Thursday, July 03, 2008

 

To: Jesus Christ
cc: Jehovah, Allah, Buddha, Vishnu, Flying Spaghetti Monster
bcc: Satan

header "borrowed" from The Poor Man

Please make them mean it or at least do it when the time comes even if they don't mean it now.

Reps. John Conyers (D-MI) and Linda Sanchez (D-CA) ...:

We want to make clear that the Subcommittee will convene as scheduled and expects Mr. Rove to appear, and that a refusal to appear in violation of the subpoena could subject Mr. Rove to contempt proceedings, including statutory contempt under federal law and proceedings under the inherent contempt authority of the House of Representatives.

posted by Robert permalink and comments10:06 PM

 

Death to "Statistical Dead Heat"

People object to CNN calling the following poll a statistical dead heat. They are right as the phrase has no useful purpose. The results of the poll, by themselves, do not enable us to reject the null that the race is actually tied at the 95% confidence level (there is nothing particularly special about the number 0.95)


July 01, 2008

POLL: CNN National

CNN/Opinion Research Corporation
6/26-29/08; 906 RV, 3.5%

National
Obama 50, McCain 45
Obama 46, McCain 43, Nader 6, Barr 3

CNN polled 906 people of whom 45 or4 46 didn't say Obama or McCain. The correlation between supporting Obama and supporting McCain is approximately -0.90.

The maximum likelihood estimate of the variance of the fraction support Obama
is 0.5*0.5/906 = roughly 0.000275 giving a standard error of roughly 0.0166 = 1.66% so 2 standard errors = 3.32%

The maximum likelihood estimate of the variance of fraction who support McCain is about 0.000272 giving a standard error of the faction who support McCain is about 0.0165 so 2 standard errors = 3.30% (why don't they ever admit that the variance of a binomial depends on the probability ?).

The variance in the fraction that supports Obama - the fraction that supports mecain
is not the sum of the variance given above because -0.9 < 0. it is
variance Obama + 1.8(se Obama)(seMcCain) + variance McCain = about 0.00104 for a standard error of the difference of about 0.0323 so two standard errors of the difference Obama-McCain would be more than 6.4% and 6.4%>5%.

The +/- bands given by pollsters are valid for testing the null that a candidate has support equal to 50%. They are not valid for testing the null that two candidates have the same number of supporters in the population.

Now all of this is totally irrelevant for any practical use of polls. I agree that the phrase "statistical dead heat" has no place in rational discourse. You can always make a poll such that the result is a statistical dead heat. Just ask one person one Obama supporter does not enable us to reject the null that McCain has more supporters in the population.

More importantly, 2 polls which are "statistical ties" does not imply that we can't reject the null that McCain has more supporters in the population. The variance of the average of two independent measurements is only half of the average of the variances. Since many polls of Obama vs McCain are conducted and sensible people average them, the standard error due to random sampling of average is tiny. Of course this doesn't mean that the outcome is determined as people change their minds and there are many other sources of error in estimates of current opinion. It's just that sampling error is a relatively minor problem (so long the sampling is really random). It gets absurd over emphasis, because it is easy to calculate and, besides, journalists have no clue as to what use can be made of a standard error.

posted by Robert permalink and comments1:07 PM

Wednesday, July 02, 2008

 

I bet Ken Houghton is going to be a bit puzzled as to why he suggested that the Post-Autistic Economics Review publish my work when he finds that I consider this video absolutely fabulatastic.



via Ezra Klein

posted by Robert permalink and comments11:27 AM

Sunday, June 29, 2008

 

Quis custodiet ipsos custodes?

Mark Kleiman writes

This is an example of what Orwell calls a "dead metaphor," where the phrase has lost its original metaphorical meaning and become a pure idiom. ("Toe the line," which originally meant to stand properly in rank during military drill, is another such, as evidenced by the frequent misspelling "tow the line.") So how about using "restrain" or "control" or even "check" instead? Most of us don't ride horses.

This has been another official notice from the Language Police.

and helpfully links to the essay in which
In which George Orwell called "Toe the line" a dying metaphor and not a dead metaphor.

DYING METAPHORS. A newly invented metaphor assists thought by evoking a visual image, while on the other hand a metaphor which is technically ‘dead’ (e. g. iron resolution) has in effect reverted to being an ordinary word and can generally be used without loss of vividness. But in between these two classes there is a huge dump of worn-out metaphors which have lost all evocative power and are merely used because they save people the trouble of inventing phrases for themselves. Examples are: Ring the changes on, take up the cudgel for, toe the line, ride roughshod over, stand shoulder to shoulder with, play into the hands of, no axe to grind, grist to the mill, fishing in troubled waters, on the order of the day, Achilles’ heel, swan song, hotbed.

This has been an official notice from the Language Police's office of internal language affairs.

posted by Robert permalink and comments3:56 PM

Saturday, June 28, 2008

 

Commenter Larry at Economists View has a hypothesis

I google to check. It is closer to true than I thought, or true if by significantly you mean not "economically significantly" but "we can be sure of the sign of the difference given the huge point estimate"

I have not seen a quantitative comparison of how much oil CAFE would have saved versus how much (Democrat-and-the-public-blocked) greater drilling would have produced, but I bet the amounts aren't significantly different.

Larry your comparison makes no sense. The reason is that the effect of Cafe would depend on the mileage standard. Requiring the kind of average mileage residents of Europe get would reduce US oil demand by ... I'll google (time now 3:47 pm here)

This is an edf pdf but it says that "moreover a focus on auto efficiency has been effective historically with a net 33 percent reduction in fuel use per mile yielding nearly 3 million barrels per day of oil savings." From context this seems to be US.

http://www.edf.org/documents/3115_OilDemand.pdf

OK drilling

ANWR

1.45 million barrels a day in 2028


http://mediamatters.org/items/200806180007

Off shore

The 574 million acres of federal coastal water that are off-limits are believed to hold nearly 18 billion barrels of undiscovered, recoverable oil.

http://www.foxnews.com/story/0,2933,368221,00.html

That would be equivalent to 6000 days of fuel efficiency improvement so far spread out over who knows how long. The ANWR number is the peak, not the average over so long as we drive cars.

Now possible future fuel efficiency gains which seem reasonable to me would be to get the US fleet like European cars. That means (see below) doubling economy standards so a gain equal to that so far (1 to 2/3 is like 2/3 to 1/3). However, as population and miles driven increase (miles per capita too I'd bet) the gain from economy grows.

The numbers are roughly similar only if you count peak ANWR production as average ANWR production and equate oil which has not been found or extracted with existing technology.

A fair comparison would be feasible cafe standards vs feasible oil drilling. and 60 miles per gallon are certainly feasible (that's what a Prius gets).

More importantly, if we don't drill in ANWR we will have the oil in ANWR. That is banning drilling now leaves open the optino of drilling later. Burning gas now does not leave the option of unburning it later. Only if you adopt an outlook which is both short term and "what if" are they comparable.

Given choices to date, ANWR and off shore won't help us for decades, then they will help us for decades, then the oil will be gone.




Below some quotes and links on what I think is easily doable by imitating Europe and getting rid of light trucks.

"The average combined MPG for all US cars and light trucks on the road today is 19.8 MPG. (Source: 2005 Highway Statistics from the U.S. Department of Transportation, Federal Highway Division)." http://www.google.org/recharge/dashboard/calculator#note1


Some mess with calculations from this

http://news.thomasnet.com/IMT/archives/2007/04/start_engines_for_big_prize_green_future_automotive_x-prize.html



European cars today average around 163 grams per kilometer, and the European Union is already shooting for a target of 130 grams per kilometer across all cars by 2012. In today’s mainstream market, the greenest cars achieve something like 28 kilometers per liter (65 mpg) and 100-120 grams of carbon per kilometer, says Nature.

65 mgp/1.6 > 40 mpg

So going from US mix of cars and light trucks to European cars, which seems feasible to me, would double mileage.


time now 4:13 pm elapsed time (including writing and believe it or not thinking) 26 minutes.
Use the google.

posted by Robert permalink and comments4:14 PM

 

Barack Obama discussed the role of religion in public life in a keynote address at a call for renewal conference on June 28.

"James Dobson criticized Sen. Barack Obama, accusing him of "deliberately distorting the traditional understanding of the Bible to fit ... his own confused theology," of having a "fruitcake interpretation of the Constitution" and of appealing to the "lowest common denominator of morality.""

Peter Wehner criticized James Dobson in the Washington Post in a column which I have actually read (unlike the speech and Dobson's criticism which I have no intention of reading).

I am going to write a post about Wehner's column which is probably not worth reading.
Of course I totally disagree with Dobson as quoted by Wehner (although on one key point the disagreement depends on one key word). I don't disagree with any of the snippets of Obama's speech as quoted by Wehner. I disagree with much of what Wehner wrote. I will try to focus. First on the main point of Dobson's criticism as summarized by Wehner

The passage of the speech that prompted Dobson's "fruitcake interpretation of the Constitution" and "lowest common denominator of morality" comments was this: "Democracy demands that the religiously motivated translate their concerns into universal, rather than religion-specific, values. What do I mean by this? It requires that their proposals be subject to argument, and amenable to reason. I may be opposed to abortion for religious reasons, to take one example, but if I seek to pass a law banning the practice, I cannot simply point to the teachings of my church or evoke God's will. I have to explain why abortion violates some principle that is accessible to people of all faiths, including those with no faith at all."

Dobson paraphrased this as "unless everybody agrees, we have no right to fight for what we believe in."

Like Wehner I agree that Dobson's paraphrase is nonsense. My complaint is simple. To get where Dobson ended up one has to replace the word "accessible" with the word "convincing" then go on to abbreviate. The word "accessible" was carefully chosen.

Oddly, I think I am closer to Dobson on this point than Wehner is. I'm not so thrilled with Obama's use of the phrase "universal values" as I don't think people agree that much on basic principles of right and wrong. I hope what Obama means is statements of value that everyone understands and recognize have some importance even if, for example, we differ deeply in our views of the relative importance of justice and mercy.

The effort to reach practical agreement with people with whom one disagrees on important matters which are not settled by evidence and logic is not finished if religious people translate religious teachings to statements about ethics. I, for example, do not consider retribution a legitimate justification for the punishment of crimes. Thus I disagree on a fundamental moral point with, for example, Barack Obama. I think we could manage to reach agreement on most issues of criminal justice all the same (discussing in private -- like many people I assume that Obama agrees with me more than he lets on in public, because he can't be frank and elected President).

Dobson is also, quite frankly, outraged that Barack Obama describes what was written respectively in plain Hebrew and plain Greek in the bible. I think Dobson considers it an outrage against people of faith to claim that Leviticus Chapter 25 verses 44 through 46 read, in the King James translation

44 And as for your male and female slave whom you may have -- from the nations that are around you, from them you may buy male and female slaves.

45 Moreover yuo may buy the children of th strangers who sojurn among you, and their families who are with you, which they beget in your land and they shall become your property.

46 And you make take them as an inheritance for your children after you, to inherit them as a possession; they shall be your permanent slaves. But regarding your brethren, the children of Israel, you shall not rule over one another with rigour.

To claim that the bible contains such a passage is an intollerant assault on people of faith, even those people of faith who like to appeal to Leviticus chapter 18 vs 22

22 You shall not lie with a male as with a woman. It is an abomination

Can one argue that Christianity condemns both homosexuality and slavery ? Not as far as I can see.

In the USA there has been a deal in which no one criticizes the Bible and, in turn, the people who claim to follow it don't say what is written in it. Dobson et al have broken this deal, insisting on following the letter of the Bible (including the Old Testament. However, if someone quotes the part about slavery (or see below) it is an outrage.

I don't think that Obama can get along with many of his fellow Christian Americans, exactly because he has read the Bible and remembers it. It is un acceptable to say that the Old Testament sanctions slavery, even though it could not be more explicit.



Once I started quoting chapter and verse I had some trouble stopping. The Old Testament is really quite clear on what is important and what isn't. The main thing to do is to kill the enemies of Israel.

Religious right leaders in the US, such as Dobson, tend to glide over much of this (for one thing I strongly suspect that Dr Dobson MD knows much less about what is written in The Book than Barack Obama does). The Israeli religious right is much more honest, at least the extreme right wing of the Israeli religious right. They know what's in The Book and they advocate obeying the instructions.

Still even Kahane chose overlook some things (this is definitely true, I think, only of my first example).

Oh and how about Judges 11 verses 30, 31, 34, 39 and 40

30 And Jephthah made a vow to the LORD and said "If you will indeed deliver the people of Ammon into my hands,

31 then it will be that whatever comes out of the doors of my house to meet me, when I return in peace from the people of Ammon, shall surely be the Lord's and I will offer it up as a burnt offering.

...

34 When Jephthah came to his house at Mizpah, there was his daughter, coming out to meet him with timbrels and dancing; and she was his only child. Besides her he had neither son nor daughter.

...

39 And it was so at the end of two months that she returned to her father and he carried out his vow with her which he had vowed. She knew no man. And it became a custom in Israel

40 that the daughters of Israel went four dayes each year to lament the daughter of Jephtah the Gileadite.

Sure sounds like human sacrifice to me and there is no hint that the LORD disapproved of Jephtah's act or would have been willing to release him from his vow.

How about 1 Samuel chapter 15 verses 1, 2, 3, 8, 9, 10, 11, 26, 27, 28 and 29.

XV Samuel also said to Saul, "The LORD sent me to anoint you king over his people, over Israel. Now therefore, heed the voice of the words of the LORD.

2 "Thus said the LORD of hosts: ' I will punish what Amalek did to Israel, how he laid wait for him on the way when he came up from Egypt.

3. 'Now go and attack Amalek, and utterly destroy all that they have, and do not spare them. But kill both man and woman, infant and nursing child, ox and sheep, camel and donkey.'"

...

7 And Saul attacked the Amalekites for Havilah all the way to Shur which is east of Egypt.

8 He also took Agag kinf of the Amalekites alive, and utterly destroyed all of the people with the edge of the sword.

9 But Saul and the people spared Agag and the best of the sheep, the oxen, the fatlings, the lambs and all that was good and were unwilling to destroy them. But everything despised and worthless, that they destroyed.

Saul Rejected as King

10 Now the word of the Lord came to Samuel, saying,

11 I greatly regre that I have set up Saul as king, for he has turned bck from following me, and has not performed my commandments." And it grieved Samuel

...

26 But Samuel said to Saul, "I will not return with you, for you have rejected the word of the Lord and the Lord has rejected you from being king over Israel."

27 And as Samuel turned around to go away, Saul seized the edge of his robe, and it tore.

28 So Samuel said to him, "The Lord has torn the kingdom of Israel from you today, and has given it to a neighbor of yours, who is better than you.

29 and also the Strength of Israel will not lie nor relent, For he is not a man that he should relent."

This is a rather important passage as said neighbor is David who is presented as a model of what a man should be ("except in the matter of Uriah the Hittite"). Saul did well killing infants and nursing children, but he is not acceptable because he neglected to kill King Agag and some sheep.

David by the way in 1 Samuel chapter 27 verse 9

9 Whenever David attacked the land, he left neither man nor woman alive, but took away the sheep, the oxen, the donkeys, the camels and the apparel, and returned and came to Achish

and 11

11 David would save neither man nor woman alive, to bring news to Gath, saying, "Lest they should inform on us, saying 'Thus David did''" And so was his behavior all the time he dwelt in the country of the Philistines.

(note David is doing all of this on behalf of a Philistine king).

According to the old testament from Joshua through 2nd Kings genocide is quite all right (and sometimes obligatory). The two intolerable sins are religious toleration and miscegenation. Actually from exodus through Ezra at least Chapter 9 verses 1, 2 and 3

... the people of Israel and the priests and the levites have not separated themselves from the peoples of the lands, ...

2 "For they have taken some of their daughters as wives for themselves and their sons, so the holy seed is intermingled with the peoples of those lands. Indeed, the hand of the leaders and the rulers has been foremost in this trespass."

3 So when I heard this thing, I tore my garment and my robe, and plucked out some of the hair of my head and beard and sat down appalled.

posted by Robert permalink and comments2:06 PM

Friday, June 27, 2008

 

Karl Rove Knows This part II

posted by Robert permalink and comments1:15 PM

 

Waldmann on Waldman

Krugman argues that speculation in oil futures can't have caused the current high price of oil because the future price is lower than the spot price.

Steven Waldman explains why this argument isn't rock solid. His argument is that oil demand isn't deterministic and, in the very short run, oil in different places can have very different prices. This means that the expected cost of having a tank full of oil isn't the storage cost plus interest, but the storage cost plus interest minus the "convenience yield".

What is this "convenience yield"? [snip+]

Oil is a "spiky" commodity. Every once in a while, someone really needs it, now, and will pay a premium for immediacy. The market for oil in Cushing, Oklahoma might be reasonably efficient, but what happens when someone in Peoria needs oil today? Opportunity! ... you build an oil tank in Peoria. Suppose that every month, there's a 10% chance a desperate client will offer a 5% premium for immediate delivery of all your oil, and that interest and storage cost you 0.2% per month. Then on average, you'd earn 0.5% (10% x 5%) each month from desperate clients, and pay 0.2% in expenses.

Actually I'm glad that Waldman isn't arguing with Krugman about the actual case of actual current oil prices, because I wouldn't want to disagree with another Waldman*.

He writes "I agree with Krugman that futures markets can't explain the recent skyrocketing oil prices." and "This is a disquisition, and ode, a homage and a tribute to the marvelous, mysterious, misunderstood and maligned convenience yield:"

The reason is that the convenience yield argument can reconcile one of Krugman's facts, the futures price is below the spot price, with the speculation hypothesis, but it can't explain the other -- inventories aren't growing.

In contrast, it is easy to explain the other -- the inventories in question are oil under the ground (although that should show up as a decline in production which I don't see but I only know monthly up to April). The point is that storing oil under the ground doesn't have a storage cost (you even save the interest on the cost of pumping it if you pump it later) but it does have an interest cost and it doesn't have a convenience yield.

Both facts together seem to make a solid case that the current price of oil is not due to futures speculators.

posted by Robert permalink and comments12:19 PM

 

A Very wonderful e-mail which came with the *.pdf of optimal capital taxation attached
published with permission of an anonymous very nice guy (or gal or group of people or alien being who doesn't want me to tell you humans that he or she is on this planet)

Hi,

I found your blog post on income taxation really interesting, but I had a hard time reading the math in plain text. So to read it, I converted it to latex and made a real article out of it. It was only to scratch my own itch, but I figured you might have some use for it. It's attached as a PDF and tex source file.

If you publish it on your blog or whatever, I'd prefer you to not credit me for conversion or anything. I did this while I really should have been working, .... . Feel free to do whatever you want to it, as long as you don't credit me (now that's an interesting license)

posted by Robert permalink and comments11:37 AM

 

Like Paul Krugman, I am somewhat surprised that Republicans don't believe in the efficient markets hypothesis. However, I think I have a better explanation.

In today's op-ed the fact

Somewhat surprisingly, Republicans have been at least as willing as Democrats to denounce evil speculators. But it turns out that conservative faith in free markets somehow evaporates when it comes to oil. For example, National Review has been publishing articles blaming speculators for high oil prices for years, ever since the price passed $50 a barrel.

And it was John McCain, not Barack Obama, who recently said this: “While a few reckless speculators are counting their paper profits, most Americans are coming up on the short end — using more and more of their hard-earned paychecks to buy gas.”

On his blog, a hypothesis

I think that conservative belief that the market is always right is colliding with another, even more deeply held belief — that there are no limits, except for those imposed by tree-huggers.The idea that oil might really be getting hard to find, in spite of the magic of capitalism, is just unacceptable; so they insist that it’s all craziness in the futures markets.

Now I like the snark of how the magic of capitalism makes oil as in (with apologies to William Shakespeare)

Conservative: Capitalism can call oil from the vasty deeps.

Krugman: Ay and so can I or any man, but does it come ?

But I have a very slightly different way to put it (not worth a blog post but I've typed so far).

(with apologies to David Manning who writes somewhat less well than William Shakespeare)

"the intelligence and facts [are] being fixed around the policy."

There are hard core fresh water economists, many of whom are conservatives, who have consistent views about how the world works and draw policy implications. Most conservatives, however, start with the policy implications and work backwards to the view about how the world works.

If the market for oil were perfectly efficient (perfectly competitive even) then the US government could use its market power to the benefit of US citizens.

A gas tax in the USA with revenues redistributed to the citizens would, in this case, have a second order dead weight cost (assuming no global warming and that the money isn't used to pay for highways as it is) and cause a first order transfer from oil exporting countries to oil importing countries. Such a policy is anathema to Republicans so conservatives have to come up with an argument for why it wouldn't work. If they have to abandon the efficient markets hypothesis they will.

The claim that, if markets are efficient, then the best policy for the citizens of a given polity is laissez faire is correct only if 1) the polity is a closed economy, or 2) a tiny open economy which has no effect on world prices or 3)if world supply curves are horizontal or, finally (I think) 4) there will be retaliation for begger other countries policies.

I'm not sure prof. Krugman wants to talk about that so much as people might think that it applies to other goods as well. Such benefits from tariffs don't appear in standard trade theory for reason 3) with CRS production functions relative prices of goods depend on prices of factors and not on demand for specific goods since supply curves are horizontal (any quantity for the right price none for less) if production functions are CRS. Then factor mobility and I don't remember what ...


Anyway aside from psychoanalyzing psychopaths Krugman and I agree and, of course, he puts it better

Most of the adjustment to higher oil prices will take place through private initiative, but the government can help the private sector in a variety of ways, such as helping develop alternative-energy technologies and new methods of conservation and expanding the availability of public transit.

But we won’t have even the beginnings of a rational energy policy if we listen to people who assure us that we can just wish high oil prices away.

It's about the policy response.

posted by Robert permalink and comments10:49 AM

Thursday, June 26, 2008

 

My faith in the internet and humanity is much increased by the amazing experience of a kind reader (who insists on anonymity) which converted my illegible post on capital income taxation to *.pdf format.

posted by Robert permalink and comments6:50 PM

 

Hey there are two official languages in Norway

Norway has two official languages - Bokmal and Nynorsk. Both languages are very similar. In addition to the two versions of Norwegian, Sami is spoken in some communities in northern Norway.

Generally Bokmal is used in most websites, books and newspapers and it is the language used in most official documents. It is also the main spoken language in Oslo. Nynorsk is the more common spoken language outside Oslo and you'll hear it spoken most often outside the big cities, even though small town newspapers are usually printed in Bokmal.

In the language guide below, we indicate where the two versions of Norwegian differ.

Notice the list of important official documents "websites" and then "books and newspapers" How long is it going to be until I read "websites" and historical source material such as "books, newspapers, parchment scrolls, Papyrus scrolls, and cave paintings" ?

Henrik Ibsen is one of my favorite authors. I don't know if he wrote in Bokmal or Nynorsk or, shudder, Sami.

posted by Robert permalink and comments6:33 PM

 

OK I admit it I'm a www.fivethirtyeight.com addict, but I did learn something staring at their red to pink to blue to indigo map. Thanks to Barack Obama, who is turning Virginia blue, I noticed that the westernmost point of Virginia
83° 37'W is to the west of the westernmost point in West Virginia 40° 40'N.


However I am comforted to learn that North Dakota is unambiguously to the North of South Dakota.


Do Y'all to learn something new every day too ?

posted by Robert permalink and comments5:58 PM

 

This is a joke right


OPINIONS

Too Much Hot Air

Bjorn Lomborg: Most rhetoric about climate change is unhelpful.
Milbank: Energy Creates Friction
RePosted: When Gas Was $1

* Robert Novak: The Rise of the Obamacons
* David Broder: What Really Distorts Our Elections
* George Will: Don't Deport the Tech Talent
* Richard Perle: When Good Coalitions Go Bad

I mean not even Fred Hiatt would have such an ultra right op-ed page I mean not even Paul Gigot would do something like that.

Oh it's not a joke ? Just shoot me with one of your newly legal in DC hand guns after the supreme court decision which shocked Italy.

posted by Robert permalink and comments5:37 PM

 

Hell Freezes Over

I agree with Bill Gates about windows.

I go to my add/remove programs place to make sure it is there.

It is not there.

What is there? The following garbage is there. Microsoft Autoupdate Exclusive test package, Microsoft Autoupdate Reboot test package, Microsoft Autoupdate testpackage1. Microsoft AUtoupdate testpackage2, Microsoft Autoupdate Test package3.

Someone decided to trash the one part of Windows that was usable? The file system is no longer usable. The registry is not usable*. This program listing was one sane place but now it is all crapped up.

Quite. Pity Bill Gates can't do anything about it.

* Dear Normal windows user who is not a super genius like Bill Gates (read the whole e-mail at Brad's place).

This is a typo. There is no such thing as a "file registry". You can't edit it by searching for "regedit" (it is not c:\windows\regedit.exe) and double clicking.

In any case Don't. Ever. Do. This.

If you're like me, you really hate the fact that windows treats you like a dangerous idiot, who has to be prevented from modifying anything, or you will mess it up, but This. Time. They. Are. Right.

I never destroyed a computer editing the file registry, but I did come close once (I had saved the old one).

Bill Gates is so right. The "add/remove programs place" was functional. It just took windows 30 seconds just to open mine.

hmm do I really need Microsoft.NET Framework 1.1 Hotfix (KB928366) ?

I'll never know. I don't dare mess with add/remove programs anymore, because I have no way of knowing what the hell they are. Oh if you happen to know that Microsoft.NET Framework 1.1 Hotfix (KB928366) is a virus please tell me in comments.

Ah sigh, I just opened dos prompt and typed cd\ (why the hell does it send me to C:\Documents and Settings\rjw?)then dir autoexec.bat ahh dir dir dirrest autoexec.bat
it is empty. 0 bytes. But just seeing the filename brings tears to my eyes as I remember those sweet long long gone days when I knew what the hell was on my hard disk. I know I'm showing my age but once upon a time, back in the stone age, the stuff on our hard disks was DOS plus stuff we had put on it by using the command "copy " and these two cute little files "autoexec.bat" and "config.sys" which we edited with a text editor.

posted by Robert permalink and comments9:44 AM

 

Gallup Anomaly III, this time it's personal.

posted by Robert permalink and comments6:12 AM

Wednesday, June 25, 2008

 

The Last Contango In Paris.............comment at the Oil drum
(May 22 2008)


Jeffvail

To the greatest extent in the history of oil futures trading, oil prices are now in continuous contango--that is, oil futures get progressively more expensive each year into the future.

Raw8 comments

I

ts not a lot of buyers. It looks like one..or a couple.

And with the IEA news this morning, we know why - but they said that in paris in April -guess the journalists weren't listening

0 Up Down
Comments can no longer be added to this story.

It's over

posted by Robert permalink and comments11:49 AM

 

Milton Friedman Meets Robert Klitgaard

I encountered the writings of Robert Klitgaard twice.

I read "Tropical Gangsters" an excellent book on his experience working for The World Bank in Ecuatorial Guinea which is not to be confused with the epymenus epyminus (oh hell I'll never guess the spelling of that word ) CD by King Creole and the Coconuts.

Years earlier, when I was a freshman I think, I saw students protesting "The Klitgaard Report" to the president of Harvard, in which he noted the fact (it's a simple calculation) that African American students at Harvard had a lower GPA* than would be expected conditional on SAT scores. Brad DeLong, who actually read the report, says he detected no sign of racism in it.

Now obviously we all knew that average SAT scores of African Americans are lower than those of Euro-Americans (also known as honkies) so the SAT was presumably biased against African Americans (I mean if interpreted as a measure of smarts not assimilation in the dominant US cultural tradition). A justification for affirmative action which I personally liked a lot was that a reasonable prediction of performance would be standard measures (like the SAT) corrected for disadvantage. Thus I was most distressed by the Klitgaard report (not enough to go to the protest wehre Derek Bok talked to angry students as he often did because I mean he just did a simple calculation and the data ambushed him).

Now I understand. First lets assume that the cultural bias in Harvard grading is the same as the cultural bias in the SAT so race has the same effect on the expected value of the Harvard GPA as on the SAT score. Now note that an SAT score is the sum of the expected SAT score for that individual and a disturbance term which is specific to that test that day. The disturbance term includes did the student have a cold that day etc and also, if the student guessed on questions, did the student guess right. Fact is, if someone takes the SAT twice he or she will get different scores.

Given the fact that the distribution of SAT scores of African Americans is lower than that of Whites (first order stochastic dominance) if one has an African American and a White American with the same SAT score, one can rationally (and illegally) infer that the African American probably had a good day that day and the White American a bad day, that is that the expected value of the day specific disturbance is higher for the African American than for the White American.

Already this implies the Klitgaard effect even if the effect of race on expected SAT score and expected GPA is the same.

Of course that's not the half of it. Even without colds and lucky guesses and such, the SAT is correlated with GPA but they are not measuring the same thing (whatever it is and whether or not either has anything to do with one's real ability to contribute to the growth of human knowledge and the fullest flowering of humanity which they might because, hell, anything is possible). For example, in the SAT they gave us tiny little passages to read and it was wise to read every word. At Harvard professors don't bother to winnow their reading lists so you have to quickly decide what to skip and what to actually read (unless you are Brad DeLong and read 1000 words a minute and never learned that skill and is suffering from that lack now). So for the same SAT score, one would guess that the African American student has more ability to read every word and understand compared to his or her ability to decide what to read when he or she doesn't have time to read every word.
Ergo** Klitgaard effect.

Now even if the SAT has a particularly strong cultural bias so race has a bigger effect on expected SAT score than on expected GPA, the measurement error statistical discrimination bit can imply Klitgaard's result if it outweighs the SAT is biased effect.

OK now sticking with GPA as our end point, I note that even if 11% of people who would get a harvard GPA over 3.9 (Harvard is different 4 is the max) are African American, this won't be true of people admitted to Harvard if 11% of admitted students are African American. It's that disadvantage and cultural difference and stuff makes the predictors of performance less accurate. Getting a student with an over 3.9 GPA requires that there be such a student and that one detects him or her and that you don't have to choose between him or her and the son of a super rich alumnus who will give tons of money if you admit his son but it is neither gross class bias or bribery because Harvard is different and superior and you don't understand and an institution struggling to get by with an endowment of only I don't know how much more than $ 40 billion***
has to make some compromises.



*Harvard called it something else like a "cube" because Harvard is superior and so it has a superior measure of grades)

** I never heard a Harvard student use that word except when denouncing "Ergo" a really dumb libertarian student magazine published by people who claimed some affiliation to MIT.

*** I note that the person who will start managing all that money in one week, Jane Mendillo seems to be neither male nor anglo. Another glass ceiling broken. Now she can decide whether to bail out a firm run into the ground by Jenna Bush like a predecessor of hers did for Harken energy (high treason since Bush is a Yalie).

posted by Robert permalink and comments9:43 AM

 

Over at Economists View Winslow R. says...

Robert Waldman wrote: "You know what else? Race exhibits a substantial, income-independent influence on consumption -- Black households consume less than White households with the same income."

Anne posted a article yesterday showing that blacks with the same credit scores, income etc. pay higher interest rates than whites. I don't believe subprime interest payments would be included in your consumption number.

It sure wouldn't be included. When I wrote consumption I should have written consumption of non durables and services so not even services from cars let alone houses.

The phenomenon noted by Anne can perhaps, in part, be explained if banks are (illegally) using Friedman's logic. That is called statistical discrimination. The idea is that bankers rationally decide that if there is a Black and a White family with the same current income, the expected value of future income of the Black family is lower, so they are a more risky borrower.

This is just as illegal and unfair to the individual as discrimination due to hostility or irrational prejudice. There is a fairly large literature on the possible magnitude of statistical discrimination in labor markets. It explains a tiny fraction of racial wage differentials.


I would guess it is that way for interest rates too.

Statistical discrimination can be distinguished from discrimination due to hostility (taste) or irrational prejudice using, you guessed it, statistics.

With a lot of data, one can estimate foreclosure rates as a function of current income, credit score, and race. Then estimate interest rates as a function of the estimated foreclosure rate and race. The second coefficient on race is an estimate of discrimination other than statistical (hostility, irrational prejudice, whatever). The effect of the first coefficient on race on average interest paid by race is an estimate of statistical discrimination.

Statistical discrimination is just as illegal as discrimination due to hostility (note the phrase appears in the law) and it is just as immoral and unfair. However, it is economically rational in the sense that the bank benefits from its tort while a banker motivated by racial hostility will have to pay for the pleasure of shafting African Americans. Thus market selection will not eliminate statistical discrimination.

posted by Robert permalink and comments9:40 AM

 

I just thought of something.

It was triggered by this "studies show that race exhibits a substantial, income-independent influence on school achievement," (don't blame Matt he's just the messenger and is making a very good point about something else).

You know what else ? Race exibits a substantial, income-independent influence on consumption -- Black households consume less than White households with the same income.

Few suggest this proves that Blacks are more prudent and patient than Whites. It is similar to the information on school achievement, Blacks have outcomes similar to poorer Whites.

The economics profession's favored explanation for the consumption fact is that consumption doesn't depend only on current income but also on permanent income (not at all on current income if people are not liquidity constrained and rational). Blacks are on average poorer than Whites. A Black household at say the 50th percentile of the income distribution is more likely to have had an unusually good year than a White household with the same income.

The income measure which is likely to explain school achievement and consumption is income averaged over a long period of time (lagged income for school achievement and, I suspect, consumption).

Now it is possible to construct a race specific mapping from current to permanent income (using the PSID say) and use that to see if there is a permanent income independent difference in school achievement. However, just using current income as a control is a mistake.

Another way of looking at is it that current income is permanent income plus noise so the coefficient of say achievement on current income is the coefficient of interest (achievement on permanent income) biased down by errors in measurement of permanent income. Thus one might impose coefficients higher than the estimated coefficients.

Milton Friedman first considered the effect of measurement error on estimates when arguing that the true elasticity of consumption with respect to permanent income is 1 even though the elasticity estimated with cross sectional data is less than one. He thus reconciled the cross sectional estimates with the aggregate time series evidence that the savings rate doesn't increase systematically with economic growth.

This suggests a constant correction factor which can be applied to other estimates where current income is used but permanent income is the variable which one wishes one had.

posted by Robert permalink and comments3:40 AM