their absolute standard of living goes up. Actual retrograde movement into a smaller house with less yard, or a tiny car, feels wrenching. Moreover, it has broad effects on society: if the stagnation is widespread, people become less generous, more self-involved. Charitable giving drops off sharply during recessions, because people think of it as a luxury.

In an interesting way, I wonder if environmentalism and liberalism aren't politically at war with each other. I don't mean that they are philosophically incompatible; they aren't, and in fact they tend to come as a package deal. But if we actually cut back on people's standards of living in order to conserve energy, their willingness to support other parts of the liberal platform, such as broader safety nets, will probably drop.

Poor little rich girls and boys

Of course I know intellectually that the New York Times Style section exists solely in order to fill libertarians with existential disgust about the shallow, grasping lives that the free market enables its more successful denizens to lead. But even so, I was unable to control my visceral repulsion at the people described in this article who are--everyone got a hanky?--having to pare back their multimillion dollar lifestyles to a few paltry million a year.

These financial problems — if they can be called that — will hardly elicit tears from the rest of us. But in those gilded living rooms, there is a quiet nervousness about keeping up appearances.

“Even if they’re not in danger of not paying their mortgage, there’s still a psychological change,” said Chris Del Gatto, chief executive of Circa, which has watched its business jump by 50 percent in the last year as wealthy clients sell their spare diamonds and Rolexes. “The economy is an issue even for people who don’t need the money.”

THEIR spouses could leave them when they discover that their net worth has collapsed to eight figures from nine. Friends and business associates could avoid them as they pass their lunchtime tables at Barney’s or the Four Seasons. And these snubs could trickle down to their children.

“They fear their kids won’t get invited to the right birthday parties,” said Michele Kleier, an Upper East Side-based real estate broker. “If they have to give up things that are invisible, they’re O.K. as long as they don’t have give up things visible to the outside world.”

. . . wealthy clients are cutting luxuries that they think their friends and relatives won’t notice, according to Mr. Del Gatto of Circa. At Circa’s midtown offices, he said, the seven consultation rooms have been busy with customers selling their precious gems. Some older couples, he said, are selling estate jewelry to help support their children who have lost Wall Street jobs. Bankers are paring down their collections of Patek Philippe watches. Wives from Greenwich and Scarsdale are selling 2-carat to 35-carat single-stone diamond rings. One recent client explained to Mr. Del Gatto that she was selling $2 million in diamonds she rarely wore, because her friends wouldn’t notice that they were gone.

“She said, ‘If I sold my Bentley or my important art, they would notice,’ ” he said. “That we hear, in differing examples, every day.”

I went to school with a fair sample of the most obnoxiously rich people in the country. I don't remember anyone saying to their parents, "No, I don't want Emily at my birthday party--her father's bonus dropped 90% this year." I have also lived my life under the impression that friends are the people who know when you're in trouble. In fact, I've always thought that that was one of the main joys of having friends. It's not as if anyone's unaware that there's a quasi-recession going on.

But the saddest thing is that it matters so much that other people think that they make crazy amounts of money. I understand why people might want to present a show of strength for business reasons, but c'mon--this stuff isn't secret. Bonuses are well known, company financials are public, or known to the investors, and it's hard to hide it when a real estate goes sour. Still, they lie, because they think that not making millions of dollars is shameful. It's one thing to lie about your finances because you blew it on craps and crystal meth, but because of an economic slowdown?

This is when I start flirting with the Megan Tax, which is a special tax for people who have too much money. "Too much" does not refer to any particular sum, but rather to the effect on the possessor: Larry Ellison clearly has too much money, just as Bill Gates and Steve Jobs clearly do not. Mostly it comes down to how much of your income you spend in order to show people how much money you can spend. I sometimes therefore toy with the idea that the purchase of certain objects, like $20,000 Hermes handbags, should trigger the Megan Tax, where the government takes half your money because you plainly have too much. The purpose is not retribution, nor redistribution. It is entirely paternalistic.

Appearances in Style section articles like this one have just been added to the mental list of ridiculous luxuries which should trigger the Megan Tax.

Advice column: ask the readers

I have a number of friends who are really good at making mix tapes, now iPod playlists. Over the years, I have treasured their gifts, and dearly longed to reciprocate. Unfortunately, I am possibly the world's worst playlist/mixtape/CD creator. I think I once managed to successfully create a CD for a boyfriend that I thought was really good. I would bet a lot of money that he not only no longer has the CD, but doesn't even remember getting it.

So I solicit your advice: what are the rules for making a great mix? Feel free also to list the contents of your own favorite mix.

Bonus music note: Silent Movie by Quiet Village is a terrible, terrible album. It is not the worst thing I have ever heard, a title I reserve for the screechings of Mariah Carey. But I have yet to discern a single redeeming feature, even though I rather like the sound of chirping birds. The friend who persuaded me to waste valuable eMusic credits downloading the thing is definitely not getting a mixtape any time soon.

Union-paid actuary takes New York for $500 million

My mother, who has recently moved to DC after living in New York for forty years, was shocked by the corruption scandals. "Even in the worst days," she said, "no one took the city for $50 million."

Not so fast!

n the hundreds of bills for which he has provided estimates to lawmakers since 2000, the actuary, Jonathan Schwartz, said legislation adjusting the pensions of public employees would have no cost, or limited cost, to the city.

But just 11 of the more than 50 bills vetted by Mr. Schwartz that have become law since 2000 will result in the $500 million in eventual costs, or more than $60 million annually, according to projections provided by Robert C. North Jr., the independent actuary of the city pension system, and by Mayor Michael R. Bloomberg’s office.

Liberal commenters wonder why I don't associate public sector unions with the public good. This is why:

Mr. North and other city employees made the calculations on the 11 bills when they were before the Legislature, but for the other bills, no alternative to Mr. Schwartz’s projections could be found. The New York Times reported last month that in an arrangement that had not been publicly disclosed, Mr. Schwartz was being paid by labor unions. He acknowledged in an interview that he skewed his work to favor the public employees, calling his job “a step above voodoo.”

But never fear, justice will be swift and sure:

As a result, legislative leaders said they would no longer rely on Mr. Schwartz’s work, and a disciplinary board affiliated with the American Academy of Actuaries has begun a review of Mr. Schwartz’s conduct.

Telephonemania, Day 2

Your interesting 3G iPhone tidbit of the day: Eric Zeman thinks the rumors that AT&T will subsidize it like a normal cell phone are wrong.

Roger Entner, analyst with Nielsen, disagrees.

He told RCR News, "There's no need to upgrade the device's capabilities and lower its cost at the same time. AT&T Mobility first will have to see the effect that a 3G iPhone will have on its HSDPA network. Right now, that HSDPA service is robust, with only a few million laptops riding on it. Add a few million iPhone users, who are heavy users of the Internet, and it could be like shaking a skyscraper. AT&T Mobility is not just selling a device, it's selling a service. AT&T Mobility doesn't want complaints about its service. That would spell out no abrupt price subsidy for the device." In other words, AT&T will keep the price high to prevent too many people from signing up.

But this raises another issue. Remember last week's rumors that there may be limited supplies of the iPhone at launch? If AT&T is indeed worried about the veracity of its 3G network, Entner's comments make perfect sense. AT&T boosted the capabilities of its 2.5G EDGE network mere weeks before the iPhone's launch on June 29, 2007. It is doing about the same thing this year, completing a necessary upgrade to its 3G network just ahead of the supposed launch of the 3G iPhone. The timing (two years in a row) is awfully curious.

Even if AT&T isn't worried about its network, it's hard for me to see why they should subsidize it, at least initially. The iPhone has already upped its subscriber base, and you can expect a lot more people to turn over this summer. How many customers want to pay close to $100 for a phone and data plan, but will refuse to pony up for a coveted phone?

The cultural sustainability of the welfare state

Matt Zeitlin muses on Hayek's relevance today:

Jesse Lerner has a fantastic piece in Dissent appraising the work of Friedrich Hayek from an explicitly left wing prospective. In Lerner’s opinion, Hayek got one thing absolutely right: that planned economies are horrible, horrible ideas. He thus spends a lot of time on Hayek’s most famous work - The Road to Serfdom - but not so much on his ideas about pricing in markets and the importance of dispersing knowledge.

What’s interesting about these two ideas, which are by far Hayek’s most influential intellectual contributions, is how obvious and almost redundant they seem today. The Road to Serfdom is either horribly overblown or very narrowly descriptive. His description of what inevitably happens when a state controls and plans the entirety of the economy is early prescient and perceptive, but is only applicable to situations in which the state control the entirety of the economy. Road became horribly bastardized when conservatives and libertarians would point to every instance of European social democracy or the existence of some state-owned industries and then wave around Road and say that tyranny was just around the corner(arguably, Hayek is partially to blame for this unfortunate tendency). But when we see that European social democracies are some of the most substantively and formally free nations on the face of the earth, we must grapple with the fact that either Road was wrong, or it was right about a system that has little relevance today. That’s not to say that Road wasn’t an important contribution in 1944, when many British socialists were promoting an incredibly technocratic, “enlightened totalitarian” model, but it’s hard to discern its relevance today when the most “socialist” states (Scandinavian social democracies) have the freest economies.

I wonder if this will continue to be true. It occurs to me that Scandinavia, with its homogeneous population, may have been spending down the accumulated social capital of its pre-welfare state society. Before the widespread welfare state, people who attempted to free ride by collecting benefit when they could be working faced both internal guilt and considerable external social pressure; the neighbors essentially functioned as the fraud police.

But as the generations who grew up before the kribbe-to-grav safety net die off, and are replaced by a newer generation perfectly comfortable with broad public charity, this is clearly breaking down. Sweden's rates of long term disability, sick leave, and so forth, are very high. The Scandinavians I know generally report that the once-famous work ethic is not really all that impressive any more, and there's little stigma attached to malingering on long-term sick leave.

I think we generally underestimate how much culture matters to economic success. It isn't even a matter of getting the rules just right; it's a matter of cultivating a hidden law, a sort of cultural operating system, that limits abuse of public and private trust. Hayek understood this very well; his intellectual heirs on both sides of the political spectrum, less so. We've made amazing strides in allowing people to trust perfect strangers enough to transact with them multiple times every day. But I'm not sure how well we're doing at supporting the safety net.

70's redux?

Paul Krugman has an op-ed on why this is not your father's inflation:

Here’s an example of the way things used to be: In May 1981, the United Mine Workers signed a contract with coal mine operators locking in wage increases averaging 11 percent a year over the next three years. The union demanded such a large pay hike because it expected the double-digit inflation of the late 1970s to continue; the mine owners thought they could afford to meet the union’s demands because they expected big future increases in coal prices, which had risen 40 percent over the previous three years.

At the time, the mine workers’ settlement wasn’t at all unusual: many workers were getting comparable contracts. Workers and employers were, in effect, engaged in a game of leapfrog: workers would demand big wage increases to keep up with inflation, corporations would pass these higher wages on in prices, rising prices would lead to another round of wage demands, and so on.

Once that sort of self-sustaining inflationary process gets under way, it’s very hard to stop. In fact, it took a very severe recession, the worst slump since the 1930s, to get rid of the inflationary legacy of the 1970s.

But as I said, this time around there’s no wage-price spiral in sight.

The inflation hawks point out that consumers are, for the first time in decades, telling pollsters that they expect a sharp rise in prices over the next year. Fair enough.

But where are the unions demanding 11-percent-a-year wage increases? (Where are the unions, period?) Consumers are worried about inflation, but you have to search far and wide to find workers demanding compensation in the form of higher wages, let alone employers willing to accept those demands. In fact, wage growth actually seems to be slowing, thanks to the weakness of the job market.

There's a conundrum here: people really value job security and predictible wage increase. But job security makes the economy much more rigid. When labor prices are calculated over three year periods, it takes a really nasty adjustment to wrench the economy around in the event of a shock. That's what Paul Volcker provided in the form of interest rates that briefly topped 20%, and the deepest recession since the Great Depression. Those kinds of long term coontracts ease the initial shock, but make the adjustment more jarring in the long run.

This is probably a good metaphor for life, actually. The longer you remain in denial, the harder it becomes to face reality.

We had to destroy the village to save it (money)

Jon Corzine, the governor of New Jersey, has embarked upon a bizarre quest to force towns with populations below 10,000 to merge with their neighbors. The alleged reason is cost saving, but as Jim Manzi points out, small towns actually cost less to run than larger towns. Perhaps there are some trivial efficiencies in the administration of state funds, but this seems a rather mean reason to disincorporate more than three hundred towns. I find Arnold Kling's explanation rather more convincing:

I have no first-hand information, but I would bet that a lot of the push for Corzine's comes from public-sector labor unions. My guess is that they have a harder time overpowering voters in smaller jurisdictions. If my suspicions are correct, then this is not a drive for efficiency. It is rent-seeking hardball.

Education for peace

Israel is refusing to allow seven Fulbright scholars to leave Gaza, resulting in the cancellation of their scholarships. This seems, to put it mildly, somewhat at odds with Israel's state goal of supporting moderates in Gaza. The students are not terrorists, or suspected of being connected to terrorists; Israel is just refusing to let anyone cross the border except for medical reasons*.

Israel has legitimate security concerns which the fence has allayed; terrorists have switched from deadly suicide bombings to largely inaccurate missile and mortar attacks that rarely kill anyone. But it is also turning Gaza into an open air prison, and crushing any chance for the moderation we would all like to see. Whether you think the US government's foreign policy sins were monstrous or negligible, 9/11 probably didn't make you think "They can get us! We should change to accomodate them!". Probably, like me, you thought "Time to unleash some righteous whoop-ass". The Palestinians feel the same way, which is not surprising, since there are very few novel human emotions. Gratuitous exercises of raw power, like preventing a few Fulbright scholars from going to the US, are not going to put any meaningful pressure on the Palestinians. But it is going to make them even madder and more convinced that Israelis are bastards who can't be trusted.

* For those who keep asking why Egypt doesn't let them out through their border, Israel has ringfenced the entire Gaza strip with walls that it controls and monitors. As I understand it, there is basically one pedestrian border crossing to Egypt, Rafah, which is run by an international mission called EUBAM, but EUBAM gets access to the Rafah crossing through the Kerem Shalom crossing point which Israel controls, so when Kerem Shalom is closed--as it is--so is Rafah.

Troy, fallen

Noah Millman's essay on Euripides The Trojan Women is the best thing I've read since I got back. I saw a not very good college production once, but though the acting was weird, stilted, or overdone, the play itself was both beautiful and horrible. I remember thinking it was like watching souls being savagely crushed, and finding hope only in the fact that there had been souls to crush. But Mr. Millman is both more prolific and more profound on the topic than I, so go read it.

In which my womanly instincts force me to rant about this season's new looks

What the heck is with the evolution towards ever-more voluminous and short-waisted dresses? Empire and yoke style dresses look good on almost no one. If you're tall and thin, they flap loosely about your frame as if you'd just gotten back from fat camp. If you're short and zaftig, they resemble some sort of ambulatory tent. If you're sort of medium, people are very likely to mistake your summer sheen for the happy glow of mid-pregnancy. I have no objection to the waistless shift. But the shift-less shift must go.

Surprise! The states are out of money again.

Louis Uichetelle writes that the states are about to be in trouble:

State and city governments have yet to shrink the economy; indeed, they have even managed to prop it up. They have quietly maintained their spending at pre-crisis levels even as they warn of numerous cutbacks forced on them by declining tax revenues. The cutbacks, however, are written into budgets for a fiscal year that begins on July 1, a month away. In the meantime the states and cities, often drawing on rainy-day savings, have carried their share of the load for the national economy.

That share is gigantic. At $1.8 trillion annually in a $14 trillion economy, the states and municipalities spend almost twice as much as the federal government, including the cost of the Iraq war. When librarians, lifeguards, teachers, transit workers, road repair crews and health care workers disappear, or airport and school construction is halted, the economy trembles. None of that, or very little, has happened so far, not even in California, despite a significant decline in tax revenue.

“We are looking at a $4 billion cut to public schools and deep cuts that will result in thousands of Californians losing their health care,” said Jean Ross, executive director of the California Budget Project, offering a preview of coming hardships. “But the reality is we have not pulled money off the streets yet.”

Quite the opposite, the states and municipalities have increased their spending in recent quarters, bolstering the nation’s meager economic growth. Over the past year, they have added $40 billion to their outlays, even allowing for scattered spending freezes and a few cutbacks in advance of July 1. Total employment has also risen. But when the current fiscal year ends in 30 days (or in the fall for many municipalities), state and city spending will fall, along with employment — slowly at first and then quite noticeably after the next president takes office.

This story is not exactly an evergreen--more of a counter-cyclic perennial that blooms every time the economy slows down. At each turn, the news that tax revenues fall during recessions is greeted first with surprise, and then with indignation. This is perhaps why no one has expected the states to anticipate this bewildering state of affairs by building up their reserves to levels adequate to weather the really rather moderate financial storms that beset them during lean times.

Too, these articles rarely see fit to mention the other ways in which these wounds have been self-inflicted--the habit of making ever more lavish pension promises to the public sector unions, for example. Public pension funds are now officially a disaster. Politicians promised benefits without funding them. The befuddled fund managers seem to have mistaken beta for alpha, pouring their assets into riskier asset classes because they couldn't make up the deficit on a safe, modest appreciation every year. If these were private companies, most of those managers and their bosses would be under indictment. The problem is about to get worse, of course, because when do pension funds need the most topping up? During downturns, when asset values decline.

The pension funds illustrate why, contra the opinion of most of those journalists, states should have to balance their budgets. If they could borrow during lean times, they would never get their financial houses in order.

In a weird way, state governments are like banks: they have a fundamental and inevitable duration mismatch. Banks loan money long and borrow short (a demand deposit, aka your bank account, acts in crises like a renewable daily loan); under the right (wrong) conditions, the short lenders flee and the bank collapses.

This is not a perfect analogy with state governments of course. But they make long promises with only short funds, and when long and short durations collide, disaster can occur--just ask John Lindsay. Plus both have an implicit guarantee from the Federal government that allows them to be less fiscally responsible than they ought.

The credit fallout continues

The CEO of Wachovia just resigned. More as I learn more; it just came across BBC News, which, well, doesn't really care. First thought however is that this is actually sort of beautiful to watch, not because I have anything against Ken Thomson, but because the market is working without anyone but the participants ordering it to correct itself.

To gun or not to gun

So if Heller, as libertarians devoutly hope, legalizes gun ownership in DC, the question immediately arises for those of us who live here: buy one, or not? On the one hand, they are expensive, and shooting ranges far away. On the other hand, I live alone in an apartment that is something less than amply fortified. On the third hand, I'm pretty sure I shouldn't handle a gun when I'm sleepy.

However, I probably will anyway, just because I can.

Update Pre-emptive request to trolls: please try to make your jokes slightly funnier than a plainly stated hope that I shoot myself, either accidentally or on purpose. That wasn't even very funny in fifth grade. It's time to stretch yourselves! There are much funnier things than that to be said about my possible death or disfigurement, and I believe that you can find them if you'll just try. In exchange, I promise that I will post photographs of any handgun accidents I happen to survive.

Random thoughts that sprung up during the last post

1) Ann Althouse doesn't like the Kindle because the gray-on-gray print is too hard for her to read. E-ink is basically an electronic etch-a-sketch, so the screen is not perfectly white because of the magnetic particles behind it. Or so I understand it.

This bothers me not at all, particularly since you can resize the text--a feature I find more useful than black-on-white when I have forgotten my glasses. But I know a lot of older readers complained about contrast during my previous website's brief foray into dark-gray text, so if you think this might bother you, you should definitely borrow someone else's for a test run before you take the plunge. I would be surprised if this troubles anyone under forty who isn't legally blind. But it's a good point.

This, however, is not:

The truth is, I hardly ever touch the damned thing.

(But please, if you buy one, buy it through this link so I can get a percentage of the $359 purchase price. And I'm saying that mainly to prompt some skepticism about rave reviews of the Kindle you might be reading in blog posts with Amazon Associates links like that in them. So if you appreciate that little lesson in skepticism, but still want to buy a Kindle, reward me by using my link.)

Most bloggers have Amazon Associates accounts that generate a fairly trivial amount of revenue. Perhaps Instapundit makes a fortune off of his, but the rest of us--and I've had one for years--get enough money to buy a nice electronic gadget once a year, maybe. This is hardly worth jeopardizing my relationship with my readers, my reputation, and my salary in order to push worthless crap.

The Kindle is, for me and the friends I have bullied into buying one, the best thing since the MP3 player. For other people, like Professor Althouse, it's apparently a dud, which is not surprising--no one likes everything (thank God!) But the commission on the one or two Kindles they might sell through their website is not enough to push many bloggers into praising the thing without merit. Most of them would make more money for hour popping nuggets into the deep fry down at McDonalds than hawking Amazon merchandise.

2) This seems like the most useless product ever. Can someone explain?

3) Amazon guarantees that if the price drops on an item within thirty days of your purchase, they will refund the difference. For big-ticket items, it is worth checking the site two or three times a day just to see if the price has dropped. For example, if you bought a Kindle during the last thirty days, they just knocked $40 off the price. Go email them about it.

4) Holy cow, I'm living in the future!

Telephonemania

So yes, when the 3G version comes out, I'm buying an iPhone. Yes, I know the arguments for the Blackberry, etc. But my hands are a little large for those tiny keyboard keys. And I'm trying to pare down how much I carry. Consolidating my modest PDA needs, MP3 player, and phone into one advice will make amazing progress towards this worthy goal. Ideally, I will have only six items in my blogger bag:

1) Macbook Pro
2) Kindle
3) iPhone
4) USB headset
5) Broadband modem
6) Digital camera

I know what you're thinking: this bag is an invitation to one hell of a mugging, and also, needs a cappucino frothing attachment. But The Atlantic is a Mac shop. I am still not a Mac evangelical--unlike my colleague, I was perfectly happy with my Sony Vista laptop, at least after I uninstalled the crap Sony loaded on there. But just as I couldn't blog American and write British for The Economist, I found it too annoying to switch back and forth between platforms. That means that I favor Apple products.

There's also the fact that the ubiquity of the iPhone means that there's lots of development for the iPhone. My iPod accessories all work with it. Driving back from North Carolina, a friend not only played music from his iPhone through my little Belkin iPod car dock, but also used its quasi-GPS to get us unlost. At this point my heart was lost. The new one is rumored to have actual GPS.

Besides, I am perfectly fascinated by the hype surrounding the iPhone. It's not just the probably-fake photographs, the speculation about the exact day it will go on sale, or the uncomfortable mental picture of all those salivating mac-bloggers. It's just the sheer, amazing lengths to which people will go to get information about the damn thing. For the first time in my life, I'm planning to take part in one of these events, and buy my phone on the first day of release--whenever that might be--not because I can't wait two days to get a new phone, but because I want to enjoy the show. And thanks to the broadband modem, I'll be liveblogging it.

Apres beach

This photo sums up the zeitgeist of my vacation all too accurately, but not the sweetness of a week sunning, drinking frozen things, and checking email only on a whim. I am now looking at seventeen loads of laundry, and contemplating declaring RSS bankruptcy rather than trying to wade through the thousands of posts that have accumulated in my absence. But at least I have y'all.