Site Meter

Thursday, February 27, 2014

Winston (not Smith) and Myths

Karen Tumulty wrote a good article including one bad sentence on the Republican all the eggs in the Obamacare basket case strategy.

"In Winston’s view, it is a myth that the last midterm election was swung by voter outrage about Obama’s health-care proposal, which was then being debated in Congress."

Well that would be a myth, since the bill was signed months before the 2010 midterms. I'm pretty sure the error is not the fault of "David Winston, a pollster who advises House Speaker John A. Boehner." I think it quite possible that it isn't Karen Tumulty's fault either. I think a copy editor might have decided to save some ink by eliminating un-necessary words editing down from something like

In Winston’s view, it is a myth that [the outcome of] the last midterm [campaign] was swung by voter outrage about Obama’s health-care proposal, which was then being debated in Congress.

As rewritten, the sentence says that the law was debated during the 2010 election campaign. This is arguably true (especially but not only if you think the 2010 campaign started in November 2008). But really debating *in Congress* during an election ? Congress would never do that.

Sunday, February 23, 2014

Now that's pretty wiki

The wikipedia lives up to it's name. Earlier today, the capo* of the Sinaloa Cartel El Chapo Guzman was arrested in Mazatlan
MEXICO CITY — Joaquin “El Chapo” Guzm├ín, the man who supplied more illegal drugs to the United States than anyone else on Earth, was captured by Mexican Navy commandos without a shot early Saturday morning in the Pacific coast resort town of Mazatlan, according to U.S. and Mexican authorities.
here is a screen capture from the wikipedia article on the Sinaloa Cartel
Now the screen capture seems to suggest that it is now early Sunday, almost 24 hours after the arrest. But in Mazatlan it is now 9:15 PM Saturday February 22 2014. *the Italian translation of the word capo is "boss" as in "boss della mafia." What goes around comes around cicciatori

Friday, February 21, 2014

More on Julia Boonstra

Glenn Kessler noted that the latest ad presenting an alleged Obamacare victim doesn't add up right. Koch funded "Americans for Prosperity" broadcast an advertizement in Michigan in which Julia Boonstra complained that her old insurance was cancelled due to the ACA. Kessler notes that also as a result of the ACA her annual premium is $571 per month instead of $1100 a month. Boonstra complained about out of pocket expenses.Kessler noted that "under Obamacare, there is an out-of-pocket maximum of $6,350 for an individual plan, after which the insurance plan pays 100 percent of covered benefits." This means that the maximium cost if the old plan had $0.00 out of pocket would be $2 this year. Of course it didn't so Boonstra will save money. I have a question. Why wsa the old plan cancelled ? The ACA imposes minimum standards for what counts as insurance (although insurance plans people had when the bill was signed are grandfathered). This is clearly needed to make the mandate meaningful. But Boonstra's old insurance sounds like excellent insurance. How could it not be ACA compliant. I can think of a few possibilities 1. It is ACA compliant, but ooops the contract is renewable by mutual agreement. Boonstra has leukemia. Obvsiously her old insurance company (and her new one) will lose money insuring her. The old company might have cancelled the policy for that reason only. I assume that the cancellation notice mentioned the ACA. I also assume it was not a sworn affidavit. 2. Her old plan was not ACA compliant for some minor reason (minor in the expected number of dollars paid by the insurance company to care providers). I might even suspect that insurance companies deliberately wrote technically non ACA compliant plans so they would have to cancel them. Then they could offer essentially identical plans at almost the same cost to healthy policy holders. Again the cancellation would be caused by the Leukemia. 3. Her old plan is seriously non ACA compliant (in dollars). For example it might have a lifetime maximum payment to providers. The ACA might have saved Boonstra a lot more money than old out of pocket minus $2. 4. For completeness I have to admit that it is technically possible that the insurance company didn't cancel the plan at all. It is conceivable that Boonstra cancelled to save the $530 a month and is now complaining. I am sure this isn't what happened. In any case, I'd be interested in the explanation. I suspect it shows how dangerous it is to trust insurance companies and how vitally important are the ACA regulatory reforms.

Great catch by Glenn Kessler

I have a more critical take here, but I want to note that Glenn Kessler did a great fact checking job figuring out the maximum possible cost of Obamacare to the latest victim ($2 if the "low" out of pocket costs under her pre-Obamacare insurance were zero oh and her insurance company raised premiums zero this year).

Not even Americans For Prosperity can defeat Glenn Kessler's love of "both sides"

I mean that he loves the phrase "both sides". This fact check is pretty much "Opinions on shape of planet differ. Both sides overstate their case." He is discussing a grotesquely dishonest ad by Americans for Prosperity about an Obamacare victim who " told the Detroit News that her monthly premiums were cut in half, from $1,100 a month to $571. That’s a savings of $529 a month" I am mainly objecting to this "Too many anecdotal stories, on both sides, have fallen apart under close scrutiny." Before the cut and paste comment, I'd like to make a really rude question here. You do facts right ? OK how many pro ACA anectdotal stories have fallen apart. An honest fact checker would have calculated a number before concluding it is "too many." Naturally this would be a lower bound as in what ? At least 100 ? At least 10 ? Well arguably at least one ? No one who respects facts should say a number is "too many" without deciding how many is too many and checking that the number is greater than that. my comment. I was expecting to enjoy reading this fact check (which is widely cited). I absolutely don't agree with only 2 pinnocchios. I'd go for four (note the very inflamatory claims). In any case, the assertion that an absolute maximum of $2 more a year is "unaffordable" is clearly at least 3 pinocchios false). Also you write "Too many anecdotal stories, on both sides, have fallen apart under close scrutiny." I understand about limits of space, but I don't know about anecdotal stories on the pro Obamacare side which have fallen apart. Really, I draw a blank (I vaguely remember maybe one case). In contrast I don't know of anecdotal stories presented by the anti-Obamacare side which haven't fallen apart. I think the "on both sides" is knee jerk Ballance which has no place in a fact check. In any case, you made an assertion of fact without presenting evidence. I think you should not allow yourself to do that. You must assert that "many" pro ACA anecdotes have fallen apart under scrutiny. You must now find at least several examples or award yourself at least a couple of pinocchios. Note that I didn't assert that there aren't many such anecdotes. I just said I knew of zero or one (depending on how one scores the one). I ask you to ask yourself why you wrote "on both sides". Was it the result of memories of pro-ACA anecdotes which fell apart or was it because you fear being accused of liberal bias ? I think you can and should obtain the answer by introspection. To try to phrase the second explanation more politely, was it that you didn't want to claim one side on a debate is less honest than the other, because that is a broad judgment and not the assessment of a simple claim of fact. The problem is that the assertion that their honesty is roughly comparable (both sides) is also a broad judgment not the assessment of a specific claim of fact.

Thursday, February 20, 2014

What is the Opposite of a Weasel Word ?

I need a metaphor and no one is answering at metaphor customer service.

I need a nuancing partner for weasel word. A weasel word is a qualifier which makes a statement so weak it is unfalsifiable without making it sound like "I don't know either." I think there is an equally seriously problem with words used only to set up straw men. There are words which can be used to make a perfectly reasonable claim false.

I am tempted to call them "berserker words" as only the sort of person who would go into battle unarmored would actually use them. On the other hand, berserkers were people and not at all like weasels. I also thought of "rabid lion words" but, come on, syllables. I think "wolverine words" might be good, since wolverines are closely related to weasels (who are ferocious and fearless so whose weaseling whom here ?).

I just read "invariably" in one of the "Five Myths about ..." essays (here I think part of the problem is the norm that there have to be five myths -- the essayist who can only think of four is strongly tempted to strawmanize). I won't link to it, because I don't want to criticize the author.


Necessarily, inevitably, exclusively, absolutely, automatically, [give me a minute I'll think of more]

I wonder what is the ratio of people saying something is invariably true to people claiming that a (usually un-named, un-cited, and absolutely made up) opponent says it is invariably true.

update: "gospel" is another berserker word

as in "It is taken as virtual gospel among progressives that Democrats once had a lock on white working class voters, but that position quickly eroded in the 1990s and later" Uh Chris I'm a progressive and I sure didn't have that impression in the 1980s and earlier. Name a progressive preacher of that gospel (it will have to be one of the kids I envy who don't even remember Reagan)

Wednesday, February 19, 2014

The usual metodological rant

I managed to resist commenting over at Krugman's blog but not here I think Krugman didn't go far enough. I think the heuristic explanation of why the model gives the result it does is often the useful product of the whole effort. One use of models is to clarify thought. The clearer thought is the heuristic explanation of what drove the model. Even if the details of the model aren't true, that informal story can be true. I add that I think that this is the only way in which economic theory has ever been useful. Obviously abstruse theories in the natural sciences have been useful aside from the intuitive explanations including some which remain incomprehensible. But they are used because they yield astonishing but accurate predictions and are ruthlessly tested (they are hypotheses or theories not models). I think it just so happens that, so far, economic theory doesn't include anything like that. I think many economists try to convince themselves to fall for a very elementary logical error. The fact that it is not true that models which are rejected by the data are necessarily useless doesn't mean that they are useful. I wasn't an economist in 1982, but by 1985 the argument that models were false by definition and could still be useful wasn't controversial. Furthermore, it has been an absolutely standard argument made by economists at least for well over a century. I think Williamson set up a straw 1982 economist. I am often very irritated by economists' use of made up intellectual history. If it matters enough to mention, it matters enough to get right. Assertions about what people wrote should be supported by citations. Also I'm trying to get to a clear statement of a sense I have about a catch 22 use of hypothesis testing. The point is that the argument that rejection of a model doesn't tell us anything interesting because it could still be useful is not followed by any discussion of anything which might tell us that it is useless. You note the argument that it doesn't matter if the models are not useful for forecasting, because they are for something else. I think an effort to see if the world looks roughly like the model is not going to be taken seriously at all, because it involves statistics whose distribution under the null is not known. I think that economic theory defends itself by arguing that hypothesis tests are irrelevant and also that anything which isn't a hypothesis test is invalid econometrics. I guess I have two questions for straw orthodox macroeconomist . I will make them narrow. 1) do you think it is conceivable that the Euler equation for optimal intertemporal consumption choices is no good -- not useful -- something else should be used in macroeconomics ? 2) If the answer to question 1 is yes, what would convince you that this conceivable possibility is the case ? I don't think that he will argue that we know a priori that good models must contain such an Euler equation. I don't think anything could possible convince him that a model without such an Euler equation is better than a model with such an Euler equation. I think that he has, and incorrectly denies that he has, absolute a priori faith.

Monday, February 17, 2014

Coberly is a Monad

Post deleted because Coberly wouldn't enjoy reading it and no one else would care.

Comment on Krugman

Commenting on Smith, Krugman wrote

"real business cycle theorists ... aren’t like French generals getting ready to fight World War I in 1939; they’re still working out how to repel cavalry charges."

(my thought but put eloquently)

"I think it puts Keynesians (of all stripes) in a better light than Noah grants."

and "Bottom line: I am not a French general!"

I comment.

I agree that you aren't a French General. You are, however, fighting an old war. You are fighting the Japanese stagnation of the 90s. Not a mistake (or a reflection on you) since it is the rich world wide problem of the 10s. History doesn't repeat itself but sometimes it rhymes.

But what about "I think it puts Keynesians (of all stripes) in a better light" hmm alll stripes ? It seems to me that new Keynesians are a war or two back (in 39 figuring out how to defeat the Prussians). In NK models, real variables are assumed to be stationarily distributed around an exogenous long run equilibrium. They didn't explain the European unemployment problem of the 80s and 90s. They decided that Europe wasn't a proper market economy so it is irrelevant to the mainstream of macroeconomics. Then reform made it OK. Now (without reversal of reform) there is extremely high unemployment for a long time without deflation (well maybe deflation in Greece).

Even you have had some intellectual discomfort. You tentatively forecast deflation and later noted that downward nominal rigidity was much stronger than you thought. Existing new Keynesian models can't deal with downward nominal rigidity, because they work in minus expected inflation space. It is easy to add downward nominal rigidity to an adaptive expectations augmented Phillips curve. The slow recovery (so far) creates no problems for old Keynesians. It creates a whole lot of problems for anyone who claims that new Keynesian economics is an advance on old Keynesian economics.

Bonus side Rant

Smith quotes House "We now know more about the details of price setting than any other field in economics. "--House I actually don't know if he meant "we macroeconomists know more than people in other fields" or "we macroeconomists know more about price setting than other things". It doesn't matter. I think new Keynesian models of price setting are total nonsense. I am not at all talking about Calvo alarm clocks. I am talking about the idea that price setting is rationally forward looking. I have 3 objections

1) expected inflation is equal to the true expected value of inflation given the policy rule so it changes when the policy changes and not just because past inflation changes. If the models are taken literally, this happens instantly. Of course all assume that there is really some learning dynamics -- but that is enough to weaken the claim enough for it to be untestable given historical data. Now I don't think that anyone could doubt Volcker's resolve in 1982. Survey data (of experts even) from the trough of the ruthless Volcker recession show they expected inflation to increase. This can be explained if one assumes that Volcker hadn't demonstrated resolve or that the survey participants were distracted by flying unicorns. The second story is much more plausible.

2) desired prices are a markup on marginal costs. This requires managers to have a firm opinion about what their marginal costs are and to believe that it is a useful concept. To believe that, you have to act as if "as if" were a convincing response to any fact. Notoriously managers either are not familiar with the concept or say they have no use for it. Micro foundations means ignoring what actual economic agents say about what they do. I have no idea (and have long wondered) how anyone can claim to believe in microfoundations and also use "as if" arguments. This is a plain obvious blatant contradiction.

3) anticipated future marginal costs have to matter too. Brad asked "Thus your standard New Keynesian model will use Calvo pricing and model the current inflation rate as tightly coupled to the present value of expected future output gaps. Is this a requirement anyone really wants to put on the model intended to help us understand the world that actually exists out there? " He sure is insinuating nK models of price formation are nonsense, and I don't know of anyone answering the question.

Sunday, February 16, 2014

Commenting Before Reading -- Personal Worst

This is getting out of hand. I felt the need to comment on this post by Noah Smith after reading the first paragraph

The eternally simmering blog debate over "microfoundations" has reached a sort of balance, with Simon Wren-Lewis and Paul Krugman on the skeptical side, and Chris House, Steve Williamson, and Tony Yates in support of the dominant paradigm. But "balance" doesn't mean "boring", so I encourage you to read the latest round, which is about the history of New Keynesian macro. Wren-Lewis and Krugman say that New Keynesians, by embracing the microfounded approach, gave up an important type of modeling tool unnecessarily; House and Williamson say that the thing that was given up was not useful at all, so it deserved to go.
My comment:

Balance ! We don't need no stinking balance ! Look I'm not in their league or anything but I am very vigorously participating in the discussion and I don't find my view there at all. I disagree with Krugman and Wren-Lewis because I think the approach for which new-Keynesians abandoned the old approach is worthless.

Now I guess my contribution to the debate hasn't gotten all that much attention, but I haven't gotten a one tenth of the way convincing answer to the question "what have microfoundations ever done for us." I am particularly pleased that you lumped Wren-Lewis and Krugman together because it gives me an excuse to embed this link (it really shows that their views are different -- it's here because it proves Krugman typed "Robert Waldmann" but it's relevant).

One would think that being accused of offering "very thin gruel" by Krugman would stimulate some further effort. I do think that. I am confident that Wren-Lewis has devoted considerable effort to the search for payoffs from the micro-foundations approach. I think he hasn't found any, because there aren't any to find.

update: comment after reading

You wrote "And it seems to be rapidly erasing the "freshwater/saltwater" divide." You read Krugman. You know that the divide seemed to be rapidly vanishing way back in 2000-05. Then it reappeared with freshwater economists saying saltwater economists must be fools knaves or both because Calvo pricing was fine until models with it were used to justify Obama's fiscal policy and then it was known to be nonsense as it had been known for decades. If a macro consensus is patched up again, it will hold exactly until the next time there is a major partisan debate about macro policy.

you wrote "the stagflation of the 70s (which seemed to fit with RBC models) and the Volcker Recessions of the early 80s (which seemed to fit with New Keynesian models)."

Ah you are so young. I wish I was so young. The original RBC models didn't include a price level. They had nothing to do with inflation let alone stagflation. The model which seemed to fit the stagflation was, in fact, the Phillips curve as discussed by Samuelson and Solow in 1960. It was perceived to be the critique of a strawman made by Friedman and Phelps (who added nothing and subtracted hysteresis). Later it was thought that the stagflation era and earlier data might fit the Lucas supply function which was Huge for a while. Later it was noted that those data reject the Lucas supply function which was a clearly silly idea to begin with. As noted by Krugman, RBC emerged when freshwater economists had to come up with something new or admit that saltwater economists were right.

New Keynesian economics does not fit data from the Volcker deflation except to the extent that it is identical to old Keynesian economics (see above). Also over here (in Europe) the last war was the huge unemployment problem of the late70s 80s and 90s which is radically inconsistent with new Keynesian models (as note by, among other, leading new Keynesian O.J. Blanchard).

Macroeconomists are totally unprepared to fight the last war or the war before that.

Your idea that macroeconomics always changes so that it wouldn't be defeated in the same way again assumes that old macroeconomics was defeated in battles which newere macroeconomics would win. My view is that this is totally false and that not only have macroeconomists not gained the ability to predict the future but they have lost ability to fit past data.

Saturday, February 15, 2014

Global Savings Glut Skit Pitch

Three planets walk into a bar. It's the dive where planets grow to guzzle cubic megameters of beer and complain about the kids these days. Mars complains about kids these days riding around on rovers and littering jelly donuts (he'd tell them to get off of his lawn but he hasn't had one since the water dried up). Earth says that's nothing, she's dealing with a (threatening music) Globalll Saaavings glut The other planets ask what exactly that is. Earth explains that the fundamental problem is that there are all of these incredibly hard working and productive Chinese who recently were incredibly hard working and poor Chinese so they haven't figured out that to be happy they need to consume as much as Japanese (they don't even believe the crazy stories they hear about how much Americans consume). So they produce all this stuff and the only way to get it all bought is for to big to fail banks to lend to bound to default consumers in countries where people know how to consume. Also too, the hard working Chinese who don't expect to consume much are spewing huge amounts of C02 and S02 and kitchensink02 out into the atmosphere. So the other planets laugh until they spill gigaliters of beer and say that all planets should have such problems. And Mercury says so Earth howsabout you get those incredibly hard working productive Chinese who don't consume enough to spend their energy making antipollution equipment and mwindmills and photovoltaic cells ? And Earth says "I never thought of that (except for the photovoltaic cells)" and all the other planets laugh until they spill teraliters of bear and say "Wait Earth you have too much production of goods, too little consumption of goods and huge problems which require gigantic amounts of work which could otherwise go into producing goods and you haven't put two and two together ? Are you stupid Earth ?" I mean are you stupid Earth ?

Thursday, February 13, 2014

I like this Ed Kilgore post

Ed Kilgore wrote (among other things) "accept the validity of other religions", " Erick Erickson’s denials that I’m a Christian at all", "the confusion of belief with fundamentally secular efforts to advance laissez-faire capitalism, American nationalism (and sometimes militarism), partriarchal family structures, and what God-hater Ayn Rand called “the virtue of selfishness.” " and "the very old but much-forgotten historical fact that secularism has been very good for religion in America." I meant to write an approving comment to make up for yesterday but the interested reader (if any) can read what I actually wrote. There is something about Kilgore that sets me off. In other words, I find him extremely intellectually stimulating. I don't know what it is. My comment

I think this is a brilliant essay. It is very beautiful. I also think you are fundamentally right.

Some thoughts

1) your belief that Christianity implies social solidarity and help for the least among us is different from their belief that Ayn Rand was a Christian. Your interpretation is based on the text. But if their goals are secular, so are yours. Its none of my business (I'm an atheist) but it seems to me that Erick Erickson isn't a Christian at all. So it seems to me that his view that you aren't one is dead wrong, but not at all in the way you think he is dead wrong. Now as a practical matter, I think that one should never tell someone who thinks he is a Christian that he doesn't know what the word means. It is rude and leads only to bad consequences. That typed, there is no doubt in my mind that Erick Erickson doesn't know what the word "Christian" means (note I trust he won't read this comment [blog] thread).

2) what does "validity" as in "validity of other religions" mean ? To me a set of claims are valid if they are true *and* we have good reason to believe they are true.. Believing in the validity of two different religions seems to me to be logically impossible. I think the limit of sane toleration is to believe that believers in different religions haven't made a mistake -- an intellectual error. I suppose I would accept "equal validity." I don't think any religious beliefs are valid (I'm an atheist). But I don't think atheism is valid -- I have no proof that there is no God and no doubt that there is no God. I think I can manage to be tolerant (and even at times polite) without accepting the validity of your faith. I think that the issue of religion causes liberals to abandon language and logic. In any case, I ask for your definition of "validity" in that context.

3) Is the key role of religious freedom in promoting religion really forgotten ? The argument was made (also eloquently) by Mill in "On Liberty" . Also by Walter Mondale -- OK you may have a point there -- "aid by Mondale" and "ignored" are closely related concepts. But surely people have noticed the fact that the US separation of church and state was extraordinary and almost incredible at the time (and for almost a century, somewhere Marx, for example, noted the astounding fact that in some states Jews could be elected and didn't grasp the incredible fact that this was true in all states) and the other fact that the US is much more religious than other rich countries. But yes you are right -- it is almost impossible to believe that people could be so blind that the fail to notice the two facts, but people manage.

Wednesday, February 12, 2014

In which I get pissed off again by the same Kilgore post

OK I read on and got to " if, on the other hand, she just doesn’t think HRC is progressive enough, or anti-Wall Street enough, or “passionate” enough to get the job done in the White House, she might want to spend some time wondering why Clinton is so popular among Democrats, " and then "if no one has a prayer of beating Hillary Clinton, it’s probably a pretty good sign she’s not the grossly inappropriate nominee Ball makes her out to be." I comment. On the actual substance, I should start by saying I cringed when I read (a bit about) what Ball said. I plan to vote for Clinton in the primary and (of course) the general. But I don't think detect any logic in the argument that Clinton is way ahead in polls of Democrats and so must be an appropriate candidate*. The argument seems to be that the majority is always right so the minority should shut up. Sorry, I mean to write that if there is any reasoning at all behind your argument, it must be that the majority is always right so the minority should shut up. In contrast, I think debate is healthy and questions of what should be done are not finally answered by polls (or elections). The argument that we are more numerous than you so shut up, is inconsistent with liberalism (by which I mean the set of opinions shared by Bernie Sanders and Friedrich von Hayek). Your argument that Clinton is a good Democratic candidate implies that you think that Reagan was a good presidential candidate in 1984. To be consistent, you must argue that if he weren't an appropriate choice for US president, he wouldn't have had such support. Of course you don't accept that absurd illiberal argument. But it is exactly the argument you made. *update: Only a posting the comment and then cutting and pasting context here did I notice that the claim is that the opinions of poll respondents who intend to vote in Democratic primaries mean that Clinton is not a "grossly inappropriate nominee." I think I could just update and ask Kilgore if he thinks that Reagan wasn't a grossly inappropriate candidate for president. It is a bit delicate to stress this even more having just misquoted Kilgore, but I notice that he puts words in his opponents mouth again (as I did and I just admitted it). This is the named opponent Krystal Ball, but did Ball use the words "grossly" and "inappropriate" ? Crap now I have to read Ball to check. OK I was unfair to Ball -- the essay is very reasonable. It includes "To be clear, I would back Clinton with all my heart against any Republican, and I would even support her over most Democrats. But she is much less than ideal." That is just not consistent with Kilgore's false assertion that Ball said that Clinton would be a "grossly inappropriate nominee" I assume no one has read this far. I have a worry. I generally ignore reading Kilgore,find his arguments reasonable and nod my head. He is usually criticizing Republicans. I now fear that I enjoy reading him, because he critiques a made up caricature Republican. I have no particular opinion of Krystal Ball (I just checked the spelling of her first name although, come on, you don't expect me not to know that there is a famous political reporter who does, among other things horse race reporting whose name rhymes with chrystal ball). Kilgore attempted to critique her post by asserting that she had written something grossly massively inconsistent with what she actually wrote. It is easy to win arguments if you feel free to claim that someone said something different from what they said. I now fear that I enjoy reading Kilgore, because I generally agree with his conclusions and his willingness to make shit up makes the debate fun and easy to read him so long as one agrees with his conclusions.

In which I get pissed off at Ed Kilgore again

I have a very high opinion of Ed Kilgore. I also agree with most things that he writes. But, for some reason, most of my comments there are negative and often quite angry in tone. He has a strange ability to irritate me. I am regularly irritated by his hippy punching. Or, in other words, I often wonder how such a reasonable person got along at the DLC and sometimes I don't wonder at all. I think it the current US political debate, there really isn't a significant movement of people clearly to the left of Ed Kilgore. He is much more likely to criticize Obama (and other prominent elected Democrats) from the left than the right (in fact I can't recall Kilgore ever criticizing Obama from the right). I think I will check, but I can't remember a recent case of someone Kilgore criticized by name for excessively left wing policy views (I do recall such a criticism of Ezra Klein -- yes Ezra Klein). On the other hand, he often criticized un-named unreasonable lefties. I think he is neither willing to defend what the DLC became in the end or accept that its critics aren't unreasonable. But the DLC hasn't existed for years. I guess it isn't surprising that Kilgore can't let it go, having worked there, but I should be able to do so. Anyway my latest comment (there is no real need to click the link -- the comment really is a comment on the quoted passage and not on his post). You write " some progressives think the ... obviously a “populist” campaign that refuses to “blur the differences” with the Right is ... forever the sure path to victory. " If by "some" you mean "more than ten" then I agree. However, you are clearly asserting that this view is widespread enough to matter. To quote someone I admire, "that’s probably something we should talk about, not simply assume." I have an honest question (and actually hope for an answer). You set up a straw man. I think putting the word "sure" into your fictional debate opponent was sufficient. Anyone who thinks there is a sure path to victory is wrong (I mean what if [favored progressive candidate] is photographed in bet with a goat a week before election day). Why did you add additional obviously absurd words "obviously" and "forever. To be frank, I assert that such excessively dishonest rhetoric is a sign of intellectual discomfort. Typically people who put words into the mouths of imaginary opponents are satisfied with fewer than three words each of which is strong enough to make any argument false. Another question. If you are really sure there are such progressives and have google, why didn't you spend a few minutes to find and quote one ? It couldn't be that you know perfectly well that you will not find any actual text in a comment thread to a blog which is as easily refuted as your imaginary opponent.

Is our journalists familiar with the words "singular" and "plural"

In The Observer, Ken Kurson finds proof that it is possible to report for our nation's journal of record for more than 20 years without learning the difference between singular and plural. He wrote "One veteran reporter who has been at the paper for more than 20 years said, '‘Bullying’ and ‘petty’ [sic] are Andy’s middle name. ... '" I has a questions. Is it possible that someone who has been at the New York Times for more than 20 years does not understand that "bullying" and "petty" are two different morphemes (written with different letters and all that) so the two of them are plural and can't be be a singular "name" ? Is it possible that Kurson misquoted his anonymous source ?

Sunday, February 09, 2014

Shorter Rob Portman

Portman Explains His Vote Against Extending Unemployment Insurance My son isn't unemployed. Believe me, I am being kind. His actual explanation is 1. Democrats weren't nice enough to me 2. It would add to the deficit 3. We should provide the unemployed with job training (which wouldn't add to the deficit). or, to be really harsh, his own words "Unfortunately, Democrats did not work with us, wouldn't negotiate with us on how to pay for it," he said on NBC's "Meet the Press." "We also have record numbers of people long-term unemployed. And the Democratic answer to that is, 'Let's add more to the 26 weeks of unemployment insurance to emergency benefits, and let's do nothing to reform the program. Let's do nothing to give people the skills they need to access the jobs that are out there.'" What a douchebag.

Thursday, February 06, 2014

Dana Milbank and the "Fact Free Zone"

I expected to enjoy Dana Milbank's article entitled "From Obamacare to the IRS scandal, Republicans are ignoring the facts" But Milbank decided that he should Ballance his observation that Republicans are indifferent to facts with the following paragraph.
Rubio’s fact-free approach to Obamacare is puzzling because plenty of damning things can be said about the health-care law that are perfectly accurate: It does little to curb entitlements, it disrupts insurance plans for millions, it leaves 31 million Americans without coverage and, as the CBO forecast, it would take the equivalent of 2.3 million full-time workers out of the workforce.
Yep that's showing em Dana. 1. "little" is a nice weasel word, but the ACA eliminated the huge Medicare advantage extra payments and massively cut the rate of growth of regular Medicare payments. It also made hospitals responsible for the costs of treating the infections people pick up there. I don't claim that the sudden complete utter change in US entitlement spending is mostly due to the ACA but the assertion "little" is based on completely ignoring those data which are inconvenient to the quest for Ballance, that is all of the relevant data. The disrupted insurance plans are of free riders whose care will be financed by others because the so called insurance won't pay for it. Also most of them will get much better insurance for a modest increase in premiums. Most of the rest will get much better insurance and pay less for it. The Republihype and MSM laziness was much more effective in this case than in the latest two, but it is bogus. The figure 31 million Americans is simply false. The figure includes over 9 million people who will not get insurance because they are undocumented aliens. I think these people should get insurance (and citizenship) but they are not "Americans" as the word is conventionally used (I mean most are Americans just not statunitensi). Notably Republicans can't complain about undocumented aliens not being covered, because they have been claiming that undocumented aliens will be covered. Also the assertion the equivalent of 2.3 million full-time workers out of the workforce is false for two reasons. The 2.3 million is the upper end of a range of estimates. To be accurate Milbank had to write "as many as" but he didn't. More importantly the word "workforce" is simply incorrect. The claim is false as written. Labor supply is forecast to decline by up to 2.3 million full time equivalents (that is by up to 4.6 billion hours) but much of that is forecast to be of the form of reduced hours worked. Part time workers are employed and therefore in the workforce. Milbank's claim is simply false. This is important, because the safety net as hammock argument is an argument that withdrawal from the work force is bad for the ex workers and a bad example for their kids. There is no reason to think that working part time has similarly bad social effects. Milbank's error is material. It is also undeniable. Now I guess the disrupting millions claim could be defended. The other three claims in Milbank's ballancing paragraph on other people "ignoring the facts" are definitely undisputibly falsehoods and must be corrected. Now I understand the problem. Milbank feels that he must ballance criticism of Republicans with criticism of the ACA. I'm sure that he gave almost exactly no thought to the paragraph full of errors. It was just something he had to type between the paragraphs he cares about and received about as much thought as the period and double hard return between other accurate paragraphs.

Tuesday, February 04, 2014

House effects

Noah Smith and Chris House are engaged in a stimulating blogospheric discussion. I am tempted to engage House in debate. I am not at all tempted to actually read his posts. Caveat Lector I will here dispute the part of an an essay up to the point where I stopped reading.

update: paragraph breaks


Welcome ThomaTwitterTots. When I wrote this post, I honestly considered it a test of whether Mark Thoma links to everything I write about economics methodology macro and all that. Note above (and below) that I admit I am critiquing a post which I didn't read to the end. I honestly thought "if that doesn't keep Mark Thoma from linking nothing will". Also Matt Yglesias has a more interesting post responding to House. He notes that academic economists are to the left of the general public and explains the leftish implications of economics 101.

See new added bit *

end update

According to Smith and my semi reading, House argues that in economics the facts have a conservative bias.

The evidence is that the policy views of economists are to the right of those of other academics. I guess that House guesses that this is because economists know more of the relevant facts. Smith thinks the facts may have a non DFH bias, but not a conservative bias. I want to consider three examples listed by House (at the point I stopped reading I admit).

"it is quite common to hear faculty members emphasizing the benefits of limited regulation, the gains from trade, and the harm caused by market intrusions like minimum wages, capital taxation and import tariffs. I am quite sure that many of the economists in my department would be viewed as radical right-wing conservatives by members of other departments at Michigan. "

Let's deal with them. The minimum wage is a case in which the facts seem to have won a long struggle. But not with the DFH view that it has no effect on employment. Estimated effects of the minimum wage on employment are the number one top example of meta-analytic evidence of publication bias. Over time, estimates have become more and more precise. The null of no effect was rejected at about the same significance level in many papers over a long time. That is, as the estimates became more precise, the estimated effect became smaller.

Now people tend to try to be a bit polite in the literature, but ask yourself what would happen if economists had dredged the data trying sprecification after specification until they got a result pleasing to Republicans. I am not saying that happened (I am confident it didn't) but it is very consistent with the facts.

This is a question on which the views of economists have shifted. I will now drop a name. About 25 years ago Brad DeLong said that maybe the equity benefits of the minimum wage outweighed the efficiency costs. Then he corrected himself and said "reading data from disk" (this meant a long pause back when computers were made of flints and bear skins). To drop another name, I asked Larry Katz what he thought of raising the minimum wage. He refused to answer yes or no and just said that the EITC was a much better policy.

This is not the current state of play. I think it is a clear case where economists were prejudiced against the minimum wage and many have been convinced by the strong evidence of small (if any) negative effects on employment.

OK now about capital income taxation. Here the effect on growth efficiency and welfare is through consumption savings equations. The argument against capital income taxation is based on the Euler equation. This Euler equation "Eichenbaum said something that really caught my attention: 'Maybe next time [we update our model], we can finally get rid of the...Euler Equation.'" Eichenbaum is a very leading macroeconomist who went on to explain that the Euler equation receives less than no support from the data.

Now here on eonomists and the facts, I note that this has basically been known for decades (as in was known when I was a student). Yet it is right there at the heart of macro models and is used to assess the efficiency effects of capital income taxes. I think this is clearly a case in which economists have just dismissed the facts because of the facts' blatant bias.

I think it is clear that many economists have views on the minimum wage and capital income taxation which place them to the right of the median US adult (and well to the right of the median academic). But the idea that these beliefs have anything to do with the facts is absurd. Instead they show the incredible ability of many economists to resist the data.

I now have to ask myself, if it isn't the evidence, then what explains economists's views. At one level it is simple. The arguments are based on simple standard economics models -- the ones which are taught first. The current body of theory does not support either conclusion. It is possible to come up with models so that the minimum wage causes increased employment and the optimal tax on capital income is positive (even if the revnues are then thrown away). The models are very close to standard models (the assumptions are not extreme). Economists' strange views on the topics then seem to come in two steps.

First old simple models have pro laissez faire implications. Second, the fact that any result can come out of an economic model forces economists to decide if the exercise of theorizing without data is a total utter waste of time (it is) or to prefer the old models because they are old (which is what many do). Many economists are convinced by theoretical arguments even if they are based on models which have been massively rejected by the data. Also those economists are convinced by theoretical arguments even if later work in theory demonstrated that the conclusions are the result of assumptions made for convenience and never taken seriously (until they had to be to get a conclusion). I won't argue these claims, because I have many times before and, I think, all honest economists know they are true.

A question remains why do the simple old models provide support for laissez faire. Here I think a key point is that they weren't always old. The policies certainly weren't always conservative. There was a classical liberal movement. Leading classical liberals developed economic theory as it once was. They also defeated Tories aristocrats and so forth. There once new policies are the oldest policies which are even considered. So the first (and second) wave of liberals created a world and a theory which praised and justified it. Economists who don't want to do without theory cling to that ideology, because the alternative is to admit that a priori reasoning can lead us anywhere and so leads us nowhere.

-------------------------------------------------------------------appendix of snips not worth reading.

* update: new extra bit

I have a new story about why economists' views are to the right of those of other social sciences. The view in my original post was (I hate to admit it but see below that I can't deny it) Marxist -- economics 101 was part of the Whig/classical liberal/bourgeois movement support of which is now conservative because they long ago totally supplanted the older Tory/aristocratic conservatives. Sticking with Karl, I note that Marx had much more influence on other social sciences than on economics. To me, his economics seems very very similar to Smith's. In contrast, sociology seems to have begun with attempts to reply to critique and build on Marx (this is my conclusion based on looking at the reading lists of intro sociology courses and reading one (1) of the books "The Protestant Ethic and The Spirit of Capitalism").

But I recently re-thought of another reason for the relative non leftism of economists compared to other academics. For simplicity, we consider models in which agents are completely selfish (and also totally shameless liars). There is always an apology that this is just a simplifying assumption which we think might be a useful approximation when studying say consumption/savings decisions (who really worries about whether it would be better for the economy if they spend or if they save ? except my mom ?). The suggestion is that once we understand models with selfish liars we will get to models with not totally selfish people who don't like to lie but will if the incentive is strong enough. Even the naive student who believes we mean to get there before the first of never finds the assumptions off putting. I think it is an experimental fact that people cooperate in the prisoners dilemma except for economics graduate students.

I don't totally enjoy being rude, but I'm going to be rude. I think there is a kind of conservative who assumes people are selfish and basically thinks that is OK. This is not the only kind of conservative. But look basically a totally selfish US academic is not going to be a serious egalitarian because they are near the top of the world income distribution. So I think people comfortable with the assumption of selfishness are more likely to be economists than academics in other fields and more likely to be conservative than the average academic.

end update


Also, a simple standard model of the use of capital income taxation to redistribute from the rich to the poor does give the standard result that as time goes to infinity the optimal tax rate goes to zero. But it does this exactly because the optimal policy eliminated all inequality and the most rabid egalitarian won't redistribute when everyone has exactly the same income. I note that this is the standard mathematical result with the standard model. Yet somehow that simple math seems to be over looked by the economists with whom House discussed the issue.


Finally free trade. I was sincerely amazed to learn that someone thought that pro-free trade was the right more position. At the time (and now) I hated protection by rich countries because I considered it an expression of nationalism and based on the view that citizens of rich countries are more important than citizens of poor countries. I promise this perception of left and right was sincere. I oppose restrictions on trade for the same reason I oppose restrictions on migration.

I stress that the logic is very similar. I note that the idea that people should be free to migrate to the USA is not strong on the US right (or center or even left). It is, however, to be found in House's department. This is a case in which the standard logic of economists puts mainstream economists on the left fringe of the current policy debate.

Now I don't know what Krugman thinks of restrictions on immigration, but I do know that he supports free trade because he thinks it is in the interest of third world workers and he is egalitarian enough to be most interested in the interest of the absolutely poor (I know that because he wrote exactly that). I am not sure that Krugman would be eager to repeat this. His view -- that he cares more about some non-Americans than about the affected Americans is so far left as to endanger his influence.


On another topic, Smith and House seem strangely puzzled by the fact that academics' views are well to the left of those of the general public. I can't think of a less puzzling puzzle. It is a fact (even if over stressed in simple economic models) that people would rather be rich than non rich. It is another fact that it is generally believed that academic salaries are low (I don't think this is all that true in the USA any more). The decision to become an academic is, I think, very definitely perceived by most academics as a choice to say no to wealth. This obviously selects people who think that money is filthy and that greed is very very bad.

Basically, I think the simple story of the US highly-educated elite is that kids are choosing other and finance (maybe also law if one likes money and not math). This means that people from center to far left are over represented in other. So academics tend to be to the left of non-academics. Reporters to the left of non-reporters and politicians capable of framing arguments to the left of politicians who can't.

Now it hasn't always been this way. When I was in college, the idea was that the way to make money was to get an MD. The shift may have come close to destroying the world financial system, but I think it has been great for medicine. In any case, whether or not it is true anymore, the view is that the academy is for people who hate greed.

Monday, February 03, 2014

What Have I learned from Abenomics ?

Well I have learned nothing, but the foolish people who take my predictions seriously have learned not to trust my predictions. Noah Smith may have been one of those people. He asked what have we learned from Abenomics. My comment I was a naysayer. I didn't expect bad effects from Abe/Kuroda/nomics but I expected much smaller good effects. Then my fall back was to argue that QE works for Japan because the People's bank of China isn't pegging the value of the Yen. You will notice that this doesn't work. The Abe miniboom is not export led. Japan shows a shift in expected inflation (measured by indexed bond vs nominal bon breakevens) and an increase in building starts. That is the pure expectations Krugman/Woodford/Yglesias/Avent pathway. It can work. I thought the promise to create inflation in the future (when it would no longer be needed) would never be believed by investors and, especially, builders. I was wrong.