Marginal Utility

by Ken Houghton

Via Professor mochi_tsuki (and Tina –ed), a great website that also serves a great cause.

Learn definitions (well, when you guess correctly, at least) and Feed the World. Send the rugrats, after they're done with their costumes, explicit or exotic.

Labels: blogging, education, Meme-A-Riffic

by Tom Bozzo

On the private equity reverse-alchemy watch, yesterday wasn't a good day in the NYT for John Snow's star hire, Chrysler LLC CEO Robert Nardelli.

Micheline Maynard rocks 'im:

Mr. Nardelli... talked about the auto industry in a way that suggested he was still in a home-improvement state of mind.

“I think a vehicle today has to be your most favorite room under your roof,” Mr. Nardelli said. “I really believe that. I mean, it has to bring you gratification, it has to be tranquil. It’s incidental that it gets you from Point A to B, right?”

[...]

An automobile also needs “cup holders — some for water and some for...,” Mr. Nardelli said, but he did not finish that thought.

And Nick Bunkley socks 'im:

Apparently referring to a recently approved plan to cut fourth-quarter production by 85,000 vehicles, Mr. Nardelli said, “We made a decision in seven minutes that would have taken Toyota three months.”

Er, maybe Jim Press didn't tell him that production-cutting decisions haven't exactly been weighing on Toyota execs' minds? Way to face reality, anyhow.

(reference; this is not to suggest that Nader isn't a total knee-biter)

Labels: High Finance, Trains Planes and Automobiles

by Ken Houghton

but my HELOC rate just went down 25 bp.

(Reference)

Labels: Economics, Economists View, monetary policy, Politics

by Ken Houghton

Goes to Jon Swift, whose Aristotelian logic* is unimpeachable.


*A moron wrote the e-mails; Steve Boylan Is Not a Moron; therefore everyone who agrees that the computer is Boylan's and the style is Boylan's and therefore the e-mail was sent by Boylan—be they on the right, left, or center—must be wrong.

Labels: Iraq, Politics, SoftBigotryofLowExpectations

by Ken Houghton

Jeremy is on blogging hiatus—again.

The way you tell the difference between Jeremy on hiatus and this blog having only a post or two over a few weeks is that he tells you he's on hiatus, while Tom, Drek, Kim, and I just don't do any blogging.*

So keep wishing John a speedy recovery.

Tom says: Teh Boy got sprung from the hospital yesterday, for an extra 5th birthday present. Word from home is that he's had a good day today.

*My occasional posting of this annoying video—thank you again, Rory—generally shifts Tom's Utility Curve so that he posts something, but that's a collateral effect. And I can't think of an excuse to post this annoying video right now.

Labels: blogging, Meta

by Ken Houghton

Yesterday at Angry Bear, I apparently started and ended the comment thread for this post. The absurdity of the claim that Rudy G. had in any way done anything to defend NYC after the 1993 WTC bombing—that is, for his entire term as mayor—was beyond the pale.

Now, as a public service, Teresa Nielsen Hayden Explains It All to You. In one place, everything you need to know about "America's mayor."

Labels: NYC, Politics, Republicans, terrorism, theother11sep

by Ken Houghton

Tim Duy nails the reality, but missed the overriding rule of the Failed Paulson Treasury:

In my mind, the argument for a rate cut hinges on one crucial assumption – that the market is expecting a rate cut, and the Fed will not want to disappoint.

Dear Tim,

This is the Fed that chose triple-witching day (August 17th) to give the bank a "Get Out of Risk Management free" pass. This is an Administration that talks about stock market gains and tax cuts, not jobs, growth, or inflation.

And this is a Lame Duck Administration: what comes next is at best the All-Too-Loyal Opposition, at worst (one hopes) a transition from the Democratic Republic of my ancestors, relatives, and, one hopes, descendants.

I'm not saying that 2:45pm tomorrow is going to feel as if it undermines 376 years of family history; that would be hyperbolic. But an Administration that plays style over substance, appearance over reality, and "us[es] 1984 as an operations manual" (h/t DeLong).

I haven't been so certain there would be a Fed rate cut since the first month Wayne Angell came to Bear. I hope I'm wrong, but, as Mark Thoma notes, that's not the way to bet.

Labels: Brad DeLong, Economics, Economists View, monetary policy, Politics

by Ken Houghton

Cokehead's favorite baseball player on Slappy and the "GREATEST MANIFESTATION OF EVIL ON THE FACE OF THE EARTH":

"Between them and the Yankees making sure we were updated every 15 minutes about when they were actually going to name their manager, I didn't give a crap. Bottom line was they're playing golf and making organizational decisions and we're still playing games."

Labels: baseball, LGandM, Yankees

by Ken Houghton

Henry Hyde also to be honored for leading the impeachment of William Jefferson Clinton. ("known for his battles against abortion rights and his leading role in the impeachment of President Clinton.")

And, no, this is not The Onion, nor do I feel like bothering with a link.

Labels: Economics, IronyisDead, Politics

by Tom Bozzo

Dear Real Steve Jobs:

This past week, a 32GB iPhone felt like a really good idea, even at current prices for that quantity of flash memory. Just saying.

Love, Tom

[reference]

Labels: computers, just life

by Tom Bozzo

Paging Dr. Baker.

An AP story on the incipient water-supply clusterfuck says that the cost of upgrading water supply pipes in the U.S. could be "staggering:"

Experts estimate that just upgrading pipes to handle new supplies could cost the nation $300 billion over 30 years.

$300 billion is a lot of money by most standards, but it's what the U.S. spends on the wars in Afghanistan and Iraq in 18 months, or less than a year's service of the U.S. federal debt.

I could say the same thing, with minor changes of scale, for just about any other "staggeringly expensive" infrastructure project — providing the U.S. with intertubes as good as South Korea's, intercity trains as good as France's, take your pick — it's not that the money couldn't be there. It's certainly available for maintaining U.S. supremacy in nation-wrecking, despite the lack of proven utility to such capabilities.

One unfortunately prescient-seeming bit of near-futurism in Charlie Stross's Halting State is the suggestion that the U.S. will fall off the global economic power map by the end of the next decade, at least while biting a few trillion bucks' worth of infrastructure improvement.

[reference]

Labels: cognitive biases, Journamalism, other priorities, sf

by Tom Bozzo

Inadvertent truth-telling from Tommy G. Thompson:

In an interview with The Capital Times, Thompson said the contract awarded to Logistics Health, Inc. in September was done properly and had nothing to do with the La Crosse-based firm hiring Dr. William Winkenwerder, former assistant secretary of defense for health affairs. Winkenwerder was hired as a director and consultant for Logistics Health on June 1, three months after he left his Pentagon post.

"There was no conflict of interest," Thompson said. "Logistics Health Inc. is so ethical it's beyond the pale."

[link added; reference]

Labels: Utter Stupidity, Wingnut Welfare, Wisconsin

by Tom Bozzo

The week's excitement has put me in the unusual positions of not only driving my car but schlepping Julia around in it. Opportunity to indoctrinate child to avoid "High School Musical" noted! The current playlist...

1. The Fall, Cruisers Creek, This Nation's Saving Grace (iTMS, eMusic)
2. The Jazz Butcher, Looking For Lot 49, Fishcotheque
3. Wire, Too Late, Chairs Missing
4. Naked Raygun, Home of the Brave, All Rise (iTMS, eMusic)
5. Gang of Four, I Found That Essence Rare, Entertainment! (iTMS)
6. Modern English, After the Snow, After the Snow (iTMS, eMusic)
7. Love and Rockets, All in My Mind, Express (iTMS, eMusic)
8. Matthew Sweet, Girlfriend, Girlfriend (iTMS)
9. The Family Cat, Goldenbook, Magic Happens
10. Blur, There's No Other Way, Leisure (iTMS)
11. Echo & the Bunnymen, Never Stop, Porcupine (iTMS)
12. Mojave 3, Ghost Ship Waiting, Puzzles Like You (iTMS, eMusic)

While the LDSEI [*] for the list is a low 0.25 for my mellow (early?) middle age, it's interesting that two of the three tracks in that quarter were major label releases. EMI released Wire's first three albums in the UK, and the Family Cat album was released on Arista in the U.S. If I can d/l the Higsons' "Attack of the Cannibal Zombie Businessmen," I can only assume there's some rights nightmare going on.


[*] Legal Download Service Esoterica Index.

Labels: just life, Random Ten

by Ken Houghton

Via Brock at Battlepanda and Daniel Gross, this bio in toto of a Fox Business Channel personality:

Dagen McDowell was a well-known financial journalist before joining FOX News in 2003.

Labels: infotainment, Journamalism

by Tom Bozzo

I might have responded to Ken's current titling by calling this "Another Shitty Day" after the great song by the Sneetches, but kept this clean out of respect to the bloggers who let us lower the tone of the discourse via RSS on their sidebars.

Short background:

• Last Wednesday, John had an unscheduled doctor visit for a nasty upper respiratory virus, leading to lots of coughing.
• Thursday, he was feeling a little better.
• Friday, he was feeling worse again.
• Saturday, he had a fever and was complaining that his tummy hurt; both responded to NSAIDs.
• Sunday evening, the fever picked up and his tummy hurt a lot.
• Very early Monday morning, he was inconsolable. Off to the ER!
• 9 P.M. Monday-now, he's recovering from an appendectomy at the UW Children's Hospital.

If you have to be in the hospital, the American Family Children's Hospital is just about as good as it gets, befitting a brand-new facility; I've certainly been in less nice (though certainly far cheaper [**]) hotels. The chief of surgery just happened to be on call for the operation, the staff is very attentive, and John is recovering as well as can be expected. It gives the impression that the health care system in general is humane.

The teases.

A recurring theme of Paul Krugman's is that the health insurance system runs an expensive and officious bureaucracy for the purpose of making money by denying care (or payments for it, often effectively the same thing). We are fortunate only to be screwed by our insurer in the form of large backward-looking premium increases that make our insurance seem less insurance-like.

A related problem with more direct bearing on our situation is that Our Wonderful System tends to reward doctors for (or maybe requires [***]) spending as little time as possible with patients. Those of you who have worked in consulting, law, or other fields where one's time is sold may recognize that clients who are very persnickety about timekeeping get to pay (directly or via overheads included in the billing rates) for record-keeping that may or may not be more useful than actual work. Throw in the Murphy's Law of Children's Health, i.e., when your kid gets really sick, it will happen after 5 P.M. on Friday, and you have the makings for some big insurance claims.


[*] Readers with small children of certain inclinations may recall that in Madeline, the other girls cry boo-hoo because they want their appendixes out, too. Fat chance.

[**] As you might guess, business travel rarely brings me to Manhattan. At least the Wi-Fi here is free.

[***] I don't have direct medical back-office knowledge, and am too sleep deprived to go and learn more about it.

Labels: Health Care, just life

by Ken Houghton

1. Barron's, via Felix Salmon:
   

   As a retail-industry laggard with tired locations and mediocre merchandising, Sears figures to suffer mightily if consumers retrench and the economy slows, they insist.

   
   English translation: people know where their stores are, so they won't go there.
   
   This, one presumes, is why the accompanying graphic declares that Sears is "A Screaming Bargain: The implied value of Sears' retail real estate is absurdly low relative to competitors' property."
   
   
2. Because Everyone Cares about the Green, not the Yellow, Jersey:
   

   And for the first time since 1967, the race will start with a full road stage, 121 miles from Brest to Plumelec in Brittany, instead of an opening individual time-trial race against the clock that had become traditional. The goal is to give more riders, and not just time-trial experts, the chance to compete for the race lead and its coveted yellow jersey from the very start.

   
   Right; because a pack sprint and a Tom Boonen victory will definitely be something New and Unusual for the first week of the tour.
   
   Continuing with Press Release "Reporting":
   

   After the drug problems of the past two Tours, [there will be] 19 major mountain passes that riders will face, two fewer than in this year's race.

   
   Because mountains are never interesting television, and climbing video (not to mention those 70mph descents) are boring.
   

   "The idea was really to break the classic scenarios," Tour director Christian Prudhomme said. "I am convinced that cycling will rediscover its romanticism that made it a legend."

   
   I'm convinced that the Tour de France just moved to a lower Utility Curve.
   
   
3. Via Felix again, a Milken Institute report indicating that Congestion Pricing Works [PDF] —but so far has required an autarch to be implemented successfully.
   

   In the case of London, Mayor Ken Livingston was determined to introduce congestion charging and made it part of his platform in 2000. The act restoring the mayoral form of government to London after more than two centuries also gave him powers to introduce congestion charging without consent from the national government....
   
   Later on, the public indirectly endorsed the plan, re-electing Livingston a year after congestion pricing was introduced. There were no U-turns at the local
   government level at any point.
   
   Singapore has been run by the People’s Action Party since it first won an election in
   1959. As the ruling party, it has dominated most of the political and economic development of Singapore....Thus, it is not surprising that once the decision was made to charge for road use, there was little dissent. [emphasis mine]

   
   The most encouraging part of that, from NYC's point of view, is bolded above. Londoners voted for a man who promised to deal with congestion by setting a charge for externalities, and he did. And they re-elected him.

Especially in the context of that last, there has been a lot of straw-man idiocy recently alleging the superior "efficiency" of the private sector. But, as has been noted frequently, if you assume a functional democratic republic, there is a clear process in place for improving efficiency, one dependent only on the will of slightly over 50% of the people being realised.* That mechanism in the private sector (Shareholder meetings) is, at best, even less responsive.**



*I will freely stipulate that this is more true of an actual democracy than a democratic republic such as the United States. Overall, though, for a population of 300MM+, both (1) the benefits outweigh the risk and (2) that is the process.

**Oh, right, in Masonomics, you blame the victims.

Labels: bicycle racing, congestion pricing, conspicuous consumption, rational expectations, sports

by Ken Houghton

Sobering find of the day:

US$850 per year puts you at the world median income.

In those circumstances, it's rather easy to claim that globalization is doing some relative good.

(Possibly more later, building on here)

Labels: free trade, globalization, Income Inequality

by Ken Houghton

Stanley Fish stares at his navel, and confuses lint therein for discussion:

But with what motive would the teacher initiate such a discussion? If you look at commentaries on “Moby Dick [sic],”[1] you will find Ahab characterized as inflexible, monomaniacal, demonic, rigid, obsessed and dictatorial. What you don’t find are words like generous, kind, caring, cosmopolitan, tolerant, far-seeing and wise. Thus the invitation to consider parallels between Ahab and Bush is really an invitation to introduce into the classroom (and by the back door) the negative views of George Bush held by many academics.

If the intention were, as claimed, to produce insight into Melville’s character, there are plenty of candidates in literature for possible parallels – Milton’s Satan, Marlowe’s Faust, Byron’s Cain, Bram Stoker’s Dracula, Shakespeare’s Iago, Jack London’s Wolf Larsen, to name a few. Nor would it have been any better if an instructor had invited students to find parallels between George Bush and Aeneas, or Henry the Fifth, or Atticus Finch, for then the effect would have been to politicize teaching from the other (pro-Bush) direction.

Now, I'm as fond of the next person, and probably fonder than most, of the idea that you should compare literary characters to other literary characters. And I might suggest that Fish is blowing smoke when he talks about comparisons with Iago ("I am a villain" is not something Ahab would ever say) or Faust (though his search for knowledge led to mercury poisoning of his patients, that was, effectively, before the play starts).[2]

And let's leave aside for the moment that possibly the best character comparative for George W. Bush—John Ford's Perkin Warbeck—isn't even suggested by Fish.

The question is: if you are trying to teach literary texts to undergraduate students, do you only make references to other texts, or do you try to teach them by relating things to their experiences?

If you're Stanley Fish, who may not have seen an undergraduate since early in his days at Duke, you might try to keep the references all to other texts. But you would be doing yourself and your students a disservice. You're making it unnecessarily difficult to communicate with them. They may not know who Atticus Finch is, but they certainly know who George W. Bush is.

Also, let us consider the GWB/Ahab comparative a bit more. In a world not quite so black-and-white as Fish's, characters are robust. In Fish's world, by contrast:

But with what motive would the teacher initiate such a discussion? If you look at commentaries on “Moby Dick,” you will find Ahab characterized as inflexible, monomaniacal, demonic, rigid, obsessed and dictatorial. What you don’t find are words like generous, kind, caring, cosmopolitan, tolerant, far-seeing and wise. Thus the invitation to consider parallels between Ahab and Bush is really an invitation to introduce into the classroom (and by the back door) the negative views of George Bush held by many academics.

I'm happy to see that (1) Fish is able to understand motivation so completely and (2) academics are not that much different from 63% to just under 70% of those polled by FoxNews, not to mention 75% in a poll actually taken this month.

Sarcasm aside,[3] there are many reasons to compare Ahab and GWB. Let's do a short list:

1. Each took on what may appear to be an impossible quest (The White Whale, The GWOT), and showed a dedicated energy toward that goal.[4]
   
2. Ahab was motivated in his search for Moby-Dick by having had a previous ship under his command destroyed, and having lost a leg in the process; George W. Bush's most reasonable explanation for the war in Iraq was and remains, "He tried to kill my dad."
   
3. Ahab "stayed the course"; GWB is doing the same, with the ending still to be written.
   
4. Ahab's quest is chronicled by Ishmael, who may not be reliable in his narration. GWB has been chronicled across the spectrum. What does this tell us about perspective on the two characters?

That's my very short, top of the head list of Four Questions that are perfectly reasonable, without fear or favor, comparatives, each of which can expand our understanding of the text of Moby-Dick, none of which requires a negative interpretation of GWB as either person or president.

It's a pity Stanley Fish is too busy building straw men and seeing conspiracies.
He clearly has read extensively, and has some decent interpretive skills. It's just a pity he doesn't think about literature as a living, breathing entity that is enriched by reader responses to the text as much as by the original text itself: a Self-Consuming Artifact, as it were, that reinvents itself with each new discovery.

For instance, here's Andy Serkis on the character of Iago:

There are a milion theories to Iago's motivations, but I believed that Iago was once a good soldier, a great man's man to have around, a bit of a laugh, who feels betrayed, gets jealous of his friend, wants to mess it up for him, enjoys causing him pain, makes a choice to channel all his creative energy into the destruction of this human being, and becomes completely addicted to the power he wields over him. I didn't want to play him as initially malevolent. He's not the devil. He's you or me feeling jealous and not being able to control our feelings.

That seems much more interesting than Fish's declaring him a parallel to the "inflexible, monomaniacal, demonic, rigid, obsessed and dictatorial" Ahab.


[1]Let us graciously assume the copyeditors at the NYT, not Fish himself, do not know that the actual title is Moby-Dick.
[2]My Marlowe and Goethe texts are stored in the garage as the basement gets finished; I'm working from memory, and can vouch only that the mercury poisoning is explicitly in the Goethe; it may not be in the Marlowe.
[3]Well, as much I can put sarcasm aside when dealing with cardboard characterization and arbitrary, unsubstantiated declarations of omniscience.
[4] YMMV as to whether the energy was optimally used in either case—but that's for the discussion, not the declaration.

Labels: Academia, literature, Politics, teaching

by Ken Houghton

Caroline Spector Explains Punk All to You. (The material about Paul Ross Evans is spot on as well.)

Labels: Eat Our Brains, pop music

by Ken Houghton

Via the comments to this post at Making Light, a transcript from Ms. Rowling's Carnegie Hall appearance last night.

(And, yes, I do plan to entitle posts after Tom Robinson lyrics and songs for a while, his current Radio 6 job notwithstanding.)

Labels: Harry Potter, literature, sf

by Tom Bozzo

The cat is happy to get his sleeping quarters back, too.



(Stephen and Drek had asked how the Falcon was going. My five- and three-year-old help made it a breeze.)

Labels: LEGO

by Tom Bozzo

I'm not here today, but I do have a post up at Total Drek, "Economies of Fun."

Labels: blogging, Realities Virtual and Otherwise, sf

by Ken Houghton

Did research organizations in the 1940s and 1950s decry reading by children, since it kept them from being active outside, or is this just a phenomenon of the television age?

(Yes, I've been looking at obesity research. How did you know?)

Labels: Economics, leisure, Optimal Resources

by Ken Houghton

It's bad politics to acknowledge genocide, because Turkey is going to get angry, but it's great for the President to award a Congressional Gold Medal—the highest honour given to a civilian in the United States—to the Dalai Lama since that will only irritate China?

(To be pre-emptively clear, I have no problem with either act, though the irony of the man most similar to Nixon in his ways giving an award to a Tibetan should not be lost.)

(Edited to add appropriate, comparable FTD links.)

Labels: Politics, Religion, Republican Party

by Ken Houghton

Via Felix, a piece in New York magazine on Citigroup Chair Chuck Prince gives us this gem:

As for the board, well, it will support Prince, as they say, until it doesn’t. It’s a board, it should be noted, that gave Prince a 13 percent pay raise, to $26 million, in 2006, a year during which Citi’s profits fell 12 percent and the company lost market share on several fronts. Says one former executive, “A different board would have thrown Sandy out. So it’s kind of strange to expect it would do something with Chuck. And many of them have faced the same issues as Chuck. Dick Parsons [of Time Warner] had Carl Icahn. Alain Belda [of Alcoa] has been criticized. And everybody knows what Mike Armstrong did to AT&T. With the exception of George David [of United Technologies], who is a rock star, none of them have distinguished themselves of late. It’s hard to imagine this group will take any action.”

One of my B-School professors, Jeff Netter, recently wrote a Working Paper in which he found that Directors are being compensated more generously in the post-SOX world. Unfortunately, this doesn't mean that their demonstrated governance abilities have improved.

Labels: Economics, governance, Regulation

by Tom Bozzo

A friend wrote a couple days ago to suggest I chime in on the much-blogged new album, In Rainbows, from Radiohead. The band's experiment (as they put it) is effectively sacking the middlemen of the recording business, not only the major labels but also Apple and the other online music distributors. In addition to releasing the album themselves, they're offering it mainly as a download of DRM-free MP3 audio files at whatever price (of at least 1p) the purchaser chooses to pay.

Before claims of average selling prices began to leak out, some silly things were said regarding the exercise. Following word from a source that the band had sold 1.2 million downloads, gigwise.com did some math and worked out:

Even if every person who downloaded the album paid just 10 pence, the band will still rake in a massive £120,000.

Massive, eh? That's about four times the average annual household income for the UK, and the previous Radiohead studio album was released in 2003. Likewise, ABC News' Silicon Insider column suggested:

[E]ven assuming the worst-case scenario, that all of those millions of Radiohead fans decide to take In Rainbows for free, it's still hard to imagine how the band loses. After all, it produced the album without a contract, using its own studio outside Oxford, so it hasn't had to pay exorbitant recording fees.

There may be some debate as to whether economists understand opportunity costs, but ABC's columnist certainly doesn't. If the band had 120 grand, let alone nothing, to show for the experiment, there would be champagne corks popping at Parlophone Records [*] in anticipation of re-signing the band on favorable terms.

My correspondent describes a surprising number of music business insiders, who should know better, incorrectly regarding the download revenue as pure profit for the band. To borrow some regulatory terminology, part of it is a "contribution" to cover the costs of producing the album, arranging for industrial-strength web hosting [**], etc. Recording studios don't build themselves, and had Radiohead not occupied theirs for the production of In Rainbows, it could have been collecting recording fees ("exorbitant" or otherwise) from someone else. [***]

Radiohead also reserve the right to charge a 45p transaction fee, which is apparently imposed on lower-priced transactions. Compare Radio 6 DJ Tom Robinson, whose breakdown of the recipients of a 79p iTMS download's revenue, quoted by Macworld UK, suggests Apple and the credit card processors receive roughly 19p. Assuming the charge imposed by the band reflects the actual transaction cost, they've given up roughly £300,000 to inefficient transaction processing.

Now, the band seems to have done a lot better than that, with reports suggesting an average selling price as much as £4. I think I speak on behalf of the quantitative socioeconoblogiverse in saying that actual data on the price distribution would be really interesting. That's not bad, but iTunes terms — which reportedly hand 70% of the sales price to the label, a cut which would go to the band for an independent release — could have given the band £5.59 out of a £7.99 iTMS UK download (or $7 or €7 for US and Eurozone sales, respectively).

Tom Robinson (op. cit.) says "sod that" to the labels getting such a large cut of the legal-download proceeds. While an array of jokes implying record-company inefficiencies may be cued at will [****], it can be forgotten that record labels do useful things for musicians like advancing them money that's to be paid back from music sales proceeds. The terms of the deals may or may not be great, from the performer's perspective. But consider as an exercise what terms you'd require before lending the kids down the street who are Serious About Their Band (say) $50,000 to advance their career.

Reportedly part of Radiohead's desire to avoid iTunes is not so much money issues as control over the sales model; they don't want people diminishing their album-oriented art by picking up tracks a la carte from iTMS or other services. In traditional music retailing, insisting people buy the CD album for a single track would (and does) drive people to free-as-in-beer alternatives. The name-your-price model can address this problem, since someone who would otherwise be willing to buy a 79p/99cent track can get the track (along with the rest of the album) for that price. The customer might even be willing to state a positive cash value for the rest of the album.

Whether a £4 average is sustainable for further sales is a good question (see again, sales data would be really interesting [*****]). I'd expect that super-fans willing to pay at least a standard download charge for In Rainbows are overrepresented relative to the idly curious and passers-by who will take a legal bargain over an extra-legal download among the early adopters. After the initial wave of people willing to pre-order the download given the band's terms, it's hard to see where they'd find a reservoir of high-net-revenue customers. [******]

In the end, I can see things moving to a world in which recorded music is given away to serve as a gateway drug for things like attendance at live appearances which will retain scarcity as data bandwidth and storage costs continue to vanish. Former Creation Records boss Alan McGee says that much with regards to the Charlatans' name-your-price exercise (again from Macworld):

[The Charlatans] will get paid by more people coming to gigs, buying merchandise, publishing and synch fees. I believe it’s the future business model.

Quite probably so. But there is still money in music sales.


[*] Their ex-label.

[**] The band has taken some guff over a site outage caused by inadequate traffic planning.

[***] Lots of people have trouble with the concept of "owners' equivalent rent," see (e.g.) here. Correct imputation of the value of non-market services is important for preventing economics statistics like GDP from mischaracterizing substitution of market for non-market services as representing economic growth.

[****] Such as the one about the mathematician's dog, the engineer's dog, and the record company A&R guy's dog, which is not suitable for a family blog.

[*****] I'd also suggest, in the spirit of undermining elites who don't need special help, that if Radiohead were willing to share data with Steve Levitt, they should publish it for the use of any interested researcher.

[******] On the gross revenue front, some might be willing to pay for a physical CD, though not the £40 super-deluxe box set; that's a higher transaction cost format.

Labels: I Just Love Corporations, Modern Retailing, Music, technology

by Ken Houghton

is the trailer for Jumper.

Let's hope Steve's film agent did as well for him as Evan Handler did for David Duchovny in Californication.

And that, say, Greenwar will follow.

Labels: Eat Our Brains, movies, sf

by Ken Houghton

Stanley Fish tries to be fair and balanced:

At least as an on-camera presence, Maloney is polite, unflappable and relentless. He borrows some techniques from Michael Moore, but rather than resembling a giant donut, Maloney has the lean boyish looks that could earn him a role in “Oceans 14″ alongside Brad Pitt and Matt Damon. So when he ambles into a university office in search of an administrator who will explain why there is no Men’s Resource Center at a university where The Women’s Resource Center flourishes, a viewer is likely to ask, Why won’t they even talk to that nice young man? [emphasis Fish's; underscore mine]

but makes a point that Bruce Bartlett (via DeLong) appears to have missed:

Political diversity (a more honest label for what Maloney, following David Horowitz, calls “intellectual diversity”) means that in terms of its partisan affiliations, a university faculty should look like America and display the same balance of Democrats and Republicans as can be found in the country’s voting rolls. But this requirement of proportional political representation makes sense only if you can predict what and how a professor teaches from his or her partisan identification: absent such a correlation, the political makeup of the faculty is not a legitimate pedagogical concern.

More later...

Labels: Academia, Brad DeLong, Politics

by Ken Houghton

UPDATE: The game is played. The citations lose.

Via Dani Rodrik (because I'm catching up on blogs in alphabetical order), Greg Mankiw does what he does best: plays politics, this time with the "Nobel" in Economics.

And even here, he's more of a politician than an economist:

Based on citations, who is in line to get the prize? In that old ranking, the top two on the list who have not yet won the prize are [Eugene] Fama and [Martin] Feldstein. In this somewhat more recent citation ranking, the top two economists are Fama and [Robert] Barro. In this most recent ranking, the top two are Barro and [Andrei] Shleifer.

Thus, if I had to bet a dollar on this year's prize, I would put it on Fama, Feldstein, or Barro. Andrei, who is still in his 40s, will have to wait a few more years. But as long as he lives long enough, he is a sure thing.

Yep, that's Andrei Shleifer, about whom alone David Warsh is worth reading. (Start here or here.) And in honor of Janet Reno's new album, I want quote the final paragraphs of the second piece cited above:

Very little is known about whatever representations and back-channel communications took place among Harvard, the Justice Department and the US attorney's office in Boston during those three years, much less what went on in the government itself, among the Treasury, Justice and State departments (beyond simply staring daggers at one another, that is). The US attorney in Boston finally filed his suit near the end of September 2000 -- barely a month before the presidential election. Stern and Bloom have maintained principle silence throughout.

What is known is that the attorney general in those days was Janet Reno. Whatever appeals were made to her, she declined to interfere. The suit went forward, resulting in a jury verdict against Harvard and a finding of fraud against Shleifer.

Without that finding, the rise of Vladimir Putin and his high favorability ratings would be harder to comprehend. Commentators routinely note that among ordinary Russians, the sense of having been taken to the cleaners by the Americans is widespread. Then, too, ordinary Americans wouldn't understand that the Russians' grievance was genuine, if Stern and Reno hadn't stood their ground.

Instead, citizens of both nations received a vivid illustration of the meaning of the rule of law -- not even Harvard, for all its friends in high places, could break it with impunity. The first female Attorney General of the United States set a high standard, by which her successors will be judged.

That's what it takes to make it in Mankiw world these days, apparently: the willingness to undermine countries, as long as you have always had great connections.*

It has been over a decade since Mankiw reviewed Peddling Prosperity in JEL (JSTOR link). Mankiw recommends the book still (rather more strongly, I might suggest, than his original review indicated), while Krugman's reputation has, if anything, risen in the past decade.

One wonder if the same will be true of Shleifer.

*It would be callow of me to note that Shleifer's citations often come in the he edited, and where the editor may be said to have influenced the citations. It will be interesting to see if the rate of citations declines.

Labels: Economics, governance, Politics

by Ken Houghton

With Jeremy and Erin both celebrating, and even The Curse of Scott only having extended their playoff life one game, it's well past time for the final Yankees v. Mathematician v. Gamblers post of the year.

My original post was all too accurate, and the absurdity (not Joe Torre's decision) of starting Wang* on three days's rest instead of Mike Mussina only proved the initial point.

In the end, though, the Yankees ended up 3.5 games below where the bettors had them at the beginning of the year—which is quite an accomplishment, given the injuries and changes the team went through this year.

I freely admit being no fan of Joe Torre's;I remember his Mets team that battled Roger Maris for the single-season home run title. I generally give most of the credit for Torre's "success with the Yankees" to Woody Woodward and Brian Cashman. But even I have to admit that this year's team—aging, fading, increasingly weak defense, and without the dominant closer than Rivera was since the year after Jeffrey Maier—overachieved in retrospect.

By contrast, the mathematician predicted the Mets to win 90 games, two more than they did and virtually the same as the "over 89 1/2" SportsMemo predicted.

So we have one team that achieved 3.5 less wins than it was predicted to, in the face of its own injuries, and one that achieved 1.5 less despite major injuries to its closest rivals and which ended with Carlos Delgado declaring that they are "so good they get bored," even as they lose nine of their last ten home games.

If you're asking a fan which one was motivated, they can tell you the answer. Seems a pity that management doesn't know it.

The previous posts in the series are one, two (really a throwaway), three, four, and five.


*Or, as FoxSports referred to him, BLEEP.

Labels: baseball, LGandM, sabremetrics, Yankees

by Ken Houghton

This was even after selecting "Go see it with mixed feelings, knowing it can't possibly measure up but looking forward to seeing some of the best moments on a big screen" on the optimistic idea that Lempriere's Dictionary will be filmed.

What Kind of Reader Are You? Your Result: Obsessive-Compulsive Bookworm You're probably in the final stages of a Ph.D. or otherwise finding a way to make your living out of reading. You are one of the literati. Other people's grammatical mistakes make you insane.
Dedicated Reader
Book Snob
Literate Good Citizen
Non-Reader
Fad Reader
What Kind of Reader Are You? Create Your Own Quiz

(via The Little Professor)

Labels: just life, Meme-A-Riffic

by Ken Houghton

Not only does he provide an excellent summary of flying coach (which will get worse when cell phones become legal, instead of just commonly used because the ban isn't enforced), but there is this, at which several of us laughed:

Not being a devout follower of college football these day, I will nevertheless be making additional burnt offerings this weekend on behalf of the Kentucky Wildcats, who will -- if justice is not the cruelest of illusions -- tear LSU limb from limb.

Close enough.

Labels: LGandM, sports

by Anonymous

My little corner of the world has been abuzz with the visit of the Dalai Lama. In typical local fashion, there has been much pomp and circumstance, all pulled off with the requisite quota of birkenstocks* and small-town unprofessionalism. Little stuff, mostly, like the K-9 dog, detailed to sniff out bombs prior to the Dalai Lama's arrival, that barked to be let out of the back of the truck. One would think K-9 dogs would be better trained than the average household dog, but evidently not.

At any rate, I was part of a group of 30 onlookers (well, 15 onlookers + 15 police officers/secret service types) who happened to be in front of the museum when the Dalai Lama arrived, with motorcade, his own full security detail, and retinue. The University President, his wife, and various other local dignitaries were there to greet him.

As is evidently the custom, a dedicated scarf-distributor unrolled a white scarf and handed it to a dignitary. The Dalai Lama would take the scarf from the dignitary, hold it up to his forehead, bless it, then give it back to the recipient. This went on through three or four dignitaries, at which point the Dalai Lama ... sneezed.

Which led me to ponder one of the more important questions of the universe, and the inspiration for the post title**: What do you say when the Dalai Lama sneezes? I mean, isn't "bless you" a tad presumptuous?

Aren't you glad I stopped in? (Don't answer that.)

* The Dalai Lama, however, doesn't wear birkenstocks. He wears old-man shoes. Bass walkers, in a brown-ish red carefully chosen to clash with his robes.
**Extra points to me for resisting the obvious and by now tired joke, "Hello, Dalai," for the post title.

Labels: just life, Religion

by Tom Bozzo

There are a lot of people who don't believe in a college education.

-Mike Mikalsen, professional outraged guy and research assistant to professional outraged guy and University of Wisconsin System critic Rep. Steve Nass, explaining why his boss is not so concerned with getting Wisconsin high schoolers ready for college.

Isthmus story via Barry Orton. Read the rest as you care to see a very angry Republican couple couple of Republicans in action. Maybe if their party allowed them to get married, or something?

On Rep. Nass's reported F in a class at Whitewater, Barry says, "'Dad, I got a bad grade because I was defending your conservative values and the professor is a Commie.'" Heh indeedy. I got the one and only F of my life on the Fascism midterm in "Communism, Fascism, and Democracy" class (poli sci). I didn't particularly like the professor, but when I went to discuss the results, he made a persuasive case that what I'd written wasn't totally wrong but was non-responsive. Remarkably, the solution to passing the class was harder work on my part, rather than agreeing or disagreeing with the prof.

Labels: Utter Stupidity, Wingnuttia, Wisconsin

by Ken Houghton

and off-course, with this piece about The Old Firm:

While the Bear funds certainly made colossal mistakes, nothing we’ve heard so far has indicated criminality....

Some will no doubt be happy that the guys who lost all that money may face criminal charges someday. But the less vengeful of us might want to think twice about enjoying the another instance of regulating finance through criminal prosecutions. How well has that been working out?

We would prefer actual regulation, thank you.* But since there's no inclination that way, I'll just quote that busiest of blog commenters, Anonymous, at 7:47 tonight:

One of the funds that blew up was marketed as a low risk investment that had positive returns every month since inception. Of course that turned out to be the result of marking prices to their own models, which they didn’t bother to mention in investor meetings. Misrepresentation of risks including telling investors about the use of hedges that did not actually exist was common practice at another fund. They also claimed that all the Bear hedge funds used their internal risk management software called “Bear Measurerisk” to stress test portfolios, among other things. However, this was complete BS as the program was considered internally as basically useless. [MeasureRisk won several industry awards last year - kh] They had people in the back office that did not know how to settle trades, so they didn’t. They misrepresented the amount of assets that PM’s had invested in their funds…..I could go on

It sounds worth investigating, so it's no surprise that DealBreaker would be worried. But they're still only looking at a few of the pieces, not the whole jigsaw puzzle.

The investigators may know better; time will tell.

*Rudy G.'s reputation—but not reality—was built, of course, on his alleged "regulating finance through criminal prosecutions." To point out that his actual record was abysmal—and that it probably got him where he is today—would be rude of me, and Rudy is a man with faith in work, God, and himself.

Labels: Regulation, The Old Firm

by Ken Houghton

from Moody's September 2007 Subprime Mortgage Market Update, as cited by Tanta at CR:

Interestingly, FICO scores and LTV ratios do not vary significantly between the strongest and weakest performing transactions and on average transaction performance does not appear to have been influenced by these characteristics.

If the sentence didn't include that adverb at the beginning, would you look up and say, "Interesting..." at the end of reading it?

Or would you say, "That's obvious. As Felix Salmon noted, '[Y]our mortgage is pretty much the last thing you're going to default on.' Loan-to-Value has nothing to do with whether you can pay your mortgage, and FICO is going to be at best a lagging indicator.

"The idiocy was in attributing all-seeing power to those factors in the first place."

Labels: Calculated Risk, mortgage, subprime

by Tom Bozzo

August-in-October hasn't been good for the blog. Sorry, all. Here are a few thoughts rattling around:

• There's nothing better than watching political suicide when it's the other side doing it. Angry Pregnant Lawyer has the perfect related post title: Kiss-my-assionate Conservatism.
• Good for David Obey for realizing that it's not a bad thing to stand in the way of the war funding bill. Can we just all say, together, $190 billion for the war(s) is fucking nuts?! That is, we'd spend in the sixth year more than what Larry Lindsey got sacked for saying the whole enterprise would cost (not counting blood). But Larry Lindsey is fat.
• In comparison, copies of Civ IV with expansion packs cost less than $100 and could occupy neocon idiots for an arbitrarily long time. Who says playing computer games at work can't be value-creating?
  
• What blockhead(s) approved the American Center, surely our area's least transit-oriented development?
• While headed out there for an allergist appointment, my car's odometer passed 6,000 miles. That was exactly 21 months after the delivery date. Do not, repeat do not, get an expensive-ish car for 300 miles of driving a month.
• Ironically, this car was less expensive than its predecessor, and indeed meant to be a baby step off the inclined treadmill up auto manufacturers' product lines as one's career advances. Memo to self: when detaching from the consumerist culture, be bolder.
  

Labels: Iraq, Random Bullets, Trains Planes and Automobiles

by Ken Houghton

The argument that government-provided health insurance "crowds out" the private sector actually has two components: (1) is this happening and (2) if so, is it worse than the alternatives?

The second part is often seriously overlooked by some economists, who only use Pareto-optimal in one direction. Jonathan Gruber is one of those who has argued most vehemently that there is crowding out. But his recent NBER paper with Kosali Simon*, an update of Gruber's 1996 AER paper with David Cutler*, notes what we have always known about the model of private health insurance, that its preference to insure declines with the need for that insurance**:

We also find that recent anti-crowd-out provisions in public expansions may have had the opposite effect, lowering take-up by the uninsured faster than they lower crowd-out of private insurance.

The graphic of this is left as an exercise to the reader, but the English version is that the Administration argument against S-CHIP will (as Jason Furman notes at Greg Mankiw's blog) help children in poorer families more than it will provide any subsidy to higher-income families. (UPDATE, appropriate quote, which I missed last night, but which was highlight by Brad DeLong, quoting from Mankiw's blog:

The Democrats and a substantial number of Senate Republicans support a proposal whose principal focus is covering low-income children who are currently eligible (3.2 million according to CBO) plus expanding coverage modestly to new children (600,000 according to CBO). In total 85 percent of the coverage expansion is for those who are already eligible but are not getting coverage either because the funding limits assumed in the baseline are projected to be reached leading states to turn away currently eligible children or because families simply do not sign up for the coverage that is available to them. [emphasis mine]

If economists (or Class of 1975 HBS MBAs) really believed in Pareto-optimal solutions, expanding S-CHIP would be acknowledged as a clear winner.

*Anyone know of a free version for either of these papers? Perfectly willing to add a link.
**This is an intuitive corollary of The Market for Lemons argument.

Labels: Brad DeLong, Economics, Health Care, Optimal Resources, policy wonk, Politics

by Ken Houghton

Even with the family away for the week, I'm buried. But these two are too good not to highlight:

1. Quote of the day, via Dr. Black: "In fact, the most homes in foreclosure [in the Orlando, FL, area] are in ZIP codes that didn't exist five years ago." If that is true, then (1) it is clearly the speculators who are suffering the most right now and (2) those are precisely the contracts (second homes, rental properties) that current bankruptcy law allows a judge to revise. No wonder:
   

   Some mortgage companies and lenders don't want you to know how bankruptcy lawyers can help, telling you bankruptcy is for deadbeats.
   
   In bankruptcy, retirement savings and 401(k)s are protected. You can be freed from second and third mortgage obligations. Some lawyers are even negotiating directly with lenders, which has never been done.
   
   "It just absolutely breaks my heart when I have a couple who wiped out a humongous retirement account nest egg before they came to see me," bankruptcy lawyer Lori Patton said.

   
   If you want a textbook definition of a principal-agent problem, look no further.
   
   
2. The Derivatives world has turned upside down in the past twenty years. Proof: this quote from Tanta at CR from about a week ago:
   

   One of the ways LIBOR was "sold" to consumers who were used to old-fashioned indices like Constant Maturity Treasury (CMT)or Cost of Funds (COFI)...

   
   I spent about an hour in early 1994, during my first round at The Old Firm, on a conference call with an economist and one of our salesmen, discussing with one of his clients why COFI was underperforming the market. And CMT Swaps were not anywhere near so prevalent as LIBOR-based ones.
   
   Time marches on.

Labels: Calculated Risk, mortgage, principal/agent problems, The Old Firm

by Ken Houghton

In the grand tradition of Scott at LG&M, here's the lede opening paragraphs (corrected; h/t, Gary in comments) for today's article on the faith of Rudy "I Hate Ferrets" G., the thrice-married Devout Catholic, as it should be:

Minutes before the South Tower of the World Trade Center collapsed into a roar of white dust and debris, Mayor Rudolph Giuliani caught a glimpse of the Fire Department's chaplain, Father Mychal Judge.

"Pray for us," the mayor said, reaching out to grab the chaplain's hand as the two raced past each other in the chaos.

"I always do," replied Father Judge. "I always pray for you."

It was the last time Mr. Giuliani would see his close friend and spiritual adviser. Judge was killed minutes later as he administered last rites to a firefighter who might not have died had Mr. Guiliani not both moved the Emergency Headquarters from the safety of the basement of One Police Plaza to the 25th floor of the WTC and failed to work over the previous eight years to provide the fire department with proper communication equipment, such as the police who had been warned to evacuate the building by then were using. The chaplain was just one of many personal friends among the casualties, which the mayor summed up for the stunned nation simply as "more than we can bear."

There. That's better.

Labels: 2008, Journamalism, LGandM, Politics, the rule of law

by Tom Bozzo

Still busy...


John is ready to dive in.


- Our hair! Our luxurious '70s hair!
- Could be worse...


- "Chewbacca?" Dat's a funny name.
(Not shown: Julia 1, Darth Vader's TIE fighter, 0.)

Labels: Kids, LEGO, Star Wars

by Ken Houghton

For the Why? Generation: Because they like customers.

Labels: just life

by Ken Houghton

For the first time since the evening of July 18th, 41st Street between Park and Lexington is open to traffic.

Labels: just life, NYC

by Tom Bozzo

At the recalls page for TtFTE toy distributor RC2 Corporation, the browser window title simply reads, "RC2 Corporation."

Go to the page for requesting a return for the latest recalled TtFTE items, and that bulks up to "RC2 Corporation - compelling passionate parenting and play for all ages."

And I thought I was getting some more time to myself now that John builds his own track layouts...

Otherwise, RC2 Corp. has compelled me to direct family members to the Whittle Shortline R.R. I like the Metra set, myself.

Labels: I Just Love Corporations, Thomas the Frackin Tank Engine