Tied to the whippin' post

This is a pretty amazing table:

Let's break it down:

1. I guess Mustafa Kemal really did have some influence.

2. Pakistan and Egypt are seriously messed up places.

3. Those numbers do not conform to the pleasant image of Jordan that I have in my head.

Hat tip to Roving Bandit.

Degrees of freedom

In my seminar on Growth & Development today we discussed a paper where the sample size was fairly small, around 75 observations. The authors said due to the small sample size, they couldn't estimate models with a lot of regressors in them because of degrees of freedom issues.

Then they proceeded to investigate upwards of 30 variables, by using them one at a time! To "save" degrees of freedom!

Yikes!

First off, excluding relevant variables in the analysis biases results unless the variables are somehow orthogonal to each other, which is EXTREMELY unlikely.

Second, estimating 30 small regressions on the same sample does not actually save ANY degrees of freedom over estimating one big regression on the sample.

Sure you can say it does and use the nominal critical values in each case, but you are kidding yourself and misleading your readers.

Degrees of freedom are like cigarettes. Once you use them, they are gone. They can't be re-used over and over again.

Overall the paper reported well over 100 estimated coefficients. On 75 data points. In a ton of different regressions all with the same dependent variable. Used the nominal critical values in every case.

What is the critical value for a "t-stat" with negative 34 degrees of freedom?

Anyone?

Bueller?

Low voltage

Obama motors is having trouble with their signature product.  Chevy sold 603 Volts in January. Their sales target for 2012 (45,000) has been dropped. Last year they sold around 8,000 Volts.

More info is here, and the hat tip goes to Mark P.

Has the $7,500 tax credit for buying one of these bad boys expired? Or has America run out of Volt-less rich people?

Or maybe people don't want their cars to double as fireplaces?

Grand Game: San Francisco Edition

A truly remarkable cavalcade of idiots, ideologues, and squishy thinkers. A parade of sports and horribles. Hard to believe they are serious, but then lefties are always serious. Wrong, but serious.

I won't spoil it for you. But don't miss the consequence where the company can't even bid on government contracts because now their costs are too high. Presumably we will soon have a set aside to assure that the halt and the lame of SF get their "fair chance" at being the high bidder yet still winning the contract.

Discuss.

(And nod to Anonyman)

No Sh*t, Sherlock

Hey. Do you know what is the favorite food of people that live in India?

Well it's INDIAN food!

How 'bout Mexico?

You guessed it, MEXICAN!

Now, do you know the moronic NGO that paid $$ to find this out?

Well, it's OXFAM (scroll down to the "top 3 foods by country" table).

Nice job guys, really good use of $$ and really fascinating findings. Don't know what we'd do without you.

The partners from Hell

Mrs. A and I have returned from two weeks in Uganda. It was a fantastic trip. We saw and did so much, I'm still kind of trying to process it all (and get over the jet lag).

However, one negative element of the trip was the incredibly disfunctional partnership between Delta and KLM. We flew OKC-ATL-AMS-EBB out and EBB-AMS-DET-OKC back. The full round trip was code-shared by both airlines, with KLM equipment on the flights in and out of Amsterdam and the rest with Delta equipment.

The first issue was that it turned out to be impossible to use frequent flyer miles to cover the flights. Not because there weren't seats, but because Delta said they couldn't get seats on the KLM provided flights and KLM said they couldn't get seats on the Delta provided flights. So it wasn't exactly true that we couldn't use frequent flyer miles, we just would have had to use twice as many as it should have been.

The next issue was that if you booked the flights with KLM you could only get amenities on the KLM provided flights (upgrades, special meals, priority boarding). If you booked with Delta, you could only get them on the Delta provided flights. This turned out to even be the case with seat assignments!

People, it is so bad that you are not even informed of SCHEDULE CHANGES on the flights provided by whichever company that you didn't book with!

At least KLM flew a modern plane with personal entertainment systems and such. The Delta equipment from AMS to DET was an ancient 747 with a couple of TV screens bolted to the ceiling.

More on the fun parts of the trip later.

you can't hit what you can't see

I am heading to Mungotown to talk about monetary policy. I was researching the question of whether the Fed should target asset bubbles (and by target I mean, prevent / deflate!!). Chairman Ben's point of view is that the Fed should do so only to the extent that the bubble bleeds into overall inflation.

At this point something burbled up in my reptile brain; "housing is about 1/3 of the CPI, how could it have soared so far without bringing inflation along?"

People you probably know this already, but in 1983, the BLS redefined how to measure housing costs to "owner equivalent rent", and this variable didn't much move with housing prices in the last decade.

Here's a graph, courtesy of Dr. Housing Bubble (clic the pic for a more glorious image):

The red line shows the growth rate in the Case-Shiller housing price index, the blue line shows the growth rate of housing component of the CPI.

YIKES!!!

From 1998 to 2006, there was a complete disconnect between housing prices (rising like crazy) and the BLS measure of owner equivalent rent (which never went up more that 4% in any of those years).

Hard for a bubble to bleed into inflation when it's been defined out of the index!

The culture that is New Jersey: Jersey Shore >> Beloved

Rutgers is paying Toni Morrison $30k for the commencement address but gave $32k to Snooki for an hourlong appearance.

Snooki's advice to the students? "Study hard but party harder"

Where's Chris Christie when you really need him?

The Washington Monthly loves its readers

It loves them so so much:

"Strange as it may sound, to get a grip on costs, we should in many cases be hiring many more bureaucrats—and paying more to get better ones—not cutting their numbers and freezing their pay. Because in many parts of government, the bureaucracy has already crossed that dangerous threshold beyond which further cuts can only mean greater risk of a breakdown. Indeed, much of the runaway spending we’ve seen over the past decade is the result of our having crossed that line years ago—the last time there was a Democrat in the White House, a divided government, and calls for slashing the federal workforce in the air."

Yes, people, they really said that "much of the runaway spending" is a result of having too few Federal bureaucrats! Talk about pandering to your audience.

This is just so far out there that no one can really take it seriously right?

Wrong!!!!

Sticking a Fork in the National Libertarian Party

As some of you people may remember, I was scornful of the LP's choice of Bob Barr as their presidential candidate in 2008.

Now comes the delicious word that Bob (still rockin' a porn stash for the ages) is in Haiti, REPRESENTING BABY DOC DUVALIER!!

Yes that's right, the Libertarian presidential candidate is helping out a notoriously corrupt and brutal ex-dictator.

I do not think that the party will soon recover from the complete and total sellout of libertarian principles that Barr's nomination represented. This is just icing on an ugly, ugly cake.

LP members: Check out this load of crap from your candidate:

Barr "will be representing" Duvalier "in bringing his message of hope to the world," the former Republican congressman's website says.

"I also am reminded of others who have risen from the ashes," Barr told reporters Friday. "The city of Atlanta is the Phoenix city. The people of Haiti, likewise, will rise from the problems created by last year's earthquake and emerge stronger and better than before. That I know is Mr. Duvalier's deep wish and something that he knows in his heart."

1. Baby Doc was a 15 year slow motion earthquake for the people of Haiti.

2. Baby Doc can't know anything in his heart because he does not HAVE a heart

3. If one finds themselves within 10 feet of Baby Doc, the only appropriate course of action would be to try and inflict as much physical damage on him as possible as opposed to the heinous butt kissing of Bob Barr.

Thank you sir, may I have another?

People, it just never ends. Now a group in California is suing Mickey D's over their happy meals. It turns out that kids like them and get mad if mom says no. So mom is suing!!

I am not making this up.

Of course mom is not "just" a mom; she's an employee of a state funded vegetable advocacy group.

I am not making that up either.

Remind me again why we need lawyers?

Hans Rosling's Chart is SERIOUSLY MISLEADING

I guess I am the last person with an internet connection to see this video.

Yes he's an entertaining and enthusiastic guy. Yes, the rise of China and India is amazing and fantastic. Yes there is a large "middle class" of countries.

But people, have you looked at the horizontal axis of his chart? The distance between $400 and $4000 is the same as the distance between $4000 and $40000.

That is incredibly misleading.

Properly plotted on a linear scale, it would be clear that there was way way way LESS income inequality in 1810 or that magic year of 1948 than there is in 2010.

We are NOT living in an "age of convergence" with respect to per-capita incomes.

It is NOT only Sub-Saharan African countries stuck at the bottom.

Latin America is NOT catching up to the USA.

The whole thing is pretty much horse hockey.

Then the press grabs ahold and starts to exaggerate the exaggerations. Here's David Brooks:

"Then, over the last few decades, the social structure of the world changes. The Asian and Latin American countries begin to catch up. With the exception of the African nations, living standards start to converge. Now most countries are clumped toward the top end of the chart..."

Just keep repeating this to yourself people: "The left half of the chart covers a range of $3,600, but the right half of the chart covers a range of $36,000.

Holy Crap!

The leaky lockbox

Of all the weird stuff surrounding the tax deal (Bill Clinton and President O, mortal enemies, now together??), I think the weirdest of all is the idea that cutting the payroll tax imperils Social Security.

Let's sort this one out right here, OK people?

First, at the meta-level, money is fungible. It's very difficult, if not impossible, to earmark funds even when you try. This is what makes humanitarian aid to oppressive dictatorships such a morally murky area.

Second and most relevant though, is the fact that payroll taxes are NOT dedicated only to paying social security benefits. That's right, not only are your personal contributions NOT saved to fund your social security benefits, aggregate annual payroll taxes are not used explicitly to fund social security. The money is spent, period. On what? it's really impossible to say (see the above paragraph).

Yes, I know, Al Gore told us there's a lockbox with our "contributions" safe inside.

People, it's a lockbox with a 100% skim rate (i.e. not a lockbox at all)! Get Al to let you look inside; that sumbich is empty!

In truth, there really isn't much "imperiling" social security; it's the stream of future health spending obligations that are unsustainable. A combination phasing in partial means testing for benefits, and phasing in a slight rise in eligibility age could easily solve any "problems" that might be conjured up.

But the cut in the payroll tax doesn't "imperil" social security any more than it "imperils" the defense budget or the Pell grant budget.

If benefits aren't altered, then the day that payroll tax revenues fall below benefit payouts, what will happen? Nothing! Benefits will be paid out of general revenues just like they've effectively always been paid.

While tax cuts may imperil future spending (that's the essence of "starve the beast", no?), there is no real link between the type of tax being cut and the type of spending being imperiled.

Motes vs. Beams

People, Dean Baker is quite a piece of work. He goes after people hard with what I will charitably describe as less than a fully correct analysis.

Here's another example, a post purporting to explain "Robert Samuelson's confusion on real interest rates:

In an economy operating below capacity, it would be desirably to have very low real interest rates to boost investment. This means that the cost of borrowing is low relative to the return on investment. Because interest rates can't go negative, it is impossible for real interest rates to fall as much as would be desired given the weakness of Japan's economy. It would be ideal if it could keep its nominal rates at their current near zero level, while inflation rose to 3.0 or 4.0 percent.

The other reason why inflation would be desirable is that it would allow homeowners to get out from under their debt burdens. If wages rose 3.0-4.0 percent annually in step with inflation, the burden of a fixed mortgage debt would be eroded through time. Also, if house prices rose in step with inflation, consumers would gain equity in their homes.

Excuse me for a moment.....

[AAAAAAAARRRRRRGGGGGGHHHHHHH!!]

Thanks, now I feel a bit better. I think I may even be able to make a couple comments.

First, if the real rate is negative, then investment projects with a negative return may actually be "profitable". If the real rate is -4%, then a project with a -2% return "works". Strange way to rebuild an economy, no?

Second and more importantly, the most widely used model of the real interest rate is the Fisher equation which states that the nominal rate is equal to the required real rate plus a premium for expected inflation. It is beyond bizarre (but sadly not uncommon) to assert that inflation can rise significantly without nominal rates also rising.

Third, if inflation rose in a predictable manner, mortgage interest rates would rise as well (see point two) and there'd be no "savings" on new mortgages.

Fourth, to the extent that inflation was unanticipated, yes, borrowers would gain. But this is a zero sum game. Lenders, who after all are people, consumers, and voters too would lose an equivalent amount.

Fifthly and finally, as for how inflation builds home equity, all I can say there is WTF??? Housing is in the CPI. If all prices go up 3% how is the real value of your home increasing?

People, I am fine with trying a little bit of inflation here in the US of A. There are tons of idle cash sitting around, inflation is a tax on holding money, so maybe peoples will spend more. I don't think QE2 is the first sign of the apocalypse. But, even if it works to the specifications of its most ardent supporters, it's not going to come close to solving our problems.

what goes around comes around

Alan Blinder is up in arms at the audacity of foreign leaders calling QE2 "currency manipulation". So is President Obama, Paul Krugman, and a host of other luminaries.

Here's Blinder in today's WSJ: "But calling QE2 "currency manipulation" is a grotesque abuse of language".

His (correct) argument is that QE2 is basic everyday expansionary monetary policy just applied to a different portion of the yield curve. Sure it may have the side effect of lowering the dollar, but.....

People, the foreign reaction is a predictable consequence of our insistence in labeling China's fixed exchange rate as "currency manipulation".

A fixed exchange rate is a basic everyday policy regime. Bretton Woods was a system of fixed exchange rates, so the US has had a fixed exchange rate in the not so distant past. The countries of Western Europe continued to struggle to achieve a system of fixed exchange rates post Bretton Woods, culminating in the creation of the Euro which is a system of fixed exchange rates between all the participating countries.

Here's another gem from Blinder: "the US is sovereign nation with a right to its own monetary policy".

And China isn't???

Our administration and elite pundits have been blaming other countries for our problems for a while now, so it's not surprising that many other countries are enjoying their chance to throw it back into our faces.

My idea of Hell

"ACADEMICS at one Australian university have to fill in 14 forms for a PhD student to get from pre-admission to graduation. Those 14 compulsory forms demand 270 separate pieces of information. Each of those items of information has to be supplied, on average, 2.7 times. For each PhD student, academics lose 580 minutes of precious time on form-filling, according to a conservative estimate."

Story is here.

At my university, I get by with having my grad students fill out their own forms and me signing them! That's a foolproof system, right?

Here he is people: the stupidest man alive

yes Mick Cornett, you KNOW I'm talking 'bout you!

Uncle Sam: Part Pusher, Part Preacher

The front page of today's NY Times sings a new verse to a familiar tune. The Federal government actively helps market extra fatty pizza (Uncle Sam the Cheese Pusher) while at the same time putting out publications warning people against eating pizza.

Just like when it subsidized the production of tobacco while running advertising campaigns against consuming it.

Just like how it limits the importation of sugar and subsidizes the production of corn so that kids grow up swimming in an post-natal amniotic fluid of high fructose corn syrup, while at the same time good old uncle sam leads the fight against childhood obesity and diabetes.

We pay for the pusher and we pay for the preacher and they are one in the same.

Ignominy, thy name is Ginepri

Squirrel 1, Robby Ginepri 0 !!

Uh, will any of this be on like, the final?

Did I Miss Anything?

Tom Wayman
From: The Astonishing Weight of the Dead. Vancouver: Polestar, 1994.

Question frequently asked by
students after missing a class

Nothing. When we realized you weren't here
we sat with our hands folded on our desks
in silence, for the full two hours

Everything. I gave an exam worth
40 per cent of the grade for this term
and assigned some reading due today
on which I'm about to hand out a quiz
worth 50 per cent

Nothing. None of the content of this course
has value or meaning
Take as many days off as you like:
any activities we undertake as a class
I assure you will not matter either to you or me
and are without purpose

Everything. A few minutes after we began last time
a shaft of light descended and an angel
or other heavenly being appeared
and revealed to us what each woman or man must do
to attain divine wisdom in this life and
the hereafter
This is the last time the class will meet
before we disperse to bring this good news to all people
on earth

Nothing. When you are not present
how could something significant occur?

Everything. Contained in this classroom
is a microcosm of human existence
assembled for you to query and examine and ponder
This is not the only place such an opportunity has been
gathered

but it was one place

And you weren't here