Friday, July 31, 2009

When government is the monopsonist

The one industry where the government is the sole buyer, defense, does not have an encouraging record of cost-effective, innovative procurement.
--Megan McArdle, Atlantic Monthly, on single-payer health insurance

The most popular boring sport

Swimming has long relied on flimflam to inflate interest. The whole structure of a swim meet is an exercise in creative accounting: No other sport gives out so many separate medals for doing minor variations on the same thing. In Beijing, Phelps got one gold medal for swimming 200 meters in 1:42.96. Then he got another gold medal for swimming 200 meters in 1:52.03. Then he got yet another gold medal for swimming 200 meters in 1:54.23. Freestyle, butterfly, freestyle-butterfly medley—different strokes for the same old folks. It was as if, having sprinted 100 meters for the gold, Usain Bolt could have followed up by winning the 100-meter skip, the 100-meter bunny hop, and the 100-meter moonwalk.

The more mildly different ways there are to race, the more mildly different ways there are to break records. "We're the most popular boring sport in the world and so we need and only survive on records," Austrian swimmer Markus Rogan said the other day. "So we're going to need whatever we can do to keep doing records."
--Tom Scocca, Slate, on record inflation

Thursday, July 30, 2009

Bob Shiller on the Daily Show

The Daily Show With Jon StewartMon - Thurs 11p / 10c
Home Crisis Investigation
Daily Show
Full Episodes
Political HumorJoke of the Day

HT: Greg Mankiw

Confucian values?

The household savings rate in South Korea will have plummeted from a world-beating 25.2 percent in 1988 to a projected world low of 3.2 percent in 2010, according to the OECD. ... Meanwhile, household debt as a percentage of individual disposable income has risen to 140 percent, higher than in the United States (136 percent), according to the Bank of Korea. ...

South Koreans work more, sleep less and kill themselves at a higher rate than citizens of any other developed country, according to the OECD. They rank first in time spent online and second to last in spending on recreation, and the per capita birthrate scrapes the bottom of world rankings. By 2050, South Korea will be the most aged society in the world, narrowly edging out Japan, according to the OECD. ...

An obsessive pursuit of educational achievement, it seems, is one of the driving forces behind the low savings rate. About 80 percent of all students from elementary age to high school attend after-school cram courses. About 6 percent of the country's gross domestic product is spent on education, more than double the percentage of spending in the United States, Japan or Britain.
--Blaine Harden, Washington Post, on "a society under extraordinary stress." HT: Marginal Revolution

Wednesday, July 29, 2009

Euphemism of the day

I am one, sir, that comes to tell you your daughter and the Moor are now making the beast with two backs.
--Iago in Shakespeare's Othello

Tuesday, July 28, 2009

Self-induced gluten intolerance

The health benefits of a gluten-free diet might also be a kind of self-fulfilling prophecy. It's well-known that our digestive system adapts its secretions (rather quickly) to whatever we're eating. ... Now imagine that you've cut out gluten from your diet completely—that means no bread, no cereal, no wheat whatsoever. Chances are you'll have reduced your total intake of carbs, and thus the amount of α-amylase in your gut. In other words, the mere fact of being on a gluten-free diet could make you more sensitive to grains and cereals—which would only reinforce your conviction that you're gluten-intolerant. Slip up for even one meal, and you'll pay the price with indigestion.
--Daniel Engber, Slate, on why gluten intolerance might be on the rise

Managers vs. makers

There are two types of schedule, which I'll call the manager's schedule and the maker's schedule. The manager's schedule is for bosses. It's embodied in the traditional appointment book, with each day cut into one hour intervals. You can block off several hours for a single task if you need to, but by default you change what you're doing every hour.

When you use time that way, it's merely a practical problem to meet with someone. Find an open slot in your schedule, book them, and you're done.

But there's another way of using time that's common among people who make things, like programmers and writers. They generally prefer to use time in units of half a day at least. You can't write or program well in units of an hour. That's barely enough time to get started.

When you're operating on the maker's schedule, meetings are a disaster. A single meeting can blow a whole afternoon, by breaking it into two pieces each too small to do anything hard in. ...

Each type of schedule works fine by itself. Problems arise when they meet. Since most powerful people operate on the manager's schedule, they're in a position to make everyone resonate at their frequency if they want to. But the smarter ones restrain themselves, if they know that some of the people working for them need long chunks of time to work in. ...

How do we manage to advise so many startups on the maker's schedule? By using the classic device for simulating the manager's schedule within the maker's: office hours. ... Because they come at the end of my day these meetings are never an interruption.
--Paul Graham on why professors should avoid meetings

Sunday, July 26, 2009

In event of moon disaster

Fate has ordained that the men who went to the moon to explore in peace will stay on the moon to rest in peace.

These brave men, Neil Armstrong and Edwin Aldrin, know that there is no hope for their recovery. But they also know that there is hope for mankind in their sacrifice.

These two men are laying down their lives in mankind's most noble goal: the search for truth and understanding.

They will be mourned by their families and friends; they will be mourned by the nation; they will be mourned by the people of the world; they will be mourned by a Mother Earth that dared send two of her sons into the unknown.

In their exploration, they stirred the people of the world to feel as one; in their sacrifice, they bind more tightly the brotherhood of man.

In ancient days, men looked at the stars and saw their heroes in the constellations. In modern times, we do much the same, but our heroes are epic men of flesh and blood.

Others will follow, and surely find their way home. Man's search will not be denied. But these men were the first, and they will remain the foremost in our hearts.

For every human being who looks up at the moon in the nights to come will know that there is some corner of another world that is forever mankind.
--Speech written by William Safire for Richard Nixon in case the Apollo 11 astronauts were stranded on the moon. HT: Amy Davidson, New Yorker

Thursday, July 23, 2009

Self-serving test-optional policies

When colleges announce they’re making entrance exams optional, they publicly embrace a holistic stance: standardized tests are incomplete scorecards on how a student will fare in college; they favor families who can afford test prep, while minority students tend not to do well.

Cynics cite additional motives. ...

The crush of applications makes colleges look more selective, and because low-scorers are less likely to share their results with admissions officers, score averages can be artificially higher. That’s information students scrutinize when deciding where to apply. Applicants should also know that some colleges continue to use standardized test scores to divide up merit aid.
--Lynn O'Shaughnessy, NYT, on truncated distributions

Tuesday, July 21, 2009

Barack, make 'em scared!

Machiavelli said a leader should be feared as well as loved. Obama is loved by the Democratic chairmen, but he is not feared. On health care, Obama has emphasized cost control. The chairmen flouted his priorities because they don’t fear him. On cap and trade, Obama campaigned against giving away pollution offsets. The chairmen wrote their bill to do precisely that because they don’t fear him. On taxes, Obama promised that top tax rates would not go above Clinton-era levels. The chairmen flouted that promise because they don’t fear him.
--David Brooks, NYT, on Obama's need to flex some muscle

Monday, July 20, 2009

An advantage of having a celebrity governor

The governor [Schwarzenegger] also said, on his Twitter feed: “We’ll actually be having a CA Garage Sale at the end of Aug to auction cars and office supplies.” He will sign some of the items to increase their value.
--Jennifer Steinhauer, NYT, on how a celebrity governor can increase state revenues

Real-life X-men ice

Good stuff happens at 0:56 mark

Galápagos phones

At first glance, Japanese cellphones are a gadget lover’s dream: ready for Internet and e-mail, they double as credit cards, boarding passes and even body-fat calculators.

But it is hard to find anyone in Chicago or London using a Japanese phone like a Panasonic, a Sharp or an NEC. ...

The Japanese have a name for their problem: Galápagos syndrome.

Japan’s cellphones are like the endemic species that Darwin encountered on the Galápagos Islands — fantastically evolved and divergent from their mainland cousins — explains Takeshi Natsuno, who teaches at Tokyo’s Keio University.
--Hiroko Tabuchi, NYT, on evolutionary forces in cellphones

Friday, July 17, 2009

Agency problems cut you either way

[A] commission appointed by the [Massachusetts] governor wants to move in a new direction: capitation. That's when the state pays providers a fixed amount for each person (in the plan, or in their practice) and lets the providers figure out how to treat them. ...

I don't like a system where the doctor has a financial incentive to give me unnecessary tests. But I'm even less fond of the idea of giving her financial incentives not to give me necessary ones.

I predict this lasts about half a news cycle before the public outrage overwhelms state legislators, who start screaming for the heads of the traitorous, heartless bastards who suggested it.
--Megan McArdle, Atlantic Monthly, on why it's hard to move away from fee-for-service healthcare

Tuesday, July 14, 2009

Better Californian government through competition

By now, almost everyone agrees that California government is seriously dysfunctional. The state suffers from a grave fiscal crisis, extraordinarily high taxation (which, however, is still not enough to finance the state's exorbitant spending), overregulation, and numerous other problems. ...

Steven Greenhut suggests that California's problems are structural, not merely the result of bad decisions by individual politicians. He argues that the Golden State's people would be better off if it was broken up into three or four separate smaller states. ...

Normally, the ability to "vote with your feet" is one of the strongest checks on dysfunctional state policies, a point John McGinnis and I discussed in this article. If a state government has poor economic policies, excessive taxes, or bad public services, taxpayers will tend to migrate elsewhere, putting pressure on the state to clean up its act. ...

California has been largely insulated from foot-voting pressure because of its huge size, and the way in which it monopolizes most of the desirable parts of the US West Coast. Because of these geographic advantages, the cost of leaving California is often much higher than that of leaving most other states. As a result, Californians have had to put up with more abuse than most other state governments could get away with.

If California were divided into three or four smaller states, the cost of exit would be lower, and the new states would have strong incentives to compete with each other for people and businesses. Foot-voting would be a far more viable option.
--Ilya Somin, Volokh Conspiracy, on when politicians encounter an inelastic demand curve

Monotonous but sustainable

Potatoes contain nearly all important vitamins and minerals, they support life better than any other crop when eaten as the sole article of diet. Humans can subsist healthily on a diet of potatoes, supplemented with only milk or butter, which contain the two vitamins not provided for by potatoes, vitamins A and D. This, in fact, was the typical Irish diet, which although monotonous, was able to provide sufficient amounts of all vitamins and nutrients.
--Nathan Nunn and Nancy Qian, "The Potato's Contribution to Population and Urbanization: Evidence from a Historical Experiment," on what to eat if you're really poor. HT: Chris Blattman

Monday, July 13, 2009

Why is health care spending rising?

Meanwhile, The Enterprise blog has one of the more fascinating health care charts I've seen in a while:

Veterinary spending is rising just about in line with human medical spending. Kudoes to AEI for publishing a graph that seriously undercuts one of the major conservative arguments about health care: that the main problem is consumers who don't bear their own costs. Veterinary spending is subject to few of the perversities that either left or right suppose to be the main problems afflicting health care spending. Consumers pay full freight most of the time. They are price sensitive, and will let the patient die if keeping him alive costs too much. There is no adverse selection. There is no free riding on mandatory care. Government regulation is minimal. Malpractice suits are minimal, and have low payouts. So why is vet spending rising along with human spending?

Two reasons, presumably: technological change and rising income. As we get wealthier, we spend more of our income on former luxuries, like keeping our pets healthy--nineteenth century veterinary care for sick cats consisted of a sack and some stones to weight it down with. And improvements in health care technology are giving us more things to spend that money on.
--Megan McArdle, Atlantic Monthly, on a more perfect market

Tuesday, July 7, 2009

Socialism all over again

But consider the following common arguments:
  • National health care will be cheaper because we will reduce administrative overhead
  • National health care will reduce wasteful competition in the form of me-too drugs
  • National health care will reduce wasteful competition in the form of advertising and other marketing expenses
  • National health care will allow us to rationally distribute care to where it does the most good rather than the current messy, wasteful hodge-podge
  • National health care will use resources for production instead of profits
  • National health care will achieve economies of scale in purchasing and record-keeping
  • People will not overuse free goods because there are hard limits to desired consumption
These were all arguments advanced in favor of socialism. ... Economists who would be ashamed to make these sorts of arguments about Proctor and Gamble or the used car market suddenly start parroting these things as if they hadn't been thoroughly discredited by the last seventy years. ...

My critics will want me to explain why, then, Europe can do it cheaper. ... We're still driving quite a bit of product innovation. Our messy, organic, wasteful, unfair, irrational system allows experimentation, and they cherry pick the best results. If we stopped doing this, their system would stop looking so good.
--Megan McArdle, Atlantic Monthly, on political arguments in the thrall of the ideas of some long-dead economies