Domestic Terrorism

Right-wing bloggers spent quite a bit of time last month complaining about an FBI report warning of the dangers posed by right-wing extremists, calling it an Obama-orchestrated “hit job” on conservatives, among other things.  One of the many passages found objectionable reads as follows (emphasis mine):

Rightwing extremism in the United States can be broadly divided into those groups, movements, and adherents that are primarily hate-oriented (based on hatred of particular religious, racial or ethnic groups), and those that are mainly antigovernment, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely. It may include groups and individuals that are dedicated to a single issue, such as opposition to abortion or immigration.

It looks like the FBI was right.  In the words of Mark Kleiman, “If you’ve ever said ‘abortion is murder,’ be sure to use lots of soap and water when you try to wash the blood off your hands.”

The killing of George Tiller was a terrorist act, and should be investigated and prosecuted accordingly.

Update 10:40 PM: Kleiman nails it.

Context

I love XKCD.

1000 Times

About Iceland

Because Iceland is really just one big family, it’s simply annoying to go around asking Icelanders if they’ve met Björk. Of course they’ve met Björk; who hasn’t met Björk? Who, for that matter, didn’t know Björk when she was two? “Yes, I know Björk,” a professor of finance at the University of Iceland says in reply to my question, in a weary tone. “She can’t sing, and I know her mother from childhood, and they were both crazy. That she is so well known outside of Iceland tells me more about the world than it does about Björk.”

From Michael Lewis’s essay, Wall Street on the Tundra.

When you have good arguments, don’t use bad ones.

I ran across this post over the weekend, and found it to be disappointing, simply because the writer chose to spin and distort someone else’s words, rather than deal with the validity of his target’s assertions.  From the post:

Questioned yesterday at an AEI-sponsored discussion of green jobs, Smith admitted that her modeling actually shows that even with the climate policy in place:

“When you look out to 2050 there’s a doubling of the GDP.”

Wow. I’m not sure how “a doubling of GDP” amounts to the suicide-bombing induced economic meltdown the Chamber likes to portray. Was this a momentary aberration on Smith’s part?

I’ll answer this one.  A doubling of GDP over the next 40 years would correspond to an annual average growth rate of about 1.75%.  Over the past 40 years, the annual average growth rate has been about 2.93%.  Using that as a baseline, a doubling of GDP by 2050  would correspond to a complete failure– the cost of climate action would, on average, subtract almost 1.2 percentage point from annual growth, year after year.  

Fortunately, there’s good reason to believe that this wildly overestimates the actual cost.  So why not just refute Smith’s claims?  Doing so would avoid this:

Apparently not, since Smith went on to say that:

“The real issue isn’t whether we’re going to tank the economy. Its, is this something we’re willing to spend for? You’ve got to look at what are we getting for that and is it worth doing?”

In other words, all of Smith’s research and damning presentations aren’t about saying we shouldn’t do a climate policy, or that it will kill the economy. Rather, that we should make sure we get the best value we can.

Hmmm…I’d have to say that if the cost of getting the US to fight global warming is that we double the GDP, well, that sounds like a pretty good value to me.

No.  She’s saying that maybe action on climate change isn’t worth doing.  She’s probably wrong– but address that, don’t distort her words– and don’t try to spin a dismal growth rate as a positive, especially when you  have good reason to believe that the real cost of action on climate change would be far lower.

Dear Barry Ritholtz

Dear Barry,

Please confine yourself to talking about things you understand. Items I’d specifically suggest you exclude include the alleged mis-measurement of inflation, and any technical aspects of the measurement of GDP.

This morning, you suggested that TARP artificially increased GDP.

Unfortunately, you apparently did not read the passage you quoted in your post, or didn’t understand it– otherwise, you’d have attached some importance to the sentence beginning “The recording of a capital transfer in the GDP accounts does not affect GDP or net government saving”.

I assure you that the folks at the BEA are capable of distinguishing between production and transfers.  A hint to you would have been that the table 3.1 you cite is in Section 3, “Government Current Receipts and Expenditures”, not in Section 1, “Domestic Product and Income”.

Finally, with regard to this:

And there you have it: Pour billions of dollars into insolvent banks, goose the GDP for your troubles.

Ain’t DC Grand?

You are now advised to save your snide remarks for times when they are actually appropriate.  As it’s clear that you’re not able to distinguish those moments accurately, I recommend that simply keep those remarks to yourself.

Thank you.

President-Elect Obama’s Christmas Present to America: Science

“…promoting science isn’t just about providing resources.  It’s about protecting free and open inquiry.  It’s about ensuring that facts and evidence are never twisted or obscured by politics or ideology… because the highest purpose of science is the search for knowledge, truth, and a greater understanding of the world around us.”

Pseudo-socialism

From an article by Andrei Shleifer, emphasis mine:

There is, however, a class of cases where the argument against government ownership is not as straightforward. In these cases, cost reductions for which private suppliers have stronger incentives have potentially deleterious effects on the non-contractible quality. For example, private prisons might abuse prisoners by hiring cheaper guards and failing to train them, private hospitals may refuse to treat patients on whom hospitals generally lose money, private schools might substitute less effective teachers’ aides for more expensive teachers, and so on. In such situations, strong incentives may lead to inefficient outcomes or, put differently, the efficient producer might need to have soft incentives. Ironically, the government sometimes becomes the efficient producer precisely because its employees are not motivated to find ways of holding costs down.

 

The modern case for government ownership can often be seen from precisely this perspective. Advocates of such ownership want to have state prisons so as to avoid untrained low-wage guards, state water utilities to force investment in purification, and state car makers to make them invest in environmentally friendly products. As it turns out, however, this case for state ownership must be made carefully, and even in most of the situations where cost reduction has adverse consequences for non-contractible quality, private ownership is still superior.

While the failed auto bailout plan never constituted ownership per se, it certainly would have entailed the exercise of control rights.  After all, one group in Congress pushed for requirements that would have forced automakers to invest in environmentally-friendly products– exactly what Shleifer pointed out ten years ago, but without explicit ownership.  Another group pushed for major concessions on the part of the unions.  It should not be a surprise that these two groups were mutually exclusive and that their proposed requirements hewed closely to their ideological priors.  What few people have mentioned, though, is that government regulation is in part at fault for the current situation.  I’ll go into it in depth in a later post, but it shouldn’t be hard to see that the composition of the automakers’ fleets at the time of the oil price spike was in no small way defined by CAFE standards– and not in a way that was helpful to the American auto manufacturers.

This is just to say– it’s not at all clear that any restrictions on the conduct of business by the recipients of any bailout are in the best interests of either the firms receiving the funds or their creditors.  While the government has the right to impose restrictions on the money it lends, in doing so, it will more likely attempt to pander to the biases of particular constituencies than it will achieve any useful purpose.

A Note on Humility

As mentioned before, I recently performed some major maintenance on the site.  In the process, I found myself reading through a lot of my old posts.  I found some to be really valuable in certain ways, but others I’m frankly a little disappointed in myself to have written.  I offer two examples, each of which featured unnecessary swipes at people for whom I actually have quite a bit of respect.  While neither of these posts is particularly biting, especially by the often less-than-civil standards of the web, I don’t think that either properly expresses the respect I have for Messieurs Cowen and Krugman, nor do they display a level of humility in accordance with the possibility that I may well have been wrong (a probability that almost all people systematically underestimate).  I hope to do better in the future– let’s call this post a commitment strategy.

Happy Holidays!

Happy Holidays!

Migrating from Nucleus to WordPress

Apparently the consequence for neglecting a blog for too long and failing to diligently update its software is that spammers will hijack it and insert invisible links to male enhancement products. Not that I didn’t realize this before, but…

Anyway, I’ve moved to a different CMS and taken steps to at least harden it against bot attacks (paying particular attention to this security whitepaper from BlogSecurity).  One side-effect of this is that the site has a new (if not original) design. Another is that it’s lost all of its original comments. I’ve saved them so that I can restore them in the future if time permits, but they’re gone for now.

Below the fold: my notes on migrating from Nucleus to WordPress.

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Economics, Energy, and the Environment.