Saturday, September 29, 2007

All Hail the Googleborg (Google Maps API Edition)

by Tom Bozzo

I'm probably the last person to have noticed, but MapMyRide is a pretty cool Google Maps-based tool, in part in that its point-and-click route creation is not much more time consuming than bashing out a text description of a ride in an e-mail.

Here's yesterday's after-work ride with my co-workers.



Not that it's perfect — Google Maps isn't Madison bike path-aware, which limits the usefulness of a street-following feature. But it's free-as-in-beer!

And I'm not sure what crazy person designated N. Sherman and Aberg Avenues on the northeast side as bike routes. (Yet the accordingly deserted Starkweather Creek path has lighting and the heavily trafficked Southwest Path doesn't. Go figure.)

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Friday, September 28, 2007

Bad News That's Even Worse Than It Looks

by Tom Bozzo

It's not exactly news that the house sales data released this week stank on ice, especially the new home sales. What's remarkable is the magnitude of the fire sale that's on. This is from an account of the results from builder Lennar Corp.:
During the quarter, Lennar offered buyers $46,000 per home in incentives to move unsold homes, up from $35,900 in the year-earlier period.
So, while their reported average price decline was 6% (to $296,000), the effective selling price net of incentives fell more than 11%. Nevertheless, units sold were down 41 percent.

Amusingly, on Lennar's average sale price of $296,000, the incentives have about the same magnitude as $5,000 on the hood to move a gas-guzzling truck-based SUV, only the SUVs are more marketable.

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Wednesday, September 26, 2007

"Why'd You Say Burma?" "Panicked."

by Ken Houghton

Watching The Daily Show: does the Bush administration still not acknowledge that Burma became Myanmar, in the eyes of the United Nations, nineteen years ago?

Oh, right; I forgot. We don't need to be gracious or courteous in the eyes of the rest of the world, especially when we're "implor[ing] the United Nations on Tuesday to recommit itself to restoring human decency by liberating oppressed people and ending famine and disease."

Maybe it's time to take a few more shots that make the Iranian president look intelligent, instead of showing him for what he is:

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Jessica Hagy catches the hidden costs of Halo 3

by Ken Houghton

A TCO analysis to make MSFT quiver in its boots (even though their methods are much less transparent).

Go. Read.

(Better yet, think of it as the Answer Vocal to this post from Chris Anderson.)

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Random Bullets of Car-Free Challenge Week

by Tom Bozzo

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Tuesday, September 25, 2007

Busy.

by Tom Bozzo

4504 and 10179

Added: That "16+" age range — are they having a laugh? 26+ or 36+ would be more like it.

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Monday, September 24, 2007

(Washington, D.C.) Advantages of Monday Morning Meetings

by Tom Bozzo

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Sunday, September 23, 2007

How Soccer Commentary Should Be Done

by Ken Houghton

My Loyal Reader sends this link to Manchester United v Chelsea. Sample comments:
[Chelsea manager] Avram immediately comes bounding down to the touchline from the dugout; maybe [Chelsea owner] Roman's thrown a stick onto the pitch.

"This has the potential to be the dullest Big Four clash in history, and that's saying something," shouts Archi Campbell over a torrent of running hot water, between mouthfuls of Tesco Value Gin. "It might even end up with a negative amount of goals." Archi, you're talking my language.

Chelsea just haven't a clue, although here I'm specifically talking about the team.

I'm trying to see both sides here, and have ended up saying nothing.

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Saturday, September 22, 2007

$20 a Barrel Oil because of Iraq Predictions

by Ken Houghton

A letter-writer to Altercation asks about the legendary "$20 a barrel oil will pay for the Iraq War and then some" claim.

Rupert Murdoch is best known for having said it in an interview published 12 Feb 2003:
They'd certainly want to establish a democratic regime as soon as possible and they'd want to get out as soon as they can. It's got to be a question of handing the assets of Iraq back to the people of Iraq under a responsible government as soon as possible. I'm sure that's the game plan; what the time frame is, I don't know. The greatest thing to come of this to the world economy, if you could put it that way, would be $US20 a barrel for oil. That's bigger than any tax cut in any country. [emphasis mine]

But places such as NRO had already made the argument at length (17 Jan 2003):
War with Iraq is now likely, and timing of the war points to the first quarter. The war should end quickly with minimal casualties.

Differences between today and 1991 suggest that oil prices are unlikely to match the highs seen in 1990 — but that the correction [he means downward] is apt to be as severe. Here are the variables:

Iraq is a less important supplier of oil today....

A quick military victory could remove a major uncertainty facing world oil supplies....Under U.S. military occupation, oil exports would be expected to hold steady, as opposed to Saddam’s use of oil as a political weapon....The U.S. military will oversee oil production operations to secure volumes near Iraq’s current capacity of 3 million barrels a day or more, versus production of 2 million barrels a day in 2002.

Even if war is averted, oil prices should fall this year. The “no-war” scenario would likely come about if Saddam Hussein’s government complies with UN sanctions and cooperates with UN weapons inspectors. This scenario assumes a steadier flow of oil from Iraq in 2003 of, say, 2.8 million barrels a day, or 800,000 more barrels a day than in 2002.

And higher production from Iraq would consume all, or more than all, of the increased call on OPEC oil projected for 2003, leaving no room for higher output by the other ten OPEC members — for the third year in a row — unless oil prices fall.* The persistent erosion in OPEC’s market share and need for revenues is apt to push members to cheat further on production quotas.

A drop in oil prices to a more normal level, of $18 to $20 barrels a day [? - I assume this is an editing error], would stimulate economic growth and likely would be beneficial to many industries, just as it was in 1991.** [emphases mine]

But beating up the NRO is rather pointless, especially as they had abundant company.

One of the earliest sources appears to be the Jerusalem Center for Public Affairs (26 November 2002):
many analysts believe that if America were to help a "pro-Western" Iraqi government to develop the country's oil resources, such a price spike would likely be followed by a sharp decline in oil prices (possibly to well under $20 a barrel). [emphasis mine]

Business Week at least cited a source, beating Murdoch by a full six weeks (30 Dec 2002):
The oil threat from an Iraqi war is less immediate but potentially more severe. Lehman Brothers Inc. global chief economist John Llewellyn in London figures there's a 70% chance that there will be no war or an easy war with Iraq, causing oil prices to fall to $20 a barrel. But he estimates that there is a 5% chance that the conflict could spread to other parts of the gulf, potentially driving oil prices to $75 a barrel or more. Impossible? He regards the $3 price increase resulting from Venezuela's troubles as a warning: "It shows what even a modest supply disruption can do in a tight market." [emphases mine--and I want to play poker with Mr. Llewellyn]

And, of course, despite being a late-comer to the party (31 March 2003), Money magazine piled-on with an article CNN headed with "Iraq has been on the sidelines of the oil world for 20 years. Soon it won't be.":
Indeed, while rebuilding Iraq's decrepit oil industry could cost the U.S. billions of dollars, that will be more than made up for by lower oil prices over the long term. For starters, $20-a-barrel oil would probably bring prices at the pump back down to about $1.35 a gallon, well below the current average of nearly $1.71. For a typical SUV driver, that's a savings of $228 a year.***




*Note the contrast between Iraq "leaving no room" and the "third year in a row" declaration--which would include 2002, when Iraqi production was 1MM bbl below capacity.

**The 1991 production gain notably came from restoring Kuwait, not destroying Iraq.

***How's that working out for SUV drivers? Oh, yeah.

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Friday, September 21, 2007

Around the World and Elsewhere

by Tom Bozzo

I have a post up at Total Drek on our own Freedom From Religion Foundation's efforts to keep (not necessarily religious) advertising out of Madison schoolkids' backpacks.

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Thursday, September 20, 2007

I Am a Happy Boy Today...

by Tom Bozzo

...because 5,195 pieces of LEGO Millennium Falcon are on the way.

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Tuesday, September 18, 2007

PSA

by Ken Houghton

Throw Erin some love.

(Try not to contribute too many more Bad 1970s Songs to the thread though.)

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Matryoshka Lemons

by Tom Bozzo

(Another coinage I wish I'd invented; credit goes to Dr. Hypercube, see here.)

One of the controversies regarding George Akerlof's famous paper on "lemons" and the markets for used cars is that nice used cars sell all the time and at some premium to nasty ones. While there are information problems (and accompanying horror stories), there are not-overly-costly means of assessing the quality of a car and so there's a big and reasonably liquid used car market.

The recent financial market disruptions, meanwhile, have been looking like a lemons market in action — or, at least, participants have reassessed the quality information in the market in such a way as to shift to a panicky lemons "equilibrium." There's been plenty of news about once-liquid securities failing to trade at any price, and the issue seems to be less that the securities are backed by some amount of low-quality loans than that nobody knows where exposure to the low-quality loans has been stuffed. The former should lead to price changes that may be unpleasant by some standards, but not a market failure as such.

To give Dr. Hypercube full credit for his concept, the information asymmetry can be aggravated by the layers of transactions between the original loan and the troublesome securities, so that quality assessment is extremely difficult or costly; as for the regulators and quasi-regulators, well, oops.

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Monday, September 17, 2007

That Maestro, Always Ahead of the Curve

by Tom Bozzo

Deeply buried in a story on the continuing Northern Rock bank run in Britain:
In an interview published Monday in The Daily Telegraph, former U.S. Federal Reserve Board chairman Alan Greenspan warned that Britain was susceptible to some of the problems now roiling the U.S. real estate market.

"Britain is more exposed than we are — in the sense that you have a good deal more adjustable-rate mortgages," he said.
Some of us do recall that Greenspan was hawking ARMs to U.S. house buyers not too long ago — and not long at all before the Fed Funds target rate began its latest upward march.

Meanwhile, it might not get such prominent play over here, but the UK's housing bubble-like event makes the U.S. housing situation look trivial by comparison.

To make an exchange rate-free comparison, the average house price in the US is in the ballpark of 4.5 times average household income. The average price in the UK is around 7 times UK average household income. So the average house price the UK would need to fall 36 percent just to get to the same not-necessarily-sustainable position, relative to income, of the US.

This sort of thing makes the UK look like a huge subprime bomb waiting to go off, since lending excessive amounts of money to the hitherto-creditworthy has many of the risks of lending to the relatively uncreditworthy. Good luck, Bank of England!

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The Compassion Business

by Tom Bozzo

The Cap Times has a story of another area business that got socked with a 30 percent health insurance premium hike — we'd been there last year. Here's what an executive for the insurer has to say:

Kathryne McGowan, vice president of sales and marketing Physicians Plus, declined to speak specifically about the Park Printing situation, citing client confidentiality rules. But she said companies getting hit with "above market" premium increases are either offering too much in employee benefits or have failed to embrace a wellness culture in the workplace.

"When employees think an office visit only costs them $10 they have no incentive to ask the right kind of questions about their own situation," said McGowan, who counts over 25 years in the health insurance arena.

Well f**k you too, lady.

Maybe it would help if the answer at least made sense. Normally, you'd expect better coverage to be reflected in higher premium levels, but not so much higher growth rates. Among the factors that would lead you to expect otherwise is something that should warm the hearts of (some) hedonic pricing skeptics. If the quality of the typical policy in the market is declining, as by shifting costs and risks from insurers and employers to the insured, then the "market" premium increases represent implicit discounts for the quality degradations. [*] However, "why of course you've been paying more for less" may not be the slogan that private health insurance marketers will want on the tips of their tongues when the revolution comes.

I'd like to see their "wellness culture" metrics. It sure sounds like a buzzword justifying premium increases after the fact of payout events. "Insurance" is a lot less insurance-like when the insurer operates on a heads-I-win, tails-you-lose model.

The glibertarian appeal to incentives and customer involvement in care is just icing on the cake. Medicine is yet another complicated area where there are gains from trade with specialists. At the risk of paternalism, should people who, say, need paid tax preparers to fill out the 1040EZ be encouraged to rely less on experts?

[*] As far as I'm aware, this is not corrected in measured inflation.

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Sunday, September 16, 2007

What Windows Vista Does for Users (or, why Linux doesn't need Marketers)

by Ken Houghton

(The following true story is posted due to What Windows Vista Does For Me.)

UPDATE II: Chris at MSFT, who is either one hour ahead of me or 11 hours behind, was wonderful yesterday in getting the laptop back to where it should have been all along.

He was also far too honest. Me: "How much RAM do you need to run Vista?" Him: "At least a Gig. Probably two."


Shira's laptop has been fairly useless for the past couple of weeks, claiming that the OEM copy of Windows Vista is "not genuine." We've used workarounds for a while, but this weekend was Time To Take Action:

Act I, Scene 1

Saturday late afternoon:

Attempt several times to use the links suggested by MSFT. After searching through multiple screens, find the Technical Support number.

Call MSFT Support. Surely this is an easy issue to solve, and they will Know What to Do.

Three to six menu options later: "Our Technical Support line is closed. Our hours on weekends are 6:00am to 3:00pm, Pacific time. Please try your call again then."

Scene 2: The Manufacturer

HP/Compaq takes a while, but at least tells you from the start they they offer 24/7 service. It takes a while to figure out that I'm calling about a Compaq C2500. (Compaq no problem; model numbers should be hidden, apparently.) No wait time indication on the line; several suggestions that I should be thrilled to buy their Total Care Package, their Television sets, and possibly a stray bugging device or two. Roughly six Total Care ads, three television set promotions, a couple of random moments, and several Gene Hackman imitations later, the obligatory Subcontinent-accented "support" person comes on the telephone.

A roundelay ensues in which he tells me to keep tapping F8 while rebooting the machine. I attempt to make it clear that this is a Vista machine with MSFT-spec'd memory, and that rebooting therefore lasts only slightly less time than a Ken Burns "documentary." But he has a script, and I keep trying.

Me: "The screen is blank."
Him: "What do you see?"
Me: "A blank screen."
Him: "Keep hitting F8. And try turning the machine off and on again." (I have, by this point, pulled the battery twice.)

Finally, we get to the right screen.

Me: "There are multiple options. Are we running diagnostics?"
Him: "How about Safe Mode."

I silently note that I have tried bringing the machine up in safe mode several times in the past few weeks, and it doesn't appear to have helped.

Him: "When you bought the machine, did you register it and call MSFT?"
Me: "We registered it online, yes. What do you mean, call MSFT?"
Him: "You were supposed to call MSFT and register your copy of Vista."
Me: "There's nothing in the registration or the documentation that said that."
Him: "You were supposed to do it. You'll have to call MSFT."

By this point, I'm wondering why he didn't tell me this fifteen minutes ago, not to mention being rather irritated that it's now being described as my fault.

Him: "I'll give you the number."
(He gives me a different number than the one called in I, i)
Me (encouraged): "Thank you."

The number turns out to be Microsoft SALES. When I get through to where I need to be, we are again at "Our Technical Support line is closed. Our hours on weekends are 6:00am to 3:00pm, Pacific time."

UPDATE: Credit where due: HP Support recognizes that they have an issue, and they set up a Case Number and follow-up calls to ensure it is resolved.

Act II: Sunday afternoon

MSFT Technical Support, whose motto is "We're a monopoly, so we can afford to provide the worst service and call ourselves the best company."

Several moments of information being given to the suport person. After gathering which she finally says:

MSFT Rep (cheerfully): "You need to call the MSFT Genuine Advantage Support Team. But they're not available on weekends."
Me, irritated: "So you can't provide any support?"
MSFT (even more cheerfully): "No. I'll give you their telephone number."
Me: "When are they open?"
MSFT (approaching orgasm): "The number is..."
Me: "And what hours are they open?"
MSFT (having climaxed, through her cigarette): "They're open from 9 to 5."
Me (having dealt with the MSFT telephone system): Is that Eastern or Pacific time?"
MSFT (taken aback, as if it shouldn't be an issue): That's Pacific time."

The chance of my buying another Vista machine, or any hardware from HP again, is fading by the day.

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We're a City of Immigrants

by Ken Houghton

Not only is it the first single from Steve Earle's upcoming album, Washington Square Serenade, it's apparently very true of the NYC Public Schools, which are #22 on Infoweek's list of H1-B Employers in 2006.

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Saturday, September 15, 2007

Annals of Moral Hazard (Northern Rock Edition)

by Tom Bozzo

Some of you might remember that during the savings and loan crisis of the 1980s, there were some runs on S&Ls whose deposits were insured through weak state systems.

Fast forward, and our friend Xtin was on the scene [*] of the run on England's Northern Rock, which is remarkable in part because England does have a deposit insurance system as part of the Financial Services Compensation Scheme [**]. However, the NYT account this morning leaves out a significant detail of the system in the following:
One reason Northern Rock customers may be nervous is that there is less protection for account holders in Britain than in the United States in case a bank fails. Deposits are insured up to £31,700, or about $64,000, compared with up to $100,000 in the United States.
The difference between £31,700 and $100,000 in covered deposits doesn't do much to explain the length of the lines at Northern Rock branches. The difference which might is that the FSCS only provides 100% insurance to £2,000. The next £33,000 on deposit is insured 90%, so customers with non-extravagant balances could find themselves out sums that might not be enormous, but which also might not be inconsiderable either.

One criticism of deposit insurance is that it takes away a depositor's incentive to put money in sound banks. This is a form of "moral hazard," and a coinsurance scheme like the FSCS is a common means of dealing with it — in this case, by having the depositor share some of the risk. I would argue that this isn't an especially damning critique, since the soundness of banks isn't easily observed, and it's facially ridiculous to suggest that there aren't gains from specialization in bank regulation.

Meanwhile, the anti-moral hazard design may suffer from an excess of cleverness by half or more, to the extent it induces depositors to behave as if they are uninsured and run on the bank, which works at cross purposes to rescue attempts such as the Bank of England's in this case.


[*] She snapped, at higher resolution (if you click through), a picture of the queue at one of the branches depicted in this Calculated Risk post on the story.

[**] I suppose "scheme" doesn't have the connotation of fraud or unsoundness it has in American English; we'd undoubtedly substitute the robust-sounding "System" for the trailing "S."

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Friday, September 14, 2007

Eye-Catching Headlines from the Wall Street Journal

by B. Strong

"How to Improve Your Child's Credit Rating."

Because, you know, the subprime lending problem wouldn't be so bad if more 5-year olds were qualified for no-money-down mortgages.

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Thursday, September 13, 2007

"It's in your DNA"

by Ken Houghton

The Avon girls* were passing out St. Derek of Pasta Diving (tm - Scott L) new cologne, Driven,** so I had to visit LG&M Thursday.

Well worth the trip.*** It's nice to see that that messy "Iraq" thing has been solved and we can go back to important work:
[Senator Mitch McConnell]’s “deeply disappointed” the new Democratic-controlled Congress has not tackled the “tough issues,” like Social Security…

Besides their “preoccupation” with the Iraq war, Democrats spend their time dreaming of “taxation, regulation and litigation. It’s in their DNA.”

It's a good thing, as I noted Wednesday, that Jane GaltMegan McArdle assures us that we can ignore anything a politician says; otherwise, I might start thinking that the Republicans are trying to distract us from the war and pay for their exorbitant spending with the Greenspan Committee's payroll tax increase that both (1) was scheduled to pay the Boomer retirements and (2) even now was rather accurate in its demographic projections, and moderately pessimistic about productivity and revenue gains.

Headline Reference should be clear to EOB readers. See here for album picture.


*Phrase used advisedly. While at my age anyone Suzanne's age or younger can fairly be considered a "young woman," these two appeared barely old enough to carry a Trapper-Keeper.

**The cologne was named, one guesses, because it is the answer (along with "He was...") to "How did Derek Jeter get to a ball hit four steps to his right?"

***I have to assume that this
Given rural Kentuckans' well known hatred for Federal entitlement programs, dismantling Social Security is a sure winner for Mitch, but it's still kind of surprising to see a Republican in a border state try to shift the focus from the war to domestic issues...

is a joke (possibly unintentional), since without those Federal entitlement payments, the state of Kentucky would be at least $500MM a year poorer [PDF]. If we assume they are rational, then cutting SocSec and Medicare payments should be the last thing on a Kentuckian's mind.

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War for Oil: Trees vs. Forest?

by Tom Bozzo

Thinking of EconoSpeak, Barkley Rosser has a post up that suggests that while oil was a contributing factor in the decision to wage the Iraq war — most notably insofar as it was set up by Gulf War I — there are other causes to consider. But this arguably misses a common thread to the other factors, that none of them point inelutctably to war in Iraq in the absence of the oil cause:
[*] Or, as my friends and I liked to call it, Operation Just 'Cause.

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Wednesday, September 12, 2007

Random Notes

by Ken Houghton

Many distractions in the past week, including but not limited to the start of school for the Eldest Daughter, a cold, house renovations beginning, a tree branch falling on the swing set (no injuries, fortunately), and the need to study Drek's advice here.

So, a few things I might have wanted to discuss, but am now happy to relegate.

The Dustbin of History is a good idea:

  • Glenn Reynolds defines derivative, and, implicitly, what wasn't:



  • The here-doubtable Tyler Cowen suggests one should read Megan McArdle instead of Matt Yglesias, failing to note that it was one of "the former Jane Galt"'s idiocies that cued Matt's rant. (Apparently, in McArdle's world, politicans are perfectly neutral, since they say nothing they believe and therefore should never be taken at their word.* Having grown up with Lee Hamilton as my Congressman, I expect better, recent matters notwithstanding.) Fortunately, AngryBear and Mark Thoma beat this one severely into the ground, though Paul Krugman (h/t Thoma) lays to rest the idea that economic ideology alone is the issue.

    Posts I Might Have Written:

  • I spent three days body surfing, and still have some cuts and bruises to prove it. It made me think about the mortgage market. Which means I'm quoting these lyrics:
    Pick up here and chase the ride
    The river empties to the tide
    Fall into the ocean

    The river to the ocean goes,
    A fortune for the undertow
    None of this is going my way...

    Strength and courage overrides
    The privileged and weary eyes...
    Pick up here and chase the ride
    The river empties to the tide
    All of this is coming your way

    Only in part because the alternative isn't a song we talk about on family blogs, though several subprime borrowers may find this more appropriate:
    I am friend to the undertow
    I take you in, I don't let go
    And now I have you


  • Max has left the blogsphere; what is the opposite of "Pareto optimal"? A hearty "L'Shana Tovah!" to him, and change your bookmarks to the robust but unMaxed Econospeak.

  • My radio this morning produced Nachum interviewing NYC Mayor Michael Bloomberg. Bloomberg, who as a politician reminds me a lot of Bill Clinton (in his pre-mayor days, he sounded less convivial and more cocksure; it may just be age). He mentioned his 98-year-old mother trying to fast on Yom Kippur and fainting. "Mom, G-d doesn't want you not to eat and drink and take your pills, and this is his way of showing it." Especially now, we often forget that fasting on the Day of Atonement is waived for children and those whose health would be negatively impacted.

  • One way you can tell when an "economics paper" is written for a giggle: when the phrase "participants extended offers (albeit in Canadian dollars)" is used. Note to Dani Rodrik: I didn't bother checking the mathematics involved after hitting that sentence, and I suspect Matthew Dowd would have the same reaction.


    *It is also necessary, for this model to have a chance of working, to assume that their policies also do not reflect their speeches or predelictions. For instance, George W. Bush mentioning several times, though in an offhand manner, during the run-up to the 2004 election that he wanted the government to address issues with Social Security must in no way have affected the political discussions of 2005-2006.

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  • Another QOTD

    by Tom Bozzo

    Paul Soglin:
    We won the Cold War. And to show for it, we now all fly Aeroflot.
    Though really, pretending to work for pretend pay isn't exactly the problem (as Soglin does correctly note after the laugh line). Rather, the 2007 flying experience represents the sort of paradise that we can expect from "lean" service production!

    Related in the W$J: Cranky Skies: Fliers Behave Badly Again as 9/11 Era Fades. This piece features deep burial of the lede, since unless the latent assholishness of the flying public has worsened, considerable blame must accrue to the deterioration of U.S. airline service at the hands of chiseling management. I have more than a little sympathy for the airline employees working (with various degrees of competence) in customer service roles, since many of them are working under terms which, but for the alternative of not working, would encourage many people to pick up torches and pitchforks and to go marching on HQ.

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    Defeating your own brain.

    by Drek

    In a blog post a while back Brad Wright helpfully posted a list of cognitive biases common to human thought. For those who are not familiar, cognitive biases are shortcuts or pseudo-flaws* in human reasoning that can lead us to incorrect or unsupportable conclusions. Brad raises the question of how these biases affect discussions of religion, but I'm not really interested in that just now. Since all humans that we've checked (and we've checked a lot) appear to be susceptible to these kinds of biases, it's most likely the case that both the theist and the atheist are equally vulnerable. It may be that each group has its own "preferred" kind of bias, but that's not really an improvement.

    I bring this up because of an excellent article that recently appeared in the Washington Post that deals with a particularly disturbing cognitive bias. This article reports on, among other things, some research performed by the Centers for Disease Control that came to a rather disquieting conclusion: it appears that efforts to contradict false information may actually end up reinforcing it. To quote from the article:

    The federal Centers for Disease Control and Prevention recently issued a flier to combat myths about the flu vaccine. It recited various commonly held views and labeled them either "true" or "false." Among those identified as false were statements such as "The side effects are worse than the flu" and "Only older people need flu vaccine."

    When University of Michigan social psychologist Norbert Schwarz had volunteers read the CDC flier, however, he found that within 30 minutes, older people misremembered 28 percent of the false statements as true. Three days later, they remembered 40 percent of the myths as factual.

    Younger people did better at first, but three days later they made as many errors as older people did after 30 minutes. Most troubling was that people of all ages now felt that the source of their false beliefs was the respected CDC.


    So, not only was the incorrect information retained, and not only was it retained as "accurate" knowledge, but it had somehow acquired the prestige of being supported by the Centers for Disease Control. Given that this was a study dealing with influenza, readers can be pardoned for not being too concerned, but what if this were instead dealing with information about HIV, tuberculosis, or anthrax? Would we feel as sanguine if citizens were coming to believe false information about those much more serious diseases? I suspect not. The unfortunate truth here is that this tendency for contradictions to reinforce that which they seek to discredit is a serious problem for our society. The medical implications are obvious- and may help to account for continued hysteria about vaccines- but the problems do not stop there.

    We could talk about the political implications of this research. Indeed, the article itself does so, observing that this tendency to continue to believe discredited information, even to believe it more strongly, may account for a number of persistent myths surrounding the 9/11 attacks. For example:

    This phenomenon may help explain why large numbers of Americans incorrectly think that Saddam Hussein was directly involved in planning the Sept 11, 2001, terrorist attacks, and that most of the Sept. 11 hijackers were Iraqi. While these beliefs likely arose because Bush administration officials have repeatedly tried to connect Iraq with Sept. 11, the experiments suggest that intelligence reports and other efforts to debunk this account may in fact help keep it alive.

    Similarly, many in the Arab world are convinced that the destruction of the World Trade Center on Sept. 11 was not the work of Arab terrorists but was a controlled demolition; that 4,000 Jews working there had been warned to stay home that day; and that the Pentagon was struck by a missile rather than a plane.

    ...

    A report last year by the Pew Global Attitudes Project, however, found that the number of Muslims worldwide who do not believe that Arabs carried out the Sept. 11 attacks is soaring -- to 59 percent of Turks and Egyptians, 65 percent of Indonesians, 53 percent of Jordanians, 41 percent of Pakistanis and even 56 percent of British Muslims.


    In more general terms, this research may also help explain why the political right in the U.S. seems to so consistently kick the ass of the political left. With its reliance on soundbites and fireworks from the likes of Rush Limbaugh, Ann Coulter and Bill O'Reilly, the right is ideally structured to keep punching out assertions of often dubious accuracy. And when the left attempts to combat them, it may end up simply strengthening its opponents. Heads I win, tails you lose. Perhaps if you are on the right wing you won't find this idea disturbing but you should, if only because it implies that the only way to carry out politics is to reduce it to the level of a deranged shouting match.

    I mean, we're more or less there already, but it would sure be nice if we could at least try to make use of reasoned debate and discussion.**

    Finally, this research has some fairly significant implications for those of us who teach, and especially those of us who teach sociology. One of the greatest problems we face in sociology is in leading our students to question their own society. We have to guide students into accepting the idea that their own society is not the only way, and probably not the best way, of living. Often this involves contradicting things our students believe or helping them to see that their own beliefs are, themselves, contradictory.*** Unfortunately, this may not actually be the best way to go about it, and in demonstrating how a previous belief is incorrect, we may do little more than reinforce it in our students' minds. It is, perhaps, no surprise then that many adults look back on their sociology classes as having been silly, obvious, or a waste of time. With the hazy perspective of years, they have forgotten all the things sociology tried to teach them, and perhaps remember only those things we sought to contradict. Only now, they remember them as being true.

    I'm not sure what is to be done about this. Remaining silent won't work as silence is often taken as tacit approval. Nevertheless, we can perhaps avoid some of the consequences of this cognitive bias by spending less time contradicting bad ideas, and more time arguing for the good ones. This may, of course, be less satisfying sometimes but in the final analysis, do we want to feel good, or do we want to be effective? I prefer to think we want to be effective. And, if nothing else, we should be sure to talk about these cognitive biases whenever it's appropriate. We're all vulnerable to the mistakes they lead us towards, and our only real defense is being aware that they exist.

    It's never easy to defeat your own brain but, from time to time, it's the very best thing you can do.


    * I say "pseudo-flaws" because these biases were probably very useful in our evolutionary environment where the idea wasn't to reach the best conclusion, but rather the one that was good enough to keep you alive. So, for example, given a choice between alpha error and beta error, alpha error is the one to make. It's better to think you see a predator that doesn't exist than to miss the one that does. If you want to think more about this, I have pondered the matter at least once before.

    ** Sorry, folks. Sometimes my zeal for democracy as envisioned by political philosophers leads me to say some pretty naive things.

    *** My favorite example being that common sense tells us both that "Birds of a feather flock together" and that "Opposites attract." It's pretty easy for common sense to appear to be correct when it covers all of the bases like that.

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    QOTD

    by Tom Bozzo

    Reported by David Corn in The Nation:
    [Sen. John Warner] then asked Petraeus a pointed question: "Do you feel that [Iraq war] is making America safer"?

    Petraeus paused before responding. He then said: "I believe this is indeed the best course of action to achieve our objectives in Iraq."

    That was, of course, a non-answer. And Warner wasn't going to let the general dodge the bullet. He repeated the question: "Does the [Iraq war] make America safer?"

    Petraeus replied, "I don't know, actually. I have not sat down and sorted in my own mind." [Emphasis added.]

    Via Instaputz, where Blue Texan says, "Game over." Now to get Democratic Party "leaders" to figure that out...

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    Tuesday, September 11, 2007

    Fuel Economy Regs: AEI-Brookings "Scholars" Offer the Best Analysis (GM's) Money Can Buy

    by Tom Bozzo

    I haven't been impressed by the output of the AEI-Brookings Joint Center for Regulatory Studies before, but Felix Salmon is back and points to a hit piece on the CAFE standards by Robert Crandall of Brookings and Hal Singer of the consulting firm Criterion Economics — not uncoincidentally written for the Wall Street Journal's loony op-ed page — that reads like it was written by the Heritage Foundation's densest intern on a bender.

    It's hard to pick what among the piece's abundant rubbish deserves highlighting. You might think that one thing that's clearly within economists' purview is measuring the pecuniary costs and benefits of policy changes. Not so, say Crandall and Singer!
    Ask any economist and he'll tell you that estimating the private costs and private benefits of increasing fuel economy is a fool's errand.
    Right, because figuring out how much money consumers would save from burning less gas is just about the hardest cost-benefit analysis task in the world, which is why the calculations for this post took literally minutes to carry out. But I should have been satisfied that the magic market pixies have already ensured that every cost-effective technology has already been adopted!
    With large numbers of vehicle producers and well-informed consumers, the market is so efficient, in fact, that it ensures that all such transactions will occur, generating the socially optimal level of fuel economy.
    Well, that settles things, since a public that once majority-approved of George W. Bush's job performance could never incorrectly weigh the life-cycle costs of their durable goods purchases! (And the volume of SUV purchases has nothing to do with the marketing efforts to convince people that this is cool and this is not. [*])

    There's the scary if totally undocumented claim that there would be big costs to higher fuel economy:
    According to our preliminary estimates, every new GM customer would incur a net loss of several hundred dollars under the newly proposed standard, as the higher cost of the car would exceed the discounted fuel savings.
    I can only assume that the "higher cost" is the (IMHO exaggerated) $4,000-$4,500 claimed by Bob Lutz for a diesel meeting U.S. emissions standards. Perhaps Crandall and Singer have also lowballed future fuel prices, since current levels seem highly optimistic as a forecast of the prices prevailing at the end of the next decade.

    As I've previously shown, such engines can pay for themselves in fuel savings at existing fuel prices with no performance shortcomings, and current-technology 35 MPG midsize hybrid sedans don't sport premiums of nearly that size. Today's news from Frankfurt includes Honda's announcement that its new diesel four (expected in the U.S. Accord) meets U.S. emissions standards and will outperform its well-regarded predecessor — which turns in 42 MPG in the Euro Accord (aka Acura TSX) and still 36 in the aerodynamically-challenged CR-V — in power, torque, and fuel economy.

    In fact, Crandall and Singer take a prize for what corporate cash can persuade the theoretically respectable to write. Behold, commentators who won't even pay lip service to the idea that U.S. oil dependency is a wee problem:
    Even if one accepts the debatable proposition that less reliance on oil would improve our national security, we should focus our attention on all oil consumption, not just that used in new vehicles. [Emphasis added **]
    I guess Michael "If Supplying Material to the Washington Times Doesn't Get You Knocked Off the Serious People List, It Should" O'Hanlon got to them on that one.

    [*] Example adapted from actual vehicle purchase decision in my immediate family.

    [**] I don't disagree with their claim, but it's at best in the spirit of making the perfect the enemy of the good.

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    Six Years On

    by Tom Bozzo


    Photo (cc) by Flickr user Gladius. Model by Todd Webb.

    Go read "Beauty, unfathomable loss, and the beginning of the forever war" at Letter From Here.

    Then join your local peace racket.

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    Monday, September 10, 2007

    Tom Toles is a Priceless National Treasure, Volume 7

    by Ken Houghton

    See cactus at Angry Bear.

    Volumes 6 (via Brad DeLong), 5, 4 (includes Mark Thoma), 3, 2, and 1.

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    Friday, September 07, 2007

    Question Hour

    by Tom Bozzo

    (An occasional look at search terms that bring people to this blog.)

    Q: A Googler from Swaziland asks:
    Is the CEO labor market neoclassical and frictionless [?]
    A: No.

    This has been another MU version of "Simple Answers to Simple Questions."

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    Annals of Excessive Compensation: Pension Funds Throw the Greenwich Ferrari Dealer Under the Bus

    by Tom Bozzo

    Yesterday's NYT included a refreshing moment of sanity as Stephen Labaton and Jenny Anderson (I've praised Ms. Anderson's work in an earlier installment of this series) report on Senate hearings on the tax treatment of "carried interest." The lede:
    Pension fund and tax specialists told Congress today that a proposal to more than double the tax rate of executives at private equity firms and hedge funds, which invest money from pension funds, would have a negligible effect on the returns provided to pensioners.
    I could pick a nit or two with the "more than double the tax rate" wording. It would not have decreased the accuracy of the statement to have said "proposal to close a tax loophole used by executives at private equity firms and hedge funds to pay less than half the tax rate on ordinary income." But that's about all the beating of the press here. [/Dean Baker] The rest of the piece is an unrelenting demolition of the funds' rather incredible claims that the special tax treatment of the managers' income benefits Joe and Jane Six-Pack and preserves the Entrepreneurial Spirit of America. Read the whole thing.

    Here's an interesting quote from Sen. Max Baucus:

    “The data says to me that hedge funds and private equity funds may need pension funds more than pension funds need private equity or hedge funds,” Mr. Baucus said. “And that means that hedge funds and private equity funds may not have the economic power simply to pass along increased costs to pension funds.”

    To the first part, I can only say "no kidding" or "heh indeedy." On the second, Baucus's causal link may be questionable, but if he's otherwise right, it would be good for Econ 101 economics, which otherwise would have some 'splainin' to do as to how the 2-and-20 fee structure could withstand such massive entry.

    Oh, and the hedge fund managers' incomes could be taxed at Clinton-era marginal rates for ordinary income without hurting the Ferrari dealers any more than the pension funds, really.

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    Thursday, September 06, 2007

    You Know What This Means...

    by Tom Bozzo

    So Qwest shareholders and/or ratepayers will get to pay for the CEO's wife and stepdaughter to commute between Denver and their present California residence on the company jet (apparently a Falcon 2000).

    The Rocky Mountain News (via) quotes a Corporate Library analyst calling the arrangment "ridiculous." A forthcoming report from this analyst on personal use of company jets shows only 28 out of 215 companies allowing such arrangements (not including Qwest).

    Am I too cynical, or am I hearing the sound of 187 CEOs getting on the horn to the lawyers who handle their employment contract negotiations?

    Bonus:
    "I don't have a problem with a board saying, 'We think there are security issues here,'" [Corporate Library analyst Paul] Hodgson said.
    Bah. Corporate aviation departments have pretty good safety records, but they're no better than Part 121 airlines. Nor is it very credible to suggest that there's a significant threat to corporate managers and/or their families between airport curbsides and gates beyond the indignities of shoe removal and the occasional frisking.

    For the boards, at least, the better argument would be that paying someone a few thousand bucks an hour to cool their heels in a security checkpoint line isn't a great use of resources. But that argument probably only gets them into a Citation (and not the Citation X, either). Cue the Boogeyman to make the leap to the G550.

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    In Steve Jobs's Base, Guessin His Product Announcements

    by Tom Bozzo

    March 6, 2007, at this humble blog:
    There's no good reason [*] why the Civ IV game engine couldn't run well (with functional graphics) on the iPhone-minus-the-phone that will presumably be the next-generation iPod.
    Note to Apple lawyers: this prognostication was powered by pure logic — which is to say, the totally obvious conclusions that Apple would rip off its own industrial design efforts on the iPhone for a high-end iPod that, unlike Microsoft, Apple wouldn't cripple a Wi-Fi iPod.

    Anyway, I really couldn't have asked for more, except of course for pocket Civ IV.


    [*] Other than the resource-hogging graphics, of course.

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    Wednesday, September 05, 2007

    Some Elementary Analytics for the Surge

    by Tom Bozzo

    We picked up a link a few days ago from an unlikely source, the Protein Wisdom Pub. In a post that, among other things, describes our quals based on the political content of the blogroll ("fairly left-leaning"), it's asserted that "statistics comparing 2006 with 2007" deployed by major figures of the left blogiverse such as Kevin Drum and Matthew of Large Media, "[tell] us nothing about the success of the new US counter-insurgency strategy" because the surge "did not have any implementation before mid-February." The preferred analysis claims a downward turn to the civilian casualty trend line (eyeballed or the equvalent from seasonally unadjusted and otherwise tweaked icasualties.org data) since the start of the surge, and does so by comparing data from this summer with the winter and/or spring.

    Now, I'm no Jim Hamilton, but I can say with reasonable authority that the claim that year-over-year comparisons of data from Iraq are necessarily uninformative is all wet. Indeed, such comparisons are a simple way of eliminating some seasonal effects from data. With a simple model of data generation (e.g., the seasonal effects are additive), you can verify by simple algebra that a year-over-year difference will eliminate the seasonal factor [*], whereas intra-year comparisons and comparisons between different periods in different years will tend to confound seasonal and trend effects.

    So, for the intrayear comparisons to be (relatively) valid as an indicator of trend reversal, it must be either that the seasonal effects are small, or that they just so happen to cancel out. Indeed, PW Pub's Karl argues that the effects are small, in part based on analysis at the econoblog Creative Destruction, which ran a seasonal adjustment model on the fatality data for the U.S. forces.

    The results at Creative Destruction, which yield a seasonally adjusted 101 U.S. military deaths for July 2007 from the actual 79, aren't actually helpful to the trend reversal argument. Apart from a peak in May, seasonally adjusted casualties suggest a plateau at a rate of around 100 deaths/month for the surge through July (the analysis was posted on August 2), which is very high for any extended period. As I'd noted previously, while there's a lot of variation in the data, it's clear without any special quantitative analysis that the summer months are never the annual peak.

    However, there is a bit more to the argument out of Wingnuttia that perhaps merits some additional discussion. It's suggested that year-over-year comparisons confound an effect of the surge with that of an increase in violence against civilians which is dated to the February '06 bombing of the Golden Mosque in Samarra, even though the real takeoff in the data (from icasualties.org) isn't until the fall of '06. The implication that civilian life in Iraq was just hunky-dory in 2004-2005 is questionable at best, though I wouldn't dispute a claim that the the SNAFU has acquired more CF since. [**]

    The argument is that if you think things are bad now, imagine how much worse they'd be but for the surge. That's not exactly a narrative of triumph, considering the difficulty of maintaining the surge, let alone any further escalation of a magnitude that might be thought to be able to restore the status quo ante.

    Worse still, the supposed reversion in the civilian fatality trend is, itself, showing signs of reverting in the bad direction. The count at icasualties.org, after dropping from 1,782 in May to 1,148 in June, increased sequentially in July and August — 1,458 and 1,598, respectively. The latter, in particular, is at the level of the civilian casualty peak or plateau (using data that are adjusted as described, in part, here) from the pre-surge months.

    So, really, there's sod all to show for the surge. Coalition military fatalities are high, Iraqi civilian fatalities are high, and by many other metrics Iraq remains an unholy mess. All this at a cost to the U.S. taxpayer of several tens of billions of dollars at an annual rate. Who wouldn't want more surge? [/sarcasm]

    The last thing is about the adjustments to the civilian casualty data, which remove a few peaks from the raw icasualties.org data. In one case, the adjustment is ostensibly justified, as it eliminates the effects of a temporary change in the count methodology [***]. In another, the rationale is, to say the least, curious. "Engram" deletes the 965 deaths in August of '05 from the Al-A'imma bridge stampede because:
    Those tragic deaths were clearly an aberration and should not be included in a graph that tries to assess trends in the level of violence in Iraq.
    The reported cause of the stampede was a rumor that a suicide bomber was amid the crowd, which had been subjected to mortar attacks earlier in the day. So this is hardly a non-terrorism-related incident, even if the spread of the rumor wasn't itself an act of terrorism. The irony is that Engram is a member of the Althousian 9/11-changed-everything set:
    Pre-9/11, I was a politically incurious liberal, but my curiosity increased substantially -- and my views changed considerably -- after 9/11.
    By the same logic, if you're trying to assess trends in the level of violence in the U.S., the tragic deaths of 9/11 are clearly an aberration. So what the hell are we doing there?


    [*] This assumes the seasonal component enters additively in the current and previous-year data. More sophisticated seasonal adjustment approaches allow for situations such as seasonal effects that vary over time.

    [**] The subsequent discussion ignores the significant obstacles to reliably measuring the consequences of the war for the civilian population; the icasualties.org data is an incomplete and unverified tabulation from news accounts

    [***] For some purposes, it actually can be better to have data that are wrong in a consistent way.

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    Tuesday, September 04, 2007

    The Best Worst Time You'll Ever Have

    by Tom Bozzo

    My good buddy Drek has advice for new graduate students (and a refresher course for the not-so-new) which is about a thousand times more useful than Drek's characteristically self-deprecating post title suggests. I'd written some of this to a correspondent just last week, so Drek has saved me a lot of cutting, pasting, and expanding had I any inclination to have shared my "wisdom" more broadly.

    Anyway, the frosh should heed #1-3 especially. The rest of y'all might be advised that failure to heed #6 and #9 led to the most pointless washout from graduate school I'd witnessed. [*] And all should make note of #20-21 but not #22.

    [*] That is, the person in question both wanted to finish and was intellectually capable of doing so. But never fear, by some standards the person in question failed upwards.

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    Monday, September 03, 2007

    Shira's SFWA Membership May Get Renewed Yet

    by Ken Houghton

    On Friday night, we left for the beach for the long weekend. At the time, SFWA had just turned itself into a complete cf (see Hugo-Winning Editor Patrick here).

    Fortunately, Michael Capobianco—who was on the case early—took ended up doing the right thing:
    Motion: That, effective immediately, all of the activities of the
    current ePiracy Committee be suspended and the Committee itself be disbanded
    until such time as the Board has had the opportunity to review the legal
    ramifications of sending out any additional DMCA notices, as well as to explore
    other methods by which SFWA may be able to assist authors in defending their
    individual rights, while ensuring that any such activity will not unduly expose SFWA to negative legal ramifications.

    This is in no small part because Scribd did the right thing, after receiving multiple complaints:
    On August 17, 2007, you sent an email to Scribd.com on behalf of SFWA alleging that numerous items hosted on Scribd.com allegedly infringed the copyrights of authors who you claimed to represent. On August 27, 2007, you confirmed in another email that your earlier communication was intended as a formal notice under the Digital Millennium Copyright Act (DMCA).

    We have now heard from no fewer than four authors whose works were improperly targeted by your notice. They confirm that they have never authorized SFWA to act as their DMCA enforcement agent. As a result, it appears that your notice constituted a misrepresentation both of your authority to act on their behalf and that the targeted materials were infringing....

    I understand and appreciate that SFWA has taken steps to apologize to Scribd.com users whose materials were improperly removed as a result of your notice. This letter is intended to prevent any repetition of these unfortunate events. While we will continue to consider valid DMCA takedown notices sent on behalf of rightsholders who you are authorized to represent, this letter puts you on notice than any further takedown notices that contain misrepresentations may expose you and SFWA to liability (including attorneys fees) pursuant to 17 U.S.C. 512(f). This would include not only notices that misrepresent about your authority to act on behalf of rightsholders, but also any notices that target activities (such as the inclusion of small excerpts of copyrighted material within larger original works) that are plainly noninfringing fair uses. See Online Policy Group v. Diebold, Inc., 337 F.Supp.2d 1195, 1204 (N.D. Cal. 2004) (imposing liability for sending DMCA takedown notices targeting obvious fair uses).

    Now don't get me wrong. Scribd isn't the greatest site in the world for copyright protection. But they've just gotten a lot of positive, free publicity due to the actions of the e-piracy committee, and SFWA not only has a black eye from Boing Boing users, but the job of the new e-piracy committee is going to be that much more difficult.*

    But it's a step in the right direction, and creates the biggest giggle of the weekend from Andrew Burt:
    It seems that SFWAns' feelings about the risk tolerance for fighting piracy have shifted, and we need to assess what those now are before we proceed.

    In other words, SFWAns in general want the group, we're going to fight piracy**, to fight actual piracy, not send scattershot, poorly vetted requests that subject us to legal action.


    *Without going into details, the suggestion that the e-piracy committee needed to be rebuilt from scratch was made and greeted with reprobation at best.

    **As Will Shetterly noted, "[p]erhaps copyright concerns should be addressed by an independent organization that wishes to [be in the business of] police[ing] copyright."

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    You Know It's Time to Think About Getting Rid of the Second Car When...

    by Tom Bozzo

    ...you find yourself calling roadside assistance because the car is sitting in the driveway with a dead battery due to disuse.

    A somewhat relevant missing market is that for a car exchange with someone in a part of the country (say, Arizona or Florida) where the cycling seasons are effectively reversed.

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