Monday, February 20, 2012

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.

Tuesday, February 14, 2012

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.

Monday, February 6, 2012

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."