White House/Wodehouse

I draw your attention to the letters page of the Times today, where William Julius Wilson smacks down Krugman for last weeks' "Nixonland" column. It really was a nasty column. The reader is clearly given the impression that the MSNBC guy who made the inexcusable comment about Chelsea was acting at the behest of Obama's campaign. The column is a prime example of the sneaking insinuation it purports to decry.



But enough of the road to the White House. I took an escapist break this past weekend and re-read Pigs Have Wings, by P.G. Wodehouse. I have read just about all of Wodehouse's stuff and he is just phenomenal. Wodehouse has been admired by people as different as Evelyn Waugh and Alexander Cockburn. He is the best writer of comedy ever to have lifted a pen, I think. While the novels involving Bertie Wooster and his butler Jeeves are more widely known, I strongly recommend the Blandings Castle series, of which Pigs is one. Much of the plotting revolves around the corpulent Empress of Blandings, Lord Emsworth's prize pig, who has won the prize for corpulence at the local Agricultural Show on multiple occasions, despite the nefarious attempts on the part of owners of rival pigs to hobble him. I guess you had to be there - as it were- but if you've never read him before, drop everything until you have. You will thank me. How can you not like a man who pens throwaway lines such as:

"If not positively disgruntled, he was certainly far from gruntled,"

The Next Steroids.

I'm not much of a sports fan, but the story below suggests once again that it's time to take the money totally out of sports (beyond salaries for jobs done). The "winner take all" nature of the game creates a gigantic incentive to use performance-enhancing drugs to get into the high-paid majors (which pay much (much) more than the minors and amateur sports) or to stay there (cf. Barry Bonds).

If things continue to go the way they are going, big-league professional sports will either involve cyborgs, druggies, and/or transplantees -- or it will involve a draconian and intrusive system to prevent any kind of significant enhancement (making an extremely arbitrary decision about what's "significant").

So, even though (as an inveterate couch potato) I can't be the pied piper in this movement, I think sports fans should shun major-league sports and flock to (truly) amateur sports, or as a compromise, minor-league sports. The Olympics would be a good place to start: fans should insist that it go back to amateur athletics, perhaps with some allowance for athletes receiving a standardized salary.

My friend Ian responded that "Athletes have been cyborgs since shoes and helmets were invented and the pharmacology of performance enhancement is thousands of years old."

True, but that doesn't change the point: we have to end the winner-take-all nature of sports. (Look what winner-take-all competition does to politics! but that's another question.)


The New York Times / February 12, 2008
Finding May Solve Riddle of Fatigue in Muscles
By GINA (Piña) KOLATA

One of the great unanswered questions in physiology is why muscles get tired. The experience is universal, common to creatures that have muscles, but the answer has been elusive until now.

Scientists at Columbia say they have not only come up with an answer, but have also devised, for mice, an experimental drug that can revive the animals and let them keep running long after they would normally flop down in exhaustion.

For decades, muscle fatigue had been largely ignored or misunderstood. Leading physiology textbooks did not even try to offer a mechanism, said Dr. Andrew Marks, principal investigator of the new study. A popular theory, that muscles become tired because they release lactic acid, was discredited not long ago.

In a report published Monday in an early online edition of Proceedings of the National Academy of Sciences, Dr. Marks says the problem is calcium flow inside muscle cells. Ordinarily, ebbs and flows of calcium in cells control muscle contractions. But when muscles grow tired, the investigators report, tiny channels in them start leaking calcium, and that weakens contractions. At the same time, the leaked calcium stimulates an enzyme that eats into muscle fibers, contributing to the muscle exhaustion.

-ellipsis-

Then, collaborating with David Nieman, an exercise scientist at Appalachian State University in Boone, N.C., the investigators asked whether the human skeletal muscles grew tired for the same reason, calcium leaks.

Highly trained bicyclists rode stationary bikes at intense levels of exertion for three hours a day three days in a row. For comparison, other cyclists sat in the room but did not exercise.

Dr. Nieman removed snips of thigh muscle from all the athletes after the third day and sent them to Columbia, where Dr. Marks's group analyzed them without knowing which samples were from the exercisers and which were not.The results, Dr. Marks said, were clear. The calcium channels in the exercisers leaked. A few days later, the channels had repaired themselves. The athletes were back to normal.

Of course, even though Dr. Marks wants to develop the drug to help people with congestive heart failure, hoping to alleviate their fatigue and improve their heart functions, athletes might also be tempted to use it if it eventually goes to the market.

-ellipsis-

So the day may come when there is an antifatigue drug.

That idea, "is sort of amazing," said Dr. Steven Liggett, a heart-failure researcher at the University of Maryland. Yet, Dr. Liggett said, for athletes "we have to ask whether it would be prudent to be circumventing this mechanism."

"Maybe this is a protective mechanism," he said. "Maybe fatigue is saying that you are getting ready to go into a danger zone. So it is cutting you off. If you could will yourself to run as fast and as long as you could, some people would run until they keeled over and died."

Copyright 2008 The New York Times Company

A View of Obama's Win from Virginia

So, this is the first time ever that I am aware of that a primary in Virginia has been important in tilting a presidential nominating race, now all the more significant since VA appears to be competitive in the national election, despite an edge John McCain may have with all the military personnel and veterans in the state (and, yes, most of those protesting Evangelical pro-Huckabee supporters will probably "go home" to him against that obvious "Muslim," Barack Hussein Obama). I had made forecasts in a local blog about the outcome, but way underpredicted the scale of Obama's win (as did everybody else).

I note that some of the media has been misreporting things. I heard somebody this morning on ABC claim that Obama won "all regions" of VA. Not so. Except for saying Northern VA would be close (it was a blowout for Obama) I came near to perfectly forecasting the regional outcomes in the state. I said the Blue Ridge Mountains would be the line, with Hillary winning most locales west of them, with the city of Harrisonburg (where I live) a possible exception (it went for Obama with 69%), and east of the mountains going for Obama, with the exception maybe of a few counties just east of the mountains in the Southwest. This is how it played out. Among the counties east of the Blue Ridge in the Southwest going for Hillary was Franklin County, long famous as the Moonshine Capital of America (yes, she got the Dukes of Hazzard vote, especially Daisy's mom and aunt). One of the few mistakes I made was that the county containing Harrisonburg (here in VA, alone among states, counties do not embed cities), Rockingham, also went for Obama, although only by 57%. I blame this on the influence of Harrisonburg on the county. The only identifiable demographic group going for Hillary statewide were white women, by 55% (which group included my wife, who says "we need a woman as president to keep those macho bastards in line"). I close by noting that both Rockingham and Harrisonburg and the areas that went for Hillary, mostly also went for Huckabee on the Republican side.

Support the Troops, Not!

The mantra about supporting the troops is like the conservatives concerned about the sanctity of life until after the baby is born. The military opposes improving the GI Bill because it gives soldiers and incentive not to reenlist. Even after a soldier leaves, navigating the system is complicated and the ultimate funding is inadequate for a college education, except, perhaps from a mail-order diploma mill. Here is the story from the Boston Globe.


Sennott, Charles M. 2008. "GI Bill Falling Short of College Tuition Costs: Pentagon Resists Boost In Benefits." Boston Globe (10 February).

"The original GI Bill provided full tuition, housing, and living costs for some 8 million veterans; for many, it was the engine of opportunity in the postwar years. But, in the mid 1980s, the program was scaled back to a peacetime program that pays a flat sum. Today the most a veteran can receive is approximately $9,600 a year for four years -- no matter what college costs."

"The Pentagon and White House have so far resisted a new GI Bill out of fear that too many will use it -- choosing to shed the uniform in favor of school and civilian life. "The incentive to serve and leave," said Robert Clarke, assistant director of accessions policy at the Department of Defense, may "outweigh the incentive to have them stay"."

"Paul Rieckhoff, an Iraq war veteran and director of the Iraq and Afghanistan Veterans of America, an organization based in New York, said that enhancing the GI Bill is a solid investment in the country's future. One study he cites suggests that every dollar spent on the original GI Bill created a seven-fold return for the economy. "Funding the GI Bill as Senator Webb proposes it for one year would cost this country what it spends in Iraq in 36 hours," he said."

"Beyond the financial struggle is a daunting bureaucratic obstacle course that can confound veterans and sometimes steer them away from the benefit altogether. That struggle starts with the requirement that all participants buy into the program with a $1,200 upfront payment. William Bardenwerper, an Army veteran of Iraq with an undergraduate degree from Princeton University, described a six-month odyssey of paperwork in trying to navigate the current GI Bill. He kept a detailed log of his frustrating, and to-date fruitless, effort to access his benefits for graduate school. "Not to sound elitist," said Bardenwerper, "but if a 31-year-old Princeton grad has a hard time deciphering what he is entitled to, then I have no idea how a 21-year-old armed only with a GED could navigate this system."

"Clarke, of the Department of Defense, said it is simply off-base to compare what was offered to World War II veterans to the situation today. There was no concern about retention rates back then, he said; rapid demobilization was the order of the day."

Taxes, Mandates and Rebates

I have to disagree with Mark Thoma regarding the equity advantage of mandates (like CAFE standards) over taxes on carbons and other bads. I think he misses two points: equity can be credibly built into the tax, and mandates and taxes (or permits) are not mutually exclusive.



For simplicity, let’s assume that the policy on the table is a carbon tax, overlooking the advantages (in this case) of a tradeable permit system. Requiring 100% auction of permits would be equivalent to a tax under full certainty, but in an uncertain world—the one I woke up in this morning—a permit system would nail down the atmospheric impacts at the expense of price volatility, while taxes would do the opposite. But we will ignore this for now and talk only of taxes.

My first point is that a tax system could be introduced with the stipulation that all (or a very, very high percentage of) proceeds be rebated to citizens on a per capita basis. As Boyce and Riddle show, this would be highly progressive, benefitting a solid majority of us on a net basis (even after subtracting higher prices from rebate income). Yes, the rich could still whiz by on the freeway in their supersized guzzlers, but ordinary folks could take comfort in their ability to buy more of the non-carbon-emitting stuff. They might even think, as the behemoth roars by, “That’s another dollar in my pocket.”

Thoma worries that low income people might worry that a future administration and congress might tinker with the rebate formula. Maybe, but it’s our job to nudge perceptions as close as possible to reality. Consider Social Security: we have seen multiple attempts in recent years to eviscerate the program, but they have been turned back every time, for a simple reason: most of us benefit from SS and would lose out if it were privatized. The same goes for a rebate plan. If it is written in as a basic entitlement, once the rebates start rolling the program will be virtually impregnable.

Second, I am sensing an emerging competition between tax (or permit) advocates and those pushing higher standards. There is no reason for this to happen, and each should stand or fall on its own merits. For instance, students of energy efficiency, like Gar Lipow, tell us that there is lots of low-hanging fruit—big improvements in efficiency at no net cost or even producing a net benefit. The purpose of a standard would be to circumvent information gaps, coordination failures and the like. A tax doesn’t change any of this; on the contrary, by enlarging the pool of innovations that can ultimately pay for themselves, a tax can justify an even more stringent efficiency standard. On the reverse side, a well-designed efficiency standard can help the public better cope with the demands of a tax. True, a bad standard can be an efficiency-loser, but we don’t want this beast with or without a tax.

Keeping an eye on the bottom line, once we get a new congress and a new president in 2009, a national climate change program will be on the table. We are likely to get a carbon cap: a permit system that limits carbon emissions, with the cap going down on a yearly basis. We have to stay very focused to avoid fine print that will weaken the effect of the program or steer the huge amount of money involved into the pockets of the upper class. But we should also use the opportunity to look for regulations that target bottlenecks and irrationalities in the market: better energy efficiency in transportation, land use, the built environment.

Why either/or?

Will the GOP Ever Join the Pigou Club?

Mark Thoma wonders why there is more support for mandates such as CAFE standards over Pigouvian taxes as a means of addressing the problem of global warming and comes up with this:

In thinking about efficiency as the primary reason for promoting one policy over the other, I think we might be missing something important: equity. More choice is best most of the time, but when it's a matter of being constrained, of not being able to do something you want or need to do, people want that constraint on behavior to be shared equally - especially when it involves something as essential to daily life as energy.

Kevin Drum challenges the premise that mandates are politically preferred to taxes, but then adds this bit of realism:

Republican politicians, of course, are a whole different story. Greg Mankiw can yell "Pigou Club" until he's blue in the face, but as a Republican himself he knows perfectly well that it won't do any good because Grover Norquist and the Wall Street Journal editorial page will cheerfully eviscerate any Republican who dares to raise any tax of any kind, regardless of how efficient it is, what it's funding, or whether it's revenue neutral.

Greg does seem to be trying to alter this Norquist dominance over GOP politics. Good luck Greg!

Good for the Geese, Bad for the Geezer

Out running today, I had occasion to think about the difficulties involved in sharing the planet with geese. These hefty birds would be a plus in every respect were it not for their shortcomings in the domain of personal hygiene. While picking my way gingerly along the route, I focused on possible solutions.



First, we need to direct environmental budgets to serious problems, like goose poop. If people were pooping in public to anywhere near the same extent, stopping it would be viewed as a top priority.

Now on to specifics. As we know, geese are subject to imprinting. We should pay people to become surrogate goose-parents and to lead them (as pictured in the linked photo) to an appropriate bathroom or outhouse so that they can see what proper pooping looks like. But this will create a further complication: geese, alighting from their migrations, will be knocking on doors everywhere, asking to use the facilities. To forestall this, I recommend building banks of public toilets along known flyways. This might seem extravagant, but the size of these goose-a-potties can be small, holding down costs.

And then we humans can run along rivers and bays without staring at our feet all the time.

The Intellectual Roots of Obamian Post-Partisanship

Barack Obama has been driving Paul Krugman and others crazy with his call for a warm, fuzzy hands-across-America style of politics. Where does this come from? Here’s one answer....



Cass Sunstein. Sunstein has been cited as an advisor to Obama, and he has written extensively on the dangers of a world in which people only communicate with those they already agree with. If the right listens only to Limbaugh and Hannity, and the left logs on only to Huffington and Kos, each side will shift further away from the other, until there is no middle ground left. All will be blinkered extremism. For details, consult his book Republic.com or his continuing stream of papers like this one. (Question: how does he write this stuff faster than I can read it?)

I have mixed feelings about this view of our political condition. On the one hand, as a partial follower of John Dewey, and as someone who teaches at an institution that embraces “learning across significant differences”, I know how important it is to listen with an open mind to those whose point of view challenges your own. You do yourself and the quality of your thinking no favor when you live and converse in an echo chamber.

But there are two problems with the let’s-all-get-along school. First, there is the issue of power. There are wealthy, well-entrenched interests that don’t want an open-minded, cooperative approach to political questions. They are in charge and want to keep it that way. Opposing views will be censored, defunded, misrepresented and, if they arise in distant oil-bearing regions, incarcerated and waterboarded. It is necessary to struggle against these interests if we want to create a world in which thoughtfulness and generosity rule.

Second, what counts as moderation in America is often hopelessly skewed to the right, even by the standards of other capitalist countries. I generally distrust corner solutions—all this or all that—and look for blending and balancing, but if John Edwards is too far to the left to be taken seriously, I’m a speck on the thin edge of the political distribution, several sigmas out. In this respect, the Sunstein/Obama analysis is correct, but radically incomplete. We need to really extend the conversation to the vast regions beyond the pale of approved discourse. The resulting zone of consensus will be moderate by the standards of intelligent human thought but extreme with respect the political constraints we live under today.

Economy is sound

Bush: "our economy is structurally sound in the long term and that we're dealing with uncertainties in the short term."

Need I say more?

A Con Job Versus Wishful Thinking

The absences serious policy discussion in the vacuous election campaign made me think about the CON Job, were con indicates coal, oil, and nuclear. Other than a brief mention of the ridiculous tax subsidies that the cons get, nobody has said anything serious about global warming, which brings me to wishful thinking, where the wish is Wind, Solar, and Hydrogen -- assuming that the hydrogen comes from reasonable sources, such as a recent story about using bacteria, instead of nukes, to produce hydrogen.

Economists As Bullying Witch Doctors

Esther-Mirjam Sent has a work in progress regarding how Herbert Simon made an ass of himself in debating with progressive mathematicians, who did not approve of Samuel Huntington joining the National Academy of Sciences. She included two wonderful quotes from one of the mathematicians, Neal Koblitz regarding economist misuse of mathematics.

Sent, Esther-Mirjam. 2008. "Mathematical Verbiage as a Witch Doctor's Incantation? Herbert Simon vs. The Mathematics Community." unpub.

Koblitz, Neal. 1988. "A Tale of Three Equations: Or the Emperors Have No Clothes." The Mathematical Intelligencer, 10: 1, pp. 4-10.

10: "Mathematical verbiage is being used like a witch doctor's incantation, to install a sense of awe and reverence in the gullible and poorly educated."

Koblitz, Neal (1981) "Mathematics as Propaganda." in Lynn Arthur Steen, ed. Mathematics Tomorrow (New York: Springer-Verlag): pp. 111-120.

Koblitz (1981) had noted: "Mathematics can be used to mystify and intimidate rather than to enlighten the public."

Carbon Offsets as Personal Absolution and Environmental Policy

I am at the Bainbridge Graduate Institute, where last night I heard a presentation on the carbon offset market. Someone from the audience asked if this is really just a modern version of purchasing indulgences, salving the conscience of the sinner so he can go on sinning. This is a fair question, but it doesn’t dispel the confusion that now surrounds offsetting.

First point: it is an obvious fact that many if not most of the offsetting crowd in the US, the ones who seek to neutralize their carbon footprint, take a moralistic approach. In the end, purchasing offsets is about them and how they feel about themselves. I wouldn’t condemn this, since good intentions are, well, good (most of the time). But from time to time we should ask ourselves, what is the net effect of this business on actual carbon in the atmosphere?

This leads to the second point: carbon offsets mean entirely different things now and under a future regime of carbon permits. Today, if you buy a carbon offset, there is no particular social cost and probably some potential social gain. The offset doesn’t make you drive or burn fuel oil; you buy the offset because you do these things in the first place. Meanwhile, if the offset causes any improvement in the carbon situation somewhere else, even just a little, it is a plus. True, some offsets also make things worse because they take a tunnel vision to the problem and ignore other environmental and social effects, but these can be avoided with a little research.

Now think about the future. Suppose we institute a system of carbon permits, ratcheting them down each year to meet our long term carbon goals. In this hopefully not too hypothetical world carbon offsets become a threat. An offset represents the cancellation of some part of the permit framework: you get to emit more carbon because you bought an offset. In this case there is a clear and substantial social cost, measured against the same iffy social gain. The net effect is that carbon emissions are likely to go up.

Moral of the story: transcend moralism. Put some of your spare cash into carbon offsets, but do some digging into the practices of the offset providers. Support a national system of carbon emission controls that makes no room for offsets.

Interest Rates During the Clinton Years

In a couple of comments to this post, EconoSpeak reader wellbasicly at first questioned whether the 1993 return to fiscal sanity actually promoted long-term growth and then posed this question:

for instance it is incontrovertible that interest rates did not go down

Our graph shows that interest rates moved up and down during the 1992 to 2000 period but it also shows that the interest rate was 5.24% when Clinton was leaving office as compared to 6.77% when Bush41 was leaving. So to the simple question posed, the answer is yes. Now matters like cause and effect are a little more difficult.



Much of the ups and downs likely relate to Federal Reserve’s actions and their view of how the macroeconomy was stacking up with respect to full employment. For example, the FED was allowing interest rates to fall during 1992 as the economy was weak. Why the FED slammed on the monetary brakes in 1994 was beyond me because the recovery had yet to get us anywhere near full employment.

But mercifully, the FED did allow interest rates to basically fall during the next four years even as economic growth was quite strong. I suspect the return to fiscal sanity convinced the FED that we could encourage more investment demand as at least the government was trying to boost national savings for a change.

Alas, the experiment with fiscal sanity and more national savings departed the White House along with the Clinton economic team. Then again, this decade started off with an insufficiency of aggregate demand that was stubborn to reverse itself for several years.

Is the Obama Campaign saying the 1993 Tax Increase and Health Care Proposals Were Bad Politics?

Greg Sargent notes:

In what may be Obama's most direct and aggressive criticism of Bill Clinton's presidency yet, the Obama campaign dropped a new mailer just before Super Tuesday that blasts "the Clintons" for wreaking massive losses on the Democratic party throughout the 1990s.

The Republicans did win a majority in Congress during the 1994 elections. From a policy perspective, what to make of this mailer?



As I recall, the Clinton Administration was pushing a couple of policy in 1993. One was a tax increase to end the Reagan-Bush41 policy of Spend&Spend and Borrow&Borrow. The other was the ill fated health care reforms. If Senator Obama is now saying he does not have the courage to end Bush43’s fiscal irresponsibility, then why should we want him as President? And it strikes me that health care reform will be a high priority for our party during the 2008 election.

But maybe the Senator does have the courage to push for both fiscal responsibility and health care reform. If so, I would suggest that Senator Obama apologize for this mailer. Let me also echo a concern that Kevin Drum shared:

So what does this tell us? Nothing except that this was a really, really close race.

The good news: Exciting! The bad news: Contrary to the storyline the talking heads have been feeding us, this hasn't really been a very nasty race. But it might turn into one now. Fasten your seat belts.

My plea to both candidates is that they try really hard to avoid what Kevin fears here (and this plea extends to the spouses even the ones who used to President).

Some Economists for Edwards to Endorse Obama

I am jumping the gun as this has not yet been publicly announced, but on Sunday about half of the former group, "Economists for Edwards," agreed at the urging of James Galbraith and Clyde Prestowitz to endorse Barack Obama for president. A condition of this, which I insisted on as a condition for signing on, was that it be made clear in our statement that we would be working to change some of Obama's policy positions, particularly on health care and social security, to become more like those supported by Edwards. There was considerable debate in the group on all this, and about half are not signing on. However, none of those not signing on expressed that they favored Hillary instead, even though some favored some of her policy positions.

Regarding the social security issue, I would like to make public a table that I have cooked up with invaluable input from Bruce Webb. It makes clear the degree to which reality in the last decade has been much closer to the low cost (LC) projections by the Social Security Trustees, the projection under which the system never runs a deficit ever, in contrast with the widely publicized intermediate cost (IC) projections which give deficits starting in 2017 and "bankruptcy" in 2041 (after which recipients would only be getting about 120% of what ones are now in real terms), thus reinforcing the case for doing nothing. The numbers are annual percentage terms, and I think it is otherwise pretty self-explanatory. The only year that reality was below the IC projection was the recession year of 2001, and it exceeded the LC projection in six out of the ten years. I also note that final GDP numbers for 2007 are not in, but social security balances came in above the IC projection by $3 billion, but below the LC projection by $12 billion.

Year IC projection LC projection Actual real GDP change
1997 2.5% 3.2% 3.8%
1998 2.5% 3.1% 3.9%
1999 2.6% 3.4% 4.0%
2000 3.5% 3.9% 5.1%
2001 3.1% 3.5% 1.0%
2002 0.7% 1.6% 2.4%
2003 2.9% 3.8% 3.1%
2004 4.4% 4.9% 4.4%
2005 3.6% 3.9% 3.6%
2006 3.4% 3.8% 4.7%

1997-2006 average IC = 2.92% LC = 3.51% Actual = 3.60%
2001-2006 average IC = 3.02% LC = 3.58% Actual = 3.37%