Brooks lies with the truth

The best lie, is the truth without context. David Brooks attacks neo-Keynesian stimulus with a truth: the evidence is that the problems with the American economy are structural. While Krugman can lie, and say "all the evidence is that the problems are lack of demand," the price of resources contradicts him. If this were a cyclical problem, then the price of resources and the ability of those that sell them to keep their profits, would be near zero. Deflationary liquidity traps hit the resource producers much harder than others, because they have less flexibility in their capital employment. You can't sell, what you can't mine.

However, the reality is that the structural problems that Brooks speaks of, are largely the creation of his preferred ideology, and yes, the result of lack of government spending. The problem the left faces is that while correctly understanding that more, not less, public investment is required to fix the economy, they absolutely refuse to do this. Krugman's defense of the ACA/PACA is case in point. The ACA moves more money to financial insurance companies, who are part of the structural problem. A health care bill, as opposed to a health insurance bill, would have created a huge investment to shift national effort from selling fast food and other forms of unhealthy activity, to selling health care and improving human capital. The price effects of the bill, are zero, all of the trumpeted reduction in health care spending, is cyclical. Or to put it another way, Krugman decries depression economics, except when it saves his political ass.

Brooks decries neo-Keynesian stimulus, and yet the very financial meltdown he attacks was entirely caused by the misallocated structural spending of his party - the Republican Party ran the government when we built oil consuming houses and ran two losing wars and invested in making more billionaires. The meltdown is from the structural problems that Brooks advocates. He might as well say that by creating a camp for young people, Socialists are to blame because they put Brevick's victims all in one place.

Brooks has no desire to reduce superstar salaries, except in the cases where these salaries are annoying to his masters. Lord knows that if Brooks thought superstar salaries were a problem, he could ask for a pay cut. A big one.

Brooks has no desire to reduce the carbon economy. He racks up too many air miles.

Brooks has no desire to end the red queen's race of wealth, except if it involves invading Iraq again - a policy he supported nearly to the bitter end.

Brooks has no desire to increase education, but instead to reduce it, that is what is cut when governments cut spending.

In short, one could go down the list of structural problems and find that Brooks is a loud, public, and consistent proponent for making them all worse by closing the few remaining avenues out of poverty, killing millions with structural inequality, and promoting a global order of war, torture, and violence, from which his ideology profits. If Krugman lies in support of his slice of the truth, Brooks is worth, he tells only so much truth as is useful to protect his slice of the lies.

Generation #fail goes marching on. And every day that David Brooks is allowed to publish in front of more than three goats, two bats, and a three legged dog, is further proof that it is a generation without moral character, intellectual integrity, or even a scrap of human decency. Brooks cheerful advocates the murder of millions, as the way to solve the problems created by the millions his ideology has murdered over the last thirty years. The distant descendants of this time will look at this generation the same way we look at chattel slavery, it will simply be incomprehensible to them how such a vile institution could be, not only allowed, but protected.

The rich are getting richer. Liberals demand we send them money every month

The reality of disparity of wealth is less control over physical resources, than control over the direction of society. The rich aren't really rich, but merely the infinitely overdrawn - that is what the money the Fed has pumped into the world economy did, prop up the super wealthy.

The problem is that the left is now as captive to financial interests as the right is to resource extraction and labor extraction. Case in point is the dogma over the "health care mandate." This is a mandate for almost all Americans to send money to insurance companies. While the numbers will be small at first, there is nothing to stop governments from cutting subsidies over time, and for employers to continue to opt out of providing health insurance. The penalties are smaller than the costs of doing so. More over, the dogma from the technocratic establishment is that if there is not a mandate, prices will spiral upwards as healthy people opt out, and sick people opt in. But prices have continued to spiral upwards in Massachusetts, even with a mandate.

The reality of health insurance is, that for most people, it is a lousy deal. Look at it as a bet, the MLR is the amount the house "pays out." Even the most generous numbers have MLR's paying out 77% based on a Senate inquiry. That's worse than a slot machine. Since much of care is in the last year of life, for a person before they are about to die, the loss ratios are closer to 40%. Now, if you pay in 1 dollar and get back 40 cents, why? Insurance companies, by negotiating discounts with providers, can make the gap look bigger, but the government could do that as well, even absent government insurance. The bottom line here is that it is impossible to say, on one hand, that the rich getting richer is a problem, and demand, on the other, that ordinary people pay insurance companies on a game of massively negative expectations run by... the same rich people.

The Hangover Games

Shorter Hunger Games: The Liberal Industrial Complex is killing our pure kids from the hinterlands, but violence still won't solve anything.

What the film is, is a mash up of populist delusions on the world, which is to say, one, no wonder it is so successful, and two, no wonder it is so corporate.

When Marx called religion the opium of the masses, he really didn't understand what entertainment was going to be like.

Education is a painful thing

Some of that growth has resulted from a phenomenon called Baumol’s disease, after the economist William J. Baumol, who described it in a 1965 article he wrote with William G. Bowen. The basic idea is that while productivity gains have made it possible to assemble cars with only a tiny fraction of the labor that was once required, it still takes four musicians nine minutes to perform Beethoven’s String Quartet No. 4 in C minor, just as it did in the 19th century.

One can plow through the first movement in about 9 minutes, but the whole quartet will take an ensemble closer to 24 minutes even if rushing a bit.

Also, as is often the case with Thaler, the empirical data does not agree with his suppositions very well. In fact, there has been a dramatic increase in many degree programs in the time to degree. The increases have not been even, for education the length of time is now 6 yars longer, an increase of 1/3. This trend peaked some two decades ago, but the ebb has been far less than the rapid increase in the 1970's.

What is interesting is that time to degree was lower when there was institutional support, indicating that when the institution was paying, it wanted people done. Conversely, for all students, in constant dollars, the average indebtedness has tripled, at a time when salaries have not gone up that much in the corresponding fields, so Thaler's explanation that a fixed time activity has to go up in unit cost because it is competing with technologically affected wages, is not born out by data. Any one who knows his work would not be surprised

However, these numbers are what one would expect if college were a rent, and the cost were some percentage of the difference between having, and not having a degree, because the difference would go up, even if wages for college graduates were rising slowly or stagnant, because what matters is the difference in risk adjusted wages, which includes, of course, unemployment risk.

The colloquial term is "a racket."

Nancy Folbre sells out to boomer bullshit

This is what boomer bullshit looks like.

Folbre is one of the the better economists, but this is a trail of slime without redeeming intellectual value in service of a con job. And obviously botched.

What does this miss?

1. The boomers are charging people for education thrice: once through taxes to pay for intergenerational transfer, once through loans – both direct and for housing – and once by licensing everything, including culture. Charge three times early.
2. This has a second cost, since the young can't invest, they are facing the miracle of compound interest in reverse. Every 1000 dollars of additional debt means an additional 10000 of cost at retirement, given historical 2% real returns. That's real, not nominal 10 fold cost.
3. They cannot discharge any of the debts from (1) by bankruptcy. That is, these are serfdom loans that follow a person to the grave. The boomers, in an era where returns are hard to come by, are locking in well above market returns from licensing, education rents, and housing rents that are being artificially propped up.
4. She of course dishonestly does not mention that the cost of college education has been going up faster than inflation for over 20 years. This patently dishonest, inexcusably so, this compounds the shift from grants to loans.
5. We haven't gotten to the externalization of carbon - charge the boom a relatively standardly quoted figure of $35/dollars a ton for carbon, and they are so far in the hole that they will never dig out.
6. Other externalization of costs, including consuming biological value of anti-biotics, are also left unpointed out. Then let's get to the gift of Iraq, which is going to keep on giving.
7. Unaccounted for is the absolute versus relative value of education. How much increases the real benefit, and how much is defensive to avoid being penalized. Realize that lower educational attainments are either dropping in value, or their increase is going down.
8. We of course note that as with many historical surveys, by including the double boom of 1983-1999, her numbers assume that the Reagan-Clinton bubble is going to start tomorrow. Not going to happen, it was a one time robbing of energy, not to be repeated.

In short, her piece is a dishonest aplogia for economic rent. It boils down to "we were here first, so whatever we decide to charge you for the grace of educating you, is what you are going to pay." Arguments in favor of setting economic rents at arbitrary values are the heart and soul of conservative economics. The only difference between Folbre and Santorum is where, precisely, they draw the line – there is no difference in essential ideology, only in which old people are in the magic circle.

This is why there is very little point in writing at this point: the past is dominated by corrosive conservatism, even among the so called liberals. One might as well ask who the liberals were in the first two Estates of the Estats-General of 1789. Sure, there were a few. A few. But in general, even the most radical members of the privileged could only be described as reform minded aristocrats. That Folbre is so patently dishonest in her suppositions means that there's no discourse possible.

"Those who make peaceful revolution impossible, make violent revolution inevitable."

A They Don't Live in Your World Example

Helicopter pilots are complaining about new rules.

This is a conflict between two of the most powerful lobbies in America: the ultra-rich lobby, working on creating a parallel world for themselves, and the suburban lobby, working on creating a parallel world. The argument is over how much oil that we don't have we should spend on propping up property values, because of course helicopters are to the Hamptons, what cars are to the inner suburbs: the way to speed the commute.

Of course, a high speed rail line could do both, but then those nasty "other people" could get out there, and everyone would have to move.

It is hard to have sympathy with very very rich people having to spend more, but they aren't going to be spending it on the solution to the problem, only on making the problem worse for the benefit of other people, who are also making the problem worse. In a nutshell this is American politics: an upper class party against a middle class party on how much damage they can get to apply to their own credit.

There's no actual sense going on here, except in so far as this is an extreme case where the ultra-rich are more wrong than usual, however, the middle class party no more wants the problem solved than the rich to.

Bad thinking about finding love

People have been spending a great deal of time thinking internet dating. Mostly bad thinking. Consider this slate article which hypes a study that shows that a limited supply of virtual roses increases a chance of interaction by 20%. Now, in the internet dating world, this is not a noticeable amount.

There is a larger problem with this idea, in that it is another example of neo-classical economics at work: if there isn't scarcity, create it. It leads to stupid IP laws and other forms of artificial restriction which are highly profitable for politically connected gatekeepers, but bad for everyone else.

If one is going to use restriction here, then it needs to cut both ways, because not only are contacts, but refusals, cost free. This leads to a spam cycle: the chance of getting a reply is low, particularly for men, and that means they send out large numbers of queries. Which, in turn, swamps women, especially desirable seeming partners. Who then reject more, leading more men to spam. People are reduced to the lowest level of interactions.

Better is to create a system which generates actual meetings, because, and this should be no surprise, people are more attractive in person. Internet dating is victim to the "S" curve of adoption. When there were few people on the internet dating scene, and more particularly few attractive people in comparison to the pool, it took few queries and worthwhile offers were few. It worked very well for a small number of people. But once the pool was filled, particularly by men looking for second, third and so on relationships, life changed. It is hard to sort the dross, profiles don't work well, and queries have such a low chance. Chat rooms became clogged, and it is the chat rooms that people used effectively, because real time winnows out not serious people quickly.

So back to the query aspect. The system should be that people get a limited number of mails out, but also a limited number of rejections. Once they have not responded to a certain number of queries, their profile disappears until they send out a certain number of queries. That is, people can no longer hang back and wait for offers, but must make offers themselves.

This falls into a class of economic markets where there is asymmetrical cost of negotiation: it takes one party a great deal more energy to make an offer than the other party to reject one, hence the waiting party has no incentive not to wait, and wait, and wait. Offering parties have no ability to gauge who is serious, that is looking for an offer now, and who is merely fishing. The same applies to employment, which is why I was thinking about the class of problem, and discussing it over the summer - candidates for employment have basically three categories of job offers, those where there is a real need that must be filled quickly, terrible jobs that churn and burn through people, and those that they have virtually no chance of getting. While it is fairly easy to filter the bad job out, and take one only if it is clearly necessary, the other two are much harder to sift out.

But the differences in chances of being hired are vast. For the real need, there is essentially a 2 week to 1 month window. This means that there are few candidates, and one must be selected unless all are unfit. For the second, the employer is basically looking for the person who is the perfect fit who just got laid off in the middle of an ugly divorce and needs to be at work now and so willing to work at a 30% discount. The discount number is one I calculated based on some proprietary data I had available at that time. Roughly, the fisher is trying to get that much off the going rate for the skills set.

For the job seeker, there is actually a heuristic: the longer the list of desired skills, the worse the chances. If job sites wanted to reduce the amount of fishing and increase the chances of people being hired – which they don't by they way – then they would place a low cap on the desired skill list, because long skill lists indicate an employer who can afford to be picky, read slow, and is looking to knock down the salary from the market rate for not having obscure skills, or very particular domain knowledge. All of which can be acquired quickly.

For the dating site, the basic problem is that the interests of the dating site, and the people on it, are 100% in opposition to each other. Daters want to find dates, dating sites want people to not find dates. This is a death spiral: the most desirable people for a dating site are cheaters – particularly men – because they stay on, they are more attractive than they should be – and picky women who are looking to boost their egos by rejecting men. For the same reason, they are more attractive than they should be, and are on more. They need just enough matches so that desperate people will join, but matches disappear.

Is there a solution for this? The physical world places an offer cost: a store, clothing and the time to get ready for a date, physically flying in a candidate or flying out an interviewer. The network world can impose a cost to, but of a different kind.

Sure, and if I start a company, it will be based on the algorythm that solves this version of the asymmetrical offer problem, and the mismatched incentives between markets which want to be clogged with failure, and the members, who want success. BTW, this applies to political activism. Activists are generally failures, because there is a huge incentive to be a failure. The activist proposition is to build up a network of people who are highly motivated by your cause, and give you money. This is a huge wall to climb. Once in place, it is easy to maintain. Hence failure is better, because a perpetual, unsolvable problem becomes legacy activism. Activists deserve being picked on, because the entrepreneurial model of activism has not served the people they get money from well, but it is far from an isolated case.

Asymmetrical offering and failure incentives are two large structural problems that come from the low cost of internetworking, and lead to network and market failure. In another age, we would have used government, but that isn't really possible now, because government right now is loaded with people trying to generate barriers to entry for the profit of constituencies, who are, in turn, part of failure incentivized markets. That is, they have a high incentive to come up with a solution that benefits them short term, and then collapses, so that they have no competitors coming after them. Consider the implications of the Buffet rule: it is in effect a barrier to people getting rich, which benefits the people who made their money during the "Great Tax Depression."

And so on. So executive summary: one of the problems of a cheap communication high barrier to network world is that it creates incentives to two kinds of strategy which are market failure producing. One is the fake offer, which leads to the spam cycle, the other is the failure incentivized actor. There is a solution, it is simple, elegant, and will be opposed by generation Fail to the bitter end. Their lives, their fortunes, and their sacred celebrity depend on it. update: seems like this is being realized.

Started the MX-5 Turboing project

First step was to upgrade the suspension. Next will be to redo the exhaust. Then for more power. Remember, "The Goal is Control."