Wednesday, August 31, 2005

Wednesday Baby Extra: These Toes Are Made For Movin'

by Tom Bozzo

...and Julia probes weaknesses in the baby-proofing here at the ranch.


(click for larger images)

Look mom, my climbing behavior is reproducible!

And if that's not enough... she's now into finger-walking, too. My crazed look may be interpreted as "Honey, please put the UW Sports Medicine PT on speed-dial."

For equal time, here's a blast from the past: John at 15 months, climbing the treacherously steep stairs at our old house.

Tuesday, August 30, 2005

Smart Guys In The Room?

by Tom Bozzo

Is it me, or did it seem (pre-Katrina) like there were a lot of stories in the news about refinery outages and mishaps while gasoline prices were most recently spiking? See, e.g., here among a large number of returns from this Yahoo! news search timed to eliminate Katrina-related stories; unfortunately this search feature really doesn't allow a good comparison of the density of articles, and the MU budget doesn't include a Lexis/Nexis subscription.

The news story metric is not without problems. Clearly, there's a considerable likelihood of news-selection bias. The onset of the NWA mechanics strike, for instance, brought with it stories mentioning mildly scary but basically routine incidents that wouldn't otherwise have been nationally newsworthy. It's arguable as to the intrinsic newsworthiness of air safety incidents (drama!) versus energy supply shocks (hits everyone's pocketbook!).

Still, consider me suspicious. I read plenty before the damning Enron tapes came to light to the effect that it was just ridiculous to think that people might be trying to manipulate the California electricity supply. It seems that conditions for manipulation in gasoline markets— strained refinery capacity, short-term demand inelasticity — are ripe.

Addendum 9/1/05: As I noted in comments on Ken Houghton's Economics Question of the Day blog, the magnitude of the Gulf Coast refinery outages are big enough (~11% of capacity) to cause at least local gasoline supply disruptions, as well as more than to eliminate such spare domestic refining capacity as there was nationwide, and so the attendant price spikes needed to equate demand with the available supply are not unexpected without (necessarily) any "price gouging." See also Mark Kleiman's good post on the economics vs. politics of market clearing, though I think he should recognize that the market feature(s) that provide the potential to earn a windfall from withholding supply are hardly unique to the Enron manipulations of the California electricity market.

Household Criminals: Reagan Was Right Edition

by Tom Bozzo

My friend Oscar claims to be a meme-avoider (*), but is ever so keen to start one of his own. Some of his efforts, while worthy, suffered from the difficulty of having not so much been invented as much as rediscovered. I don't think that's the problem with the brilliant "Dangerous Criminals At Large" post. In fact, I'm not sure Oscar even intended it this as a meme-candidate. But, then, we all know "intelligent design" is a crock, don't we?


The oak tree — OK, my next door neighbor's, but we have 4-1/2 of our own. Majestic. A diabolical machine for imparting gravitational potential energy on small projectiles (innocently called "acorns" by tree apologists) which it releases, over a period of days or weeks, and all hours of the day and night, without regard to what or who may be innocently working, playing, or passing underneath — or just trying to get a good night's sleep without a gunshot-like crack every two minutes.

Danger: UXB.


The neighbors think this white pine, probably at least as old as the neighborhood, is an invaluable part of the neighborhood treescape over which they'd be on my front steps with torches and pitchforks were I to, say, cut it down to build a garage. I know it better as an unreformed sprayer of droplets of sticky goo on the parking pad, the side street, and related environs. Plus, it drops large quantities of easily weaponizable "needles" on the ground where terrorists could easily pick them up and misuse them. (Yeah... maybe instead of spending 5 grand getting it cut down, I can just have the tree sent to Gitmo. Sorry, neighbors, nothing I can do about it. [**])


(*) Though see here. Note that I do not claim any proprietary rights to the "evil meme," which I couldn't have passed along to the Phantom Scribbler pixiesphere at the time in any event.

(**) I've long wondered if the Bush national security team is smart enough to distinguish a 70-foot pine tree from an actual terrorist, a question fairness dictates that I classify as answer unknown, however much my prior might be negative.

Monday, August 29, 2005

Paradoxes of Thrift

by Tom Bozzo

First in a series?

That last post might have been the reverse of Tonya's new "Imagining the Blog Post" series, had I posed the matter to the commenting pixiesphere of filling in the rest of the post about what the heck was it that set ol' Tom off. (*) Like it or not, here goes.

I attended a milestone wedding reception (**) over the weekend: the first reception for a second marriage. (Suzanne had, in fact, attended the bride's first wedding, too.) The reception, with about 100 guests in attendance, was held at the clubhouse of an upscale ($75 greens fees) public golf course in the Minneapolis exurbs, and the bill was footed by the couple, as far as I was aware. (***) The couple did not spring for an open bar, instead providing the aforementioned Michelob and a non-alcoholic punch gratis and a cash bar for everything else.

As it happens, I consider the imperative from the wedding-industrial complex for couples to spend tens of thousands of dollars of their own and/or their parents' money on one big party — as opposed to house downpayments, college fund contributions for actual or hypothetical children, etc. — to be something almost nobody would be worse-off resisting on some margins. So I am not fundamentally unsympathetic to the couple's choice. Yet I was at least a little cheesed off, (****) and not because I'm an especially expensive date.

Rather, it was more of a microcosm of what's wrong with "trickle-down" economics. It probably didn't help to have ended up seated with a couple of real estate guys who apparently own some commercial property in partnership with the groom.

Next in the series: whither the love affair with the SUV?


(*) While I'm basically happy that there are now comments on nearly every post, the commenting corps here is not deep enough that I'd want to take Tonya's leap.

(**) But not the wedding itself, which was a small affair somewhere way up in the north woods of Minnesota.

(***) I knew the basic deal in advance, as Suzanne had been consulted by the bride on the free beverage selection.

(****) Additionally over a lack of glassware for drinks other than wine (mainly a failure of the venue). Some drinks are just not worth drinking out of plastic cups.

Saturday, August 27, 2005


by Tom Bozzo

I find that no quantity of modifiers can be added to "Michelob" to make it palatable. Even at zero price.

Friday, August 26, 2005

On The Road To Cornucopian Millitechnology

by Tom Bozzo

LEGO Factory, the coolest frickin' idea in the (toy) world, was switched on yesterday. The idea is that you use a CAD program they supply to build a model on the computer (PC or Mac, thankyouverymuch!), upload it to the Lego web site, and then may buy the bricks or share the model with the world. This looks to be a classic example of exploiting the zillions of niche markets among children and grown-ups who build their own stuff, which hipsters sometimes call the "long tail."

This being version 1.0, the execution is a bit wanting. The Brickfest announcement (also lengthy MP3 podcast here) noted that the available parts "obviously" would be drawn from a limited "palette" of bricks. That turns out to be a mildly eccentric selection of 183 brick types, not counting color variations — apparently derived from the assortments of a selection of mass-market building sets. (The Q&A session after the Brickfest keynote speech by Lego's CEO noted that there are about 8,000 active elements, including color variations; so maybe a low four figure number of brick types.) Fair enough, as they promise to add elements as they forge ahead with the project.

The more interesting question is exactly how they'd fulfill the orders. It was advertised that the system would use pre-packaged bags and as such the Factory sets would not be bespoke a la The Diamond Age. Still, one might think, what an interesting combinatorial optimization problem. This does not seem to have initially seen too much attention, as the pre-packaged parts themselves seem to be derived from the mass-market sets' assortments.

As a result, the Factory sets seem to be quite inefficient at delivering just the parts for the custom models. This is a potential marketing problem as parents balk at paying $40 for a 75-piece creation by their six-year-olds. (Typical mass-market set prices in the U.S. are around a dime a piece.)

Ideally, this will be worked-on and they'll get closer to custom assortments with time. Also, ideally Lego management will be patient and not confuse signals emanating from the supply-chain limitations with the underlying interest in the project. Leg godt!


Note on title: The smallest conventional Lego bricks are about 3mm high by 8 mm square. In some contemporary science fiction, "cornucopia machines" are nanotechnology devices that can assemble essentially anything given a source of raw materials (atoms or molecules).

Thursday, August 25, 2005

CAFE Overflow Seating

by Tom Bozzo

Addendum to the previous post: See also more concise discussions at MaxSpeak, Andrew Samwick's Vox Baby, and JustOneMinute (links via Max). A couple of MaxSpeak commenters raise points in favor of CAFE versus fuel taxation, including claimed effectiveness of CAFE and the incidence on poor drivers. Samwick also notes that the gas tax incidence can be set to one's liking by rebating the gas tax proceeds progressively through the income tax (i.e., via a refundable credit).

There's also a stylized fact — that at least passes the test of driving through upscale suburban neighborhoods and downscale apartment complexes — that the well-to-do buy new SUVs and the less-well-to-do buy used cars. An upshot is that while newer vehicles' engines may have lower specific fuel consumption than those in older vehicles, a fleet of older economy cars is likely more efficient than the relatively heavy and overpowered new production. (This is at a cost of performance and some measure of crash protection.)

I'm also not sure that the effectiveness of CAFE is being subjected to an appropriate counterfactual test. Remember that when gas prices spiked back in my tween years, little Hondas and Toyotas that were previously curiosities in many parts of the country suddenly became phenomenally popular. Who says people don't respond to incentives?

I'm not fundamentally opposed to regulating fuel economy, but I'll admit that I hit an economic libertarian streak after a fashion: if drivers were actually facing the total marginal social cost of fuel consumption at the pump, which I'd guess we aren't to the tune of at least a couple bucks a gallon, then I wouldn't care so much what people drove or how much. And there's just no way that CAFE makes drivers internalize the various external costs of driving.

Renovating the Truck CAFE

by Tom Bozzo

The National Highway Traffic Safety Administration, which apart from its namesake portfolio is responsible for establishing such automobile fuel economy standard as we have, has issued a lenthy notice of proposed rulemaking (169 pp. PDF) describing changes to the fuel economy standards for "light trucks" to be phased in over the 2008-2011 model years. The present single fuel economy standard for trucks, which is less stringent than that for "cars" (21.6 MPG versus 27.5 MPG for MY 2006, increasing to 22.2 MPG for MY 2007), would be replaced with a six-tier standard in which vehicles with larger "footprints" would face lower fuel economy standards than smaller models. During the phase-in period, the single-tier standard would increase to 23.5 MPG by MY 2010.

In particular, the proposed standards for the two smallest truck categories would be close to those for cars, which is advertised as having the benefit of reducing incentives to game the CAFE system by reclassifying cars as trucks. However, the complexities of the multi-tiered system are such that there is ample confusion as to the likely effects of the rule change, should it be adopted, and some suspicion that it might not do much if anything to improve fuel economy standards. There is some merit to the cynical view, as I'll note below.

What's perfectly clear is that the proposed rule is intended as a gift to the domestic automakers' large truck lines, which would indeed face a lower standard than the current regulations provides (hat tip, Ken). Whether it will end up mattering at all depends on the path of oil and gas prices. The start of the fuel price spike seemed to offer a little preview of Truckageddon, at least until the employee discount sales (in which trucks were discounted much more heavily than cars) stuck a finger in the leaky dam at the cost of moving the trucks at something a lot closer to cost than was typical of the Big Three's SUV glory days. It also is a bit of a stick in the eye to Japanese makers, including Honda and Toyota, who sell large numbers of relatively fuel-efficient car-based crossover SUVs; with the multiple size tiers, they get higher MPG targets for their trouble.

The ease with which the current regulations are gamed by classifying car-based vehicles as CAFE trucks would make a real effort to reduce the incentives to torture the rules a welcome change. In this regard, the carlike MPG standards for small trucks give something, but another part of the rule change affecting the definition of trucks perhaps could take away a lot.

There are a couple of loopholes through whcih cars and car-like automobiles can get classified as trucks for the purpose of fuel economy regulations. One is that a vehicle whose seats can be easily removed and replaced, using simple tools, to create a flat cargo floor may be classified as a light truck. This is the provision through which many minivans, and car-based wagon-styled confections such as the Chrysler PT Cruiser and Chevrolet HHR, gain light truck status. Second, "off-road" vehicles, defined as automobiles with four-wheel drive that meet several ground clearance standards, may also be classified as light trucks. This provision was used to reclassify the Subaru Legacy Outback wagon as a "truck" as of its recent redesign.

The car-like standards under the proposed regulations would apply to trucks with "footprints" (the product of the wheelbase and track) up to 43 square feet (26.8 MPG in MY 2008), and from 43 to 48 square feet (25.6 MPG). Above 48 square feet, the MPG standards are no more (or even less) restrictive than the current regs (20.4-22.3 MPG). All would increase gradually through MY 2011. In particular, these put small SUVs nearly on par with the 27.5 MPG car standard.

NHTSA chose footprint over weight and "shadow" (the total area under the car) to establish the tiers on the claim that footprint is difficult to alter without a major redesign. Certainly, length and width can be cosmetically manipulated at low cost — we are spared the ugly bumper protrusions of the seventies coming back into fashion, at least. Of the footprint measurements, wheelbase is more difficult to manipulate than track, depending on the extent to which a vehicle platform is designed to be stretched. With some suspension mods and fender flares, it's not too hard to give a vehicle the square foot or so of footprint it might need to hop into the next category. You could imagine, though, that the first redesign cycle under these regs would tend to yield wider-track, longer-wheelbase SUVs.

The Times noted in the article linked above that the Outback (MPG ranging from 19/24 to 23/28 depending on powertrain) is just under 43 square feet, and would thus be a candidate for modifications that would bump it over the first threshold. While the 1.2 MPG difference between the MPG standards for the up-to-43 and 43-48 sq. ft. tiers may not seem like much incentive to manipulate the Outback's footprint, since Subaru's Tribeca SUV (18/23 MPG) is just under 47 square feet, they'd benefit from being able to average the two lines by putting them in the same size class. Likewise, if BMW could convince NHTSA to classify the 325xi wagon (around 44 sq. ft.) as a "truck," its decent fuel economy could be averaged with the relatively gas-guzzling X5 SUV (just under 48 sq. ft.).

The transition to truck-like MPG at 48 sq. ft. also looks to potentially benefit a number of mid-sized domestic wagon-like cars. The long-wheelbase version of GM's mid-sized front drive platform (as in the Chevrolet Malibu Maxx) has a footprint of nearly 47 sq. ft. Moving over 48 sq. ft. would provide close to the current CAFE car-truck gap for a reclassification incentive, plus would permit averaging with some mid-size SUVs

If I were an environmental group commenting on the proposed regs, I'd be keen on moving that size cutoff over 50 sq. ft. — at which point it would be harder to get midsized cars into the size class — argue for a smaller MPG step between the second and third-smallest size tiers, or both.

Now the ability to migrate wagons to the truck category depends, you might say, on the manufacturers' ability to get NHTSA to believe that their wagons are trucks and not cars. That is where an additional provision of the proposed rules comes in: NHTSA wants to clarify that the flat cargo floor provision in the light truck definition can be met with folding, but not necessarily removable, seats.

This is advertised as mainly affecting minivans, and remedying a consistency-of-regulation issue whereby folding-seat minivans could be put at a disadvantage relative to removable-seat minivans, were it necessary to classify them as passenger cars rather than light trucks. NHTSA also argues that folding seat minivans may be safer, as they reduce the likelihood of incorrect re-installation of the seats. All well and good.

However, the folding seat regulation would also potentially enshrine a gambit Daimler Chrysler attempted to use to classify its manifestly car-based Dodge Magnum wagon as a light truck via its flat-folding back seats. (I haven't been able to determine through a cursory search whether Dodge actually prevailed.) Put simply, there doesn't seem to be an easy way to prevent a flat-folding seat regulation intended to apply to minivans from extending to any wagon with suitably engineered back seats.

Indeed, wagons have been getting flatter-folding seats if only for the market-driven utility value of the flat cargo floor. You'd have to think that if the folding seat provision survived the rulemaking process without a clarification limiting its applicability to station wagons, only a sucker of a car maker wouldn't take appropriate steps to ensure that its mid-sized wagons met the light-truck definition. Permitting widespread cross-over of wagons into the light truck CAFE category would do a lot to subvert the cause of fuel economy.

At this stage, it's too early to say whether the fuel economy rules will be an item for Jonah Gelbach's new Faint Praise series, or just plain damnation. Given the administration's proclivities, it's always safe to be on the lookout for the latter.

But if you've made it this far, it should be clear that many of the complexities of CAFE rules don't obviously do much to promote fuel economy. You'd have to say that if you really wanted to send the signal that people should save fuel, you'd tax it, rebate some portion to mitigate the effect on the poor, and use the balance to add some much-needed revenue to the Federal budget. Since that's a political non-starter, we just have to take what we can get.

Tuesday, August 23, 2005

Conspiracy of Dunces

by Tom Bozzo

Feeling myself in toxic waste removal mode, I thought I'd investigate my claim from a couple posts ago that as long as there is a Donald Luskin, merely being a Pollyanna for the national security state is playing amateur hour. I was not totally disappointed.

The last week of Luskin's conspiracy looked pretty much like rip-and-read links, as well as this item, pertaining to Paul Krugman's August 15 column on the 70th anniversary of the Social Security program, which I reproduce in its entirety.
WILL HE NEVER LEARN? Just getting around to Paul Krugman's Monday column. Seems he's quoting people saying things they never said (again). Power Line has him dead to rights -- I can't improve on this one. And the EU Rota blog catches Krugman in a little arithmetic misunderstanding -- something about percentages.
Of this, only the sentence about Paul Krugman having a column on the 15th is true (and the "just getting around to" part is not provably true, especially considering how Krugman-stalking fits in Luskin's M.O. on the Internets, but that's irrelevant to the discussion). The balance makes up for its lack of complex argument in willfull falsity on both substantive points.

Needless to say, subcontracting one's fact checking to Power Line is a dicey proposition. The blogger now known as just plain old manly John (*) quotes a portion of an op-ed by Social Security Commissioner Jo Anne Barnhart and says:
In Krugman's twisted world, this mild exposition is a tissue of lies, misprepresentations, and abuse of power. Krugman writes:

Last week Jo Anne Barnhart, the commissioner of Social Security, published an op-ed article claiming that Social Security as we know it was designed for a society in which people didn't live long enough to collect a lot of benefits.
But wait! Barnhart didn't say any such thing. Krugman is just making it up! Read Ms. Barnhart's article with care, and see whether you can find any trace of a claim that "Social Security as we know it was designed for a society in which people didn't live long enough to collect a lot of benefits." There is none.
Not wanting myself to be manipulated, I did read Barnhart's op-ed in its entirety. To excerpt the relevant portions (portions in italics NOT quoted by Hinderaker):
[T]he passage of seven decades has brought substantial and unanticipated change, especially to the population the program was created to serve.

The number of older Americans living now is greater than anyone could have imagined in 1935. Then, only 7.5 million people were age 65 or older. Today, approximately 36 million, or roughly one in eight people, are older Americans.

These numbers are going to continue to grow even more rapidly in the coming decades. In less than three years, America's 78 million baby boomers will begin to reach retirement age. By the middle of this century, about one of every five Americans will be 65 or older.

This increase in life expectancy is a wonderful success story for our nation. More and more Americans are working longer and enjoying a lengthy retirement. But increases in life expectancy mean challenges for Social Security.

The Social Security program is largely a pay-as-you-go system -- with today's workers paying for today's beneficiaries. This system has worked well over the years -- especially when there was a relatively large number of workers to support each individual receiving benefits. But today's demographics are working against us. [Emphasis added.]
Barnhart is claiming that increases in life expectancy and the attendant the shift to the present age distribution of the population was "unanticipated" and "mean[s] challenges for Social Security." Far from being caught "dead to rights" putting words in Barnhart's mouth, Krugman is simply noting the isomorphism of Barnhart's exposition and the Republican talking points along the lines that the system supports a lot more long-lived beneficiaries now than it did in the past, or alternatively that it was "designed" to do. So Krugman is correct, unless Social Security's designers managed somehow to incorporate even factors they couldn't anticipate into the design of the system. Hinderaker, meanwhile, reinforces the old saw about the difficulties of getting someone to understand something when they're paid to stay ignorant.

But the claim that the demographic shift was unanticipated is itself totally false, leading to the so-called "arithmetic misunderstanding." Krugman noted that the current one-eighth of the population over age 65 is fractionally less than was estimated — in 1934 — for the year 2000 by FDR's Commission on Economic Security. Given this lemon, both Hinderaker and the author of EU Rota try to make some lemonade over the Commission having underestimated the actual 2000 population by nearly half, leading to this bottom line question on EU Rota:
Could it be that a system designed in 1935 for 19 million people [the number of retirees forecasted in 1934] may be in trouble when the actual number is over 35 million?
In short, no. While there are nearly twice as many retirees as was forecasted in 1934, there are also proportionally more workers to support them. (**) The right question is:
Is it a problem that there are 35 million over-65 seniors instead of the 19 million originally expected, given that it turns out there are 140 million workers to support them instead of the 75 million in the original design?
The bad 1934 forecast of the 2000 population simply introduces an irrelevant scale factor; missing the population composition clearly would have constituted a far more significant error, and once again Krugman has it right.

It's interesting to see both Barnhart and the forces of Wingnuttia clinging to the false implication — uttered by George Bush and Alan Greenspan, at least one of whom should know better — that the declining number of workers per retiree poses a problem for Social Security that it wouldn't also pose for an alternative (privatized) retirement system. Were a privatized system not to keep older workers on some job any longer than the status quo with current-law Social Security, there couldn't be any material improvement in the worker-retiree ratio. What would change a lot would be the nature of the claims retirees would have on the production of those workers, as the large fraction of the population unable to amass significant private savings would get to fend for itself.

Remember, thousands of sites link Power Line, mostly because in the right's reality distortion field, it's considered a reliable source by the site owners; it gets tens of thousands of visits daily. Heck, hundreds of sites link Luskin, most of those not in the "utter stupidity" section of the blogrolls. It can make you wonder, as Drek did here in the Pub Sociology comments, why it's even worth trying to be fair. On that note, I'm off to decontamination.

Addendum: Author GEA3 of EU Rota responds in comments, and I respond to the response.


(*) I know that my son is just plain old manly John, but I doubt he'll be using overcompensating nicknames like Hindrocket (not that there's anything wrong with that) when he grows up.

(**) I couldn't find a corresponding employment forecast, but it's unlikely that 1934 forecasts would have predicted the increase in the employment-population ratio that began in the late 1970s and most recently peaked in Clinton's second term.

Monday, August 22, 2005

Monday Baby Extra: Bucky and the Babies at the Block Party

by Tom Bozzo

Our second annual appearance at the block party (which, thanks to our position at the corner in the addressing — if not geographical — centroid of the street, is held right in front of the house) was more exciting than usual, thanks to a special celebrity appearance at the event. Maybe the street's brand new pavement was a draw.

Julia turns out not to be especially shy of six-foot-tall bipedal badgers. Her big brother is wary.

Bucky went way beyond the call of duty trying to break the ice with the boy. Considering that the party weather was summery, if not roasting, I'll give Bucky this: whatevery you are paid, it isn't nearly enough. In the end, he got a smile but not a high-five from John (click the images for enlargements).


Sunday, August 21, 2005

The Economics of Jane Doe v. United States

by Tom Bozzo

Mark Kleiman has a good analysis (via MaxSpeak) of the moral dimensions of the recent decision from a panel of the 9th Circuit Court of Appeals in Jane Doe. In that case, among other things, the John Ashcroft Justice Department was compassionately (*) seeking reimbursement for the abortion of an anencephalous fetus that a lower court had ordered TRICARE (the medical benefits program for military service members' dependents) to pay for.

The decision hinged on the language of 10 USC §1093(a), which the court interprets as banning TRICARE from paying for abortions:
(a) Restriction on Use of Funds.--Funds available to the Department of Defense may not be used to perform abortions except where the life ofthe mother would be endangered if the fetus were carried to term.
and a Supreme Court decision, Harris v. McRae, in which similar statutory language applicable to the Medicaid program was upheld:
[6] McRae’s applicability here cannot be denied. Doe challenges a statute nearly identical to one that passed constitutional muster almost 25 years ago. The only difference Doe urges upon us, that the Hyde Amendment affects women on Medicaid whereas § 1093(a) prohibits funding for women covered by TRICARE, is insufficient to distinguish it from controlling the outcome of Doe’s appeal. See Britell II, 372 F.3d at 1384. Therefore, we are bound by the Supreme Court’s holding in McRae.
I'll leave the court's application of the law to the lawyers. However, the court failed to note a significant economic difference between Medicaid and TRICARE: dependent medical benefits are part of the compensation package for active duty servicemembers, whereas federal Medicaid funds are (indirectly) grants to the eligible poor. So the decision economically relates to the freedom to use various forms of compensation for any otherwise legal purpose.

The upshot is that the decision treats cash compensation of servicemembers differently from in-kind compensation like the TRICARE insurance benefits. The former, after all, comes from "funds available to the Department of Defense." But that Jane Doe is evidently permitted to use her own money (**), which comes in part (possibly substantial part) from a servicemember's DoD-funded cash compensation, suggests that those funds are somehow de-federalized when they pass into the servicemember's hands. (***) Compensation via TRICARE, in contrast, is never so transformed, the only economic difference being that the compensation is in-kind.

It could be argued, no doubt, that servicemembers enlist knowing the rules limiting TRICARE benefits, and thus understand that restrictions on the benefits merely reduce the cash-equivalent value of the benefits (something that is more likely legally rather than literally true). But consider a counterfactual world in which servicemembers were paid the expected cash value of the benefits. The same amount of DoD funds are committed in that world, but the funds in lieu of TRICARE benefits would seemingly be allowed to be spent on any legal medical service.

It's funny how economic liberty is more important in some parts of the economy than others.

Additional comment: I wrote this under the assumption that it's a settled matter that at least some types of strings attached to in-kind compensation are legally permissible, but I am curious to know if there are general principles as to how one's employer can or cannot restrict employees from using their compensation as they see fit.


(*) Irony alert.

(**) The issue is that Ashcroft was seeking the money back, not to prevent the abortion itself.

(***) It should be noted that part of the supposed rationale behind the "global gag rule" is that money is fungible among organizations' accounts, so financial controls can't be counted on to ensure that federal funds are only used for permissible pueposes.

Saturday, August 20, 2005

The Menezes Tragedy And The Professor

by Tom Bozzo

Ann Althouse made herself a lightning rod for mostly left-blogosphere scorn over an old post of hers on the shooting death of Jean Charles de Menezes. Not uncharacteristically, she complains that linking articles on (mostly) left-leaning blogs with titles like "Wingnut Authoritarian Law Professors On The March" are "vicious," "really foolish," and "hotheaded." (*)

Were the hot-headed commentators really so foolish? No. At the risk of piling on, let's look at what she originally argued.
...But should we worry that the shoot-to-kill policy will result in more deaths?

Really, it should be quite unlikely for the same sort of thing to happen again, just as it's very unlikely that anyone will ever again hijack an airplane with a small knife... Similarly, everyone -- at least in London -- now knows not to run from the police, especially not onto a train and while wearing bulky clothing.
Ann's argument has two main infirmities. First, she neglects entirely to consider the government's possible responses to the incident. If re-examination of the policy leads only to acceptance of the need to break a few eggs to make an omelette, then you'd have to conclude that the probability of another tragedy, conditional on similar circumstances arising, is in fact undiminished. Indeed, a more recent Althouse post noting that the shoot-to-kill policy remains in effect suggests this may actually be the case, depending on the nature of some "small changes" reportedly implemented. (**)

Considering the apparent role of similar logic in U.S. policies that have led to the grievous abuse and even death of innocent, or at least not provably guilty, detainees, the use of "extraordinary rendition," the indefinite detention of citizens without trial, and so on, this is a Crime and Punishment's-worth of subtext to serve as a flash point (apologies for the metaphor mixing). And I'll admit that one of the things that pisses me off most about the right blogosphere's quasi-centrists is all the torture-excusing (Ann, for the record, expressed "anger at the American soldiers" participating in torture a couple months ago.)

Second, she inappropriately assumes that law-abiding people will, or even can, rationally respond to the tragedy by avoiding "suspicious" behavior. I leave it to the game theorists as to whether the strategy combination of "government threatens to shoot you for 'suspicious' behavior" and "non-terrorists do not exhibit suspicious behavior" is a Nash equilibrium under reasonable payoffs. Outside of a rational choice utopia, it just isn't a realistic outcome. Consider, for one thing, the scores of thousands of contraband items confiscated at airport security checkpoints. Even I wonder how those people — thousands, all carrying objects the DHS officially considers to weaponizable if not actual weapons — have managed not to have heard of the events of Sept. 11, 2001. Somehow, though, society has not crumbled from the authorities failing to shoot dead even the gun-toters among them.

Then there's the question of whether a balance of terror between the government and the populace is actually desirable. Indications point to no. As Scott Lemieux notes, some elements of the behavior Ann suggests might be suppressed, and for which de Menezes was supposedly shot, is not abnormal at all. All the more so, of course, as the actual details of the incident have emerged. Sprinting for trains? (***) Doing so while wearing bulky clothes (heard of winter)?! This obviously could be solved by using private transport, though insofar as walking can at times be Central London's fastest mode of surface transportation, it's not a great idea for a large fraction of the Underground's ridership to so choose.

The and-pigs-could-fly quality of the previous argument just makes Ann's look on the bright side conclusion look clueless:
Is it not true that yesterday's sad mistake has already solved the problem it represents? In fact, a further good has been created: as ordinary persons change their behavior and drop the bulky clothing and unnecessary running, the real terrorists will stand out more. Indeed, if anyone ever behaves like Jean Charles de Menezes again, the presumption that he is a terrorist will be so overwhelmingly strong that the police really must kill him.
So the system is self-correcting and the tragic f*ck-up has a massive external benefit. From the above discussion, neither conclusion is warranted. Nor does the preceding argument particularly support her assertion that the terrorists will just stand out more if subway riders behave in various ways unlike time-pressed urbanites. If there's one group you'd expect to fully adapt to the revelation of the shoot-to-kill policy, it would seem to be the actual terrorists. If their incentive is to try to blend in, then it's back to square one with the problem of extracting the tiny signal of actual terrorists from the cacaphony of every weird person riding mass transit. And thus it can't be presumed that the prospect that shoot-to-kill will only kill terrorists is high enough to justify a policy that, as Daniel Davies notes in his One Minute MBA series, so upends the usual legal arrangements.

So Ann's argument was very poor. The dumbest thing I've seen in a blog? Not even close, as long as there's a Donald Luskin. But the best way not to be called a wingnut authoritarian is to avoid the appearance of arguing for the transformative power of the state's misapplication of deadly force. Or just listen to Jeremy.

Update: Reinforcing that last point, Ann's original post earns her the runner-up slot for the Golden Winger from The Editors at The Poor Man Institute.


(*) She should know well enough that the blogiverse is a tough place — and that incivility is not just a left-blogiverse phenomenon.

(**) You'd suppose the changes would be geared towards error-mitigation. But there's still the problem of Ann suggesting in the more recent post that this will be net-tougher on the terrorists than everyone else. So far, the score is still innocent bystanders 1, terrorists in the midst of attack 0.

(***) Heck, on July 7, I sprinted a few steps to catch a Yellow Line train at the L'Enfant Plaza Metro station, with a bulky-looking briefcase over my shoulder and a roller-bag in tow right in front of an armed transit cop. If the cop had told to me to slow down and I didn't notice over the train and crowd noise, would I have had what was coming to me?

Friday, August 19, 2005

Friday Baby Extra II: You Think These Steps Can Keep Me In The Family Room?

by Tom Bozzo


(Click the pictures for larger versions.)

Friday Baby Extra I: When Worlds Toy Railway Gauges Collide!

by Tom Bozzo

James (*) helps the much bigger GP38 pull a freight train (non-Lego version). I think I can...


(*) Am I missing something, or is Sodor an aristocratic-socialist utopia with a railway network that's the envy of the world despite its antiquated equipment, or what?

Thursday, August 18, 2005

It's Marginal Utility's 518th Postiversary!

by Tom Bozzo

It's hard to believe, but to the guarded curiosity of my spouse and the notice of nearly nobody else, I started this blog one year ago today.

If you visit the way-back files, you can see the general pattern of discourse here forming early: three posts about food, one about the curious political disease befalling recent mayors of St. Paul, Minnesota among other burning political controversies of those days when there was cause for guarded optimism that George W. Bush could be sent to an earlier retirement, and a comment on Canon Law (IANACL). Then, lest one think this wasn't an economics blog, there was a post noting the shocking implications of labor-saving technological change in the design of Great Lakes freighters for employment at the ports of Duluth-Superior.

You might think I'd gone on vacation in Minnesota just after starting the blog or something.

I'd like to thank all the year's visitors, especially the commenting pixies (possibly excepting the couple of you who have moved me to use the administrative powers of deletion); my blog pals, especially Jeremy and Nina for inspiration and encouragement in the early days, and Oscar for permitting this blog and The Columnist Manifesto to have a Special Relationship; and linkers one and all — not fully enumerated here, perhaps a post for another time.

I will try not to bore you all to death with posts 519 et seq. Thanks again!

Wednesday, August 17, 2005

Wednesday Baby Extra: The World-Weary Toddler Edition

by Tom Bozzo

John, this morning.

That was waiting for the departure of the Milwaukee zoo train, today being pulled by the 'Irwin Maier' — a real steam engine, here getting a quick bath between runs.

Note: while the Milwaukee County Zoo, unlike our own little Henry Vilas Zoo here in Madison, has
I left with the feeling that Vilas Zoo would be a bargain at twice the price.

Tuesday, August 16, 2005

Adventures In The Could-Be-Longer Tail

by Tom Bozzo

The idea of the "long tail" is that net-enabled relaxation of the constraints of physical retailing, if not the actual embodiment of products, frees us from the tyranny of the merely popular (the "short tail") and opens all sorts of niche and fringe markets.

As net-related concepts with elements of pure hype go, the long tail has the advantage of a substantial element of truth. This contrasts with the more usual total nonsense that's peddled in the name of the digital revolution, for instance this George Gilder quote via Thomas Frank's One Market Under God:
"Rather than pushing decisions up through the hierarchy, the power of microelectronics pulls them remorselessly down to the individual."
(For an exercise, assume the statement is true. Then explain executive compensation levels.)

If you are reading this, or for that matter most of my blogpals, you're somewhere in the blogiverse's long tail. I've downloaded a couple of albums so far from the long tail of the iTunes Music Store's collection, sparing me the need to digitize vinyls in order to get eighties indiepop rarities on my iPod while permitting me to stay somewhere in view of "fair use." (*) Midlist authors seem to see material sales gains from free parallel distribution of their work as e-texts. And so on.

This brings us to the sad story of John's and — cough — my — cough — favorite toy. Lego has been struggling to adapt to a world in which its primary audience, pre-teen children, is less interested in traditional building toys than video games. At the same time, Lego is under price and shelf space pressure from cheaper knock-off brands with no compunctions against occupying niches that Lego has traditionally avoided, like military and other undeniably violent themes. (**)

Much of their strategy has involved what you could call in this paradigm mining the "short tail" for ideas — notably through the endless Bionicle line, where coming up with the wacky names for the scary-looking critters would seem to provide a challenge on the order of Ikea product naming, and licenses of entertainment properties including (more or less successfully) Star Wars and Harry Potter (***) and (less so) Jurassic Park and North American professional sports leagues with labor relations issues. The line of Thomas the Frickin' Tank Engine Duplo trains is too new to gauge.

The down side is that in a battle between the power of established brands and the license fees' exacerbation of the price differential between the knockoff brands, price seems to be prevailing at the nameless discount retailers who account for ever more of the toy market. And Lego has been losing Kroner hand-over-fist, leading to the usual retrenchments of the business and sourcing of production outside the E.U.

Their efforts to wean themselves from lesser licenses has also been a mixed bag. In the department of what-they-think-of-us, a decision (since rescinded) to market only in North America one of the latest themes, "Dino Attack" — with sets consisting of action-figure mutant lizards and militaristic vehicles, no protectable relation to a certain film trilogy — while the rest of the world got a cool line of Viking-themed castle sets led to amusing reactions on the discussion boards, such as:
Oh we could have a field day with this one.

Guns ‘n’ Pickups for the gun crazed middle America versus historical playsets for sensitive Scandinavians?

Dinosaurs co-existing with humans for the creationist New World versus mythical beasts for the barely Christianised barbarians of the Old World?

Forward looking, modern technology for the freewheeling United States, versus backward looking swords and wooden boats for the hidebound EU?

Discuss - 1000 words.
After that, it was a pleasant surprise to see that at BrickFest 2005, a D.C.-area convention for grown-up Lego fans (AFOLs, or Adult Fans of Lego, in the lingo), Lego announced (****) an actual long-tail killer application: build virtual models with Lego CAD software, upload the files to their Web site, and they'll supply you with the bricks in the real ABS.
At the end of this month, we’ll be launching the new LEGO Factory site – a true revolution in our product platform. Users will be able to use LDD to build and upload their models, which can then be purchased by the creator or other consumers.

The key here is the concept of a “product platform”. Being able to allow consumers, or LEGO designers alike the ability to create models in a quick, relatively free-form fashion is a powerful capability that will create amazing possibilities.

The best thing about this platform is that it no longer locks us into having to choose between a few major, mass market product lines each year. We literally now have the ability, with your help, to deliver a wide array of themed content through LEGO Factory.
When I was 12, I'd have thought this was the coolest frickin' idea in the world. Now that I'm 37, have money, and can indulge my children by way of a rationalization... well, it's still the coolest frickin' idea in the world. Happy building.


(*) In both cases, search costs remain a major hurdle.

(**) This didn't remotely hinder my brother and me from building ray guns and horribly beweaponed space cruisers with them when we were kids. There are also a multitude of sell-outs of those principles littering Lego catalogs going back to my childhood. Nevertheless, I'm in complete agreement with Tonya that realistic toy rifles which require brightly colored plastic bits to ward off nervous police are off-limits.

(***) The down side is that this has tied a good chunk of their business to the film release cycles, as well as to the less beloved Star Wars prequel trilogy. They also had relatively little to sell into the Potter-mania attending the publication of Half-Blood Prince.

(****) This blog page is unusually authoritative, as the author is "Global Community Relations Specialist" for the Lego Group. Now there's a job where fun may actually be a significant part of the remuneration.

Monday, August 15, 2005

Can You Imagine A World Without SUVs?

by Tom Bozzo

Over-extrapolation alert, from Saturday's Times:
"This gas and vehicle thing is tied up with the entire way we lead our lives now," said Steve Hoch, a professor of marketing at the Wharton School of Business at the University of Pennsylvania. The bigger vehicles that are getting slammed by the surge in gasoline prices, Professor Hoch said, are all part of the supersized demographic shift to bigger everything in the last decade, like the sizes of an average home and of the average big-box discount retail store.

"But just imagine if everybody had to get to Costco in a Prius," Professor Hoch added, referring to the Toyota gas-electric hybrid that gets about 50 miles to the gallon. "How would they bring the 43 rolls of toilet paper home? This shift to higher prices is not going to be easy."
Hmm, you could actually see where you were backing up, not being hemmed in by land-behemoths?

Most of my observations of full-sized SUVs are as wildly inefficient commuter vehicles for single occupants with cell phones seemingly surgically attached to their ears. I haven't found the 10-cu. ft. trunk of my car constraining during diaper runs, and the Prius has quite a bit more interior volume than my car. Then there's the likes of the Passat TDI wagon, which has interior volume in the ballpark of mid-sized SUVs and half the fuel consumption.

Families with lots of children may need big SUVs or vans to provide enough seats, but even on that front I'm reminded that neighbors of ours recently packed two adults, two teenagers, a seven-month-old baby, four bikes (via roof rack) and stuff for a week to Minocqua in a '92 Passat wagon.

In the bigger picture, what worries me is that we'll get policies that take the organization of suburban sprawl life as immutable consequences of primal human desires, rather than as an adaptation to cheap private transportation that may be abandoned as quickly as it was thrown up when market forces turn on it. (Policies that seek to promote low gas prices versus low fuel consumption may have this effect.) Human life has been successfully lived without big-box stores, even in my lifetime, if you can imagine that. This is not to say that I disagree at all with Prof. Hoch's conclusion that the transition will be hard, especially as it implies that the values of today's half-megabuck McMansionettes are no more privileged than those of the once-grand houses owned by the elites of small (and not-so-small) towns along, say, the route of the Erie Canal.

But I think an underappreciated feature of neoclassical microeconomics is that while consumers may in principle want everything, what they actually choose to have is regulated by relative and absolute prices. So when self-mobile freedom is sufficiently expensive, sooner or later other forms of consumption will be substituted for it. The question is whether the corporate welfare state will allow this to happen.

Sunday, August 14, 2005

Some Notes On The Economics Of The Used Car Market

by Tom Bozzo

An open response to my buddy Oscar's "open letter" on the economics of car buying

At the Columnist Manifesto, Oscar offers his theory of the new versus used car purchases. To excerpt what strike me as the salient points:
...if you can afford to buy a new car for cash (without financing it), there's no point in buying a used car. Used cars, while cheaper than new cars, are almost never a better value, and are usually a worse value.

You and I are virtually never going to have better information about the value of a used car than the used car dealer...

With amateur private car sellers, the issue is one of mutual ignorance. Neither party has really good information about what the car is worth.

I think that there really is no new car premium. If cars lose disproportionate "value" when driven off the lot, it may be because this market is likely to have a disproportionate number of lemons, and the potential buyers' fear of buying a lemon pushes down the price.
Oscar also apologized for a long and humorless post — though I, for one, laughed heartily at the "2003 Cilantro." I've heard enough economist humor not to make representations about the answer to follow.

First, let's answer the question of whether Oscar is right, or mostly right. Economic theory offers an an answer of yes, though with some potentially significant qualifications that I'll get to later. Ivy-educated lawprof Oscar has basically rediscovered one of the central results of the economics of asymmetric information, and specifically "adverse selection" — where quality is unobservable on one side of a transaction. This serves as an illustration both of the potential minor mischief that could be done with a time machine, were such a thing not to violate the known laws of physics, as well as Brian Leiter's periodically renewed critiques of economics' most prominent prize.

Suppose we set the way-back machine 37 years. Oscar is, I'd gather, between third and fourth grades or thereabouts, and I'm a precocious diaper-filler of five months. A couple of early middle-aged dudes show up with a paper that takes the essential ideas from Oscar's post and spices it up with enough math to impress the economics profession of the time, which we could give a title like "The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism." We could get this paper published in a top journal, say the Quarterly Journal of Economics.

Young Oscar and I would then be shoo-ins for the Johnny B. Clark Medal for achievement by economists under the age of 10. Following the research program to its logical conclusion, we could have been in a position to split the economics pseudo-Nobel with Joseph Stiglitz and Michael Spence, when the committee decided to honor the founders of information economics.

This probably would have irritated George Akerlof, who published a paper of that title in the QJE 35 years ago this month and went on to take 1/3 of the 2001 Bank of Sweden Prize in Economic Sciences with Spence and Stiglitz (*).

At the usual gross oversimplification risk, a main result from Akerlof's paper was a demonstration of how the absence of (or missing market for) credible quality information could lead to a market "equilibrium" in which the price buyers are willing to pay, given the prospect of buying a "lemon," is sufficiently low that only sellers of "lemons" are willing to supply their cars to the used car market. So, as Oscar suggests, there are low prices but no "deals" in the sense that one gets what one pays for.

As I said, there are significant qualifications. To offer a personal anecdote, two cars ago I bought a 1998 BMW M3 coupe that was 6-1/2 months old and had less than 1,000 miles on the odometer when I took delivery. I paid about $5,000 less than sticker price for a car that would not normally be discounted much as a new car. And it was a cream puff! What gives?

1. The segment of the market matters. In the realms of the woefully undertaxed, it's not uncommon for the fashion-minded to acquire and quickly unload whatever car is the flavor of the month. Mercedes CLS 55 today, BMW M5 tomorrow: nice work if you can get it. Similarly, in the luxury market segments, buyers can afford to indulge "princess and the pea" syndrome, and unload cars not for mechanical failures but because they turn out not to suit them so much. Plus, it seems like a lot of high-end sports cars get sold off due to divorce or downward financial mobility. Bottom line is these create a source of supply for lightly used non-lemons. Those motives may be too costly for someone to pursue in the econobox market.

2. Dealer reputation matters. The dealer that sold me the old M3 is the only show in town for Audi, BMW, Mercedes-Benz, Porsche and Saab. They do aspire to repeat business, which discourages them from knowingly putting lemons on the lot. When I got the M3, as a single guy with no immediate prospects for marriage, I had told myself that if I was still single and bitter in 2001, I was going to have my mid-life crisis early by getting myself a 911. As it happens, I wasn't and didn't, but had they pissed me off by sticking me with a lemon, they'd have risked locking themselves out of the eventual sales of Suzanne's current car, the probable successors to our current cars, etc. This is also why related-party transactions can offer higher-quality cars: the close friend or relative may care enough about the relationship not to risk it by trying to sneak a lemon past the goalie. This does not really alter Oscar's conclusion in that a dealer with a valuable reputation will be able to translate the reputation into higher prices.

3. The biggest recent innovation in the used car market, manufacturer certification of used cars, can be seen as an effort to provide a credible (and valuable) signal of quality. The promise of the more rigorous certification programs is a more extensive inspection than the $30 checkup from one's favorite mechanic (plus, items flagged in the inspection are supposed to be corrected, or the car can't be certified), backed up with a sometimes substantial warranty extension from the manufacturer. Since certified used cars can bear a premium of a couple thousand dollars over an equivalent non-certified car — which includes relatively useless dealer certifications, which are often little more informative than a "cream puff" sign in the windshield — this also doesn't alter Oscar's conclusion that you get what you pay for. Also, a few unscrupulous dealers have apparently taken the certified used car premium as an inducement to fraud, particularly in the certification programs of non-luxury brands.

4. Cars are, generally, highly reliable and have relatively long warranties. So while getting a lemon (or at least a car with Issues in need of Sorting Out) may be inconvenient, the financial burden of a late-model lemon is likelier than not to fall upon the manufacturer.

So I think Oscar has the economics more-or-less right. A used car can be a rational purchase choice, though not likely because it constitutes an exceptional bargain over a comparable new car: the low price is, in effect, a risk discount. Caveat emptor.

See also Isaac at Armchair Capitalists for a related take.


(*) Akerlof was not a recipient of the John Bates Clark Medal, given to a hard-charging economist under 40, but both Spence and Stiglitz were.

Friday, August 12, 2005

Something In The Electrons, II

by Tom Bozzo

News flash! "Record" oil prices, in "real" (inflation-adjusted) terms
are only records because inflation has raised prices across the board. In real terms, oil's record price was reached shortly after Iran took hostages in the US embassy, way back in 1979, when a barrel of oil cost roughly $90 of today's dollars.
says Megan McArdle at Instapundit. Her source? A blog post at Outside the Beltway complaining about the reporting of the records. This is not quite a triumph over "MSM," though. As it happens, the AP story that's the first listed offender notes:
While oil prices are about 46 percent higher than a year ago, they would need to surpass $90 a barrel to exceed the inflation-adjusted peak set in 1980. That — and the fact that the U.S. economy burns fuel much more efficiently than it did 25 years ago — helps explain why the country's financial engine is still going strong, analysts said.
(The first sentence also appears in another version of the story via the New York Times, too.)

No doubt, the talk of "record" prices comes off as a somewhat lame effort by the reporters to add some spice to otherwise thrilling commodity market reporting. But it's not like the inflation-adjusted record just dawned on the right blogiverse on Thursday.

Friday Baby Extra: The Adventure in the Overturned Tent

by Tom Bozzo

It turned over after Julia crawled in, but couldn't crawl back out over the threshold. That did not diminish the fun, though sadly I couldn't find the camcorder to film the tent moseying its way across the floor of the screen porch.


Thursday, August 11, 2005

Democratization of Wealth Watch

by Tom Bozzo

While visiting today, I noticed a "plain talk on investing" item entitled "Will baby boomers cause a market meltdown?" A Vanguard analyst is quoted as expecting "some modest selling pressure" in the stock markets from baby boom retirees. The article proceeds to list several mitigating factors. Among them? Rich retirees don't need to sell their equities; they can live off the dividends. Plus, rich retirees hold a lot of equities.

According to this paper by Fed economist Arthur Kennickell (cited in the Vanguard item), the richest 10% of households — minimum net worth in 2001, $745,500 — held 88% of individual stocks according 2001 Survey of Consumer Finances data, still the most recent available.

Individual stock holdings are not particularly common among the non-rich, but other asset categories don't make the distribution of financial wealth look much more equal. The top 10% held 79% of mutual fund balances, 96% of bonds, 60% of funds in retirement accounts; add in a few other financial asset categories and the bottom line is they held 72% of all financial assets. (*)

Things are not completely rosy as the remainder of the above-median-wealth households were sitting on just under $2.1 trillion in their retirement accounts, plus another trillion or so in stocks and nonretirement mutual fund accounts, much of which will need to be eaten at some point.

Not a big factor are the poorest half — maximum net worth in 2001, $87,500 — who sit on an aggregate of $512 billion in financial assets, which is not quite one-twelfth of the holdings of the top one percent. That half of the population should be hoping that the Republicans don't screw up Social Security too badly.


(*) If you want to try this at home for a few other quantiles, you can get close enough for rock 'n' roll to Kennickell's figures using data in this table (Microsoft Excel spreadsheet).

Wednesday, August 10, 2005

By Reading This, You Assent To...

by Tom Bozzo

...nothing that I can think of, but the scourge of "browse-wrap licenses" — the legalese behind the "Terms and Conditions" links you see on many websites — has come to the blogiverse. Gary Farber notes that the TPMCafe terms of service include the following terms:
TPM does not claim ownership of the Content you submit or make available for inclusion on TPMCafe. The Content is the property of the author of such Content. You agree to grant TPM a perpetual, royalty-free and irrevocable right and license to use, reproduce, modify, adapt, publish, translate, distribute, transmit, publicly display, publicly perform, sublicense, create derivative works from, transfer, and sell such Content in any format now known or hereafter created, and to use your name and other identifying information you provide in connection with that Content. You also permit any visitor or member of TPMCafe to use such Content for personal use as described above.
And, furthermore, the terms require that quotes of TPMCafe comment be accompanied with the notice:
Used with permission from, a service of TPM Media LLC.
Which I suppose I would have because my purpose is noncommercial and my audience is a "limited number of individuals" (as is anyone's, actually, at least in the sense that the Sonny Bono Gift To Disney And Other Big Content Creators Act respects the authority granted to Congress to allow copyrights of "limited Times").

My admittedly non-lawyer understanding is that that grants of "perpetual and irrevocable" (belt and suspenders, eh?) licenses are not unusual in intellectual property transactions. For blog comments, they even makes a degree of sense as expiry or revocation of the blogger's license to reproduce or excerpt a comment unmodified could in theory make it impractical or impossible to do useful bloggy things like serve archived posts with the original comment threads intact, or quote from a comment in another post. Where the TPMCafe TOS go overboard, for my two cents, is in the asserted grant of rights to modify and particularly to resell, royalty-free, notwithstanding the present market reality that the value of blog comments is still mostly psychological value to the blog author.

Actually, TPMCafe's license terms weren't the most outrageous I found in today's blog reading. I paid a brief visit to Brad Setser's blog, recently moved to the RGE Global Monitor site (linked, along with Nouriel Roubini's, in the sidebar), and saw its TOS via the click-wrap license for Setser's comments function. These just made me laugh, and I'm sorry to say not with Roubini Global Economics LLC.

First off, you can't enforce a contract with someone not legally capable of assenting to the terms, even by what passes for standards in the relevant case law. The solution?
1. Eligibility.

You must be 18 years of age or older to visit or use in any manner. By visiting or accepting these Terms of Use, You represent and warrant to the Company that You are 18 years of age or older, and that You have the right, authority and capacity to agree to and abide by these Terms of Use.
It doesn't look like Roubini teaches undergrads, but nevertheless a youngish NYU freshperson in an introductory macro class would violate the Terms by reading the RGE blogs.

At least the hypothetical NYU frosh would be in compliance with the restrictions to keep the RGE blogs on-topic:
RGE Web Logs and the Site may be used only for lawful purposes by individuals seeking to view and post commentary related to Global Macro Economics and Geostrategic information.
So, I could (and probably did) violate the Terms of Use by visiting with the intent to see if there was any microeconomic content posted there. I'll leave it to the lawyers whether Setser himself violated the TOU with the post "Back to Blogging," whose nexus to "Geostrategic information" is thin to say the least.

And, if you think TPM Cafe is being tough in requiring a rights notice with quotations of TPMCafe content, here's RGE's restriction:
The use of the RGE Content on any other Web site or in a networked computer environment for any purpose is prohibited.
So forget about quoting them, or be prepared to mount a "fair use" defense.

If I understand what sources say about the case law, and again IANAL, browse-wrap licenses can be shaky, but click-wrap ones such as you notionally assent to by registering at TPM Cafe or commenting at Setser's blog are generally enforceable, though individual overreaching terms may not be. (The licenses typically provide that waiver or unenforceability of any individual term or terms will not invalidate the entire license.)

I think Farber's bottom line is right — presumably neither RGE nor TPMCafe intend to launch a wave of litigation over the blogiverse expanding in its usual ways, but you might nevertheless think twice before "engaging in discourse on these terms."

For now, I'm noting in the sidebar that Roubini and Setser are rated X. Young international economics and macroeconomics people visit at your own risk.

Additional thought: Part of what makes these terms of use interesting is that they put in explicit contractual terms a variety of implicit transactions that are more-or-less fundamental to the blogging process and conducted with such regularity that probably few people are conscious of them. This is perhaps a natural consequence of the increasing commercialism of portions of the blogiverse, and serves in part to remove the illusion that blogging is a free-for-all moderated by the Law of the Schoolyard. (Like Jeremy, I'll emphasize that this is a big schoolyard, and none of the above should be taken as disapproval of anyone's blogging approach so much as of some overlawyering.)

Tuesday, August 09, 2005

See The Stars. Maybe.

by Tom Bozzo

With the just concluded STS-114 mission less than an unqualified success apart from the crisis management angle, I wonder if the already accelerated retirement of the Space Shuttle won't be pulled forward. TradeSports doesn't yet have a contract for the next flight's timing, so the wisdom of the crowd offers less than the usual enlightenment. I'd have to think that Pr[Never] is at least as high as Pr[as of yesterday, there might have been a half-percent increase in the Fed Funds target today] (see here).

Another interesting quantity is Pr[bitter disappointment forthcoming from 35 years of no coherent space policy], which I suspect is vanishingly close to 1.

It's not that I don't want to see more exploration of Mars and elsewhere. I don't even mind some elements of the Bush space exploration "vision," such as nuclear-electric power and propulsion, that would have ample application to the robotic probes that (still) have by far the highest scientific yield net of costs.

Rather, I doubt that anyone actually will pay for it. It doesn't seem unlikely that we'll find in a few years that after existing space science budgets have been pared back in anticipation of implementing the exploration "vision," a future Congress chokes on the price tag for the manned Moon/Mars mission and fails to restore the funding for everything else in the name of fiscal rectitude.

At that point, at least in the nearer term, space fans are left hoping that nanotech fabulists are right about the imminent technical and economic feasibility of space elevators, and/or that the sheer power of creative destruction will vanquish all of the hideously expensive-to-solve problems where Burt Rutan cleverly punted to get SpaceShipOne to 100km on a budget. While it might happen some day, you know what they say about the long run.

Tuesday Baby Extra: Space Shuttle Edition

by Tom Bozzo

The safe return of Discovery gives Julia a good opportunity to eat her rocket ship spoon.


Stupid Questions And The Answers They Deserve

by Tom Bozzo

Two of them grace the cover of this week's Time magazine.

1. "Can Condi Rice save Iraq?"

Only if a freak lab accident endows her with super powers. This will not stop Rice '08 boosters from taking credit for however victory ends up being defined, in turn keeping the outcome of my Rice '08 bet with Nina interesting.

Update: In the comments, Ken Houghton provides the answer to the related question of would Condi Rice save Iraq if she could.

2. "Does God have a place in science class?" (This is the question raised by "the push to teach intelligent design.'")


Monday, August 08, 2005

Something In The Electrons

by Tom Bozzo

The Washington Post obituary for Peter Jennings notes:
A smoker until about 20 years ago, he said he relapsed under the pressure of Sept. 11, 2001, but later quit again.
In response, Insta-Ann writes:
IF YOU SMOKE AND DIE OF CANCER, every obituary will take advantage of your death as an opportunity to remind the living to quit smoking.
While I basically agree with Mark Kleiman's take, he misses a minor opportunity to point out that not only did Jennings mention his smoking in his on-air announcement, but also was in fact the source of the Post's language:
"I was a smoker until about 20 years ago," Jennings told the "World News Tonight" audience on April 5, 2005, when he announced he had been diagnosed with lung cancer. "And yes, I was weak and I smoked over 9/11."
Advantage: MSM.


P.S., I don't want the Madison smoking ban repealed, either.

Note: Edited to better represent Kleiman's post.

Sunday, August 07, 2005

I've Heard A Musical Setting of the Argentine Economic Crisis

by Tom Bozzo the second movement, marked "Tango para sonar," of Miguel del Aguila's Salon Buenos Aires, a new work performed in the third installment of our incomparable Bach Dancing and Dynamite Society's summer festival. And it rocked (*), in a manner of speaking.

Salon's three movements consist of themes derived from warped South American dance themes intended to constitute a nostalgic (or quasi-nostalgic) look at a part of the world now vanished in political and economic upheaval. Four thumbs up from author and spouse.

Hopefully, one of the commissioning groups — it was commissioned jointly by BDDS and festivals in Texas and California — will offer a recording; otherwise, perhaps Wisconsin Public Radio will pick it up will pick it up for the Music from Wisconsin series (hint to WPR programmers).

Great To Be In Wisconsin note: season tickets (3 concerts) were $60 and included intermission snacks. Fun and/or cool door prizes are another BDDS staple, though we sadly didn't win anything, let alone the grand prize of U.N. goodies.

(*) The music, not the economic crisis.

Friday, August 05, 2005

Things You Can't Imagine Yourself Saying Until You Become A Parent, Part XCVI

by Tom Bozzo

"'Blue's Clues' makes 'Elmo's World' look like the Feynman Lectures."

Dept. Of Do You Really Want To Know

by Tom Bozzo

We interrupt the Friday music staples of new wave and indie-pop esoterica for this "serious" music note.

A while back, I'd received the Lyric Opera of Chicago's 2005 audience survey, administered by the University of As Fancy Pants As You Get In The Midwest Survey Lab. The survey asks for reaction to every production (as applicable) since the 1999/2000 season and gauges interest in various future productions. It also has the broadest range of income categories I've ever seen in the demographic section of a survey. Amusingly for a survey that seeks to distinguish the million dollar a year set from the two million dollar a year elite, the reply envelope is addressed to suggest that each response will individually be read by General Director William Mason. (*)

Some of the questions turn out to be much more open-ended than others.

The Lyric has been running mostly contemporary American opera (e.g., John Harbison's The Great Gatsby) every year, and short-series subscribers are asked whether they'd like to have that opera every year, every other year, every third year, less often, or never. OK, fine, that's one of their big artistic initiatives.

In the '03/'04 season, we saw a rousing performance of The Pirates of Penzance, and another item asks how often we'd like to see Gilbert & Sullivan operettas. We're not exactly G&S fanatics — not like Chief Justice Rehnquist, for one — but have seen a couple of Madison Savoyards productions over the years. The allowed preferences from the survey are every six years, every seven years, or less often. (Pirates was the only G&S production in the six seasons covered by the survey.) I can also surmise from an item seeking interest in specific operettas that my chances of seeing Iolanthe at the Lyric in my subscribing lifetime are much better than those of seeing H.M.S. Pinafore.

Likewise, reflecting what turns out to be something less than an artistic initiative, musical theatre productions are offered in another item at the same frequencies of every six years, every seven years, or less often. (Two advanced musicals, Street Scene and Sweeney Todd, have been produced in the survey period; we'd consider Street Scene to have been one of the highlights of the '01/'02 season.) I'd surmise that however much we might like these productions — and presumably also Sir Andrew Davis or they wouldn't have been programmed in the first place — some other Person(s) of Influence must be less than thrilled that they've displaced more conventional opera repertoire.

In both cases, I took the liberty of writing in that I would accept G&S and/or a musical more often than six years. I'd be interested to know how my notations in the margin will be handled by the U of AFPAYGITM folks. The temptation does arise to write the Institutional Review Board — there to protect my rights as an opera-going respondent, small type on the front of the survey instrument assures me — to complain that I feel marginalized by the leading survey design, or whatever language will bear most weight in IRB-land.


(*) A card thanking me for my reply, or in the alternative encouraging me to respond, requests that tardy surveys be sent to a researcher in the U of AFPAYGITM Survey Lab.

Tuesday, August 02, 2005

The Reverse Lake Wobegon Feature of the Distribution of Wealth

by Tom Bozzo

A article on the latest savings rate data (via Economist's View) claims:
Even as a government report Tuesday showed the national savings rate at zero -- that's right nada -- the rise in the value of homes has given the average U.S. household a net worth of greater than $400,000, according to a separate report from the Federal Reserve.

The distribution of wealth has a long right tail, the very rich being, well, very very rich. So the average net worth — i.e., total net worth divided by number of households — in the 2001 Survey of Consumer Finances (*) was $395,500. But the median net worth — the amount such that 50% of households have greater net worth and 50% have less — was only $86,100. (Update: See here for the latest data from the 2004 Survey.) Indeed, in 2001 around 80% of households had below-average net worth.

The poorest 25% of households had an average net worth of zero and a median net worth totaling a whopping $1,100. This includes bank accounts and other financial assets, vehicles, houses and other real estate, and more.

Wealth isn't that democratized.

Additional Note: From 1992-2001, the mean and median diverged,with the median increasing by 40% ($24,800) and the mean increasing 72% ($165,000, both adjusted for inflation). The distribution data in the Federal Reserve Bulletin article allows some easy lies with statistics. The 12.5th percentile of net worth (1/8 of households are poorer) increased 83%, while the 95th percentile (19/20 of households are poorer) increased "only" 58%. But if you want to know who will be popping the Champagne, the former increase was $500, while the latter was $479,300.

Another important definitional limitation ofthe data is that the Survey of Consumer Finances wealth measurement excludes employer-sponsored defined benefit pensions. As a result, the shift from defined benefit to defined contribution retirement plans will make measured household wealth increase when there has actually been a subsitution of a measured asset type for an unmeasured type.


(*) This is the most recent data I could locate; the Fed web site notes that results from the 2004 update of the Survey are due early next year. I'm trying to figure out precisely what Federal Reserve release is referenced in the article. (The summer Federal Reserve Bulletin is due soon, but not yet posted to the web.)

We'll Do It For You In Six Minutes

by Tom Bozzo

Via Pandagon and Pharyngula, Fearless Leader steps into the evolution "debate":

WASHINGTON - President Bush waded into the debate over evolution and "intelligent design" Monday, saying schools should teach both theories on the creation and complexity of life.

In a wide-ranging question-and-answer session with a small group of reporters, Bush essentially endorsed efforts by Christian conservatives to give intelligent design equal standing with the theory of evolution in the nation's schools.

So, Bryan, ready to go Libertarian yet?

Addendum: The linked Pharyngula post compiles a long list of reactions. Blogistan is pretty quiet, though Ann Althouse's favorite linker has a humorously timed (if unrelated) "HMM. MAYBE BUSH IS AS SMART AS SOME PEOPLE SAY" (shouting in original, link to Hindquarters deleted). Why, if a Yale J.D. says so, it must be right! The catch is that "some people" is actually P.Z. Myers.

Second Addendum: Welcome DeLong readers. Please do see the Pharyngula post. For one pro-science voice out of the right blogosphere, see John Cole.

Third Addendum: Jonah Gelbach locates an on-topic Instapundit post from a not-too-thrilled Glenn Reynolds. My question is, why isn't it "lame" to pander to the Base by being stupid?

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