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, September 30, 2010

On not being obliged to vote Democrat, part 2

Continuing in this series …

The Paradox of Voting and the Bait and Switch

This was trailed in comments … basically, the second point I'd make is that when major party activists put the guilt-trip on minor party supporters[1], they engage in what looks like very fallacious reasoning. The point is that a minor party supporter has three options on election day:

First, stay at home
Second, vote for their minor party
Third, vote Democrat

And the thing is that the major party activist has to steer them between the Scylla and Charybdis of the first two choices, both of which might superficially look more attractive than voting for a candidate you don't support[2]. To do so, they need to make two contradictory arguments.

Obviously the problem to overcome in getting you to drag your ass[3] down to the polling station is the Paradox of Voting. Which isn't really a paradox; it could more accurately be titled "The Actual Extremely Low Expected Value Of Voting". This requires an appeal to your civic sense of duty; remember Martin Luther King, etc. In other words, they need you to see it as your duty to society to vote, or alternatively to see your vote as an important form of political expression.

However, once your ass is duly dragged and you're in the voting booth, the last thing they want you to do is your civic duty (which would be to vote for the candidate you think is the best; that's how voting systems work, strategic or tactical behaviour is a pathology of the system) or political expression (which also wouldn't have you voting for their guy). Once you're there, they want to argue in purely instrumental terms - you have to vote for the Democrats because if you vote for your minority party, you have no chance at all of being the marginal voter.

It looks inconsistent, because it is. Particularly in a midterm election, when you have a very small chance of being the deciding vote for a Congressman who in turn has a very small chance of being the deciding vote on an issue of importance (and given that this is the Democrats we are talking about, you have to take into account votes of importance where your congressman is the swing vote for the wrong side), the expected value of your vote is very small indeed, and the costs of it are the psychological toll on your own morale, plus the opportunity cost of whatever else you might have done with the time. Which will be the subject of part three.

[1] I'm using this term innaccurately to refer to anyone who doesn't support the Democrats, but who might be considering whether to vote for them on lesser-evil grounds, to avoid anything more cumbersome.

[2] Note that in many important cases (including many of the kind of close races where people really start putting the pressure on minor party supporters), the incumbent Democrat you are being exhorted to turn out and vote for might be absolutely atrocious. Because of the absurd lack of aprty discipline in US politics, where it is not even grounds for loss of seniority if someone actively campaigns for the other side, it is entirely likely that in the November election there will be people on "the Left" who are asked in the name of "save our precious healthcare reforms", to vote for Congressional candidates who did their level best to destroy Obamacare.

[3] note American spelling
18 comments this item posted by the management 9/30/2010 08:20:00 AM
Thursday Music Link

In which themes are revisited ...

Laurindo Almeida and the Modern Jazz Quartet play Bach

This Debbie Harry version of "Well Did You Evah" is a ton of fun

also a few more modern classics in this spirited defence of 20th century music in a very long blood'n'treasure comments thread.
1 comments this item posted by the management 9/30/2010 03:27:00 AM
This one is obvious

What common practices of today will be looked back on with horror by future generations, like slavery is today?

Everyone's all on about vegetarianism and the enviroment, but I think it's simpler than that. Future generations of Britons and Americans will look back with horror and digust at the days when we used to allow caricatures of the Prophet Mohammed to be published and tolerated blasphemy and obscenity to be published in the daily newspapers.
15 comments this item posted by the management 9/30/2010 01:50:00 AM

Wednesday, September 29, 2010

Respublica Policy Limited - CH return now filed

A grateful nation says "thanks". Now holding our breath for "The Respublica Trust" (return due 17 December). Also the Quilliam Foundation has its CH return due on 18 December and its accounts due on New Year's Eve - careful with the Boxing Day snooze lads. Biteback Media Limited accounts due to be filed tomorrow! Well done to Social Affairs Unit Magazines Ltd (Standpoint), which is nice and up to date, and to the Centre for Social Cohesion. Policy Exchange Limited due on 31 Oct. And of course, the Henry Jackson Society's Charities Commission filings for the year to Dec 2009 will be due on the same date.
0 comments this item posted by the management 9/29/2010 05:37:00 AM

Tuesday, September 28, 2010

On not being obliged to vote Democrat, part one

As we head on toward US midterm elections (a set of elections in which President Obama, the charismatic and world-historical leader will not be standing, the somewhat less attractive Democratic slate consisting of "a bunch of old white guys, most of them rather rightwing"), we head once more into that season in which anyone with a US passport and politics to the left of the Washington Post editorial page has the unpleasant experience of being informed, usually quite bluntly, that the voting franchise which the US Constitution appears to grant to them personally is actually the simple property of the Democratic Party, and that any failure to dispose of it accordingly is to be regarded as a terrible dereliction of moral duty.

Obviously, one can hardly blame the Democrats for carrying the scars of 2000, but this is a point of view with which I strongly disagree, and since the current administration doesn't seem to feel the need to be polite in demanding votes[1], nor do I. Time for a short series setting out the case for not letting yourself be pushed around by the median voter theorem. I will start with an argument that is a) unserious, b) rather technical and c) therefore ineffective, to lull you all into a false sense of security. Rest assured, future episodes will get rather more realistic and, I hope, perhaps a little more convincing, and therefore are likely to generate significantly more discomfort.

Point the first: Nobody really believes in the median voter theorem

Assume a voter faced with a choice between four alternatives - {D, R, minor party, abstain}. Suppose further that the last two are genuinely equivalent (an assumption that will be relaxed in a future episode). Stipulate further that R is always measurably worse than D. The standard first year political science result would say that no matter what the extent to which you dislike D, you still ought to vote for them.

So the question is - how bad does D have to get before you get off the bus? Racial policies of mass internment? Genocidal wars in the Third World? Bad examples, I know (and there are some souls in the grip of the model who probably would vote for a policy of exterminating X puppies over a policy of exterminating X+1), but it seems pretty clear that there is some point at which it becomes obvious that a morally and politically valid response is simply to declare that the fundamental basis of the implied democratic contract has broken down, and that it's a reasonable choice to give up on electoral politics altogether. (Simple proof: if this wasn't the case, then the government of a one-party state could sponsor a local branch of the Khmer Rouge to stand against them on a Year Zero ticket, thereby obliging the local Aung San Suu Kyi figure to campaign in their favour).

The mistake here is in treating a descriptive model (the spatial competition framework underlying the median voter theorem) as a normative one. It's a model which is meant to predict which ice cream cart you choose out of two, not one that's meant to persuade you to buy an ice cream if you don't want one.

It might (and indeed, probably will) be successfully objected here that the Democrats aren't anywhere near the level at which it becomes an actual act of evil to vote for them, although Dennis Perrin disagrees. But remember that the (abstain, third party) option has more or less been set to zero by stipulation in this model, which is the assumption that will need to be relaxed, and when we do the expected value calculation you might be surprised at the results.

[1] Actually, it appears that if you are a member of "The Left" in America, it isn't just the vote that they want. A proportion of your money and quite some few hours of your time are also apparently to be mortgaged as "campaign contributions". Recent immigrants from Africa or Sicily might be confused by this, since the relationship in American politics is all bloody quid and no bloody quo.
22 comments this item posted by the management 9/28/2010 04:26:00 AM

Thursday, September 23, 2010

From the department of reader deterrence

Some reasonably sensible advice on how to throw a dinner party, from "The Awl". One thing I don't get though - I understand why she specifies Italian pasta and French bread, but what's so special about Polish glassware?
12 comments this item posted by the management 9/23/2010 05:44:00 AM
Thursday music link

Isaiah Berlin said (and it is widely quoted by people who want to sound profound) that the fox knows many things, but the hedgehog knows one big thing.

Mind you, the thing that the hedgehog actually knows, is how to shove its nose up against its arse and hope that its problems go away by themselves. It's not really all that impressive a thing to have as your Very Big Knowledge.

Cinderella, by the Sonics, a band which really did know one big thing.

Update: Guest suggester Des von Bladet points toward pagan metal stuff. Since I don't speak Saxon, it just seems like fairly decent melodic thrash to me. It does underline the point though that the Nazi-pagan types are the ones with a firm grip on the traditions of pre-Christian Europe, while the nature and tolerance Wiccans really aren't. All of which goes to show that the ancient tribal cultures were a bunch of bastards, and 1950s hippy-dippy chanters are much nicer and better people. Civilisation was a massive improvement on traditional cultures, that's why they call it "civilisation".
7 comments this item posted by the management 9/23/2010 01:45:00 AM

Wednesday, September 22, 2010

Wicca, the thinking man's Scientology

See here - in comments, me and many of the usual cast of characters, giving a bit of gentle stick to the cloud-dancer crowd.

We used to have quite a few of these types hanging around while I was growing up, naturally (there's a proper Druids' circle halfway up the mountain behind my mum's house). Also this rather grim cult, who ran a pretty cool shop in the Deiniol Shopping Centre, where you could buy chess sets and small electric motors. They did not in general look too closely into the pages of the Mabinogion or the Book of Leinster, but I did, once, and I can exclusively reveal to D^2D readers that in fact, the Celts did not revere Swarovski crystals, did not use the elemental classification of Thales of Miletus, and in fact the main themes of Celtic mythology were

a) Murdering people and stealing their cows.
b) Passing out drunk and fantasising about war.
c) Aggravated sexual assault of one sort or another.

Makes me think I should revive Secret Society Blogging - not so much in America, but in Europe there were quite a few genuine attempts to revive the traditions of the pre-Roman tribes and concoct them into something resembling a religion. They more or less all ended up on the wrong side of the Second World War, though. Post war, modern Anglican theology has been surprisingly influential on Satanism; the more modern kind of actually existing Satanists will often accept (I think) Don Cupitt's definition of Satan as "a kind of state of being apart from God".
28 comments this item posted by the management 9/22/2010 07:12:00 AM

Tuesday, September 21, 2010

Praise the Lord and pass the carved wooden phallus

A niche market for anyone who's recently bought a lathe, via dealbreaker. On the one hand, anyone who has ever played rugby will know that there's always some type trying to do the "manliness", let's-all-take-our-clothes-off-and-have-a-bonding-experience thing; usually this character isn't even original enough to be a closet case. On the other hand, the guy who objected to this corporate weekend is "a chiropractor turned negligence lawyer", ie, about as unattractive a plaintiff as you could possibly invent. So it goes.

They also mention "Landmark". I once had a conversation about Landmark weekends which went on for nearly twenty minutes before it turned out that they were talking about self-realisation and development while I was talking about a plan to spend a weekend getting pissed in a converted lighthouse with my mates.
8 comments this item posted by the management 9/21/2010 02:50:00 PM

Monday, September 20, 2010

The injustice of it all

Via Henry, I must say that I heartily agree with Ben Stein that there is something fundamentally wrong and unfair about a world in which he pays higher rate tax.

(irregular readers may wonder who the fuck this guy is, as I do occasionally myself. He's a curious character, whose activities have been documented ably by Felix. In his mind, Ben Stein is an economist and stock market commentator. In reality, he's the guy who said "anyone? Bueller? anyone?".
13 comments this item posted by the management 9/20/2010 01:12:00 AM

Thursday, September 16, 2010

Thursday Music Link

My plea a couple of years ago that after "Twenty years ago today" had been twenty years in the past for twenty years, we could perhaps stop blaming the 1960s for our problems, fell on stony ground. There is a piece of blah by Michael Kinsley doing the rounds, basically doing the whole "baby boomers, the selfish generation, entitled, not the Greatest Generation, concept of sacrifice, grr hippies, self-loathing, sixties" thing, tied to some dumbass idea or other about the national debt.

Fact: The 1960s postwar generation defeated the Soviet Union, a military power clearly comparable to Nazi Germany. And they did it more or less without firing a shot. They also managed to end apartheid in South Africa and the USA. That's pretty good going actually.

Of course, none of this counts, because what's missing is sacrifice, nobility, suffering for a cause etc. The greatest lesson of both the Sixties and the Cold War is - fuck that for a lark. One of the reasons why, despite it all, I'm still an economist is that economics, for all its many faults, measures the goodness of things by what their results are, not in some twisted calculus of misery. Victory in the Cold War is not less meaningful by the fact that its casualties could be measured in single rather than double digits of millions.

I wrote (but scrapped) a post on something I was going to call "the McCain ratio", after the Senator and Presidential candidate, this being the ratio between the amount of personal suffering and heroism expended in a cause, to the the actual contribution made. If someone had undergone five years of prison camp torture, but the end result was that they destroyed one of their own side's planes and made a propaganda film for the enemy, I would standardise that as minus one McCain units; an alternative numeraire might have been the corresponding ratio for Ayaan Hirsi Ali, which wouldn't have the problem of a negative denominator.

Fortunate Son
11 comments this item posted by the management 9/16/2010 07:42:00 AM
A short update on my Ben Goldacre policy

Just to note - I am still trying to work out precisely what it is about "Bad Science" that I don't like (and am beginning to think that the answer will involve writing an intellectual biography of Richard Dawkins, presumably after I finish the John Birt one I've been promising for five years). But in the meantime, I note that he is apparently on good terms with Rupert Sheldrake, which counts quite heavily in his favour in my estimation.

I actually think that Sheldrake has been led up a massive blind alley by the negative binomial test he uses (and that what his ESP tests on dogs show us is that this test isn't powerful enough to reject the daffiest of nulls), but the way he was treated by science-politicians in the British university system was a bit of a scandal, and the piling on of skeptics who clearly don't understand what they're talking about was no more edifying.

I'd also note that although it is actually highly unlikely that there are any theological revisions that the Catholic Church could carry out which would have an iota of effect on the spread of AIDS in Africa (summary: Africa not very Catholic, Papal influence on Catholic contraception behaviour not very great, condom-promotion programs surprisingly ineffective), the CC is nevertheless wrong and silly about contraception, and what's a couple of genocide analogies between friends.
17 comments this item posted by the management 9/16/2010 01:27:00 AM

Wednesday, September 15, 2010

The state of state visits

I must say, I don't really understand why Peter Tatchell is so worked up about a visit from an internet payments system.

Labels: , ,

0 comments this item posted by the management 9/15/2010 12:32:00 PM

Tuesday, September 14, 2010

The Wal-Mart Effect, and how it plays havoc with your digestion

More Walmart boosterism - first time I've seen this in a couple of years. Apparently it will be "to the benefit of European consumers" when they arrive.

I went to a Walmart shop when I was on holiday in America last year. The thing that sticks in my mind is that although the shop itself was about twice the area of Camden Market, the fruit & vegetables section was slightly smaller than that of an average Tesco Metro.
19 comments this item posted by the management 9/14/2010 09:26:00 AM

Friday, September 10, 2010

A blaze of amateur sociology

The article referred to on the Krugman blog today is here. It's actually rather good.
7 comments this item posted by the management 9/10/2010 06:55:00 AM

Thursday, September 09, 2010

Hardy perennials

I suspect that there are as yet undiscovered Amazonian tribes who also make the mistake of believing that houses are a consumption good. Via Yglesias, we have some bod in the New York Times:

I can’t claim to clear up all the uncertainty. But I do want to suggest a framework for figuring out whether you lean bearish or less bearish: do you believe that housing is a luxury good and that societies spend more on it as they get richer? Or do you think it’s more like food, clothing and other staples that account for an ever smaller share of consumer spending over time?

sigh. Nothing particularly objectionable about this as long as you're clear in your mind about the meaning of "housing", and indeed the accompanying chart correctly plots the CPI component reflecting rent and imputed rent. But David Leonhardt's article jumps immediately from there to talking about house prices.

The value of a house is the capitalised value of the stream of housing consumption provided by it over its lifetime. So it depends not just on the price of housing or its expected future path, but the capitalisation rate used. You can't ignore the level of interest rates in thinking about these things.

I think that the root of the problem here is that the following sentence refuses to stay put in its proper home on the personal finance page, and keeps trying to run away and join the circus in the economics page.

The best advice for homeowners and would-be buyers may be to think of a house not as an investment, first and foremost, but as a place to live.

I would guess that some restaurant critic has written "think of the Doodleburger not as food, first and foremost, but as a thing to eat", but he probably knew he was joking. This one about housing is just as incoherent.

The only people who are actually purely looking for "a place to live" and purchasing housing on the spot market are tramps searching for doss-houses. Everyone else is looking for a place in which they are going to live for a period of time. During that period of time, they will consume housing and pay money, and at the end of it (if they bought) they will receive the difference between the buying and selling price. It's an investment. In the personal finance pages, this just means "don't enter into housing transactions where price appreciation is vital to the affordability calculation", which is reasonably good advice, but anyone reading the economics section ought to be enough of a grown up to realise that a house is an investment.

Bonus hilarity - the bit where they try to find out what happens to the housing component of consumption for long runs of time and hooray! some Freakonomics type has found some houses! in Boston! that have been recorded since "the late 19th century and are still around"! American exceptionalism, how are ya.
16 comments this item posted by the management 9/09/2010 02:40:00 AM
Stirrings in the Blondosphere

While checking to see whether Respublica Policy Limited (company number 06974842) had filed its Companies House return yet (nope), I noticed that Respublica Public Policy Limited had somehow disappeared from the WebCheck register. How odd. Readers may recall that RPL is a company limited by shares, RPPL is a company limited by guarantee, and that "Res Publica"[1], Philip Blond's thinktank, is according to its website "a trading name" for both companies. I did not understand at the time why a thinktank would have two legal entities behind it and still don't, beyond my speculation that RPL might be there for things like conferences and publishing which could reasonably be expected to make a profit.

Anyway, from now on I'm definitely going to be noting numbers as well as names of thinktank entities. Checking through "former names" on the CH search reveals that RPPL is number 07081565, and changed its name yesterday to "The Respublica Trust". The website has not been updated yet to reflect this.

I think that what might have gone on here is that "Trust" is a reserved word in company names, and "Respublica Public Policy Limited" might have been a placeholder name while they convinced CH that this half of the thinktank was entitled to use it. But this does mean that Respublica has had the lawyers in and has been dealing with CH, making it that crucial little bit more irritating that RPL is still overdue on its return.

[1] There used to be a company called "Res Publica Limited", which does not appear to be related to the thinktank, and which was dissolved in August of this year.
4 comments this item posted by the management 9/09/2010 02:12:00 AM
Thursday Music Link

from the "topics for discussion" list - one day, Turkey will be in the EU (yes it will). Turkey has twice the population of Poland and half the GDP per capita. It is also full of people with expertise in the building trades. Casual empiricism - I went on holiday there a couple of years ago in the last two weeks of May which marked the end of the construction season before a moratorium came in for the tourist season - suggests that these guys have a hell of a work ethic, if perhaps lacking somewhat in risk aversion. I watched a McMansion being put up from my balcony over the week and wow. At one point, there was a storey going up every day, but I got the strong impression that every time the muezzin came on the tannoy down in town, the builders were rushing off to pray that the morning's work would still be standing when they came back. So anyway, what cultural impact would we expect the obvious labour market consequences of Turkish EU accession to have in the UK, given what we've seen with Poland? I suppose I've just argued that it depends on whether there's a housing bubble going on.

For some reason I have "The Impression That I Get" on my mind, but I like this one better.
18 comments this item posted by the management 9/09/2010 02:02:00 AM

Wednesday, September 08, 2010

Thoughts on the current state of humanities education

too many espressos for me this morning I think ...

So, teach your undergrads ottava rima
Or drag them through "Of Grammatology"
Shit, make them rap the Shorter Latin Primer
If you think that will help, but don't blame me
When you still get called "hippy" by old-timers
And students just watch Zizek on TV
Dear English Profs; the best that I can say
Is please yourselves, they'll fuck you either way


7 comments this item posted by the management 9/08/2010 08:24:00 AM

Thursday, September 02, 2010

Yes this is what I'm talking about

I think I am right here and Krugman & Rogoff are wrong! It's not "an inflation cure" or "two or three years of inflation". What is needed is a step-change shift in the price level. These are two distinct concepts - we want a change in P with constant dP/dT, not a change in dP/dT. This has the effect of a one-off windfall redistribution from nominal creditors to nominal debtors, a one-off increase in the ratio of collateral to credit. If anticipated, it would encourage an investment boom, as owners of nominal assets attempted to exchange them for real assets.

The reason why I'm insisting on this is not just anal retention, by the way - it's that several of the world's most important central banks have it written into their constitutions that they need to control inflation or target price stability. I think a good lawyer could make a case that a decision to target stability, but stability at a higher level would be consistent with the letter if not the spirit of these laws. Also, if you're going to change the constitution of the ECB, the aims of the Fed or the contract between HMT and the Bank of England to accomodate a more expansionary policy, making the change in terms of a step shift in the price level rather than a change in the inflation target means you only have to do it once.
28 comments this item posted by the management 9/02/2010 07:41:00 AM
Thursday Music Link

Jesus' Blood Never Failed Me Yet.

While looking for a Youtube clip of the 1975 version without Tom Waits (there isn't one), I was repeatedly offered "Get Jesus' Blood Never Failed Me Yet Sent To Your Phone As A Ringtone". The possibilities of that one are endless.
6 comments this item posted by the management 9/02/2010 07:16:00 AM

Wednesday, September 01, 2010

In which I might (or might not) disagree with Prof Krugman, on something which might (or might not) be important

In the 1998 "Japan's Trap" note, Krugman's conclusion is that "the central bank needs to credibly promise ... that it will permit inflation to occur". But, in the process of simplifying the model to draw out the key intuition, he has basically converted it from a full intertemporal optimisation model into a two-period one with respect to the price level.

Therefore, strictly speaking, with respect to this model, the word "inflation" above is not actually right - what happens in the simplified model is that the central bank accomodates a one-off upward shift in the price level, then (as noted earlier in the paper), the price level remains constant at P*=M*/y* for the rest of time.

The question I'm asking here is - if one were to move to the full intertemporal version of the model, would this still be the case? Would the necessay policy be to target a positive inflation rate, or to target a price level shift? I think this could potentially matter quite a lot for a variety of political economy reasons. I think it's only a price level shift that's needed, not a commitment to inflation, but I have arrived at this via a very different thought process (basically that of considering a country with a commodity-standard currency having a devaluation). Can anyone who hasn't forgotten dynamic programming quite as comprehensively as I have shed some light?
0 comments this item posted by the management 9/01/2010 03:02:00 AM
Webcheck - it's more of a hobby than anything else

Respublica Policy Limited, number 06974842 - OVERDUE! Perhaps we need a communitarian, village-based system, where the plain people of England watch over each other and smiling housewives and cheerful vicars make sure that everyone gets their regulatory filings in on time. Or perhaps Philip Blond and his amanuenses forgot about the existence of Respublica Policy Limited, given that Respublica Public Policy Limited was formed two months later with the same registered address (and so isn't late yet).

hmmmm ... No that can't be it. Per their about page, Res Publica is a trading name of both RPL and RPPL, with RPL being a company limited by shares and RPPL taking the more normal form (for an thinktank which doesn't really need shareholders) of a company limited by guarantee. I am not sure what's up here - I can only presume that somebody anticipated the thinktank making a profit at some point (neither RPL nor RPPL are charities) and wanted there to be a structure where this profit could be paid out to somebody. Whatever else is the case, get cracking on that CH return please lads, it should have been in on the 25th of August.
0 comments this item posted by the management 9/01/2010 02:16:00 AM
Economics bleg

I am writing some economics, and need to make it look more rigorous and convincing. Does anyone have a Windows-compatible version of that really crappy skinny font which is the default for LaTex? I think I can set up a Word template to have infeasibly wide top and bottom margins and almost-but-not-quite-wide-enough-to-be-useful line spacing, but if anyone has a template which emulates the LaTex default that would be cool too as it would save the trouble of fucking up the footnotes manually.

Update: ten seconds, via email. Star man.
23 comments this item posted by the management 9/01/2010 01:29:00 AM

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