Posts Tagged ‘austrian economics

16
Mar
12

Roundup – Space Girl Dance

Best of the Best:

How to Dispel Your Illusions [Freeman Dyson on The New York Review of Books]

The reason why our commander in chief was unwilling to rip out gun turrets, even on an experimental basis, was that he was blinded by the illusion of validity. This was ten years before Kahneman discovered it and gave it its name, but the illusion of validity was already doing its deadly work. All of us at Bomber Command shared the illusion. We saw every bomber crew as a tightly knit team of seven, with the gunners playing an essential role defending their comrades against fighter attack, while the pilot flew an irregular corkscrew to defend them against flak. An essential part of the illusion was the belief that the team learned by experience. As they became more skillful and more closely bonded, their chances of survival would improve. When I was collecting the data in the spring of 1944, the chance of a crew reaching the end of a thirty-operation tour was about 25 percent. The illusion that experience would help them to survive was essential to their morale. After all, they could see in every squadron a few revered and experienced old-timer crews who had completed one tour and had volunteered to return for a second tour. It was obvious to everyone that the old-timers survived because they were more skillful. Nobody wanted to believe that the old-timers survived only because they were lucky. At the time Cochrane made his suggestion of flying the white Lancaster, I had the job of examining the statistics of bomber losses. I did a careful analysis of the correlation between the experience of the crews and their loss rates, subdividing the data into many small packages so as to eliminate effects of weather and geography. My results were as conclusive as those of Kahneman. There was no effect of experience on loss rate. So far as I could tell, whether a crew lived or died was purely a matter of chance. Their belief in the life-saving effect of experience was an illusion. The demonstration that experience had no effect on losses should have given powerful support to Cochrane’s idea of ripping out the gun turrets. But nothing of the kind happened. As Kahneman found out later, the illusion of validity does not disappear just because facts prove it to be false. Everyone at Bomber Command, from the commander in chief to the flying crews, continued to believe in the illusion. The crews continued to die, experienced and inexperienced alike, until Germany was overrun and the war finally ended.

The Simpletons: David Brooks, Thomas L. Friedman, and the banal authoritarianism of do-something punditry [Matt Welch on Reason]

Do something. Is there a two-word phrase in politics more loaded with disguised ideological content? Embedded within is both an urgent call for powerful government action and an up-front declaration that the policy details don’t matter. The bigger the crisis, the more the urgency, the sparser the detail. On September 30, 2008, in a classic of the do-something genre, Brooks argued that the Troubled Asset Relief Program should be rammed through Congress over public objections because the federal government needed “to give people a sense that somebody was in charge, that something was going to be done.” Did that “something” involve buying up toxic assets? Introducing or relaxing certain banking regulations? Taking over or winding down Fannie Mae and Freddie Mac? Not important. “What we need in this situation,” Brooks declared, “is authority.”

Hospice Turns Months-to-Live Patient Into Years of Abusing Drugs [Peter Waldman on Bloomberg]

Suffering from painful nerve damage in his feet, Charles Groomes was prescribed a daily dose of 205 milligrams of Oxycontin and oxycodone in 2007. His doctor wrote that it was the most he was comfortable prescribing — more, he said, than anyone without cancer should take. After he was admitted to hospice care 11 months later, his painkillers were eventually increased to 2,880 milligrams, 14 times the pre-hospice levels. The hospice doctor forecast he had six months to live at most. He was wrong. Groomes was discharged from Horizons Hospice LLC in Pittsburgh last year after 32 months. The legacy of the stay was debilitating, according to his family and doctors who examined him. He was depressed, addicted to narcotics and desperate. He turned to four doctors and three hospices begging for more drugs.

For decades, city fathers and academics have studied economic development, searching diligently for ways to make urban economies prosper. Surely this quest is understandable—as understandable as the search for success that so many people undertake in the personal-finance section of the local bookstore. But just as personal finance has yet to unlock the secret of how to get rich, no surefire government-led strategy exists that can turn around a troubled economy like Buffalo’s or Gary’s. Cities, like people, are too diverse to allow anything but fairly commonsense prescriptions. A lot of grand theories have been advanced—targeted tax incentives! bike paths!—but they have proven of little practical use.

The Best States to Grow Up In [Nancy Folbre, economics professor at University of Massachusetts, Amherst via New York Times Economix]

Unfortunately, as the political scientist Robert Putnam asserts, racial and ethnic diversity tends to weaken social solidarity. Children are directly affected. Research by the economists Alberto Alesina, Reza Baqir and William Easterly, among others, shows that racial and ethnic diversity tend to undermine support for public spending on education and other services at the municipal level. Other research indicates that the causal linkages are complicated. Levels of segregation, interaction and political representation all have an impact. The political scientist Daniel Hopkins shows that a sudden change in the racial and ethnic composition of a community may have a particularly divisive effect. But some institutions – and political jurisdictions – do a better job of coping with these stresses than others do. Professor Putnam points to the success of policies adopted by the United States armed forces to bring recruits together and build their trust for one another. As a previous Foundation for Child Development report by Donald Hernandez and Suzanne E. Macartney emphasizes, immigrant children in the United States are geographically concentrated in a few states where they remain economically and socially vulnerable. The new analysis of state differences shows that African-American and Hispanic children have lower levels of well-being than white children. The higher the percentage of children in a state who are minorities, the lower the state’s index of child well-being. But demography is not destiny. Some states with large numbers of immigrants and minority children, like New Jersey, New York and Illinois rank fairly high, while others, like Texas, Florida and California, rank quite low.

How Many Stephen Colberts Are There? [Charles McGrath on The New York Times]

Colbert’s super PAC is in a way an extended improvisation with no end in sight. It just keeps adding new layers. Why does he have a super PAC? Because he can and because it’s funny. On most evenings the show’s best moments occur when Colbert is winging it with a guest. There’s the Colbert persona listening and grinning while the other Colbert, the one who is surely not an idiot, processes what the guest is saying, invents a response and then translates it back into the language of his character. The process happens faster than most of us can think. “The trouble with the jokes,” Colbert said to me, talking about the ones scripted beforehand, “is that once they’re written, I know how they’re supposed to work, and all I can do is not hit them. I’m more comfortable improvising. If I have just two or three ideas and I know how the character feels, what the character wants, everything in between is like trapeze work.”

Counter-Terrorism Is Getting Complicated [Tom Junod on Esquire]

Listen: Sammy Crump was never going to go to Africa. He was never going to make botulism, and he wasn’t going to make ricin, either, despite shopping for things like lye and acetone and having a stash of castor beans. The preposterous extravagance of his plans should have been exculpatory. As you listen to him on the tapes, you just want someone — perhaps Sims; maybe Scott Matthewson, the FBI agent who collected many of the tapes from Sims once they were made — to tell him to just stop, the show’s over, time to go home. Instead he’s fixed to a conspiracy to make weapons of mass destruction. The first thing you ought to know about the conspiracy is that it could have been stopped at any time. The second thing is that it never was. It never stopped. It didn’t stop, even after Thomas found out that Joe Sims had just gotten out of jail and that Anthony Howard had been arrested, because Dan Roberts vouched for Joe Sims. It didn’t stop, even when Fred Thomas told the undercover agent that they didn’t have the money to buy what they wanted; it didn’t stop even when Dan Roberts is heard on tape worrying that they’re stepping into a sting. It didn’t stop because it was powered by Fred Thomas’s Ahab-like obsessions and Joe Sims’s need to stay out of jail. It didn’t stop because the old men had too much time on their hands and the government had too much invested in the outcome.

L.A. Woman Was the Doors’ Bluesy Masterpiece, and Jim Morrison’s Kiss-Off to L.A. [Jeff Weiss on LA Weekly]

With Morrison out on bail pending appeal, the only legitimate option is to head into the studio to deliver the final record on their Elektra contract. After that, an indefinite hiatus is certain — provided the band can capture something superior to “cocktail jazz,” the slander with which their longtime producer Paul Rothchild leaves them before quitting during early L.A. Woman sessions. The Doors return to their rehearsal studio at a crossroads, attempting to invent a new, Western blooz and reimagine a dissolute swamp as the concrete Delta. Jazz is Beat, but blues is blood. Blues is bruised. Blues is booze. Blues is the boomerang. Blues isn’t the hangover; it’s the hanging. Jim Morrison jokes to John Densmore: “You’re drinking with No. 3.” Janis. Jimi. Jim. Blues is when the doors close.

The Obama Memos [Ryan Lizza on The New Yorker]

Obama made important mistakes in the first half of his term. He underestimated the severity of the recession and therefore the scale of the response it required, and he clung too long to his vision of post-partisanship, even in the face of a radicalized opposition whose stated goal was his defeat. The memos show a cautious President, someone concerned with his image. When, in 2009, he was presented with the windfall pot of thirty-five billion dollars that he could spend on one of his campaign priorities or use for deficit reduction, Obama wrote, “I would opt for deficit reduction, but it doesn’t sound like we would get any credit for it.” At other moments, the memos show a President intensely focussed on trying to restrain the government Leviathan he inherited, despite an opposition that doesn’t trust his intentions. When his aides submit a plan to save money on administrative efficiencies, Obama writes back, with some resignation, “This is good—but we should be careful not to overhype this given D.C. cynicism.” He is frustrated with the irrational side of Washington, but he also leans on the wisdom of his political advisers when they make a strong case that a good policy is bad politics. The private Obama is close to what many people suspect: a President trying to pass his agenda while remaining popular enough to win reelection.

FiveBooks Interviews> Peter Boettke on Austrian Economics [Sophie Roell Interviews Professor Peter Boettke of George Mason University on The Browser]

Analytically, the biggest difference between the Austrians and their mainstream brethren is a focus on processes of adjustment and changing conditions, as opposed to static or equilibrium states of affairs. In a supply and demand curve, a standard economist would focus on the price and quantity vector that would clear the market. The Austrians want to talk about all the exchanges and activity that take place that results in that vector being discovered and the market being cleared.

Turn off, tune in, drop out [Devin Powell on Science News]

Previous studies suggested that hallucinogens stimulate certain kinds of neurons in mice. Nutt expected to see an uptick of activity in the visual regions of the brain, which would explain the kaleidoscopic hallucinations often experienced by magic mushroom users.But suppressing core regions that help to coordinate and control the brain could have deeper, more philosophical consequences. It fits with how Aldous Huxley described the effects of mescaline — a hallucinogen that, in his words, flung wide the “doors of perception.” “Decreasing the activity in certain hubs in the network may allow for a more unconstrained conscious experience,” says Matthew Johnson, an experimental psychologist at Johns Hopkins University School of Medicine in Baltimore who studies psilocybin and other hallucinogens. “These drugs may lift the filters that are at play in terms of limiting our perception of reality.”

In China, Human Costs Are Built Into an iPad [Charles Duhigg and David Barboza on The New York Times]

Given Apple’s prominence and leadership in global manufacturing, if the company were to radically change its ways, it could overhaul how business is done. “Every company wants to be Apple,” said Sasha Lezhnev at the Enough Project, a group focused on corporate accountability. “If they committed to building a conflict-free iPhone, it would transform technology.” But ultimately, say former Apple executives, there are few real outside pressures for change. Apple is one of the most admired brands. In a national survey conducted by The New York Times in November, 56 percent of respondents said they couldn’t think of anything negative about Apple. Fourteen percent said the worst thing about the company was that its products were too expensive. Just 2 percent mentioned overseas labor practices.

Amazon’s Hit Man [Brad Stone on Bloomberg Businessweek]

In the middle of this stew of rancor and mistrust sits Kirshbaum. He was once the ultimate book industry insider, widely known and almost universally liked. He has a well-honed instinct for big, mass-culture books and was thinking about e-books—and losing money on them—long before almost anyone else in the industry. Many of his former peers now consider Kirshbaum a turncoat. In interviews, more than a dozen publishing executives said he had gone over to the dark side; some said they’d conveyed that sentiment to Kirshbaum directly. (None of the executives would speak on the record because Amazon is still a vitally important retail partner.) “I have a message I really believe in,” Kirshbaum says. “Which is that we’re trying to innovate in ways that can help everybody. We are trying to create a tide that will lift all boats.”

Cell phone taxes and the tragedy of the anticommons [Alex Tabarrok on Marginal Revolution]

no single politician does choose to tax them that much. Instead, the high taxes that we pay on our cell phones are the sum of lots of little taxes imposed by several different political entities. Consider, for example, the tax bill of a typical New Yorker. It includes a federal USF fee, four state taxes, five city taxes, and a local 9-1-1 fee. Each of these is relatively small, but when you add it all up, the combined rate is over 22 percent.

Videogamers Embark on Nonkilling Spree [Conor Dougherty on The Wall Street Journal]

Stephen Totilo, Kotaku’s editor in chief, says videogame pacifism isn’t usually a moral decision but rather “an urge to break the rules”—and dial up the difficulty of the game. “One of the most interesting challenges is to get through the game without killing,” he says. Virtual pacifism can be a squishy concept. Ian Jones, a 21-year-old college student in Charlotte, N.C., has also been playing Skyrim as a “pacifist.” But his method is hardly nonviolent: He uses spells to possess the game’s computer-generated bystanders, and they do the killing. Tweaking the rules to make a game more difficult is as old as play itself. Some golfers, for instance, challenge themselves by playing with one club instead of 14.

Segregation Hits Historic Low [Miriam Jordan on The Wall Street Journal]

Using the most common measure of segregation, the “dissimilarity index,” the authors found that segregation is lower now than it was in 1970 in all but one of the 658 housing markets tracked by the Census Bureau. Between 2000 and 2010, segregation declined in 522 out of 658 housing markets, the report said. The index of dissimilarity measures how evenly two groups are distributed in a neighborhood. The score indicates what share of the members of one group would need to move neighborhoods to enable the two groups to be equally distributed. In 2010, Dallas-Fort Worth and Houston were the country’s least segregated large cities. Atlanta’s index fell 28 points to 54.1 in 2010 from 82.1 in 1970; Dallas-Fort Worth’s fell to 47.5 from 86.9 over the same period. Still, segregation hasn’t been eliminated. The typical urban African-American still lives in an area where more than half the black population would need to move to achieve overall integration.

Why the Clean Tech Boom Went Bust [Juliet Eilperin on Wired]

As with the Internet bubble, and the more recent housing bubble, there were signs of trouble. In fact, in the weeks and days leading up to Obama’s visit to the Solyndra plant, officials at the Office of Management and Budget were issuing warnings. “I am increasingly worried that this visit could prove embarrassing to the Administration in the not too distant future,” wrote one OMB official. In fact, though Solyndra CEO Brian Harrison painted a rosy picture for lawmakers in July 2011—boasting that revenue “grew from $6 million in 2008 to $100 million in 2009 to $140 million in 2010″ and would nearly double in 2011—the truth was laid out in an internal White House memo obtained by The Washington Post after Solyndra filed for bankruptcy. The August 2011 memo, written days before Solyndra went bankrupt, stated simply that “the company has had 0 percent sales growth since [fall] 2009.” Perhaps the biggest force working against not just Solyndra but clean energy in general is this: Because natural gas has gotten so cheap, there is no longer a financial incentive to go with renewables. Technical advances in natural gas extraction from shale—including the controversial practice of hydraulic fracturing, or fracking—have opened up reserves so massive that the US has surpassed Russia as the world’s largest natural gas supplier.

No seriously, I’m dead. [James Byrne on Scientific American]

As comical as it appears to be it is obviously a manifestation of some deep-seated emotional issues or brain dysfunction. Another commonly described case involved a motorcycle accident victim who believed he had died as a result of complications during his recovery from the accident. Furthermore his mother had moved to South Africa with him from Edinburgh shortly after the accident, which confirmed to him that he was in hell as it was so hot. The underlying cause of Cotard’s Syndrome appears to be a misfiring in the fusiform face areas of the brain, which recognises faces, and also in the amygdala, which adds emotions to those recognitions. The result is a lack of emotion when viewing familiar faces and the result disconnection can result in complete detachment. Viewing ones own face in this condition can lead to a lack of association between their reflections or projected self and their own sense of self, leading to a belief that one doesn’t exist.

Defending Mom-and-Pop Stores, an Old and Enduring Fight [Marc Levinson via Bloomberg]

In most countries, these laws to protect small shopkeepers have faded over time, but change has often come slowly. That’s likely to be the case in India as well. Indian consumers will gradually learn the virtues of large-scale retailing, and they will press their own government to let them choose which type of retailer they wish to patronize. Meanwhile, we in America shouldn’t be patronizing about a country that seems to be turning its back on modern retailing. That used to be us.

For Wounded Vet, Love Pierces the Fog of War [Michael M. Phillips on The Wall Street Journal]

During a lull in the fighting, Mr. Welch drew a sketch of the first man he killed, an Iraqi soldier he shot in the neck. Later, in a bombed-out Iraqi barracks, he wrote a starkly prescient letter to a Marine friend. “Our penance comes in many forms,” he wrote. “Never will we smell fire the same. Never will we be at ease during the fireworks and storms….Our penance will be the sleepless nights, the fools we will make of ourselves at loud noises, the looks on our faces at the sight of swerving cars, and the pains in our chests when no one is awake.” Mr. Welch called April 7, 2003, “the beginning of the end of my life.”

Comedy First: How Harold Ramis’s movies have stayed funny for twenty-five years [Tad Friend on The New Yorker, April 19, 2004]

Ramis said that he identified with Nathan Zuckerman, the alter ego in many of Philip Roth’s novels: “Watching other people having experiences I’m not going to have. But understanding, empathizing. Much as I want to be a protagonist, it doesn’t happen, somehow. I’m missing some tragic element or some charisma, or something. Weight. Investment.” After a moment, he continued, “One of my favorite Bill Murray stories is one about when he went to Bali. I’d spent three weeks there, mostly in the south, where the tourists are. But Bill rode a motorcycle into the interior until the sun went down and got totally lost. He goes into a village store, where they are very surprised to see an American tourist, and starts talking to them in English, going ‘Wow! Nice hat! Hey, gimme that hat!’ ” Ramis’s eyes were lighting up. “And he took the guy’s hat and started imitating people, entertaining. Word gets around this hamlet that there’s some crazy guy at the grocery, and he ended up doing a dumb show with the whole village sitting around laughing as he grabbed the women and tickled the kids. No worry about getting back to a hotel, no need for language, just his presence, and his charisma, and his courage. When you meet the hero, you sure know it.” He smiled. “Bill loves to get lost, to throw the map out the window and drive till you have no idea where you are, just to experience something new.” And you? “Oh, I’d be the one with the map. I’m the map guy. I’m the one saying to Bill, ‘You know, we should get back now. They’re going to be looking for us.’ ”

A Cheesebox on a Raft [Rick Beard via Opinionator on The New York Times]

In the meantime, though, Ericsson had written to Lincoln on his own initiative. Never modest, the engineer assured the president that he possessed “practical and constructive skill shared by no engineer now living” and sought “no private advantage or emolument of any kind.” His battery, he claimed, could within 10 weeks “take up a position under the rebel guns at Norfolk and … within a few hours the stolen ships would be sunk and the harbor purged of traitors.”

Why French Parents Are Superior [Pamela Druckerman via The Wall Street Journal]

I first realized I was on to something when I discovered a 2009 study, led by economists at Princeton, comparing the child-care experiences of similarly situated mothers in Columbus, Ohio, and Rennes, France. The researchers found that American moms considered it more than twice as unpleasant to deal with their kids. In a different study by the same economists, working mothers in Texas said that even housework was more pleasant than child care…Yet the French have managed to be involved with their families without becoming obsessive. They assume that even good parents aren’t at the constant service of their children, and that there is no need to feel guilty about this. “For me, the evenings are for the parents,” one Parisian mother told me. “My daughter can be with us if she wants, but it’s adult time.” French parents want their kids to be stimulated, but not all the time. While some American toddlers are getting Mandarin tutors and preliteracy training, French kids are—by design—toddling around by themselves. I’m hardly the first to point out that middle-class America has a parenting problem. This problem has been painstakingly diagnosed, critiqued and named: overparenting, hyperparenting, helicopter parenting, and my personal favorite, the kindergarchy. Nobody seems to like the relentless, unhappy pace of American parenting, least of all parents themselves.

Curiously Strong Remains:

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