Friday, August 28, 2009

Violence, the Multiverse, and Everything

Steven Pinker argues that violence has decreased over time. Leaving aside the issue of how this fits with his radical evolutionary psychology views; I'm inclined to agree with him on balance. But using data from the last century to show that doesn't work--because of selection bias.

The world avoided nuclear catastrophe in the last sixty years by a slim margin. So even if the Cold War reduced the murder count, it did so by ramping up the risk of human extinction.

But now consider the multiverse. The only logical way to square the fact that the universe is random--particles arbitrarily pick quantum positions--and also deterministic is to assume that every time a "random" event comes up, the universe splits and all possible events happen in different dimensions. Sure, we can't observe those other worlds, but the resulting theory is more elegant than the alternatives. Just believe this for a second.

To see how this fits in with nuclear war, consider a device which would blow up the entire world with probability 9/10. In nine worlds, everything is gone. In one world, cognitive scientists rave about how murder is so rare. In order to figure out the real decline in violence, we'd have to average across all worlds in which the Allied Powers win WWII with a nuclear bomb. Many of those worlds would destroy humanity entirely; but we are unlikely to be born in those worlds. The mere act of observing self-selects you into certain states; namely, those in which conscious, advanced life is possible, etc. etc. And 'bad events' like the use of nuclear weapons are much rarer in those worlds.

Put another way, it's not surprising that you're alive now, in the most populous period in human history. If you think that the act of "being a conscious human observer" is about random across all people, it's much more likely that you live in the 21st century than any previous century.

Somewhat surprisingly, observing that one is alive now makes it less likely that humanity will survive very long. If humanity were to survive for thousands of years, and spin off untold trillions of souls, it would be unimaginably unlikely to be born at a time when the population was (comparatively) trifflingly small. It's possible, though, that this could happen. Plato, if he made the same calculation, would conclude that humanity would be extremely unlikely to grow to its present level. But we're not Plato; and our best estimate of the duration of humanity is not very long.

Ted Kennedy

I don't wish to speak ill of the dead, and certainly Ted Kennedy did many good things (immigration reform, deregulation, No Child Left Behind, etc.).

But it's a little gratingto see someone so clearly steeped in the priviledge of birth being hailed for heroic public service. Politicians come in many flavors, but the love of power, prestige, and control unites them. They ought less be seen as "public servants," and more as venal plunderers, on par with bankers. Look how shabbily we treat CEOs, who arguably do good on occasion. As a group, I think we realize politicians are shifty, at best. But every individual politician seemingly deserves praise for their charity in spending our money.

Lots of people complain about income inequality, but what Kennedy represents is far worse--a power born of dynastic legacy, which can use wealth and status to do anything from escaping murder charges and DUIs, to stopping a wind farm which disturbs the view from one's cabin. The Jeffersonian ideal is predicated not on the view that there can't be rich people; but that extremes in wealth should never alter basic social relations. That doesn't mean he should be villified, but it's a reason to tone down the media hagiography of him and his brother--who was, after all, a mediocre President.

Monday, August 24, 2009

How Aware is Tarantino?

I saw Inglourious Basterds the other week (spoiler alert). It was a good movie, but the big gripe that people have is that it uncritically supports barbaric violence against Nazis.

Of course, morally unambiguous, unreflective violence is nothing new, especially not in Tarantino films. But in this movie, Tarantino actually provides a little reflection.

In one of the final scenes of the movie, we see a crowd of Nazis cheering at a war film celebrating the exploits of a Nazi soldier. Then, the Basterds burst into the scene and start machine-gunning the movie goers (many of them women), as the theater is set on fire. In explicit Holocaust imagery, the doors out are locked shut. Naturally, the entire theater I was in goes wild cheering.

This might be the first time I've seen any reflection or commentary on violence from a Tarantino film. While he doesn't go so far as to equate Nazis with the suffering in the Holocaust, it's very unsettling as a viewer. You're essentially asked to play a role--that of the cheering spectator--that just a second ago you denounced Nazis for playing. It's something like being in a being in a Stanley Milgram experiment, and actually makes a pretty powerful point against hyper-nationalism.

Of course, the entire rest of the movie is a commentary against moralizing; because Nazis are, well, Nazis, wanton cruelty is outright encouraged. So it's not a terribly coherent critique, but surprising nonetheless to see in a Tarantino flick. Of I could be making this all up and assigning greater awareness to Tarantino than he deserves; certainly he's shown little of that in the interviews for the movie I've seen (though I've always assumed that much of his public persona was for showmanship purposes).

Tuesday, August 18, 2009

What Reihan Said

I intend to write more about Singapore's approach to healthcare in the near future. I'll just make a simple observation: many on the left emphasize the virtues of the National Health Service, most strikingly the fact that health expenditures in the UK amount to roughly 8.4 percent of GDP, slightly more than half of what the public and private sectors spend on health in the United States. But Singapore, which has a system built around catastrophic insurance coverage and health savings accounts, spends less than 4 percent of GDP. And according to the World Health Organization, Singapore has the world's sixth best healthcare system, miles ahead of Britain or the United States. Rowan Callick wrote a brief and useful summary of the virtues of Singapore's approach in The American last spring.

To grossly oversimplify, Singapore relies on a mix of mandatory savings and universal catastrophic coverage. David Goldhill has proposed something similar for the U.S. in The Atlantic. So has Brad DeLong. Ross and I backed a similar approach in Grand New Party. And Ron Bailey made the case in Reason back in 2004.[link]

Sunday, August 16, 2009


Krugman is very disappointed about the state of American democracy:

A couple of years ago there was a debate I was sorry I did not see, between Alice Rivlin and Paul Krugman. Alice Rivlin thought that organizations like the Brookings Institution at which she worked had a role: you could design and argue for good policies, convince senators and influential House members of their value for the public interest, and then build a bipartisan coalition from the center out--either to the left or to the right, depending on which ideological extreme's price for coming on board to support sensible policies that worked was least obnoxious.

Paul Krugman said no: that that strategy worked only as long as the ideological lines of party cleavage were blurred, which would be the case only as long as there were (a) a larger number of relatively liberal northerners who voted Republican because Lincoln freed the slaves, and (b) a large number of relatively conservative southerners who voted Democratic because Lincoln freed the slaves. Once the parties realigned, zero-sum partisan loyalties would dominate: Republicans like Hatch would think hard whether it was more important to vote for a bill because it was good for America or vote against it because then you could paint the Democratic president as a failure and pick up seats in the next election, and make their decision. You had, Paul said (I think: I wasn't there) to pick your party and then work hard to make its policies the best policies possible because "bipartisanship" was no longer a viable legislative strategy.

Well, this is basically how parliamentary systems work--the dominant party does whatever it wants, and the other parties remain in perpetual (loyal) opposition. Occasionally, if there are big divides in the leading party, the Prime Minister can reach out to willing opposition members (as Blair did over the Iraq War). But antagonism is the rule. These governments seem to work well enough.

We might as well admit that partisan fights are a reality, and bipartisanship, whatever its theoretical merits, is unlikely to endure in American politics. That's fine. But it would be useful to adopt some other tactics from parliamentary systems--like the Question and Answer time in the House of Commons--that force politicians to talk to each other, instead of relying on the media to intermediate.

Saturday, August 15, 2009

Health Care and Orszagism

You're probably tired of hearing about health care at this point, but there's an excellent article on the subject at the Atlantic:
A wasteful insurance system; distorted incentives; a bias toward treatment; moral hazard; hidden costs and a lack of transparency; curbed competition; service to the wrong customer. These are the problems at the foundation of our health-care system, resulting in a slow rot and requiring more and more money just to keep the system from collapsing.
Health care doesn't work because it's not a market, and lacks the prices, cost-cutting, and consumer focus that dominate most markets (and even the more consumer-directed parts of the healthcare system, like elective surgery or vet care).

So how do the reforms being considered in Congress stack up? These are dominated by the "Orszag" principle--the idea that technocrats, on their own, can use the powers of modern statistics to identify and trim fat, at minimal political cost. This way, we can afford to give everyone full health coverage.

Maybe. But even if the entire cost-cutting brigade knew how to do their job, it's not clear that they could combat the various established interests and Congress and actually do so. People like to talk about cost cutting in theory, but become much more wary in practice. The "death panels" meme is obviously over the top; but they raise a point that any government plan will have to face--at what point do you say no to treatment?

Nor is it clear that government-mandated cost cutting could work even if it were politically possible. In the past, when Medicare has cut reimbursements, doctors responded by increasing the number of procedures and raising overall costs. As long as the entire healthcare system remains a bureaucratic mire, it's not clear how further government meddling with solve the problem.

So what should we do? Whenever faced with any public policy problem, my default response is to ask: What would Mitch Daniels do? He's expanded Health Savings Accounts to cut costs while expanding catastrophic coverage.

Thursday, August 13, 2009

Why Care about the Uninsured?

You hear a lot of comments like this one on healthcare:

But the British system is extremely cheap. Uncommonly cheap. Weirdly cheap. About 41 cents for every dollar we spend per capita cheap.

Now it’s definitely true that to an extent the Brits are getting what they pay for here. If you look it up, the research shows that British health care is not especially effective by international standards. That said, the difference is subtle enough that you actually do need to look up the research. It’s not as if people in the UK are just dropping dead of the plague all the time. To the casual observer, it all looks about fine, and the 59 cents on the dollar they’re saving is quite a lot. The fact of the matter is that health care is not an especially important determinant of health outcomes. Genetic predisposition is hugely important, and we can’t do anything about it. The biggest issue is “behavioral patterns” which are hard to change. But even “social circumstances” and “environmental exposure” (which is really a kind of social circumstance) swamp health care as a factor.

So--the British NHS delivers substandard care, but at a much cheaper price. But, since health services don't actually matter that much for "health", we could just cut all sorts of costs, and spend the rest of the money on various paternalistic method to stop people from injuring themselves.

But if you take this data seriously, it's hard to get worked up over the plight of the uninsured. They don't get access to healthcare; but healthcare doesn't matter anyway, and forcing them to pay for insurance may make them worse off. In fact, there's no reason to stop at British-level care. Britain could probably cut bills by half, and not lose too much in terms of life expectancy. What's the problem with that?

The standard liberal rationale for reform is a little bizarre. On one hand, we need to cover the uninsured, because that's a moral necessity. But we also need to cut costs, because medical spending is wasteful and unhelpful--but then why do we want to give it to everyone?

The right liberal approach, I think, would be to expand the sorts of consumer directed care plans that expose people to the costs of their behavior and help generate prices and markets. The vet care/lasik surgery portion of the healthcare market works fine--if we made the rest of the healthcare system look like that, we could lower costs enough to provide catastrophic care for everyone. This is, by the way, what Milton Friedman has been arguing for decades.

Wednesday, August 12, 2009

No Comment

The US Citizenship form asks:

Have you ever been a member of or in any way associated (either directly or indirectly) with:
a. The Communist Party?
c. Any German, Nazi, or S.S. military unit, self-defense unit, vigilante unit, itizen unit, police unit, government agency or office, extermination camp, concentration camp, prisoner of war camp, prison, labor camp, or transit camp?

Elsewhere, it also asks if you have ever been a "habitual drunkard." However, you may be able to submit a written explanation why your answer was "Yes" or additional documentation to help explain your answer.

Tuesday, August 11, 2009

Whole Foods and Healthcare

Whole Foods tends to be categorized as a part of the liberal-hippie-Birkenstock wearing-tree hugger constellation, but the CEO is actually pretty libertarian. See his latest op-ed:

While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system. Instead, we should be trying to achieve reforms by moving in the opposite direction—toward less government control and more individual empowerment. Here are eight reforms that would greatly lower the cost of health care for everyone:

• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees' Personal Wellness Accounts to spend as they choose on their own health and wellness.

Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan's costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.

• Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.

• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.

• Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor's visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?

• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program.

That all sounds good to me. By lowering healthcare costs and expanding coverage, liberals can get on board. By involving markets, increasing responsibility and transparency, conservatives can too. This is, by the way, how Singapore runs its entire healthcare system.

Monday, August 10, 2009

The Future of Journalism

A number of people--from Tyler Cowen to James Fallows--have taken to believing the online payments myth. It's the idea that newspapers are fundamentally fine--they just need to come up with smart pricing plans for their online content. People have always paid for news; newspapers just took momentary leave of their senses and decided to give up all of their content for free online. Once they come up with the optimal payment service, they'll start making money again.

This argument misses two big issues:

1) It's really hard to charge money on the internet. Information wants to be free. You want to be able to link to, and follow, internet links. It's costless to back between the New York Times and BBC. So why pay? That would be like one bar, on a street full of bars, suddenly charging a cover--you'd just go to the other bars. Even micropayments haven't ever caught on. To some, that's because we haven't come up with the idea pricing plan. To me, it's because people make a big distinction between something that's free and something that costs them money. For instance, I consume several cups of coffee a day now that it's free. Charge me, and I'll drink a cup every now and then.

Of course, there are some things you can charge for. But that's generally for the most specialized news sources that business are willing to pay for. That's why the WSJ keeps these gated, even as it opens up its editorials and blogs for everyone in order to generate buzz and links, and attract more people. If you're selling a unique news source that's essential for rich people, you're fine. Maybe even top news places like the NYT or FT can get away with charging for some content. Other than them, no one else can charge without destroying their use base.

2) Newspapers have never relied on subscriber fees to cover the cost of news. Even back in the glory days of news (which, let's be honest, were way worse than today in terms of global coverage, analysis, discussion, etc.--at least if you have some good blogs on your Google Reader), the cost of subscription covered just the cost of producing newsprint. The profits all came from advertising--especially the classifieds.

Newspapers cannot now, nor have they ever, managed to get people to pay more than the marginal cost of production. That this cost is now zero is not a big problem. The problem with newspapers is, basically, a problem with the changing nature of advertising. Had advertising revenue remained constant per reader as news migrated online, newspapers could have actually made more money by slashing the publication costs. In fact, advertising went down across the board--both lower advertising in newspapers (replaced by more direct internet options like mass email and Craigslist) and much lower ad revenue online than on print.

If they ever figure out how to turn pageviews into dollars, they can turn their pages into virtual gold mines. It's a difficult, perhaps impossible task, but the best minds in the industry need to be focusing on that, rather than on payments.

There's one solution, but you won't like it. We can revive the newspapers if we cede all privacy about our consumer lives. Targeted ads--Google's Adsense next to searches--are basically the only internet ads that have ever worked. If newspapers could go through your entire purchasing history, they could pitch ads for things you might actually want, rather than random things you would never like. And I think people would click on those--I'm frequently interested by Amazon's 'suggested items,' while I can't remember the last time I clicked on a banner ad. You could link it up with social networks to show you what your friends are buying--especially what the 'popular people' are getting--or mobile devices to give you suggestions on local spots to visit.

Friday, August 7, 2009

Plug-and-Play economy

Lots of people seem to think Starbucks’ new “stealth stores” are creepy

A Seattle outlet of the 16,000-store coffee behemoth is being rebranded without visible Starbucks identifiers, as 15th Avenue Coffee and Tea.

Two other stores in Starbucks’ native Seattle will follow suit, each getting its own name to make it sound more like a neighborhood hangout, less like Big Coffee, a Starbucks official told The Seattle Times on Thursday.

…but imagine that this was playing out differently:

What if Starbucks was offering up a Starbucks API—a set of hooks into a vast, efficient coffee shop support system with incredible economies of scale? You, the local coffee shop owner, simply plug in, and wham, your costs drop by thirty percent because you’re leveraging Starbucks’ insanely optimized supply chain. You can use as much or as little as you want.

The NYT cites the Huffington Post

You can imagine where this un-branding campaign could lead. A little neighborhood burger place run by McDonald’s? A little neighborhood hardware store owned by Home Depot? A little neighborhood five-and-dime operated by Wal-Mart?

…and I find myself thinking, uh, yeah, wouldn’t that be cool? Swap out “run” and “owned,” and put in “powered” and “supported.” Wal-Mart’s back-end is as innovative and important as its front-end. Why not offer it up to indie retailers?

I know it’s a stretch, but consider the analogy: Amazon’s web services have been absolutely transformative in the startup world. You can store files and spin up servers without buying, or committing to, anything. It’s easy to try things and cheap to fail. The notion of plug-in infrastructures just as flexible for other businesses—real-world businesses—run by other goliaths isn’t unsettling. It’s exciting.


That would be awesome. We could have lawyers draft up common legal documents, builders set up commonly used designs for rental fronts, and logistics all planned out. All you need to do is come up with an idea, and outsource everything else.

Wednesday, August 5, 2009

Department of Real-Time Economic Indicators

At Marginal Revolution, there's a link to a paper which links satellite light information (like that map) with economic activity.

It's a pretty neat tool, one the authors use to look at GDP numbers in places which are otherwise closed off (ie, Burma).

There is, however, another potential use: get close to real-time spatial economic data. This would be really useful for the Fed, which is forced to make decisions on monetary policy based on old data. Ideally, they would know the economy is set to behave in the future, but at the least real-time data is an improvement. It would allow, for instance, the Fed to realize in late 2007 that there was a serious economic shock, and force it to cut rates further (potentially avoiding some of the financial turmoil the next year).

Another indicator is using Google Trends to see what people are searching for. If it's 'bird flu', you can track how that spreads by city. If it's 'dodge ram', you might figure auto sales are going to go up. If it's both... maybe you have a spreading pandemic.

Of course, hedge funds might like this data too. You check out Google to figure out what the BLS data will be before they come out, and check out industrial production before everyone else. You can go hyper-micro, too, and see how individual towns and cities are doing. This kind of satellite data has been useful, apparently, in uncovering Burma's nuclear ambitions.

There's just no more privacy these days.