Site Meter

Saturday, December 25, 2004

High quality scholarship over at AEI "Robert J. Waldmann of Columbia University complemented these findings by using another measure of inequality. In a 1992 article for the Quarterly Journal of Economics he examined pairs of countries in which the poor (defined as the lower 20 percent of household income distribution) had equal real incomes but where the rich (defined as the top 5 percent of the household income distribution) in one country were much wealthier than in the other. He found that the infant mortality rate was higher in the half of the pair in which the rich households were wealthier."

I did not use pairs of countries but rather OLS on a cross section. Also I do not work at Columbia University. Still I am very flattered to be criticized in "The Public Interest."

Robert Waldmann
Universita' di Roma "Tor Vergata" Facolta' di Economia Via Columbia 2 00177 RM Italy.

Wednesday, December 22, 2004

Brad Delong has a wonderful story on his blog. Ron Avitzur unofficially working without pay at Apple interests a bunch of friends in a project called a "graphing calculator." He Greg Robbins and un named others develop software without official permission. Oddly he writes "My sanity was saved" at one point, in the face of all the evidence. I think partly this shows how Apple survived, by tolerating genius. Still even Apple seems rigid, sluggish and stupid from the point of view of underground programmers.

I didn't know whether to laugh or cry when I read " We wanted to release a Windows version as part of Windows 98, but sadly, Microsoft has effective building security." The guy wouldn't use a mild word like "sadly" if he had to use a Windows machine.

Monday, December 20, 2004

Salvatore Nistico has a web page

A New Pareto Liberal Paradox

One of the core principles of Liberalism is that there must be equality before the law. The law must not discriminate. In practice, this principle is often restricted to citizens and people are citizens only if they are born in the liberal polity or have the right ancestors. I personally consider this restriction absolutely inconsistent with my core beliefs.

In any case, equality before the law is a core principle. Liberals might consider equality of income very important or not at all important, but we must defend legal equality or else we are not liberals.

I naively imagine that I am pretty utilitarian. Consequentialist enough to accept Pareto improvements anyway. I reconcile my absolute respect for legal equality with my absolute respect for utils ideologically, that is by convincing myself that reality is such that I can hold both moral beliefs. In plain English, I am deeply convinced that legal equality is not just good in itself but also is the most efficient legal rule. I think that hereditary priviledge is not only wrong but also leads to incompetence in key positions.

However, I can imagine an alternative world in which a law which discriminates can cause a Pareto improvement. I am absolutely unwilling to name such a law clearly, because I consider it obscene. I will discuss the issue only in complete abstraction. The reader will have guessed that I am more liberal than utilitarian and would reject the Pareto improvement in the unhappy alternative universe.

The model is a case of the Matsuyama model (QJE 1991 vol 104 pp 617-650) built on the Murphy Shleifer and Vishny big push model and analysed by Herrendorf Valentinyi and Waldmann (ReStud 2000 Vol. 67 no. 2 pp. 295-307). This is a model in which different people leave villages where they farmed and move to cities where they work in industry. It is assumed that different people either face a different moving cost or have different productivity in manufacturing. This means that for intermediate values of the present value of wages in the city, some people move to the city and some stay on the farm.

The interesting dynamic arises because there are Marshallian spillovers or something (in MSV imperfectly competative firms with increasing returns to scale). Thus it is not wise to move to the city if no one else does. In an early draft of HVR 2000 Akos suggested considering congestion as well. In an unpublished draf, for very high urban populations, wages in the city decline as more and more people move to the city creating congestion. The math doesn’t change if this is a non pecuniary disutility of living in a crowded city. In the model all aspects of living in the city today are summarised by the “wage” which is the income which would give the same utility if earned in the villages minus the income which would be earned in the village. Clearly the "wage" is not just a wage. It is, at least, a wage differential.

will further assume that the income of villagers goes up as more people move to the city. This makes sense as simply supply and demand. The key variable which depends on urbanisation (n) is the difference between the income in the city and the income on the farm which first increases in urbanisation then decreases in urbanisation (n). This should be called a wage differential, but I will call it the “wage” to create confusion.

Given the risk of congestion, it might be Pareto improving to restrict migration to the City. The model becomes evil, because it is also assumed that the state is inept and can only do this by choosing an arbitrary inate characteristic of people and restricting migration based on that characteristic. That is, the State can’t say you are allowed in the city if you moved here already because it can’t keep track of it citizens. Also it can’t tax and transfer because its employees are crooks or something.

People die at a constant rate and new people are born in villages so the population is constant. Babies are all somehow born in the countryside, because … well I forget why but it is a model meant to clarify thought.

It changes in a very simple way. For any n, there is a present value of “wages” such that n remains constant. The graph of this is called the

ndot =0 curve where ndot is the derivative of n with respect to time. For higher V (above the ndot =0 curve) n increases and for lower V n decreases. At n = 1, the ndot =0 curve goes to infinity. In the example in figure 1 it is horizontal for n close to 1 then becomes vertical.

Recall that the wage is really a differential between the value of income plus non pecuniary amenities in the city minus that in the countryside (randomly called “villages” farm and all sorts of things because this is a blog and I am the editor).

Another key variable is the present value of “wages” V. V changes according to Bellman’s equation, because it is a present value. This means that for any n there is a V such that V does not change which defines the Vdot=0 curve. Such a V is the “wage” dividied by the sum of the real interest rate and the death rate. Importantly present value has the property that if V is above the Vdot = 0 curve V is increasing. That is present values tend to be unstable. This makes perfect sense when you realise that in the present value equation with perfect foresite the future causes the present. (that was a joke).

It is possible for the model to have a steady state which is a “saddle” that is such that n near steady state n can, in perfect foresight equilibrium converge to steady state n (I have corrected figure 1 so that it shows a saddle steady state). This requires exactly the right initial V on the saddle path. Let’s make everything linear near such an equilibrium. Then the saddle path is a line as shown on figure 1. There is also an explosive path which leads away from the steady state. The saddle path is also called the stable manifold and the explosive path is also called the unstable manifold.

Assume that initial n is very slightly above the steady state n of the saddle steady state. A question of interest (to ecotheroy geeks) is whether n must decline to the saddle steady state n or whether it can increase and get to some other steady state. This would be another perfect foresight equilibrium. In the example this second equilibrium would definitely be Pareto better than moving down the saddle path to the saddle steady state.

ne possibility is to move out the unstable line and see what happens. Given initial n near the saddle steady state, this is pretty much the only alternative. Initial n and V minus saddle steady state n and V must be a linear combination of (delta n, delta V) on the saddle path and (delta n, deltaV) on the explosive path (because all vectors are). The equations are all linear for a large region around the saddle steady state in the example so you can think of these to vectors seperately. The one on the saddle path gets smaller and smaller and (n,V) gets closer and closer to the explosive path. Figure 1 illustrates this among other things.

update: In fact it is possible to characterise the lowest explosive path with increasing V in (n,V), that is, the one with lowest V for given n. This lowest path is the one followed if the economy starts on the n dot = 0 line and hence above the Vdot = 0 line. If one starts with higher V, then V is higher for any n, since perfect foresight paths can't cross. If one starts with lower V but still above the saddle path, (n,V) moves up and to the left till it touches the n dot=0 line then up and to the right and passes over n_o above the n dot = 0 line, above the lowest explosive path with increasing V and stays above it. If V is below the saddle path , n goes to 0 and V violates the transversality condition. Figure 2 to illustrate this.

Figure 2 is a closeup of figure 1 near the saddle steady state. The red curve is the explosive path with increasing V which has the lowest V for any n. I have added another path, drawn in purple to show why this is the lowest such path.

Possible paths leading to steady state with higher n must be very close the explosive path. Weird assumptions about the “wage" can be made so that these paths cross the V dot = 0 curve but stay above the ndot=0 curve and are not on the Vdot = 0 curve at n = 1 (see figure 1). If n is not changing because everyone is in the city, V must be on the Vdot = 0 curve. Otherwise the transversality condition is violated.

No equilibrium with high n is possible because people don’t stop going to the city when the possible equilibrium path hits the V dot = 0 curve. Let’s say this happens at n =0.9. This good steady state can be reached, at the end of a perfect foresight equilibrium path, if one tenth of people chosen at random are forced to stay in the country side. The equilibrium is better than the saddle steady state for them too, because the relative price of food is high. The unspeakable policy causes a Pareto improvement.

OK all this depends on the figure which I will feebly try to explain. The red curve is the lowest curve whith increasing V for initial n n_0. The very key Vdot = 0 curve is hard to see. It slopes up from 0 to s as more people in the city help each produce (s for Solow or standard or something because after that, for a while nothing weird happens). At g the “wage” jumps up. This is like the late 90s in the US somehow with a growth spurt. G is for Greenspan or Glassman or Gilder or anyway someone who thought the tech bubble would last. At meverything begins to go wrong and society starts to collapse in the city. This is named Mathus or Marx or anyway someone gloomy. So the Vdot =0 curve slopes up, goes flat, slopes up steeply then slopes down very steeply. If congestion problem went critical very suddently, the V dot curve could jump down and wouldn’t be continuous. In this case the saddle path to the saddle steady state (low n steady state) could be the only equilibrium.<

The blue curve is the n dot = 0 curve with the discriminatory policy. The policy is descigned so that it stops urbanisation just before (or just after) congestion kicks in. It makes the red curve an equilibrium path. The new blue ndod=0 curve and the old black ndot = 0 curve should be superimposed when they are horizontal. The policy shifts the ndot =0 curve n/10 to the left because 10% of migration is banned.

Update: Figure corrected.

Sunday, December 19, 2004

Sen’s Paradox replicated

Recall Sen’s èaradox. There are two agents Lewd and prude. Lewd likes to read pornography, Prude does not, but what really disturbs Prude is the thought that Prude is reading pornography and enjoying it. Similarly, while Lewd enjoys porn what would really get him off is the thought of Prude reading porn and being shocked. A liberal would consider each to have the right to do what he wishes so Lewd would read porn and Prude would not. Pareto would say this is an unacceptable outcome and propose a Pareto improvement in which Lewd is not allowed to read porn and Prude is forced to read porn. Both Lewd and Prude are happier so this is a Pareto improvement. Thus one can not be a Paretian liberal.

The point is that liberals like to think that they can be consequentialists too. That is that liberal rules lead to desirable outcomes and certainly, at least, to Pareto efficient outcomes (in which to make an agent happier some other agent must be made less happy so no Pareto improvement is possible). Now even if one agrees that liberal policies lead to good outcomes in the real world, Sen showed that the philosophical problem remains. Considering his hypothetical world, we see that we might have to decide if we consider liberty good as a means to the end of making people happy or good in itself.

Brad Delong (I think I can’t find it on his blog so no link) finds it hard to accept Sen’s world in which the only possibilities are compulsion or each acting alone without interacting with the other. He asked why don’t Lewd and Prude sign a contract in which Lewd promises not to read porn and Prude promises to read porn. Then the Optimal outcome is achieved via the liberal principal that the state should enforce contracts.

Personally, I am willing to accept the assumption that they can’t contract as much as I am willing to accept the assumption that they have weird preferences. However there is also a standard way to make private contracting ineffective – replicate the model.

Imagine a million prudes and a million lewd people. The prudes don’t want lewd people to read porn. The lewd people really really want prudes to read porn. A proper moral tone in which no one is reading porn and enjoying it is a public good for prudes. A hilarious world in which all prudes are being shocked by porn is a public good for lewd people. A Pareto efficient outcome would be for all prudes and no lewd people to read porn. This can not be achieved without compulsion because there is a collective action problem. Consider one of the many identical prudes P. P does not care if other prudes read porn. To read porn causes P 100 units of pain. For a lewd person to read porn causes P 1 of pain. Now consider lewd L. To read porn gives L 100 units of pleasure. For a prude to read porn causes L one unit of pleasure. The best contract for L and P is to leave each other free to choose. There is no set of prudes which can gain from contracting with L. There is no set of lewd people who can gain from contracting with P. There is a free rider problem. The immoral prude who shirks his or her duty to read porn leaving the whole burden of keeping lewd people from reading porn to the public spirited prudes who, sad to say, given the assumptions above don’t exist.

Now this example is very unrealistic, because people are totally selfish and incapable of shared sacrifice. However that is an assumption about preferences not about what contracts are allowed. Two agents can write a contract to achieve Pareto efficiency. 200,000,000 can’t or rather the contract is called the social contract and it’s particular clauses are called laws.

Prudes seem to positively enjoy collective action. In fact, as far a as I can tell that is the main fun of being a prude. Consider kiddie porn. I hate it. I think I would enjoy fighting the good fight against kiddie porn in community of anti kiddie porn activists (so long as we could keep the prudes out of our campaign). I am almost ready to claim that the problem is not that I am lazy and selfish but one of coordination. I am willing to note that even in the hypothetical case that I were not lazy and selfish there would still be a coordination problem.

My conclusion is that Sen’s claim does not require the extraordinary assumption that people can not contract. It holds if contracts are arrived provided the original model is replication a few million times.

Historical digression. Why have I been talking about “reading” porn on a web page even. If it’s like a book which you read, it can’t be porn right ? This is roughly the state of current jurisprudence (which is I admit more grammatical). Sen was writing just after an English court decided that “Lady Chatterley’s Lover” was not porn. In a name dropping digression from the digression, I heard Sen present Sen’s paradox to graduate students and he apologised profusely for his benighted generation born early enough to see judges who thought that “Lady Chatterley’s Lover” might be porn. I mean a bit preachy yes but porn ??? Why it is a classic. Clearly part of the Canon as defined by Microsoft Word which just corrected my spelling of

Saturday, December 18, 2004

Reading this headline words fail me. Also patience fails me. I can't stand to read the actual article.

Learning by example, I denounce the Fijian nuclear weapons program. I hope to be wrong enough to claim an increased role in intelligence gathering. And a posting to the Fijian provisional authority wouldn't be bad at all.

Tuesday, December 14, 2004

My link to the internet being refurbished.

Some time ago, my link to the internet was threatened when a car hit a telephone pole (I wasn't there at the time but I think there were no injuries). The broken pole was held up with twine for a while (see the white twine in the photo) and I was planning to photograph it for a funny post post on the variety of the internet. As ususal I left things till the last possible moment.

These two nice guys from telecom Italia are making sure that I will be able to continue bloggin (I forgot to get their names).

Saturday, December 11, 2004

Berlusconi prosciolto

In the New York Times Ian Fisher has a very good story on this event A key point of the verdict and the article is "One crucial charge of paying off a judge was dropped essentially on procedural grounds, because the statute of limitations had run out." This is an improvement over the already good instant story whose timing was noted with awed admiration at La Repubblica. In the instant story Fisher rushed past the statute of limitations a bit quickly. I put it in the headline. If Berlusconi had been judged innocent on the merits on all charges, he would be assolto.

The case was complex. On one charge the verdict refers to the statute of limitations. On one to the absence of proof of guilt. On one the 3 judge panel appears to have concluded that the cash handed by the deputy the honorable Cesare Previtti (already convicted in two earlier trials) to the judge his honor Renato Squillante (already convicted in the same two trials) was on behalf of other clients (presumably the very rich Rovelli's who don't have fancy titles but have a ton of money due to being relatives of an extraordinarily incompetent and corrupt businessman).

One charge was dropped because of the statute of limitations. It was transferring money to the judge Renato Squillante via his lawyer the deputy and former defence minister Cesare Previtti via the Swiss Bank account "polifemo" Polyphemus the ironically named.

English speaking people might imagine that the statute of limitations is simple enough that prosecutors and judges would not disagree about the application of the statute of limitations. How naive, the Italian "prescrizione" is very complicated and often binding. Crucially any factor which can affect the sentence can affect the statue of limitations. For the second time, the concession of the "attenuanti generici"(non discript attenuating factors) implies that Berlusconi can not be punished. The announcement by the 3 judge panel begins

"Visto l'articolo 531 CPP dichiara non doversi procedere nei confronti di Berlusconi Silvio in ordine al reato di corruzione ascrittogli al capo A) limitatamente al bonifico in data 06-07 marzo 1991 perché, qualificato il fatto per l'imputato come violazione degli articoli 319 e 321 C.P. e riconosciute le circostanze attenuanti generiche, lo stesso è estinto per intervenuta prescrizione; visto l'articolo 530 CO.2 C.P.P."

"Based on article 531 of the Penal procedures Code [statue of limitations] the court declares that is must not act on the accusation of bribery made in Part A of the accusation with regard only to the bank to bank transfer on the 6th and 7th of March 1991 one because it describes the act [for] the accused as a violation of articles 319 and 321 of the criminal code [corruption of a public official not corruption of a judicial action which is a more serious crime] and recogniseing the non descript attenating factors, the accusation has expired. "

Notice it is quite explicit that other charges are not "prescritto" because it was not proven that Berlusconi did the dead. This makes it very clear that the judges concluded that Berlusconi gave money to Squillante and that this was an act of corruption. Less clear to me is the translation of
" il fatto per l'imputato" il= the, Fatto = act or deed, l'imputato = Silvio Berlusconi. "per" would generally be translated "for". This is important because if the judges had declared "the deed of the defendent" they would have said he done it. As it is, the preposition "per" means we will have to wait 90 days for the explanation of the verdict to be absolutely sure.

The claim that the transfer of money to Squillante was criminal was already made in an earlier trial when Squillante and Previtti were convicted. The claim that Berlusconi must have known about it is based, in part, on the fact that his lawyers have explicitely claimed that the money in "polifemo" belonged to him and not to his firm (Fininvest). This is a subtle distinction in Italy expecially in the case of paragons of disinterested devotion to the shareholders' interests such as Berlusconi, but it was key at the time it was made because the account (also used to send a huge sum to Bettino Craxi) was not on the Fininvest books and the statute of limitations for false accounting ran longer than that for illegal contributions to a politician (Berlusconi was convicted then appealed and was prosciolto when the statue of limitatiosn ran out). Thus Berlusconi's problem is that at the Swiss money laundry he was using something was singular when it should have been double, just like the single eye of Polyphemus. This should be the basis of a joke, but after a week of trying, I hereby give up.

By the way, I learned this the from La Repubblica and the other such case was bribing judges in an attempt to gain control of La Repubblica and the presumably fire its then current staff. Previtti and Squillante were convicted in that case too, while Berlusconi was not even tried, because the court, which indicted other defendents, declared that he was covered by the statute of limitations. So La Repubblica is biased. That's life. In Italy journalists either work for Berlusconi or hate him because he tried to get them fired.

The key issue therefore is the concession of the attenuante generici. I am proud to note that I knew the was the key issue before the verdict. As the name suggests, judges have more or less complete discretion in granting attenuanti generici. In the case of trying to take over the firm that owned La Repubblica, the court explicitely said they were conceded because Berlusconi has a prominent public role. It is worse stressing that "attenuating circumstances" is not a correct translation, since the concession may depend entirely on events separate from the illegal act.
Previous verdicts based on the statue of limitations (1 conviction 1 indictment) amnesties (2) or recent changes in the law by his parliamentary majority (2) are sufficient to conclude that Berlusconi is not an ex con.

The presiding judge Francesco Castellano has publically declared that he thinks prosecuters are persecuting Berlusconi's firm and that there should be a moratorium on trials of Berlusconi. The prosecuters obviously asked him to recuse himself, the asked the President of the tribunal of Milan to recuse him. Both refused demonstrated a depraved determination to betray their office and their hostility to law and truth. As much as Renato Squillante, these vile beings illustrate what a judge should not be. While blatently partisan, they used the public trust which they betrayed, to impose their wishes. The panel includes two other judges. The depraved presiding judge clearly agreed to declare, along with his colleagues, that it has been proven yet again that Berlusconi committed a crime. However, in addition to declaring that Berlusconi should not be subject to crime, he used his office, and the inevitable discretion which must not be combined with blatant partisanship, to declare him unpunishable in this case.

I note that I am writing this in Italy where slander is a crime colunnia and there is no special standard for slander of a public figure.

Thursday, December 02, 2004

New York Times Op Ed page Correction.

There seems to have been a serious error at the NYT op ed page today. An article clearly written by Paul Krugman has Tom Friedman's byline and photograph. Seriously folks I think that Friedman has earned an honorary stay in the ancient and hermetic order of the shrill
""provided it is not very long.""

Update: Checking the Shrillblog URL I find that Friedman is already a member and, indeed, falsely described as the founder. That order is more hermetic than I thought.

Monday, November 29, 2004

According to a google search I am the webs fourth leading source on "national guard tcrs" which is odd since I had to look up tcrs (at google) to find out what I meant.

Sunday, November 28, 2004

Social Security Book Cooking

Blogger ate a long post I wrote on this recently. Republicans are still talking about not describing the increase in the deficit due to the Bush administration's partial privatisation of social security as an increase in the deficit. Interestingly, they seem to be willing to claim that the partial privatisation will move the social security administration towards solvency.

This is crazy. Furthermore there is no way to use financial tricks to hide the complete craziness of the argument. When a reform is proposed, its proponents should, and I trust will, be forced to discuss three numbers which can't be fudged. The date when the Social Security Administration will begin to spend down it's trust fund (seems to be 2005 according to current proposals) the date after which, without further reform, SSA outlays will exceed revenues for the forseeable future and the date when the trust fund will hit zero. The plan to "save" social security will bring all of these dates closer. Therefore the claim that it addresses the shortfall is laughably false.

Of course the plan is not at all a plan to save social security as is suggested by the argument in its defence.

A reasonable amount of borrowing now, the proponents say, would avert a much bigger financial obligation decades later. They say personal accounts would yield higher returns for individuals than the current system and could be a catalyst to broader changes that would bring the benefits promised by Social Security into line with what the system, which is also about to come under intense financial strain from the aging of the baby boom generation and the increase in life expectancies, can afford to pay.

The above paragraph, written by RICHARD W. STEVENSON by in The New York Times seems to me to mainly demonstrate the extreme strain that a reporter faces when required by the canons of the profession to write a balanced article on a debate when one party to the debate (the Republican one) insists on saying things that make no sense whatsoever.
Here the defender of the proposal is anonymous, which is odd given that it's the President's proposal. The defence is laughably weak, since it is based on the claim that the proposal will be a "catalyst" for something completely different, which is not described at all.

The honest argument would be that, yes the private accounts would make the shortfall worse, but once they are in place it will be politically possible to cut (or eliminate) social security, which would be a good thing. Obviously that is not politicially possible right now, so the anonymous source chose to say nothing about what exact "broader changes" he or she has in mind.

I really think that 55 senators are not enough to win the debate in the country (or even maybe the Senate) when one is so totally utterly unwilling to address reality. Of course, I've always been wrong before.l

Friday, November 26, 2004

Rejecting the Alternative

Elementary statistics makes the front page of the New York Times
Michael Kinsley take notice.

"Witth his condition deteriorating from Parkinson's disease last year, Steve Kaufman gave up making improvements to his home in Algonquin, Ill. "I couldn't even hold a nail stable," he recalled.

Earlier this year, after taking an experimental drug in a clinical trial, Mr. Kaufman built new kitchen cabinets and an outdoor deck. He was so steady he could walk across a narrow piece of lumber like an Olympic gymnast on the balance beam."


The drug, however, is no longer available to Mr. Kaufman or other Parkinson's patients in clinical trials. In June, its developer, Amgen, announced that the drug, which is called glial cell line-derived neurotrophic factor, or GDNF, had not proved better than a placebo.

"To control for the placebo effect, Amgen began a 34-patient trial last year in which all the patients had the pumps and catheters implanted but for the first six months half got GDNF and the other half saline solution. The results, announced in June, showed that while the group getting GDNF did somewhat better than the control group on a scale measuring the severity of symptoms, the difference in the results was not statistically significant."

Let us review the two claims in bold, both due to AMGEN the manufacturer of GDNF. In the first it is asserted that the treated group did not do better than the group given the placebo. In the second it is asserted that they did do better but that the difference was not statistically significant.

The statistically insignificant positive effect is considered proof that the true effect is zero. This is an exceedingly common but blatent error due to incomprehension of the meaning of the phrase "statisticially insignificant". Another approach would be to perform a larger trial in order to get more precise estimates and find out if the effect of the treatment is positive as weakly suggested by the initial trial.

Note the number in bold -- 34. Amgen appears to have decided that if a trial with a sample size of 34 doesn't show a significant effect, there is no reason to look further.

Now let's consider the cost of type I and type II error in this case. Type II error (failure to reject the nul that GDNF does not work even though it does) means people with Parkinson's suffer horrible disability and early death. Type one error means that a potentially large number of un-necessary surgery involving drilling holes in peoples skull will be performed until it becomes clear that the treatment doesn't work. Both are costly, but in this case, type II error is even worse, so rejecting the alternative is worse than a mistake, it is a crime.

Of course a larger study would be expensive "Amgen had spent hundreds of millions of dollars over 10 years on the drug's development." This is an absurdly tiny sum compared to the reasonable chance of a useful treatment for Parkinson's. Recall the voters of California just voted for 3 billion on a long shot.

And the point estimate was positive! It boggles the mind.

Wednesday, November 24, 2004

Private sins and public service

I have long been totally irritated with the gossipy interest in personal scandals unrelated to fitness to serve in public office (long means before Clinton). Now I wonder. I still feel a bit guilty about paying attention to Bush's going AWOL, since it was long ago, but now I think Bush and Cheney's record of fraudulent accounting matter. It seems they are now planning to cook the federal books by counting the social security surplus as offsetting part of the general revenue budget deficit while keeping the costs of their social security partial privatisation off the books.

"As they lay the groundwork for what will probably be a controversial fight over Social Security, Republican lawmakers and the Bush administration are examining a number of accounting strategies that would allow the expensive transition to a partially privatized Social Security system without -- at least on paper -- expanding the country's record annual budget deficits. The strategies include, for example, moving the costs of Social Security reform "off-budget" so they are not counted against the government's yearly shortfall."

To paraphrase Dirkson "a trillion here a trilion there and soon you are talking real money."

Now I can't imagine a general revolt over accounting standards, so I guess the economy is screwed. I thought they couldn't shock me anymore but this made my jaw drop.

Via Atrios of course.

Thursday, November 18, 2004

Faint Praise From Senator Leahy

"the president, with the majority he has in the Senate, could have sent up Attila the Hun and got him confirmed," Mr. Leahy said. "But Judge Gonzales is no Attila the Hun; he's far from that, and he's a more uniting figure."

and furthermore Judge Gonzales is a member of a much more important demographic group, is a US citizen and is alive. On balance, I agree that he is a better choice that Attila the Hun. The grim thing is that Sen Leany's joke is barely exaggerated given the Leninist level of discipline of most Republicans.

Oh and if they think they can take us Huns for granted, they better watch out (OK so tehcnically I'm a Magyar but Americans call the Magyar Koztarsasad Hungary).

Thursday, November 11, 2004

Shorter Matthew Yglesias
At Least Ashcroft wasn't Gonzales.
I hope Alberto Gonzales doesn't suffer organ failure during his confirmation hearings
but I also very much hope that he is closely interrogated under oath about his views on what constitutes torture, how quaint the Geneva conventions are and why judge Robinson just declared the military tribunals unconstitutional. I was not pleased to see Ashcroft leave, because I suspected that Bush would try this.

The Senate has a chance to finally declare itself irrelevant by confirming the appointment of Gonzales whose contempt for the legislature is as profound as his concept for human rights and the very concept of law.

Wednesday, November 10, 2004

It's all in the timing - John Carson

Kristof writes "Paging China! Help us! Urge the U.S. government to respect freedom of the press!...three different U.S. federal judges, each appointed by President Ronald Reagan...U.S. District Judge Ernest Torres found Mr. Taricani in contempt for refusing to identify the person he got the videotape from, and the judge fined him $1,000 a day... Then there's Patrick Fitzgerald, the overzealous special prosecutor who is the Inspector Javert of our age. Mr. Fitzgerald hasn't made any progress in punishing the White House officials believed to have leaked the identity of the C.I.A. officer Valerie Plame to Robert Novak. But Mr. Fitzgerald seems determined to imprison two reporters who committed no crime, Judith Miller of The New York Times [Finally we get to the point] and Matthew Cooper of Time, because they won't blab about confidential sources.

Jesusof Maryof and Josephof, I understand that blood is thicker than logic, but couldn't you have just said that you consider the sanctity of your employer more important than the law?

Freedom of the press does not imply that the sacred promises made by journalists to criminals
must be allowed to help criminals violate the law. Our constitution, in parchment and ink, does not stand between judges and journalists' sources. "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press;..." does not imply that any law inconvenient to journalists is unconstitutional. People who witnessed a crime can be compelled to testify against the criminals other than themselves. "nor shall be compelled in any criminal case to be a witness against himself" does not mean "nor shall be compelled in any criminal case to be a witness against his or her confidential source"

The thing that really bothers me about this idiotic op ed is the pretense that it is about Mr. Taricani in Providence not Judith Miller in New York. The three seperate examples just show that there is nothing unusual about Fitzgerald or the Plame case. Promises of confidentiality of journalists to their sources have no particular constitutional status. The claim that refusal to defer to such promises is equivalent to censorship reminds us that the political power of journalists has caused enough arrogance to overcome their ability to read the plain english of the 1st and 5th amendments..

Tuesday, November 09, 2004

Truth Justices and the American Way

Everywhere including the Washington Post

"Military trials set up to determine the guilt or innocence of enemy combatants imprisoned at a U.S. military prison in Cuba are unlawful and cannot continue in their current form, a federal judge ruled this afternoon.

In a major setback to the Bush administration, U.S. District Judge James Robertson found that detainees held at Guantanamo Bay, Cuba, may legally be prisoners of war entitled to the protections of international law and should be allowed a hearing on whether they qualify for those protections."

It looks like judges might save what's left of our honor and civil liberties. Of course judges don't serve forever. Hang in there Sandra, we need you.

Friday, November 05, 2004

Class War

The Democrats decades long effort to be Republican light has not succeded yet. I have long thought that an extreme proposal to increase the progressivity of the tax code would be both good policy and good politics. The Republicans would reply by accusing the Democrats of class war. So ? Seems a pretty feeble argument. It would make rich journalists hostile. Like they are so sympathetic now. It would make it hard to raise money, but not impossible with the small donations on the internet and the Kerry campaign showed the limits of money without slogans.

I am sure that this would be popular. Whenever it is polled it is popular (this is very rarely).
I am also sure it would be good policy. Roughly a good case would be that this is what Clinton did with his increase of income taxes on the top 2 million households and increase in the EITC.

I think there is clearly an active margin of people deciding whether to participate in the labor market including married women and young people. Problems with high taxes on rich people seem to me to be difficult to detect in practice by people who don't cheat (no names but there are two in my mind).

I'd say eliminate income tax on all earnings under $ 50,000 for a family of 4. This isn't even much money.

Now a better policy would be payroll tax reform, but eliminating the income tax for many households would be better politics.

This seems obvious to me. I have never heard an even semi convincing argument against it.
I think I'm going to return to my previous semi rule of avoiding making predictions.

Wednesday, November 03, 2004

There are an estimated 250,000 provisional ballots in Ohio. These are ballots cast by people whose right to vote was challenged. Bush currently has a lead of 127,992 with 97 % of precincts reporting. The remaining 3% are mainly in pro-Bush counties. There are also tens of thousands of uncounted absentee ballots (some of which haven't arrived). They will also probably break for Bush. My guess is that most of the provisional ballots are marked for Kerry by African Americans and pushed into provisional by Republicans. If this is true, this election too will be decided by the courts.

I got this from Kevin Drum
Random Vote totals at C-Span 2

For New York with 0 % of precincts reporting C-Span 2 has 17 votes for Bush and 17 Votes for Kerry. Yellow Pig. I think it is a joke and that the guy who pulled it knows I can't get a screen shot.
Congratulations Senator Castor

Bit allarmed about the Senate exit polls which seem to be from Luntz. However, I am calling Florida for Castor based on official vote counts

Mel Martinez
Betty Castor
Dennis Bradley
Peter Blass
Rachele Fruit
Mark Stufft
Nancy Travis
822,960 756,235 40,646 0 0 0 0
Percent17.5% 50.8% 46.7% 2.5% 0.0% 0.0% 0.0% 0.0%

Huh they show Marinez ahead. Yeah but look at this

Bush Cheney
Kerry Edwards
Peroutka Baldwin
Badnarik Campagna
Cobb LaMarche
Harris Trowe
Brown Herbert
Nader Camejo
1,158,153 971,176 1,525 3,906 1,021 584 712 9,996
Percent23.0% 53.9% 45.2% 0.1% 0.2% 0.0% 0.0% 0.0% 0.5%

Castor minus Marinez - (kerry - Bush) = 4.7%. Seems that Republican precincts have reported first. I am quite sure that Bush will not win Florida by 4.7 % (I stand by prediction that Kerry will win Florida). Thus I call it for Senator Castor. Am I the first? May I call you Betty ?

Update: Looks like I wiffed this one too. Martinez appears to have won. Sorry Ms Castor
CNN says the election will be decided by Gays Lesbians and Bisexuals

Yes (4%)
76% 1%
No (96%)
49% 1%

They don't dare call it but their exit polls say President Kerry and that, if only straights could vote, Bushwould have been re-elected. Historic.
Exit polls from Wonkette who is hanging in there by switching to text only

Hot, Fresh Polling #

5:40 p.m.

CO Bush 50 Kerry 48
FL Kerry 51 Bush 49
IA Kerry 50 Bush 49
MI Kerry 51 Bush 47
MN Kerry 54 Bush 44
NV tied
NH Kerry 53 Bush 45
NJ Kerry 54 Bush 44
NM Kerry 50 Bush 48
OH Kerry 51 Bush 49
OR still too early to get accurate reading
PA Kerry 53 Bush 46
WI Kerry 51 Bush 48
Disclaims a birdie: "*** There appear be problems with exits in the following states that could be tipping numbers toward kerry: MN, NH, VT, PA, VA, CT, DE. described only as 'serious' issues we're looking at. so i would not put too much faith in those results."

Wonkette backup site

6:50 p.m.
6 p.m. exit polls -- not internals.

FL 51 49
NC 48 52
OH 51 49
Missouri 46 54
Ark 47 53
Mich 51 47
NM 50 49
LA 43 56
CO 48 51
AZ 45 55
Minn 54 44
Wisc 52 47
IA 49 49

Tuesday, November 02, 2004

4 p.m. exit polls via kos
Tue Nov 2nd, 2004 at 20:41:53 GMT

Grain of salt, yadda, yadda... These numbers come from Slate. Kos took out a couple numbers that are clearly from the first round:

48 46 49 54 50 50 51 50 51
Bush 50 53 51 45 49 49 47 48 46
Exit Polls Via kos
Tue Nov 2nd, 2004 at 18:03:32 GMT

Jerome over at MyDD gets the big scoop on the 2 p.m. VNS numbers:

45 48 42 60 52 51 51 50 58 52 49 57
Bush 55 51 57 40 48 48 47 48 40 43 49 41

These depend only on early voting, and so are presumably biased.
In 2000 the early exit polls showed Bush winning big. Now we see
hunger for Bush's scalp.

Monday, November 01, 2004

Faulty Polls or Faulty Analysis

One thing many poll watchers seem able to agree on this year is that there is something wrong with the polls. It appears that polls by different agencies give very different results, much too different to be explained by the stated sampling errors. In particular it appears the different agencies likely voter filters give systematically different results. I have been an enthusiastic proponent of this view since 2000.

Now I think that we may have seen patterns in random data and taken out our frustration over a deadlocked race on the pollsters.

I strongly suspect that some people are treating the margin of error of the polls as a margin of error of the difference Bush - Kerry when it is not. In fact the standard error of the difference Bush minus Kerry is almost twice the standard error of support for Bush or Kerry (see explanation below). I further suspect that some people assume that the variance due to sampling in the difference between results in two polls is about the same as the variance of each of the polls when in fact it is the sum of the variance of the two polls. These two mistakes would lead those people to underestimate by a factor of about 2.8 the variance in differences in Bush - Kerry in two valid (or equally biased) polls taken at the same time. This would explain why such people think there is something strange going on. It is less clear to me why people who understand simple statistics had the same impression.

After Luigi Giamboni and I attempted unsuccesfully to improve on pollsters raw numbers reweighting with internals, I finally checked the variance accross polls compared to the stated sampling variance, or taking the square root, I compared the standard devation of polls to the mean square average sampling standard error. The mean squared average is close to the ordinary average standard error which I will present here.

The variance across polls should be the sum of the sampling error, squared differences in bias across pollsters and the squared changes in actual opinion. Nonetheless it is only slightly greater than the stated average sampling variance.

I will present a lot of standard devations across polls and average sampling error for Bush-Kerry, that is percent who say they would vote for Bush minus percent who say they would vote for Kerry.

First consider all 98 polls of likely voters who were prompted with Nader as well as Bush and Kerrytaken in 2004 and reported at including an estimate of sampling variance. The standard deviation across polls of
Bush-Kerry is 3.97 % . The average standard error due to sampling alone in the 98 polls whihc report this is 3.11 %. The difference of 0.86 % is partly due to all of the variance in true opinions over the year. Now a kindof table

Likely Voter 3 way 98 polls standard deviation 3.97 average sampling standard error 3.11%.

Likely Voter 2 way 97 polls standard deviation 3.64 average sampling standard error 2.81 %.

Registered voter 3 way
105 polls standard deviation 3.90 average sampling standard error 2.90 %

Registered voter 2 way
77 polls standard deviation 5.23 average sampling standard error 3.17 %

The variation across polls is only slightly higher than one would expect from sampling error alone even though some were taken in August and others in September.

Now look at polls whose sample period ended in October

Likely Voter 3 way 41 polls standard deviation 3.22 average sampling standard error 3.13 %.

Likely Voter 2 way 17 polls standard deviation 2.04 average sampling standard error 3.10 %.

Registered voter 3 way
29 polls standard deviation 2.85 average sampling standard error 2.95 %

Registered voter 2 way
13 polls standard deviation 2.56 average sampling standard error 3.19 %

There is somewhat less than zero evidence of anomalous variation across polls. That is the variation across polls is slightly lower than one would guess given the stated sampling error.

Some explanation of the calculation

Bush-Kerry is 100% times the average over respondendts of a variable which is 1 if they support Bush -1 if they support Kerry and 0 if they are undecided or support someone else. The variance of the variable is the probability someone supports Bush or Kerry. A sample estimate of this probability is the fraction of people in the poll who say they support Bush or Kerry (Bush+Kerry)/100%. The variable is averaged across respondents and multiplied by 100% to give Bush - Kerry which therefore has variance 10,000*((Bush+Kerry)/100)/N where N is the number of people polled. The sampling standard error in Bush -Kerry is therefore
10 times the square root of (Bush+Kerry) divided by the square root of N %.

I am very very embarassed to admit that Brad DeLong had to explain this to me in 2000, but I trust no one will read this far.

Sunday, October 31, 2004

State Poll update from Race 2004

for battleground states. Kerry has pulled ahead in Wisconsin. His lead is not statistically significant, but, I think, given that undecided voters split for the challenger, he should win Wisconsin. Kerry's lead in Ohio has narrowed slightly. I am sorry to say thatt this is partly because I counted a L.A. Times poll twice yesterday (LV and RV for same survey). I also made a similar mistake with Wisconsin, but it didn't affect the average as much. Data are from

My reading is OBL that is the only barrier left between Kerry and the White House is Osama Bin Laden. OBL Only Bin Laden can save Bush and it would take more than a video.

Average of polls at since 10/20
Bush Kerry

S.E. Dif
49,28 44,78
Arkansas 1,90

49,38 45,28
Colorado 1,67
48,23 46,56
Florida 0,93
46,00 45,40
Hawaii 4,05
48,07 46,45
Iowa 1,28
44,64 49,19
Michigan 1,42
45,20 47,23
Minnesota 1,54
48,86 46,09
Nevada 1,58
42,17 48,83
Jersey 1,62
49,28 44,68
New M 1,86
47,07 47,53
Ohio 1,25
46,36 48,93
Penn 0,95
46,55 47,62
Wisconsin 1,70

Average of polls at since 10/25
Bush Kerry

S.E. Dif N

50,47 45,30
Arkansas 2,43
50,30 43,23
Colorado 2,39
48,37 46,78
Florida 1,16
47,86 46,93
Iowa 1,50
45,40 48,38
Michigan 1,79
45,27 47,43
Minnesota 1,70
49,60 46,43
Nevada 2,11
42,00 48,33
Jersey 2,10
49,33 44,90
New M 2,09
47,21 47,87
Ohio 1,48
46,97 48,95
Penn 1,17
46,20 48,12
Wisconsin 1,90

Mickey Herskowitz

fired ex ghost writer of "A Charge to Keep" claims he has the goods on Bush. If he could prove these claims he would guarantee Bush's defeat. I'm afraid he is blowing smoke, because he has not presented proof.

Russ Baker via Brad at Shrillblog

According to Baker, Herskowitz claims that

1) Two years before the September 11 attacks, presidential candidate George W. Bush was already talking privately about the political benefits of attacking Iraq.

"He said to me: ‘One of the keys to being seen as a great leader is to be seen as a commander-in-chief.’ And he said, ‘My father had all this political capital built up when he drove the Iraqis out of Kuwait and he wasted it.’ He said, ‘If I have a chance to invade….if I had that much capital, I’m not going to waste it. I’m going to get everything passed that I want to get passed and I’m going to have a successful presidency.'”

2) that Bush expressed frustration at a lifetime as an underachiever in the shadow of an accomplished father. In aggressive military action, he saw the opportunity to emerge from his father’s shadow.

3) Bush told him that after transferring from his Texas Guard unit two-thirds through his six-year military obligation to work on an Alabama political campaign, he did not attend any Alabama National Guard drills at all, because he was “excused.”

4) "He [Bush] told me[Herskowitz] that as a leader, you can never admit to a mistakeThat was one of the keys to being a leader.”

5) In 2003, Bush’s father indicated to him that he disagreed with his son’s invasion of Iraq.

6) George W. Bush’s beliefs on Iraq were based in part on a notion dating back to the Reagan White House – ascribed in part to now-vice president Dick Cheney, Chairman of the House Republican Policy Committee under Reagan. “Start a small war. Pick a country where there is justification you can jump on, go ahead and invade.”

7) Bush’s circle of pre-election advisers had a fixation on the political capital that British Prime Minister Margaret Thatcher collected from the Falklands War."

The problem is that, while Baker has Herskowitz on tape, Herskowitz does not have Bush on tape. Baker says he said that "A campaign official arrived at his home at seven a.m. on a Monday morning and took his notes and computer files." I thought ghost writers usually tape record their converstions with "authors", Herskowitz doesn'teven mention a cassette (that's a molecular biology joke). There is no way of knowing if he has nailed the guy like Mickey Spillane, hit it out of the park like Mickey Mantle (another client) or made a fool of himself like another journalist named Mickey.

Unless unless he had a tape and kept it.

Here is a critical state update from

Sam Wang explains that they are slightly quicker than

Average of polls at since

Bush Kerry

S.E. Dif
48,85 45,23
Arkansas 2,16
48,74 45,96
Colorado 1,84
48,13 46,53
Florida 0,87
46,00 45,40
Hawaii 4,05
48,19 46,00
Iowa 1,51
44,36 48,99
Michigan 1,58
45,02 46,92
Minnesota 1,88
48,64 45,54
Nevada 1,88
42,20 47,80
Jersey 1,80
49,37 43,27
New M 2,42
46,29 47,67
Ohio 1,25
46,19 48,88
Penn 0,98
47,06 47,18
Wisconsin 1,80

Average of polls at since 10/25
Bush Kerry

S.E. Dif

50,2 46,45
Arkansas 2,97
49,15 43,9
Colorado 2,97
48,2 46,76
Florida 1,23
47,92 46,48
Iowa 1,90
45,275 47,625
Michigan 2,15
45,075 47,15
Minnesota 2,21
49,8 45,4
Nevada 3,04
42 45,5
Jersey 2,62
49,5 43
New M 3,04
46,1 48,07143
Ohio 1,48
46,76 48,87
Penn 1,23
46,75 47,7
Wisconsin 2,32

Saturday, October 30, 2004

Bush 47.8 Kerry 45.6 is the population weighted average of the average post 10/20 poll at in each state. The standard error due to sampling alone is around 0.56%.

Rundown of fairly close states as of 10/30 using polls since 10/20

……………….Kerry… Bush… number of polls

Florida…… 46.1..… 47.4.… 11
46.8… 48.6… 5
Michigan….. 49.6…
45..… 5
Minnesota…. 45..… 44.5… 2
Missouri….. 45.4… 49.8… 5
Nevada……. 45.25..… 50… 4
New Hampshire 49.6… 43.7… 2

New Jersey… 47..…
40.7… 3
Ohio……… 48.3…
46.3… 7
Oregon……. 49.6 … 44.6….. 5
Pennsylvania. 48.8… 45… 11

Wisconsin…. 48….. 47….. 1

one old poll which I left in by mistake has been removed from the Michigan average.

The population weighted average of the average state poll completed on or before 10/10 is
Bush 47.5 % Kerry 45.8 % with a standard error due to sampline alone of about 0.43 %

There has not been any noticible trend.

Debating David Brooks is a waste of time but I can't resist.

Jesse Taylor has the definitive interpretation of this column here at pandagon

But at too much more length.

1) Yes Jesse, Brooks lives in a world of words and spin and has forgotten that the orders of the commander in chief matter more than his slogans.

2) Brooks shows that it is impossible for him to argue that Bush should be elected without twisting Kerry's words. "Kerry vowed to mitigate the problem of terrorism until it became another regrettable and tolerable fact of life, like gambling, organized crime and prostitution. [snip] Well, the Osama bin Laden we saw last night was not a problem that needs to be mitigated. " Brooks does not admit that Kerry has very clearly said that the only way to make Bin Laden a mere nuisance is to kill or capture him. Is Brooks problem that an unburied Osama Bin Laden corpse would, indeed, be a nuisance and Kerry is not determined to bury Bin Laden's dead body ? Kerry never suggested that his aim could be achieved without killing or capturing Bin Laden. Brooks knows this perfectly well. He must also know that he will not deceive many readers of the New York Times. Clearly he doesn't mind making it clear that he is a hack.

3) Brooks assumes that on any battlefield either US forces must overwhelmingly outnumber allied forces or must be outnumbered by US journalists. "When we rely on allies everywhere else around the world, that's multilateral cooperation, but when Bush does it in Afghanistan, it's "outsourcing." In Iraq, Kerry supports using local troops to chase insurgents, but in Afghanistan he is in post hoc opposition." Kerry is inconsistent, since there is no middle ground between what Bush did in Afganistan and what he did in Iraq. Bush, on the other hand, is resolute, since he made opposite choices in successive wars.

4) Bush and Brooks fail the Osama litmus test. The assumption that, if getting Bin Laden is too important to oursource, then occupying Iraq is too important to outsource can only make sense to someone like Bush or (he claims) Brooks who has not grasped how specially deadly a threat Bin Laden is and how contained a former threat Saddam Hussein was.

5) Brooks thinks that all our allies are no more reliable than Afghan warlords who were loyal allies of the Taliban until the winds shifted. Maybe Brooks just assumes all foreigners are alike. More likely, Brooks is making an anology which he knows perfectly well is bogus.

6) Bush is not responsible for his underlings. " Bush's response yesterday to the video was exactly right." Bush is not responsible for Pletka delcaring accurate criticism to be treason, nor can he fire her. Bush is not responsible for Brooks (granted) or Bartlett (why not?) trying to use the Bin Laden video to silence Kerry in the last days of a campaign. Kerry shouldn't have mentioned the obvious, since the facts, as usual, make Bush look bad.

7) "Since he joined the Senate, what cause has he [Kerry] taken a political risk for? Has he devoted himself selflessly and passionately to any movement larger than himself?" asks Brooks having run out his 700 words so he can't answer the question. Hmm investigating BCCI, contra Contras, normalising relations with Vietman (a no lose for McCain and a no win for Kerry), the vote against the defence of marriage act, and, of course, the 11th most liberal voting record in the Senate, which is obviously not the way to get elected President. It is obscene that Bush's supporters both use Kerry's courageous votes against him and claim that he never showed courage in the Senate. One claim must be false and Brooks knows perfectly well which one.

Now obvioulsy candidates race to the center, which means they are not blunt, frank or candid. I didn't notice Brooks doubting the character of the suddenly moderate candidate Bush.

8) Brooks elides the difference between Bush supporters' beliefs and facts "Many people are not sure that he gets the fundamental moral confrontation. Many people are not sure he feels it, or feels anything." This is a sudden shift from Brooks stating his own opinions to Brooks speculating about other peoples opinions. It is a cowardly way to suggest that Kerry feels nothing without taking responsibility for the smear.

9) Again Bush failed the Osama litmus test,. I am sure he does not get the "fundamental moral confrontation" or else he would not have pulled resources outof Afghanistan to devote them to Iraq. We know that, although he lied about it, on September 12th he wanted to blame Saddam Hussein. Osama didn't hold his attention for two full days, because Bush just does not get it.

10) Kristof is cleaning Brook's clock. He actually quotes Bush. He does not have to pad his essay to get to 700 words without admitting that he is trying to slide over all the real issues.

Update: Laura Rosen has an excellent post on Brooks. The one point which Brooks made that I did not address is the claim that Kerry supported the outsourcing strategy at Tora Bora. I suspected that the claim was based on a distortion of something Kerry said, but I didn't try to look the quote up. Reader KL of Laura Rosen's blog claims exactly that.