Quote of the day

I’m old enough to remember when Republicans insisted that anyone who said they wanted to cut Medicare was a demagogue, because I’m more than three weeks old.

I comment on Ed Kilgore commenting on Josh Barro

Always click the link

Even the conservative Josh Barro.  I am surprised every day which he continues to self identify as a conservative. If there is any difference between his proram and Obama's it must not have made your cut.

In particular other conservatives are about as enthusiastic about "aggressive government-managed health care cost containment" as they are about tax and transfer based redistribution.  Note Cantor said if Obama was serious about the fiscal cliff negotiations he would put Obamacare and, in particular, re neutering of the Independent Payments Advisory Board on the table.

Since the 1970s, liberals have been obsessed with avoiding and eliminating poverty traps and broadening the tax base (I won't remind you of my old ground ax related to Welfare Reform but just note that I also get irritated with Ezra Klein and Matt Yglesias when they casually assert that base broadening and rate lowering would increase efficiency http://bit.ly/Wz4E3q
 http://bit.ly/U6Oaxg http://bit.ly/SzHVEL

See also that Klein did the work and learned that his earlier casual claim is not supported by the evidence.  What are the policy disagreements between Conservative Josh Barro and liberal Matty Yglesias and Ed Kilgore ?

Barro quoted out of context and out of order


"For example, they could focus on [skip] making sure the tax base is broad so progressivity can be achieved with relatively low tax rates."

"Lower taxes [skip] might raise GDP growth"

"The main problem with this position is the lack of evidence to support it"

OK the promised Klein quote
http://bloom.bg/11rleGL

"In 1997, Alan Auerbach  and Joel Slemrod  conducted an exhaustive survey of studies conducted after the 1986 tax reform. The results were mostly disappointing.

[skip]

 what about moving the growth needle?
“At the bottom of the hierarchy is the response of real activities chosen by individuals or firms.” On this, the authors concluded, the evidence is “mixed.” Oh."

Bottom line Barro's ideas for conservative is to support poverty trap reducing transfers like the EITC  and the making work pay tax credit.  Oh and reform like the 1986 tax reform which is universally agreed to have been wonderful on the basis of "mixed" evidence of any effects on real activities.

How about Asking Them

Menzie Chinn who has access to a sample of at least one Asian American wrote some good speculation (his word)  on  why 70% Asian Americans polled in exit polls said they voted for Obama.

I commented.



Oddly the speculation on Asian Americans doesn't seem to have involved much polling.

I know of only one poll which focused on Asian Americans and so had a decent sized Asian American sample (800).  I don't have the numbers (hell I probably can't find the link -- use the google http://bit.ly/Rnklhn). Headline "National Asian American Election Eve Poll Shows Immigration Reform & Health Care Drive Fastest-Growing Minority Group to the Polls"  Actual number

* Most important issues. The vast majority of Asian American voters (58%) said that fixing the economy and creating more jobs was the most important issue that politicians should address. Health care and education reform were each cited by 20% of Asian American voters as the most important issue, followed by civil rights/immigration issues (13%).

[skip]

* Health care. 60% of Asian American voters supported the federal government's role in ensuring access to health insurance, compared to 23% who believe that people should secure their own health insurance.

Here I think the issue is that Asian Americans support a scientific approach in the abstract, but that a larger minority of them than non-Asian Americans have taken the scientific approach of finding out what the hell the Obamacare bill says.

Obamacare was a key issue in the campaign. The bill is unpopular and most provisions are popular.  There is no reason to be surprised that extremely highly educated people split for Obama.  This doesn't explain the Asian American vote, but I tend to suspect it is more important than believes about 1,000,000 BC.

The link between caring about education and obtaining a lot of it is (not quite) too obvious to note.  The link between slashing government employment and weakening the education system is obvious to anyone who has a passing knowledge of the fraction of public employess who teach (one of Romney's worse gaffes was to correctly note that "more government employment" and "more teachers, police officers and firement" are pretty much the same thing -- Republicans win by convincing the voters that the typical government employee is a  federal bureaucrat writing memos and attending meetings.

I'm going to write it right here.  I have a BA in biology and I would have voted for mr monkey trial William Jennings Bryant himself if I had been alive and over 18 at the three times.  Also I am an atheist but would vote for 99.999 % of Christians if the alternative were Ayn Rand.  

The speculation without data is especially striking in the case of Murray who just assumes that Asian Americans must agree with him on the issues he cares about, because everyone must, because it's obvious (in spite of the stubborn refusal of the data to do what he predicted).

Posner is head shoulders torso and belly button above Murray, but I suspect a bit of pundit's fallacy there too.  He sure doesn't like Republican war on science and imagines Asian Americans are all scientists (also the ivory tower -- the Asian Americans he knows include a lot of colleagues who share his aim of studying legal precedent using the tools of social science).

Kevin Drum has an outstanding post on lead there.  I have a mediocre comment there and here.

When I finished the Steinglass quotes I was saying "lead lead lead" to myself.  But your post precedes this comment.   I agree both with your specific hypothesis and with the general argument that if the same thing happening all over suggests surprising simplicity not surprising complexity.  

I think that Steinglass did an OK job*, but has the problem of too much respect for conventional wisdom.  He notes that there seems to be something wrong with the conventional stories for New York and Boston, but then concludes that there is a deep puzzle and not just an odd failure for people to confront their hypotheses with any data except that which prompted them to form it (oh hell or for New Yorkers  to  really deep down believe that there are human beings outside of their city if they are New Yorkers).  

I think there are reasons why the lead hypothesis doesn't get the respect that your wonderful graphs show it deserves.  It is deeply offensively materialistic reducing human behavior to biology and chemicals.  This is a common problem with hypotheses which fit the facts (see also anti depressants do indeed work).   It's also painful to believe that so many people died and suffered because of something so almost exactly useless as putting lead in gasoline.

Anyway to add something, there is another common factor for Boston and New York and now that you oddly don't mention it Los Angeles.  William Bratton http://en.wikipedia.org/wiki/William_J._Bratton

(who I see is Sir William Bratton in countries which allow titles of nobility since Elisabeth II made him a Commander of the British Empire). I might add it is also odd that you don't mention the fact that one of the things he did in Boston, New York and LA was to uh use computers to allocate resources  and provide incentives (called CrimeStat).  Not really odd for a computer dude from the LA area.  Yes Bratton doesn't explain DC, Canada, Britain, Finland or the 1920s crime wave so your allocation of valuable pixels makes perfect sense.  I am typing about him, because pixels down in the comment thread are not so precious.

*Re-reading I do have to qualify the "OK job" attempt to be polite.  First he just guesses what results of experiments which weren't performed might have been.  It isn't really OK to discuss the proper analysis of made up data.   Also the only way that a study can show that something doesn't reduce crime is to provide statistically significant evidence that it increases crime.  The proposed interpretation of a hypothetical study in which an intervention did not have a statistically significant effect would be an incorrect interpretation of such a result.  Steinglass expresses skepticism about the experimental method and statistics.  He does so by imagining hypotheticial experiments and suggesting that statistical analysis must include the gross elementary error of rejecting the alternative hypothesis.  I think OK may have been a bit generous.

Why Isn't Colorado Red ?

First I think this would be a great title for the sequel to "What's the Matter with Kansas" (WTMWK below) this one explaining how the Democrats manage to win elections.

However the text I would write if I weren't so lazy would be an explanation about how the joke in the title is just a joke.  The joke for the linguistically handicapped is that "Colorado" is Spanish for "red" and the Republicans seem to have a problem with communication with Spanish surnamed Americans.

Having confidently predicted victory in 2012, Republicans are now explaining their debate WTMWK with the WTMWK argument (or maybe its mirror image). They claim that most Americans agree with them on most of the issues, and they lost because single issue voters voted for the Democrats.  The candidate single issues are abortion, the contraceptive mandate and amnesty for undocumented aliens.  The idea is that the sluts and the Spi - uh - anish surnamed Americans voted based on their gonads or their skin color.

The problem is that the argument is not just switched from Kansas to Colorado, but also from true to false.  The WTMWK argument was that most US adults agree with the Democrats on the central point where the parties differ -- tax cuts for the rich vs social insurance.  A majority wants higher taxes on the rich and a huge majority opposes entitlement reform.  This makes the Republicans' electoral performance surprisingly good.

Republicans are not reality based and evidently have decided that all issues polling is skewed.  They insist on two obvious falsehoods:  That there program isn't to cut Social Security and Medicare so we can cut taxes on the rich and that their program is not rejected and detested by the majority of US adults.

So they have decided that they lost single women because of positions related to sex (hey at least I didn't type sexual positions).   In fact abortion is one of the issues with a relatively small gender gap.   Women are much less likely to support war than men and much more willing to risk some of their money going to those people compared rather than risking starvation in the USA.

Republicans are convinced that they lost hispanics because they oppose a path to citizenship for undocumented aliens.  This is an issue on which the opinions of hispanic Americans are relatively similar to those of US adults over all.

I just googled "hispanic polling" roughly the first link which wasn't obviously just about who will be elected president in 2012 sent me (with a couple more clicks) to this pdf

Here I saw that Hispanic respondents opposed repealing Obamacare 61 % to 25%.  Also a big big 12% support the Republican proposal to reduce the deficit without tax increases.  These data are not consistent with the view that all Republicans have to do is drop their opposition to comprehensive immigration reform.  Of course there is a more direct question

30 If the Republican party took a leadership role in supporting comprehensive immigration reform, with an eventual pathway to citizenship for undocumented immigrants, and Republicans worked to ensure it would pass would this make you

More likely to vote Republican 31%
Less likely to vote Republican  11 %
Have no effect on my vote       48%

Notice the hypothesis in the question goes way beyond the possible with Republicans pushing for reform not just tacitly accepting it.  Note the 11% who claim to oppose reform so much that this would actually make them less likely to vote for Republicans, but especially note the 48% who say it would make no difference.

This is not what one would get if one polled people who generally agree with the Republican party but voted Democratic because of a single issue.

Most Hispanic Americans disagree with Republicans on most of the big issues.  I have linked to only one poll, but everyone who is willing to look at polls knows this.

The Republicans are delusional.  Colorado is purple not red, because there isn't a solid majority of Coloradans who want a sink or swim society or who trust that the wealth will finally start trickling down.

In particular the vast majority of hispanic Americans reject the Republican ideology.  Republicans can't save themselves from Demographic change by focusing on special interests. If current trends continue, there will be a majority which thinks their approach is inconsistent with the common good, the interests of the nation as a whole, the evidence, common sense, human dignity, decency and ponies.

Note I am not predicting current trends continue.  But I sure am hoping.

Fear Bearing Greeks Gifts

Could it really be a coincidence that decades before Very Serious Germans (and Germans can be very very serious) presented their theory of the current European crisis "It's all Greek to me" was an idiom for "I don't understand it at all" ?

Economists and Immigration

Ah something I know something about -- immigrants with postgraduate degrees.

Katherine Geier wrote on the topic.

So why, then, don’t we see more of this type of immigration here? A simple application of the principle of cui bono gives you your answer. Highly educated elites after all, are the people making these policies. You are not likely to see, for example, many economics professors running around arguing themselves out of a job — even though I am sure virtually all of them are highly replaceable.

I totally lose it in comments.


I'm going to start seriously and get silly.  Seriously when you write "income inequality" you mean "income inequality in the USA".  Allowing high skilled immigration to the USA would cause increased inequality within their countries of emigration and increased inequality across nations, since the USA is still the richest large country.

Notably higher education in most countries is even more highly subsidized than it is in the USA (I'm not saying too highly subsidized -- I think the USA should subsidize more to equalize opportunity and to increase the supply of highly educated people which would reduce inequality in the USA and world wide). The popular proposal is to take advantage of education provided at the expense of foreign taxpayers.  This is entirely in keeping with US public opinion generally -- the one program US adults most want to cut is foreign aid.  But that doesn't make it morally right.

I support free immigration which means I support free immigration of MDs too (as a matter of respecting the human right of people to live where they please and out of opposition for hereditary privilege including exclusive US citizenship). But I am disturbed by complete indifference to the interests of anyone outside of the USA.


"You are not likely to see, for example, many economics professors running around arguing themselves out of a job —" but one is typing this comment.  To be exact, I argue that it is a mistake to employ me, not argue in a way which puts my hold on my tenured job at risk.

I teach labor economics in Rome. I just gave a lecture on migration and wages (I didn't have anything non obvious to say).  I note that Italy is very very open to immigration by economics professors.  So, for that matter, is the USA (ever heard the phrase "brain drain").  Visas and such are a minor issue.  The faculties of elite Universities in the USA include many immigrants.

Baker is talking about professional licencing which is different, but US economists are perfectly willing to compete with people born overseas.

Consider this list of top young US economists -- recpients of the John Bates Clark medal "The John Bates Clark Medal is awarded by the American Economic Association to "that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge"" Note the word "American" in the title.  Of the past 11 recipients, 5 were born outside of the USA (4 outside of the Americas): David Card (Canada), Andrei Shleifer (then USSR -- in particular Russia), Daron Acemoglu (Turkey), Emanuel Saez (France) and Esther Duflo (France).  Shleifer was not a highly educated immigrant -- he didn't have a high school diploma when he immigrated at age 15 in 1976.

This is not a field which exclude immigrants.  Your observation that US economists do not argue that they should have to compete with immigrants is valid for the simple reason that it goes without saying being the current and unquestioned policy.

I beat "Beat the Press"

Everything is possible and I think that Dean Baker just lost a debate with a Washington Post reporter.

Post reporter Zachary A. Goldfarb  wrote

The two economists compared what happened in U.S. counties where people had amassed huge debts with those where people had borrowed little. It had long been thought that when property values declined in value, homeowners would spend less because they would feel less wealthy.
But Mian and Sufi’s research showed something more specific and powerful at work: People who owed huge debts when their home values declined cut back dramatically on buying cars, appliances, furniture and groceries. The more they owed, the less they spent. People with little debt hardly slowed spending at all.

among other things.  The link is his.

Dean Baker wrote

The housing wealth effect is one of the oldest and most widely accepted concepts in economics. It is generally estimated people spend between 5 and 7 cents each year per dollar of housing wealth. This means that the collapse of the bubble would be expected to cost the economy between $400 billion and $560 billion in annual demand. 

among other things  Again the link is his.

Baker's main point is that low consumption by underwater home owners is not a plausible explanation of the sluggish recovery.  However, he also confidently asserts that the housing wealth effect is linear based on google it.  I think that he has decided that new empirical research is irrelevant, because he already knew how economies work.

My comment.



In the comment I define your disagreement with post reporter  Zachary A. Goldfarb as a disagreement about whether reduced but still positive home equity causes a reduction of consumption on the order of between 5 and 7 cents each year per dollar of housing wealth or on the order of zero.

That is, I won't address you valid points that the recovery of consumption was roughly normal while the recovery of house construction was not.

Notably Goldfarb cites empirical estimates based on micro data.  He claims there is a significant change in the slope of the home equity effect on consumption at home equity equals zero.  To say he is wrong, you must convince me that the 5 to 7 % estimate is valid for a sample containing only homeowners with positive equity.

An estimate with aggregate data just does not address the claim in the article which you criticize.

Notably, in this case the Washington Post cites specific research by named economists.  You, in contrast, cite what all macroeconomists know.

I am shocked to find that I call this one for The Washington Post.  Your conclusion may be correct, but your reasoning is based on the assumption that all functions are linear.  I don't like to be square, but that's not true.

Update: Baker notes that the old empirical estimates of a 5 to 7% effect are based almost entirely on households with positive home equity as there were very few households with negative home equity in the USA until recently.  I thought of that but neglected to update this post before being called on the dumbness from laziness.  I insist I am lazier than I am dumb.

Obama is two Conservatives' dream Candidate

At Frum forum Justin Green extensively quotes Jeb Golonkin on how conservativism could be much better if conservatives made specific policy proposals.  Sad but true, almost all of the proposals have been signed into law by Barack Obama.  This is not a rare event.  While many conservatives stick to slogans, some try to come up with constructive alterantives to the stimulus (ARRA) and Obamacare (PPACA).  I don't remember where to link but the phenomenon of 'Obamacare is horrible and we should replae it with Obamacare isquite common.

My comment with all of Golonkin's proposal in bold and then my comment.

The problem is that Obama has been there and done that.  Golonkin's innovative conservative proposals are mostly existing liberal policies.

Somewhere along the way, we conservatives stopped innovating and stopped explaining, preferring instead to fall back to “small government is better.” Well, maybe it is and maybe it is not. But the notion that government is always useless simply does not ring true in a world where people look to the government to provide Medicare, a national defense, FEMA relief, and public education. This being the case, we would do well to start probing for specific policy solutions that affect people in concrete ways. What is the government doing that is hurting small businesses today? What is the government not doing that it could be that could help small businesses? 

It is not now organizing health insurance exchanges to remove big businesses advantage in insuring employees, because big business work forces are automatically large pools of policy holders helping big but not small businesses interacting with health insurers avoid the adverse selection death spiral.  It would also be nice, above and beyond the call of eliminating a market failure, to offer them subsidies.  See 'healthcare fiasco'.

What about student debt? 

How about ceasing to pay banks huge amounts of money to handle simple paper work and divide the savings between reducing the federal deficit and reducing the amount students have to pay on their debt.  See 'healthcare fiasco'

Can we use student loan forgiveness as a way to incentivize bright young people to enter particular fields? We need more primary care physicians if we are going to make this healthcare fiasco work. No one wants to be a primary care physician because primary care physicians get paid less than specialists, which makes it harder for them to pay off their medical school debts. But could we change the way the government reimburses primary care? And couldn’t we partially forgive student loans if borrowers agree to enter into primary care in particular markets for a certain number of years? 

See 'healthcare fiasco' and click http://bit.ly/Y6ObIP (warning a *.doc will download)

So far all of the bright innovating conservative ideas are provisions of the 'healthcare fiasco'.  Some are not current policy because they are scheduled to start in January 2014, but mr 'specifics specifics specifics' didn't let that little detail prevent him from arguing that a bill which is largely not yet being applied and of which he demonstrates astonishing ignorance is a 'fiasco'.  

What about tax policy: why are we not on the cutting edge of hyper-targeted tax cuts that we can show, with numbers, turbocharge the economy? 

A wish is not a plan.  Wishing that conservatives can show, with numbers, that there are tax cuts that turbocharge the economy doesn't make it possible.  There are many conservative academic economists who have looked very hard for proof that some sort of tax cuts turbocharge the economy.  They haven't shown this, because it is not true.  yes many conservatives consider numbers foreign alien and un-American (especially arabic numbers).  However there are also conservatives who love numbers and are statistical and mathematical geniuses.  The reason they haven't shown with numbers how wonderful tax cuts can be is that it is impossible to show something false with numbers.  The high respect of 'numbers' is for their power as tools for convincing people.  Golonkin doesn't need to look at any numbers to be sure it is possible to show with numbers that some tax cuts are great.  This is not the way anyone who knows what data are talks about it.  Conservatives, including Golonkin, have the very serious problem of thinking they know the answer before looking at the evidence.

Also I fear that Golonkin believes his hyper targeted tax cut proposal is pro market.  It is, in fact, based on his conviction that policy makers (provided they are conservative) can guess better than the market and wisely subsidize particular activities. The pro market position is that tax rates should not be targeted but rather that the playing field should be level.

Why are we not demanding that the government rebuild our cratering infrastructure rather than using taxpayer dollars to invest in projects it hopes will succeed (Solyndra)? 

Yes how about spending more on infrastructure ?  Nothing like the ARRA but spending on infrastructure.  How did Golonkin manage to avoid the phrase 'shovel ready' ?  He is now calling for the ARRA.  Also he doesn't recognize that hyper targeted tax cuts are using taxpayer dollars to invest in etc.  It doesn't matter if the money is called a tax cut or a subsidy or even the market value of a CDS (loan guarantee) as in the case of Solyndra.  The policy he advocates and the policy he mocks are implementations of the exact same reasoning]

Why are we not pushing pay for performance in the healthcare system AND in our education system? 

Pay for performance in the healthcare system.  See 'healthcare fiasco' and click
http://www.lifehealthpro.com/2011/04/29/ppaca-hhs-starts-medicare-performance-payment-syst
pay for performance in education recall the ARRA and google 'race to the top'

Workfare?

[Workfare was introduced under Reagan and tightened later.  This is the system before the welfare reform of 1996.  It was learned that it costs more to give them money and make them work so states backslid and it never amounted to much.  It is an experiment that all agree failed.

Some of these ideas are useless, some of them might have legs, but the point is: specifics, specifics, specifics.

So we see what happens when a conservative tries to think of constructive policy proposals.  There is the wish that conservative claims be 'shown with numbers' plus Obama policy after Obama policy after Obama policy.  

I think Golonkin should spend more time and effort on understanding the enemy. He might discover that the enemy is not the enemy but rather what he dreams conservatism might one day become.

The shocking thing is that this pathetic display of ignorance is described as "particularly fine work" by non movement conservative Mark Adomanis in Forbes in a post entitled "Epistemic Closure in Action ..."

Golonkin is not the example of epistemic closure.  He is considered a "particularly fine" example of how some conservatives are working to overcome epistemic closure.  The detail that the conservative in question has new conservatives ideas which are almost all either in the PPACA or the ARRA and that he doesn't know this, does not make the Galonkin essay an example of epistemic closure.  

Rather it is an example of how some conservatives are trying to overcome it and understand liberals before denouncing us.  

I am tempted to type "pathetic" but I don't pity them, I fear them. They are very numerous and their blind ideological arrogance makes them dangerous.

Guys and Polls

What do Damon Runyon and David Brooks have in common ?

"nothing between human beings is more than three to one." Attributed to Damon Runyon by Robert Solow, American Economic Review, 1985

 If there is one thing we know, is that even experts with fancy computer models are terrible at predicting human behavior."  David Brooks

The problem, the reason that Runyon was joking and Brooks is a joke, are the the words "nothing" and "terrible."  It can safely be predicted that Damon Runyon will not correct David Brooks, first because he is dead and second because he has better things to do with this time.

Brooks's argument is an example of an fallacy which is more common than any other fallacy or any valid method of reasoning -- the false dichotomy.  He notes that there are some things which we can't predict and concludes that we can't predict anything. 

 I think there is a not quite so general errors made by those who weren't totally delusional,  but were determined to argue that Romney's chances were well over those calculated by Nate Silver. First the natural guess that if we can't make predictions about something which is relatively simple, then we can't make predictions about something more complicated.  So since we can't place meaningful probabilities on many statements about what a single person might do, we certainly can't predict what an electorate will do.   This seems to sound sensible to many people, but it is totally false.  We can't place meaningful probabilities what an electorate will do in the sense of what each and every elector will do (including sneeze).  We can place meaningful probabilities on how people ill vote on average.  Note that Brooks's argument is not specific to 2012.  He also claims it would have been nonsense on October 31 1972 to say Nixon's chances were definitely over 90%.  Brooks is rejecting thermodynamics as well as critiquing Silver.  The logic of his argument applies to molecules too.

To be honest, I think that there is something else Runyon and Brooks have in common.  Neither really believed what he wrote.  Brooks is sane and not stupid.  He can understand as well as I can that his conclusion is much too strong.  I am very confident that the problem is that he considers his job to be to make reasonable sounding arguments, in which he gives the naive the impression that he is just trying to understand a topic, and then conclude that what Republicans say is true.   

As noted above individual humans can be unpredictable.  The false dichotomy fallacy might tempt us to conclude that all individual humans are unpredictable.  However, David Brooks is predictable.

Greed is Good. For Your Competitors

Kevin Drum has a very good post describing how terrible a manager Romney is as demonstrated by his shambolic campaign.  The key result is that the huge amount of money raised by Romney seems to have gone in large part into the pockets of his top campaign aids.

I think this is bound to be a weakness of organizations which rely on greed and not ideology, esprit de corps or a sense of mission to motivate their employees.  This is not a new hope (I read it in Plato's "Republic" and I doubt the idea was new then).

I speculate and gloat in a comment which I cut and pasted below.

My theory  (which I also read at Brad DeLong's blog) is that the Romney campaign was basically a scam* and people eager to lead it were basically grifters whose main aim is always getting their hands on money.   I think it is demonstrated that the campaign was based on lies.  A problem with lying as a strategy is that the team of liars will lie to each other.  

This theory leads to optimism.  If people who believe in a cause are much more efficient than cynics who are in it for money or even just winning for the sake of winning, then the truth will tend to come out.  If efforts to distort the debate using money are weakened by the self interested behavior of people who are willing to lie for money, then they will be less damaging.

The problem is that candidates who are not compulsively honest had efficient campaigns.  The Romney team was no less honest than Karl Rove and the Bush campaigns weren't undermined by self dealing.  Bush was not uh reliably honest but he had extremely loyal aids (I am thinking of Harriet Miers and Karen Hughes.  Bill Clinton is not always honest and willing to do extreme things to win elections (such as having Ricky Ray Rector killed) yet he inspires great loyalty (including I fear someone who will angrily reply to me in comments -- nah not to worry no one will read a comment this long).  Why even Richard Nixon himself had extremely loyal aids.

My guess is that Romney has a very particular problem with equating self dealing with brilliance and good management.  The case for Romney was that he had acquired a lot of money demonstrating ability so we should hire him as our President.  My guess is that he was sincere about this.  So I guess he decided that people who had done very well for themselves in politics were smart and hired them.  

I think the point about how success in private equity and managing a firm are different is very important.  My sense is that Romney 's core competency was separating counterparties (including the other people who worked at Bain) from their money.  Such an approach can make people rich, but that skill isn't socially useful and has nothing to do with managing in the pre 80s sense of the word.

The recent performance of the US economy sure suggests that a lot of US businesses weren't run the way you imagine businesses are run.  I must resist temptation to speculate (again) that most businesses are mostly run for the benefit of top management.  You've worked for a for profit firm and find the Obama campaign familiar and the Romney campaign strange.   But some are and their managers are superstars because they have obtained great wealth.  The greed is good error (that is the illusion that the greedy are useful employees -- I am talking about top bosses who don't know how to get what they want and not about right and wrong) saved us from a Romney presidency.  But it also helped cause the great recession.

* I am honestly trying to be polite here.  I personally think the Republican party is a scam, but I don't have to make so broad and harsh a claim.

How did Republicans Win the House with less than half the votes ?

I think this is the best post I have read so far on the topic.  Just go read it before reading my comment below.

Of course I have my usual comments.


Thank you for your excellent post based on good shoe leather (OK leather ear to the phone) reporting.  I should also thank the political scientists who have been doing their job while I pretend to do it commenting on blogs (I'm supposed to be an economist).

But (of course there is a but) in those comments I have been stressing that bipartisan and court-drawn maps systematically cause Republicans to win a larger fraction of seats than votes.  The reason is that a bipartisan and court (except sometimes the Supremes) principal is that the House should look like the country and not like the White plus some brown and no black at all Senate.  There is an absolutely deliberate effort to create majority minority districts.  Those districts are overwhelmingly Democratic districts.  The intent isn't partisan, but the effect is to cause Republicans to be over represented.  I add that I support the effort to make the House look like the country and not like the Senate.


Also, while I see why incumbency helps the party with more seats I do not at all find an eplanation for why it explains the gap between popular vote and seats won.  The advantages of incumbency discussed in the post should cause the party with more incumbents to get more votes, yet they are discussed as if they affect seats won but not vote totals.  To explain the gap, one has to argue that incumbents generally win by narrow margins or lose by wide margins.

Here I think the problem may be with the reported vote totals.  Some states don't report votes in races where there is only one candidate on the ballot.  Incumbents often get on the order of 99% of votes or more.  That's a lot of wasted votes which would cause the party of incumbents to have a lot of votes per seat won.  But only if they are counted.

Even if the votes are counted, they may be few.  Some people (definitely including me) are irritated when invited to vote for the only candidate on the ballot (if I wanted to live in the USSR I would have moved there back when it existed).  For decades I chose Michael Capuano over write in, but I'm sure lots of other people left the oval empty out of irritation (this year I actually got to vote in a contested congressional election for the first time since hmmm voting for O'Neill over Abt in 1982 IIRC).  I think some correction for races with only one candidate on the ballot is needed.

Finally I don't get this bit about fewer people in red districts.  What geographic boundaries are being considered ?  I can see how the requirement that each state have 1 representative could in theory create a small population at large district.  However, I think it doesn't as even Wyoming is not an unusually small district.  I don't see why representation of low population states would be rounded up more often than down.  If the boundaries are, say, county boundaries, then current redistricting does not respect them (I vote in the same county and a different district).  I tend to suspect that the random districting which respects geographic boundaries doesn't correspond to anything but a silly modelling assumption.

Polite conclusion about how this is a great post and political scientists are awesome.

Digital Cat Photos Get Serious

LOL Catz the joke's on you

 Franklin, Tenn. resident Michael Brown, is under investigation (and has his computer stuff under seal) by Secret Service agents attempting to figure out whether he attempted to blackmail Mitt Romney claiming to have Romney's tax returns (encrypted on thumb drives).

For one thing, there are the cats. Among the pieces of evidence included in the search warrant released by Brown are two black and white images of house cats. The images, according to Brown, were found on one of the thumb drives mailed out with the ransom notes. And the Secret Service at first thought the cats were Brown’s. Brown has maintained that they are not his cats — they are the cats of a family friend. 

meow.

Suzy Khimm interviews Kent "Chainsaw"* Conrad

The key part in which Conrad totally dodges Khimm's question is

So do you think there are actually good policy arguments for raising tax rates on capital gains and dividends to raise revenue, as opposed to raising the individual marginal tax rate?
Sure there are. The argument against raising marginal rates is that has a very different economic impact than it does to raise capital gains taxes, or to raise capital gains and broaden the base. Broadening the base is seen by most economists as more efficient, with better incentives. And when you’re having [taxes on] capital gains and dividends at 15 percent, when everybody else is at 35 percent, it creates these incredible distortions in which very wealthy individuals are paying a fraction of the rate of those with far more modest incomes. You can see a rationale for doing it that way.  

I comment noting that Conrad is making up the views of economists.


I am very pleased that Conrad supports stimulus spending. Of course it isn't going to happen.

On the other hand, he dodged your question on the economic effects of raising income tax rates vs raising rates on capital gains and dividends.    He switched to discuss loophole closing, but even if you insist that the capital gains and dividend rates are loopholes, economists have very different views on them compared to say the mortgage interest deduction.

There is a very widespread view among economists (supported by formal models) that the optimal tax on capital income should be zero.  I am not one of those economists, but this is not a fringe view at all.  In contrast I've never met an economist who supports the mortgage interest deduction (I do occasionally see one in the mirror who says end the mortgage interest deduction but not now wait till the housing industry has recovered).

It is just not true that economists generally think that Clinton era income tax rates are too high to be efficient.  In fact, there are many top economists who advocate a 70% top income tax rate (Nobel memorial prize winner Diamond and Clark medalists Saez for two examples).  I'm not a top economist, but I am an economist and I agree.

As you implicitly argue (without pushing the claim in a follow up question) the Washington consensus that base broadening is more efficient than rate increases does not correspond to the academic public finance literature.  I think it has a lot to do with Republican ideology as they are especially obsessed with the top income tax rate.  He sure knows more than I do about this, but I am irrationally confident that Conrad doesn't understand the politics either and that Republicans will never accept an increase in the capital gains tax or the tax on dividends.  In any case his proposal is not based on the views of academic economists.


*when first elected he said he planned to take a chainsaw to the defense budget.  He also said he wouldn't run for re-election if they didn't eliminate the budget deficit during his first term. Of course they didn't and he didn't run for re-election (he left the Senate and returned when appointed to complete the term of the late Quentin Burdick).  He is the single solitary deficit scold who has walked the walk.  If even he understands the logic of stimulus now and austerity later -- well it's still hopeless.

Very rude rant on Macroeconomics

My comment on this post is so intemperate that I will put it only here -- I use this blog as a trash can for excessive rudeness.

I must admit that I didn't finish reading this post.  


Soon after reading
"Interestingly, the biggest challenge to large multipliers does not seem to come from the empirical front, but rather from the theoretical front." I realized that no useful conversation could include both of us.  At that point I should have left without typing.  But I won't.

You argue that empirical estimates are refuted by theoretical considerations.  The possibility that a DSGE model might not correspond to the true true economy, you know the world out there, was not considered when I gave up reading.

Do you agree that you claim that empirical research is challenged by a purely theoretical argument ?  My sense is that to make such a claim someone has to be incapable of even grasping the concept of science.

On the empirics, yes it is true that consumption is lower than say Krugman would guess when there is rationing (I mean explicit rationing with ration coupons).   Also private investment is lower when it is illegal without explicit permission which was often not granted.  The ambiguity in the empirical literature is explained to anyone who looks at history with other than mind boggling ignorance.

But i have slipped and discussed evidence not DSGE models.  I ask is there any reason to pay any attention at all to what would happen if a DSGE model were a good approximation to reality.  I believe that DSGE modelling is a complete total 100% failure -- that the models require one arbitrary parameter for every summary statistic they fit.  I think they have absolutely no merit whatsoever.  For about a year I have been challenging New Keynesian economists to present any counter argument, any evidence that the models work better than one would expect a totally false worthless theory to work.

It might not be surprising if people ignored me (but they didn't) but Paul Krugman who you note, gets attention.  He has made the same challenge and agrees that NK DSGE model defenders have failed to meet it.

http://krugman.blogs.nytimes.com/2012/03/13/microfoundations-micro-payoffs-wonkish/

(I don't agree entirely with Krugman -- the stagflation effect was predicted by Samuelson and Solow in 1960 -- the claim that those old Keynesians got that wrong is based entirely on taking the legend of a figure out of context http://bit.ly/TDqz9R so I count 0 not 1).

Why should I or anyone give a damn about the properties of DSGE models.  I stress I am not just saying that I think they are not useful to policy makers.  I think that any pure social scientist who seeks the truth should recognize that they have no merits as contribution to social science.

Lamarckable Evolution on Immigration

Lamarckable: adj extremely rapid as a result of of a perceived need for the sake of survival.

Often used to modify the noun "evolution".   Lamarckable evolution is an unexplained shift due to the perception that if one remains the same one will join the dinosaurs in the ash pit of evolution.



Example.  Sean Hannity's evolution on immigration reform the day after the 2012 election sure was Lamarckable.

Also John Boehner is a Lamarckable statesman.

Brit Hume just tweeted that voter fraud is very rare and accusations of voter fraud are often nonsense.
Isn't that Lamarckable ?

Etymology: a reference to  Jean-Baptiste Pierre Antoine de Monet, Chevalier de la Marck (1 August 1744 – 18 December 1829), often known simply as Lamarck whose theory of evolution was based on the idea that organisms produced modified offspring in response to perceived needs.  Darwin only partly disagreed with Lamarck whose theory was finally rejected later in the 19th century ( IIRC mostly based on the arguments of August Weismann ).  

p.s. Do you always recheck to make sure you typed "etymology" not "entymology" ?  I do and it bugs me.

All the ducks in a row

Bliss was it in that dawn (Nov 7 2012) to be alive (and learn of the total failure of ORCA)

But  (to learn that Microsoft developed Orca) was very heaven!

Marshall Schools Brooks

Josh Marshall doesn't support comments on his generally excellent posts, so I have to say that this post is unusually excellent.  In it he notes the factual inaccuracy of a sympathetic portrayal of the Republicans' dilemma by David Brooks.    OK yes refuting David Brooks is close to knocking down a straw man (not because Brooks is dumb or rigidly ideological but because of the clause in his contract which says he has to sugar coat any constructive criticisms of Republicans).

Brooks argues that Republicans have trouble with Hispanics and Asian Americans because Republicans' views derive from the Calvinist Puritan tradition.  Marshal notes that the areas settled by the Puritans are the bluest region of the USA.  The Republican party is based in the ex Anglican South, the South West and the Plains states.  To be blunter than Marshal the Republican party is the descendent of the 1860 Democratic party not the 1960 Republican party.

I just want to pile on.  Marshall summarizes

David Brooks ... finds his way to an interesting observation — new groups entering the American story (he’s speaking specifically about Hispanics and Asians) have many of the values Republicans claim to celebrate — hard work, entrepreneurialism, dedication to family. And yet they’re voting for Democrats by overwhelming proportions. And Brooks says it’s because Republicans ‘Big government is squashing your liberty and economic opportunity’ line just doesn’t make any sense to these people.

Brooks fails to note that Democrats claim to celebrate the values of hard work, entrepreneurialism and dedication to family too.  Evidently this claim made Democrats is, to Brooks, so plainly false that he is puzzled that Hispanic and Asian Americans seem to accept it.

US voters are presented with two options.  Brooks can't explain why they don't vote for Republicans while tacitly accepting the Republicans' caricature of the alternative.  

The true difference is that Republican support for hard work implies opposition to any assistance to the poor as they assume that the poor must be lazy.   Republican support for entrepreneuralism means Republican support for low taxes on the rich, or, as Republicans call them "small businesses."  And Republican support for the family means Republican homophobia, opposition to sex education, ambivalent attitude towards contraception, contempt for atheists and agnostics and opposition to abortion (the last two positions don't hurt them with Hispanics any more than it hurts them with Anglos).    The Republicans' celebration of values differs from the Democrats' celebration of the exact same values, because with Republicans it is to a greater extent code for us vs them for we are good and they are bad.

To be blunter still, the Republican party is the party of white hostility to blacks.  It is not in the slightest surprising that they have trouble with browns and yellows.  Their failure is puzzling only to someone who accepts (or pretends to accept) their lies about what differentiates them from Democrats.

America's best hope and main chance

Is that John Boehner will act like Winston Churchill.  That is to say, we are screwed.

Let me explain.  I am not talking about Churchill the indomitably courageous enemy of Hitler.  I am not talking about Churchill the only politician to win a Nobel prize in literature.  I am talking about Churchill the politician who betrayed his party out of personal ambition -- twice.  He crossed the aisle and became a liberal for a position in the Asquith government, then helped split and destroy the liberal party to make and keep David Lloyd George Prime Minister.

I am equally saying we need a Republican who acts like Ramsey MacDonald or David Lloyd George.  Lloyd George would be best, since he permanently crippled his party.

Right now a faction of 5 Republican Senators and 25 Republican representatives can rule the country.  In particular, if Boehner allows the majority of the House to over rule the majority of his caucus, he can be a speaker more powerful than Sam Rayburn himself.  Boehner and 24 yellow cats (the opposites of blue dogs) can be so useful to the Democrats that the Democrat yellow cat caucus will keep him in the big chair facing out even if the rump Republican caucus tries to replace him with Cantor.

Unfortunately Boehner doesn't have the guts to grab power.  So we are doomed to four more years of gridlock probably including another recession, possibly including default and eventually leading to the drowning of Washington DC when Antarctica melts.

Unballanced www.washingtonpost.com headline person

Wow.  Noted without further comment

GOP’s rejection of higher tax rates an obstacle to debt deal

Paul Kane and David A. Fahrenthold

Another Polling Rant

At www.nationaljournal.com Steven Shepard discusses the night of truth which settled the partisan debate about the skewed samples of polls.  

I tried to post two comments.  One notes that the article presents the debate over whether all major pollsters but Rasmussen and Gravis were statistically biased.  It notes the evidence is that those two are biased and the MSM pollsters aren't.  I objected that this was not an open question before the 2012 election, since Rasmussen's polls had a 3.8% Republican minus Democrat bias in 2010.  

By shouting loudly, Republicans managed to make the debate over alleged bias in pollsters with good records and not the bias in a pollster with a very bad record.  People who looked at the data  from 2010 were not surprised by the results in 2012.  I have no doubt that there will be an article in 2014 on the Republicans' argument that all polls but Rasmussen Gravis and new imitators are biased and, after the election, another  noting the new discovery that Rasmussen is biased and that the Gallup likely voter filter introduces bias.  I am confident that, two years from now, journalistic conventions will imply that two year old facts must be considered irrelevant again.

My more serious concern with the generally good article is that the choice of one word repeats an unsupported claim made by the unskewers in an article noting that they're predictions were wrong.

The unfortunate choice of word in context (my emphasis)

 Groups such as Project New America and Americans United for Change commissioned multiple surveys in battleground states over the final weeks of the campaign, in some cases releasing more than one poll in a state per week, in large part as an effort to combat what one prominent Democratic strategist involved in the effort called the "negative storyline" formed by automated polls and other surveys that understated Obama's vote share. These were live-caller polls, conducted using landlines and cell phones, and in most cases they reflected Democrats' view that the demographic composition of the electorate would be more favorable to Obama.

My comment (edited a bit)

Excellent article.  

I want to object to "in most cases they reflected Democrats' view that the demographic composition of the electorate would be more favorable to Obama."  This is an assertion of causation (the effect reflects the cause).  It is only an accurate statement if the Democrats belifs caused the Grove results.  This can happen -- weights can be used to impose a guess about turnout on the rasw data.  However youpresent no evidnece that Grove did any such thing.  You could have made the other guess and written that Grove's results tended to support the Democrats' view etc assuming that the causation was from what respondents said over the phone to Democrats' views.  

In the whole sad unskweing debate, the unskewers (who you note turned out to be totally wrong) asserted without evidence that Democrat commissioned and MSM commissioned polls were unreliable because the stated results were caused by assumptions about turnout.  All pollsters who responded asserted that they chose weights based on census data and likely voter subsamples based on responses to questions.

In spite of the evidence that Grove and PPP polls were reality based since they were accurate, you casually assert causation from Democrats' beliefs to the data their contractors present.  It is known that at least some Republican internal polls reflected assumptions about turnout (no links but many Republicans have explained why their predictions were off this way).  You just assume that if Republicans do something Democrats must do it too.  This fits a rule of conventional journalism, but, in this case lead you to casually make an assertion about the direction of causation based on no evidence at all.

I think you should ask Grove if Democrats' beliefs about turnout affected who they called, their interview script or their processing of the raw data.  Just asserting this without even asking is not optimal journalism.  You will guess that I guess that Grove will  deny that any such causation occurred (and I guess accurately deny it).  I think there is a fundamental difference between Democratic and Republican approaches to polling as Republicans impose their guesses on the data and Democrats don't.  I think this is part of a general pattern in which Republicans are much less reality based thanDemocrats.  I thinkjust assuming that things must be symmetric is not a good approach to reporting on the two major parties we actually have.

Schadenfreudegasm MMMMCCCLXXVI

I really thought I was schadensatiated (honest I thought that to myself).  Then I found out about the beached ORCA.  Whatever you think of Mitt Romney, remember he is a management genius who knows how to run complex operations.

What has Nate Silver done for us lately ?

This isn't really about Nate Silver.  It is about poll aggregators in general and just as much about the Huffington Post pollster, Real Clear Politics and Talking points Memo as about Silver, Wang Linzer and others who try to estimate outcome probabilities and not just average polls.

I think that aggregators have proven that it is better to look at their aggregates than to look at individual polls and try to see patterns or calculate averages from memory.  I think this means that their judgement to not include a poll would be damaging to the pollster.  I conclude that, if they work together, they can demand and obtain transparency.

I have a real problem with what I perceive to be a lack of transparency of pollsters. I refer really to the methodological explanations they have on their web sites.  I do not have the impression that I could reproduce their numbers from the transcripts of their interviews based on their explanations.  I do not think this is acceptable.

My sense is that this is not just my ignorance -- that pollster methodology is partly secret.  Here I stress that I might be wrong -- it might be that the full protocol is not secret and I am just ignorant.

My understanding is that pollsters keep their methodology partly secret claiming it is a trade secret -- that since they are the best pollster, all other pollsters would imitate their methods if they weren't kept secret.  If they do make this claim, it is BS.  They make different choices and each is, as noted, convinced they are right. My guess is that they don't describe the assumptions they make, because if they did then people would understand that the assumptions are assumptions and make a difference.  I think that, most unfortunately, most poll consumers are willing to accept a black box, buy a pig in a poke (and mix metaphors).

I think this is not a healthy attitude and that poll consumers including journalists should have a rule that no special sauce is allowed.  I have no hope that journalists will adopt this rule.  But I really hope that poll aggregaters do.

I note that academic journals have this rule.  They demand the raw data and an explanation of calculations such that they can be replicated by editors (doesn't mean they do replicate them and doesn't mean they don't ). This is actually a fairly new development.  Editors of academic journals can impose such rules as their decisions are very important -- basically research doesn't count without their approval.

I think a conference of leading poll aggregators would be useful and that a decision that polls with secret methodologies are to be ignored would make a huge difference.  But I don't think their power to impose transparency on pollsters will last.  Right now they have high status, because they totally out predicted the non quantitative go with their gut pundits.  I'm pretty sure that in 6 months the fact that they nailed 2012 will be old news which can be ignored.

Blogging suspended due to Rapture

The stupidocalypse occured Monday !

I haven't reported this because I have been suspended on a beam of light and also would have to read the four horsemen of the Stupidocalypse to know

They are, of course Mickey Kaus,  Charles Krauthammer, Fred Barnes, and Morton Kondracke

They all managed not to recognize

The Return of the Nate EV.

calculator's uncanny accuracy.

Note especially slightly shorter Kondracke "Election Oddsmakers Suffering From Fuzzy Math"

by which he means "Election Oddsmakers Suffering From Math."

Wikipedia Wow

The election in the 4th Utah Congressional district was just called.  The wikipedia entry for Mia Love begins

Ludmya "Mia" Bourdeau Love (born December 6, 1975) is an American politician. She is currently the mayor of Saratoga Springs, Utah, and was the 2012 Republican Party nominee for the United States House of Representatives in Utah's 4th congressional district, defeated by Democratic Rep. Jim Matheson for the seat in the November 6, 2012, election.^[1]

The Wikipedia is being updated in real time.

A Saint at the New Life Celebration Church

For anyone who ever thought they were too busy to vote, meet 21-year-old Galicia Malone.The south suburban Dolton mom-to-be was spotted at her polling place Tuesday morning on her way to give birth at a local hospital.
Cook County Clerk David Orr said Malone's contractions were five minutes apart when she showed up around 8:30 a.m. at her precinct's location named, yes, New Life Celebration Church.

Update .Another polling place hero -- Ty Houston 

"He was dead," Houston said. "He had no heartbeat and he wasn't breathing. I started CPR, and after a few minutes, he revived and started breathing again. He knew his name and his wife's name."
What happened next astounded Houston and the victim's wife.
"The first question he asked was 'Did I vote?'" 

Pity about that lack of enthusiasm no ?

I think that Houston and the guy who's life he saved deserve an invitation for one of those beers with Obama (especially if the death defying voter voted for Romney which I tend to doubt).

Math is Hard

Uh Sean 280 > 257

Via @daveweigel

It's a mock up page which leaked.

Uh also uh MSNBC there are 538 electoral votes not 537 you know 100 Senators plus 435 representatives plus 3 for Washington DC.    Ask Nate Silver.

You can assign 537 but then you must show Omaha grey (at least that would be the main chance not the Maine chance).

How could the crash of 2008 have happened

This Could Get Weird

Listening to a story from a friend this evening. Guy in a social setting talking to a group of Wall Street heavyweights. Every single one in the room certain Romney wins. Has Ohio locked. Has the whole thing tied up. No doubt.

Josh Marshall

I voted by e-mail

America's Worst Pollster

Who will win the hard fought contest to be declared America's worst pollster ?  Will it be the artists formerly known as Zogby interactive (now called JZ Analytics and likely to have a new name in 2014 so someone takes them seriously) ?  Look I love them, they pioneered internet based polling which strikes me as quite possibly the worst idea since President Dewey was elected, but I have to call it for

Baydoun Foster McCollum White (and associates don't forget the associates) who just released a poll showing Mitt Romney ahead by 1% in Michigan. 
The RCP average (including them) is 0 up 3.8% the 4 other RCP averaged polls average to Obama up 5% the difference is (borderline) statistically significant at the 5% level and that is one poll vs 4).  Wow.

Now that takes guts.  They also earned the coveted double asterix ** for not included editorial decision from Josh Marshall.

I'm afraid to read the internals.  I half expect that they find that Michigan voters disapprove of the auto bailout.

If they get this one right, I'll eat my hat.  OK I don't own a hat, but I'll buy one just to eat it.

Further Recklessness

Yesterday I broke my rule (well not the only one but ... pretty much) and made some forecasts.

Now I am discussing statistics and Meta Analysis with Nate Silver.  Read his post anyway.



This is an unusually excellent post.  

My commment


I want to stick on the very first and simplest issue -- random sampling error.  There is definitely something funny going on in polls with regard to random sampling error -- the results of different polls are more similar than they should be.

You have noticed this and pretty much insinuated that pollsters are deliberately herding -- fiddling their assumptions to get their polls similar to the average poll.  I don't recall the exact words (they were diplomatic) and, of course, no pollster was singled out.

But I think there is a simpler and more innocent explanation -- demographic weighting.  The stated sampling error ignores the use of weights to make the sample of adults match the adult population.  They do this in an effort to remove bias, but it also can reduce sampling error (it can also increase sampling error if a huge weight is put on a subsample of say hispanic women aged 18-25 or something).

For some reason, sampling error is always reported as if the true population frequency of any response is 50%.  This is an old tradition  presumably small c conservative since that gives the maximum sampling error.  I recall a poll of Israeli approval of Ehud Olmert where he had 2% +/- 3% approval.  By the standard calculation it was quite possible that the true number of Israelis who approved of him was negative.  Ooops.  This convention might blind pollsters to the fact that if eg. they make sure that the fraction of their sample of adults which is African American corresponds to the fraction of the adult population, they are eliminating a good bit of sampling error (example chosen as the sampling variance of Obama support from a poll of voting intentions of 100 African Americans would be assumed to be 0.0025 when it is in fact, more like 0.00025).

This is quite important because estimates of random sampling error are a small deal when looking at sampling error in the average of many polls, but they are crucial to estimating the covariance of bias in different states say. A given covariance across states of outcome minus forecast is more alarming if sampling error is smaller, and a given correlation is less alarming if sampling error is smaller.

An analogy (not baseball finance).  Asset prices include noise because assets are not perfectly liquid.  Estimates of the joint probability of default of different MBS were low, because correlations of the probability of default were underestimated because this noise in CDS prices was interpreted as variation in the conditional probability of default.  The result was not pleasant.  Ignoring sampling error when estimating correlation of bias across states would lead to overconfident estimates.  Overestimating sampling error would lead to under-confident estimates (I guess -- and I make this guess about your estimates).

What Makes Romney Run ? *

Ezra Klein has a very polite general post on Romney's faith in himself as a manager

here


I disagree in comments


Shorter Klein:  Everyone has to believe in something and Mitt Romney believes that Mitt Romney should be elected President.

You are more polite than many, but your claim is that Romney feels entitled to the presidency.

I don't entirely agree with you about Romney's record as a manager.  I'm sure you are right about how he sees himself, but you tend to endorse his claim.  My problem is that it is possible to become extremely rich without managing firms well.  Consider George Soros -- he is very rich -- he hasn't proven he can manage anything.  He is rich because he outsmarted his counter parties.  One doesn't have to manage anything well to separate fools and their money.

My honest guess is that Romney became extremely rich at the expense of two sets of people who made costly mistakes.  The first are the investors who bought bonds issued by Bain controlled firms.  In many cases, Bain made huge profits although the firms went bankrupt.  I'd guess that investors paid more for the bonds than they would have if they had accurately assessed the risk of bankruptcy.  To guess further, I think then knew that Bain Capital was very successful and thought they were part of the Bain team or at least Bain clients.  In fact they were taking the other side of a bet than Bain was.  Convincing your counter parties that they are your clients is a way to make huge amounts of money.  It has nothing to do with making firms operate more efficiently.

The other set would be the other Bain Capital principals.  The structure was that they were investors in Bain created limited liability partnerships but Romney was the sole shareholder of Bain capital.  This gave him the power to hire and fire the people who actually managed Bain investments.  I think it is very likely that this single share was given to Romney for a nominal price on the grounds that it just made control clear and that he sold it for a huge price.  Why was he still sole shareholder and CEO of Bain Capital when off in Salt Lake managing the Olympics ?  I think he was bargaining over the huge price of something which had been given to him on the assumption that he wouldn't treat it as his personal property.

I think his closest associates found that they were counter parties not partners.

I conclude that the voters who think that they can have Romney lead our team by voting for him would, if he wins, learn the same lesson about the advantages of trusting a psychopath that many others have learned from Romney.

I'm not sure you remember Richard Nixon.  I do.

*No I haven't read this book.  Why do you ask ?

Katherine Geier calls me a "penis-holder"

here

Everyone knows that Amurka is white people. ‘Specially white people who are dudes. Oh, and of course, rich people! The notion non-whites, the poor, urban dwellers, and unmarried women are second-class citizens whose votes shouldn’t count is straight-up racism and sexism of the most despicable kind. Obama’s detractors will use prettied up phrases — they’ll say he didn’t win over “middle America” or (as per Atrios) “the heartland,” but what they mean is that the votes of those who don’t have white skin or possess a penis, or a piece of paper that legally connects them to a penis-holder, should not count.

and I object in comments


Do you think "the heartland" means "the penisland" or more exactly "the whitepenisland" ? I almost wrote the english speaking white penisland and now will have nightmares of white penises speaking to me in English -- and the blame is shared equally by you and Sandy.

Isn't "a penis-holder" getting a bit personal ?  Some guys just pull it out of their pants and let it dangle while pissing.  Or do you mean not just for plumbing purposes but also uh entertainment. You're not suggesting that we are all wankers are you ?  I mean maybe we are all wankers, but it's still not polite to suggest that.