Monday, November 30, 2009

Take That, Vegans

Meat in a vat seems fairly far along:

Researchers in the Netherlands created what was described as soggy pork and are now investigating ways to improve the muscle tissue in the hope that people will one day want to eat it.

No one has yet tasted their produce, but it is believed the artificial meat could be on sale within five years.

Animal rights group Peta said: “As far as we’re concerned, if meat is no longer a piece of a dead animal there’s no ethical objection.”

However the Vegetarian Society said: “The big question is how could you guarantee you were eating artificial flesh rather than flesh from an animal that had been slaughtered.

Now, if vegetarianism was solely about not eating meat, this would be great news. The last line suggests that isn't the case.

Rather, the environmental/vegan organizations are in large part home to unreconstructed socialists. They still believe that the capitalist system is doomed to fail and something more "sustainable" should take its place, but focus their energy on peak oil and animal cruelty these days.

Thus, I predict two trends. First, a civil war will break out among vegans over whether vat-grown meat is still acceptable. Bullshit side-arguments like concerns over labeling will mask what is really an aversion to meat and desire for self-abnegation.

Then, everyone else will pick up the next masochistic form of denial so they can feel better about themselves. I see local food as best placed to pick up market share. Which is still crazy, since food needs to be grown in Iowa, not Chicago.

As a corollary to Lexington's idea that people have a fixed quantity of intolerance, and merely spread it between people differently, I suggest that people have a fixed amount of guilt, and differ only over what to feel guilty about.

Saturday, November 28, 2009

Copenhagen and Climate Change

The White House has released a joint statement in the aftermath of Manmohan Singh's visit. On the subject of climate change, the agreement promises a program to advance clean energy to counter climate change.

This statement follows direct negotiations with China, and is accompanied by announcements of US cuts "in the range of 17 percent below 2005 levels in 2020 and ultimately in line with final U.S. energy and climate legislation." These negotiations have raised the possibility of a meaningful deal at Copenhagen.

Not so fast. There is much less progress on contentious issues than meets the eye.

First, the House, but not the Senate, has signed off on those emissions cuts--which are in any case half-achieved due to ongoing economic troubles. Thus Obama will address a global audience asking them to trust that he can get the Senate to sign off, despite no evidence that it will do so.

Second, Chinese commitments are themselves weak. China has pledged to reduce only the intensity of its emissions in the long-run, safely after the tenure of current political leadership. Plainly China has demonstrated that it will not sacrifice its growth trajectory unless greater financial inducements are on the table.

Finally, the list of goodies offered by America are rather weak. A number of US-India partnerships on clean energy have been offered, but it is unlikely that their aggregate impact will be large. To meet India's energy needs, wind and solar are not enough.

For signs of a more proactive approach, one need look only as far as George Bush. The Indian-US Nuclear Deal has the potential to generate 470 GW of electricity by 2050. Construction of foreign-aided nuclear plants is well under way. These efforts will likely dwarf anything Obama achieves on climate change in India.

In fact, the probability of a meaningful deal at Copenhagen is minimal. In all likelihood, failure to reach a deal will cause a number of climate-related problems. Yet the best solution to these problems is not to further go down the rabbit hole of global negotiations; but to increase economic growth. Wealth and technology are the best weapons to fight unanticipated changes in the climate, as richer countries are better able to mitigate and adapt to any possible changes. For instance, the Maldives are currently under threat of going underwater, yet the country could easily meet the cost of building levies if it were a rich country (as the Netherlands does with its sea wall, for instance). Whatever the consequences of climate change, a wealthy India will be able to bear them. A poor India will face serious problems regardless of the state of global coordination.

In this respect, costly negotiations that involve expensive subsidies or onerous environmental regulations may do more harm than good. Indur Goklani has an analysis which makes this point clearly. He estimates the GDP per capita in 2100 of developing countries under energy-intensive development--$72,800--and under a more environmentally friendly regime--$40,200. For the next hundred years, at least, countries like India are far better off with high economic development and more climate change than without. Pranab Mukherjee, not Jairam Ramesh, will have the biggest impact on India's sensitivity to climate change in the long-run.

Physics has Stopped Making Sense to Me

(H/T) to MR:
Crane first started thinking about artificial black holes 12 years ago when physicist Lee Smolin, now at Canada's Perimeter Institute for Theoretical Physics in Waterloo, Ontario, asked Crane to read the manuscript of his book The Life of the Cosmos.

Nobody knows what happens at the singularity of a black hole, the point where space and time become so warped that the laws of relativity break down. In his book, Smolin suggested that a new universe could be created and bud off. So universes in which black holes are likely to arise will give birth to more and more such universes. This means that our universe could be a baby universe, and is more likely to have come from one that is good at making black holes than one that isn't.

Crane then wondered what would happen if intelligent civilisations could make black holes. This would mean that life in these universes played a key role in the proliferation of baby universes. Smolin felt the idea was too outlandish and left it out of his book. But Crane has been thinking about it on and off for the last decade.

He believes we are seeing Darwinian selection operating on the largest possible scale: only universes that contain life can make black holes and then go on to give birth to other universes, while the lifeless universes are an evolutionary dead end.

His latest calculations made him realise how uncanny it was that there could be a black hole at just the right size for powering a starship. "Why is there such a sweet spot?" he asks. The only reason for an intelligent civilisation to make a black hole, he sees, is so it can travel the universe.

"If this hypothesis is right," he says, "we live in a universe that is optimised for building starships!"

Asheville, NC

In local news, a former North Carolina firefighter, who shot a cyclist in the head here, has just been sentenced to four months in jail and a $1200 fine.

Apparently the guy was upset that the cyclist was biking along Tunnel Road with a child; an offense so troubling to this guy that he fired a warning shot at the guy's head.

So in case you ever want to let out some road rage with minimal legal repercussions, you know where to go. But I wouldn't recommend biking.

Monday, November 23, 2009

Powerful Words

Some good writing I've run into. Via MR:
To me then, Isildur represents something totally alien. He represents the nameless feeling that we all know when we play somebody who we feel that we just cannot beat. The pre-rational feeling that no matter what we do we cannot win; this force (it does not congeal into a person) will push us down and there is no way to fight back, to go up for air – our only option is to surrender. No matter what cards we are dealt or what flop we see, somehow we end up losing or getting outplayed. To a poker player, there is no feeling as terrifying as losing and not knowing why. When Isildur appeared, nobody knew who he was. Nobody knew why he played the way he did, how he was so good, or why he won so much. He surprised everyone, and in a whirlwind he destroyed almost everybody he played. He was a faceless force who suddenly disrupted all of the sensible hierarchy of the Western poker world. Whether or not we acknowledge it, everybody became afraid. Afraid that maybe he would tear everything down. That all of our hierarchies would be rendered irrelevant. Maybe he was the greatest poker player in the world. But to claim that title, he must answer to the king. To me, that is the symbolism behind the battle between Durrrr and Isildur.
On Asimov:

When I started writing this section, I reread Isaac Asimov's robot books and I learned a great lesson: What struck you as profound when you were fourteen may be utter tripe when you're in your forties. I remember consuming all of Asimov's works that I could find as a teenager. He wasn't my favourite author by a long chalk, but he was readable and I was fascinated by his ideas. However, decades of reading and experience made revisiting his fiction an unpleasant time. I had forgotten how Asimov's writings were so much schoolboy prose frozen in the adolescent vocabulary of '40s pulp, or how he had no real command of the language-- or at least did not show any interest in polishing his prose. I did recall his lack of visual sense, which made his stories rough going, and how he tended to labouriously describe what could simply be shown. Worst of all, Asimov had no real understanding of history, human motives, or character and would often have his stories revolving about some trend or phobia or drive that had as much basis in reality as my hopes of winning the Nobel Prize.

His work was most emphatically not literature and his robot stories among the most so. They weren't so much stories as logic problems bundled up as fiction with some of Asimov's cod philosophy thrown in for good measure. That being said, one can't deny that the robot stories were a milestone in sci-fi writing and had a great influence on later writers and filmmakers to the point of practically acting as a template for future tales.

From Amit Varma:
I used the word “complicity” a bit ago. I like the word. To me, it indicates an unspoken understanding between two people, a kind of pre-sense, if you like. The first hint that you may be suited, before the nervous trudgery of finding out whether you “share the same interests,” or have the same metabolism, or are sexually compatible, or both want children, or however it is that we argue consciously about our unconscious decisions. Later, looking back, we will fetishize and celebrate the first date, the first kiss, the first holiday together, but what really counts is what happened before this public story: that moment, more of pulse than of thought, which goes, Yes, perhaps her, and Yes, perhaps him.

Sunday, November 22, 2009

What a Free Market in Healthcare Looks Like

From the WSJ:

Dr. Shetty, who entered the limelight in the early 1990s as Mother Teresa's cardiac surgeon, offers cutting-edge medical care in India at a fraction of what it costs elsewhere in the world. His flagship heart hospital charges $2,000, on average, for open-heart surgery, compared with hospitals in the U.S. that are paid between $20,000 and $100,000, depending on the complexity of the surgery.

The approach has transformed health care in India through a simple premise that works in other industries: economies of scale. By driving huge volumes, even of procedures as sophisticated, delicate and dangerous as heart surgery, Dr. Shetty has managed to drive down the cost of health care in his nation of one billion...

Mr. Parashivappa says he can't himself pay for the surgery, but it is covered by a farmers' insurance plan that Dr. Shetty began several years ago in partnership with the state of Karnataka, which includes Bangalore.

Nearly one third of the hospital's patients are enrolled in this insurance plan, which costs $3 a year per person and reimburses the hospital $1,200 for each cardiac surgery.

That is about $300 below the hospital's break-even cost of $1,500 per surgery.

The hospital makes up the difference by charging $2,400 to the 40% of its patients in the general ward who aren't enrolled in the plan. An additional 30% who opt for private or semi-private rooms pay as much as $5,000.

You can complain about purchase price parity here. But the costs faced by a private hospital--wages for skilled doctors and medical equipment--are more comparable to US prices.

Saturday, November 21, 2009

Daniels on Running

Strongest wording we've heard yet from Mitch Daniels:

But in Indiana we think about the next generation. We think about the future. We want this state to be better for our kids than it was for us. We don’t resign ourselves for a second to the idea of any decline. Any step back. And that’s the job that we have taken on as a party. That you have made possible. That you’re making possible by your attendence tonight. I cannot thank you enough for that.

I just want to tell you that we’re not going to default on the burden that falls on the party of hope. I read this great line. It’s been on my mind since I read it. In the book Lee’s Lieutenants, the classic study of Civil War generals under Robert E. Lee, there’s a great line. It’s about Gen. Beauregard, whose best battles were his first ones. Bull Run. Early days of the war. Then he gets cautious. Then he gets timid. Then he’s always looking at the newspapers to see how it’s all playing. Freman, the author, says, “A soldier is on the wane from the moment he begins to think more of reputation than opportunity.” A soldier is on the wane from the moment he begins to think more of reputation than opportunity. He meant if you start thinking more about yourself than the people you’re there to serve, the cause you’re there to serve, if you start worrying more about how it’ll look, how it’ll play, than about what’s the next challenge? What’s the next hill? What’s the next battle? What am I going to do for the benefit of the cause I’m a part of? Then you’re not the soldier you used to be. You’re not the soldier you ought to be.

We have to be soldiers who think always of opportunity, not of reputation. Who think always of the future and tomorrow. Not of things we already did. Not of preserving gains and any credit that might have come from it. I promise you tonight, on behalf of everybody who’s part of our team. On behalf of the Republican Senate majority that is and the Republican House majority that will be, we will think of opportunity, not reputation. We will think of tomorrow, not yesterday. We will think of yes, not no; hope, not memory. And we will create in this state a model of a party and a state that all of America looks to for greatness.

Thank you for your support and for being here tonight.

I am now ~70% confident that he will run in 2012. Yet he's still very cheaply priced on Intrade.

Thursday, November 19, 2009

The Maginot Line

Here's super-investor Bill Gross on what it feels like to hold cash:
My point is to recognize, and to hope that you recognize, that an effective zero percent interest rate, as a price for hiding in a foxhole, is prohibitive. Like the American doughboys near France’s Maginot line in WWII – slumping day after day in a muddy, rat-infested pit – when the battalion commander finally blew his whistle to charge the enemy lines, it probably was accompanied by some sense of relief; anything, anything but this! Anything but .01%!
Leaving aside the WWI-WWII confusion, it's a very common perception to think that the Maginot line "didn't work", and the French deluded themselves by focusing on the past and hunkering down, while the Nazis sped forward through blitzkrieg.

It's true that the French battle plan didn't quite work out. But the Maginot line was actually a pretty good idea. Yes, the Germans could evade it by flanking and invading Belgium. But that was the whole point of the line. Instead of dealing with the Germans on home soil, you force them into Benelux, where the combined forces of the British, French, and million-odd Belgian and Dutch forces could bog the Germans down.

The initial German plan was forced by the Maginot line to play out exactly this way. Had that invasion happened, the Germans would have met vastly superior French armor and quite possibly would have dug in to another WWI-like stalemate. It was a phenomenal stroke of luck that resulted in the Germans switching to a plan that cut into the seemingly-impassable Ardennes to cut off the body of the Allied force in Belgium, more luck that the French failed to realize and respond to that, and yet more luck that French tanks didn't have enough gas.

But the Maginot Line itself worked exactly as intended, and could have won the war five years early had it not been for von Manstein and company.

Wednesday, November 18, 2009

The Chimera of Chimerica and Obama's Foreign Policy

Really, I've just been looking for an excuse to put up that title. But check out Acorn, my co-blogger at INI:

It is one thing to argue that the US-China bilateral relationship is one which is most important to the world, but quite another to call it “G-2″ suggesting it would engage, in some form, in the task of global governance... an important reason why the US-China relationship is seen as important is because it is a problem. It is important to the rest of us in the same way as Pakistan is for international security. So just like how you wouldn’t entrust Pakistan with the job of ensuring international security, you wouldn’t entrust the United States and China with the task of global governance.

Unfortunately, this G-2 mindset... is influencing the Obama administration’s foreign policy. “US-China consultations regarding India and Pakistan,” the former argued, “can perhaps lead to more effective even if informal mediation, for a conflict between the two would be a regional calamity.” Sure enough, the joint statement at the end of President Obama’s summit with President Hu Jintao included a words that said that “the two sides welcomed efforts conducive to peace, stability and development in South Asia.” Clearly, there is an attempt by the two countries to get China involved in India’s relations with Pakistan, as well as in Afghanistan.

On Taiwan, you have a statement that goes:
The two countries reiterated that the fundamental principle of respect for each other's sovereignty and territorial integrity is at the core of the three U.S.-China joint communiqu├ęs which guide U.S.-China relations. Neither side supports any attempts by any force to undermine this principle. The two sides agreed that respecting each other's core interests is extremely important to ensure steady progress in U.S.-China relations.
This is just one joint statement. But it seems to reflect a durable assessment among the Obama team that the G-2 relationship is of primary importance due to China's role in global imbalances, Treasury holdings, climate change, and regional/security issues. These items are apparently of such importance to the Administration that they are willing to sacrifice relations with India, Taiwan, and other local powers--as well as the human rights agenda--even for little substance in return.

My own impression is that an "allies-first" approach of deepening ties to local democracies is more in line with American values, ensures the spread of democracy and human rights as sources of stability for the entire region, and grants greatest bargaining power with respect to China. I suspect that China's domestic constraints are greater than America's in some sense, and little cooperation will be forthcoming. But I'm no foreign policy expert, and the China-first strategy may well work out.

But whether or not this works out for China and America; certainly it's India (and Taiwan) that has room to be concerned. While Bush and Clinton saw the potential for a serious potential partnership with India; the new Administration seems largely intent on viewing India as either an adjunct to Af-Pak (Holbrooke) or a bargaining chip to be wagered to further the crucial China policy. Surely Obama is aware that China and India are going through one of the worst patches of bipartisan relations since the 1962 war--and a failure to consider that is a sign that India has little strategic significance to America beyond Thomas Friedman-ish platitudes of "largest democracy, peaceful Muslims, etc. etc." One can't really fault America for this. It's a failure of Manmohan Singh's foreign policy to think beyond America and consider strategic partnerships with democracies and China-skeptic powers around Asia. The Pakistan-China geopolitical nexus represents an existential threat to India's survival and economic progress, and the US has demonstrated where they stand on that, push come to shove.

I was initially impressed by Obama's foreign policy. There were seeming turnarounds in relations with rogue states like Iran, Cuba, and North Korea; and you heard great things about his team and their professionalism. You have a President who can seemingly get out of any bad scrape through a well-delivered speech.

But whether it's the lack of Asian trade policy, the reversal of the stance against settlements in Israel, or the now-ambiguous Af-Pak strategy; I think it's fair to say things look murkier. Obviously it's a little soon to pass judgments, nor do I think that Glenn Beck-style rants hold. Most Administrations have a crappy first year and this seems to be going better than most.

Still, I think it's fair to say that the more overblown hype is gone. Here is Andrew Sullivan almost two years ago:
Consider this hypothetical. It’s November 2008. A young Pakistani Muslim is watching television and sees that this man—Barack Hussein Obama—is the new face of America. In one simple image, America’s soft power has been ratcheted up not a notch, but a logarithm [sic]. A brown-skinned man whose father was an African, who grew up in Indonesia and Hawaii, who attended a majority-Muslim school as a boy, is now the alleged enemy. If you wanted the crudest but most effective weapon against the demonization of America that fuels Islamist ideology, Obama’s face gets close. It proves them wrong about what America is in ways no words can.
Yet a recent poll finds that far more Pakistanis rate the US as a threat than India or the Taliban. Having a lower impression in Pakistan than India is quite an accomplishment, and suggests that American policy--for instance the drone strikes so beloved among the doves in the Administration--rather than the identity of the American President drives resentment and blowback. Obama's star power has moved the US in global polls (with the telling exception of Pakistan), but it remains to be seen how much of that increase is durable, and to what degree that assists America in achieving foreign policy goals or cubing terrorism.

Weird Days

I spend far, far too much time following the news cycle of the day. It's toxic and unrewarding, yet I'm addicted to the information fix.

Anyway, it's a little bizarre to see liberals pulling all sorts of sexist stunts with Sarah Palin--she deserves to shown as a sex object, she's obviously stupid and superficial, etc. etc.--while conservatives throw out all sorts of feminist arguments. These positions would be exactly reversed if Hillary Clinton or someone was on stand instead of her.

I actually used to like arguments and the like. You hash things out, and get somewhere. Since then, I've kept seeing how ideas are more like the rationalizations and weapons people use to defend their gut reactions to things for which they feel an emotional affinity. All politics is identity politics, one way or another.

A good way to get over this is to follow politics in some other country, or listen to foreign commentary on the US. When there's less of a sense of who you're supposed to be rooting for, you can get a clearer picture. Or just accept the inevitable and become a partisan hack. Or better yet, turn off the TV.

Tuesday, November 17, 2009

Be More Like France

Ed Glaeser says (via The Economist):

[I]f China’s per capita carbon dioxide emissions increase by 14.4 tons and reach United States levels, then world carbon dioxide emissions will increase by about 19 billion tons or 67 percent.

If per capita carbon emissions in both China and India rise to United States per capita levels, then global carbon emissions will rise 138 percent. If the emissions of these rising superpowers stop at French, rather than American, levels, global emissions will only increase by about 28 percent.

This suggests the biggest contribution that the United States can make to reducing world carbon emissions is to persuade the Indians and Chinese to use energy like Frenchmen rather than Americans.

This is true. However, it's important to know why France has lower emissions. It's not because they obsess more about the green content of their packaging or worry more about leaving the lights on as they leave the room, or because the French are more moral or better people. In huge part, it's because the French went all-nuclear after the '70s Energy Crisis, while the US enacted an array of environmental-pushed regulatory barriers on nuclear after Three Mile Incident. As a result, the US uses lots of carbon-intensive coal to generate power.

India and China also have huge coal stores, but they've been more farsighted about taking a look at nuclear power. China has plans to generate about 250 GW of energy (about five times the total output of Britain) by 2030. The India-US nuclear deal has paved the way for the Indian nuclear program; with potential output of 470 GW by 2050. Obviously, both of these are optimistic projections; but certainly energy of this magnitude is going to come online either from coal or nuclear, and a share of nuclear this large is the only way to ensure that China and India approach France-like levels of carbon emissions rather than US-levels. Incidentally, by signing this bill, Bush possibly did more for reducing global carbon emissions than Obama (though he voted for the bill) ever will.

The US could get down to French levels as well. For various reasons, the feel-good technologies like wind and solar will probably not get us there--they're too expensive, too intermittent, and not scalable enough to replace coal as a source of base energy--nor will green jobs materialize. Yet nuclear power, especially linked with battery cars, can cut US emissions drastically with no increase in costs. Switching over to electricity instead of gas would also end persistent trade imbalances which have been implicated in the financial collapse, and eliminate oil shocks as a source of economic problems.

Fortunately, Carlos Ghosn is hard at work on electric cars (though Chevy has backed away, despite this being the rationale for their bailout); the Energy Secretary is pro-nuclear; and there are encouraging signs that the bipartisan deal being brokered over Cap and Trade will feature a heavy nuclear component as well.

The takeaway here, as usual, is that the environmental movement is its own worst enemy. Their emotional and fear-based attacks against all things nuclear have jeopardized the only clean, cheap, and scalable source of combating global warming.

They've chosen to highlight global warming on grounds of personal morality; spreading "awareness" and emphasising how we all need to inconvenience ourselves in ways that address our guilt in destroying the world, but which ultimately are not effective. If they got together and emphasized rational, cost-effective policies like nuclear power, geoengineering, or carbon taxes; we would make much more progress, both here and other countries.

Monday, November 16, 2009

Gattaca Tells us Nothing About Genetics

Every now and then, genetic testing advances a little bit, and people mutter darkly about an apocalyptic, Gattaca-like world. "You gotta check out this movie!" they say. "They start genetic screening for all sorts of jobs, and put in a genetic caste-like system!" Health insurance will break down, eugenics, etc. etc.

The perils and promises of genetic testing and experimentation remain to be seen. But Gattaca is a horrible way to make his point. I mean, [spoiler] the guy was prepping for a long-distance space flight, and hiding a pre-existing heart condition was deeply irresponsible and selfish. This is why we already screen astronauts; and I hope they do so in the future on genetic grounds as well. I'm sure this guy could have made it just fine as a banker; but noooo, he just had to get out there in space, and the costs in terms of mission success and the safety of his fellow crewmen just weren't his problem. Asshole.

The movie does raise an interesting point about the survival of humans during manned expeditions. In a trip to Mars, for instance, getting the astronauts back is the real challenge. This seems somewhat taboo to mention, but space exploration would be a lot easier if it were one-way. It does seem odd to spend so much money retrieving astronauts, when there are so many people willing to take the one-way ticket, and millions continue to die for want of a few dollars in health costs.

Incidentally, it looks like they're thinking of making a police procedural based on Gattaca's world. Hopefully the bioethics will be a little less butchered here.

To be A Fly on the Wall in That Conversation

Must have been some debate:

North Carolina, Oct 14(ANI): Jailed Ponzi king Bernard Madoff was involved in a prison scuffle with a fellow inmate in North Carolina federal prison following a debate over stock market, and reportedly came out victorious.

According to reports, Madoff and the other inmate had a heated debate over the stock market, which turned sour when the former pushed Madoff.

Madoff retaliated and as his attacker tried to stand up straight, Madoff hovered over him, red-faced and glaring.

The 71-year-old emerged the winner in the brawl as the other inmate chose to leave the scene.

“I didn’t think Bernie had it in him. He got the best of him; he was really aggressive, and the other guy was in shock that he fought back,” The New York Post quoted an inmate, as saying.

Sunday, November 15, 2009

Pigs Fly; I Agree With Paul Krugman

Here's Paul:

We’re in a liquidity trap, with interest rates up against the zero bound. This means that conventional monetary policy isn’t sufficient. What should we do?

The first-best answer — that is, the answer that economic models, like my old Japan’s trap analysis, suggest would be optimal — would be to credibly commit to higher inflation, so as to reduce real interest rates.

But the key thing to recognize about this answer is that it’s all about expectations — the central bank only has traction over expected inflation to the extent that it can convince people that it will deliver that inflation after the liquidity trap is over....

So some readers have asked why I’m not making the same arguments for America now that I was making for Japan a decade ago. The answer is that I don’t think I’ll get anywhere, at least not until or unless the slump goes on for a long time.

OK, so what’s next? The second-best answer would be a really big fiscal expansion, sufficient to mostly close the output gap. The economic case for doing that is really clear. But Washington is caught up in deficit phobia, and there doesn’t seem to be any chance of getting a big enough push.

That’s why, at this point, I’m turning to what I understand perfectly well to be a third-best solution: subsidizing jobs and promoting work-sharing.

So in a best-case scenario, the Fed could adopt a proper monetary stance, and the economy would be in a great shape. Unfortunately, the inflation-hawks there have eliminated this option, and Krugman is perfectly willing to accept their views as given (while spending the rest of his time trying to convince other people of different views). Scott Sumner, however, pushing this idea pretty hard.

One second-best approach Krugman highlights is job subsidies. As I've noted, these have been used by various Asian and European countries--even by ones that typically have rather flexible labor markets--to keep employment losses far below America's.

I think the virtues of these two approaches in combating tough economic conditions like those prevailing today is fairly clean-cut. The merits of a fiscal stimulus are more debatable, but for the moment let's count that as another tactic to fight economic Depressions.

The tragedy is that all three of these ideas are not on the table. We're down to the fourth and fifth-best economic policies.


I've discussed the absurdity of using the word "alleged" in journalist accounts of events that clearly happened. This was clear when newspapers discussed the "alleged" Fort Hood Shooter. Whatever one thinks of the insane partisan spewing that has emerged from that shooting; I think all sides can agree that the suspect is, in fact, the killer.

Well, Slate fills us in on the details:
Why can't newspapers drop all these modifiers and just go with killer?

They can, but they usually don't out of deference to the judicial system. In a criminal case, of course, the defendant is presumed innocent, and prejudgment in the media could bias the jury pool. Any publication that chose to identify Hasan as the killer would be immune to libel claims, since the statement would clearly have been made in good faith. But reporters traditionally hedge until the legal system delivers its final verdict. Some news stories attribute conclusions to public officials so they don't seem like statements of fact. ("Prosecutors claim" can be a handy phrase.) The Associated Press Stylebook goes so far as to recommend "John Jones, accused of the slaying" over "accused slayer John Jones," because the latter more strongly suggests prejudgment.

The more the phrase sounds like legalese, the more dangerous it becomes for the news outlet. So you'll often see people described as pirates even before trial, but an arsonist would almost always be "suspected" or "alleged" until his trial was over.
So there you go.

Capretta on Obamacare

Here he is:

For months, the president and his team argued that stepped-up investments in health information technology, comparative effectiveness research, and prevention and wellness programs could “bend the cost-curve,” thus making an expansion of coverage affordable for taxpayers. But the Congressional Budget Office, along with a chorus of independent skeptics, said those steps would never be up to the task of reliable cost control without more fundamental changes in the financial incentives facing consumers and providers of services.

Unfazed, the administration argued that it had other ways to control costs waiting in the wings. The conversation turned to “delivery system reform,” with the administration and its allies in Congress suggesting that new ways of paying health-care providers in Medicare could spur a wholesale shift in how doctors and hospitals cared for patients. As White House Budget Director Peter Orszag put it, “Medicare and Medicaid are big enough to change the way medicine is practiced.” The implication was that the new team was working on ways to painlessly root out wasteful spending by compensating providers for their services differently than they are paid today.

But no such proposals were ever forthcoming (except for relatively minor adjustments related to payments for hospitals with high readmission rates, and some baby steps toward more “bundling” of payments for a full episode of care). What the White House did eventually propose was a commission that would have the authority to change the way Medicare pays for services without further approval by Congress. So instead of offering a serious plan to “bend the cost-curve,” the administration offered a commission that would come up with a serious plan to “bend the cost-curve.” Quite predictably, many in Congress have not been so keen on this idea, as it would hand off to an unelected commission the power to rewrite Medicare’s provider-payment regulations. The administration’s commission idea is not in the House-passed bill.

Not to worry! The administration has another favorite cost-cutting tool. The idea is to tax so-called “Cadillac” health insurance plans, thus forcing both the insurers and the plan enrollees to find ways to economize to avoid the tax. But there’s a little problem with this idea too. President Obama was against it before he was for it. Recall that Republican presidential candidate John McCain proposed to convert today’s preferential tax treatment of employer-paid insurance premiums into a refundable credit. In October 2008, the Obama-Biden campaign excoriated this idea in scores of ads because it would tax health benefits “for the first time ever.” Now, the president wants to do just that — but, again not surprisingly, the populist revolt he stoked against it in 2008 was still smoldering when he endorsed it in 2009. It turns out that taxing high-cost insurance plans will actually hit many middle-class households, especially those with union members enrolled in collectively-bargained plans. House Democrats wouldn’t go near the idea, and reports indicate that the version of the high-cost insurance tax in the Senate Finance Committee bill is getting watered down by the day. If some version of it survives at all, it is highly unlikely to pinch enough to generate meaningful cost control.

Reviewing this legislative landscape, it’s suddenly dawning on all concerned that the bills moving in Congress won’t come close to “bending the curve” after all. That’s the thrust of a piece today in the New York Times, as well as one from last week in the Washington Post. Of course, even as House members and Senators shy away from tough decisions, they are not nearly as reticent about extending new health entitlement commitments. Thus, it is now abundantly clear that if anything is produced by this legislative process, it will be a bill that piles more unaffordable entitlement commitments on top of the unreformed ones already on the books.

The complete spinelessness of Congress is now a fairly entrenched trend. Going back to Social Security reform; the Medicare prescription drug plan; etc.--it's very hard to write sweeping legislative changes these days. Every President going back to at least Reagan came to Washington and at the very least was forced to substantially roll back their agenda. Past Presidents may have left a broader impact in other countries, through their foreign policy, than domestically through their legislative agenda. Obama's majorities, his legislative background, and legislative staff may make a difference. But it seems very unlikely that any of their major bills--on healthcare, climate, or what have you--will be seen as very worthwhile on the merits.

And then you have Jonathan Gruber's logic, in which health care reform is a Pascal's wager; and increased coverage will make cost-cutting possible. This is a little like saying "Sure, eat another cheescake; there will be far greater pressure for you to diet once you're heavier, so there's no way you can get morbidly obese." Aside from the on-face absurdity, this does not match the experience of state governments testing variants of reforms under consideration, nor of any other countries as far as I can tell. Yet the idea that Congress will spontaneously grow a conscience before health costs engulf the economy is the best hope any of us have.

Wednesday, November 11, 2009

Going Dutch

All industrialized countries other than the US offer universal health care, but they do in different ways. England has an entirely government-run system. But several countries manage to cover everyone with a more market-oriented system. Here's what the Dutch have to say:

Between meetings, Mr. Klink sat down with The New York Times. The Dutch are in the midst of a significant health overhaul to inject greater competition into the nation’s insurance and hospital markets, but Mr. Klink also offered some pointed observations of the health system in the United States.

His first official visit to the United States as health minister came in 2007, and he came with the usual European preconceptions that this country had a wide open and fiercely competitive health insurance market with a myriad choices.

“And what struck me,” he said, “is actually the lack of competition you have.”

Mr. Klink pointed out that nearly 40 percent of the nation’s population gets care fromMedicare, Medicaid and Veterans Affairs, all of which have significant restrictions on the choices available to patients. “We don’t have these kind of public insurance groups in our country,” he said.

And even among those in the United States who get insurance from their work, he went on, “it’s the employer who is making the choices of the health plans from which you can choose.”

The Swiss have a similar system. Singapore has one that's even more free market--people have health savings accounts to pay for most routine care--and they also spend the least out of any industrialized country on Healthcare as a percent of GDP. What's common across all three is that subsidies are targeted through means-tested vouchers, rather than with a public plan, Medicaid, or Medicare.

Yet somehow we get caught in a debate where one side yells at the other for throwing people at the mercy of markets; and the other refuses to tinker with the system. Ensuring Universal Coverage should be the premise of the health care debate, and there are a range of options both to the left and the right on how to get there. Yelling at John Mackey for expanding health coverage and cutting costs isn't going to help; there are issues here beyond the purely moral.

Monday, November 9, 2009

Mitch Daniels for President

As some of you know, I've been a big fan of Mitch Daniels, Governor of Indiana, and think he would make a great Republican Presidential candidate in 2012. The big issue with his campaign, though, has always been that he's been very reticent about running, citing family issues. These can be serious, as we found out with Colin Powell. Still, you don't make it as a two-term Governor without a little bit of political ambition.

He's been playing this very smartly too. He came out against the stimulus, but in a more principled and soft-spoken way than Perry and Sanford and the rest. He's been against the Health Bill, but again on very general grounds. He's been making his media appearances and WSJ op-eds. He already has a compelling story and record; this helps prepare some of the groundwork, much as Romney did his time appealing to evangelicals. But doing so in an off-key manner allows you to come in a little later, with far fewer negatives and with more of a post-partisan Obama feel. Jindal should be taking notes.

Anyway, now you're starting to read stuff like this:
Still, despite the dominance of the big three likely presidentials, some in the GOP are hoping for a new conservative face, particularly one being pushed by the activists who attended spring antitax tea parties and flooded summer town halls to demand a halt to government expansion. And for them, insiders say, that could be Daniels, the fiscal conservative and rare Republican governor to win re-election in a state President Obama won in 2008. We hear he's serious about considering a 2012 entry, so much so that he's consulting with some of those who once sat in the White House, like former Vice President Dan Quayle, also a Hoosier.
I suppose I should highlight why this is a good idea: Daniels has turned Indiana around; attracting jobs, balancing the budget, and reforming government. He has good ideas on transportation, healthcare, and education. This is exactly the sort of working-class agenda that can appeal to dying rust-belt states. Even if you're not a Republican, you know they have to win at some point, so it's better to have the party be functional. Nominating a no-nonsense technocrat would go a long way towards erasing the stains of fiscal irresponsibility and incompetence after Bush, and frankly would be exactly what the country needs after several rounds of bipartisan binge spending.

And no; Sarah Palin will not win the nomination. Zero chance.

Not So Deep Thoughts

Two people coming out as highly effective politically in the last year are Rahm Emanuel and Nancy Pelosi. Under Pelosi, the House has passed a sweeping stimulus package; a cap-and-trade program; and now a Health Care Bill. Emanuel's more behind the scenes, but by all accounts he's the most powerful Chief of Staff in recent memory; with sweeping authority on foreign policy, healthcare, finance reform, and the economic recovery.

Interestingly, people tend to say the same thing about why each is so successful: both are very active in pulling their levers of power and driving forward at a frantic pace. Pelosi has moved to vote on bills where others would have held back, while Emanuel has been very active in pressing his agenda as much as possible.

There's another school of thought that says you should husband your power, as a failed attempt to demonstrate what you have weakens your authority. Pelosi and Emanuel would suggest that your power actually comes from your constant exercise of it.

Obviously, this is going on in the backdrop of a very popular President, a solid Democrat majority in the House, etc. etc. But it makes you wonder about WTF Reid is doing; what are the consequences of legislation at all costs; and whether this is a useful template going forward.

Sunday, November 8, 2009

How to Build Brands on the Internet

From Cheap Talk,
A major theme of the conference was market design and I heard a story repeated a few times by participants connected with research and implementation of online ad auctions.

Ads served by Yahoo!, Google and others are sold to advertisers using auctions. These auctions are run at very high frequencies. Advertisers bid for space on specific pages at specific times and served to users which are carefully profiled by their search behavior. This enables advertisers to target users by location, revealed interests, and other characteristics.

Not content with these instruments, McDonalds is alleged to have proposed to Yahoo! a unique way to target their ads and their proposal has come to be known as The Happy Contract. Instead of linking their bids to personal profiles of users, they asked to link their bids to weather reports. McDonalds would bid for ad space only when and where the sun was shining. That way sunshine-induced good moods would be associated with impressions of Big Macs, and (here’s the winner’s curse) the foul-weather moods would get lumped with the Whopper.

WNC Politics

I'd just like to point out that Heath Shuler, House Representative of NC 11, Western North Carolina, has voted against the health care bill. This follows his voting against several stimulus provisions. He is also against abortion, in favor of gun control, and against illegal immigration. And yes, he is a Democrat.

I imagine this is bad news for the 20% of his non-elderly adult constituents who are uninsured. But the broader picture here is that Democrats are finding it difficult to pass their agenda not (just) because of Republican intransigence, but because of loud opposition from Democrats representing conservative bits of the country. Rahm Emanuel's strategy of running culturally conservative moderates in red districts paid off huge electoral dividends, but these marginal legislators are much less favorable to a progressive agenda.

It also looks like Hendersonville's hotshot mayor, Greg Newman, is planning on running for this seat in 2010, the first of what looks to be a wave of local Republicans hoping to cash in on the coming 2010 Republican bonanza. This is, of course, another great reason for Shuler to vote against the Health care bill, lest Newman and company scare all the old people into thinking that their Medicare is going away.

Man, politics really is local. It's great reading the comments to some local story on a totally non-consequential issue, and seeing people get completely riled up about it.

Saturday, November 7, 2009

Time Traveling Bandits

Surely you remember the Large Hadron Collider. It's a device built by physicists to test some theory none of us will ever understand, at the improbable cost of destroying the world. The device has so far failed to work. A while ago, some physicists came up with a reason why which centers on the role of... sabotage, from unknown time-traveling forces:

A pair of otherwise distinguished physicists have suggested that the hypothesized Higgs boson, which physicists hope to produce with the collider, might be so abhorrent to nature that its creation would ripple backward through time and stop the collider before it could make one, like a time traveler who goes back in time to kill his grandfather.

...According to the so-called Standard Model that rules almost all physics, the Higgs is responsible for imbuing other elementary particles with mass.

“It must be our prediction that all Higgs producing machines shall have bad luck,” Dr. Nielsen said in an e-mail message. In an unpublished essay, Dr. Nielson said of the theory, “Well, one could even almost say that we have a model for God.” It is their guess, he went on, “that He rather hates Higgs particles, and attempts to avoid them.”

This malign influence from the future, they argue, could explain why the United States Superconducting Supercollider, also designed to find the Higgs, was canceled in 1993 after billions of dollars had already been spent, an event so unlikely that Dr. Nielsen calls it an “anti-miracle.”

You'd think that this is the sort of nonsense which one could dismiss off-hand. But it looks like there's been some more trouble:
The Large Hadron Collider, the world's most powerful particle accelerator, just cannot catch a break. First, a coolant leak destroyed some of the magnets that guide the energy beam. Then LHC officials postponed the restart of the machine to add additional safety features. Now, a bird dropping a piece of bread on a section of the accelerator has, according to the Register, shut down the whole operation.
This is getting more embarrassing by the day. They really should get this thing working so at least the Universe will make some minimum amount of sense.

Unless that would destroy everything on Earth. In which case, these nebulous forces from the future should continue to do their job:
While it is a paradox to go back in time and kill your grandfather, physicists agree there is no paradox if you go back in time and save him from being hit by a bus. In the case of the Higgs and the collider, it is as if something is going back in time to keep the universe from being hit by a bus. Although just why the Higgs would be a catastrophe is not clear. If we knew, presumably, we wouldn’t be trying to make one.
I haven't heard this thrown around, but it should also be quantum suicide at play. Imagine you flip a coin and kill yourself if you hit heads. You flip a coin, and find yourself split into one world in which you survive and another in which you cease to be a conscious entity. But from the point of view of the non-dead copies of the you, it just came up tails. You can keep flipping coins. You'll die half of the time. But from your own point of view, because you can only observe the world in which you survive, it's always tails. You are, they say, immortal in a quantum sense.

Similarly; humanity may only survive in those states of the world in which the LHC fails to operate; so of course we are alive, look around, and find that the device does not work.

I should add that none of this makes sense to me. That's fine, as there's no reason to think that our intuitions--which evolved at non-relativistic speeds etc. etc.--need to match up to how the world works. But I still very much hope that physicists one day discover that we live in a reasonable universe.

V Review

ABC has a new show out called V, which is apparently a remake of some crappy 80s Sci-Fi series. It's not a great show, or even good; though I'm sure that it was better than the old series, and that fanboys will complain anyway.

What does seem to pop up again and again are allusions to Obama. A race of attractive aliens show up and promise us "universal healthcare", world peace, and lots of cool gadgets as long as we give them total devotion. The masses get suckered into it, while a brave few spread skepticism and doubts. The aliens turn out to have a hidden agenda, having engineered all sorts of catastrophes to pave the way for their triumphant welcome (there are some conspiracy theories out there, btw, that the market crash was orchestrated by Obama's Wall Street boosters). They manipulate the media to exchange preferred access for favorable coverage.

I can't imagine this was the show's intention (which looks like a fairly bland and conventional anti-totalitarian message), but it looks like Glenn Beck, Sean Hannity, and O'Reilly are boosting the show as anti-Obama.

What no one is picking up, though, is that there are a lot of parallels to Arthur C. Clark's Childhood's End--though this series is much less favorable to the aliens. Which is great--some of the big early Sci Fi guys were techno-optimist and pro-alien/pro-robot; and things have gotten much more cynical and depressing since them.

But seriously, don't bother watching it. Instead, think about the fact that the one Sci Fi show with decent character development and plot--Virtuality--was cancelled.

Friday, November 6, 2009

Jobs, Jobs, Jobs

After the latest set of elections, everyone is really harping on the "jobs jobs jobs" agenda. With unemployment crossing ten percent, this is an eminently reasonable approach to take.

Yet both Republicans and Democrats haven't a clue about how to actually generate jobs. Meanwhile, Europe's managed to keep the rise in unemployment fairly low, and some countries are actually recovering. And they've done so without a stimulus. Here's what The Economist has to say:
The United States has put in place a hefty fiscal stimulus, but relatively little of that money has gone into labour-market policies—schemes to slow firing, boost hiring or support the jobless. Although America has extended its (meagre) unemployment benefits, and is likely to do so again, Congress’s main response to persistently high joblessness has been a host of ill-targeted new stimulus proposals. The extension of a homeowner’s tax credit is imminent and a $250 payment to old people is being discussed.

Europe’s policymakers, in contrast, appear to have a more coherent strategy: one which uses government money to subsidise a shortened work week, cuts labour costs and, in a few cases, offers tax subsidies to support new jobs. The OECD says 22 out of 29 of its member countries have extended support for workers on furlough, and 16 have cut payroll taxes and other social contributions. The countries doing these sorts of things are disproportionately in continental Europe.
And The Economist's resident blogger:
As the piece notes, one wants to be careful putting in place policies that will lead to ossification of the current structure of the work force, particularly given the structural shifts underway in the American economy. But America's oblique approach to stimulus has meant fewer jobs saved per stimulus dollar. What's more, the fact that stimulus policies have not directly targeted unemployment (for the most part) has probably led to a waning of public confidence in the very idea of stimulus, thereby making it difficult to follow up the spring economic package with a booster shot. Tying stimulus more directly to hiring subsidies and payroll tax cuts would ensure a steady constituency for additional action. Washington should take note.

In fairness, I suppose I should say that the Republicans have been far more favorable to this type of European strategy--which is, after all, in many cases being implemented by the local right-of-center party. And, of course, parts of Europe still have plenty of structural problems generating chronic unemployment. As the graph shows, the type of unemployment now seen as catastrophically bad is more or less routine in Continental Europe.

The general point is that wage inflexibility is really bad. The reason why you see rising unemployment during recessions is that companies want to compensate workers less during bad times. But people don't tend to like wage cuts. So you see mass layoffs. The way to tackle this is not through massive spending somewhere else, but by altering the incentives of employers to hire and fire; by cutting payroll taxes, giving out credits for job creation, or ideally allowing employers to cut wages and have the government make up the difference.

But I'm optimistic about this. Given the huge importance of job creation to politician survival--I think it's fair to say that the Democrats will win or lose in 2010 and 2012 based almost solely on the strength of the labor market--you'd expect them to take seriously ideas which have a proven track record of generating jobs very cost-effectively. And you'd expect the crack economic team advising the White House to be aware of these types of policies and their performance internationally.

And if it doesn't happen--well I guess I'll be there to write an angry blog post in response. It would really be very short-sighted and horrible for the US not to follow suit with useful policies to generate jobs.

Sunday, November 1, 2009

Privatized Flying Armies of Robotic Killer Assassins Found Problematic

This week's New Yorker is actually pretty good. Gladwell's piece on football and dog fighting has gotten a lot of attention, but Jane Mayer also has a good article on the Predator Drone program:
It’s easy to understand the appeal of a “push-button” approach to fighting Al Qaeda, but the embrace of the Predator program has occurred with remarkably little public discussion, given that it represents a radically new and geographically unbounded use of state-sanctioned lethal force. And, because of the C.I.A. program’s secrecy, there is no visible system of accountability in place, despite the fact that the agency has killed many civilians inside a politically fragile, nuclear-armed country with which the U.S. is not at war. Should something go wrong in the C.I.A.’s program—last month, the Air Force lost control of a drone and had to shoot it down over Afghanistan—it’s unclear what the consequences would be.
There are some ethical questions here, and a tradeoff between security and the consequences of extrajudicial assassination. As well as interesting psychological problems created by having people go to war during the day and come home to their families at night.

But what's also interesting is that using air power to conduct counterinsurgency is not new; it's not even new in Afghanistan. From Wikipedia:

Following the end of World War I and the accompanying British defence cuts, the newly-independent RAF took up the task of policing the British Empire from the air. It was argued that the use of air power would prove to be a more cost-effective way of controlling large areas than by using conventional land forces. Sir Hugh Trenchard, the Chief of the Air Staff, had formulated ideas about the use of aircraft in colonial policing and these were first put into practice in 1920 when the RAF and imperial ground units defeated rebel Somaliland dervishes. The following year, in 1921, the RAF was given responsibility for all British forces in Iraq with the task of 'policing' the tribal unrest. The RAF also saw service in Afghanistan in 1928, when following the outbreak of civil war, the British Legation and some European diplomatic staff based in Kabul were cut off. The operation to rescue them, the Kabul Airlift, was the first evacuation of civilians by air.

Arguably, the pacification of these areas by the British shows how purely air-based strategies can work. On the other hand, the fact that America is still fighting in tribal conflicts in Somalia, Afghanistan, and Iraq--essentially, taking over previous British entanglements--suggests that these are not good long-term solutions.

WTF Story of the Day

The Reddit headline for this story goes "We’ve secretly replaced this couple’s alarm clock with a Chevy Malibu. Let’s see if they notice the difference."

CNN has the full take. What's great is that CNN has to use the word "allegedly" in front of any crime. So you get reporting that goes:
With motor fluid spraying their faces and the weight of a car numbing their bodies, two Nevada college students struggled to stay calm after a drunk driver allegedly tore into their home, ripping them from their slumber.

Kristin Palmer and Trent Wood were asleep in their home last week when a motorist allegedly drove into their bedroom around 4 a.m., mistakenly believing it was his ex-girlfriend's home.

Allegedly? I think the photos of the car inside the house, the ER calls, the testimony from the College students, etc. all add up to a fairly convincing story.

I wonder what the protocol is for this type of tone. If a bombing goes off somewhere, should they say it's an "alleged" bombing? If there is a suicide bomber involved; did he "allegedly" cause the explosion? Or do you only need to use "allegedly" if there is a criminal case involved? In which case; it's a little odd that the factual circumstances behind an event must be discussed with an ambiguous tone as soon someone investigates the case.

I mean, if we can't be sure about whether or not someone drove a car into a home; what basis does CNN have for any of their stories?