Monthly Archives: January 2009

Naive Extrapolations: GDP Down 3.8 Percent

The Wall Street Journal reports

Third-quarter GDP fell 0.5%. The back-to-back GDP declines were the first since GDP fell 3.0% in the fourth quarter of 1990 and 2.0% in the first quarter of 1991. 

The New York Times reports

In the broadest official accounting of the toll of the credit crisis, the government reported that gross domestic product shrank at an annual rate of 3.8 percent in the fourth quarter of 2008. While that was less than economists’ expectations of a 5.5 percent drop, the decline would have been much steeper — more than 5 percent — if shipments of goods had fallen as sharply as orders.

So which is the more meaningful number? The actual decline in third quarter growth or the extrapolated trend predicted for a year? Judging from the past, we should be wary of such extrapolations. And to the extent that this recession represents a problem of confidence, then reporting that the GDP is down 3.8 percent is, in the phrase of the maximum leader, the height of irresponsibility.  I’m comforted that Alan Reynolds agrees

The preliminary GDP estimate for the fourth quarter of 2008 is $11,599.4 billion (in 2000 dollars). That was 0.965% smaller than the third quarter — a figure commonly multiplied by four to convert it into a more dramatic 3.8% annual rate. But these quarterly rates are highly erratic, even in recessions, so converting them into compound annual rates is misleading if not foolhardy.


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Pirates Attack!

From the New York Comptroller, we learn pirates have ransacked TARP: 

New York State Comptroller Thomas DiNapoli said that total Wall Street bonuses totaled $18.4 billion last year. Though that represented a 44% drop from the previous year, the size of the bonus pool was the sixth-highest ever.
At first I felt outraged, but then I thought, well, this is what public choice theorists have predicted. A vision then came to me.  I saw the United States as an old bitch gone in the teeth, teetering on the brink as a botched civilization.  If TARP was a disappointment, if you think these bonuses are only the beginning, wait till we watch the stimulus funds trickle to every crony, every power-grubbing whore, every brother-in-law of anybody who has a government job. These corsairs–the bankers, the interest groups, the lobbyists, the commissars of public education–these freebooters will once and for all kill the State. They will bring this bitch down. That is my vision. The stimulus package is nothing less than a prescription for slow suicide.  The cure is worse than the disease. Aegrescit medendo!  The government is preying upon the weak: future generations, anyone who can’t vote today, who couldn’t tell you what stimulate means. If you support the stimulus, take a second, and ask yourself how you came to enslave the unborn. That is all. 

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Morality for Cats and Dogs

Marc Bekoff presents the gist of his new book, Wild Justice: The Moral Lives of Animals, in a Daily Camera op-ed:

Do these examples show that animals display moral behavior, that they can be compassionate, empathic, altruistic, and fair? Yes they do. Animals not only have a sense of justice, but also a sense of empathy, forgiveness, trust, reciprocity, and much more as well.

The books comes out this spring. I look forward to reading it. But I have to wonder in advance, do animals only demonstrate two of Jonathan Haidt’s moral sensitivities? Are animals only concerned with fairness and preventing harm to others? You can observe in group/out group biases at the zoo. Perhaps liberal minded scientists aren’t wont to test and look for other moral sensibilities among all creatures great and small. Bekoff mentions some animal behavior that could be characterized as a concern with hierarchy and loyalty, though, again, it’s not clear whether this merely might making right. Is the idea of the sacred among these beasts too much anthropomorphism? Anyway, interesting stuff…

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Mozart’s Birthday

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David Brooks Says Submit!

David Brooks pulls out the whip and imitates the Grand Inquisitor. That lovely Spaniard suggested all of humanity wanted three things: 

  1. Someone to bow down to. 
  2. An institution to take over its conscience. 
  3. And a means of uniting everyone at last into a common, concordant, incontestable ant-hill. 

It’s good to see Brooks has taken up the Inquisitor’s cause. What life asks of us, Brooks writes, is to submit to authority: 

In this way of living, to borrow an old phrase, we are not defined by what we ask of life. We are defined by what life asks of us. As we go through life, we travel through institutions — first family and school, then the institutions of a profession or a craft…

Each of these institutions comes with certain rules and obligations that tell us how to do what we’re supposed to do…In the process of absorbing the rules of the institutions we inhabit, we become who we are.

Institutions do all the things that are supposed to be bad. They impede personal exploration. They enforce conformity.

But they often save us from our weaknesses and give meaning to life.

In other words: once an administrative assistant, always an administrative assistant. It’s your place the divine institution has set down for you. (I wonder how much Brooks submits his ego to the Times‘ mission to preach news of slow suicide.) But besides conflating an openness to new experiences with egocentrism, and besides assuming a distrust of authority translates into a lack of respect for it, Brooks leaves you wondering what every ass felt in all those 20th century ass festivals called nation states. The Nazis. The Bolsheviks. Take your pick. I’m sure they all felt great meaning in their lives.  But if a lack of institutional allegiance led to the financial crisis, as Brooks intimates it had, then I’ll take 100,000,000 such crises for every World War and revolution.

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Krusty Krugman

The incorrigible Nobel Prize winner, with no sense of logic, in his latest column

Next, write off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.

Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.

By what logic, if it can be called logic, does this follow? It might imply that we ought to privatize air traffic control. But then Krugman would have to show, yes, using the methods of logic and induction, that air traffic control is a public good whose provision is only possible through a tax on air tickets. Of course, he’d also have to demonstrate how a user tax bears any resemblance to a you-rot in jail-unless-you-pay tax.

Krugman makes an argument against a minority opinion–one that says it’s always better to cut taxes–but really he comes off sounding as though he always wants to increase government spending. A more honest thinker would provide some kind of criteria for how he decides if and when and to what extent government spending is good. Tossing out non-sequitors of numbing grossness works on the Times’ op-ed page, but in more sober symposium, it smacks of stupidity.

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Bias at The

So the submits an annual question to 151 intellectuals, artists and scientists, among others. This year they ask “What game-changing scientific ideas and developments do you expect to live to see?” Many of the answers are interesting. But I want to focus for a moment on a bias among the respondents. The first thing I notice is that many respondents answer that a development within their field of expertise will be the game changer.  This is very suspicious and self-serving. (Nevermind that some of these folk need more attention to raise more money for their projects…squeaky wheel gets the oil.) 

Why not tie a betting market to this question?

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