Wednesday, May 28, 2008
The Canadian Rock - Science Fiction Connection
Many years ago, before many of you were born, there were two guys from Winnipeg named Randy Bachman and Fred Turner.
They wanted a name for their band, and with all of the folk-rocky duets of the time (Seals & Crofts, Loggins & Messina, etc.), they weren't about to be Bachman & Turner, since they played loud. (Or, perhaps, loudly, if we're leaving off the presumption of "music.")
So they were in a drug store or something one day and saw a magazine about Trucks. BIG Trucks. LOUD trucks.
The magazine was called Overdrive, and a band name that will live in infamy was born.
The current editor of Overdrive magazine, per the introduction to his story in Wizards, is Andy Duncan.
Just thought you might want to know.
Tuesday, May 27, 2008
Finally, an Obama-supporter reason I wholeheartedly endorse
Dr. Black has a Deep Thought to make his television work better.
Meanwhile, Mark Thoma makes an endorsement that should be obvious.
Monday, May 26, 2008
Those Evil Venezuelans
Don't let anyone ever again tell you that Conservatives support "free trade":
London’s Tory mayor, Boris Johnson, today announced that he was scrapping a discounted oil agreement with Venezuela that provides half price bus fares for London ’s poorest citizens. Fares for those on Income Support are expected to double by the end of year, causing serious financial hardship for 80,000 Londoners who had taken advantage of the scheme....
The agreement, which was negotiated by Johnson’s predecessor, Ken Livingstone, bartered London's strategic advice on city planning for cheap Venezuelan oil.
This is precisely the type of agreement you want to make in free trade: rent out your expertise (a non-rival, public good) for a discount on a commodity that allows you to raise the marginal utility to your population of its government services.
Which is also what Venezuela has been doing with its oil revenues:
Venezuela’s socialist president, Hugo Chavez, has used the proceeds from record oil revenues to roll out free health and education services across the country. Incomes for the poorest 60% of Venezuelans have risen by 130% in real terms, according to surveys conducted for the Venezuelan American Chamber of Commerce.
Now you can argue, as some are prone to do, that making life marginally easier for the poorer members of your society is not a path to growth. But that's an entirely different argument than "we should charge our poorest members of society more."
Columbia College Class of 1983 member accepts Vice Presidency
No, not that one.
Jesse Walker (h/t Jim Henley), who can rationalize that Bob Barr was a good choice, is not happy:
But given the number of party activists who are wary of the former congressman, and given Barr's deficiencies on several issues, it would have made sense to round off the ticket with a more hardcore libertarian....Instead the delegates opted for another member of the party's conservative wing. Worse yet, the conservative they picked was Wayne Allyn Root, a man with the deportment of a Ronco pitchman with a squirrel in his pants.
They must think they're the Republican Party of eight years ago.
Sunday, May 25, 2008
Why I Don't Believe People Have all of the Information about their Diets
Economic Logic always makes a point arguing that externalities should be taxed. (See, for instance, here.) The counterargument, of course, is that if you're going to try to discourage behavior, people have to know what behavior you are trying to discourage before they can stop it.
For instance, if you don't know the full calorie count of that Combo—10-piece Chicken McNuggets (420), Medium French Fries (380), Medium Coca-Cola(r) (210); total 1,010 calories, or more than half the calories of a "normal" (2,000 calorie) diet—the decision you make cannot be considered rational.
And how do we know that people don't have full information? Well, we know when divinecaroline (h/t Avram at Making Light) realizes that it's still necessary to publish an article such as Five Foods That Cause Anal Leakage.
Tuesday, May 20, 2008
How to Devalue Your Brand
Greg Mankiw, clearly distracted by his former collaborator's wife having been denied a tenured position at Harvard, quotes Fred Bergsten in the WSJ, Instapundit-style:
By effectively killing "fast track" procedures that guarantee a yes-or-no vote on trade agreements within 90 days, lawmakers in Washington, led by House Speaker Nancy Pelosi, have destroyed the credibility of the U.S. as a reliable negotiating partner.
Which leads to the obvious conclusion: Republicans "destroyed the credibility of the U.S. in 1998 when they did the same thing to President Clinton.
Strangely, Greg Mankiw (Fortune, January 12, 1998) "knew better."
Policy and politics diverged again in the fast-track debate. Clinton was asking Congress for something all recent Presidents have had--the authority to negotiate trade deals that Congress would consider without amendment. This power is crucial if the President is to continue the multilateral process that over the past half-century has moved the world toward freer trade and greater prosperity.
Although economists are united in support of free trade, opinion polls show the American public is more skeptical. The public's view is partly based on the false analogy that trade is like war--some countries must lose for others to win....
Because of the public's ambivalence--and the opposition of interest groups that fear foreign competition--fast track went down to defeat. This may put an end to the multilateral approach to opening up world trade. But it need not mean an end to the free-trade movement.*
Got it? If it's a Democratic Congress, then Pelosi is a "problem." If it's a Republican Congress doing the same thing, it's Through No Fault of Their Own.
And by not pointing out that he himself used to know better, Greg Mankiw destroys not Fred Bergsten's credibility, but his own.
Cross-posted to AngryBear, where Tom is on a roll.
UPDATE: Dani Rodrik gives the lie to the whole line of "reasoning.")
*Yes, I omitted Mankiw's framing issue (tomatoes), but if he really wants to claim George W. "Steel Tariffs" Bush was different, the only possible response is "Bring it on."
Sunday, May 18, 2008
PSA: APL back to Active status
Angry Pregnant Lawyer has returned to blogging (semi-)regularly.
Lots of posts about clipping coupons and other recession-fighting techniques (recession-talk seems to be a trend now), none of which discuss opportunity costs or retail loyalty cards.
Not that that's a bad thing.
One Great Thing about Blogging
This has been said better than I, ad nauseam, by others but it always bears repeating: blogs prove to people that You Are Not Alone.
Case in Point: Ann Wilmer's blog Cake for Breakfast, in which she talks about caring for her mother, who is in the later stages of her life, and Alzheimer's.
I too wish she had started the blog sooner, but the elegiac ending—not to mention the notes on sources for help with Alzheimer's and, especially, for information on how to get help keeping parents at home with you—are not to be missed.
Friday, May 16, 2008
Hillary Jumps the Shark?
As per the desires of the world, she attacks McCain without mentioning Obama:
"I believe saying no to the farm bill is saying no to rural America."
Bush and McCain both say the bill, which boosts farm subsidies and includes more money for food stamps, is fiscally irresponsible and too generous to wealthy corporate farmers.
"When Bear Stearns needed assistance, we stepped in with a $30 billion package. But when our farmers need help, all they get from Senator McCain and President Bush is a veto threat," Clinton said.
The $30 billion didn't help Bear Stearns (ask most of my former coworkers); it guarantees that the market remains stable while the Great Sucking Sound that is Bear fades.
And this is over the farm bill? The "Disgraceful" farm bill?
The bill includes the usual favors like the tax break for racehorse breeders pushed by Mitch McConnell of Kentucky, the Senate minority leader. But the greater and more embarrassing defect is that the bill perpetuates the old subsidies for agriculture at a time when the prices that farmers are getting for big row crops like corn, soybeans and wheat have never been better. Net farm income is up 50 percent [56% in the past two years, per the WSJ&,mdash;though it is on the Editorial page, and therefore needs a to be taken with a five-pound bag of salt].
The legislation preserves an indefensible program of direct payments amounting to about $5 billion a year that flow in good times and bad. It raises support levels for wheat and soybeans, while adding several new crops to the list in a way that will make it easier for farmers to raid the federal Treasury even when prices go up.
And this is, to be certain, a farm bill that targets the richest of the rich. From the WSJ:
A bigger scam is the new income limit to qualify for subsidies. Mr. Bush sought a $200,000 annual income cap, but Congress can't bring itself to go below $750,000. Even that is a farce, because it doesn't include loan programs and disaster payments, and it allows spouses to qualify for payments too. The White House and liberal reformers calculate that farm owners with clever accountants can have incomes of up to $2.5 million and still get a taxpayer handout.
I know Senior Managing Directors at Bear Stearns who didn't make $750K a year, let alone $2.5 million.
It's a good thing we have Barack Obama to speak against the bill, and for the "little people" who have financed his "grass roots" campaign.
Huh? Oh, wait.
"I applaud the Senate's passage today of the Farm Bill, which will provide America's hard-working farmers and ranchers with more support and more predictability."
"The bill places greater resources into renewable energy and conservation. And, during this time of rising food prices, the Farm Bill provides an additional $10 billion for critical nutrition programs. I am also pleased that the bill includes my proposal to help thousands of African-American farmers get their discrimination claims reviewed under the Pigford settlement."
(in best Emily Litella voice) Never mind.
Wednesday, May 14, 2008
I haven't done any hard searching yet, but after some desultory searching at Zipskinny, one thing stood out.
I was checking, basically, ZIP codes in which I've lived (19119, 47331, 07040, etc.).
At a glance, you can tell that the middle one above is from the Midwest and the other two are East Coast. And, as David Brooks tells me, the soul of the Earth is different. More stable.
So here's my attempt at making a table:
|ZIP Codes||City and State||Stability|
(same home 5+ years)
|44116||Rocky River, OH||61.0%|
Need to work on those border lines. (UPDATE: Ah, so they just don't show in Preview mode. No idea about all that white space, though.)
Judging by the data—which, as noted is a semi-random sample: ZIP codes in which I've lived, ZIP codes where relatives live, a Place of Legend* to which some old friends moved recently (Westport), and three Ohio cities that are suburbs of Cincinnati (Xenia), Columbus (Gahanna), and Cleveland (Rocky River; h/t Erin for that one being chosen)—it appears that most of those nice, stable Midwestern towns are less stable than the East Coast Dens of Iniquity.
I'll be waiting for David Brooks to apologize for every column he's written in the past eight years. Expect that will happen about the time he accepts one of those offers to actually provide accurate statistical analysis to him.
*Fortunately, since this is a family blog, the phrase "doing Westport" is not defined at The Usual Sources.
Monday, May 12, 2008
It took 11 Hours for Someone to Point out the Obvious
Is Zubin Jelveh one of the economists advising Hillary Clinton, or was Tyler Cowen just giving him a pass?
If you're a married woman living in the New York City area, there's a better than 50 percent chance that you don't work, according to a recent analysis of Census data by economists affiliated with the St. Louis Federal Reserve Bank.
More specifically, only 49 percent of white high school-educated married women in their prime working ages were holding down jobs in the New York area as of the 2000 Census.
It was not until 6:04p.m.—eleven hours later—that "Cardinal Fang" noted:
What, so now only white women count as women?
Posted by: Cardinal Fang at May 9, 2008 6:04:19 PM
while Andrew Samwick perpetuates the meme.
I would have hoped that Felix would apologize that one of Portfolio's reporters swallowed this one whole, but it's been three days.
NOW I Can Use the R-Word
Surely a hedge fund specializing in "adult industry investments" is either a sign of a recession or a sign of the Apocalypse.
(I'll be contemplating this at youporn.com [h/t Erin] for the rest of the day.*)
*Actually, I won't, and not just because I'm on a public computer. Too much Really Cool Stuff to read (all links gated; if anyone can find free links, e-mail me or post them in comments).
Sunday, May 11, 2008
I Should Never Need to write about the idiocy of Economists talking about the Evils of the Minimum Wage Again
Thank you, Kathy G, guesting at Crooked Timber.
Now, if only she would point out the spillover effects of rent control.
Waiting for Stephy
During all the "gas tax holiday" contretemps last week, I kept asking if Obama had any plan, other than to sit there and let Johnny Mac run as a "populist."
The two responses were "Well, Obama said that the cut enacted in the Illinois legislature, of which about 60% went to consumer, did nothing to help the consumer" and "He wants to stop putting oil into the Strategic Petroleum Reserve."
I leave explaining the first to The Mendacity-Finding Duo of Greg Mankiw and Brad DeLong.
For the second, however, we now see (via Some Assembly Required), we find that stopping putting oil in the SPR is expected to do even less than the gas tax cut.
Waiting patiently for Stephanopoulos to ask Obama about that. (At least his response probably won't have all the economists in the blogsphere whining.)
In the off chance you were wondering why things are quiet here, it's because I've been blogging at the venerable Angry Bear for the last week — and expect to continue to do so until my co-bloggers take away the virtual keys. While I'd like to say that won't change things around here, a finite amount of time for blogging does mean that this site will be less frequently updated (by me) and focus more on matters of personal and/or local interest.
Meanwhile, if you haven't done so, please check out the week's activity at AB:
- Defending, in part, the Consumer Price Index
- On Chrysler's latest sales gimmick, extending fuel price hedging to the masses?
- Looking at the link (or lack thereof) between tax policies and the housing bubble
- Taking a whack at the Shadow Government Statistics alternative GDP series
- Refereeing "Jane Galt"'s efforts to debunk Harvard bankruptcy expert Elizabeth Warren on the plight of the middle class
- Finding new meanings of the term "bracket creep" on the Wall Street Journal's op-ed pages.
Thursday, May 08, 2008
C-Net Inbox to be filled with remembrances of Agnew this week
The short list of "challenges" I won't send in response to this query, even with its opening:
Today, I'm not here to create another discussion topic dealing with how Vista sucks or how peripherals aren't working because they don't have drivers for Vista, or how I want to revert to XP again, and so forth. [T]his week's topic stems from a forum discussion created by CNET member chustar, who wants to know if there are any folks out there who are part of a silent, Vista-loving majority and would like to express their enthusiasm for it. He has used Vista for close to a year without any problems and simply loves it. I'm sure he's heard enough of the bashes on Vista and would like to take this opportunity to hear from the people who actually are using Vista and, quite frankly, like it or love it
Realizing that not having anything to publish next week would be embarassing, Koo adds:
Now remember, folks this discussion is, for the most part, based on the positive experiences around using Vista, but not just limited to that. So I ask that you please be civil in your replies and be considerate of others when posting.
So here would have been my list of positive things about Vista:
- It has given me a new appreciation of Linux systems
- It has confirmed that Bill Gates and/or Steve Ballmer really were good at finding products for MSFT, since the results since they moved to being upper management have been a monopolistic version of the Peter Principle
- It has given me a new appreciation of those cute little Apple computers.
- It has proved that the OEMs are still dumb enough to believe anything they are told by MSFT. (Releasing Vista OSes on a machine that can handle a maximum of two MB of RAM should, in itself, put several firms out of business.)
- It has given me a greater appreciation of Unix systems
- It has reminded users who had forgotten with the NT4.0-XP that MSFT systems require Constant Vigilance.
- It has given me a greater appreciation of XP
- It has demonstrated that Judge T. P. Jackson was correct, and that the Fourth Circuit and the Bush Justice Department are not working in the best interest of the long-run survival and growth of United States corporations.
- I has given me a greater appreciation of Sun systems
- It has returned us to the Good Old Days where you could make a cup of coffee, have a conversation with your family, and catch up on your reading—and that's just waiting for it to boot up.
- It has given me a greater appreciation of OpenOffice 2.0 and GoogleDocs, since the money spent on that 2 Meg of RAM (see point 4 above) would otherwise have gone to buying MS-Office.
Feel free to add to or correct this list in comments.
Tuesday, May 06, 2008
Paul Krugman is a Voice of Sanity
Please read him, since anne and I haven't been able to get through on this one.
Non-Audacious Reasons to Hope
If I believed the punditocracy (including most of the web-based supporters of ObamaNation, e.g., here and here* UPDATE: Or here, with a hat tip to Mark Thoma), the "battle" between Their Man and HRC is much more brutal than anything the Republicans will throw at him, and will only damage his support among the Democrats who, since they still have a choice, are voting for her and may not turn up in the general election.* * Or something like that.
So it's nice to see that all the Macro factors (2006 being historic, a large number of retiring Republicans, Presidential popularity in the Nixon-just-be-resignation range) also translate, as Stan Collender details at Capital Gains and Games:
[S]pecial elections are typically dominated by the party in power. The incumbent party can usually, and easily, get its supporters to the polls. Combined with the almost always low-turnout in a special, that gives the incumbent party a huge and frequently insurmoutable advantage.
So what can you say when an insurmoutable advantage turns out not to be enough? What does it mean when the same thing has now happened in Illinois and Louisiana, two very different states in two exceptionally different parts of the country?
Maybe it means that all of those "benefit of the doubt, and besides we're at war" votes in 2004 have come to doubt? Maybe it means four more years of real-wage-losses and more deaths (even without the benefit of seeing the coffins) have taken their toll, and "you can't fool all of the people all of the time" is a truism because it's true.
Or maybe it's that running the same play every time gets as boring to MOR and socially-conservative voters as it is to those being tarred. Collender:
[T]he GOP campaign strategy in Louisiana was to tie the Democratic candidate to Barack Obama and Nancy Pelosi and paint the local candidiate as too liberal for the district. If using something as tried and true as the "liberal" label doesn't work, what does that say about what will be effective in November?
Maybe even Harry Reid could win if he were running as a Democrat this year.
*Though "the Sherman's March to the Democratic nomination for President" is a classic, if precious, phrase.
**Many of them appear to expect Obama's supporters not to turn up in the general election if HRC is nominated. Is this really an indication of their candidate's strength?***
***There might be an argument that it would be, but it seems rather specious without details of what those voters will do that is different from what they did, say, in 2004.
Monday, May 05, 2008
is a very, very, very fine house (even if it was priced by a geek).
Labels: just life
Now I'm Glad Obama had to get rid of her--is he?
Via Rob Farley at LG&M, ousted Obama advisor Samantha Power discusses Canada's role in the Afghanistan/Iraq CF:
Canada has been quietly embroiled in one of the most revealing political and international-security debates since the end of the cold war. It's a debate critical to the future of NATO. And its outcome may tell us a lot about the fate of the U.S.'s struggle against terrorism.
At issue is Canada's military role in Afghanistan. Canada is one of 26 NATO countries in the International Security Assistance Force, which is attempting to stabilize Afghanistan and neutralize the Taliban and al-Qaeda. But Canada is one of only a handful of NATO countries that have embraced the task of actual war-fighting. The Canadians, who have 2,500 troops on the ground, have suffered 82 fatalities, a death rate that is higher than the U.S. military's in Iraq. In an increasingly two-tiered NATO alliance, Canada occupies the fighting tier, alongside the U.S., Britain, Denmark and the Netherlands.
The real Coalition-of-the-Willing(-to-sacrifice-their-citizens).
She then notes that the Canadian citizenry is Rational:
The Afghan war had broad public support in Canada in 2002, but is now seen as one front in George W. Bush's hugely unpopular "war on terror."...Having taken few casualties in the past half-century, Canadians have found it jarring to watch flag-draped coffins return to what can feel like a very small country. A public that has long seen its military as innocently patrolling the peace has had trouble adjusting to its forces engaging in a full-fledged, unconventional war.
We now see why pictures of coffins are not broadcast in the United States.
Perhaps most important, Canadians do not see the Afghan conflict as directly relevant to their own security. Al-Qaeda has never staged an attack on Canadian soil. And although 24 Canadians were among the victims of 9/11 and terrorists were planning to blow up two Air Canada flights in the British terrorism plot of 2006, Canadians worry that fighting alongside the U.S. will increase--not decrease--the risk that they will become a target.
So they have no national security interest—even if we are dumb enough (as Power apparently is) to conflate Al-Queda with Afghanistan and Iraq.*
But Power is thrilled because the Canadian government didn't listen to its voters.
A recent poll showed that 47% of Canadians wanted their soldiers to leave Afghanistan immediately, and only 17% supported maintaining a combat role....After a heated and long-overdue domestic debate, the Canadian Parliament last month voted to keep its soldiers in Afghanistan until 2011--with the provisos that Canadian forces be reinforced by 1,000 troops from elsewhere and that Canadian forces concentrate less on combat and more on training Afghan security forces.
Power disingenuously concludes that "When finally consulted in earnest, Canadians concluded that the financial and human costs of the mission were in fact worth bearing, at least for now."
And then she gets to her point, sort of:
The U.S. alone can't succeed in Afghanistan. But Canada's example shows that even our closest allies need to be convinced that the fight is theirs too.
I'm not generous enough to conclude that "alone" and "But" were added by an editor. So how does she plan to convince them?
NATO rules should be rewritten to ensure that countries that invest disproportionate military and financial resources (as Canada has done) should have some of their costs subsidized by the alliance. If a government does not want to send its troops to fight, it should still be obliged to contribute funding and civilian expertise, which remains in short supply.
Since Scott and Hilzoy want to get all hyper, again, about Clinton's 2002 vote—even though it's not so different from Obama's public positions—maybe they could explain the difference between Power's pitch and John McCain's Hundred Years War.
Kathryn Cramer performs a useful service
She doesn't specify her method, but I'm certain the guts-of-the-Internet-savvy can figure it out.
Just to be clear: this announcement (which is not in the order of importance of the poster) doesn't mean anything has changed here.
Annals of Proving Negatives: Hybrid Cars and EMFs
I sometimes joke that things that are too good for you must be dangerous, usually with respect to my collection of non-iron dress shirts. Hitting close to the shopping list for my next car, the NYT recently carried a story with the scaaaary headline, "Fear, but Few Facts, on Hybrid Risk."
The case of claimed Hybrid Health Syndrome is not the most compelling I could have read:
No kidding. I'm curious as to whether this was the only story the reporter Jim Motavalli could find, or just the best. Ms. Linzer's "wellness consultant" just might be doing her a disservice by encouraging the belief that there's a stronger causal nexus between the car and those symptoms than, say, aging.
Neysa Linzer, 58, of Bulls Head in Staten Island, bought a new Honda Civic Hybrid in 2007 for the 200 miles a week she drove to visit grocery stores in her merchandising job for a supermarket chain. She said that the car reduced her gasoline use, but there were problems — her blood pressure rose and she fell asleep at the wheel three times, narrowly averting accidents.
“I never had a sleepiness problem before,” Ms. Linzer said, adding that it was her own conclusion, not a doctor’s, that the car was causing the symptoms.
The extra journamalistic touch is here:
Their concern is not without merit; agencies including the National Institutes of Health and the National Cancer Institute acknowledge the potential hazards of long-term exposure to a strong electromagnetic field, or E.M.F., and have done studies on the association of cancer risks with living near high-voltage utility lines.Bob Park reminds us what the NCI study of long-term exposure to EMF actually found:
On July 3, 1997, the day the massive four-year NCI study of power lines and cancer appeared in the New England Journal of Medicine, Gina Kolata reported in the Times that the study was unambiguous and found no health effects associated with electromagnetic fields. An editorial in the same issue of the Journal put it in perspective: "Hundreds of millions of dollars have gone into studies that never had much promise of finding a way to prevent the tragedy of cancer in children. It is time to stop wasting our research resources."I suppose hybrids will eventually be certified to some EMF standard as a matter of lawsuit avoidance. But I don't think I'll lose sleep over the prospect of adding yet another Prius to Madison's streets.
I take back every catty thing I've said in the past few years. It never would have gone this far without his work in the first, second, and third OTs.
Saturday, May 03, 2008
Dep't of Priorities (FAA Reauthorization Edition)
Via Traffic World (subscription required), the FAA reauthorization bill has stalled in the Senate over Republican objections to non-aviation spending in the bill:
Senate Republicans, as well as the White House, object to sections in the bill that would add $3.4 billion to shore up the Highway Trust Fund, add $1 billion for rail infrastructure investment, and double the oil spill tax.That $3.4 billion represents a shortfall in the Highway Trust Fund before the Big Pander Express's proposed summertime raid. Of course, that compares to the one-year price appropriation for the war, now revealed as $178 billion. There's another provision that's objectionable to the Administration, just in case you thought they were losing their common touch:
In addition to taking issue with a proposed fuel tax increase for private jets and other aircraft, the administration wrote that it has "serious concerns" with several labor-related provisions included in the bill relating to airline mergers, repair stations, and air traffic controllers. [emphasis added]Because it's more important to keep private jets in the air than to make sure that airliner repairs are properly monitored.
Harry Reid characterizes this behavior appropriately:
"Republicans are acting like the kid on the playground who doesn't like his team mates, but he owns the ball and takes it home to his mother," Reid said on the Senate floor Friday. "They've been in a snit ever since we took the majority."
Labels: Trains Planes and Automobiles
Friday, May 02, 2008
Trade vs. the Big SUV
The Capital e-Times has a remarkably wrong-headed editorial trying to take Rep. Paul Ryan, the GOPipsqueak whose district includes GM's Janesville assembly plant, to task over Ryan's support for various "free trade" agreements. The Janesville plant, which assembles GM's full-size SUVs, is losing a shift and 756 hourly manufacturing jobs thanks to free-falling sales of its output. Shouldn't Ryan get a clue on trade, the editorialist wonders?
(A clue might be a lot to ask of Ryan, whose greatest hits include a Social Security privatization plan which would have put the government on the hook for investment losses in the would-have-been private accounts.)
The obvious reply is that GM's Janesville employees wouldn't likely have been building full-size SUVs but for policies that allow petroleum to enter the U.S. freely and which have declined to establish serious tax incentives for conserving it.
One of the editorial's more curious claims is that Janesville's woes can be attributed in part to "[t]he federal government's conscious neglect of the basic tenets of industrial policy." What tenets might those be? If you ignore that destabilizing-the-Persian-Gulf business, the Bush Administration has been as openly friendly to motoring by gargantuan SUV as is imaginable.
However, the CT may be on to a meta-truth on the industrial policy front. Economics tends to describe production and consumption in highly abstracted terms ('Amalgamated Widgets' etc.), and it seems that's led to an indifference to if not maybe a touch of elite contempt for actually making things. You can see that when Chickenshit John McCain gallantly tells Rust Belt audiences that good jobs are gone forever, or in the more sophisticated version you get out of someone like McKinsey's Diana Farrell (here, from an NYT roundable with Stephen Roach and Josh Bivens):
MS. FARRELL -- This is a big deal in the sense that we see something structural happening. But I would react to the notion that it is a big deal we should try to stop or recognize as anything other than the economic process of change. I think the bigger deal is the fact that we are going to have very serious curtailment of the working age population.This is pretty typical of the 'can't fight Mother Nature' neo-laissez-faire view of the economy, where outsourcing to China in search of a 20 percent unit cost decrease is treated as a matter of universal gravitation rather than human agency. I can also imagine a McKinseyite thinking that the knowledge work we're theoretically specializing in has brains and electrons as inputs, and money as outputs, and who wouldn't want that instead of dirty and tedious manufacturing work. Of course, it doesn't sound quite so good in the Krugman formulation of "selling each other houses... with money borrowed from the Chinese," and when talk turns to offshoring the knowledge work, the narrative would seem to have run away from its tellers.
MS. FARRELL -- There is an assumption by protectionists that these jobs are going somewhere else, and all this money has been pocketed by C.E.O.'s who take it home. A little more sophisticated version is: It's being pocketed by companies in the form of profits. [Which is to say, knowing what we do about the distribution of the ownership of the means of production, it largely goes to the CEOs or the CEOs' country club buddies. -- TB] One step further and you say those profits are either going to go as returns to the investors in those companies, or they're going to go into new investment by those companies. Those savings enable me, if I am an investor, to consume more and therefore contribute to job recreation, and if I am a company, to re-invest and create jobs. That's important because I agree that we are migrating jobs away, some of which will never return, nor should they.
One thing I'd noticed scanning the notice of proposed rulemaking on U.S. automobile fuel economy standards is that Congress did stick an industrial policy provision in the enabling law: domestic passenger cars are required to have an average fuel economy that's at 92% of the manufacturer's fleet average. So there's an allowance for larger (and hence less fuel-efficient) cars to be built domestically, but perhaps not so much that manufacturers could meet the standards simply by importing the more fuel-efficient ends of their product lines. We'll see how this works out in practice, but at this point the Detroit Three's manufacturing workers' biggest problem is less the outright collapse of the U.S. car market than that they're not screwing together the more marketable end of it.
Thursday, May 01, 2008
Dep't of Bad Metrics
Mike Ivey reports in the Capital e-Times that Madison homeowners rank high for house-poverty:
The city was ranked No. 10 in a survey of places with the highest concentration of homeowner debt because of home equity loans or second mortgages. It said 27 percent of homeowners here have a second mortgage or home equity line of credit.
Sacramento, San Diego, Washington, D.C., and Colorado Springs were ranked as the four markets with the highest debt load. Denver, Minneapolis, Los Angeles, Boise [?!], Las Vegas and Madison rounded out the top 10...
The survey was based on U.S. Census data to determine which of the country's largest 150 housing markets had the highest percentage of outstanding home equity and second loans. Forbes combined that data with housing price trends from the National Association of Realtors, to gauge which markets are experiencing steep price drops.
You'd have to wonder about a ranking that puts Minneapolis and Boise ahead of Vegas on the stress-o-meter. Other statistics aren't so dire. Also via Ivey, who has an excellent long piece on stalled residential construction projects in the area:
That 1-in-2600 foreclosure rate is a considerable increase over pre-crash rates, but the level is a bit more like it. The Madison metropolitan area as a whole never saw the sort of house-price inflation (I should update this graph) that dangled hundreds of thousands of dollars of ephemeral equity in the faces of Joe and Jane Homeowner, in contrast to the Irvine Housing Blog's tales from Real Estate Hell. Which is not to say that I'd want to have to sell my house anytime soon.
At the same time, the Madison area housing market has held up better than a lot of places. In Nevada, for example, nearly one in 140 households was facing a mortgage foreclosure last month. In Dane County, the figure was just one in 2,598, according to RealtyTrac.
Anyway, the mere presence of home equity loans and/or HELOCs doesn't say a whole lot. They're a source of relatively cheap credit, and if you have to borrow money, cheap is good. You'd never say that a HELOC borrower was more stressed than an otherwise identical borrower who had the HELOC debt on credit cards. As with many tools, they're dangerous when misused — and, moreover, widely were — but Forbes seems here to have gone for the data that was around rather than data that were directly on-point.