Thursday, January 29, 2009

Blago out

I do like the Tribune's "Rod & me" gallery, which commemorates the governorship of a man who did nothing wrong whatsoever except fight for the people of Illinois every day and fight for health care for children and senior citizens and fight for the people of Illinois in general, until he was wrongly railroaded from office for no reason by a bunch of short-sighted self-interested Springfield politicians who flouted the people's will by refusing to give him a fair trial or allow him to continue to fight for the people, every day, which is what he wanted to do every day.

Coffee break Gorilla

Thanks to Snowak for the pic. He's got plenty more.

A new stimulus idea?

Study: When local revenue falls, traffic tickets go up

A new study to be published in next month's Journal of Law and Economics finds statistical evidence that local governments use traffic citations to make up for revenue shortfalls.

A few thoughts on stimulus

[ed. - Rob, dont mean to pile on but my thoughts were too long for the comments]

1. Leadership Vacuum
Whatever leadership vacuum in the GOP people seem to be going on about (especially given all the huffing and puffing about Rush Limbaugh as the new de facto leader), I think the House GOP's unanimous showing couldn't have happened by accident -- someone must have been shepherding. As much of a fan of spontaneous order as I am, someone was pulling the strings. This leadership vacuum, which was certainly real, goes back to at least last September when GOP leadership got behind Bush and still couldn't rally passage of TARP in the House. What's changed? Well, an election I guess.

Nate Silver has a point that this could have been the result of the roll call vote, which shames ambivalent caucus members into falling in line -- basically an information cascade. But where was this effect on TARP? And since most remaining Republicans are in safe seats, why would they care? I suspect this explains a few fence-sitters but not the rare showing of unanimity.

2. The Orphaned Tax Cuts
Yglesias may be right that Obama, for policy reasons, should've focused on getting the best deal his team wanted, and not trying to buy out Republicans. Because the end result was totally predictable based on what was offered and was politically shrewd to boot. No one really liked these "tax cuts"....except Democrats. It's probably deserved that anything that involves "taxes" and "cuts" is assumed to be part of the conservative Republican ideology. But this large share of the bill devoted to tax cuts are not the supply-side kind that right wing economists salivate over.

These tax cuts are tax rebates, in other words a bunch of checks that will go out. You may remember this plan from all the way back in 2008. And what was the result? A small, temporary blip in GDP and then it fell right back to trend. We know (and conservative economists especially know) these kinds of one-time rebates don't work(since 1820), especially in an environment of uncertainty and mounting budget deficits. In fact for all the talking points from Dems saying "we don't want to repeat the economic policies of Bush," they're doing a fine job of rehashing.

The tax cuts Republicans like are incentive-changing: preferably permanent, but sometimes temporary, changes to rates and application that change how people decide to order their economic arrangements. No one in the Republican leadership was asking for one time rebates, especially not for low-income and non-tax paying individuals. The tax cuts portion included in HR1 were drafted by Dem leadership, and championed by no one. What Obama got was a way to say he made an effort to compromise on the bill, done so in a way that most people wouldn't see the difference in what Republicans wanted and what they got. It was brilliant -- House R's look bad either way.

3. The GOP alternative
GOP leadership picked way too late in the game to get their shit together, but they did eventually and did not simply foot stomp their way to voting "no" (well, there was some foot stomping going on). Before the vote they offered their own alternative.

Some portions of it are basically right out of the Heritage Foundation proposal (I was there when it was being pitched). That's no big surprise. But it was so late that I don't blame Pelosi for calling the vote.

4. Heterogeneous Views
As Rob has aptly explained, there are plenty of legit economists who disagreed on how and whether a stimulus would work. Coming out of the gate, Obama and Biden and others said otherwise, and Greg Mankiw has some ideas why that is. But it simply wasn't true and it may have alienated GOP members early on.

5. My Stimulus
I've got my own thoughts on how a stimulus should be structured, and without belaboring this post, the basics are:

--The annual aggregate state sales tax is worth about $400B. The federal gov't buys out this sales tax for one year, and on day of passage, states suspend their sales tax. If you want people to spend, make it cheaper to do so, and go directly to the source. Consider phasing the tax back in next year instead of a sudden reinstatement.

--If employment is your primary goal, you have to operate on that margin instead of a roundabout one. Reduce the employer contribution to payroll tax by 50% for one year. This would cost about $200-250B

--Embrace the built-in, counter-cyclical (some would even say Keynesian) policies we already have. Unemployment insurance, food stamps, and Medicaid all cost more (because of increased demand) in downturns by design. They are also already targeted at the most needy. Unfortunately these burdens largely fall on states and they are running red all over. So increase federal support of these programs with conditions that they ease restrictions on eligibility and duration.

No Republicans

I have some thoughts on the stimulus politics here.

Tuesday, January 27, 2009

R.I.P. John Updike. Wrote a lot of great stuff.

Monday, January 26, 2009

Gandhi Blago on Larry King

Busy day for Rod Blagojevich! I like the moment about 18 seconds into this clip when Blagojevich thinks he's off-camera and gets in a quick hair-groom:

He recovers quickly when he realizes the camera is on him.

Blago on The View

Ladies and gentlemen, Rod Blagojevich on The View...

Here's an alternative link if this gets taken down from YouTube.

Sunday, January 25, 2009

Life is but a hologram

I am terrified by this, but also sort of comforted:
The idea that we live in a hologram probably sounds absurd, but it is a natural extension of our best understanding of black holes, and something with a pretty firm theoretical footing. It has also been surprisingly helpful for physicists wrestling with theories of how the universe works at its most fundamental level.

The holograms you find on credit cards and banknotes are etched on two-dimensional plastic films. When light bounces off them, it recreates the appearance of a 3D image. In the 1990s physicists Leonard Susskind and Nobel prizewinner Gerard 't Hooft suggested that the same principle might apply to the universe as a whole. Our everyday experience might itself be a holographic projection of physical processes that take place on a distant, 2D surface.

Friday, January 23, 2009

Blagojevich on The View

What a good idea. Let's all cross our fingers that this actually happens. I am setting my DVR up now just so I don't miss it...

Jay-Z at Obama's Staff Ball

Wednesday, January 21, 2009

What he said

Via Megan McArdle, Will Wilkinson cuts to the core of Obama's effective but ultimately non-transformative address:
Strategically, the speech was a commonplace effort to reduce resistance to a political agenda by generating a vague sense of uplifting cohesion and casting any possible opposition as outmoded, small-spirited, and immature. Politicians take this tack because it works, and Obama's really good at it. People liked it. Obama worked the perennial rhetoric of transformative politics expertly, but if you were expecting something truly transformative, beyond the transformative fact of a black president, then you've got to be a bit disappointed.
And lest you think I'm just settling into sore loser mode, I've committed to abide by these "DO NOTs."

Bush: damned by faint praise

Apparently Bush was not the least popular President of the last century, or event he last half-century. This neat little Wall Street Journal graphic charts the popularity of Truman through Bush (using AP poll data).

Bush manages, at his lowest, to edge out Nixon and Truman, and is just below Carter's bottom.

Of course the real measure of how like/disliked a President would require taking the integral of the "poll function" to measure popularity over time. But I dont think these lines have a closed form solution, so that would be pretty difficult.

Tuesday, January 20, 2009

When the red man can get ahead, man

Obama's speech was good, but this was my favorite part of the inauguration:

A little more from me at the other blog.

Sunday, January 18, 2009


Watchmen Watchmen by Alan Moore

My review

rating: 5 of 5 stars
Critically acclaimed, but don't hold that against it! I didn't like "V for Vendetta" -- too simple, too much faith in violence -- and part of me expected not to like this book, either. But, no. This is good stuff. The layers work together, good art, there is action and reflection and the characters change. My friend said this story is so carefully composed as to be claustrophobic, and there is some truth to that. But it's also a fine puzzle, part detective story, part metaphysical exploration, part paranoid Cold War dystopian fable.

Also, I don't think this is an anti-superhero book. Some of the heroes are villains, that's true, but some are heroes, and a lot of the "super" is very super indeed.

Another good thing about this book: A lot of scenes take place in Antarctica, and I am totally into Antarctica lately.

View all my reviews.

Not to worry, there are new reasons to worry

So the TED spread is back down below one, which is a good thing. It's a sign of at least some health in the credit markets.

Lest you be tempted by this news into some kind of moment of optimism, though, now comes a new economic indicator I had never heard of before, the TIPS spread, the difference between nominal US bond rates and rates on Treasury Inflation-Protected Securities. And Paul Krugman says it looks bad:
Too low is as bad, or worse, than too high — if expected inflation is low or negative, even a zero interest rate isn’t that good a deal, and the Fed may have a hard time booting us out of a recession.
Well, it's much too low, lower than it's been in years. Krugman says this could point to the possibility of a "Japan-style trap," which could mean we're headed in the direction of an L-shaped recession that never gets better. Happy Sunday!

Friday, January 16, 2009

Dems and TARP

Harry Reid's terrible humiliation continues: Burris votes with leadership, and with Obama, on releasing TARP money.

Thursday, January 15, 2009

Radio silent

Rob, sorry for the quiet blogging as of late. With my new job focusing on financial markets the last few months (my timing couldn't have been worse!) and preparing for the onslaught here in DC, life is in a kind of red-lining mode.

I'll have more to contribute after inauguration and once I've solved the economic crisis.

Wednesday, January 14, 2009

Cold night pt. 2

A few more, tonight at -21 degrees...



While walking, with a long exposure. I sort of love these:



Cold night

Taking garbage out last night at -15 degrees, playing with my camera's "night landscape" setting:

Monday, January 12, 2009

Did Blagojevich win something today?

I get why everyone is saying that Blagojevich "won" the Burris showdown: Because he got Harry Reid and the rest of the Senate to allow his appointment to be seated after all. There was a showdown, and Blagojevich won.

What I don't understand is what Blagojevich actually gets for winning. It doesn't improve his lot with the Illinois legislature. It's neither here nor there to Patrick Fitzgerald's legal case. It's not at all clear that it helps his approval rating with Illinoisans. What did he win?

P.S. ... Also worth noting that Harry Reid didn't really lose anything here except face... Reid was "beaten and outfoxed into having one more Democratic senator than he was counting on having," which is not exactly a career-ender when you are the Democratic Senate Majority Leader... Can you realistically imagine Roland Burris failing to vote with party leadership on even one major issue?

Friday, January 09, 2009

The Wire in rap

Benton sent me this, The Wire's five seasons in five minutes:

Many spoilers, by the way, so don't watch if you're not already a Wire fanatic.

Wednesday, January 07, 2009

Most wanted painting

The popular taste wins again:

This painting is the result of public opinion polling about what painting Americans most want to see. I like it. I like the deer, and the George Washington. More most wanted and least wanted paintings here.

I heard about this project on this This American Life episode. The most/least wanted song project is much less interesting to me for some reason.

Monday, January 05, 2009

I worry about Lil Wayne

I just tonight finished reading the feature on Lil Wayne in the January issue of GQ, and I must say I am concerned about Lil Wayne. I feel that he may be doing too many drugs. Can someone who knows Lil Wayne please ask him to tone things down, please? Maybe it wouldn't be so bad if in 2009 he only records a few dozen songs rather than the hundreds he did in 2008. Also, less syrup. That is not good for your heart. Tell him when you see him, okay?

Video Weltschmerz

A friend emails about the video below:
I don't know what I was expecting but there was something mournful about it. 2008 didn't feel sad to me until the 2nd week of November and then it felt oppressively sad. Maybe it was just the way the songs spun together.
She is right, there is something strangely mournful about this mash-up of 2008's top 25 singles:

Friday, January 02, 2009

Is stem cell research a divisive issue?

The NYT writes that Democratic leaders are deciding between legislation and executive order as a way of approving funding for stem cell research:
The debate is not academic. Democrats who oppose abortion say such a legislative fight holds the potential to get the year off to a difficult beginning, even though the outcome is certain given solid majorities in both the House and the Senate for expanded embryonic stem cell research.

"It is a very divisive issue, and it is a tough way to start," said Senator Ben Nelson, a moderate Democrat from Nebraska. "You don't want to stumble out of the box."
Wait, is this a "very divisive issue"? My overall reading of the stem cell debate is that funding research is broadly popular and basically separate in the public's eyes from the abortion debate as such. I'm quite sure it can pass without Sen. Ben Nelson's vote -- in fact, it already did!

Clearly there are a small set of anti-abortion activists who strongly object to this, and could conceivably make so much noise as to make it a divisive issue. But I don't see it. Essentially this was an issue that commanded majorities in both houses of Congress and then was vetoed by a president who didn't care much about his approval rating. I think legislation is the likely course here.

That, and in the same NYT piece Nancy Pelosi says she favors the legislative approach. So I think it gets done.