Marginal Utility

by Tom Bozzo

The Wisconsin Taxpayers Alliance prefers a relatively narrow measure of state and local tax burden that makes Wisconsin look like a high-tax state, in the top decile of collections as a fraction of personal income. It isn't that they don't have a prima facie case. Insofar as my house is assessed well above the Madison median, I can get ample rise out of some family members and non-local friends merely by quoting the amount of my annual property tax bill.

So it's funny that the Alliance's president, Todd A. Berry, made a compelling case in Sunday's Wisconsin State Journal that Wisconsin is less spectacularly in the third quartile once the totality of taxes, fees, user charges, and other tax-like revenue sources is considered. An accompanying graphic (n/a online) solidified the presentation. That put Berry to a position about mid-article where it looks like we're not that heavily taxed at all, particularly considering the barely mentioned detail that state and local government actually provide some services.

D'Ohh.

That led to paragraphs of furious backpedaling in which it's asserted without proof that a bunch of government-levied fees and other revenue sources are less tax-like than various other taxes. So taxes and fees that fund highways are taxes by the preferred measure. Various license fees, which one might view as taxes on the licensed activities, and fees such as those that fund higher education are not so tax-like.

The state is, in effect, penalized by Berry for not nickel-and-diming residents enough.

UW tuition remains a comparative bargain, despite rapid recent increases. That's one price you'd think even the state's Republican politicians might be smart enough to keep relatively low if they want to suggest that Wisconsin is a desirable destination for brains, and the associated money, that otherwise could be planning to get pizza at 4 A.M. in Manhattan.* But by Berry's account it's bad that low UW tuition and a low-ish sales tax — as a native Delawarean ("home of tax-free** shopping") I think the sales tax is the most stupid and evil tax, plus it's regressive — require correspondingly higher property and (progressive) income taxes. Uh, we might end up taxing people who can actually afford to pay?

Since what you don't hear is much clamor for reduction in government services, even though some (cough, corrections) seem to be massively over-provided, what Berry really is offering is a love-letter to stealth taxes. Stealth taxes happen to be, perversely, the only revenue sources that are available for tapping in our poisonous political climate.

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* Of course, it's possible that low-priced public higher education leads to a net export of brains to the coastal cities.

** Delaware levies sales taxes on automobiles and rentals.

by Tom Bozzo

Discussing the vulgarity of political blog discourse at Crooked Timber, Henry Farrell notes the failure of the Becker-Posner Blog, which regular readers will recall is one of my "favorites."

I suspect that this is why some blogs that one might have expected to have a substantial impact in the blogosphere, such as the Becker-Posner blog, have been relative failures... The Becker-Posner blog has interesting arguments, but it’s rather reminiscent of those German academic seminars where the senior professors talk exclusively to each other, and the junior people are supposed to be edified by the conversation. There’s not much of a sense of open dialogue to it – and open, democratic, sometimes demagogic dialogue is what the blogosphere is about (and, for all its faults, should be about).

That last part is true enough, though I somewhat prefer Ken Houghton's pithier characterization of the Becker-Posner conversational mode, "'We rule by fiat.'"

I'm a little more amazed that none of the couple dozen CT commenters as of this morning has taken issue with the obvious howler in there: "The Becker-Posner blog has interesting arguments..." Farrell may need to be reminded of CT co-blogger Kieran Healy's classic post on the Becker-Posner opening exchange, else he thinks the quality of their arguments has improved — the latter, I've suggested, doesn't hold much water (here, here, and here).

Some of you may be saying, "Tell me something new about why Becker-Posner Blog sucks." (Sorry for the vulgarity.) Well, readers, I've been saving one for just this sort of occasion! Link via Marginal Revolution, here's a prescription from Dr. Becker in his comments on Medicare reform:

Another way to cut excessive use of medical care is to end the free riding by the approximately 40 million uninsured individuals who receive cheap care at emergency rooms of all hospitals, and as in-patients in public hospitals. To prevent that, everyone should be required to buy at young ages private catastrophic medical insurance that can be automatically extended.

This passage is all but self-mocking, but it's my blog.

• It's an economic problem that we can't bar the doors of hospitals to the poor.
• In Chicago-land, health care institutions by and large don't send bills for services rendered to the uninsured.
• Going bankrupt under the weight of those bills (for those unlucky enough to receive them) is "cheap."
• The solution: compulsory purchases from the private insurance market!
• What underconsumption of preventive health care?

That's enough for now.

by Tom Bozzo

At the other Marginal Utility, Rob Horning has the goods (so to speak; here too).

Unfortunately, withdrawal would require extreme measures — I mean, I drive a BMW equipped with an iPod adapter — though this post of Jeremy's does make me think that I could give up the car, the iPod, the Corian countertops, and the stainless steel range (Suzanne might have something to say about the last two, admittedly) before I could give up sweet, sweet data.

by Tom Bozzo

Marketing material for the very sleek Mercedes CLS says, "According to BMW, 5 Series attributes include 'aesthetic power,' 'intelligent design,' 'absolute comfort' and 'precise control." (Emphasis added, via Autospies.)

by Tom Bozzo

In comments here and at his blog, Bryan Smith takes some time out from waiting for his imminently due baby (arrived since I started this post) to continue our discussion of equity returns in private Social Security accounts.

Comity, if not actually sanity, prevails in Mad City as left and right agree, at least, that insuring stock market returns is not a great idea.

Bryan also wonders why the Bush privatization plan would specify what he suggests might be an "overly conservative" default investment. That has a lot to do with the balancing act fundamental to the anticipated plan.

The Bush plan is not an ordinary retirement savings plan. Rather, it would entail borrowing on the order of $15 trillion to fund the accounts before program cost savings would start to kick in. The debt would, in principle, be paid off via reductions in future tax-funded benefits to the tune of the private account contributions, plus interest. Without the benefit offset, the plan is either a simple add-on costing tens of trillions of dollars over the infinite horizon, or in the Ryan-Sununu flavor an investment insurance system probably also costing many trillions of dollars.

So the benefit offset is needed to avoid colossal program costs that might scare the financial markets, with adverse consequences for the real economy. It's therefore necessary that private account investments have an expected return exceeding the benefit offset, plus any administrative expenses, or nobody would rationally choose the private account. This is a more severe problem for the Bush plan than the relatively common retirement planning failure of investing 401(k) funds in the money market or similar safe investments that will usually have very low real rates of return. (In this context, life cycle funds' returns are not overly conservative.)

Obtaining sufficiently high real returns to clear the benefit offset requires private account holders to assume risk. That creates another dilemma, in that Congress can't stop itself from bailing out private account holders who end up faring less well than under traditional Social Security. Again, any bailout undoes at least a portion of the benefit offset and reifies some transition cost. That, in turn, promotes a default investment choice like the life-cycle account, which gives up some expected return and, the Bush plan's designers would hope, mitigates adverse market outcomes that could be the future political undoing of privatization.

That leads us back to Shiller. Without very high forward-looking stock returns, lower-risk portfolios have difficulty clearing the benefit offset. I should note that this is a problem even with administrative cost estimates (0.3% of assets per year) that appear to be total fantasy, at least in the near term when all of the private accounts would be small.

So the solution, apparently, is to reduce the benefit offset (via Angry Bear) by cutting the interest rate charged on the private account contributions. Apparently, reducing the real interest rate from 3% to 2.7% is the favored option. At least under the assumptions used by the Social Security Trustees to score the traditional program — 3% happens to be the real interest rate for the "intermediate" scenario — this creates an expected cost in the form of subsidizing the borrowing for the private accounts.

A nice irony is that if the interest rate actually is lower, then reality will more closely resemble the far less problematic "low cost" scenario for traditional Social Security. (No, I don't know how sensitive the long-range estimates are to the interest rate assumptions.) Oops, I misread the Trustees' report. The low cost scenario features a higher real interest rate than the intermediate scenario, but a lower nominal rate thanks to lower assumed inflation. See here for the Trustees' interest rate sensitivity analysis.


Next: We'll take a look at alternative plans used by a few local governments in Texas, which have been pushed in some corners of the right blogosphere and subject to some mass media coverage. (See this GAO report [PDF] for a preview of why they do not represent a magical solution.)

by Tom Bozzo

This morning's National Weather Service forecast:

GREEN-LAFAYETTE-DANE-IOWA-
INCLUDING THE CITIES OF...MONROE...BRODHEAD...DARLINGTON...
SHULLSBURG...BENTON...BELMONT...ARGYLE...BLANCHARDVILLE...
MADISON...DODGEVILLE...MINERAL POINT...BARNEVELD
615 AM CST MON MAR 28 2005

UPDATED

.TODAY...SUNNY. HIGHS IN THE LOWER 60S. SOUTHWEST WINDS UP TO
10 MPH.
.TONIGHT...NOT AS COOL. MOSTLY CLEAR. LOWS IN THE LOWER 40S.
SOUTH WINDS 5 TO 15 MPH.

Yesterday was also much too nice to spend sitting inside and blogging. (I did see some of the Wisconsin basketball game during the kids' afternoon naptime, though; a very solid performance from the Badgers that makes me feel less bad about the Terps losing to them earlier in the season.) Today, I'll have to take a mid-day stroll through Shorewood Hills to avoid Cooped-Up-in-the-Office Syndrome.

by Tom Bozzo

The comments on Jeremy Freese's post about the "leisurely" suggested pace of the Fortune magazine reading list took an "I resemble that remark" turn:


Bedtime reading, with marriage-saving book light.

by Tom Bozzo

Congratulations to blogpal Bryan Smith and spouse on the arrival of their beautiful (and big!) daughter.

by Tom Bozzo

PZ Myers offers occasional fascinating if depressing tours of the crackpottery that hits his inbox over at Pharyngula.

Yesterday, Prof. Myers regaled his readers with this, from one Victor Zammit's The Seven Laws of Psychic Energy:

First Law of psychic energy:

All 'solid' objects are vibrating energy.

Unseen waves are also vibrating energy- sound, radio, electricity, light, television waves, microwaves, x-rays, gamma rays and psychic energy waves.

[...]

Fifth law of psychic energy:

The more spiritually evolved a being is the brighter the energy of the aura.

Is this made up (I mean, by me or Prof. Myers)? No.

Compare to:

Laurie Bohner: Terry and I worship an unconventional deity. The power of another dimension. Now you are not going to read about this dimension in a book or a magazine because it exists nowhere... but in my own mind. Through our ceremonies and rituals we have witnessed the awesome and vibratory power... of color.

[...]

Terry Bohner: This is not an occult science. This is not one of those crazy systems of divination and astrology. That stuff's hooey, and you've got to have a screw loose to go in for that sort of thing. Our beliefs are fairly commonplace and simple to understand. Humankind is simply materialized color operating on the 49th vibration. You would make that conclusion walking down the street or going to the store.

(The incomparable Jane Lynch and John Michael Higgins, from "A Mighty Wind.")

by Tom Bozzo

I'm sure you've all been waiting anxiously to hear about last night's Madison male blogger confab, with Freese and Oscar. Well, what happens at the Harmony Bar, stays at the Harmony Bar. Mostly.

One thing that crossed the table was the meaning of on-base plus slugging, or OPS, a baseball offense statistic that is defined as the sum of a player's "slugging average" and "on-base percentage." I like the Wall Street Journal's "SLOB" arrangement of the terms a bit better. Anyway, the question was whether OPS is totally ad-hoc.

Wikipedia, if you follow the link, provides the formula that results if you take a common denominator of the components and collect terms. The resulting fraction:

looks plenty ad-hoc.

If you redefine the terms somewhat, though, it does make more sense. Consider a modified slugging statistic SLG2 = (total bases on hits) / (plate appearances), which shares a common denominator with ob-base percentage.

That lets me write:

SLOB2 = SLG2 + on-base percentage = (2*H + Extra bases on hits + BB + HBP) / PA.

SLOB2 is just an offensive statistics index with "extra" weight on hits. It's obvious enough that reaching base on a hit may be more useful than reaching base on a walk — consider the potential effect on other base runners &mdash but less than obvious that SLOB2's parameters are the optimal choice for the more general :

SLOB3 = (a*H + b*(Extra bases on hits) + c*BB + d*HBP) / PA.

Some SABRmetrician has probably worked that one out.

Update: Edited a bit for clarity and to add links. Oscar has a fine baseball post up, too.

by Tom Bozzo

Apropos of Brayden King's thoughts on the "democratization" of pop music via internet technologies, and my own ancient musings on the limitations of the iTunes Music Store's alternative music catalogue, the Wall Street Journal's Marketplace section today took on the travails of classical music fans seeking to populate their iPods online.

The problem is ironic in that the iPod and (presumably) kindred music players are vastly superior to portable CD players for material such as opera, where unabridged recordings typically span multiple discs. Indeed, being able to listen to a whole opera in the car without swapping discs is a major application for the iPod adapter therein.

But the WSJ is right in at least one way: the classical department of the iTMS is woefully inadequate, between forcing me to remember to look for Donizetti under "G" and failing to carry relatively recent gems like the Renée Fleming/William Christie/Les Arts Florissants "Alcina." I realize this puts me in part of another niche market, but is there really more of a market for Section 25 (not that I'm complaining) than for opera?

Update: Joe Malchow notes a significant limitation of the iPod for some opera recordings, a brief but currently unavoidable pause between tracks. I would note that I was mainly intending to address portability aspects of listening to opera on the go, and I agree with him on the virtues of making one's music listening an "occasion" where possible. Which reminds me, I have to send my Lyric Opera subscription renewal in ASAP.

by Tom Bozzo

Back to business.

In comments to a previous post on privatized Social Security account returns, and also on his own blog, Bryan Smith of Sanity in Mad City pointed to a study by Ibbotson Associates, reported by CNN.com, suggesting that a balanced stock-bond portfolio would readily clear a 3.3% real return hurdle — the return that would be needed to clear the Bush plan's benefit offset plus annual administrative expenses of 0.3%.*

I couldn't find the research CNN cited at the Ibbotson Associates web site, though it's clear from other research available on the site that Ibbotson does not believe that the equity risk premium has declined markedly, notwithstanding the increase in the market P/E. Ibbotson predicted (in 1999) that the DJIA would reach 120,000 in the mid-2020s, making James K. Glassman and Kevin Hassett look like bears. If he's right, I'll be a happy retiree.

Via Max Sawicky, the Washington Post reports a contrary view from Robert Shiller, the Yale finance professor whose Irrational Exuberance prefigured the tech stock crash. Analyzing a "life cycle" portfolio as has apparently been considered for the private account default, Shiller estimated a median real return of 3.2% for such accounts, which would leave private account holders short of their peers who stuck with traditional Social Security. According to the Post, Shiller's view got a heavyweight endorsement from Wharton's Jeremy Siegel, whose Stocks for the Long Run is a favorite of the bulls.

One interesting thing is that Max had recently reported on attending an AEI seminar in which Siegel had argued for forward-looking stock returns just below historical averages, about 6% real.

According to the Post, Hassett says that Bush administration economists are reconsidering the life-cycle portfolio to add expected return — which, of course, adds risk, too. One political solution appears to be the Ryan-Sununu plan, which proposes to offer carve-out private accounts that insure against downside market risk to the tune of current-law Social Security benefits. I'm with PGL at Angry Bear in thinking that this is a terrible idea.

The question for Bryan (or, given the imminent arrival of Bryan's child, maybe also Joe Malchow or other conservative blog pals not known to me directly) is, does the center-left have to play the curmudgeonly conservative and say that the federal taxpayer has no business insuring equity market returns?

by Tom Bozzo

You shouldn't be surprised to hear that I don't think much of blogosphere status rankings. I've also been concerned about being a slave to my Site Meter. So I've pulled the Site Meter from the blog, and henceforth will strive to be happy even if I just have the five faithful readers who visited in the early days.

by Tom Bozzo

Note: I've replaced the post's original HTML with a JPEG image, in the interest of restoring link ecosystem balance with the next update. The original post contained approximately 700 links to the Jeremy Freeese's Weblog archives, and a few links to others.



Morning Update: Welcome Althouse visitors. For something of an artist's statement, see here.

To offer my two cents to the ecosystem's programmers, exclude multiple cross-links between blogs in determining rank.

by Tom Bozzo

In real estate listings, terminology advertising high-end features, particularly kitchen remodels, correlate positively with price. Worthless, or worse, are terms that may be recognized as real estate sales euphemisms, plus the exclamation point, and (interestingly) "great neighborhood." That's from Tyler Cowen of Marginal Revolution, previewing the forthcoming — and certain to ascend to the top of the reading pile — Freakonomics, by U. of Chicago wunderkind Steven Levitt (and Stephen Dubner).

A good question is why agents still use value-destroying contstructions in their listings. From the South Central Wisconsin MLS:

The Village of Shorewood Hills, a most desirable location! Striking 3 bedroom Erdman designed ranch on a quiet street! Bright open floor plan! Woodburning brick fireplace! Hardwood floors throughout! Skylight in kitchen! Nice size family room in lower level plus a 3/4 bath! Large backyard with a natural outcropping of rocks! Close to Lake Mendota, Shorewood Parks, the Village Pool, University of Wisconsin and shopping. UHP included. All measurements are approximate.

Asking $439,000. Close to railroad tracks.

More surprising, perhaps, is that Prof. Cowen writes that he had to look up the value-enhancing term "Corian." Obviously, he hasn't recently been in the market for a kitchen remodel.

Still life with lots of gray speckled Corian, 3/19/05.

by Tom Bozzo

Yes, readers, I do get tired of wading through Social Security privatization BS once in a while. So here's a Friday Baby Extra with the boy.


I just hope I don't need to figure out a way to protect the basement from this.

by Tom Bozzo

Also at Dartblog, Joe Malchow endorsed the results of a poll sponsored by "Generations Together," an astroturf project (*) of CoMPASS, a pro-privatization 501(c)(4) funded by the National Association of Manufacturers, the Business Roundtable, the National Restaurant Association, and the Financial Services Forum. I sent him the following note, which he graciously posted to his blog (note: in my experience, Joe has been a model for how to deal with polite but critical feedback in the absence of a comments function):

Obviously, I'm playing on the other team, but nevertheless I'll just offer my two cents that it's *not* a good poll -- which is not too surprising given its 'astroturf' sponsorship. The problems are in the questionnaire design. The questions are limited to positive aspects of the anticipated Bush plan, which in isolation ought to draw a favorable response. More notably, the questions totally ignore the issues that generate opposition in the major polls, particularly anticipated reductions in guaranteed benefit levels, benefit offsets for private account participants, and transition costs.

Here is Joe's response (in red green [aesthetic edit]), and my rebuttal:

I disagree. Remember that the anti-reform polls are sponsored by the Dems and the AARP. Even they ask questions similar to the ones asked in this poll. And though it was commissioned by a pro-reform group (as I disclaimed in the original post) its results are consistent with recent Pew polls.

We agree, at least, that partisan polls should be disclosed as such — and viewed with caution. It should be noted that Ayres, McHenry & Associates is a partisan polling outfit.

As for the Pew poll, I assume Joe is referring to this poll from the Pew Research Center for People & the Press, conducted in February and released March 2.

Joe's interpretation of the Pew poll differs markedly from Pew's. Pew headlines its report "Bush Failing in Social Security Push." While a plurality of respondents favor private accounts per the poll, the graphic accompanying the poll summary (above right) shows a 24-point swing in opinion against private accounts since September. This is consistent with other nonpartisan polls reported in the mass media (ABC News-Washington Post; USA Today/CNN/Gallup) — declining measured support for Social Security privatization is not unique to Democratic Party and AARP-sponsored polls.

That the poll didn't ask negative-questions is an important point that Tom makes.

Agreed, obviously ;-). This is actually a criticism that can be leveled against the Pew questionnaire, too. In 2004, the Pew report notes, the main privatization sentiment question included language noting the diversion of funds from traditional Social Security (“... payroll taxes in private retirement accounts, which might include stocks or mutual funds, rather than having all of it go toward Social Security”). Measured support for privatization fell anyway.

But, as I read his words on that subject, I noticed that they inevitably got technical. "Guaranteed benefit levels, benefit offsets for private account participants, and transition costs" are things that 90% of Americans have no informed opinion on. I think those questions unfairly skew anti-reform. The questions that this Ayres poll asked were clear, concise, and understandable by all.

Of course, I used technical terms because I was writing to a politically active student at an elite college who I assume understands the underlying issues, even if we disagree on them; I wasn't offering questionnaire wording for a public poll. Still, I'm not sure how the anti-reform skew is "unfair" for features of the Bush plan that, properly described, would be understood by respondents to reduce program benefits (other things equal). That would seem to be a rational marginal response.

I also sharply disagree with his characterization of the Ayres questionnaire wording (PDF). Wording that omits material aspects of the Bush plan may be more misleading for otherwise being "clear" and "concise." For instance, one polled "feature" is:

Workers under 55 would have the choice of staying in the current system or putting a portion of their Social Security payments into a personal retirement account.

There is no mention of the offset to guaranteed benefits for private account participants, a widely reported feature of the plan on which the press was briefed by a senior Bush adminsistration official prior to the State of the Union address. (They also use the administration's "personal" account wording, which is understood to poll better than "private" for whatever reason.)

One feature that doesn't poll especially well is:

Workers... could only invest their money in a conservative mix of bond and stock funds.

This would be pregnant with technical meaning to someone with personal finance knowledge. Does this mean respondents really favor doubling down with higher-risk investments, or that the restrictions on investment choice (which would be needed to prevent account expenses from excessively biting into returns, among other things) don't sound like a good deal? You can't say.

Joe is right that many or most Americans are insufficiently knowledgable about the technical details of the Bush plan. (The President's own deliberate ambiguity as to the plan details doesn't help.)

However, many Americans are insufficiently knowledgable about the Social Security status quo as well. Consider how easy it is for "MSM" to find young people on the street who believe that they won't see anything from Social Security — a misapprehension that drives a lot of people on my side of the aisle nuts — which given the program's dedicated funding source is only true if Social Security is deliberately killed.

Moreover, privatization advocates commonly base representations of the potential benefits of Social Security private accounts on the assumption that historical stock returns will be available on a forward-looking basis, which is not a proposition that most Americans are able to seriously assess on the technical merits.

What I also found interesting is that it found that AARP members are also very supportive of personal accounts. Given that these are people bombarded with anti-Bush material from the AARP, the numbers mean a lot.

Again, getting good uptake on a fantasy plan constructed to be nonthreatening to the respondents is not so challenging. Interestingly, the last two Ayres questions show somewhat greater enthusiasm for letting the under-55s have private accounts than for respondents having the opportunity themselves.

Perhaps that relates to an interesting Pew finding: 55% of surveyed non-retirees think they'll get the bulk of their retirement income from their savings, whereas a 45% plurality of retired respondents indicate Social Security as their primary income source.

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* I.e., a group that appears to be a grass-roots organization, but which is actually organized by special interests.

by Tom Bozzo

Amazingly, I got two responses to my suggestion that Alan Greenspan's job performance as a policy technician be evaluated on a counterfactual basis. That is, not just on what he's done — which pretty much everyone agrees has been a good job — but on what he's done that the best candidate for the job couldn't have done. As a rule, you don't want your job performance evaluated on a counterfactual standard unless you're the smartest and most productive person in your field, and even then you're liable to be taken down a notch or two.

DeLong, as I previously noted, identified eight episodes where he's had a material policy disagreement, scored five in Greenspan's favor, two in his (Greenspan got lucky on one, he says), and says the jury is out on the current path of rate increases. He concludes that Greenspan "does appear to have, if not a unique endowment of monetary policy acumen, lots more than I do."

What that statement requires is, for the past events where DeLong thinks that Greenspan was right in retrospect, either DeLong could not have been convinced of the wisdom of the historical policy at the time had he been in the hot seat, or a different DeLong policy would have wrecked the economy materially more than the historical policy. (I'm assuming the nature of the monetary policy controls is such that a variety of "close" policies yield economic performances that differ in ways primarily of insterest to macro/monetary economics academics.) My guess is that neither would hold if one were consider the whole set of alternative candidates. As I say, it's a tough job evaluation standard, and there are plenty of very smart macroeconomists around.

A second response came from longtime DeLong commenter Spencer England, who sent along a chart (MS Word file) from his newsletter, the Spencer England Equity Review, comparing the Fed Funds rate to a Taylor-type monetary policy rule. In Taylor rules, the policy target depends on the inflation rate and the gap between actual and potential economic output. Rates go up to fight inflation and down to stimulate the macroeconomy. There's a large literature on these rules; the eponymous Taylor collects a lot of links on his Stanford homepage. Spencer England's variation uses the unemployment rate as a proxy for the output gap. His interpretation:

Under Greenspan fed funds were within one standard error of the policy rule except for two periods.

The first in 1987 when he tightened too much and caused the stock market crash of 1987.

The second has been since the bubble burst and funds have been significantly lower than a Taylor rule would imply.

This counterfactual argument suggests that for the most part fed policy has not been significantly different then what a computer programed to implement policy rules based on fed policy decisions prior to Volcker would have generated. This says he has only been a competent technician.

Of course it does raise the question: if Greenspan followed the same policy rules as
earlier feds, why did it not generate inflation.

My answer is that we still have a poor understanding of what causes inflation.

I should note that there is literature that emphasizes the differences between the rule-based and actual policies (go to Taylor's page if interested), but what Spencer's chart really dramatizes is that Volcker-era policy was much bolder.

Another good question is whether the recent rock-bottom rates would have been as necessary had fiscal policy been competently managed. That answer is presumably not independent of Greenspan's other two faces.

by Tom Bozzo

In a post also picking up my mention of United's ridiculously low ORD-CDG fare, Joe Malchow of Dartblog links a BitsBlog commentary on a recent incident in which most or all of the rudder from an Air Transat Airbus A310 in flight. Eric Florack writes:

We have an EU made Airbus, whose makers don't really want this info out, given the long standing suspicions about Airbus's culpability from a November 2001 crash, where 265 people died on American Airlines flight 587... in another rudder incident. (The pilots were blamed in that one, if you will recall) Then there's the report of the non-fatal crashes which were amazingly similar.

Because of the considerable economic stakes in accident investigations, it's not surprising (if not encouraging, either) that the manufacturers seek to direct blame towards flight crew error or other non-design causes of crashes and other incidents. This is not to absolve Airbus or any other manufacturer of responsibility for design or manufacturing flaws, of course.

(Addendum 3/17/05: Florack notes in comments that he was not implying a "uniquely troublesome" airworthiness issue for Airbus. I'll clarify that I'm not addressing possible political aspects of the Air Transat A310 incident other than the airworthiness issue.)

What would be wrong would be to conclude that Florack has identified an issue airworthiness issues for widely used airliners are unique to Airbus. The ubiquitous Boeing 737 had a series of incidents and even fatal crashes in which a flawed rudder control system design was a suspected cause. Boeing had quite actively sought to direct blame for the most serious crash, US Air flight 427 near Pittsburgh in 1994, to the flight crew. The 737 nevertheless has a good safety record overall.

(See here for a summary of Seattle Times reporting on the subject; unfortunately, most of the links on the page no longer work.)

An irony is that the great progress made in eliminating many airline accident causes — controlled flight into terrain, mid-air collisions, even some sources of human error — has made remaining accident causes subtler and thus perhaps more prone to economically and politically driven contentiousness.

by Tom Bozzo

Images from blogger dinner, with A, presently non-blogging B, birthday boy F, O, plus Suzanne and me, in attendance; C graciously hosted and cooked up several storms' worth of delicious food.

A menu to make some bloggers very happy.


Do you want to know what's so funny? Trust me, you don't.


Jeremy says, "I rule." Regarding what, I can't recall.


The main event: Jeremy with his cake.


Addendum: See also reflections from C here (scroll down past the iris as needed), plus portraits of certain attendees.

by Tom Bozzo

From today's United Airlines E-Fares list:

South Bend, IN-Chicago O'Hare (this weekend), $90 roundtrip
Providence, RI-Chicago O'Hare (next weekend), $205 roundtrip

Yeah, yeah. Now for the good one.

Chicago O'Hare-Paris, France (April 4 departure, return April 10-May 4) , $219 roundtrip

Providence or Paris?

by Tom Bozzo

Good food, good drink, and good friends. See Ocean for more discussion. Film at 11.

by Tom Bozzo

Condoleezza Rice says she won't run in 2008 with as much firmness as can reasonably be expected, and whose candidacy is tanking at TradeSports as of 10:30 Central Time? Rudy Giuliani. His contract is off 42%, versus a 10% drop for Rice.

Now, I'd have shorted the Frist-Giuliani-Rice combination last month had I been so inclined (see the comments here for some contemporaneous discussion; see also Nina Camic here for a nice description of Rice's gift for BS). I think the true probability that Giuliani will be the 2008 Republican nominee is nearly zero for reasons that should be fairly obvious. The question is one of timing. What gives today?

by Tom Bozzo

Ann Althouse links Michelle Malkin's take on Maureen Dowd's Sunday column and... Malkin has one thing right for sure: while Dowd worries about being liked, S.Z. of World O'Crap roasts right wingers like [simile deleted for the benefit of readers who want to stay Episode III spoiler-free].

by Tom Bozzo

I've had a couple brief exchanges with Bryan Smith of Sanity in Mad City — a great name for a blog, even if we often disagree sharply on what constitutes a sane Madison. Bryan noted my general agreement with the A-list center-to-left economist bloggers and Paul Krugman, and my low opinion of Donald Luskin.

That led me to send him a link to this cnn.com story (via the Cunning Realist) noting the poor performance of a pair of mutual funds run by a company for which Luskin had been CEO. $1 invested in the larger of the funds as of January 1, 2000 would have been reduced to 43 cents as of the liquidation announcement in early August, 2001. Though in fairness to Luskin, it was not terribly difficult at the time to assemble an internet and/or telecom portfolio with performance on that level. The Fidelity Select Telecommunications Portfolio fund, for instance, returned -37% in 2000, -28% in 2001, and -29% in 2002.

In response, Bryan offered this thought on the effect of stock market disasters on private investment accounts:

Even with the stock market slide in 2000, though, people would have likely still been better off had they been investing money since the 60s and 70s. If you average 7% per year (which I believe is the historical average in the market), even if your account loses 50% during a few bad years, I think you'd still do pretty well. And if there were a more severe drop in the market, the kind that put us in a serious recession or depression, under the current system, I wonder if the government would be able to pay out Social Security in the full amount.

He also was curious about why liberal economists use lower annual returns than privatization advocates.

Four points in response.

1. Averaging 7% annual stock market returns on top of inflation would be great. The trick is finding economic fundamentals that will produce returns of that magnitude. The relatively slow economic growth used to project the long-range finances of Social Security is too low to produce historical returns unless the market price/earnings ratio grows enormously — this is the essence of the Baker-Weisbrot challenge. Liberal economists project slower rates of stock market appreciation because they're consistent with the assumptions used to gauge the health of Social Security.

2. I have nothing against disciplined long-term equity investing, and do so through my own personal retirement account. However, the problem of being caught at retirement in a bust period is serious. Relatively few people accumulate enough financial assets to make the problem one of retiring on a merely large versus a very large income. In fact, people with that level of wealth don't even show up at the level of aggregation of most published household wealth data. (Here's the most recent available household wealth survey data, from 2000.) For most households, the effect of a market crash would be to make a thin financial cushion thinner. There's a diminishing marginal utility of wealth argument to suggest that avoiding that would be more important to the not-rich.

3. The apparent structure of the Bush Social Security privatization plan makes participants particularly vulnerable to market risk at retirement. Using the CEPR calculator, a fully funded PRA under the Bush plan would grow to roughly $107,000 (2005 dollars) by my age-67 retirement in 2035 assuming a 6.8% annual real return on the account. By CEPR's reckoning, this would buy a $557/month single life annuity after management and annuitization expenses have been subtracted off. This is about right based on annuity terms from the TSP, though see here for a problem for those of us in the married single-income minority. This would give me $60/month over the guaranteed benefit offset. The implication is that under the Bush plan, you can't suffer a large market drop prior to retirement, or even much downside variation in the realized (variable) returns, and end up as well off as with the (reduced) guaranteed benefit.

4. A very deep recession or depression would put a big dent in Social Security's cashflow as payroll tax revenues dropped, but equity investors could fare far worse in such a scenario. In the Great Depression, output fell by around 30% from the 1929 peak and had recovered to pre-crash levels around 1939. The DJIA dropped 90% from the 1929 peak and didn't recover to pre-crash levels until late 1954. After more than 15 years, the Nikkei 225 is presently 70% off its 1989 peak. I would assert — and this is the liberal in me speaking — that the ability of vicious bear markets to outlive a retiree points favorably toward public insurance, as the government is best situated to ride out the economic and market cycles. Clearly, government is not constrained to operate within the limits of its tax revenues, and standard arguments in favor of countercyclical fiscal policy would suggest that it shouldn't.

by Tom Bozzo

The previous post should not leave readers assured that all is well in the Madison food scene.

An item in the Cap Times notes that the Memorial Day "World's Largest" Brat Fest is decamping to the south side Alliant Energy Center from its traditional home in the centrally located Hilldale parking lot. Which happens to be right across University Avenue from my office.

It's true that Brat Fest has gotten a little out of hand in its transition from a grocery store's customer appreciation day to a Regional Event attracting economic consultants, pseudo-vegetarian sociology professors, and thousands more for inexpensive bratwursts and bizarre entertainment spectacles such as former Republican U.S. Rep. Scott Klug and local progressive gadfly Stuart Levitan rocking out together as "Johnny and the Nakomans." I'm not kidding, I just wish I were.

The Alliant Energy Center location will have such virtues as space, parking, easy Beltline access, and an only-in-Madison detail from the earlier, not-online, State Journal article — just for you, Bryan Smith — "valet bike service" for brat lovers arriving via the bike path network.

I think we'll just have to have an alternative brat fest out on the screen porch.

by Tom Bozzo

Some of us in the know — or at least who are second-degree in the know these days — have been aware that a potentially transformative sale of L'Etoile, at its best moments our upper-Midwestern answer to Chez Panisse (and at its worst, still a very nice place to eat), has been pending. Chef-proprietor Odessa Piper has sold, the Wisconsin State Journal reports this morning, to her talented chef de cuisine Tory Miller and Miller's sister, who will keep things substantially the same:

"I've been working quietly for some time to put the next successor in place," Piper said. She wanted someone who would maintain her 28-year relationships with local farmers and the Madison community. Piper had turned down an earlier, more lucrative offer because she didn't feel the buyer understood or appreciated the charm of L'Etoile...

Chef O's hippie background is a not inconsiderable part of Madison food lore. It's nice to see it make an appearance for what will hopefully be the benefit of the local food scene.

by Tom Bozzo

One thing you sometimes hear from conservative economists is that the poor never had it so good. For example, here's Arnold Kling at TCS last summer (commenting on John Edwards' "Two Americas" theme):

In the 1970's, ordinary working people drove Vegas and Pintos. They did not eat out much. They rarely traveled by airplane. Many of their jobs were dangerous. Do you really think that there are many working Americans today who would trade places with their 1970's counterparts?

The new message, thanks to the "personal responsibility" framing of the bankruptcy bill, seems to be, "Never mind." The poor and working classes aren't poor because they have access to better cars, occasional air travel, VCRs, microwave ovens, and washing machines. However, they shouldn't have spent their (or their creditors') money on any of it.

by Tom Bozzo

Later in the month...

Dean Baker, J. Bradford DeLong, and Paul Krugman (forthcoming), "Asset Returns and Economic Growth," Brookings Papers on Economic Activity.

by Tom Bozzo

Brad DeLong, trying to make sense of what he calls "The Three Faces of Alan Greenspan," distinguishes Greenspan "the superb monetary policy technocrat" from Greenspan the Ayn Rand disciple and Greenspan the Republican team player. This is relatively kind compared to Josh Marshall, who opens a TPM post from earlier today with, "It really is amazing that anyone takes Alan Greenspan seriously anymore," though he notes that Greenspan's position remains "sacrosanct" in polite political circles.

My thought for the evening is that there is no solid counterfactual underpinning Greenspan exceptionalism. It's not that he's done a bad job as monetary policy steward as such, though consider the financial imbalances over which he's presided and tell me that his final grade isn't Incomplete at the moment.

Rather, as Robert W. Fogel might suggest, the correct question is how has Greenspan done compared to the next best monetary policy technocrat? That standard, I would suggest, would substantially deflate the Greenspan myth, as it did the railroads (PDF) in some circles.* It is not obvious that he has a unique endowment of monetary policy acumen. I'll suggest that a hypothetical Chairman Rubin, or even a shadow FOMC made up of very bright economics grad students with something like the FOMC's information set to work with, could have made more-or-less equally good monetary policy calls.

And, Chairman Rubin certainly would not have played an equivalent role in the Federal budget train wreck — even if his efforts couldn't have helped convince 1,000 more Floridians to vote for Gore in 2000.

Update: Brad DeLong lists eight times when he's thought Greenspan was making a serious monetary policy mistake. He sides with Greenspan, in retrospect, on 5 — the most recent being the 1998 financial crises (Long-Term Capital, Russia, East Asia) — and thinks the chairman could have done better in responding to the NASDAQ crash and in availing itself of nonstandard policy levers in 2002 (I agree). The jury is out on the present pace of increases in the fed funds target rate. He contends that Greenspan has an unusually large endowment of monetary policy acumen, which I don't disagree with either, though the question is whether DeLong or other highly talented macroeconomists would have done as Greenspan, or better, given the same information.

Update 2: I review the response further here.


* Which is not to say that I think Fogel actually gave the railroads their proper due, for technical reasons related to the "social saving" model described in the linked paper.

by Tom Bozzo

Kevin Drum links some research (PDF) that provides some actual evidence for characterizations of the blogosphere we were talking about last month. Incomparably, Drek also linked related work by one of the authors cited by Drum two weeks ago.

Half-assed conclusion: small blogs rule. Watch out, MSB (*)!


* Mainstream Blogosphere.

by Tom Bozzo

Earlier today, I threatened to take on a post at Mahalanobis by HedgeFundGuy, "Bankrupt Survey Data," which purports to debunk a recent survey of personal bankruptcies*, cited in Paul Krugman's Tuesday New York Times column among other places. Regular commenter Ken Houghton egged me on, so here goes.

1. HedgeFundGuy suggests, "Survey data are always very suspect, which is why economists generally do not use them." This is simply ludicrous. It took me about two seconds to draw up a short list of survey-based data widely, if not universally, used by U.S. (macro)economists:

• Payroll employment, based on the Current Employment Statistics survey
• National unemployment rate, based on the Current Population Survey
• Consumer price and producer price inflation, based on surveys
  
• Personal consumption expenditures and other GDP components, go ahead and see how many surveys are mentioned in the NIPA methodology summary (PDF) — it's Several.
  

BTW, some of the above survey data are "tendentious." For instance, the CPS determines self-employment through self-reporting by survey respondents, and under certain circumstances actually being paid is not necessary to be considered "employed" for CPS analysis purposes.


2. HedgeFundGuy's argument regarding the bankruptcy study is... lacking. Here is a summary:

• Survey data are always suspect.
• Different surveys of bankruptcy causes yield different results on the importance of medical causes. Those surveys! (HedgeFundGuy does not establish that the surveys in question were defining medical causes of bankruptcy identically.)
• HedgeFundGuy doesn't believe the results of other surveys measuring a completely different thing (hunger and 'food insecurity'). This occupies about 1/3 of the post.
  
• Therefore, it follows that something is wrong when the bankruptcy study shows a limited causal role for "personal vices" in bankruptcy filings. HedgeFundGuy complains that "vices" that have DSM classifications are considered medical contributors to bankruptcy. (Substance and gambling addictions are cited by 2.5% and 1.2% of survey participants, respectively.) HedgeFundGuy suspects self-reporting bias.
• HedgeFundGuy faults the authors for failing to cite an industry study and a 1999 Journal of Finance paper, and for citing a co-author's relatively well-known book. HedgeFundGuy offers no credit for citing a more recent American Economic Review paper that discusses determinants of personal bankruptcy filings. (The AER paper's data were derived from — wait for it — the Panel Study of Income Dynamics, another of those pesky surveys!)
• HedgeFundGuy complains that the study, which is clearly not intended for the purpose, fails to address causes of the increase in bankruptcy filings during the 1990s.
• HedgeFundGuy goes off the reservation in suggesting that credit card lending practices might actually contribute to the increase in personal bankruptcy filings. (Hat tip: Ken.)
  
• HedgeFundGuy suggests that doctors always do bad sociological research. Maybe, but the listed coauthors are two doctors, a lawprof, and a sociology prof.

I've previously expressed sympathy with the argument that surveys results in medical journals (not to mention most statistical results published in social science journals) should be better documented. However, the Health Affairs paper is not, properly construed, making an extraordinary claim requiring extraordinary justification.

In short, far from tearing the study up, as Alex Tabarrok suggests, HedgeFundGuy has offered nearly nothing to actually discredit the study. Five demerits for the Marginal Revolutionaries: they won't make the blogroll this quarter.

HedgeFundGuy might have made some hay out of the AER paper (cite) had he been so inclined. That paper, which I skimmed for the purposes of this post, provides mixed evidence for exogenous events as drivers of bankruptcy filings. The authors suggest that filers' strategic behavior is of primary importance, though their analysis also appears to show that factors such as divorce and income shocks have very large effects on the marginal probability of bankruptcy filing. (They also offer repeated caveats about the difficulty of identifying behavioral hypotheses from their analysis.) It should be common knowledge that health shocks can readily cause large adverse income shocks.

---------------

Todd Zywicki is a little more infomative at Volokh Conspiracy, but still relies too much on the Straw Man. For instance, he complains:

Nor does the requirement of $1,000 in unpaid medical bills within 2 years of bankruptcy seem like a very plausible measure of serious financial problems.

The abstract of the Health Affairs paper states that

Among those whose illnesses led to bankruptcy, out-of-pocket costs averaged $11,854 since the start of illness... [emphasis added]

and, Earth to GMU, if you're not rich, nearly $12,000 in out-of-pocket medical expenses is a lot of money.

But it's getting late. I'll just add a parting shot that Zywicki has a law review article making, among other things, an Olsonian collective-action case for why the role of creditors in pushing bankruptcy reform might be overstated. I don't think Zywicki's argument holds water, but I'll save that one for another day.

-------------

* "MarketWatch: Illness And Injury As Contributors To Bankruptcy," by David U. Himmelstein, Elizabeth Warren, Deborah Thorne, and Steffie Woolhandler.

by Tom Bozzo

I had started a post entitled, "Joementum: The Good Kind" to praise Joe Biden's Feb. 27 Meet the Press performance vs. Rick Santorum. (Elements of Santorum's performance closely mirrorred McConnell's March 6 effort.) Well, the heck with that.

Delaware being a small state, Biden's not only the senior Senator, but also my high school's most prominent alumnus (he was class of '61, I'm '85 — but not in the 15th reunion photo). I took some French classes with Biden's son Beau ('87), and attended Biden's 1984 election night party on behalf of the school yearbook. (Ask me which public television personality I think of when I hear the words "Portrait of Dorian Gray!") I was ready to forgive that Neil Kinnock thing.

Well, I'm feeling ashamed of this morning, as Biden's done his part to move along the hideous bankruptcy bill on behalf of the indigenous credit card industry. This legislation would appear to be Exhibit A for the corrupting influence of corporate money in politics, as it's just about impossible to identify a constituency for it outside of the narrow interests Elizabeth Warren lists at Talking Points Memo.

I am curious as to the seeming solidity of Republican support, as seen in the cloture roll call. Surely, one or two of them — Chafee? Santorum? — occupies a sufficiently contestable seat that as to want to avoid being labeled (not without justification) as a tool of predatory lenders. Perhaps the Angry Sicilian will remind me why I shouldn't have wondered.

Addendum: The politics of the bankruptcy bill also perplexes Ann Althouse's favorite blogger. And, via Atrios, it is even creating strange bedfellows at Free Republic. We may take on some nonsense about surveys at Mahalanobis, linked approvingly by Prof. Tabarrok at Marginal Revolution, later.

by Tom Bozzo

Whole Foods let me down earlier this evening, as they didn't stock the fennel I needed to pick up for dinner, "Tomato and Fennel Stew with Big Shrimp."

That sent me on a wild fennel chase that ended at Sentry Foods at Hilldale (nearly all the way back to work), which on my recent trips there has been a lesson in how stupid liquor laws are. Sentry employs a number of youthful grocery checkers — so youthful, in fact, that they can't ring up alcoholic beverage sales on their own authority. Late afternoon on Valentine's Day, when nearly everyone in line was a man with flowers in one hand and a bottle of wine in the other, this kept the over-21 front-end managers very busy.

Today, I found myself behind a twentysomething dude buying one food item and a 12-pack of Leinie's Honey Weiss. The checkout dude looked to be 17 or 18. A manager was summoned to check out twentysomething's beer, and the manager miskeyed the year from the ID as 1972 instead of 1982. A brief exchange between checker and customer ensued to the effect of how glad twentysomething was to be 23 instead of 33. The checker expressed a wish to be able to reach 25, then cycle back to 21, etc.

If I were Oscar, I'd wish that I had mentioned "Logan's Run" at that point. Instead, I actually said that getting older was not so bad.

Checker said, "You're, what, 29?"

The slightest grin then crept across my face. I said, "I'm turning 37 in three weeks." Checker's head popped off.

"No way! Well, if I look as young as you when I'm 37, then I guess being old won't be so bad," he said.

Update 9:59 P.M.: I wrote the preceding before seeing this post of Jeremy's, which also mentions "Logan's Run." How weird is that?

by Tom Bozzo

Yesterday, Suzanne asked me what the best blog post of the day was.

As a digressive introduction, I'll note Ann Althouse correctly interpreted a rambling non-response on Meet the Press by Sen. Mitch McConnell to a straight question about how privatization would solve the Social Security funding shortfall (it wouldn't). Ann hates long non-responsive answers to simple questions. Fair enough.

Ann is also, to her credit, unimpressed by a Donald Luskin post to the Club for Growth's privatization blog — it is as bad as it sounds, liberal readers — to which an Althouse reader pointed her. This is as it should be.

I've taken to linking this James Wolcott post whenever Luskin comes up. As I imagine most visitors woefully fail to catch on to the hypertext (if not actually the text) of this blog, I'll add here that if Luskin isn't actually the stupidest economist on the planet — variations on the proposition have adherents much more highly placed in the profession than me — he's far into the outer tail of the distribution.

-------------------

On that note, here is what I considered to be yesterday's best blog post. Answering the question of why the left economics blogosphere and certain prominent Democrats have had it with Alan Greenspan, Atrios (summarizing a Ron Brownstein column at Eschaton):

Greenspan supported 11 trillion in tax cuts and then woke up and discovered the baby boomers would retire and cost $3.5 trillion -- and the retiring boomers are the fiscal problem.

by Tom Bozzo

I confess to constantly scanning the automobile market for my next car, however improbable an actual move at any given time (right now: not very improbable), and so the major auto shows are always an exciting time. The Geneva Auto Show opened last week with a few significant debuts.

As a new parent with what turns out to be a merely adequate income (no link, as last week's Sunday Styles feature, "Six Figures? Not Enough!" is already in the Times paid archive; instead see Majikthise here), I can forget about my James Bond fantasies and the Aston Martin V8 Vantage for a while.

Among the attainable and workable choices bowing in Geneva, I liked the Lexus IS, which carries the brand's new fastback exterior styling very nicely, was shown in silver (where, after Henry Ford, I'll get a car in any color as long as it's silver), and appears to do away with the outgoing model's supposedly youth-oriented interior design quirks.

After showing the IS pictures online to Suzanne, since financial decisions of any magnitude in the household require consensus,** it was clear that she was unenthusiastic about the car beyond the usual attenuated spousal enthusiasm for my car shopping jags. She'd prefer the Acura TSX,*** hitherto the leading contender for the family sedan role, as a matter of brand anti-elitism. Acura marketing literature may be as pretentious as Lexus — maybe more, as they're striving to move up — but that's basically just marketing BS: they're Hondas underneath it all.****

I can understand Suzanne's point. Part of me wants to say the hell with the automotive status rat race and just get an Accord, such time as a second car with back doors is deemed to be required. But the part of me that doesn't want to drive what everyone else is driving will probably push us to the Acura.

----------

(*) Even though this post is dated Monday, and composed Sunday, it was originally conceived and meant to have been posted on Saturday.

(**) While I largely support the feminist blogosphere's reaction to David Brooks' ridiculous joint checking account column, I'd note that division of power is the real issue. Separate checking accounts are neither necessary nor sufficient for equal division of financial rights and responsibilities in a relationship.

(***) There are worse things. The Acura is a blast to drive, in part because it's not wildly overpowered, and I've recommended it to a friend who is in dire need of a new four-place car with an available stick-shift.

(****) Yes, I did point out that Lexuses are Toyotas.

by Tom Bozzo

Suzanne and I took John to his first rock concert: a Ralph's World full band show at the Wisconsin Union Theater. The concert, benefiting the new UW children's hospital, drew a nearly full house to the 1,300-seat WUT. The median age in the audience appeared to be 8 or 9.

Ralph Covert himself was at the CD-and-T-shirt table in the lobby before the show signing autographs. An after-show reception was scheduled, too, so Ralph is clearly still at a fan-friendly stage of his career. Ralph is a little thinner and taller than I expected. (Though my height perceptions aren't that sharp: I hadn't actually noticed that Jeremy Freese is a couple inches shorter than me.) I pointed John — who's seen Ralph on video innumerable times and asks to see the Ralph picture accompanying the New York Times profile once in a while — in the direction of the real Ralph, 10 feet away, and John just seemed confused.

The concert started a few minutes late. We weren't late, but arrived just in time to see another more enterprising dad get the last group of three open seats on the main floor, and we found spots in the balcony instead. Since that's where two of John's playgroup friends and their parents ended up, it wasn't so bad.

When the music started, my main fear was that the first amplified note would terrify our toddler. He opted for something approximating stunned silence instead. No flapping elbows to "Say Hello," the usuall intro song. The volume level was actually reasonable overall — signs of children's music pros, I presume.

Since half the Ralph's World concert attendees don't buy their own drinks, as Ralph noted to the Wisconsin State Journal (contrasting the Ralph's World audience with that for the Bad Examples, his grown-up band), the between-song banter was pitched about half to the grown-ups. I expect that it was mainly the over-10s who got Ralph's point, when exhorting the audience to sing the "la la la" part of "Happy Lemons" loud enough for the college students on the Union Terrace to hear, that small children are what college students fear most.

Ralph, while noting that animated videos to songs from the Kid Astro CD are playing on public TV in Chicago and will soon appear on a kids' cable channel, also graciously pointed the audience to the cool sign language video of "Down in the Glen" by Suzanne Prisk of the Semi-Official Ralph's World Discussion Board (see the "Ralph's Secret Fans" link in the blogroll). See the video here (7.2 MB QuickTime video). From discussion board traffic, Suzanne P. should have been in the audience, and therefore should be pretty happy.

The set was just a little long for the 2-year-old attention span. Around the half-way point, John lost interest in sitting and watching, and took to patrolling the WUT balcony's crosswise aisle with his playgroup friends, who had reached more or less the same point at the same time. I did catch John figuring out what was going on. At one point, he paused running and jumping, went to the rail separating the aisle from the seats, and pointed at Ralph with an unmistakable flash of recognition. While the toddler wall was hit a couple songs later, causing him (but not me) to miss "Honey For the Bears," seeing Ralph and All Those Kids was all he could talk about on the way home.

Addenda 3/7/05:

1. On Friday, John was overheard saying "Ralph is gorgeous!" I wonder where he picked that up...

2. I'll need to learn the program modes of the camera (which allow simulation of faster film) for the next such event. With no flash and low light, it was tough to get a relatively clear picture of the band — too much moving around on stage. They were standing pretty still for this bass solo:


Addendum 3/8/05:

3. Suzanne Prisk offers the correction that Ralph said that college students fear HAVING children. Duly noted. A few clearer concert pictures are here — including this picture, taken by Ralph himself (!), of the guitarist surrounded by small children at the end of the show.

by Tom Bozzo

While others (me, at least) were engaged in weekend trifle-blogging, Oscar has a pair of red meat posts drawing analogies between WorldCom and the Bush administration.

Oscar astutely notes that Bush administration, in concert with Bush supporters more generally, has perfected a peculiar mode of taking credit for anything that can be construed as a policy success while deflecting responsibility otherwise. The combination of opportunism and lack of causal nexus with actual Bush administration policies is a hallmark of bullsh(t as defined by Harry Frankfurt in his famous and recently reprinted essay, On Bullshit.

There may be a case to be made for willful disregard of, as opposed to mere indifference to, the truth on the part of the administration, which would remove their actions from the realm of bullsh1t to that of simple deceit. (As some critiques of Frankfurt apparently go, the two can be observationally equivalent.)

Bullsh#t was certainly the first word that came to mind reading quotes in yesterday's New York Times from one of Bush's Social Security talking sessions:

Under his proposal, Mr. Bush said, income from a private account "goes to supplement the Social Security check that you're going to get

"See, personal accounts is [sic] an add-on to that which the government is going to pay you," [Bush] said. "It doesn't replace the Social Security system."

Lying or bullsh:tting? So, so hard to decide. The Times, to its credit, immediately points out that the private accounts will offset traditional Social Security, though it takes the he-said/she-said approach to transition costs, and doesn't add the additional likely detail that the offset will be against a smaller check than current law would provide. Defending against the last critique sometimes takes the form of "Plan? What plan?" While technically true, that retort is nevertheless total bullsh%t as long as Bush is hopping from one talking session to another as if there were a Plan.

Ultimately, it's my belief in the existence of the "West Wing Syndrome" that makes me lean towards bullsh^tting as the issue, to resolve Josh Marshall's lede, "I'm not even sure 'lying' quite does it [Bush's privatization rhetoric] justice." One thing about ideology-driven policy is that it simply doesn't matter if it's effective or successful. Ideology, like Frankfurt's bullsh!t, is indifferent to the truth. Subject to a suitable belief system, you can justify anything as long as it's not necessary to eventually confront the real world.

And that is the administration's true genius: enacting, or trying to enact, a substantially pre-established agenda (tax cuts, missile defense, Iraq, Social Security privatization) with reality serving as that thing for which the righty policy establishment will retroactively contort itself so as to underscore the old saw, Piled Higher and Deeper.

by Tom Bozzo

Yesterday's mail included a letter from the New Morning Nursery School (no link, website apparently attacked by hackers), where we had applied to put John in one their two-day-a-week programs for younger children.

As a background note, the day their applications became available set off a little bit of a frenzy in John's playgroup, like it was the 92nd St. Y Nursery School or something. That said, New Morning's open house convinced me that those two mornings would be way more fun than kicking about the house.

Assaying the envelope, I was wondering, what's the difference in thickness between a nursery school acceptance letter and a rejection? Open it... he's in! Hooray!

by Tom Bozzo

Automotive News reports that GM has been conducting celebrity focus groups to evaluate the 2007 Cadillac Escalade.

This trendsetting group included NBA and NHL stars. It included TV actors, movie producers, hip-hop artists and jazz musicians. Some were teenagers, others were 40 years old.

Cadillac marketers didn't anticipate the current Escalade's popularity with athletes and rappers, and now want to make sure that they don't miss the boat with the new model.

"Is there any way to get current and future Escalades in front of them to see if it's the right direction?" [GM chairman Richard] Wagoner asked.

[snip]

...one source says some of the attendees included NBA players from the Los Angeles Lakers and Clippers, several leading actors from the TV sitcom "That '70s Show" and some of the celebrities invited to GM's pre-Oscar fashion show last week.

Hmm... Ashton Kutcher apparently drives one of these monsters, which apart from basic defects of aesthetics and good sense, may not be mass-marketable in the era of $50/bbl crude oil. But what were the VIPs really interested in?

"That [Cadillac] crest," [GM design chief Ed] Welburn says. "I heard over and over they wanted it large in the front and large in the rear and on the wheels and other unique areas."

This reminds me of one thing.

All my life, I have searched for a car that feels a certain way. Powerful like a gorilla, yet soft and yielding like a Nerf ball. Now, at last, I have found it.

Yes, the Homer.

---------------

Cadillac's other brilliant marketing idea is to sell a decent-looking and sensible small sedan, the BLS, only in Europe to try to restore the brand across the ocean and perhaps to gain credibility with Audi and BMW intenders here (currently, 96% of Cadillacs are sold to U.S. buyers). The theory of the latter is apparently that by selling an entry-level car deemed unsuitable for domestic tastes only to Europeans, Cadillac will "[underline] the brand's global ambitions and its key role in the premium segment." I judge that to be marketing B-L-S---.

by Tom Bozzo

While it is possible to extract links from web pages with ruthless efficiency by way of automation, doing so does eliminate any pleasure of actually reading through the page in question.

by Tom Bozzo

This grep command:

grep -h -o -e '<a href="http://[url].*.html">' *.html >file.txt

...searches every file ending in ".html" in the current directory for "a" tags linking the site given by [url] and, on a Unix-like OS such as Mac OS X or Linux, places the links in "file.txt."

by Tom Bozzo

Yesterday's Wall Street Journal ran an important article, "Spousal Benefit Is Social Security Wild Card" (no link due to WSJ subscription system) — on page D2 in "Personal Journal."

Personal Journal is actually my favorite section of the WSJ, and it's actually likelier (in the absence of a major blogger's mention, etc.) that I'll see an article there than, say, on its editorial page. The lede:

One of the big unanswered questions in President Bush's push to revamp Social Security is how widows, widowers, and ex-spouses would fare.

OK, now, why isn't this question worthy of A1? Or even D1, much as I enjoyed "The Luxury Car Market Gets More Crowded" on Audi's revamped product line.

The effects on survivors and ex-spouses are actually very important in evaluating the prospective benefits of privatization, as I showed a few weeks ago in this post on the Heritage Foundation's privatization calculator. Privatization advocates almost always compare Social Security benefits to earnings from single life annuities, whose payment streams end with the beneficiary's life. This maximizes the advertized benefit under privatization.

An element of deception enters because Social Security retirement benefits are not structured like a single life annuity for married (or once-married) participants. Survivor benefits make Social Security more equivalent to a joint life annuity, which requires considerably more capital to produce the single life annuity's income stream. This is particularly important for "traditional" single-earner families, as well as two-earner families with high income asymmetry, in which one partner will not have a large (or any) amount of money from payroll taxes to divert into a private account. For middle earners — most people, really — this worsens the privatization deal.

A good question is, how do conservative privatization advocates reconcile desires to promote "traditional" family structures with what the opposition research might call, with some justification, privatization's anti-family incentives?

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Separately, Ann Althouse has a good post on Bush's confession of fault, or lack thereof, in the privatization sales job, highlighting the conservative virtue of not fixing that which ain't broke.

by Tom Bozzo

One of the right's knocks on the left blogosphere that I find particularly annoying is the suggestion that comments functions on the major left blogs turns them into seething cauldrons of vitriol and vulgarity.(*) This came up in my recent exchange with Joe Malchow of Dartblog, who said:

I would also advise Tom to take a look at prominent left-wing sites, like Kos or Eschaton, and he'll see blind ideology and pure vulgarity are far more prevalent there than in the rightist blogosphere.

I let this mostly slide with a reference to a recent post in which I said:

Regarding the politics of blog comments, my observation has been that large-readership righty blogs with comment functions are as good at recirculating their own ideas without making them any more palatable to the other side as their lefty counterparts. I would argue that there is a large class of blog comments, common on both sides, that could be freely exchanged between the hemispheres simply by replacing references to the one side's heroes with references to its villains.

Today, Joe posted, under the headline "Clowns to the Left of Me" a MyDD comment that had been picked up on Daily Kos: a bit of piffle about how a simple Democratic strategy is to do the opposite of what Republicans say Democrats should do. I think there's a kernel of truth to this (and that the comment was a little facetious to boot), but what Joe cites is certianly not vulgar.


Anyway, I went to Little Green Footballs (at #4, a "Higher Being" in the TTLB ecosystem), which happens to be just above me in Joe's blogroll, and went scrolling through the comments to a post entitled "The Old Gray Lady Has a Thin Skin." The hot-button topic of the post was Michiko Kakutani's review of Ari Fleisher's memoir. What sort of comments do you think this would attract? Here are a few (all asterisks to bleep bad words are mine):

Aww, the libs are just jealous. I'll bet Ari wrote it without alot of
help either, something the Dems can't do :)

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I think all this is good news. The leftoids continue to be too stupid to
learn from their past mistakes and string of election defeats.

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If the NY Times hates it, then it must be good.

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The MSM continues to show its opposition to freedom simply because
George W. Bush is for it.

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Actually, the LLL's could kill two birds with one stone, they now have
the chance to prove that Evolution, that old, old motheaten "theory" of
how we came to be, is true, if they can prove that Bush is a Chimp.....
I suppose the scientists at the Kennedy-Kerry School of Scientific
Research Related to Evolution and Chimp Rulers are hard at work trying
to figure it out....

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[quoted from earlier comment:] BTW - You might be interested to know
that Frank Zappa was half Arab.......the other half being Italian. [end quote]

That would be the good half...

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[quoted from earlier comment:] We can't
forget that there were over 50 million votes for Kerry, or against
Bush... those voters still read their daily dose of dribble... [end quote]

they need their daily dose that results in dribble. They need their
Thorazine.

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The NYT is so full of pussies.

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Isn't it canuckistan that always points out what a staggering success
Bosnia was still is?

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Translation of review: This sh*tty book gives us leftist wacko's no ammo
to use against the administration...........Awwww too bad, you will have
to create some more false stories ala CBS. Liberals hate doing hard
work....

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Ari was awesome, he had a way of telling the press to eat sh*t, and they
didn't even know they had been had.

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Note to the Times and every piece of sh*t scumbag who works for them:

Stick to being the propaganda wing of Al Qaeda. Its what your good at...

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By the way, TImes:

If you dont think the terrorists pay attention to US media and your glorification of their acts (yes- it is perceived as glory in their eyes) your f***ing retarded. Or evil

A Daily Kos diarist is on this, too.

So to blog pals who might be inclined to pull out the one about nasty lefty commenters, I say cease and desist. Jeremy discovered the Little Boy of link bombing. I'm in the process of perfecting the equivalent of the multistage fission-fusion bomb (or, given a sufficiently prolific link source, the Vorlon Planet Killer) of link status subversion — a joy of working with a Unix-like OS — and think the whole link-exchange-economy-status-ranking thing is a game at best and a pretentious game at worst. So don't think I won't use it!


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(*) If the comments function here should ever descend into virtriol and/or vulgarity, expect ruthless comment moderation.