Thursday, July 31, 2008

John Cochrane and the Milton Friedman Institute

John Cochrane, now a professor at the Chicago GSB, has this tart retort to the letter produced by the Chicago faculty who dissented on the MFI. It is good stuff; I laughed out loud more than once.

Before moving to the GSB John was in the economics department. He taught my first quarter of graduate macroeconomics in what was also his first quarter as a professor. He was one of the two best teachers I had in my first year at Chicago even then, and I am sure that he has gotten better with experience.

On the first day of class John explained to us that he would (and I paraphrase) "spend the first half of the lecture going through the Keynesian model, and the second half making fun of it." That was indeed what happened, and that was indeed all we saw of it in that class.

Also among the students in that class was Beth Fama, daughter of Gene Fama and now John's wife. There was a skit at some point that poked fun at John for hanging out with the "Fama's daughter".

John came through Michigan to give a seminar last year. It was good to see him again; I suspect it was the first time in nearly 15 (!) years.

Hat tip: marginal revolution

Wednesday, July 30, 2008

AEI health conference

Interesting presentations from Heckman, Philipson and others.

Tuesday, July 29, 2008

Uh oh ....

Someone other than my friends actually reads this blog!

I am quoted in the Chronicle of Higher Education here in a summary of views from the blogosphere regarding the controversy over the new Milton Friedman Institute at Chicago.

Better watch what I type.

Hat tip: Peter Mueser

Academic pet peeves

One of my pet peeves is when I get a paper to referee from Journal A that I have already reviewed for Journal B and the author has not changed the paper at all in light of the referee comments from Journal B. This irritates me for two reasons. First, the author is showing a general disrespect for the process of peer review in science. Obviously, there is no need to respond to comments from Journal B that are incorrect or beside the point, but if all the comments were such, the paper would likely have been published in Journal B, rather than rejected and then submitted to Journal A. Second, the author makes me feel like a moron for putting in lots of time, as I always do, to write a careful and thorough referee report. When this happens, my habit is to write a very tough report, recommend rejection, and inform the editor about the author's poor behavior.

From the author's standpoint, why risk pissing off a referee or editor who may end up getting asked to write a tenure letter? It does not seem worth it even from a purely cynical perspective.

Multiple comparisons

Economists do a pretty bad job, in general, of being careful when making what the literature calls multiple comparisons. That term encompasses situations where, for example, the researcher has quite a lot of dependent variables and is considering impact estimates for all of them. Of course, if there are 100 independent outcomes, then we would expect statistically significant impacts on five (or ten depending on your alpha) of them even in the world of the null where the treatment has no effect on any of them.

The social science and statistics literatures contain a number of ways to address this issue somewhat formally, including various procedures for adjusting significance levels, such as the Bonferroni adjustment, and dimension reduction techniques applied to the outcome variables.

This recent report by Peter Scochet of Mathematica for the Institute for Education Sciences provides a useful introduction to the (surprisingly tendentious) literature.

The Economist on Canada

This is the best summary of the social culture of Anglophone Canada, particularly its Ontario branch, that I have ever seen.

My favorite bullet points are:

"Risk-taking and unconventional thinking do not tend to be the norm. In general, expect your business contacts to be cautious, and to value organisation and detail."

"Many Canadians nurture both inferiority and superiority complexes about America. Tread carefully."

The last one is particularly true. Living beside the US is not always easy and Canadians generally handle it with good humor (or humour if you prefer), but it is wise not to tease them overmuch or to press them too hard about the (very large) differences in how the Canadian health care system gets talked about in Canada when Americans are and are not present to listen.

Oh, and Canadians do indeed celebrate Queen Victoria's birthday, and they do so, appropriately enough, by drinking lots of beer in what they call the "May two-four" weekend, where the two-four refers to both the date and the number of cans of beer.

Monday, July 28, 2008

Does the IMF cause TB?

A loving take-down of a weak study that (surprise!) got written up in the NYT.

Hat tip: Dan Black


This BBC article about people who fake their own deaths by "disappearing" is pretty cool.

Hat tip: marginal revolution

Sunday, July 27, 2008

Naomi Klein take-down in the New Republic

It is hard to understand how Naomi Klein has done so well in the world of ideas, particularly after reading this review, which takes her down from the left.

This review reminded me of when I read the first few chapters of "If Women Counted" by Marilyn Waring, who had her 15 minutes of lefty fame back in the 1980s. Her point, which is actually not a stupid one, is that non-market work should be included in the national accounts. Her arguments for this omission were, though, truly silly, as she blamed a sort of conspiracy of (classical) liberal economists staring with Adam Smith and continuing on through the Chicago school. She seemed completely unaware that most of the key theoretical and empirical work on female labor supply and time use that would be relied on in including non-market work in the national accounts came from Chicago people. Even worse, at one point she notes the deeply sinister and highly telling fact that we never hear about Adam Smith's wife, which clearly proves he was a misogynist. It took me only a few minutes (this was in the very early internet days) to verify that Smith was a lifelong bachelor. That was about the time I put the book the book down for good.

Hat tip on the TNR piece: instapundit

LAT: Americans losing faith in free markets

The LAT offer these thoughts on the topic here in a piece that was reprinted in the Ann Arbor news (it is replacing the local news it cut to reduce costs with wire service pieces in what strikes me as an odd strategy to maintain readership in a local paper most of whose readers will get their national news elsewhere).

The piece is chock full of silliness, as such pieces by the big MSM outlets usually are. Bascially, the article offers three examples of areas where Americans are losing faith in "free" markets: the housing market, the credit market and the gasoline market.

The housing market is perhaps the silliest example, given that Fannie Mae and Freddie Mac, implicitly treated by the article as representing the "free" market are in fact themselves creatures of earlier government intervention in housing markets. As with many supposed "market" failures, the culprit is in fact poorly designed regulation. The article also implicitly suggests that housing prices have never declined before, which is false, as the authors could have easily determined if they had bothered to look. And it really is a bit rich to bemoan a 19 percent drop in housing prices in East Coast cities like DC where they went up 80 percent or more in the preceding few years.

In regard to oil, it is not the markets that people do not like but rather the current price. It is not clear why this is in here at all, though it offers the authors a chance to shower the truly underserving John Dingell with some implicit accolades for demanding to know how more about those evil speculators who provide all that insidious arbitrage and risk-spreading in the oil market. And, of course, the idea that the oil market is somehow "free" when it includes a cartel composed of government producers on the supply side somehow puzzles me but not the authors.

Credit markets are, of course, another case of people not liking the outcome rather than not liking the market. Or, put differently, if I sign a mortgage contract that I haven't read carefully and do not understand I blame the bank when I have to bail out because I can't make the payments. Please. This is not market failure, it is individual failure.

A couple of closing remarks. First, the point is not faith in markets but knowledge about them and about goverment regulation. The optimal amount of government is not zero and markets are themselves institutions that exist within a legal environment. What matters is thinking clearly and looking at evidence. This article provides a fine example of the foolishness that results when serious thinking and consideration of the evidence are both absent. Second, Robert Litan is a lot smarter than he comes off in this piece; at the same time, I'd happily trade the old New Deal for a New Deal Lite.

Saturday, July 26, 2008

Amusing spam subject lines

For some reason, the amount of spam making it into my inbox has increased in the past couple of weeks. Most of it is the usual stuff but one producer actually takes the time to provide amusing subject lines. Here are a few examples:

Genghis Khan held responsible for globalization
Stock Markets Close As Global Earth World Planet International Buys All Shares
Sarah Jessica Parker Arrested For Gross Negligee
Switzerland To Be Devoured By Black Hole
Obama engages rappers in election aid

Wednesday, July 23, 2008

Ghost towns

This site lists the top 10 ghost towns with some amazing photos.

A very nice youtube video of the first spot on the list (which has regular tours) is here.

Hat tip: marginal revolution

Tuesday, July 22, 2008

Thought for the day

"There is nothing more American than high-fructose corn syrup"
- Karen Pence

Saturday, July 19, 2008

Evaluating Amtrak

An example of the wise and practical American approach to nationalized industries can be found here.

The video is hilarious but may not be work-appropriate at particularly fastidious workplaces.

Evaluation with faces

Go here and then go to page 15 of the file (which is page number 12 of the report). This report is an evaluation of the UK program (or programme over there) called the New Deal 25+ performed on contract by PriceWaterhouseCoopers.

Things to note:

1. The faces help out struggling policy wonks who cannot otherwise distinginguish good results from bad.

2. The evaluation results summarized in the table are all essentially meaningless. Most of the report results consist either of outcome levels - what fraction were employed - instead of impacts - what fraction were employed who would not have been without the program. As many (if not most or all) of the participants would have found employment on their own, the results summarized here wildly exaggerate the causal effect of the program. The remaining results consist of participant self-evaluations which have been shown to be unrelated to impacts in my work with Alex Whalley and Nat Wilcox.

I wonder how much the British taxpayer paid for this?

Hat tip: me, trying to find out when the ND25+ started for a referee report.

Marriage, children and happiness

The chain of posts referenced on marginal revolution begins with Will Wilkinson then moves on to Megan McArdle and then on to Andrew Sullivan.

My thoughts:

I do not buy Megan's idea that the culture tricks women in marriage, most particularly because it is then hard to explain second marriages. The cultural push is much less and presumably the woman is then fully informed.

This point is really, really true with children, where you have to explain why anyone has more than one. Lisa and I are puzzled at those who have more than one but there seems to be some process whereby early trials are forgotten over time. You can see why evolution would want this to be so.

On marriage, I also think that part of the "men benefit more" view comes from looking at outcomes that women (or researchers) think are more important than the typical man does. There is an amazing passage of four or five pages in Linda Waite's "The Case for Marriage" book wherein she explains the health benefits of marriage by describing how wives basically prevent men from having as much fun, and from eating and drinking as much as they want. There are present utility costs from these limitations!

More important, I think, on both scores are heterogeneous treatment effects. We really have no evidence for the claim that "marriage makes men better off". Most of our evidence is for the claim that marriage makes the men who are married better off. I think the same is true for children. Putting aside search frictions in the marriage market and artificially high prices in the adoption market, the marginal spouse and the marginal parent should both be indifferent and the inframarginal single and childless people should be those for whom getting married or having children, respectively, has costs that exceed its benefits.

Hat tip: marginal revolution (who should be thinking more about the margin in this case)

Statistician humor

The statistician joke is here; the whole blog is pretty entertaining.

Hat tip: marginal revolution (to a different post)

Friday, July 18, 2008


A fun comic with some academic themes.

Hat tip: Jessica Goldberg

Monopoly gatekeepers

The system that requires paying a financial tribute to someone with "MD" after their name in order to be allowed access to certain medications is one that seems so normal that it is rather startling to think about how completely inconsistent it is with basic notions of self-ownership that underpin a free society.

This report, from something called the Center on Addition and Substance Abuse (CASA) at Columbia, describes the market's attempts to work around this restriction. As you might guess from the inclusion of the word "pushers" in the title, CASA is one of many institutions that produce advocacy cloaked as research. This impression is reinforced once you learn that Joseph Califano, an old political hack who was Secretary of Health, Education and Welfare (this was back in the dark ages before education was important enough to have its own separate department) during the Carter administration, heads CASA. It is not clear why a serious place like Columbia University would have this sort of center under its wing.

What the report does provides is a descriptive analysis of prescription drug availability on the internet combined with a lot of alarmism. I suppose in some sense it is cheering to know that the internet is helping sick people to find the treatments they want without the intervention of the government's licensed monopolists. This is particularly important given the harrassment and persecution of physicians who prescibe what the amateur physicians at the Drug Enforcement Agency feel is "too much" pain medication. On the other hand, it would be nice to be having a serious debate about how to restore the right of individuals to control their own bodies, while at the same time still preserving what to me seems the valuable information provision function provided by disinterested and systematic testing of safety and efficacy along the lines of what the FDA currently does.

Movie: Savage Grace

We went into exotic Royal Oak - the closest Detroit analogue to the Chicago's Near North side - to the Main Street Art theater to see Savage Grace last night.

The movie is elegant, languid and a bit on the brutal side, as one might expect given that it is based on a real-life story of idle, stupid rich people who misbehave pretty badly, with the end result a matricide. Based on the wikipedia summary of the mother's life here, the movie takes some liberties around the edges. Some of things it emphasizes are treated there as uncertain and other things are left out.

Would I recommend it? Only if you are interested in moral and psychological dysfunction or in beautiful sets of Spain, Paris and London in the 60s and 70s.

Important dates in University of Michigan history

From the official university magazine: the history of the panty raid, which apparently originated at Michigan.

Thought question: is having the first panty raid better or worse than having the first "wave"?

Wednesday, July 16, 2008

Horror show

Here are suggestions from NYT readers on how the government can help "stimulate" the economy.

Collectively, I think the comments help explain why actual trained economists are surprisingly well paid.

I didn't look all the way through but most of these make about as much sense as giving everyone a crystal to rub with "Whip Inflation Now" written on it in a sort of New Age tribute to Gerald Ford. Actually, that would almost certainly dominate actual NYT reader suggestions like tripling the minimum wage or subsidizing oil prices (just like all those clever poor countries do!) until our "Manhattan project" (boom!) for energy pans out or reducing CEO compensation so that the good CEOs will all go work for foreign firms.

Yowza! It is indeed, as I often say, amazing that anything works at all.

Hat tip: the marginal revolutionaries

Addendum: I prefer the Onion's plan here to almost everything from the NYT readers.

Hat tip: reason

Old and new

The paper presentation I found most interesting at the PolMeth meetings is this one by Gary King and co-authors. One way to think about it, which is not how it was presented, is that it seeks to codify the cell matching plus weighted regression schemes used in some of the ill-fated evaluations of CETA (= the Comprehensive Employment and Training Act, the predecessor to JTPA) back in the 1970s. Those evaluations are ably surveyed in Burt Barnow's (1987) Journal of Human Resources piece.

The basic idea is that you create cells using discrete variables plus discretized (or coarsened, in the language of the paper) continuous variables as a first step in a two step process, the second step of which is some parametric model that aims to catch any remaining bias. The method is marketed as simplifying the imposition of the common support - it is just those cells with both treated and untreated units - and also as avoiding the necessity of balancing tests as the (coarsened) covariates are necessarily balanced within cells.

The trick of course comes with choosing just how to coarsen. In the langauge of non-parametrics, this presents a k-dimensional bandwidth choice where the optimal choice for each bandwidth (which corresponds to the amount of coarsening in each of the k individual variables) depends on the choice of all the other bandwidths. In any given finite sample, institutional knowledge may suggest particular cuts - think of how you would group years of schooling into categories like < 10, 10-11, 12, 13-15 and so on) - but it is less clear how to think about the asymptotics. Also, once you rely on institutional knowledge and intution to guide the coarsening, rather than a more or less automated procedure like cross-validation, the opportunities for disagreement across researchers, and for misbehavior by researchers looking for particular answers, increase.

Nonetheless, the presentation was lively and got me thinking. I look forward to reading the (apparently already revised!) paper more closely.

PolMeth XXV

Last Friday and Saturday I attened the 25th annual meeting of the Society for Political Methodology here in Ann Arbor. This is the analogue of the Econometric Society for political scientists, but without the theorists. Michigan is very strong in quantitative political science so I thought this would be a good chance to get to know some of my colleagues better and also to see what was going on in this literature. Political methodologists often read both the economics and the statistics literatures which gives them an advantage of sorts over most economists and most statisticians, who read only in their own discipline.

Some observations:

1. Political science is going through the same non-parametric revolution now that economics went through about 15 years ago which produces a sort of deja vu as assumptions are tossed overboard in a (hopeless?) quest for purely data driven inference.

2. Political methodologists drink more than labor economists.

3. Political methodologists interrupt in presentations, which makes the visiting economist feel at home. They can even get a bit testy at times.

4. Political methodologists also fret about who to cite for the potential outcomes framework.

5. Not many, but a few, political methodologists surf the internet on their laptops during presentations.

6. I have never been to a conference that set aside so much time for discussion. Basically there are four papers a day in 90 minutes slot with a long lunch and a reception and dinners and with much of the 90 minutes set aside for the discussant and for audience comments. The time is well used; I have not been to a conference where the discussions (including lunch and dinner) had as a high a substance / gossip ratio in a while.

7. The triumphalist panel that ended the conference and celebrated the growth of the society over the past 25 years reminded me a lot so similar triumphal speeches at the Society of Labor Economists meetings.

Refereeing at the IMF

So I am co-editing a special issue of Empirical Economics and one of the submissions relates to something that suggests finding a referee at the IMF. I emailed one person who was cited in the paper (a not uncommon way of finding referees, particularly for papers where the editor is not immersed in the literature) and s/he politely declined and suggested a second person, also at the IMF. That person also politely declined, and suggested a third person at the IMF. That person also (do you sense a pattern?) politely declined, but was so helpful as to suggest four other people at the IMF. So far the ends of the string have not joined, but I cannot be far from that. I do not know enough folks at the IMF to know if I am moving up, down or sideways in the food chain.


Addendum: add one more.

Addendum on Friday: I just sent out the 7th request to an IMF person.

Addendum on 7/26: the 7th person just agreed to do it. Hurrah!

Movie: Roman de Gere

We saw Roman de Gere last night at the State Theater in Ann Arbor. It is a delightfully written and acted murder mystery. The plot overflows with fun twists and turns. The trailer is actually somewhat misleading; the movie is less dark than the trailer makes it out to be. The "R" rating is also a mystery. There is no nudity and no violence and no swearing but for a happy "merde" or two or three. It is a French movie and the characters are, not surprisingly, very French. This makes some of their actions seem implausible until you remind yourself that they are indeed French, at which point the inexplicable becomes the ordinary and all becomes clear.

Recommended (and Lisa even liked it more than I did).

Tuesday, July 15, 2008

Economists for McCain

This reason story makes me glad I did not sign the petition when given the opportunity to do so.

More broadly, the costs and benefits of attaching oneself as an economist to one or the other of the major parties are not completely obvious to me. I am not very happy with either party these days (or, indeed, with politics as an enterprise) and try to avoid identifying with either one but I am not sure how successful I am. It will be interesting to see what happens to my consulting in DC after the election.

I suspect there is an excitement and adventure aspect to working with a campaign, though there is also the potential for bad outcomes, as with Austan Goolsbee's public spanking for telling the Canadian consulate in Chicago the truth about Obama and NAFTA (which of course everyone who understands how these things work already knew). I suspect that the same is true about being on the Council of Economic Advisors, though people tell me that regardless of party, most of your time is spent explaining to policy types that demand curves slope down, that tax dollars cost society more than a dollar, that cost benefit analysis is worth doing and such like. I remember seeing Doug Holtz-Eakin on C-Span once explaining to a congressperson the difference between marginal and average tax rates. This is surely the Lord's work but man it must get tedious after a while.

Monday, July 14, 2008

So many New Deals, so little time.

I sometimes joke when presenting my paper on the British New Deal for Young People program that the Blair government set up programs for pretty much every group of identifiable voters. This turns out to be more true than I thought: there is a description of the "New Deal for Musicians" here.

Sunday, July 13, 2008

Markets in everything: final resting places

For Cubs fans: the best line is about "eternal skyboxes".

Hat tip: Charlie Brown

Thursday, July 10, 2008

Congrats to Todd Stinebrickner

Todd's paper, joint with his father Ralph, got into the top tier of the BE Press journals and won the Arrow prize in Economics and Policy as well.

It is a cool paper; I remain mystified by its failure to get into AER, QJE or JPE.

Another reason to like Australia

Musical selections for funerals in Oz.

Airline executives embarrass themselves

I received an email today from Northwest Airlines containing a letter, signed by executives of many major airlines, exhorting me to oppose rampant speculation in oil and suggesting that I visit the website of SOS - for Stop Oil Speculation. If you visit the website at the link here you will learn that speculation is like gravity in its force, though apparently it is unlike gravity in that it was much less powerful a year or two ago. I suppose some credit should be given to the PR departments of the oil companies. Instead of having discussions about collusion among the oil companies (who seem to gain and lose their ability to collude in tandem with events in the middle east as well as other supply and demand shocks) this time around oil prices have gone up and we are talking about speculators instead. No doubt a new K Street office is being set up as you read this to defend the speculators - perhaps the "American Speculation Society (ASS)" or some such. You will also learn from the SOS link that some futures markets are - hold on to your seats and imagine scary organ music - foreign! Think of it: non-Americans have the nerve to buy and sell products that we also use. Worse still, even some Americans buy things who have "no intention of using the product". God save us!

This site is pathetic and the email is an embarrassment to both the executives and the airlines that employ them.

Wednesday, July 9, 2008

Who was in charge of this?

Bad news on the Coach Rodriguez lawsuit front.

Some folks must have given and gotten some very poor legal advice if paying all $4 million is the outcome here.

Addendum: This was on the front page of the Ann Arbor News today above the fold. Who says this is not a company town?

Hat tip: Dan Black, who mentioned something about this being unlikely to happen at Chicago

Jesse Helms meets his maker, who is not pleased

This reason piece by Jesse Walker sums it up pretty well.


The economist offers their business travel advice here.

I would add the following:

1. Chicago is an international city in the literal sense that it has a lot of immigrants and a busy airport with direct flights to many cities outside the US. A better model, though, might be that it is a very, very large midwestern town. It is in many ways more narrow minded than, say, Ann Arbor or Madison, despite the size difference.

2. When I was there in graduate school it always seemed to me that Chicago had an amazing number of people who viewed the world as a zero sum game, so that the only way they could get ahead was by taking advantage of you. In this sense, Chicago is the opposite of LA, which I think of as the city of the positive-sum deal.

3. I always thought of Chicago as a lazy city rather than a hard-working one but that may be due to interacting more with government workers than with corporate types downtown. Chicagoans pay for a lot more city and county government than they actually receive. It seemed like every year one of the local TV states would do an expose on some sort of city worker where they would tail them on their daily rounds and find them spending a good chunk of the day sleeping in their city vehicle on some quiet sidestreet.

4. The woman who cut my hair at "Hair Ph.D." in Hyde Park used to return to her old neighborhood in the city to vote for Daley, even though she no longer lived there (or, indeed, anywhere within the city limits).

5. The two things I came to like about Chicago were the amazing amount of high quality, low price ethnic dining, much of it in neighborhoods scattered around the city rather than downtown, and the terrific theater scene. In regard to theater, my experience was that quality was more or less unrelated to price. The best piece of theater I ever saw cost five dollars, took place in an old warehouse, and my friend and I were the entirety of the audience.

The poem about Chicago I wrote my first year of graduate school is here.

Tuesday, July 8, 2008

Book: Luther - Man Between God and the Devil

A long term project of mine is to understand more about the history of religion. I found Luther: Man Between God and the Devil at our favorite used bookstore in A2 (just a couple of doors down from the People's Co-op). It is a revisionist biography of Luther. As such, it is probably not what you should read as a first biography of Luther. It focuses on bits where the author feels revisionism is necessary and leaves other aspects of Luther less examined. And while you can get a sense of the literature to which Oberman is responding it would have been helpful to have read some of the literature myself before reading this. In any event, I enjoyed the book a great deal despite having realized in the midst of it that I should have read another biography first.

The book engages on many levels. The time in which Luther lived was a fascinating one - so close to our own in some ways and so different in others. It is interesting to learn about how the university, a relatively new institution at that time, functioned when Luther was working as a professor. Two particular lines of discussion have stayed with me since I finished the book a few weeks ago. The first, which is foreshadowed in the title, is Luther's strong and direct sense of battling with the devil. Oberman argues that most recent Luther historiography leaves out much about Luther's thoughts on the devil so as to make him more relevant to current Lutheran readers, whose theology has, like most mainstream protestant theology, largely become universalist and free of satan. I think he makes a very strong case here. The second is Luther's anti-semitism, something I was not even aware of until I read The Holy Reich by Richard Steigman-Gall. As it turns out, Luther's anti-semitic writings were used by the Nazis as part of their own disinformation campaigns. Oberman feels that Luther historiography should not bury this aspect of his life either, but he also offers up a context and interpretation of these views that does not excuse them but also shows them to have a somewhat different motivation than that of the Nazis. His argument is both strained - he too wants to admire Luther - but also useful in providing context to what seem to modern eyes truly horrific views on Luther's part. In this regard, I think it is worth noting a general point, which is that it is futile and even a bit silly to expect historical figures that we admire for one reason or another to have been perfect on all dimensions, as with Jefferson and his slaves. Admiration and realism are not inconsistent and admiriation with realism is surely preferred to admiration without it.

The final thing I took away from this book is the amazing extent to which movements which bear a label that remains constant over time, in this case Lutheranism, can change in content over time. While I am no expert on modern Lutheran theology, it is clear even to the casual observer that it differs quite substantially in many aspects from what Luther himself thought (though it retains his fundamental point about the primacy of faith). The same is true, of course, of other religions like Catholicism, and of political movements such as liberalism or progressiveism and political parties like the Democrats and Republicans in the US and the social democrats in Europe. Why it is that we preserve the labels and change the meaning, rather than changing the labels along with the meaning, is a topic for another day.

Monday, July 7, 2008

Thought for the day

"Theory is inference without the estimation step" - John DiNardo

Sunday, July 6, 2008

Immigrants as a solution to the demographic deficit

I just read this paper from Norway, which presents some pretty dramatic findings regarding a cohort of immigrants to that country in the 1970s.

I think the basic lesson is that institutions matter a lot for the effects of immigration. They do so in two senses. First, and this is not emphasized much in this paper, the rules for who you let in matter a lot in terms of source countries, in terms of language and skill requirements, in terms of age and in terms of employment focus versus a focus on family reunification and/or political asylum. Different countries approach this very differently, even otherwise fairly similar countries such as the US and Canada. On this policy dimension, I think Canada has done a vastly better job than the US with its point system that focuses on employment. The policy debate in Canada is very honest, in a way that the US policy debate is not, about the fact that the immigrants are expected to help support Canada's pay-as-you-go government pension system.

Second, and this is what is highlighted in this paper, welfare state institutions matter a lot as well. Replacement rates over 100 percent combined with a loose review system can result in a lot of people implicitly retiring into disability benefit receipt. What is not so clear from this version of the paper is the extent to which the differences in terms of spousal labor supply and number of chlidren between migrants and natives are induced by the welfare system interacting with the poorer labor market opportunities of the migrants or whether they represent cultural patterns brought over from the source country.

Selling your vote

A young man in Minnesota has been charged with attempting to sell his vote in the November election on ebay. My question is why?

If naive young Max Sanders were to join a group - let's pick a name at random and call it the Minnesota Education Association - that regularly "sells" its members votes to a particular political party, no one would bat an eye. Some would even say that this is the beauty of interest group democracy at work. Why is it okay for groups to implicitly sell the votes of their members, in the case of teachers' unions in exchange for restrictions on competition and a bizarre system of tenure for a job that has no need of it, but not for individuals to leave out the middleman and do so directly?

Bonus thought question also left out of your high school civics course: why is it okay to trade votes for political favors but not to trade cash for political favors, when politicians can turn cash into votes via campaign expenditures?

Movie: Animation Show 4

The official website is here - it has not made it into IMDB yet. This is a collection of short animated pieces. I thought it was hilarious - the "Angry Unpaid Hooker" short, which a scholar of popular culture would interpret as a study of class differences, is worth the price of admission on its own. Very good fun with the caveat that many, but not all, of the pieces will appeal mainly to the sort of people who can recite one or more routines from Monty Python from memory - a group I have been a member of now for a couple of decades.

Hockey night in Canada

The big news story (other than the biker chick scandal) when I was in Canada in June was the theme song from "Hockey Night in Canada", which is the hockey analogue of Monday Night Football. Canada's public television network, the Canadian Broadcasting Company (CBC) decided it no longer wanted to pay up every week to use the famous theme song - Canada's "Second National Anthem" according to the website maintained by the song's owner - and announced a contest for a new theme. There was public outrage everywhere! In all seriousness, this was the top news story one day when I was in Vancouver for the CEA meetings. In the end, private enterprise came to the rescue, as one of the CBC's private competitors called CTV bought up the rights to the song and will use it in its own hockey broadcasts.

One of the best magazine covers I saw during my years at UWO was on the door of a non-pc colleague of mine in political science (who, you will not be surprised to learn, departed for the US not long after I got to UWO). It had two identical pictures of a beautiful landscape from the Canadian Rockies. One side bore the caption "Canada with the CBC", the other "Canada without the CBC".

Saturday, July 5, 2008

Advice for attracting men

Not so useful to me for a number of reasons, but I thought this list was actually pretty much on target, at least for men like me.

Barcelona tourism and food

I've been meaning to post this for a few days. This was my second trip to Barcelona so I had already done a number of the main tourist destinations, including Gaudi's cathedral and the delightful Park Guell, also by Gaudi. Both are well worth doing, as are the Roman ruins underground in the old town.

This time I visited the Museum of the History of Catalonia and the Maritime Museum. The first might better be called the Museum of Why We Don't Like Spain. It is a modern museum in old warehouse space right the water. Most of the text is in English, Catalan and Spanish though some things are just in the last two or just in Catalan. I learned a lot from a short visit, including finding out that Pompeu Fabra is actually a person! More precisely, he was a linguist who played an important role in formalizing the Catalan language. The Maritime museum is also a modern museum in a beautiful old space. If you like model ships, this is the place for you. It has less English to read but does have little ipod-like guides that play recorded messages in English for many of the highlights.

I had two excellent meals in Barcelona (plus some very good ones and a couple of mediocre ones). The first, on the recommendation of my friend Nuria Rodriguez-Planas was La Venta. If you go here, spend an hour or two first at one of the bars across the street and enjoy the amazing view of all of Barcelona. The second, in the old town, was at Senyor Parellada. It is more formal than La Venta, and a bit more oriented to classic local cuisine. I had a really scrumptious paella. Yum.

What a Rush!

I enjoyed this NYT interview with Rush Limbaugh.

My dad was into conservative talk radio in his later years. I think it had the effect of making him more of a social conservative than he was when I was growing up at home. Of the people he listened to regularly, I can only recall Rush and Michael Medved. I liked Rush because he was funny. The NYT review is actually pretty kind to Rush I think for this very reason: that, like William F. Buckley, he is having a good time, and puts that ahead of being angry. Medved tended not to get mad either, but aimed higher than Rush in terms of historical and intellectual content. Now, since I almost never drive, I never listen to any radio, let alone talk radio.

Economics of Education Blog

I found out last night that my friend and colleague Brian McCall has a blog on the topic of the economics of education.

Movie: Hancock

We went to see Hancock with Will Smith last night. I was a bit put off by the negative reviews at but Lisa really likes Will Smith so off we went.

In fact, the movie, while not as good as I Am Legend, was just fine for a summer evening of Hollywood fluff. While many of the reviews complained about an abrupt transition, mid-movie, from funny to serious, I thought there was less abruptness, and more foreshadowing of the seriousness to come, than the reviewers did. I really like the idea of PR-man as hero as well - that, at least, is not something that has been done much before!

Thursday, July 3, 2008

Great moments in state government

From an article in the Michigan Daily, some evidence that Jack Finn, a senior administrator at the Michigan Department of Labor and Economic Growth does not know that demand curves slope down. This may not be irrelevant to Michigan's highest-in-the-nation unemployment rate.

[As an aside: most states raise the minimum wage when times are good. Not Michigan.]

Note carefully that Jack did not say that most estimates of the short-run elasticity of youth employment with respect to the minimum wage are low, which would be defensible though perhaps not completely relevant to policy, which should also be concerned with the long run effects such as those that operate via capital-labor substitution. He is plainly and simply economically illiterate.

Odd, too, that the Michigan Daily did not bother to actually talk to an economist about this, but only to a bureaucrat and a student. Here is the relevant excerpt from the Daily:

Though less opportunity for new employment after a wage increase was a concern for some Michigan lawmakers, Jack Finn, director of the Wage & Hour division for the Michigan Department of Labor and Economic Growth, said a change in the minimum wage won't decrease the number of available jobs.

"It's almost like an urban legend that a minimum-wage increase leads to a loss of jobs," Finn said. "It's just not factual."

Coolidge effect

I have known the joke about Calvin Coolidge and his wife visiting a farm for a long time but did not know until dinner Tuesday night in DC after a Department of Education Technical Working Group meeting that a particular biological phenomenon had been named after Coolidge in a not-so-subtle reference to the famous (and apparently apochryphal) story.

Details on wikipedia here.

History of food production: home and market

The Michigan library has an extensive collection of cookbooks and other items related to culinary history; the University of Washington library has an extensive (and very cool) collection of restaurant menus that you can look at on line.


Wednesday, July 2, 2008

Which title?

News story here about the new clothing line from the polygamous women from Texas.

Should the title be "American exceptionalism" or "there is no such thing as bad publicity"?

Hat tip: yahoo!

Things you can do with your UM economics degree

Sure, some students go in for things like graduate school, or careers in banking and finance. Not Colin Bell!

Hat tip: Ann Ferris