Economics and similar, for the sleep-deprived
A subtle change has been made to the comments links, so they no longer pop up. Does this in any way help with the problem about comments not appearing on permalinked posts, readers?
Update: seemingly not
Update: Oh yeah!
Thursday, May 26, 2011
An important distinction to make if you are ever asked out for drinks with David Cameron
I cannot stop chuckling at the fact that a knocking shop named itself after the only remaining "gentlemens' club" not to admit women even as vistors. The difference was apparently that the gentlemens' club was called "White's Club", while "White's Gentlemen's Club" was a gentlemens' club for gentlemen who were no gentlemen. Anyway it's been closed down now, so as you were.
I am now intrigued at what sordid pleasures might be available at the "National Liberal Club", or indeed at any of these (actually I can pretty much guess what the "Cavalry and Guards" is a euphemism for).
this item posted by the management 5/26/2011 09:11:00 AM
From the department of "What a way to make a living"
Does anyone, at all, in the world, believe that this guy actually did these things? If so I have some CDOs for you to buy.
this item posted by the management 5/26/2011 03:10:00 AM
Sailors, and the women who love them
I can't believe I've never posted this anecdote before. Sadly (although, perhaps not), it's the only "Carry On" episode I've experienced. My memoirs are going to be a bloody dull read.
this item posted by the management 5/26/2011 02:04:00 AM
Wednesday, May 25, 2011
Taking the politics out of politics, and the international relations out of international institutions
Outclude me, please, from the chorus of people who (this happens on a more or less cyclical basis as one or other of the Bretton Woods jobs comes up) are outraged and horrified that the USA gets one and Europe gets the other. Prime example of the genre, Martin Wolf:
[Christine Lagarde, as it happens] is not a perfect candidate: her economics are limited. If she were to become head of the organisation she would have to rely on the advice of those around her. If she were to get the job, it would be essential for whoever replaces John Lipsky, the American first deputy managing director, who is due to depart in August, to be a first-rate economist.
A "first rate economist". Presumably meaning someone with a PhD and possibly even an academic publishing record, from a high-status (which basically means American) university. Hmmmm. Not a fantastic recent track record, those guys, have they? Whatever it was that got us into the current mess, it wasn't a dearth of "first rate economists" Giorgos Papakonstantinou is a first-rate economist.
This is real "too important to be left to generals" territory. A "merit-based" selection process for the IMF top job is effectively assuming that all the issues the IMF faces are technical (not political), and that the problem is to find someone with sufficient technical economic skills to pick the right solution from a mass of confusing alternatives.
In fact, in general the IMF tends to face situations in which there are only about three or four real options, one of which is usually both massively obviously the best idea, and politically very difficult for some powerful constituency or other. That's why it's a political job. And the allocation between the USA and Europe was agreed at the original Bretton Woods conference as part of a very dicey compromise between the only two blocks which can print unlimited hard currency. It's an international institution, and one of the biggest problems in designing such an institution is to persuade the major powers that it is worth their while working through the institutional framework rather than through bilateral diplomacy. That's why the UNSC has permanent members, for example, and it's why France and Germany tend to get first dibs on important Commission posts.
I am no fan at all of the IMF (or of the way in which history is being rewritten to cast them as opponents of pointless austerity). But it does at least kindasorta work as an international institution, which is why I'm in favour of not fixing it. The basic effect of a "merit-based" selection process would be a) one more tax-free job for a mugwump with the right CV, and b) all the important operations currently carried out by the IMF would be stitched up in back room deals, generally featuring either Christine Lagarde or someone who looked very like her.
this item posted by the management 5/25/2011 03:06:00 AM
Friday, May 20, 2011
A somewhat more sympathetic test case ...
Even though the public interest claim is pretty thin. But really, if it's "anti-democratic" to have a "judge-made" privacy law in the UK, is it much more democratic to have that law subverted by unelected peers using absolute privilege?
Clearly the whole thing needs to be put on the basis of UK statute law, rather than courts' interpretation of the European Convention. But I am increasingly coming to the view that this needs to be a Privacy Act, not just "get rid of superinjunctions!". It's more in the "the media industry is an industry" vein - like any other industry it produces pollution, and like any other industry, it lobbies aggressively for that pollution to be completely unregulated if possible. I don't think that we should necessarily go along with that.
this item posted by the management 5/20/2011 01:27:00 AM
Tuesday, May 17, 2011
Remotely attractive test cases ...
... and the seemingly congenital inability of British civil liberties campaigners to find them. The Trafigura case was a genuine issue of considerable public interest, where the superinjunction clearly impaired a sensible and necessary debate. But apparently the face of the superinjunction campaign is going to be a really murky, really squalid case with more than a hint of blackmail to it.
Why? I think two reasons. First, as with the NatWest Three in the US extradition treaty case, the public relations industry is involved. And second, the newspaper publishing industry wants to win a weak case, not a strong one, in order to set as wide a precedent as possible.
this item posted by the management 5/17/2011 02:33:00 AM
Thursday, May 12, 2011
Blagger of the century
It has just struck me that Simon Cowell's fortune is based, fundamentally, on two business coups:
1) Selling the Americans the right to organise a talent contest for themselves
2) Selling the Americans the right to organise a talent contest for themselves, again.
Obviously I am fully aware of the importance of intangible goods, the role of the British creative & media sector, etc etc - we've discussed them several times in the past. But you can see why someone like James Dyson gets wound up about this, can't you?
this item posted by the management 5/12/2011 01:15:00 AM
Wednesday, May 11, 2011
On Veblen's "Theory of the Leisure Class"
If you're Fergus Henderson, then you can talk about "nose to tail eating", using every single scrap of offal, skin and gristle, and people will nod sagely and agree with you that this is a truer, more authentic way to eat meat, and that in many ways it is a deeply respectful way to honour the dead animal by wasting not a scrap.
If you're Gregg's The Bakers? I would guess not.
this item posted by the management 5/11/2011 05:21:00 AM
Another squib on risk management
"At times of volatility, correlations move towards 1[fn1]. We saw that in every market during the crisis, and we saw it again in commodities on Thursday. Which is why protecting yourself with diversification is so dangerous. Just when you need the protection, it disappears"
I don't like that way of thinking, and it's a real example of how Talebian rhetoric about unpredictability of Big-Events-dont-call-them-tail-events leads you up some quite dangerous alleys.
When do you need the protection of diversification? All the time. You never don't need it. Diversification won't help you in a crisis, but nor will anything else; that's why they call it a "crisis".
There is only one thing that will save you in a crisis, and that is "having sufficient capital". And the only proven way to "have sufficient capital in a crisis" involves a risk management technique called "not pissing it away making silly mistakes during normal times". Of which, a sensible approach to diversification is a key part.
 Just by the way, a poor choice of day for this sermon. Not all correlations did move towards 1; only commodity futures did. If you had a diversified portfolio of commodities, bonds and shares, diversification worked for you just fine.
this item posted by the management 5/11/2011 03:03:00 AM
Bitheway, with respect to the "resistible rise of the BNP"
... and specifically with respect to analysis of their underlying support in the North West England euroconstituency, I think that although I clearly lost the battle, I might have won the war. In the 2001 general election, the BNP marked its high-water mark with 16% of the vote in Oldham. In the 2011 local election, it wasn't able to run a single candidate there.
this item posted by the management 5/11/2011 02:10:00 AM
Tuesday, May 10, 2011
In which I continue the time-honoured internet tradition of providing unsolicited consultancy to political parties which I do not support...
I do not have a "tribal hatred" of the Liberal Democrats - I voted for them in 2006 when I was angry at the Labour Party (this was back when I was the most important person in British politics). And I think a number of the points I'm about to make are shared by a few friends who have been much more LibDem-friendly in the past than myself, including a couple of former party members. So while I would be absolutely lying if I didn't say that I was enjoying the spectacle of their support melting down, lying if I claimed not to be intent on the destruction of their leader's career and probably even lying if I claimed to want them to survive as a political party, I am not lying when I say that the following advice is sincere and not motivated by simple hate.
The point that Liberal Democrats don't seem to understand is that they have entered into a coalition government with the Conservative Party and that there are consequences which flow from that. This is odd, as one of the things Nick Clegg is fondest of telling us all, is that he is in a coalition with the Conservative Party and that there are consequences of that. But "political realities" is a term with general application; it doesn't just mean "I am about to break some promises and there is fuck-all you lot can do about it". Here's the political realities as I see them.
1. The LibDems entered into a coalition with the Conservative Party
2. Therefore, the LibDems lost the presumptive trust of the Labour Party
3. Therefore, arguments based on adding LibDem votes and/or seats to Labour votes and/or seats and calling it "the centre-left" have lost credibility
4. Therefore, one cannot assume as of right that Labour voters will support electoral reforms that chiefly benefit the LibDems.
That's why they lost the AV referendum. (NB: the leadership of the Labour Party supported AV, but this is of marginal relevance since party membership is a small fraction of the Labour vote). Moving on:
5. Furthermore, LibDems cannot presume that they will benefit from tactical voting support from Labour voters.
6. Furthermore, LibDems cannot gain support from voters to their left by changing their policies, because nobody cares about their policies; while they are in a coalition government, they "own" the policies of that government.
This is, to a large extent, why the vote share has collapsed. The median LibDem voter between about 2002 and 2010 was quite likely someone who believed (sensibly, a respectable case could certainly be made for this) that they were to the Left of Labour. Their signature policy was a hypothecated income tax increase for education, along with did-they-or-didn't-they opposition to the Iraq War. Now, their electoral support consists of electoral reform trainspotters, about a dozen people who read the Orange Book and daydream about being Gerhard Schroeder, plus that part of the West Country that doesn't get regular newspapers and believes that it is still voting for Gladstone. They have lost precisely that set of voters who they have spent the last year more or less intentionally losing.
So, if the LibDems are interested in being a political party, rather than a political-party re-enactment society, what do they do? I am taking it for granted that the current strategy of fanning out across the internet looking for "progressive" voters to berate and insult for being too babyish to understand coalition politics isn't a goer - the Democrats can get away with this in the USA but that doesn't mean everyone can. In general, the LibDem political hack base really lacks strength in depth - they have very few ideologues and lots and lots of people (including their leader) who only ever joined them in the first place out of the biggish fish's instinct for a smallish pond, and I genuinely believe that they don't understand how badly they're hated. In my analysis, their only real political asset was the presumptive trust and second-preference of Labour voters, and they need to build that back in baby steps.
Since we've already established that I'm the median voter, how would the LDs go about rebuilding trust in me? Difficult. Currently, they are cemented in my view as a bunch of opportunists. I don't think they're ever going to convince me that the Liberal Democrats are anything else, and I now regard myself as having been very, very naive in the past to think otherwise (in the face of literally everyone I know who has had active involvement in electoral politics telling me).
So, I think the LibDems need to convince me that their opportunism has some good purpose. Specifically, I would need to see evidence of coalition policies that they have ameliorated or mitigated. And, at this stage, I think it would be better if this was presented in as neutral and factual a form as possible, preferably with reference to specific amendments to legislation or to public statements. Things like "we are responsible for Lansley's pause on health reform" aren't really good enough, because that's the sort of thing I would only take from a party that had my presumptive trust.
So, that's my analysis. Any ideas, liberals?
Update: This is the sort of thing I'm talking about (not coincidentally, I think, from someone with no background in LibDem politics). Although I have to say, I regard the actual list of "concessions" it links to as very small beer indeed.
this item posted by the management 5/10/2011 01:13:00 AM
Monday, May 09, 2011
They call them "Deathers", apparently
That is to say, silly conspiracy theorists who don't believe that Osama bin Laden is dead. But what's the suitable pejorative for people who believe that ObL is dead, but did not die in the Abbottabad raid? For example, if someone found himself being drawn toward the following theory:
1) That ObL was living in a house that looked rather more like a prison than a mansion; specifically, that it rather looked as if he were being treated in the way in which medieval warlords used to extend hospitality to high-value captives.
2) That if I were a high-ranking "rogue element" in the ISI (NB: the ISI has "rogue elements" like the Sorbonne has "French elements"), I might certainly hang on to Osama bin Laden without any particular plan as to what to do with him, pending a bigger prize than the $25m reward or pending my acquisition of a convincing explanation of how I got him.
3) That if on the other hand, my high value captive were to die on me of kidney failure, there would be little to do except get on the telephone and offer the USA first refusal on the body; if on the other hand I was the USA I might very definitely be tempted to save a bit of national pride with a bit of security theatre.
4) And if I were a US intelligence organisation doing something of the sort, I would make damn certain to a) rub out anyone who might at a later date want to gainsay myself and my co-conspirators, and b) get rid of the body pronto tonto, saving only a small and indubitably genuine sample of tissue (taken elsewhere than the kidneys) for indisputable verification purposes.
I offer this conspiracy theory as open source, for the community.
this item posted by the management 5/09/2011 11:50:00 PM
Live live, breaking news
Possibly the least momentous "LIVEBLOG" ever, the Guardian keeps us up to date in REAL TIME about developments on their own comments threads, followed by footage of a closed pub door. In general, I quite like the Guardian's livetime stuff and at least they're thinking about how to use the medium (also it makes for racier and more colloquial writing, which I am in favour of). But mistakes were bound to be made, and allocating a real time liveblog to this Twitter nonevent was one. Full disclosure - the Guardian hasn't published any of my stuff for years now.
this item posted by the management 5/09/2011 04:51:00 AM
Notes on the pupported biological basis of altruism
Do you occasionally wonder what JBS Haldane's reaction would be if he found out that his wife had slept with his brother? Would it be better or worse if she had slept with eight of his cousins?
this item posted by the management 5/09/2011 01:43:00 AM
Friday, May 06, 2011
Maybe all the people who are asking "But how is it possible that Osama bin Laden lived down the road from an army base and Pakistan didn't know?" could be introduced to all the people who are saying "But you see, it's just not possible to have a currency union without having some sort of plan for it to eventually end up as a fiscal union!", and they can get married and bring up their children to believe in unicorns and the tooth fairy.
Labels: seriously are we children here
this item posted by the management 5/06/2011 03:08:00 AM
Thursday, May 05, 2011
Conspiracy Theory Update
Alert alert alert - as of a few hours ago, the view that Osama bin Laden was killed in a firefight is the absurd conspiracy theory and the view that he was killed without firing a shot is common sense. Avoid embarrassment and being considered a loon by getting it right.
I have no particular opinion on any of this and no burning desire to know the details - at the end of the day, the Navy SEALS are not a police outfit and (as with the SAS in the Iranian Embassy siege) have a way of going about things that intrinsically involves shooting people. But the changing storyline does demonstrate pretty starkly why anyone talking pejoratively about "conspiracy theorists" is being much less of a hard-headed rationalist than they consider themselves to be; since our only source of information is official statements from the US government, the only two possibilities are to believe that some material misrepresentations have been made, or to believe that the US government is telling the entire truth. Both points of view are reasonable to hold.
this item posted by the management 5/05/2011 10:43:00 PM
Idea for a television show: "Later With Jools Holland And Simon Cowell"
Basically the concept would be that the suave boogie-piano enthusiast and bandleader would attract an eclectic collection of international megastars, up-and-coming trendsetters and forgotten giants of yesteryear to an intimate, club-like studio setting, and then Simon Cowell would give a frank assessment of the often wildly variable quality of their performances.
If Cowell is too expensive these days then Gordon Ramsay, or Jeremy Paxman - it is not as if one needs a musical genius to point out that Adele often sings flat, or that R Kelly is pretty much a karaoke act these days.
this item posted by the management 5/05/2011 03:16:00 AM
Tuesday, May 03, 2011
Ticking time bombs, slippery slopes
I notice that we are apparently having a minor debate about whether the intelligence which led to the mission to kill Osama bin Laden was obtained by torture. More worryingly, we are having this debate in terms which imply that some moral conclusion one way or another might be established if it was; that if waterboarding prisoners led us to being able to kill bin Laden, this might go some way toward justifying waterboarding. We're quite a long way from imminent nuclear explosions here aren't we?
I suppose that there might be utilitarians who might swallow the bullet and say that there might be occasions on which it was morally right to torture a prisoner if doing so could produce information which might lead to a really good party for a sufficiently large number of people. But I don't think it's the mainstream position.
Edit: Furthermore, in my opinion, if you've taken ten years to find a guy hiding in plain view, you've got a bit of a bloody brass neck trying to claim "my finding technique is unstoppable!" and demanding that nobody ask questions about your methods because dammit you get results!
this item posted by the management 5/03/2011 03:57:00 PM
A brief note on Ayn Rand and Objectivism
Atlas did not carry the world on his shoulders. He carried the sky on his shoulders, while standing on the earth (specifically, just outside the Gardens of the Hesperides).
If he had been carrying the earth on his shoulders, what would he have stood on?
(according to numerous artists from the Classical period to the present day, the answer is apparently "a rather ridiculous-looking little plinth", but this is hardly going to pass any test of rigorous analytical logic, is it? Examine your premises!)
this item posted by the management 5/03/2011 06:00:00 AM
Prediction and retrodiction
From the "Well, quite" files. In actual fact though, Barry is giving away far too much to the economists (this is a mistake of excessive charity that Dean Baker also sometimes makes).
The point I would make is that people can sound spuriously plausible when talking about the crisis in terms of "foresight" and "prediction". It seems (although for the reasons specified, isn't) reasonable to say that "predicting the future is difficult", and that therefore not too much opprobrium should be attached to economists, forecasters and policymakers for not predicting it.
However, the failures of the real estate crisis weren't just failures to foresee the future - they also involved failures to foresee the recent past. The US housing market started to fall in late 2005. By early 2006, a couple of subprime lenders had already failed and Ameriquest was well on the way. Plenty, plenty of economists were still saying that nothing was wrong well into 2007.
I've noted this a couple of times in the past - that while predicting the future, black swans, blah blah blah, is difficult, it is actually of surprisingly high value in investment terms (and this accounts for the success and survival of the global macro hedge fund industry in 2008, per this excellent book) to simply be aware that something big has recently happened in the economy and that this warrants action in response. After all, you can forgive a yacht captain for not predicting a coming storm, but if the guy didn't change his sails after the wind had turned, he thoroughly deserves to be spitting out salt water.
this item posted by the management 5/03/2011 03:38:00 AM