Sep 30, 2012

Marginal Revolution University



Rather touchy-feely for some people from George Mason, don't you think? But I've started their first course and I'm optimistic.

Sep 29, 2012

Quote for the Day

Kevin Drum comes at my point from Thursday from a different angle:
So far at least, the conservative approach has been....different. Their patron saint going into the last few weeks of the 2012 campaign is Dean Chambers, a blogger who runs a site called UnSkewed Polls.Chambers does not dig deep into the numbers. He doesn't explain sample sizes and cell phone biases. He does just one thing: he reweights all the polls so they have the same proportion of Democrats and Republicans estimated by Rasmussen Reports, a pollster with a longstanding Republican house effect. Then he announces what the numbers are after his reweighting is done. Romney is a big winner every time... 
This is, to put it bluntly, nuts. And it suggests a fundamental difference between left and right, one that Chris Mooney wrote about earlier this year in The Republican Brain. Neither side has a monopoly on sloppy number crunching or wishful thinking, but liberals, faced with a reality they didn't like, ended up accepting reality and deciding to learn more about it. That's the Nate Silver approach. Conservatives, faced with a reality they didn't like, invented a conspiracy theory to explain it and then produced an alternate reality more to their liking. It's a crude and transparently glib reality, but that's apparently what the true believers want.

Sep 27, 2012

Why GMO Opponents Are Not the Left's Equivalent of Climate Deniers

Matt Yglesias was plugging this Slate piece on Twitter today, "GMO Opponents Are the Climate Skeptics of the Left:"
I used to think that nothing rivaled the misinformation spewed by climate change skeptics and spinmeisters.
Then I started paying attention to how anti-GMO campaigners have distorted the science on genetically modified foods. You might be surprised at how successful they've been and who has helped them pull it off.
I’ve found that fears are stoked by prominent environmental groups, supposed food-safety watchdogs, and influential food columnists; that dodgy science is laundered by well-respected scholars and propaganda is treated credulously by legendary journalists; and that progressive media outlets, which often decry the scurrilous rhetoric that warps the climate debate, serve up a comparable agitprop when it comes to GMOs.
In short, I’ve learned that the emotionally charged, politicized discourse on GMOs is mired in the kind of fever swamps that have polluted climate science beyond recognition.
I don't buy this frame. First, it's true that the recent study on genetically modified corn is, from what I can tell, total BS. However, the science on GMOs is not yet nearly as conclusive as the science around climate change, and probably never will be. From my cursory research it seems there is no conclusive evidence so far that GMOs have any negative effects. Yet when we're altering the genetic structure of our food, a bit of the precautionary principle is in order. It's only prudent to keep a wary eye on new varieties, hybrids, or species until they have been thoroughly tested. GMO denial, though it does deserve the name, is not yet on a par with A-list denial, like the evolution, climate change, and Holocaust varieties.

Secondly, most of the actual scientists and science writers are now on "the left," if only from having been hounded out of the right. If I may be so presumptuous as to include myself in this group, there is a strong sense that in order to maintain our credibility we must keep our own house as clean as possible. Witness Orac and Carl Zimmer come down like a ton of bricks on the study and the reporters who irresponsibly blasted it from the rooftops. If GMO denial becomes more prominent on the left, well-respected people like Zimmer or Neil Tyson will root it out ever more vigorously.

We've seen this before. It is unfortunately true that tribal biases make some on the left willing to credulously accept quackery like homeopathy or the bogus vaccine-autism connection, and there remains a small core of conspiracy theorists who darkly insinuate about how Big Pharma is buying off all the science bloggers and so forth. But that kind of quackery, especially genuinely destructive varieties like vaccine or AIDS denialism, have become totally unacceptable in mainstream left discourse. Scientists, science writers, and people who take the "reality-based" slogan seriously work hard to keep it that way.

Climate denial, on the other hand, is now mandatory on the right, up to and including their presidential candidate. The 2012 GOP platform mentioned climate change once, to downplay it. Of the dozens of 2010 Republican Senate candidates, only one (Mike Castle, who lost his primary) supported strong action on climate. It is unfortunate that Mark Bittman and Bill Moyers have flirted with bad science on this topic (and I'd wager that sort of thing will die down some as more lefty thought leaders start attacking GMO denialism), but it hardly compares to the lockstep Republican position.

So, to be generous, come back to me when 75% of Democratic congressional candidates and the President support banning GMOs in the teeth of the evidence. Then we can talk about an equivalence of denial.

Sep 26, 2012

New Ebook: The Elephant in the Room


That's the title of our ebook we just put out, available on Amazon and Barnes & Noble. It's made of several articles from the Monthly back in the Bush years. I formatted and typeset all the articles, which because I got to use the Atavist's tool was pretty easy—way easier than using LaTeX to do the Setwana grammar manual during back in South Africa. I honestly recommend it, as I was putting it together I read the articles several times, and there are some remarkably good ones in there. I particularly recommend "Why Conservatives Can't Govern," by Alan Wolfe, which is towards the end.

I learned a lot putting the book together and self-publishing it, but that will have to wait for another post.

Sep 25, 2012

Blog Post of the Week

This one comes to you via Noah Smith, who is perhaps my favorite blogger to have discovered this year. Hilarious.

In related economics humor:



UPDATE: I should also mention that on the YouTube page of the above video, there is that rarest of YouTube events, an apposite and funny comments section. I particularly liked this one.

Sep 23, 2012

Game Review: Black Mesa



I missed the original Half-Life when it came out way back in 1998, but I did play through it some years later. Black Mesa is a total conversion of Half-Life 2 back into the original—basically a remake of the original Half-Life with updated graphics and art.

It's good. Very well done. It's loyal to the original material, though not afraid to streamline here and there. The Source engine is now, what, eight years old? but it still looks amazingly good. I remember the original game dragged a bit in the middle, with so many endless tunnels and catwalks, and this one feels like it plays a bit more smoothly. The custom soundtrack is a bit loud sometimes, but sounds very professional and mostly appropriate. There is a small disappointment in that the final level is not available yet, but they say it's coming soon. Overall, it's extremely impressive.

Most interestingly, this is a totally volunteer production that is available for free (see above link), so long as you have some Source engine-based game (such as Half-Life 2) already installed. (And there are of course pirated stand-alone editions without this requirement.) I'm always pleased to see when these kinds of multi-year labors of love turn out this well.

Sep 22, 2012

Modern Monetary Theory

This is a pretty clear and intriguing explanation of modern monetary theory:

 

More thoughts on it later.

Sep 20, 2012

Audiobook Recommendation Bleg

Since I've been walking to and from work a lot recently, and it takes about an hour each way, I've been burning through episodes of This American Life and Radiolab. I'd like to get back into the audiobook zone, but since the reader makes all the difference I'd like to ask the hive mind if there are any particular favorites you've got.

Also, if you've got particularly good podcasts (aside from the above), that would be appreciated as well.

Sep 18, 2012

What Agency Hath Ben Bernanke?

So, per the new policy announcement from the Fed, there's been a mini-debate on the blogs about how this decision came about. As I've said before, Scott Sumner was perhaps the most important person in the economics blogosphere pushing the idea that the Fed should adopt this new policy, which in turn certainly helped push it out into the media and intellectual mainstream. Thus there has been a round of applause online for Sumner.

But Michael Woodford, a big-name economist who wrote a recent paper advocating a Sumnerian policy, isn't sharing credit in this interview with Dylan Matthews:
DM: One big advocate of an NGDP target, on his blog and elsewhere, has been Scott Sumner at Bentley University. Did he influence your thinking on this? 
MW: I don’t think it affected me. This theme is one that I had been pushing extensively even before the current crisis, both for reasons that relate to my general views on monetary policy, and the fact that I had been giving talks on responding to the zero lower bound in this general situation. So I already had a well worked out view of that kind. I don’t think it changed my mind about the importance of the particular themes.
(As an aside, file that in the "academics are assholes" folder. Woodford, god bless 'im, is the "world's preeminent monetary economist," but can't share even a smidgen of credit with some random blogger from Bentley University, even to just say "He certainly deserves some credit for properly understanding this issue and promoting it." High-status academics should be less afraid of this.)

Anyway, Kevin Drum tentatively agrees with Woodford:
I'm not so sure. Sumner has done heroic work, writing energetically about the power of Fed guidance for the past couple of years. There's no question that he's raised awareness of the topic, and he deserves kudos for that. At the same time, Ben Bernanke is one of the foremost monetary economists of our time, a guy who's written extensively about historical episodes where conventional monetary policy has lost traction. I honestly don't think he needed Scott Sumner to remind him of his options. 
I know this sounds a little churlish, and I apologize for that. But I suspect the real backstory is a lot more complicated — and probably a lot more interesting, too. After all, Bernanke didn't just have a sudden brainstorm yesterday. He already knew the expectations channel could be an important tool. What Bernanke really accomplished yesterday was to get near unanimity from his Fed colleagues to give the expectations channel a try, something I suspect he's been working on for a while.
Where you come down on this question depends on whether you view this decision as determined by reason or by politics. Clearly Kevin is right that Bernanke is one of the preeminent monetary economists of the age—more than that, in fact, a man who made his academic career criticizing Japan for doing what he himself did for much of the last four years; namely, dither halfheartedly while the economy grinds through a period of prolonged weakness. Sumner's case for NGDP targeting (pdf) is pretty straightforward; it seems absurd to think that Bernanke wouldn't have anticipated it.

But on the political side of things, there is a lot more to consider. A lot of very rich and powerful people loathe the idea of the Fed taking the kind of extremely aggressive action implied by NGDP targeting, for whatever reason. Sitting governors have threatened Bernanke with violence for doing much less. The House of Representatives is riddled with cranks and goldbugs who yowl about Zimbabwe every time gasoline or milk goes up a nickel. The Federal Reserve board is stocked almost entirely with bankers who frankly don't care about unemployment, or even like it a little (downward wage pressure!). Etc.

So in this story Sumner's big influence on elite thought leaders is very important. He sparked a movement which provided cover and ammunition for those that advocated action, and a countervailing pressure in the media against those who would otherwise be too dumb or lazy to see through the likes of Ron Paul or Paul Ryan.

Economists usually write these kind of power dynamics out of their models. But I say this is where Sumner deserves some big credit. Not for thinking up NGDP targeting himself exactly, but for getting it out into the discourse and pressing it relentlessly.

Sep 17, 2012

The New Place

Loyal readers have been asking for some pictures of the new place. So here we go:

It's a row house in northern DC, east of Rock Creek Park.
No idea when it was built, but if I had to guess I'd say the 40s-ish.

Here's the living room.

Here's an example of what the woodwork looks like. Pretty fancy!

And the kitchen. It is quite the relief to have a fire stove with plenty of space.

Here's about 60% of the bedroom. Pardon the mess, we're still moving in,
but it's big, with a whole separate living room space, a bathroom, two closets, and...

...a sun porch. Not sure what to do with this but it will be awesome.
Anyway, it is a huge relief to be out of that damn basement into a place with windows and no grody carpet that turns your feet black no matter how many times you wash it. I can also walk to work, which takes about an hour, perfect for an episode of Radiolab or This American life. Even though my half of the rent is slightly more, I think it will probably work out revenue-positive for me.

Overall, very very happy to be here. Especially in the coming months, when we buy a couple more pieces of furniture and get fully settled in, it's going to be great.

Sep 16, 2012

Why I Would Be Nervous About Buying a House

Matt Yglesias does a bit of armchair psychoanalysis about why people my age are reluctant to buy a house despite the fact it can be radically cheaper than renting:
In the real world, I doubt we'll see a surge in homeownership.
For starters, a lot of people are now locked out of credit markets. But what's more, anecdotally most of the creditworthy renters in their late-twenties or early-thirties who I know are now totally paranoid about buying a place. This is the number one cognitive malady of investors. If prices go up, people hear about lots of people making huge returns and want to buy into a market. If the market crashes, instead of hunting for bargains people find themeselves haunted by nightmare stories.
I think he is partially right here. People my age graduated from college into a hellish economy burnt to a cinder by a massive housing bubble—it's only natural for us to be a bit wary of that smoking crater. But there's more to the story.

First, to buy a house first you have to come up with a down payment. Especially in an expensive-ass market like DC, this will take years to save up. (At my wages, decades.) I'm not certain where I'll be next year, let alone in five. Second, and probably more importantly, buying a house isn't just an investment—it's a massive commitment. Where buying stocks back in late 2008-early 2009 (something at the time even I realized would have been likely to pay off) only involves the money you're putting up at the time, a house is a whopping great claim on 30 years or whatever of future wages.

In other words, it's not the investment aspect of buying a house that freaks me out, it's the leverage. Policy elites worldwide have not exactly impressed of late with their ability to properly manage effective demand, and while I think the Dodd-Frank financial reform is underrated, none of the root causes of the crisis—too-large banks, too-large and influential financial sector, and galloping income inequality—have been addressed. I would estimate the likelihood of another global financial cataclysm in the next ten years at ~50%, and in the next 30 years ~100%.

So you can understand how young folks these days might be just a little leery of making a hugely leveraged bet on anything, housing or otherwise. It's very easy for me to imagine taking on a $300,000 mortgage just in time for the next bubble to pop, causing another recession, where I'm stuck holding the bag with no job and no savings. No thanks.

(And somewhat more idiosyncratically, I find the whole investment mindset—High Capitalism as practiced today—vaguely distasteful. Wall Street, banking, finance, investment, and "consulting" seem to me largely the province of thieves in suits, and I want no part of it if at all possible. But that's just me.)

Sep 13, 2012

On the New Fed Policy Announcement

Matt Yglesias has a good summary of what's happening and what it means:
QE3 is here, and it's pretty big. They've announced a form of "open-ended" quantitative easing in which the central bank commits to "purchasing additional agency mortgage-backed securities at a pace of $40 billion per month." 
But there's something much much much more important here than the numbers. It's the guidance. It's not the Evans Plan, and it's not nominal GDP level targeting, but it's good, and it's right here (emphasis added): 
To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.
(You know shit got real when Yglesias uses bold and italics.)

First let me say that I think this is great news, and I think it's likely to work, if slowly. And let me also say that calling this "quantitative easing" seems a bit strange. Previous rounds of this policy were called "quantitative" because they specified a particular dollar value of assets the fed was going to purchase. This is open-ended, meaning the Fed will allegedly just keep buying and buying until the labor market recovers, so there's no telling exactly how much that could be. And let me further say that this represents a big victory for the alliance of academics, econ bloggers (especially Scott Sumner), and associated journalists, who have been howling about this for years. Other fields should take note.

Tyler Cowen is on largely the same page: "I say the rate of price inflation is going up. I see this as a free lunch, and I am quite curious to find out just how big or small of a free lunch it is going to be."

I am also curious. I've been reading some stuff recently (here's a good example) questioning the mechanical efficacy of quantitative easing (QE) as it has been practiced. The issue is how QE happens—the Fed buys a bunch of financial assets, usually asset-backed securities or government debt, with newly created money. In the broadest sense, the idea is to inject money into the economy. The above paper makes the point that while years ago, the financial sector was built on a reserve of central bank deposits, these days a lot more is built on collateral—the same stuff that the Fed buys in QE operations. Some collateral is good, some bad, and since the Fed is cautious, they only want to buy the best stuff, and so QE could actually cause a liquidity shortage as they suck up all the best collateral.

On the other hand, if the important thing is the expectations channel, then this sort of effect shouldn't matter much. If everyone adjust their economic expectations up at the same time, then this could quickly become a self-fulfilling prophecy. We'll find out which soon enough, hopefully.

Sep 11, 2012

More Wedding Pictures

Just a few selections from the gazillions of shots:

Here's the newlyweds with my new brother's son.


Here's the new in-laws.

Here's my family.

Awwwwww...
Very pretty, very short and very, very moving ceremony. Proud to have suddenly expanded the size of my family by ~3000%.

Sep 10, 2012

Institution Building in the Teeth of an Incorrect Orthodoxy

Noah Smith has I think a bit of misguided post on Steve Keen, alleging that he's attempting a "purge." Some background: Keen, an Australian economist who's been a longtime proponent of heterodox economics and an early predictor (~2005) predictor of a housing bubble-based recession, has an ongoing spat with Brad Delong, a Berkeley economist. Keen alleges that Delong and others have attempted to appropriate the mantle of non-neoliberal economics without giving proper credit to Keen and others who called the crisis early (see here for some background). Keen's post (from June, mind you) is a bit unfortunate, but try to see things from his point of view:

 

One of the ways orthodoxy is enforced is by social pressure. Often, especially when vast amounts of money are at stake, the pressure is personal and vicious. Listen to Keen's voice catch when talking about those times. For years he was alone in the wilderness, professionally scorned and hated, beset on all sides by well-paid attack dogs. Personally, I find it all to easy to imagine myself in that place. (What nerd hasn't been socially stigmatized in some way?) And yet, he called the biggest economic event of the last 80 years.

Academics is more than most jobs about status and recognition. Brad Delong is an economist who publishes papers with, for example, a close adviser of the most powerful person alive. Is it too much to ask for him to throw Keen a bone when writing about economists who at least have their head on straight, instead of writing a snotty, condescending post where he thinks up a larger list only to leave Keen out of it again?

Anyway, this is not really to side with Delong over Keen or vice versa on the merits. It's more a plea to find reserves of kindness, empathy, gentleness and generosity. The budding, squabbling bunch of heterodox economists need to recognize their brethren and make peace. Smith is right that everyone needs to concentrate on winning the revolution. But you don't do that by taking sides in this kind of squabble. Save the scorn for people who really earn it (goldbugs, Randroids, Jamie Dimon, etc).

Should Keen not call Delong nasty names? Yes. Should Delong give Keen at least a modicum of credit? Yes. (And Smith is right, by the way, that Delong also deserves some credit for owning some of his failures.) Going forward, I like this summary from Andrew Lainton:
There are some rather intemperate characters in this debate though a number of them also have the redeeming feature of intellectual curiosity and flexibility. What many on the ‘heterodox’ side would really like to see is an engagement on the theoretical rather than political, issues and a reading of the texts in question. Going for the ball and not the man. In that regard the willingness of some renowned economic bloggers, such as David Glasner, Marc Thoma and Simon Wren Lewis, to begin debating and understanding the ideas in question.
Read on for some interesting points.

Sep 7, 2012

Some Reporting I Did

[I'm interested to know what people think of this. I felt a little strange writing it. It's originally posted here.]

“Twenty years from now, the next Barack Obama will have come through our program,” says Noah Doyle, a board member of the New Leaders Council, an organization that is building a foundation of progressive leaders throughout the country.

The NLC is strikingly different from the typical DC think tank or policy shop focused on electioneering or fighting in the cable news trenches. For the last six years, its main operation is to run a kind of mini-graduate school in cities across the country for up-and-coming progressive political entrepreneurs, or “Fellows,” as they call them. In five weekends over five months, a class of around twenty fellows take classes in things like business, media and communications, campaign management, or political strategy. These fellows then serve as a network of communication and support as they move into their careers throughout the country.

And the NLC’s goal is not just to build a stable of potential congressional candidates—it has its eyes on every potential position of influence nationwide: city councils and school boards, boards and chairmanships of corporations, and of course state and national elected offices. The idea is to “infiltrate and take over all the levers of power—public and private, national and local,” says the NLC’s Executive Director Mark Riddle.

Mark Walsh, the NLC’s chairman and an early backer, came on board for precisely this long-term aspect. “The NLC is not about quick fixes, or winning the news cycle,” he says. “It’s a 30-year program.”

In interviews across the NLC structure, from Riddle to graduated fellows, a common theme emerged: in the years after liberalism’s high mark in the 1960s, the left has been losing the muscle and sinew of a political movement, especially with the precipitous decline of private-sector unions. Where conservatives have nurtured their grassroots groups, pundits, policy shops, and losing politicians—to keep their bench deep, and prepare for the next grab at power—the left failed to keep up.

This is a common argument on the left, and the NLC is not the only organization to make it. A bumper crop of left-leaning organizations are also bearing fruit, particularly on the media side. (The Drudge-Fox-Limbaugh machine has real trouble working CNN like they used to.) But the NLC is planting seeds where few other, higher-profile organizations bother to tread.

“Before joining the NLC I was the type of person who thought I was ‘not into politics,’” says fellow Roxanna Elden, a teacher and author. “But these days, being a teacher is political, whether we want it to be or not.” She describes the training as “exhausting, but so, so worth it. I learned the things I most hoped to learn…[and] things I didn’t even know I needed to know, like how a city budget works, how political campaigns work, and how to apply the principles of design when addressing society’s problems.”

To maintain their dispersed character, the NLC deliberately tries to avoid spending too much time and effort inside the DC power structure. (It does maintain ties with friendly think tanks like the Roosevelt Institute, but avoids Beltway mudfights.) Though it started in the usual spots—New York City and San Francisco—it has since opened chapters in the likes of Des Moines and Missoula. It has no tiny cabal of hugely wealthy backers—every chapter is self-sustaining through its own fundraising. Its budget is lean—even Riddle works pro bono. The result, so far, is chapters in twenty cities and 400 graduates for next spring.

The NLC isn’t only working with teachers and school board members, of course. It has also attracted the likes of Michael Thakur, Harvard alum both from undergrad and law school, and former editor of the Harvard Law Review. He now works as a government attorney in Miami.

In addition to their fellowship program, the NLC holds a variety of events. One of the biggest is coming up soon at the Democratic convention in Charlotte. This happens at every convention, and it’s mostly an excuse for alumni to get together and catch up. Doyle describes it as “a big NLC-wide reunion in a dive bar.” Also, later this year the organization will release an annual list of “40-under-40,” young up-and-coming progressive leaders. Previous recipients have included the MSNBC weekend host Melissa Harris-Perry, the military gay rights activist Dan Choi, and Eboo Patel, a writer and Executive Director of the Interfaith Youth Core, a religious tolerance organization.

After their first few years planting seeds, the NLC is growing fast—fourteen additional chapters are in the pipeline for next year alone. What’s more, the word is out: last year saw 4000 applications for 400 spots, “which was an eye-opener for jaded, cynical campaign types,” says Riddle.

“In the near future,” he adds, “we’d like to have chapters in every state, and 1000+ graduates per year.”

And after that? Well, you know who also used to be editor of the Harvard Law Review

Sep 6, 2012

The Wedding

Here's my sister and father walking down the aisle.


Nice hat, eh?

Sep 5, 2012

The Aftermath

I'd say this was the biggest party ever at the homestead.


Sep 2, 2012

Programming Note

Sorry for the dead air here over the last few days. I've been swamped with moving our stuff into a new place last weekend, moving out of my old place last week, and coming to my sister's wedding this weekend, back in Colorado. By this time Wednesday I should be back in business.