Cough, cough, eh.

For Adam Cole: the current state of play on evasion of cigarette taxes in Canada.

Canada, the G20, and security

The Canadian government is planning to spend over $1bn Canadian on security related to the upcoming G20 and G8 meetings. This is nuts, so nuts that even the National Post, which is the more "rightish" of the two major Canadian papers, is calling foul.

More generally, this episode reflects the unfortunate choice by Canada's conservative minority government headed by Stephen Harper to channel some of the worst aspects of the Bush II administration, including excessive preoccupation with security and excessive government secrecy. That's a shame, because Canada could really use one party (out of five!) that is consistently (or even frequently!) skeptical of state power.

Fun with student loans

The NYT today offers up this column on student loans. In particular, it considers the sad case of of a young, attractive and intelligent woman called Cortney Munna, who recently completed her B.A. at NYU and is now having some difficulty paying off her student loans.

The column frames Cortney's situation as one where she has been ill-served by some combination of the government, NYU and her bank, but mostly by NYU. She is, the story goes, a helpless victim of the system.

The column suggests that NYU should have told her to change schools midway through her degree when her debt reached a certain level. Even taking this idea on the column's own terms, which are that young, attractive and intelligent women are actually helpless waifs who need to be told how to manage even very obvious aspects of their affairs, this makes no sense. There is little point to spending lots of money for two years of filling distribution requirements at NYU only to then switch schools and receive a degree at some SUNY campus. Where you finish is largely what matters. Moreover, Cortney's debt levels at various points in her university career were quite predictable at the time she started. If she was not to finish at NYU she should not have started there.

My concerns about this column run deeper. First, it focuses entirely on the "where should I go to school" margin and ignores the "what should I study" margin. The columnist buries the key information, which is what Cortney majored in, at the end of the article. As it turns out, she has an "interdisciplinary degree in religious and women's studies". I am pretty sure that this is not the field of study at NYU with the highest expected earnings. Sad as it may seem, in a real world of budget constraints and tradeoffs, students sometimes face tough choices between their heart and their head. Cortney went with her heart, which is fine; the point is, after all, to maximize utility, not earnings.

But that is her choice, not evidence that the system is somehow broken. Information on expected earnings by major is easy to find; if you do not believe me just google " earnings by college major" as I just did. The numbers one can find are of course estimates and are necessarily a few years out of date but for the purposes of the decisions that Cortney faced, both about where to go to school and about what to study, they provide plenty of information. Do we really want to say that someone who has the test scores to get into NYU should not be assumed responsible enough to spend 10 minutes on the internet (or talking to college educated adults) to gather the basic information related to the one of the most important decisions in her life?

More broadly, and from a slightly different angle, the NYT columnist is essentially proposing that colleges bring back the doctrine of "in loco parentis" - in place of the parents - under which undergraduates are treated not as young adults but as old children. Would the NYT columnist like public universities to go back to the days of single-sex dorms and curfews? If not, why are those aspects of university life different than decisions about where to study and what to major in?

Having said all that, I do think it would be useful for the federal loan agencies to require loan recipients to demonstrate knowledge of program details and of broader financial literacy as part of the process of qualifying for a loan. Adding in some information about the means and variances of earnings associated with particular fields of study at particular types of schools, and about rates of degree completion, would not hurt either. The public should not be offering big loans (and big subsidies) to students who cannot perform simple interest rate calculations or who display little or no knowledge of their likely earnings and loan payments.

Hat tip: Sarah Turner

Addendum: Reason's take on Cortney and her travails.

Scientists and engineers

Both clever and funny ...

Hat tip: Laura Kawano

On the realism of Charlotte Simmons

Maybe the scene, which Tom Wolfe describes in loving detail, of the formal fraternity dinner at the upscale hotel in DC is more realistic than I thought.

On the form and substance of language

Quite so.

Hat tip: Charlie Brown

The cutting edge of AIDS prevention in Africa

From the Nyasa Times and from my colleague Rebecca Thornton.

Note the role of simple, and in this case as in so many others misleading, bivariate correlations in confusing the Malawian policy discussion.

On the return of Uncle Bonsai

The Seattle Times has the story.

But they will never be quite the same without Ashley.

I followed Uncle Bonsai around in college (and after) enjoying shows all around the Pacific Northwest as well as at the Ark in Ann Arbor when I was at Western Ontario.

Security fairy tales

The task:

Your task, ye Weavers of Tales, is to create a fable of fairytale suitable for instilling the appropriate level of fear in children so they grow up appreciating all the lords do to protect them.

Good stuff - I liked the Little Red Riding Hood parody the best.

Hat tip: Gulliver (the post is here)

Clio Can Congratulations

Congratulations to my (still pretty new) colleague Paul Rhode for winning the "Clio Can" award from the Cliometric society at their annual meeting this year.

The cliometric society is devoted to applying the tools of economic theory and econometrics to the study of historical data.

Being historians, we may have to wait a while for them to update their web page of past Clio Can winners with Paul's picture, but you might enjoy looking at the pictures anyway while you wonder why no history of the somewhat oddly named award - there must be a good story there - is provided on the website.

Hat tip: Martha Bailey

Addendum: A visit to Paul Rhode's office to see the Clio Can in person reveals that it is literally a can of Clio Italian Olive Oil with a wooden base. The base has plaques with the names of the winners. The can comes in a heavy duty carrying case for travel by air.

Movie: Iron Man 2

As much as it pains me to praise anything to do with the NYT, I have come to quite enjoy A.O. Scott's movie reviews. He is pretty on target with Iron Man 2, though in the end I liked it rather more than he did.

The plot is indeed a hash, but Scott understates the comedic value. This movie shares the delightful and thoroughgoing cynicism of Robocop; there is even a gentle indirect poke at the vanity of our beloved leader, Saint Obama.

There are, as one expects, lots of pomo references to various aspects of pop culture; even Walt Disney plays an indirect role as a key aspect of the plot turns on a version of an old Disney video about EPCOT.

Gary Shandling is perfect as the weasel senator and, as Scott notes, Sam Rockwell rocks as Justin (read "Armand") Hammer.

And, of course, there is Scarlett, lovely Scarlett. I'll confess, I laughed the most at the completely superfluous Matrix-honoring action sequence towards the end of the movie in which tightly dressed Scarlett disposes of numerous security guards at Hammer's laboratory, stopping after every two or three guards to pose, grin and wink at the camera.

Recommended as light summer fun.

New NIH disclosure rules proposed

New disclosure rules regarding potential financial conflicts of interest may be on the way for NIH-funded researchers.

I support this sort of disclosure but worry that the public discussion of issues of bias in research funded by government grants and contracts tends to focus almost exclusively on issues related to researchers who receive funding from private firms.

Also important, but rarely discussed, are the incentives that face researchers to pander to the perceived objectives of the government agency funding the research. Two good examples from the Bush II administration are the Reading First program and abstinence-only sex education, which administration was heavily invested in and where it pretty clearly had an answer it wanted to hear from the evaluations.

These sorts of issues, which come up regardless of the party in power, are just as real as the private sector related concerns that appear to motivate the NIH proposals. When it became clear that the Reading First evaluation was not going to produce a shiny positive and statistically significant impact estimate, the contractor got, justifiably, a bit nervous. As a way of covering themselves, I think they had nearly every economist who had ever written a paper using a regression discontinuity design (including yours truly) review and sign off on the design and implementation of the Reading First study.

Also potentially important are biases related to individual ideology, as when individuals with strong normative views related to the environment sort into doing climate research.

I am not sure quite how one goes about developing institutions to alert the research consuming public to these issues, but they are surely worthy of note.

Hat tip: Nancy Herlocher, UM Economics' amazing computer poobah.

Who says people get boring when they get older?

Racquel Welch condemns the birth control pill ....

Saith Raquel:

'Seriously, folks, if an ageing sex symbol like me starts waving the red flag of caution over how low moral standards have plummeted, you know it's gotta be pretty bad.'

Hat tip: Charlie Brown

Hell hath no fury like ...

... a husband scorned.

Hat tip: Pierre Leget (via Facebook)

Teatotaller appointed to help oversee liquor store

My good friend Ken Troske, presently at the University of Kentucky, has been appointed by Senator Mitch McConnell to the committee that oversees the spending undertaken under the TARP bailout program.

Amazingly, this committee has been operating for over a year without a single economist.

Kick some bailout butt, Ken, and congratulations. At worst, you'll have enough good stories to keep you going for decades.

On the virtues of America

The Angry Professor summarizes perfectly what makes America great.

On the measurement of posh

A delightful piece from the Times of London on the relative poshness of Cameron and Clegg.

A teaser:

It is most odd,” said my friend, a Frenchman now living, like most sensible Frenchmen, in London. “Your country has given birth to twins. This Cameron and Clegg, he is the same person, no? They are both, how you say, posh?”

“Yes,” I explained. “But they are different sorts of posh.”

He looked confused: “But both went to private school, both are rich, both are sons of financiers. Even the hair is similar.”

“True,” I conceded. “But they are not the same species of posh. David Cameron is Eton-Oxford-country- clubby-cutglass-shooting party sort of posh, whereas Nick Clegg is Westminster-Cambridge- metropolitan-foreign-glottalstop-trustfund sort of posh. Cameron is upper-upper-middle class with a dash of English gentry, but Clegg is middle-upper-middle class with a hint of European aristocracy. These are quite different things.”

Quite so.

Hat tip: Cheap Talk

Another social conservative hypocrite bites the dust

This is almost too good to be true: soon-to-resign social conservative congressman Mark Souder is interviewed about abstinence-only sex education by his mistress.

Sometimes you just have to love those politicians.

On a more social science note, comparing the relative attractiveness of the two gives one some sense of just how powerful power is as an aphrodisiac. More broadly, collecting data on all the congressional affairs and then coding the pictures of the participants involved for their "beauty", an exercise now pretty standard in some corners of the research world, and then comparing the differences in attractiveness levels to those found in "ordinary" couples, would make a fine paper.

Now poor Mark Souder has to go back to selling used cars or chasing ambulances or whatever it was he was doing before. Only 534 more hypocrites to go.

Hat tip: Sue Dynarski

Statistics 101: a brief rant

So I spent a bunch of time over the past few days reviewing a draft final report on an evaluation that I cannot tell you about because I signed a form promising not to. Maybe I will blog about it when the results are made public and maybe not.

In any case, that is not the point. The point is that the draft had a whole bunch of instances in which an estimated coefficient not being statistically different from zero was equated with the underlying population parameter being equal to zero.

This is wrong!

Large standard errors do not mean that the population parameter equals zero, they mean that the estimate is not very precise. While that is surely disappointing, it is the very truth.

Moreover, even in cases with large standard errors, the preferred estimate - and the maximum likelihood estimate in the case of models estimated using maximum likelihood methods - is the obtained point estimate, not zero.

Classical statistics is odd in a bunch of ways (as any Bayesian will be happy to explain to you at great length) but it is what we have, more or less, so we should get it right.

Thought question on anonymous referee reports

What do you do when the author disagrees with your interpretation, in an anonymous referee report, of one of your own papers?

Hmmmm ...

More on the Columbia, Missouri SWAT team

Another piece from Radley Balko, this one reflecting on the differences between the Columbia, Missouri SWAT team and the US military in Afghanistan.

Kocherlakota on modern macro

This accessible verbal summary of the state of modern macro by Narayana Kocherlakota is stunningly good on several dimensions. It provides a clear explanation of how modern academic macro works, a short, broad history of the development of macro over the last 40 years and some thoughtful reflections on modern macro and the great recession.

I particularly like the call for more attention to the nature of the shocks and to the integration of bubble behavior into macro models.

The one thing I would add is that another limitation on the usable complexity of macro models (or, indeed, of some structural models in microeconomics) is simply the capacity of the human mind to understand them. I don't think we are at that frontier yet, but at some point we will be.

I would be really enjoy reading the analogous article on climate models, which face many of the same issues.

Full disclosure: I overlapped with Narayana at Chicago, though we did not interact much due to our differing interests and being a couple of classes apart, and he married a friend from my year in the program.

No enumeration without remuneration

The sad story of payroll disaster at the Census Bureau. I wonder if Bob Groves regrets leaving ISR?

Hat tip: Charlie Brown

Still more on the British elections

The NYT with a piece on alternative voting.

Instant runoff voting is a different bird than proportional representation but I do not know the political science literature well enough to know exactly how one would expect it to differ.

I have always been a fan of including "none of the above" on the ballot, with a new election held (with new candidates) if it wins.

Hat tip: Cheap Talk

Evolution of childhood

An interesting piece at the Chronicle of Higher Education based on a new book.

Hat tip: MR

New barber shop comes to Ann Arbor

This strikes me as likely a very profitable idea: a barbershop that combines Supercuts with Hooters and ESPNZone.

Now available in Ann Arbor, but not likely to lure me away from Salon Vox.

People I knew in Judy Thornton's class at UW

Readers who know me and also my old friend Ken Troske may have heard me tell a story about a small honors economics class - about 10 students - that Ken and I both took back in our undergraduate days at the University of Washington. The amazing fact about this class - amazing at least if you know both Ken and me - is that neither of us was the loudest person in the class nor the second loudest person in the class.

The loudest person was a fine fellow called Dan Shasteen, whose father sold aluminum siding in Hawaii and who was a great fan of Austrian economics in general and of Ludwig von Mises in particular. The second loudest person, and the motivation for this post, was called Nelson del Rio. I learned yesterday, by first reading the UW Economics Department's alumni newsletter and then following up on the "Celebration" awards ceremony page, that he has done quite well for himself indeed.

Congratulations to Nelson!

British elections (continued)

I missed the end of the drama while on the plane back to Ann Arbor.

The result was a coalition of the conservatives and the liberal democrats, as described by the BBC and approved of by the Economist.

One of the promises made by the conservatives to lure the liberal democrats into a coalition was moves towards electoral reform: something like rank order voting or proportional representation. The latter is a longtime wish of the liberal democrats, as illustrated by this old advocacy video featuring John Cleese (!) from Monty Python. I think the liberal democrats will be disappointed by electoral reform in the end, if indeed they get it, when they discover that it induces general equilibrium effects in terms of party platforms and and party composition. Is there any reason, in particular, to have a party that combines classical liberals (sorta) with social democrats under either alternative voting or proportional representation?

Police run amok in Missouri

Radley Balko continues his crusade against police using excessive force with this video.

Watch it. Is this really America? These guys are out of control.

And all over some pot.

More prosaically, whatever you think about the wisdom of the drug war, how can this sort of thing possibly pass any sort of cost-benefit test? Several cops spend several hours, all on overtime because it is at night, to execute this raid. Plus they kill the pets and scare the kids, probably making them distrust the police the entire rest of their lives. Worth it? Over some joints? What's the money value of keeping this guy from smoking pot? I don't even think it is positive, but even if you do, can it possibly exceed the costs?

Good job to the Economist's DIA blog to publicizing the video outside of libertarian-land as well.

Addendum: more on the reaction from the Columbia, Missouri - home of the University of Missouri - police to the public consternation about the video. The police chief does not really seem to get the point.

Los Suns

Good for the Phoenix Suns for taking a gentle but very much deserved jab at Arizona's new anti-immigrant law.

And shame on so many in Arizona for supporting it. But more useful than moral posturing by those opposed to it, I think, is to interpret it as an indirect plea for a reasonable fix to a very broken system. The fix should not mean keeping the immigrants out or blaming them for problems they do not cause. It should mean an honest system that includes guest workers and a clear path to citizenship for those who want it and meet reasonable requirements.

More evidence to support Ann Arbor's smug self-satisfaction

Forbes ranks Ann Arbor America's fourth most livable city.

Ahead of us: Pittsburgh! Orem (that would be in Utah) and Ogden (also in Utah).

I guess "number of places you can drink" does not have a large weight in their model.

Working at Disney

I was expecting this to be better than it turned out to be, but it is I think still worth posting these (pretty tame) "confessions" of a Disney cast member.

British election

I am watching the British election on Skynews. The final results are not in yet but it is clear that all the excitement about the "liberal democrats" (imagine separating out the subset of the US democrats with degrees in sociology or political science and giving them their own party) is not playing out at the ballot box.

Other bits: the CURE party has not won any seats but has gotten non-trivial numbers of votes in some places - ahead of many of the serious minor parties. This party illustrates something that we generally miss in the US due to (appallingly) restrictive ballot access laws. Looking up the CURE website reminded me of the OWL party in Washington State, which put enormously funny bits into Washington's voter's guide when I was in high school. What we generally miss are humorous parties designed to have a bit of fun at the expense of overly serious politicians.

The way they do the counting of votes in the UK is that each district counts its votes and then announces the total, and the nice Skynews people seem to have reporters at nearly all of them, and to broadcast many of them. This has a certain charm, as it means one gets to watch the local luminaries who do the announcing as well as even watching shots of the counting of the votes. Watching the luminaries read out the votes for the CURE party while maintaining a straight face is particularly good fun.

Also, the media do a better job of matching colors to parties in the UK. The labor party is red and the tories are blue.

Saving labor costs in Germany

The new kid on the business block in Germany is self-service bakeries. Unlike traditional bakeries, where a staff person assembles the desired baked goods for each customer, here the customer simply picks out the desired baked goods and then takes them to a cashier. The result, lower prices, 30 to 40 percent lower according to the one company, due to a smaller staff. Of course, there the cost is that some customers may misbehave and handle the food not with the tongs provided but with their hands. The main chains operate with a franchise model; here are the (English language) websites for two of them: back factory and backWERK (which roughly translates as "bakery factory" as well).

Should I note that labor costs are pretty high in Germany?

Hat tip: Michael Lechner

Further evidence on the coolness of UM

Who knew that Michigan has a computer and video game archive?

Centipede anyone?

Overactive customs agents in Switzerland

The sad story of a Stradivarius, on loan from the Austrian central bank to a noted young violinist, seized at the Swiss border by over-zealous customs agents.

The rest of the story, for which I could not find an English language link, is that the violinist was not ever able to bring the violin into Switzerland for use in a planned concert. Instead, an official from the Austrian central bank ultimately went to the border and retrieved the violin.

Hat tip: Herr Prof. Dr. Michael Lechner

Mysteries of air travel

Why does Delta serve "dinner" at 11 PM on its flight to Amsterdam that departs at 9:50 PM from Detroit? Why not just assume that people probably had (a better) dinner at, you know, dinnertime and let them get to sleep?

Just a thought.

Only sheep need a shepherd

In honor of President Obama's speaking (maybe even as I type) at Michigan's soggy graduation ceremony in the Big House, a link to the excerpt from Gene Healy's book The Cult of the Presidency published in Reason magazine a couple of years ago.

A teaser:

The chief executive of the United States is no longer a mere constitutional officer charged with faithful execution of the laws. He is a soul nourisher, a hope giver, a living American talisman against hurricanes, terrorism, economic downturns, and spiritual malaise. He—or she—is the one who answers the phone at 3 a.m. to keep our children safe from harm. The modern president is America’s shrink, a social worker, our very own national talk show host. He’s also the Supreme Warlord of the Earth.

And another:

Today Americans expect their president to pound Teddy Roosevelt’s “bully pulpit,” whipping the electorate into a frenzy to harness power against perceived threats. But the Framers viewed that sort of behavior as fundamentally illegitimate. In fact, the president wasn’t even supposed to be a popular leader. As presidential scholar Jeffrey K. Tulis has pointed out, in the Federalist the term leader is nearly always used pejoratively; the essays by Madison, Alexander Hamilton, and John Jay in defense of the Constitution begin and end with warnings about the perils of populist leadership. The first Federalist warns of “men who have overturned the liberties of republics” by “paying obsequious court to the people, commencing demagogues and ending tyrants,” and the last Federalist raises the specter of a “military despotism” orchestrated by “a victorious demagogue.”

The president, regardless of political flavor, is really just the greatest among bureaucratic functionaries but still only that.