Saturday, February 21, 2009

The ghetto approach to the bailout

Dear Mr. Geithner,

...I have been observing your first few weeks in office. I figured you could use a little help.

I, personally, don’t have the expertise, so I thought I’d lean on a few acquaintances who have weathered several economic storms. ...

I’m talking about a group of financiers who spent years toiling in an economic sector where the government played no productive role — other than to impede progress with regulation and arbitrary use of the law. Not only did these successful entrepreneurs make beaucoup dollars in this climate, but they developed ways to actually make the government work to their own advantage. ...

Full disclosure: they had once been players in the underground economy, but they are now retired and spend most of their time in church. ...

They plan to get together weekly to discuss various aspects of the financial crisis, and of course your rescue plan. But I know you are in a wee bit of a rush, so I leave you with a little early advice.

The unanimous opinion among The Thugz was that you must base your work around a time-tested law of ghetto capitalism: losers must die in full view. What? This doesn’t make sense. O.K., well, let me explain. Your first mistake (more accurately, your predecessor’s error) was to mix the bad apples (banks) with the good (banks). By doing so, you forgot what makes capitalism so much fun: winners win at the losers’ expense, and everyone gets to watch and laugh. Sort of like public hangings, except reported on the financial pages. Otherwise, why read The Wall Street Journal?

The moral is: don’t ever take the joy of death away from the public. Because if you don’t see losers in pain, you begin to think the game is rigged. And we all know the game is fair, open, and transparent … yes?
--Sudhir Venkatesh, Freakonomics, on bailouts by thugz

Thursday, February 19, 2009

Step into the light

UBS, the largest bank in Switzerland, agreed on Wednesday to divulge the names of well-heeled Americans whom the authorities suspect of using offshore accounts at the bank to evade taxes.
--Lynnley Browning, NYT, on the end of an era. I wonder if there will be an Obama Cabinet members on the list...

Wednesday, February 18, 2009

Less change than we believed in

Even as it pulls back from harsh interrogations and other sharply debated aspects of George W. Bush’s “war on terrorism,” the Obama administration is quietly signaling continued support for other major elements of its predecessor’s approach to fighting Al Qaeda.

In little-noticed confirmation testimony recently, Obama nominees endorsed continuing the C.I.A.’s program of transferring prisoners to other countries without legal rights, and indefinitely detaining terrorism suspects without trials even if they were arrested far from a war zone. ...

Last Friday, The Wall Street Journal’s editorial page argued that “it seems that the Bush administration’s antiterror architecture is gaining new legitimacy” as Mr. Obama’s team embraces aspects of Mr. Bush’s counterterrorism approach.
--Charlie Savage, NYT, on more of the same

Harvard anthropologists and unenforced contracts

Anthropology Department Chair Theodore C. Bestor said that in recent years, while the department has provided coffee to its faculty and staff, drinkers were expected to leave 25 cents for each cup consumed. But Bestor said that the $2,000 the department spent on coffee brought in only $400 worth of quarters. The department will not continue to offer coffee this year.
--Elyssa Spitzer and Noah Rayman, Harvard Crimson, on honesty in the Harvard anthropology department

UPDATE:
Reader M.E.L. suggests a more charitable interpretation: the deficit is being driven by underpricing and wastage due to underconsumption, not failure to pay. Here's why I think that's not the case. If underpricing were the main driver, the department could have increased the price. If wastage were the main driver, the department could have simply decided that less coffee would be put out each day, even if that meant that on some days, they ran out. The fact that they eliminated coffee altogether suggests to me that people simply weren't paying for what they drank.

Tuesday, February 17, 2009

Not qualified

An interesting article by Gregory Clark on the post-crisis status of macroeconomics includes the following money quote:

Recently a group of economists affiliated with the Cato Institute ran an ad in The New York Times opposing the Obama’s [sic] stimulus plan. As chair of my department, I tried to arrange a public debate between one of the signatories and a proponent of fiscal stimulus — thinking that would be a timely and lively session. But the signatory, a fully accredited university macroeconomist, declined the opportunity for public defense of his position on the grounds that “all I know on this issue I got from Greg Mankiw’s blog; I really am not equipped to debate this with anyone.”

A fully accredited university macroeconomist is not equipped to debate the defining macroeconomic issue of our generation? Sad, but all too believable. Perhaps it’s time to rethink the necessary credentials.

--Justin Wolfers, Freakonomics blog, on my profession caught with its pants down


UPDATE:

Various bloggers have quoted this story as evidence for the sad state of the economics profession. My interpretation is more benign: The chairman of the department asks a professor to do something, the professor is busy and doesn't really want to do it, so he blows off the chairman with a tongue-in-cheek quip.

--Greg Mankiw on a more charitable interpretation

Tuesday, February 10, 2009

Where it's cold inside, not outside

Just over a year ago, I escaped from New York City and migrated to Los Angeles seeking sunshine and cheap rent. Happily, I found both. I was dismayed to learn, however, that even in the land of perpetual sunglasses, winter nights get quite chilly, with lows in the mid-40s. Don't get me wrong—I know Los Angeles isn't Michigan, and I'm certainly not asking for pity. Still, many older California homes lack heating, not to mention insulation, and unfortunately our collective narcissism fails to keep us warm.

Shivering on my couch one evening, I began to wonder whether space heaters, which have always struck me as rather dinky, could raise the temperature in my house above sweater-required range.
--Dan Crane, Slate, on the hidden truth about L.A.

Saturday, February 7, 2009

Jose Canseco, truth teller

A test that the slugger Alex Rodriguez took as part of Major League Baseball’s 2003 drug-testing program revealed the presence of performance-enhancing drugs, according to two people with knowledge of the results. ...

Just a year ago, Rodriguez was forced to confront accusations from José Canseco that he had used steroids. In Canseco’s second book on steroids in baseball, “Vindicated,” Canseco wrote that in the late 1990’s he introduced Rodriguez to a trainer he identified as Max who was a “fan of steroids.” Canseco said that Max, later told him that Rodriguez had “signed on.”

Rodriguez denied Canseco’s assertions.
--Michael S. Schmidt, NYT, on somebody whose credibility grows with each passing year

Thursday, February 5, 2009

I got your fiscal stimulus project here

You know, attacking Iran is a shovel-ready project. But I wouldn't recommend it.
--Robert Barro, The Atlantic Business Channel, on why government spending for spending's sake isn't always a good idea

High-maintenance parenthood

Parents today spend much more time with their children than they did 40 years ago. The sociologists Suzanne Bianchi, John Robinson and Melissa Milkie report that married mothers in 2000 spent 20 percent more time with their children than in 1965. Married fathers spent more than twice as much time.

A study by John Sandberg and Sandra Hofferth at the University of Michigan showed that by 1997 children in two-parent families were getting six more hours a week with Mom and four more hours with Dad than in 1981. And these increases occurred even as more mothers entered the labor force.

Couples found some of these extra hours by cutting back on time spent in activities where children were not present — when they were alone as a couple, visiting with friends and kin, or involved in clubs. But in the long run, shortchanging such adult-oriented activities for the sake of the children is not good for a marriage. Indeed, the researcher Ellen Galinsky has found that most children don’t want to spend as much time with their parents as parents assume; they just want their parents to be more relaxed when they are together.
--Stephanie Coontz, professor of history at Evergreen State College and director of research at the Council on Contemporary Families, on how life revolves around your kids more than it used to

Tuesday, February 3, 2009

No, YOU pay more, part 3

We don't pay taxes. Only the little people pay taxes.
--Leona Helmsley telling it like it is

President Obama’s choice for the position of chief White House performance officer [and former McKinsey Washington office head Nancy Killefer] has withdrawn from consideration for the post, an administration official said Tuesday, after coming forward with concerns about her tax returns.
--Jeff Zeleny, NYT

Tom Daschle has withdrawn his nomination to be Health and Human Services secretary. ...Daschle has been battling for his nomination since it was disclosed he failed to pay more than $120,000 in taxes.
--Associated Press

Who?

I just received a press release insisting that Harvard professor Maria Tatar "needs little introduction." Is that so? The Maria Tatar? I realized that I could add this hoary cliche to my list of least favorite language tics, e.g., "arguably," "going forward," and "I am humbled . . ."

Barack H. Obama needs no introduction. As for the rest of us, a word or two might help.
--Alex Beam, Boston Globe, on the Barack Obama exception

Kids these days

Stiles,

I'm afraid that I've been receiving dozens of complaints regarding the noise level of amorous activities taking place in the college. We might live in a concrete building, but it sometimes sounds like the walls are made of paper. So please be considerate about this, as it's really awkward for people to have to talk about this (or write about it in an email, as the case may be). Second, I've also been receiving complaints from people both in Stiles and Lawrance regarding sexiling, as people are being asked (or forced) to leave their bedrooms. This should not be happening on a regular basis, as both roommates are entitled to the space, and therefore this practice should be kept to a minimum. Also, a word about weed. Smoking marijuana is not only illegal and harmful to your own health (and academic success, much of the time), but also has an adverse impact on your neighbors, who might not be thrilled to be breathing in your life decisions, so if I continue to receive complaints about this, my response will be swift and merciless.

Cheers,

Dean
--E-mail sent by Ezra Stiles College Dean Jennifer Wood

Monday, February 2, 2009

Working at Wal-Mart

It started when I read Nickel and Dimed, in which Atlantic contributor Barbara Ehrenreich denounces the exploitation of minimum-wage workers in America. Somehow her book didn’t ring true to me, and I wondered to what extent a preconceived agenda might have biased her reporting. Hence my application for a job at the nearest Wal-Mart. ...

The job was as dull as I expected, but I was stunned to discover how benign the workplace turned out to be. ...

Several of my co-workers had relocated from other areas, where they had worked at other Wal-Marts. They wanted more of the same. Everyone agreed that Wal-Mart was preferable to the local Target, where the hourly pay was lower and workers were said to be treated with less respect (an opinion which I was unable to verify). Most of all, my coworkers wanted to avoid those “mom-and-pop” stores beloved by social commentators where, I was told, employees had to deal with quixotic management policies, while lacking the opportunities for promotion that exist in a large corporation.

Of course, I was not well paid, but Wal-Mart is hardly unique in paying a low hourly rate to entry-level retail staff. The answer to this problem seems elusive to Barbara Ehrenreich, yet is obvious to any teenager who enrolls in a vocational institute. In a labor market, employees are valued partly according to their abilities. To earn a higher hourly rate, you need to acquire some relevant skills.
--Charles Platt, Boing Boing, on his experiencing working for Wal-Mart

Sunday, February 1, 2009

No, YOU pay more, part 2

It is easy for the other side to advocate for higher taxes because — you know what? — they don’t pay them.
--Representative Eric Cantor of Virginia on yet another Obama appointee who didn't pay his taxes. See part 1.