Easterly on State-Promoted Industrialization

Easterly will be visiting BYU next week. His blog today has implications for the likely effectiveness of the Obama administration's attempt to drive the economy via the government.

http://blogs.nyu.edu/fas/dri/aidwatch/2009/02/asian_success_mythology.html

Highlights:

So my general claim is that heavy reliance on markets is associated with long-run success, using as data the Asian successes, the earlier European and North America/Australia/New Zealand successes, the failure of non-market central planning in the Communist Bloc, and the failures of statist policies in Latin America, the Middle East, and Africa. It is true that Asian successes used state intervention more than the earlier European examples, but on average state intervention does poorly across all countries, so we have no Popper-standard evidence that state intervention contributed to their success. So my claim is based on evidence, not ideology.

So I stand by my claim that the 66-year-old idea of state-promoted industrialization has failed, and that it was irresponsible of Collier and UNIDO to resurrect it as a “major conceptual breakthrough.”

In The Bleachers

Today's In the Bleachers comic strip made me chuckle.

http://news.yahoo.com/comics/inthebleachers

Daniel Henninger: A Radical Presidency

http://online.wsj.com/article/SB123561433557778201.html

He sounds very, very worried. We now know for sure that the President is just as liberal as his voting record indicated. He is less and less the empty vessel into which one can read any motives one wishes and revealed more and more to be a typical left-wing liberal. I think Henninger is right to be worried.

Highlights:

He told Congress he does not believe in bigger government. I don't believe that. It's becoming clear that the private sector is going to be demoted into a secondary role in the U.S. system. This isn't socialism, but it is not the system we've had since the early 1980s. It would be a reordered economic system, its direction chosen and guided by Mr. Obama and his inner circle.

Gov. Bobby Jindal's postspeech reply did not come close to recognizing the gauntlet Mr. Obama has thrown down to the opposition. Unless the GOP can discover a radical message of its own to distinguish it from the president's, it should prepare to live under Mr. Obama's radicalism for at least a generation.

Annoying Russian Spam and How I Finally Got it to Stop Bothering Me

Maybe it's just me, or maybe others have experienced the same problem, but in the past month or so I have seen a huge spike in spam emails that are totally in Cyrillic characters (I assume they are Russian, but don't know for sure).

I have been struggling with how to get these to go automatically to my Junk mail folder. They come from a variety of sources and the text is not identical, but they are completely devoid of Roman characters (like the ones you are reading now). It turns out that MS Outlook will not let you set up an email rule that sorts by the script of the email. You can't throw away email based on the inclusion of Cyrillic, Greek, Chinese, or any other writing system.

My fix was to pick out one common Cyrillic character, д, and set up a rule that tossed any email containing it as a word fragment. There is a potential drawback here, of course, which is that if anyone sends a legitimate email I want to receive, but they include a д for some reason, it will still go to the Junk folder, even if the rest of the letter is in English. I am willing to live with that risk.

This morning's Junk folder shows 9 of the 16 items accumulated since last night are Russian spam, so it seems like a reasonable and useful fix.

Taxing the Richest Won't Raise Enough Revenue

This has been known for years. But in the current political climate it bears repeating.

From the WSJ opinion page today, the following quote:

Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.

Few of us realize how progressive our income tax is and how much of the largess the government doles out depends on the earnings of so few.

Today's Dilbert Cartoon

Today's is one of the best of all time. Hattip to Dave Spencer.

http://www.dilbert.com/strips/comic/2009-02-25/

A Unique Gift Idea

Have a Palestinian graffitti artist spraypaint whatever message you choose on Israel's security wall in the West Bank. The cost is 30 euro (about $40).

http://news.yahoo.com/s/nm/20090225/wl_nm/us_palestinians_israel_wall_1

http://www.sendamessage.nl/your-message-on-the-wall/?lang=eng

Self Explanatory Picture

I saw this on Greg Mankiw's blog - http://gregmankiw.blogspot.com/2009/02/ricardian-equivalence.html

Why 5 Bank Accounts Are Better Than 1

from MyBankingWay.com
http://www.bankingmyway.com/article/why-5-bank-accounts-are-better-1

If you are trying to budget effectively, here is an interesting bit of advice. It makes a lot of intuitive sense. I may even try this in our household. If Yeongmi approves, of course.

Highlights:

Meanwhile, separating your wants from your savings goals will help you achieve those goals faster. "If the two accounts are mingled, it's much easier to spend your money on the wrong things," says Ray. If they’re kept separate, you'll have to stop and think about whether that impulsive splurge will delay your vacation plans.

Managing several different accounts might seem like a lot of work, but most of the extra effort is at the beginning, when you’re setting up the accounts. After that, it's mostly a question of monitoring balances to avoid overdrafts, and keeping your overall budget on track.

Musical Gems from Pandora Radio

I've been listening to Pandora Radio for several months now. What a wonderful musical tool! Here are a few of the songs I picked up that I had never heard of before. If you like a rock/country "roots" musical style you might like these. Most of them came from stations that were seeded with songs by Mark Knopfler and Chris Isaac.


The first one, Down in Mexico, by Delbert McClinton was a real find. Great guitar work and a captivating story to go with it.

My second favorite is probably 9 Volt Heart, by the Iguanas.

Rick Santelli: A Chicago Tea Party!

This video from CNBC is worth the five minutes it takes to watch it. Some people are very unhappy with the administration's economic policies. A Chicago Tea Party is in the works!

http://www.cnbc.com/id/15840232?video=1039849853

James Taranto on Students, Professors and Grades

From today's "Best of the Web" column.
http://online.wsj.com/article/SB123505515951422771.html

Fail Your Customers

The New York Times has an amusing piece about the frustrations of college professors:

Prof. Marshall Grossman has come to expect complaints whenever he returns graded papers in his English classes at the University of Maryland.

"Many students come in with the conviction that they've worked hard and deserve a higher mark," Professor Grossman said. "Some assert that they have never gotten a grade as low as this before."

He attributes those complaints to his students' sense of entitlement.

Another prof, Ellen Greenberger of the University of California at Irvine, has published a study called "Self-Entitled College Students":

Nearly two-thirds of the students surveyed said that if they explained to a professor that they were trying hard, that should be taken into account in their grade.

Jason Greenwood, a senior kinesiology major at the University of Maryland echoed that view.

"I think putting in a lot of effort should merit a high grade," Mr. Greenwood said. "What else is there really than the effort that you put in?"

"If you put in all the effort you have and get a C, what is the point?" he added. "If someone goes to every class and reads every chapter in the book and does everything the teacher asks of them and more, then they should be getting an A like their effort deserves. If your maximum effort can only be average in a teacher's mind, then something is wrong."

Anyone who works for a living is immediately struck by the contrast between this attitude and the real world. When you hire someone to do a job, you look for results, not "effort." Someone who works effectively and effortlessly is much more valued than someone who tries really hard and produces mediocre results. Why should schoolwork be any different?

The answer is that, except at the highest levels of higher education, school "work" is the opposite of real work. Students do not work for professors; professors work for students--or, to be precise, students (in combination with their parents and the government) contract with institutions of higher education, which in turn employ professors to deliver services to students.

If students have a sense of entitlement, it is a sense best captured in that old saying: The customer is always right. They're spending tens of thousands of dollars to get a degree so they can go out and find a job, and they're working hard on their assignments to boot--you're darn right they feel entitled to good grades!

Professors, quite understandably, see it differently. To the best of them, their calling is to impart knowledge and intellectual refinement. The degree is merely a symbol. The real "product" that colleges produce is educated young people.

What we have, then, is a mismatch between what customers are buying and what institutions are selling. Colleges and universities have had great economic success marketing themselves as sellers of job-hunting licenses. If they embraced instead an old-fashioned vision of learning as an end in itself, the quality of their product doubtless would improve immensely--but their market would shrink correspondingly.

Professors may be unhappy to be working for institutions that, to a large extent, have degenerated into mere diploma mills. Many of them, however, owe their jobs to that degeneration.

Holman W. Jenkins Jr.: How Democracy Ruined the Bailout

from Wednesday's Wall Street Journal

http://online.wsj.com/article/SB123491508784704057.html

Highlights:

"Never was it a good idea to have a financial crisis in the middle of a presidential election. Involving Congress was a mistake. Letting the technical matter of keeping the banks afloat become a political football was a terrible idea. Letting our willingness to deploy giant sums of taxpayer money become the measure of credibility was a disaster. Letting all this be sold on Capitol Hill amid shrieks about the country collapsing into a Second Great Depression was a confidence killer across the economy, which until that point had held up well."

An Interesting Article on Ebooks and the iPhone

From the Economist:

http://www.economist.com/opinion/displaystory.cfm?story_id=13109596

"Might e-books be approaching the moment of take-off, akin to Apple’s launch of the iTunes store in 2003, which created a new market for legal music downloads?"

Musical Torture

I was reading the Wall Street Journal today and ran across the following article on torture through music, by Terry Teachout - http://online.wsj.com/article/SB123456310592185753.html. Apparently, some of the music I listen to on a regular basis is or has been used in interrogation of suspected terrorists. I don't quite know if I should feel insulted or offended by this knowledge. On the one hand, it would seem to indicate that my tastes in music are a bit unsophisticated. However, I might also choose to interpret this as a sign that I am a pretty tough guy, if I can voluntarily subject myself to torture on a regular basis.

Here is a list of torture music from zero dB and Reprieve, with my music in bold.

AC/DC ("Hells Bells," "Shoot to Thrill")
Aerosmith
Barney the Dinosaur (theme song)
Bee Gees ("Stayin' Alive")
Britney Spears
Bruce Springsteen ("Born in the USA")
Christina Aguilera ("Dirrty")
David Gray ("Babylon")
Deicide
Don McLean ("American Pie")
Dope ("Die MF Die," "Take Your Best Shot")
Dr. Dre
Drowning Pools ("Bodies")
Eminem ("Kim," "Slim Shady," "White America")
Lil' Kim
Limp Bizkit
Matchbox Twenty ("Gold")
Meat Loaf
Metallica ("Enter Sandman")
Neil Diamond ("America")
Nine Inch Nails ("March of the Pigs," "Mr. Self Destruct")
Prince ("Raspberry Beret")
Queen ("We Are the Champions")
Rage Against the Machine ("Killing in the Name")
Red Hot Chili Peppers
Saliva ("Click Click Boom")
The "Sesame Street" theme song
Tupac ("All Eyes on Me")

Bret Stephens: Geert Wilders Is a Test for Western Civilization

http://online.wsj.com/article/SB123483168531395775.html

It is well worth the time to read this oped piece. Geert Wilders is a Dutch politician who has called for the banning of the Quran and who is being prosecuted for hate crimes in his home country.

Highlights:

For liberals, the issue is straightforward. If routine mockery of Christianity and abuse of its symbols, both in the U.S. and Europe, is protected speech, why shouldn't the same standard apply to the mockery of Islam? And if the difference in these cases is that mockery of Islam has the tendency to lead to riots, death threats and murder, should committed Christians now seek a kind of parity with Islamists by resorting to violent tactics to express their sense of religious injury?

For conservatives, especially of the cultural kind -- the kind of people who talk about defending Western Civ. -- Mr. Wilders's case should also provoke some reconsiderations. It may not be impossible to denounce the likes of Mr. Serrano [the artist who, 20 years ago, put a crucifix in a jar of urine] while defending the likes of Mr. Wilders. But a defense of Mr. Wilders is made a lot easier if one can point to the vivid difference between a civilization that protects, even celebrates (and funds!), its cultural provocateurs and a civilization that seeks their murder.

Quote from Barak Obama

From his book, Audacity of Hope.

"Genuine bipartisanship assumes an honest process of give-and-take, and that the quality of the compromise is measured by how well it serves some agreed-upon goal, whether better schools or lower deficits. This in turn assumes that the majority will be constrained -- by an exacting press corps and ultimately an informed electorate -- to negotiate in good faith.

"If these conditions do not hold -- if nobody outside Washington is really paying attention to the substance of the bill, if the true costs . . . are buried in phony accounting and understated by a trillion dollars or so -- the majority party can begin every negotiation by asking for 100% of what it wants, go on to concede 10%, and then accuse any member of the minority party who fails to support this 'compromise' of being 'obstructionist.'

"For the minority party in such circumstances, 'bipartisanship' comes to mean getting chronically steamrolled, although individual senators may enjoy certain political rewards by consistently going along with the majority and hence gaining a reputation for being 'moderate' or 'centrist.'"

Quoted by William McGurn in today's Wall Street Journal.

An Old, but Relevant, Cartoon

I clipped this from the Wall Street Journal several years ago and posted it on my office door at work. I noticed it this morning and thought it was worth posting here.

Using the iPhone

I got the income tax refund this last Friday and I went and bought myself a new iPhone 3G. I already have At&T service and was up for a phone upgrade, but it was expensive nonetheless. I've been getting to know it since then and have the following observations.

Things I Dislike:

1) The battery charge does not last very long. This is well-known, but it is surprizing how quickly it depletes. I've discovered that if I turn off the 3G, GPS, and other bells and whistles when I am not using them, the battery does quite well. Since it is pretty easy to turn these on when I need them, I expect the battery life to be adequate. The phone came with a car charger and that may help.

2) The phone will not take videos. It takes decent still shots for a camera phone, but won't do video. There are some 3rd party apps that will allow you to shoot video, but they require "jailbreaking" the iPhone and most likely void the warranty. This seems a very odd omission.

3) It does not come with multimedia messaging. That is, you cannot send photos or other such things to other people's phones. Fortunately, there are free apps available that allow you to do this, you just need to download them from the iTunes store.

4) The phone uses alot more data than a regular 3G phone, so the coverage is $30 per month for unlimited data, as opposed to the $15 per month with my old phone. This seems a bit steep to me, but I did agree to pay for it, so it must be worth it.

Things I Like:

1) I love the seemless integration of my email through BYU's MS Exchange Server. It took a little while figuring out how to configure it. I'm sure BYU's tech guys could've told me how to do it in a few minutes, but it was the weekend and I didn't want to wait. You have the option of syncing your contacts and calendars when you sync the iPhone over its USB connection or wirelessly the same way you sync your email. Beware if you switch from one method to the other all the old contacts are erased and rewritten. You won't lose any information, but all your custom ringtones will need to be reset.

2) I love the photo storage. In fact I will probably use it as much or more than I will the music player. Uploading is simple and the screen size is big enough to see things very clearly.

3) I like all the extra apps. I am hoping to try out some of the GPS apps on my next hike or campout just to see how much it helps. The free apps only give your coordinates, but if you have a good topographic map of the area that helps a ton.

4) I like all the internet specific apps that are available. I've already installed the ones for Facebook, Google, Amazon, and Pandora Radio. They speed things up greatly over using the standard Safari browser that comes with the phone.

Overall I am very glad I bought the phone and think it will turn out to be a good purchase.

Quote from Tom Sowell

via Dave Spencer

“Human beings are going to make mistakes, whether in the market or in the government. The difference is that survival in the market requires recognizing mistakes and changing course before you go bankrupt. But survival in politics requires denying mistakes and sticking with the policies you advocated while blaming others for the bad results.”

Lynn's Warning

My lovely daughter wrote this for me to put on the door of my office while I am grading. I use it on occasion.

Taxes in the 1500s

In the 1530's Francisco Pizarro and his band of Spanish conquistadors conqured the Inca empire. Afterward they attempted to extract as much gold as possible from the Incas. The people soon learned to hide their wealth from the Spanish rather effectively, however. The Spaniards discovered that the more wealth Incas were happier and consequently could often be found humming to themselves as they walked around. To exploit this correlation, they imposed a substantial fine on any Incas found humming. This is the first historic example of a tax that is now widely used throughout the world, the "Inca Hum Tax."

Daniel Henninger: Exactly How Does Stimulus Work?

Henninger's column is always worth reading, even if you don't agree with everything he says, he almost always has an interesting point of view on an important topic. Today he is in good form.

http://online.wsj.com/article/SB123440338832275537.html

Highlights:

The whole congressional effort is an irrelevant sideshow; only the final spending number matters. The economics don't matter, because the real political purpose of the bill is to neutralize this issue until the economy recovers on its own. Much of its spending is a massive cash transfer to the party's union constituencies; a percentage of that cash will flow back into the 2010 congressional races. The bill in great part is a Trojan horse of Democratic policies not related to anyone's model of economic stimulus.

Hainan Airplane Letter

I wrote this letter to the editor of the Deseret News in 2001 and just recently discovered that it was published.

http://archive.deseretnews.com/archive/836628/Plane-incident-irrelevant-for-most-Chinese.html

Listening to the media coverage of the downed U.S. plane in Hainan, it would be easy to get the impression that the Chinese state-run media are on the verge of igniting a rash of anti-American protests. Here in Nanjing, at least, that is not the case.

My family and I have been living here since last August, where I am teaching for a year at the Hopkins-Nanjing Center for Chinese & American Studies at Nanjing University. We are part of a small American community here in this city of 5 million. We meet regularly with a very small group of LDS people living in town (five are from Brigham Young University's China Teachers Program, and one is a recent BYU graduate studying Chinese). From our point of view, interacting with Chinese students every day, it appears that for the time being, this is not a terribly serious issue.

Unlike after the bombing of the Chinese embassy in Belgrade two years ago, when large crowds gathered spontaneously (but peacefully) to shout slogans and wave banners, nothing in the way of overt anti-Americanism is perceptible. The Chinese are very nationalistic (or patriotic, depending on your point of view) at times, especially the students and intellectuals. But for the average person on the street here it is just another new item with little direct relevance.

Perhaps the best illustration I can point to occurred yesterday afternoon as I was riding my bicycle through the downtown area. I stopped at a historic building to look inside, and after showing me around, a gentleman there asked me where I was from. I replied that I was from the United States and then mentioned that I was a bit nervous telling people that right now given the airplane incident. He laughed and said, "That's a nation problem, not a people problem."

It might be best to remember right now that the mood of the Chinese press does not necessarily mirror the mood of the majority of the Chinese people.

One thing that might come as a surprise is the amount of access Chinese citizens have to Western news sources over the Internet. CNN's Web site is regularly blocked, but there are myriad other sources available which are not. (The Deseret News being but one case in point).

While it is true that Internet access remains out of reach for the majority of Chinese, it is generally accessible to the students and intellectuals who were the most active element in the post-Belgrade demonstrations. Most students realize that the incident was an accident and not a deliberate attempt to harm. They may be a bit irked that U.S. surveillance planes regularly patrol their coast, but there seems to be little overt anger at America and Americans.

Wise Words via Dan Kim

http://fromonecambridgetoanother.blogspot.com/2009/02/one-question.html

My Serbian barber chided with me that American are absolutely terrified because the value of housing is declining a bit and retirement mutual funds aren't doing too well, while we don't blink imposing crippling economic sanctions as political leverage. He should know. He lived through some of them. I can't blame him for not having sympathy for the wealthiest nation's short term economic dilemmas.

Andy Kessler on How to Solve the Toxic Debt Problem

Why Markets Dissed the Geithner Plan
http://online.wsj.com/article/SB123431465155370931.html

Highlights:

First, strip out all the toxic assets and put them into a holding tank inside the Treasury. Then inject $300 billion in fresh equity for both Citi and Bank of America. Create 10 billion new shares of each of the companies to replace the old ones. The book value of each share could be $30. Very quickly, a new board of directors should be created and a new management team hired. Here's the tricky part: Who owns the shares? Politics will kill a nationalized bank. So spin them out immediately.

Some $6 trillion in income taxes were paid by individuals in 2006, 2007 and 2008. On a pro-forma basis, send out those 10 billion shares of each bank to taxpayers. They paid for the recapitalization.

Each taxpayer would get about $100 worth of stock for each $1,000 of taxes paid. Of course, each taxpayer has the ability to sell these shares on the open market, maybe at $40, maybe $20, maybe $80. It depends on management, their vision, how much additional capital they are willing to raise, the dividend they declare, etc. Meanwhile, the toxic assets sitting inside the Treasury will have residual value and the proceeds from their eventual sale, I believe, will more than offset the capital injected. That would benefit all citizens, not the managements and shareholders who blew up the banking system in the first place.

Some Good Stuff from Camille Paglia Today

http://www.salon.com/opinion/paglia/2009/02/11/stimulus/

Most mainstream American voters are undoubtedly suffering from economist fatigue these days. This one calls for tax cuts; that one condemns them. One says we're wasting hundreds of billions of dollars; the other claims that sum falls pathetically short. A plague on all their houses! Surely common sense would dictate that when Congress is doling out fat dollops of taxpayers' money, due time should be delegated for sober consideration and debate. The administration's coercive rush toward instant action, accompanied by apocalyptic pronouncements of imminent catastrophe, has put its own credibility on the line.

Speaking of talk radio (which I listen to constantly), I remain incredulous that any Democrat who professes liberal values would give a moment's thought to supporting a return of the Fairness Doctrine to muzzle conservative shows. (My latest manifesto on this subject appeared in my last column.) The failure of liberals to master the vibrant medium of talk radio remains puzzling. To reach the radio audience (whether the topic is sports, politics or car repair), a host must have populist instincts and use the robust common voice. Too many Democrats have become arrogant elitists, speaking down in snide, condescending tones toward tradition-minded middle Americans whom they stereotype as rubes and buffoons. But the bottom line is that government surveillance of the ideological content of talk radio is a shocking first step toward totalitarianism.

Macroeconomics Models & Policy Prescriptions

At the urging of two of my colleagues here at BYU, I have been reading through an article by Chari, Kehoe & McGratten in the inaugural issue of the American Economic Journal Macroeconomics. A couple of quotes in the introduction caught my eye, especially with regard to the current debate over the stimulus package and the use of TARP funds.

Until recently, the major conflicts in macro policy in the postwar era were between the Old Keynesians and the neoclassicals. The Old Keynesian view is eloquently and forcefully summarized by Franco Modiglianai, who argues that the fundamental, practical policy implication that Old Keynesians agree on is that the private economy "needs to be stablized, can be stabilized, and therefore should be stabilized by appropriate monetary and fiscal policies." The neoclassical economists, of course, recommend quite different policies: commitment to low average inflation rates on the monetary side and tax-smoothing on the fiscal side. Moreover, neoclassicals argue that even efficient allocations could fluctuate sizably.

Something insufficiently appreciated today is that even though the New Keynesian model has many elements of the Old Keynesian stories, such as sticky prices, the New Keynesian policy implications are drastically different from those of the Old Keynesians and are remarkably close to those of the neoclassicals.


Most modern macroeconomists of both traditions use equilibrium models with forward-looking private agents, so a commitment to rules is essential for good economic performance. Even in the frictionless versions of modern models, efficient allocations fluctuate sizably. So, even under optimal policy, a model will display sizable business cycle fluctuations. Eliminating all of them is considered bad policy.

Gary Becker and Kevin Murphy: There's No Stimulus Free Lunch

http://online.wsj.com/article/SB123423402552366409.html

Highlights:

1) How much increase in Gross Domestic Product (GDP) can be expected from the stimulus package?
2) The increased government spending in the stimulus package is supposed to be only temporary, until the economy returns to a full employment level, but probably won't be.
3) The effects on consumers and businesses of the stimulus package depend not only on the stimulus to short-term GDP, but also on how valuable the spending is.
4) There are no free lunches in spending, public or private.

Our own view is that the short-term stimulus from the legislation before Congress will be smaller per dollar spent than is expected by many others because the package tries to combine short-term stimulus with long-term benefits to the economy. Unfortunately, short-term and long-term gains are in considerable conflict with each other. Moreover, it is very hard to spend wisely large sums in short periods of time. Nor can one ever forget that spending is not free, and ultimately it has to be financed by higher taxes.

25 Random Things About Me You Probably Don't Know Because They Are Totally False

I posted this to my Facebook account a week ago, but some of my friends don't have Facebook accounts themselves, so I'm reposting it here. Actually, one of the things on the list is true. Can you guess which one?

1. I am the only person to have won Nobel Prizes in both economics and physics in the same year
2. In the early 70’s I was the lead singer in a rock band called Journey, but I quit before they hit it big.
3. I once invented a time machine, but tripped and broke it. I bumped my head at the same time and can’t remember how to build one any more.
4. I once ate 500 slices of pizza in a single afternoon.
5. I wrote three operas before the age of two and even wrote a symphony while still in the womb.
6. I wrote a movie script back in 1972 when I was eleven, but I threw it away because I was embarrassed about it. It was entitled, “Star Wars.”
7. I broke my leg in high school and both Mr. T and the Ayatollah Khomeni signed my cast.
8. I can burp the King James version of the bible backwards, in one breath.
9. I trained as a ninja for a year in the 1980’s.
10. I speak fluent Cherokee.
11. I once arm wrestled a gorilla on a dare, but I lost.
12. I own a summer home on the moon.
13. I once had the name of every person in the state of Wyoming memorized.
14. I have an honorary doctorate in funkology from a musical college in South Africa.
15. I beat up Russell Crowe in third grade.
16. I won a million dollars playing the slot machines in Las Vegas, but lost it later that night at the roulette wheel.
17. I once killed an entire tribe of pigmy head-hunting cannibals in a knife fight in Tijuana.
18. I invented the electric nosehair trimmer.
19. In cub scouts I built a one-tenth size model of the Titanic out of popsicle sticks and glue.
20. I know where Jimmy Hoffa is buried.
21. During my freshman year in college I bench pressed an adult water buffalo.
22. Chuck Norris owes me $6.48.
23. There is a national park named after me in Uzbekistan.
24. I set a world record in 2004 by making 304,298 free throws in a row.
25. I dislike olives.

My Favorite Photo from 2008

Natural Arch at Escalante Grand Staircase National Monument
Originally uploaded by headlessog

Looking through my photography from last year, I liked this one the best.

This is a natural arch in the Esclante River Canyon a couple mile upstream from where highway 12 crosses the river. I took this photo a few hours before the sun went down from the opposite side of the canyon about halfway up a sandy slope. I was here with the boy scouts on a backpacking trip.
I liked this one so much I put it on my credit card.

John Taylor: How Government Created the Financial Crisis

http://online.wsj.com/article/SB123414310280561945.html

Highlights:

Early on, policy makers misdiagnosed the crisis as one of liquidity, and prescribed the wrong treatment.

To provide more liquidity, the Fed created the Term Auction Facility (TAF) in December 2007. Its main aim was to reduce interest rate spreads in the money markets and increase the flow of credit. But the TAF did not seem to make much difference. If the reason for the spread was counterparty risk as distinct from liquidity, this is not surprising.

On Friday, Sept. 19, the Treasury announced a rescue package, though not its size or the details. Over the weekend the package was put together, and on Tuesday, Sept. 23, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson testified before the Senate Banking Committee. They introduced the Troubled Asset Relief Program (TARP), saying that it would be $700 billion in size. A short draft of legislation was provided, with no mention of oversight and few restrictions on the use of the funds.

The two men were questioned intensely and the reaction was quite negative, judging by the large volume of critical mail received by many members of Congress. It was following this testimony that one really begins to see the crisis deepening and interest rate spreads widening.

The realization by the public that the government's intervention plan had not been fully thought through, and the official story that the economy was tanking, likely led to the panic seen in the next few weeks. And this was likely amplified by the ad hoc decisions to support some financial institutions and not others and unclear, seemingly fear-based explanations of programs to address the crisis. What was the rationale for intervening with Bear Stearns, then not with Lehman, and then again with AIG? What would guide the operations of the TARP?

Isaac Asimov and Game Theory

One of Isaac Asimov's most well-know set of books is the foundation series which he started writing in the early 1950's, with the books Foundation, Foundation and Empire, and Second Foundation.

I finished rereading all three of these recently and I ran across the following scene toward the end of Second Foundation.

Toran Darell and Pelleas Anthor are discussing whether Darell should go to the planet Trantor where his daughter has fled. He decides against going, even though he really wants to because he is worried that by following his first impluses he may be playing into the hands of the Second Foundation, a group of psychologists that are manipulating galactic history.

Darell speaks first in the excerpt below.

"I would rather present them with an improbable reaction. I will stay here, despite the fact that I yearn very desperately to leave. No! Because I yearn very desperately to leave."

The younger man smiled sourly. "You don't know your own mind as well as they might. Suppose that -- knowing you -- they might count on what you think, merely think, is the improbable reaction, simply by knowing in advance what your line of reasoning would be."

"In that case, there is no escape. For if I follow the reasoning you have just outlined and go to Trantor, they may have foreseen that, too. There is an endless cycle of double-double-double-double-crosses. No matter how far I follow that cycle, I can only either go or stay. The intricate act of luring my daughter halfway across the Galaxy cannot be meant to make me stay where I am, since I would most certainly have stayed if they had done nothing. It can only be to make me move, and so I will stay."

pp. 214-215 in the Bantam paperpack edition, November 1991

Asimov published Second Foundation in 1953. John Nash's pioneering work establishing the foundations of game theory was published between 1950 and 1953. Was Asimov aware of Nash's work or did he come up with this all on his own? The premise behind the books is that future history is knowable by predictions from what Asimov calls "psychohistory", a mathematical science that relys on the mass behavior of large groups of people in much the same way that physics relies on the mass behavior of large numbers of fundamental particles. I wonder if Asimov was talking with economists at the time and if he may have been exposed to the relatively new ideas behind game theory. On the other hand, Asimov was a really, really bright fellow and it is not at all unlikely that these are his original ideas. He certainly has the right intuitiuon.

Jeff Miron: Libertarian Ideas to Stimulate Economy

http://www.cnn.com/2009/POLITICS/02/05/miron.libertarian.stimulus/index.html

Highlights:

When libertarians question the merit of President Obama's stimulus package, a frequent rejoinder is, "Well, we have to do something." This is hardly a persuasive response. If the cure is worse than the disease, it is better to live with the disease.

In any case, libertarians do not argue for doing nothing; rather, they advocate eliminating or adjusting policies that are bad for the economy independent of the recession. Here is a stimulus package that libertarians can endorse:

• Repeal the Corporate Income Tax
• Increase Carbon Taxes While Lowering Marginal Tax Rates
• Moderate the Growth of Entitlements
• Eliminate Wasteful Spending
• Withdraw from Iraq and Afghanistan
• Limit Union Power
• Renew the U.S. Commitment to Free Trade
• Expand Legal Immigration
• Stop Bailing out Businesses that Took on Too Much Risk

Diamond Fork Campground

This is what Diamond Fork campground looked like this morning. Not very good for cross-country skiing, if you ask me.

The scouts were supposed to go camping here tonight and then do some skiing and paintball shooting tomorrow morning, but it has been raining most of the day. I drove up this morning to check the campground out and it was more slush than snow. We're having a breakfast tomorrow instead!

Tiananmen at Panoramio

This is my most viewed photo at Panoramio; over 3000 views. You can also see it on Google Earth if you select the right buttons.

http://www.panoramio.com/photo/2518785

Most Favorites and Comments

Sunrise at Bryce Canyon National Park 1
Originally uploaded by headlessog

This photo is the one that has the most comments and is also the one that has been chosen as a favorite by the most people of all my photos posted on Flickr.

Most Views

The Milky Way from inside a Cave
Originally uploaded by headlessog

Flickr says this photo has been viewed more than any other I have posted there. Almost 200 times, which is still not very many.

Most Interesting

IMG_5826
Originally uploaded by headlessog

Flickr says this is the most "interesting" photo I have posted there.

Some Interesting Inaugural Artwork

I noticed these today on Yahoo. Some interesting media that artists used to celebrate the inauguration of President Obama.

"A pizza in the form of U.S. President Barack Obama and his wife Michelle, by chef Gaetano Esposito, is displayed in Naples January 22, 2009. The pizza is made with cream of eggplant, tomatoes, ricotta cheese, cream of artichoke, buffalo mozzarella and extra virgin olive oil."

"This undated image provided by UKFineArts on Tuesday, Jan. 20, 2009, shows a micro sculpture by Willard Wigan showing U.S. President elect Barack Obama and his family in the eye of a needle. Barack Obama will be inaugurated as the 44th U.S. president in Washington on Tuesday."

"This image provided by Legoland California shows a Lego replica of President-elect Barack Obama's presidential inauguration, on display at Legoland California on Thursday, Jan. 15, 2009 in Carlsbad, Calif."

A Silly, But Surprizingly Entertaining, Game

My daughter, Joan, and I discovered/invented this game a few weeks ago. It's a great game to play at the restaurant while you are waiting for the food. We played this one on the back of the receipt at Apollo Burger. The first person draws a figure and writes the text explaining it. Then, each successive person adds something to the drawing and explains it in the text. Joan, Alan, Yeongmi and I did this one.

Habit Persistence in Antiquity

Habit persistence is a relatively new idea in economics and finance which argues that people's utility or sense of well-being rises with a rise in consumption only in the short-run. In the long-run, people become accustomed to higher levels of consumption and these new higher levels yield the same amount of utility as the lower ones did in the past. By the same token, if your consumption level drops you feel much worse off in the short run than you would if you had that same level all along.

This is not a new concept, however. Last night while reading The Trojan Women, a play by Euripedes dating from 415 B.C., I ran across the following lines spoken by Andromache, Hector's wife, who is discussing the death of another woman, a former princess of Troy.

Andromache: But if the choice is between a miserable life, mother, if it is between a miserable life and death, death is preferable. Because the dead feel no misery and they know nothing of grief, whereas for the living mortals, if a happy woman falls into misery she must deal with the memory of the joy she previously enjoyed. Her soul seeks the joys of the past.

Goofing Off

I am experimenting today with posting to my blog directly from my cell phone. Here is Alan and Mr. Pengy, the penguin Lynn gave me. They are so cool!