A Cautionary Note on Soaking the Rich

From Greg Mankiw (NYTimes):

Maybe you are looking forward to a particular actor’s next movie or a particular novelist’s next book. Perhaps you wish that your favorite singer would have a concert near where you live. Or, someday, you may need treatment from a highly trained surgeon, or your child may need braces from the local orthodontist. Like me, these individuals respond to incentives. (Indeed, some studies report that high-income taxpayers are particularly responsive to taxes.) As they face higher tax rates, their services will be in shorter supply.

Reasonable people can disagree about whether and how much the government should redistribute income. And, to be sure, the looming budget deficits require hard choices about spending and taxes. But don’t let anyone fool you into thinking that when the government taxes the rich, only the rich bear the burden.

An interesting discussion at HN that questions the validity of a few of his assumptions. There are two basic issues I have with most of the criticism - the first is this assumption that taxed revenues are being redeployed in something useful other than feeding ever larger bureaucracies that provide a net benefit to overall society and the second, if we understand high income earners (not to be confused with the wealthiest) to be the most economically productive in society, should there be any surprise if the productivity of society falls as these individuals choose not to work as much or as hard?

Remembering Che Guevera

As he should be remembered (Townhall via Powerlineblog):

"When you saw the beaming look on Che's face as the victims were tied to the stake and blasted apart by the firing squad," said a former Cuban political prisoner Roberto Martin-Perez, to your humble servant here, "you saw there was something seriously, seriously wrong with Che Guevara." As commander of the La Cabana execution yard, Che often shattered the skull of the condemned man (or boy) by firing the coup de grace himself. When other duties tore him away from his beloved execution yard, he consoled himself by viewing the slaughter. Che's second-story office in Havana's La Cabana prison had a section of wall torn out so he could watch his darling firing-squads at work.

Even as a youth, Ernesto Guevara's writings revealed a serious mental illness. "My nostrils dilate while savoring the acrid odor of gunpowder and blood. Crazy with fury I will stain my rifle red while slaughtering any vencido that falls in my hands!" This passage is from Ernesto Guevara's famous Motorcycle Diaries, though Robert Redford somehow overlooked it while directing his heart-warming movie. ...

The one genuine accomplishment in Che Guevara's life was the mass-murder of defenseless men and boys. Under his own gun dozens died. Under his orders thousands crumpled. At everything else Che Guevara failed abysmally, even comically.

Previous notes on the man here.

More Giggles...

For quick pick me upppers, I saw these two commercials recently and wanted to share:

As the escapistmagazine says on this one, "this parody wins the internet" (Thanks Tom!):

Giggle of the Day

Fox News via The Thinker: Postal Union Election Delayed After Ballots Lost in the Mail

Fear Not, Keepers of a Messy Desk?

Not that I need any further disincentive to keep my desk organized. Mom, take note - quote from a short film "The Desk" posted at core77:

Einstein's desk was famously messy so he stood as an example of a person who could be extremely efficient and extremely creative but at the same time very very messy. People with messy desks tend to be more open to new experiences, and [it] reflects their mental process.

"The Desk" from Benjamin Cox on Vimeo.

Thought of the Day: Takers and Makers

From Fred Wilson, a venture capitalist:

There are takers and makers in this world. Takers make their money by taking from others. They are usually bad business people and their careers often end in failure. Makers build things. They create value for society, their employees, their shareholders, and themselves.

Not entirely sure if I believe "takers" usually get their comeuppance, but I do believe that the upside in life is far greater for "makers" than "takers".

Even more honest?

I should note that I have a friend who is an avid environmentalist and a 'warmist' who is absolutely appalled by the original video. While I'd argue it's a logical conclusion based on the arguments that many environmentalists make, this is probably the best parody of the original (Warning - it's graphic, via DailyCaller):

Says the Daily Caller:

Tim Blair says it best. The producers’ message is: “If you aren’t a warmist, you deserve to become a warm mist.”

Update Oct 6: More fantasies of people killing children (Hotair)

Of the Web, Startups and Facebook

I saw The Social Network (imdb) with Anthony Del Col (Kill Shakespeare) on Friday. It was surprisingly entertaining, but also a bit empty. Like Anthony, I can't say I really empathized with the characters, and while I confess I felt like a bit of an underachiever afterwards, it was also quite motivating.

I don't always agree with Lawrence Lessig but he makes a useful observation on why Facebook is different than great startups of the past. It truly has never been a better time to be alive if you're an entrepreneur (The New Republic):

For comparison’s sake, consider another pair of Massachusetts entrepreneurs, Tom First and Tom Scott. After graduating from Brown in 1989, they started a delivery service to boats on Nantucket Sound. During their first winter, they invented a juice drink. People liked their juice. Slowly, it dawned on First and Scott that maybe there was a business here. Nantucket Nectars was born. The two Toms started the long slog of getting distribution. Ocean Spray bought the company. It later sold the business to Cadbury Schweppes.

At each step after the first, along the way to giving their customers what they wanted, the two Toms had to ask permission from someone. They needed permission from a manufacturer to get into his plant. Permission from a distributor to get into her network. And permission from stores to get before the customer. Each step between the idea and the customer was a slog. They made the slog, and succeeded. But many try to make that slog and fail. Sometimes for good reasons. Sometimes not.

Zuckerberg faced no such barrier. For less than $1,000, he could get his idea onto the Internet. He needed no permission from the network provider. He needed no clearance from Harvard to offer it to Harvard students. Neither with Yale, or Princeton, or Stanford. Nor with every other community he invited in. Because the platform of the Internet is open and free, or in the language of the day, because it is a “neutral network,” a billion Mark Zuckerbergs have the opportunity to invent for the platform. And though there are crucial partners who are essential to bring the product to market, the cost of proving viability on this platform has dropped dramatically. You don’t even have to possess Zuckerberg’s technical genius to develop your own idea for the Internet today. Websites across the developing world deliver high quality coding to complement the very best ideas from anywhere.

At Least They're Being Honest....?

Watch this. Keep in mind it's not a parody. (Simon Jester via Instapundit)

A tempered response here (WindyPundit). Also a muted apology from the organization (1010global.org).

Not Coming to Air Canada Any Time Soon

via Tim:

Quote of the Day

Vinod Khosla, one of the world’s leading clean tech investors, at the TechCrunch Disrupt conference (TechCrunch):

Environmentalists get in the way…and do more damage than they know

TechCrunch goes on to explain:

Self-described environmentalists demand or adopt technology that sounds promising without a sense of its true cost or impact to the environment. “Painting your roof white is better for the environment than driving a Prius or similar vehicle,” Khosla pointed out.

Quote of the Day

Friedrich Hayek, The Fatal Conceit (via Greg Mankiw): "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."

Simon Sinek: Start with Why

Simon Sinek: "We follow those who lead not for them but for ourselves. It is those who start with 'why' that have the ability to inspire those around them or find others who inspire them." Another interesting thought was that people should be hired not for what they do, but why they do it. Another book to add to my ever flowing list of books to read. In the meantime, watch his TED presentation here (via Swissmiss):

A Warning for "Smart" People

"Stupid people think you are as stupid as they are." It's sometimes a bit difficult to tell if you're the stupid one in the equation. Colorful anecdote here (kikabink.com).

More from Steven Johnson: "Chance favors the connected mind"

I guess they're bringing out the PR wagon for the upcoming book launch, and based on this presentation and the TED presentation, it looks like it'll be a very worthwhile read:

More @ the WSJ: The Genius of the Tinkerer.

TED.com: Steven Johnson - Where Good Ideas Come From

An interesting talk from Steven Johnson (based on his coming book, Amazon) exploring how and where we come up with good ideas:

PSA: Love may be hazardous to your friendships

I may be immune to this disorder but for those who are prone to suffering from it - "falling in love comes at the cost of losing two close friends, a study says" (BBC):

"People who are in romantic relationships - instead of having the typical five [individuals] on average, they only have four in that circle," explained Robin Dunbar, a professor of evolutionary anthropology at Oxford.

"And bearing in mind that one of those is the new person that's come into your life, it means you've had to give up two others."

What Passes as "Cool"

Something to forward to those who wear Mao or Che Guevera logos - from recently examined Chinese archives (The Independent via Ann Althouse, em mine):

At least 45 million people were worked, starved or beaten to death in China over these four years; the worldwide death toll of the Second World War was 55 million. [...] Between 1958 and 1962, a war raged between the peasants and the state; it was a period when a third of all homes in China were destroyed to produce fertiliser and when the nation descended into famine and starvation, Mr Dikötter said.

For those who committed any acts of disobedience, however minor, the punishments were huge. State retribution for tiny thefts, such as stealing a potato, even by a child, would include being tied up and thrown into a pond; parents were forced to bury their children alive or were doused in excrement and urine, others were set alight, or had a nose or ear cut off. One record shows how a man was branded with hot metal. People were forced to work naked in the middle of winter; 80 per cent of all the villagers in one region of a quarter of a million Chinese were banned from the official canteen because they were too old or ill to be effective workers, so were deliberately starved to death.

In the face of this evidence, what defies imagination is that there are those who blame colonial powers for China's poverty, saying they robbed China of its resources prior to Mao's ascendence.

"Surprise!" Exactly What You'd Expect to Happen

For similar reasons that I'm skeptical that gold will remain being a useful/safe peg of value, there are supposedly smart people from the dawn of time who believe that they can manipulate or corner the market on XYZ commodities (and the corollary of politicians who flame fears of shortage).

Needed in everything from electronics to small motors, "rare earth metals" are only the most recent scare that China has restricted exports for domestic production needs (The Australian). While it's true that in the short term resources are finite, in the long run, they're only limited by human ingenuity. And as Forbes is reporting, so it's true here - Japanese companies (and I'm sure others around the world) are responding to high prices to generate alternatives:

With prices spiking following the latest in a series of annual export quota reductions by Beijing earlier this summer, miners have been scrambling to develop deposits of the essential industrial minerals worldwide. Now Japan’s Nikkei business daily reports that Japanese manufacturers have developed technologies to make automotive and home appliance motors without rare earth metals. Hitachi has come up with a motor that uses a ferrite magnet made of the cheaper and more common ferric oxide. Meanwhile the chemicals conglomerate Teijin and Tohoku University have co-developed technology to make a powerful magnet using a new composite made of iron and nitrogen.

Take another step back and you also see the remarkable power that pricing communicates to the market. While the reactionary political response invariably is to further restrict and regulate trade, it would be refreshing if the opposite were pursued - that measures to innovate and unleash innovation to find additional or create alternative resources were pursued. Alas, dare to dream.

More on that topic of gold (Sept 13, BusinessInsider): Reasons that gold is a religion masquerading as an asset Class.

A Politician to Like...

From Roger Kimball (Pajamasmedia):

Christie didn’t “lambaste” teachers, he said, he lambasted the teacher’s union, especially its leaders. Why were so many teachers laid off in New Jersey? Because when the Governor called upon teachers to take one-year pay freeze and contribute 1.5% — one-and a half percent! — of their salaries to the cost of their health care (full-family medical, dental, and vision coverage, by the way), the union leaders said “No way. Not a penny.” Result: nearly a billion-dollar shortfall in the budget, which necessitated scads of lay offs. (Had Gov. Christie’s proposal been accepted, the state would have saved more than $700,000,000.) “So who’s really to blame?” he asked: the Governor or the intransigent teachers unions?

Pursuing Job Security

Scott Adams, the cartoonist of Dilbert, has a few thoughts on skills that can help make you more marketable as an employee (Dilbert):

I think technical people, and engineers in particular, will always have good job prospects. But what if you don't have the aptitude or personality to follow a technical path? How do you prepare for the future?

I'd like to see a college major focusing on the various skills of human persuasion. That's the sort of skillset that the marketplace will always value and the Internet is unlikely to replace.

Not sure if I agree about all his specific ideas but I think the basic premise is a sound one - taken one step further, it's businesses that maximize the potential of its people who are most sustainable. And it's difficult to do that without managers and staff who have those skill sets. Read the whole thing.

Fidel: 'Cuban Model Doesn't Even Work For Us Anymore'

Wow (The Atlantic). Of course, this presumes it ever did...?

Maslow's Hierarchy of Needs and Confirmation Bias?

Something to explore later when I have more time, but is Megan McArdle saying that Maslow's Hierarchy of Needs was developed to fit his view of the world rather than his observations of it? From a passage she quotes on her blog [emphasis mine] (the Atlantic):

Maslow admired many people I admire, Abraham Lincoln for example. But he and I can't admire Lincoln through some objective lens as psychologists or scientists. We can only say we admire Lincoln with the same level of objectivity that someone else might admire Jefferson Davis. Maslow wanted to give an objective validation that, for example, the Viet Nam war protestor was objectively superior to the Viet Nam general, the environmentalist was objectively superior to the captain of industry etc. Many cultural elites ate it up, just as Soviet elites ate it up when their psychiatrists said that anyone who didn't love the government was mentally ill and needed electroshock treatment post-haste.

Psychologists and social scientists generally still venture repeatedly today into the territory of human values and attempt to claim the ability to make objective judgments about which are the most healthy or scientifically validated. They don't ever seem to learn that they are often just trying to rationalize cultural fashions: In the 1940s the "mentally healthy" person was one who respected tradition, but he morphed into the to-be-pitied "organization man" in the 1950s. Psychologists valorized divorce as the "mentally healthy choice" for those who were not "growing" in the 1970s, whereas today they tend to say that it's better to stick it out and stop complaining so much.

Over the years, I've heard that the Hierarchy of Needs wasn't evidence based nor had there been much corroborating research but this is the first time I've heard how it was developed. Definitely something to explore further.

Sounds about right to me...

Not sure about the original points he was trying to make since there is an element of uncertainty in the whole sausage making process of regulations and pork barreling but... (Forbes):

For the time being, we’re in a vicious cycle. Consumers won’t step up their spending until unemployment eases, which won’t happen until consumers step up their spending enough to make it profitable for companies to hire additional employees.

Over the long run, though, the economy will perform better and unemployment will be lower if we reduce the drag of taxes and regulations that can’t be justified by tangible benefits. That’s the story business leaders should make if they want to help themselves and allow Adam Smith’s Invisible Hand to help the country

The fact that the BBC is reporting that the US has been overtaken by Sweden, Switzerland and Singapore in the World Economic Forum competitiveness survey should only underscore this point.

More on School Choice

via Fred Wilson - "I saw this film last night. It made me angry and upset. Go see it. It will be in the theaters on Sept 24th.":

It would seem that the movie has been getting a lot of press. More here (NYMag):

For decades, the conversation about our schools has been the preserve of the education Establishment—and the result has been a system that, with few exceptions, runs the gamut from mediocre to calamitous. Waiting for “Superman” is no manifesto. It offers no quick fixes, no easy to-do lists, no incandescent lightbulbs to unscrew. What it offers is a picture of our schools that isn’t pretty, but that we need to apprehend if we’re to summon the political will necessary to transform them. “Nobody ever wants to call a baby ugly,” says Duncan. “This is like calling the baby ugly. It’s about confronting brutal truths.”

Relationship "Best Practices": Four Minutes in the Morning

It takes a special kind of someone to use the words "best practice" and marriage or relationship in the same sentence. Not that I have any expertise in the area - quite the opposite really, this showed up on one of the VC blogs I follow, from Brad Feld:

Amy and I created a tradition about a decade ago we call “four minutes in the morning.” We try to – fully clothed – spend four minutes together every morning 100% focused on each other. [...] Of course, the “four minutes” is metaphorical. Sometimes it’s 15 minutes. A few times a year it turns into an hour when we end up in a discussion about something. But it’s always 100% bi-directional attention, except for our dogs who often want in on the discussion.

Seems like a good idea, makes sense and something to try (if I'm ever lucky enough to find myself in that situation).

"It [Really] Ain't Rocket Science"

Peter Boettke via Jeffrey Ellis:

I have adopted many of my father’s sayings as I have grown older, and this particular phrase “ain’t rocket science” I tend to use all the time about economics. Yesterday the report came out that housing sales were down, and the stock market fell. I woke up this morning to emails from a very good friend in the investment business with dire predictions from Morgan Stanley and even Goldman Sachs that the US economy is going to tailspin into a deeper recession.

I don’t possess a crystal ball, so I cannot forecast the economic future. But I do know that it is not good to expand the monetary base 140% or to run deficits the size we have, or accumulate public debt as we have.See Laurence Kotlikoff in The Economist. This “ain’t rocket science”! There will be a day of reckoning due to the monetary mischief and fiscal irresponsibility.

I also know that the problems we are facing are not “market problems” — it is not that actors are all of a sudden ‘irrational’, and it is not that markets are inherently ‘unstable’. Everything we are seeing in market behavior is a rational response to the environment created by public policy. This is not a psychological problem we are dealing with, it is a public policy problem. Bad public policy produce bad incentives which in turn produce bad results. Ultimately, this is a problem of bad ideas which result in bad public policies. Again, this ain’t rocket science.

Maybe? It wasn't about China

The Economist suggests that maybe manufacturing job losses in the US aren't about China. Markets are harsh and inherently unstable. They force an unending cycle of improvement or else you die. It might seem bleak - but the flip side of that, is that those who do innovate and meet the needs of customers thrive and profit. With mounting job losses and governments looking for easy targets to blame, China's an easy scapegoat.

Sure, I'm not the least bias source by any means but to put things in perspective (Economist referencing a chart from Paul Kedrosky):

[This is] manufacturing employment as a share of total employment. The downward trend is over 50 years old. It predates the end of Bretton Woods. It predates the union-crushing, deregulating era of the late 1970s and early 1980s. It predates the era of Japanese dominance, the rise of the Asian tigers, and the recent surge in Chinese growth. And what it is driving this trend, overwhelmingly, is technology. Manufacturers have steadily improved manufacturing productivity, routinising and then automating occupations.

A plunging dollar, a "get tough" approach to China, and an embrace of industrial policy won't reverse this trend. Eventually China will face the same dynamic and the same decline in manufacturing employment. Time to accept that reality and figure out how best to prepare workers for the good jobs to come.

The Lottery: "The interests of adults above those of children"

Worth two minutes of your time - a trailer for the documentary "The Lottery", about the selection process for a charter school in Harlem:

An interview with documentary producer Madeline Sackler (Reason.tv):

The Freedom Movement and the Libertarian Electorate

A look at what and who libertarians are. One pointed quote: "Libertarians are treated as if they have quirky beliefs precisely because they are consistent. In a country where a lot of people have inconsistent beliefs, a consistent adherence to priciple sometimes looks pretty unusual."

And a useful reminder: "A lot of the people who say they favor smaller government in the abstract, tend to favor larger government in the particular. You don't get that many true libertarians in big business because [..] big business likes regulation that disadvantages their competitors."

From Reason.tv, h/t Instapundit:

"Giving Back"?

An op-ed in the WSJ asks the provocative question of whether those like Bill Gates and Warren Buffet do more for society as businessmen than as philanthropists. I'd say yes. "Wealthy businessmen often feel obligated to 'give back.' Who says they've taken anything?":

What are the chances, after all, that the two forces behind the Giving Pledge will contribute anywhere near as much to the betterment of society through their charity as they have through their business pursuits? In building Microsoft, Bill Gates changed the way the world creates and shares knowledge. Warren Buffett's investments have birthed and grown innumerable profitable enterprises, making capital markets work more efficiently and enriching many in the process.

[...] While businesses may do more for the public good than they're given credit for, philanthropies may do less. Think about it for a moment: Can you point to a single charitable accomplishment that has been as transformative as, say, the cell phone or the birth-control pill? To the contrary, the literature on philanthropy is riddled with examples of failure, including examples where philanthropic efforts have actually left intended beneficiaries worse off. The Gates Foundation has itself acknowledged that one of its premier initiatives—a 10-year, $2 billion project to reorganize high schools around the country into schools with fewer than 400 students—was a complete bust. Good for them for admitting it. In that, they are unusual. In the failure, they are not.

If you're a locavore, you could well be an idiot

From the NYTimes of all places - Math Lessons for Locavores:

But the local food movement now threatens to devolve into another one of those self-indulgent — and self-defeating — do-gooder dogmas. Arbitrary rules, without any real scientific basis, are repeated as gospel by “locavores,” celebrity chefs and mainstream environmental organizations. Words like “sustainability” and “food-miles” are thrown around without any clear understanding of the larger picture of energy and land use.

[...] The statistics brandished by local-food advocates to support such doctrinaire assertions are always selective, usually misleading and often bogus. [...] Agriculture, on the other hand, accounts for just 2 percent of our nation’s energy usage; that energy is mainly devoted to running farm machinery and manufacturing fertilizer. In return for that quite modest energy investment, we have fed hundreds of millions of people, liberated tens of millions from backbreaking manual labor and spared hundreds of millions of acres for nature preserves, forests and parks that otherwise would have come under the plow.

Why psychopaths kill and libertarians don't

Erm... thank goodness I'm a libertarian? From the folks at Reason.tv:

PSA: What to do when you flight is cancelled

Much of this advice also applies to when you miss your connection: "Reasons You're Doing it Wrong When Your Flight is Cancelled" (hipmunk.com via lifehacker.com). Hint: don't bother waiting in the customer service line.

Reason.TV: New Orleans' School Voucher Program

via Instapundit.com:

Note to Self

From someecards.com, a reminder for those lovely days...

Why Google's Android Will Win

The war between competing Android and iPhone app markets is one to watch. When built properly (even the best markets require some form of regulation and boundaries within which players can innovatea), markets will almost always trump the selection/tastes of an individual - or even a group of individual - and that's why I suspect Android's opensource experiment and their market will trump Apple's with time. From the P2P foundation via swissmiss:

A good example of manual curation vs. crowdsourced curation is the competing app markets on the Apple iPhone and Google Android phone operating systems. Apple fans complain that the Android marketplace has too many low-quality apps for any given task. They complain that it’s hard to find an “official” or “sanctioned” app. On the other hand, Android fans criticise Apple for limiting their choices. They don’t want to be beholden to the whims of a select few. Apple is a monarchy, albeit with a wise and benevolent king. Android is burgeoning democracy, inefficient and messy, but free. Apple is the last, best example of the Industrial Age and its top-down, mass market/mass production paradigm. They deal with the big head of the curve, and eschew the long tail. They manufacture cool. They rely on “consumers”, and they protect those consumers from too many choices by selecting what is worthy, and what is not. Google Android is building itself as a platform for bottom-up innovation. Their marketplace publishes first, filters second, utilizing little more than the rankings of the community.

Of course, the fact that they've announced they will only be taking a 5% cut in their Chrome store which could end up catering to a much larger audience can't hurt (TechCrunch).

And the Blog Reader Answers: The Myth of Authoritarian Growth

Dani Rodrik at Project Syndicate (via aidwatchers):

For every Lee Kuan Yew of Singapore, there are many like Mobutu Sese Seko of the Congo.

Democracies not only out-perform dictatorships when it comes to long-term economic growth, but also outdo them in several other important respects. They provide much greater economic stability, measured by the ups and downs of the business cycle. They are better at adjusting to external economic shocks (such as terms-of-trade declines or sudden stops in capital inflows). They generate more investment in human capital – health and education. And they produce more equitable societies.

[...] At first sight, China seems to be an exception. Since the late 1970’s, following the end of Mao’s disastrous experiments, China has done extremely well, experiencing unparalleled rates of economic growth. Even though it has democratized some of its local decision-making, the Chinese Communist Party maintains a tight grip on national politics and the human-rights picture is marred by frequent abuses.

[...] For the true up-and-coming economic superpowers, we should turn instead to countries like Brazil, India, and South Africa, which have already accomplished their democratic transitions and are unlikely to regress. None of these countries is without problems, of course. Brazil has yet to recover fully its economic dynamism and find a path to rapid growth. India’s democracy can be maddening in its resistance to economic change. And South Africa suffers from a shockingly high level of unemployment.

Yet these challenges are nothing compared to the momentous tasks of institutional transformation that await authoritarian countries. Don’t be surprised if Brazil leaves Turkey in the dust, South Africa eventually surpasses Russia, and India outdoes China.

China's #2, but where's India?

So unless you've been under a rock you probably know that China surpassed Japan as the second largest economy (though on a per capita basis, China remains one of the poorest in the world). To give some context, from the Economist:

While I can't say I'm that surprised about China given how poorly Japan did, looking at the historical share of global GDP, all the accolades given to Indian graduates, I can't help but wonder, what happened to India?

John Cleese on Creativity

A talk on how to be more creative. To sum up - use boundaries of space and time, create an oasis in your life (offline). These are moments where you can think uninterrupted which are separate from your ordinary life. Interruptions are disastrous to the creative process. And sometimes, (maybe often?) starting from scratch results in a better work product than the original. (via HackerNews):

The High Cost of Free Parking

Tyler Cowen, of the popular blog Marginal Revolution, quoting a researcher on the unintended consequences of free parking (NYT):

Minimum parking requirements act like a fertility drug for cars.

Now consider the effect of free highways...

Killing African Entrepreneurship

Todd Johnson via Megan McArdle:

As a struggling businessman creating new start-ups, he could not compete with what NGO's were paying for some of the best and brightest. And even worse, he said, "by the time the NGO's are done with them, there isn't an ounce of entrepreneur left."

An issue as true back when I was in Uganda as it is today.

Decriminalize it all?

The war on drugs is an abject failure. Economics could provide the solution. From AOLNews, on how Portugal has dealt with the problem:

Ten years ago this summer, Portugal became the first country in Europe to decriminalize all illegal drugs -- marijuana, cocaine, methamphetamine and even heroin. Hefty fines and prison sentences still await drug traffickers and dealers, but users caught with less than a 10-day supply of any drug are no longer considered criminals. Instead, they're referred to a panel comprised of a drug-treatment specialist, a lawyer and a civil servant, who usually recommend treatment -- and pay for it, too. If the users decline treatment and go back to abusing drugs, that's their prerogative.

But statistics show they're not doing that. Instead, about 45 percent of the 100,000 heroin addicts Portugal's Health Ministry recorded in 2000 had by 2008 decided to at least try to quit the habit, without the threat of jail time. And the number of new HIV cases among users fell from 2,508 in the year 2000 to 220 cases in 2008, Alun Jones, a spokesman for the U.N. Office on Drugs and Crime, told AOL News. "This was a major success," he said.

Also from an earlier article in Time:

The paper, published by Cato in April, found that in the five years after personal possession was decriminalized, illegal drug use among teens in Portugal declined and rates of new HIV infections caused by sharing of dirty needles dropped, while the number of people seeking treatment for drug addiction more than doubled.

“Judging by every metric, decriminalization in Portugal has been a resounding success,” says Glenn Greenwald, an attorney, author and fluent Portuguese speaker, who conducted the research. “It has enabled the Portuguese government to manage and control the drug problem far better than virtually every other Western country does.”

Compared to the European Union and the U.S., Portugal’s drug use numbers are impressive. Following decriminalization, Portugal had the lowest rate of lifetime marijuana use in people over 15 in the E.U.: 10%. The most comparable figure in America is in people over 12: 39.8%. Proportionally, more Americans have used cocaine than Portuguese have used marijuana.

Prohibition in any form creates incentives for underground markets, increases costs and builds bureaucracies around enforcement, which in turn drives prices even higher resulting in a vicious cycle.

There are no unicorns... (aka the misplaced faith in government)

It is easier to believe in unicorns than hope for the benevolent governance of any politican. On Larry Lessig's public admonishment of the current administration (TruthontheMarket via Instapundit):

One would think a Harvard Law School professor and director of a something-something Center for Ethics would not be so naive. Criticizing the president for promising to change politics and then, once in office, playing the same old politics is like criticizing parents for telling their kids about Santa Claus.

There are no unicorns, Prof. Lessig, as much as you and I both wish there were. Our best hope for changing Washington is not to let hope triumph over experience and believe if we just elected the right person everything would change, but to make the structural changes that will deny the politicians the power they always abuse.

Only a smaller government is one that will do less damage when wielded by politicians, no matter what their stripe or promises to behave. Republicans promised fiscal restraint when they took the House, and we got profligate spending; Obama promised to drain the swamp, and yet the alligators and mosquitoes still infest it. When will we learn?

The solution is less government - not more of it.

Related: Why (some)businesses aren't hiring:

Spontaneous Order, Traffic Lights, and the Peltzman effect

There's a subset of bureaucrats and regulators who want us to believe that the only thing separating us from chaos/imminent disaster is another rule or law. So what happens when you turn off the traffic lights? From John Stossel at creators.com:

In some cases, traffic moves better and more safely when government removes traffic lights, stop signs, even curbs.

It's Friedrich Hayek's "spontaneous" order in action: Instead of sitting at a mechanized light waiting to be told when to go, drivers meet in an intersection and negotiate their way through by making eye contact and gesturing. The secret is that drivers must pay attention to their surroundings — to pedestrians and other cars — rather than just to signs and signals. It demonstrates the "Peltzman Effect" (named after retired University of Chicago economist Sam Peltzman): People tend to behave more recklessly when their sense of safety is increased. By removing signs, lights and barriers, drivers feel less safe, so they drive more carefully. They pay more attention.

In Drachten, Holland, lights and signs were removed from an intersection handling about 30,000 cars a day. Average waiting times dropped from 50 seconds to less than 30 seconds. Accidents dropped from an average of eight per year to just one.

On Kensington High Street in London, after pedestrian railing and other traffic markers were removed, accidents dropped by 44 percent.

"What these signs are doing is treating the driver as if they were an idiot," says traffic architect Ben Hamilton-Baillie. "If you do so, drivers exhibit no intelligence."

Sure enough, here's the experience of a small town in Britain (via Marginal Revolution):



Marginal Revolution goes on to quote a profile about "an unassuming Dutch traffic engineer showed that streets without signs can be safer than roads cluttered with arrows, painted lines, and lights" in the Wilson Quarterly. The article describes a busy intersection where traffic lights are removed:

At the town center, in a crowded four-way intersection called the Laweiplein, Monderman removed not only the traffic lights but virtually every other traffic control. Instead of a space cluttered with poles, lights, “traffic islands,” and restrictive arrows, Monderman installed a radical kind of roundabout (a “squareabout,” in his words, because it really seemed more a town square than a traditional roundabout), marked only by a raised circle of grass in the middle, several fountains, and some very discreet indicators of the direction of traffic, which were required by law.

As I watched the intricate social ballet that occurred as cars and bikes slowed to enter the circle (pedestrians were meant to cross at crosswalks placed a bit before the intersection), Monderman performed a favorite trick. He walked, backward and with eyes closed, into the Laweiplein. The traffic made its way around him. No one honked, he wasn’t struck. Instead of a binary, mechanistic process—stop, go—the movement of traffic and pedestrians in the circle felt human and organic.

A year after the change, the results of this “extreme makeover” were striking: Not only had congestion decreased in the intersection—buses spent less time waiting to get through, for example—but there were half as many accidents, even though total car traffic was up by a third.

Of course, regulations aren't the source of the Peltzman effect where technology designed to make us safer does the opposite - also from Marginal Revolution:

The NHTSA had volunteers drive a test track in cars with automatic lane departure correction, and then interviewed the drivers for their impressions. Although the report does not describe the undoubted look of horror on the examiner’s face while interviewing one female, 20-something subject, it does relay the gist of her comments.

After she praised the ability of the car to self-correct when she drifted from her lane, she noted that she would love to have this feature in her own car. Then, after a night of drinking in the city, she would not have to sleep at a friend’s house before returning to her rural home.

Update (Aug 17): The Antiplanner (Freakonomics)

Update (Aug 23): Solutions for traffic jams (eskimo.com)

Update (Sept 23): To tame traffic, go with the flow: Lights should respond to cars, a study concludes, not the other way around (sciencenews.org)

Union Jobs vs Children's Lives

"When I see that people are using children with seizures as a lever to get more nurses in schools, I think it's wrong." Well, duh. Figures that it's also happening in California. And yet there is probably no clearer example that teachers unions are a greedy and immoral special interest group than this -

More on teachers and their lobbying from Cato. Then there's the supposed $26 billion jobs bill, "which includes $10 billion in grants to districts to keep up to 130,000 education jobs on life support. Where are they coming up with the money? At some point in the future, they're going to pay for part of it by cutting food stamps" (Reason.com). Yep, they're serving teachers unions at the expense for food for poor people. Classy.

Regulators gone amok: "Portland lemonade stand runs into health inspectors, needs $120 license to operate"

While they ultimately reversed their stance after political higher ups intervened, it should serve as reminder that when governments and bureaucrats are given power, they'll use it (OregonLive):

It's hardly unusual to hear small-business owners gripe about licensing requirements or complain that heavy-handed regulations are driving them into the red.

So when Multnomah County shut down an enterprise last week for operating without a license, you might just sigh and say, there they go again.

Except this entrepreneur was a 7-year-old named Julie Murphy. Her business was a lemonade stand at the Last Thursday monthly art fair in Northeast Portland. The government regulation she violated? Failing to get a $120 temporary restaurant license.

There are days when it does feel this way...

Elon Musk (founder of Tesla and SpaceX, at TechCrunch):

Being an entrepreneur is like eating glass and staring into the abyss of death. …So if that sounds appealing…

"Only Prettier": Giggle of the Day

While I'm guessing that there aren't many people who follow this blog who actually like country (sister notwithstanding), I got forwarded this link from a friend of a song that's a cute twist on "can't we all just get along?".

Co-founder of Reddit.com: "Keep calm & carry on"

Success rarely comes easy. Reddit.com's co-founder Alexis Ohanian chronicles some of the personal battles on the path to the sale of his startup. It's worth a read of the whole thing:

My life -- and thus Steve's -- was dramatically changed during those startup months for reasons beyond my control. I've lived a ridiculously fortunate life, so I knew it was only a matter of time before something was going to knock things a bit off course; I just didn't think it'd happen like this.

Thought of the Day/Month

Erm... Sorry, I've been neglecting the blog. It was quite a busy July. The project which is the bane of my existence is nearly completion of its draft. From Fred Wilson, of Union Square Ventures on "N+1 Theory":

I have found that most of the time, there is always more where you think there is nothing left. You may have to look a little harder/deeper but it is there.

That does not mean that there is an infinite supply of everything. Math would say that when you extrapolate N+1 all the way out you get to infinity. But we are talking about life, not math, here.

I find the N+1 theory very inspiring. It is pure optimism sprinkled with tenacity and we need that in our work and our lives.

What separates most competitors isn't a radically different business model but a few incremental differences. Those differences however, can result in several magnitudes of profit. N+1 is a reminder to push a little harder. As one reader, JacobAldridge, pointed out at Hacker News, "'Pure optimism sprinkled with tenacity' - that's a pretty good definition of a start-up, when you think about it." Indeed.

Does this man have editors? Did he ever?

A high profile journalist, Walter Shapiro, bemoans the death of privacy (Politics Daily via Instapundit). Apparently for this man, the expectation of privacy only applies to the left wing cabal of journalists of which he was a member and of which he hopes will find a new home.

And they wonder why the public doesn't trust journalists (Gallup, 2004). Expect that these numbers have gotten worse and will continue to plummet. May these journalists continue to get what they deserve.

It's time to break out the world's smallest violin to play the world's saddest song...

Updated (June 29, 2010): From Andrew Breitbart's Big Journalism:

The fact that 400 journalists did not recognize how wrong their collusion, however informal, was shows an enormous ethical blind spot toward the pretense of impartiality. As journalists actively participated in an online brainstorming session on how best to spin stories in favor of one party against another, they continued to cash their paychecks from their employers under the impression that they would report, not spin the agreed-upon “news” on behalf of their “JournoList” peers.

China's (Great?) Readjustment

ChinaStakes takes a big picture view of recent changes as executed by China and what it means:

A series of recent events, i.e. significant pay rises triggered by labor disputes in the Pearl River and Yangtze River Deltas, RMB appreciation from re-decoupling of the yuan to USD, the cancellation of 406 different export tax rebates, with particular influence on the steel industry, has posed significant questions for investors about what this means to the future Chinese economy. [...]

Chinese government began its economic restructuring, as lip services, in the 1990s, but external and internal imbalances intensified, caused by the factor pricing failure and the distorting macro-control. The nature of the market mechanism is in response to price signals. This time, changes in wages, exchange rates, and taxes show that the Chinese economy is undergoing a true transformation, which will also help China adjust both internal and external imbalances.

As far as investment is concerned, the near-future trend is from external demand to domestic demand, from manufacturing to services, from investment and exports to consumption, from cheap low-end products to quality brands. Companies able to manage this wave will grow rapidly, and finding and investing in such companies will create China's next wave of billionaires. China's largest wealth will increasingly turn into the ability rooted in this land, people, and systems.

Read the whole thing. Personally, I suspect that while these are significant policy changes, implementation will happen slowly lest they jeopardize economic growth. The message from China's government is however clear on the direction in which they want to lead their economy. It should also be clear that China intends to make changes at its own pace and its leaders will continue to act in their own interest.

G8 and G20: Much Ado about Nothing

Holding the G20 in downtown Toronto was stupid to begin with. Bill Easterly from AidWatch pulls a passage from Alan Beattie in the Financial Times describing G8 summits:

…at which ministers from around the world gather to wring their hands impotently about the most fashionable issue of the day. The organisation has sought to justify its almost completely fruitless existence by joining its many fellow talking-shops in highlighting whatever crisis has recently gained most coverage in the global media.

By making a big deal out of the fact that the world’smost salient topical issue will be placed on its agenda …it hopes to convey the entirely erroneous impression that it has any influence whatsoever on the situation.

Add to this the completely foreseeable trampling of civil liberties not to mention the simple ineptitude of the police. Someone I knew from highschool in a younger year than I had their house raided and they were even detained at gunpoint when the police raided the wrong apartment (National Post):

Two Toronto veterinarians say they were woken up at gunpoint this morning by police officers who thought they were the anti-G20 protesters who live in the apartment downstairs.

Dr. John Booth said the officers forced their way into their High Park-area home at 4 a.m., turning their home into chaos for about 45 minutes but were unwilling to show their warrant.

Dr. Booth, 30, said he was handcuffed, and spent about 15 minutes on the curb outside the home in cuffs before his identity was cleared up. The officers said they were looking for an activist named “Peter,” who apparently lived downstairs.

As Walter Russell Mead notes, the efforts are simply pointless with any agreements are non binding with little to no expectations of agreements on anything as journalists breathtakingly report on the mess (The American Interest):

Yet, in a striking demonstration of the idiocy and futility with which our world is governed, as the G-8 morphs into the G-20 and becomes ever less likely to produce any meaningful result, it is getting more coverage and not less.

There are several reasons for this. First, the word ‘news’ is derived from the word ‘new’, not from the word ’significant’. Even the sclerotic world of serious journalism and diplomatic convention was beginning to weary of the G-7/G-8 story. With every passing summit, the vapidity of these events became harder to ignore; we were reaching the shark-jumping moment when not even bureaucrats could pretend to care. But now we have new characters and new plot lines. There is almost no chance that the G-20 meetings will accomplish more than the G-7 meetings, but what does that have to do with anything? Evidently, not much.

More what the National Review is calling Toronto's Keystone Kops.

Quote of the Day

Walt Disney (via Daring Fireball): "We don’t make movies to make money, we make money to make more movies."

I love the quote because it's the basis of great businesses - not the pursuit of money but the pursuit of a passion. That you make money is just a recognition that your passion meets a real need that people are willing to pay for.

It's all about your perspective on time...

Jeffrey Ellis calls it "the Best Video Ever". I'm not sure about that... but it's definitely worth your time:

Not Surprising, Just Sad

From a Zogby poll of 5000 people, does it really surprise anyone that self identified "liberals" have the poorest grasp of economics of any ideological group (WSJ via JeffreyEllis)? Of course, what's just sad is that these are the same people who would claim they and governments are more efficient and effective at planning and running the economy.

The arrogance of trade "activists"

On Chinese Factories (TJIC via Jeffrey Ellis):

Say that we had first contact with some super (economically) advanced aliens.

…and pretty soon they set up factories here.

…and I was offered a job in one of these factories, doing software engineering.

The pay is $400k/year.

The work week is 20 hours long.

The work environment is far better than I’m used to – great internal decoration, well tended plants, a zen-like water garden near my desk, massages every other day.

…and then left-wing alien “sentient being rights activists” started protesting, because I was being forced to work for less than a quarter of the prevailing wage in Alpha Centauri, and my work hours were twice as long as the legal norms in Alpha Centauri, and I didn’t have every mandatory benefits like “other other year off”, and “free AI musical composition mentoring”.

…and then left-wing alien “sentient being rights activists” wanted to make it illegal for my employer and I to contract with each other at mutually beneficial terms.

…then I would be rip shit that some elitist who had never visited me, or knew of my actual alternatives on the ground presumed to decide that I shouldn’t have this opportunity.

Which brings me to my core point: Chinese factory conditions may not be the exact cup of tea for a San Francisco graphic designer or a Connecticut non-profit ecologist grant writer … but they’re, by definition, better than all the other alternatives available to the Chinese workers (or the factories would find it impossible to staff up).

Butt out, clueless activists.

A must for all drivers: Laptop Steering Wheel Desk

For those of you who have a warped sense of humor - Check out Amazon's Laptop Steering Wheel Desk. Be sure to see the user added pics and the comments.

PSA: You are what you eat (and fighting cancer with food)

Just popping in. Sadly, work has been soul crushing though I've made a bit of time for a few small but personal trips here - and while fun, has made life a bit busier. Anyway, here's a pretty compelling look at "antiangiogenic therapy" and a possible "answer to cancer"/and even being fat:

A Case for Optimism

Despite what I think are pretty miserable economic policies being implemented around the world and for which we'll be paying for - for many years to come, I happened to stumble across this video by Steven Pinker on TED.com looking at the history of violence for which there's great cause for optimism:

Quote of the er, Day

Yes, it's been a while since my last post. I'm alive and relatively well, battling jetlag again, but given what's been happening in the world, I thought this quote was all too true (and double edged) - from G.E. Anderson (ChinaBizGov):

Democracy has a well-documented downside: an irresistible urge to vote oneself a share of the spoils disproportionate to one’s economic contribution.

Of course when it comes to China economic contributions are arguably outsized on the upper end of the spectrum by constraining the bottom but I think his concluding paragraph is also true while countries like the US struggle with the deciding where the line should be:

Whether through democracy, or by some other means, China’s leaders have to figure out how to give their most successful citizens a stake in the future success of the poor.

Oh and er, happy May, er Communist day - it's also a good day to take pause in "remembrance of the victims of history’s bloodiest ideology" (Volokh Conspiracy).

A Growing Menace

A public service announcement on a growing threat to all of us. These people are becoming increasingly desperate. And as they get laid off, largely unemployable as a result of positions that fed their delusions of grandeur, there's really no telling what havoc these people could wreak on society. Read on here (Iowahawk).

Oh and Happy Easter!

On the Project that Just Won't Die

From today's Dilbert:

I'm still working at the user interface for a website that has been ongoing on and off for the past few years and hopefully almost about to move into testing... so I found today's Dilbert particularly funny.

Hope you're all having a Happy April Fool's! My posting has slowed and may continue to be slow as I re-acclimatize and try to get things done after getting back to China.

Quips

Both (via JeffreyEllis) that get to the heart of human nature and political realities:

“When you remove the ability of people to fail, you remove their need to have good judgment, to work hard, to plan for the future - in essence, you remove most of the qualities that create successful adults.”
– Peg Kaplan

Putting any part of the economy into the hands of politicians is like putting the space program into the hands of astrologers.
– Don Boudreaux

Heh - Ellis's comment on the second one - "Zing! Two critical thinking-impaired groups, smacked down by a single bitchslap."

Possibly the most disturbing blog I've ever come across...

This blog is probably enough to give anyone thinking about having a kid pause: Raising a Psychopath:

http://raising-a-psychopath.blogspot.com/

I guess I've had something of a fascination of psychopaths for quite some time and have wondered if I'd even recognize one (though I feel fairly confident that I'm not one). Sort of like monsters in the closets except these are real. From another article on Hacker News: "Psychopaths among us - Dr. Robert Hare claims there are 300,000 psychopaths in Canada, but that only a tiny fraction are violent offenders like Paul Bernardo and Clifford Olsen. Who are the rest? Take a look around" (Hare)

Critical Thinking and Politics

I've been evaluating a new blog to add to my blog reader and I'm finding it more likeable more and more. It's called "The Thinker: Swimming Upstream in a Raging Current of Stupid" by Jeffrey Ellis. I like a recent post of his where he not only quotes Hayek but reconsiders his view on the intersection between libertarians and politics:

If politics were just a matter of egalitarianism versus Judeo-Christian traditionalism versus libertarianism, I would say that critical thinking has no judgments to offer. But in practice, this isn’t what politics ends up being about. In practice, it’s the big-government do-gooders versus the morality police versus the libertarians. And as Hayek’s words show, the libertarians are the only ones who seem to get the need for intellectual humility in government.

Mock Outrage or Justified Scrutiny?

Dan Pallota viciously attacks Senator Chuck Grassley for "undermining the humanitarian sector" (via Beata):

Senator Grassley and Wolf Blitzer want to frame this as a moral issue. So I do. It's immoral that in one 24-hour news cycle these leaders have manufactured a massive public relations and fundraising nightmare for the Boys and Girls Clubs, without the slightest effort to evaluate the CEO's compensation in the context of the value she is providing. Any first-year business school student who tried to make a case against an executive salary without a shred of cost-benefit analysis would be laughed out of class. [...]

It is time for us to turn the moral tables. Time to right the moral analysis. Time to call this destructive sanctimony by its real name. Senator Grassley has just dealt a sucker punch to the Boys and Girls Clubs, its CEO, and the millions of kids it helps every day in his own self-interest.

I'm not so sure I'm nearly as convinced or outraged. The problem with not for profit institutions are that in practice they're far more difficult to measure and evaluate. Surely the fact that the US government gave $41M to the Boys and Girls Clubs despite their significant current deficit suggests that Grassley does have a right to question the salaries of the organization just as much as they might for any given defense contractor. Further, Pallota is unfair in not pointing out some of the other objections that were made (AP): "They also questioned why in the same year officials spent $4.3 million on travel, $1.6 million on conferences, conventions and meetings, and $544,000 in lobbying fees."

Grassley also suggested that "changes Congress' original intent--providing initial seed money to providing a perpetual source of funds to sustain the Boys and Girls Club" (WSJ). It should be questioned why the organization didn't reach out to find more sustainable donors for their mission than the government.

While I can respect that you need to pay these people something and that organizationally it is important to attract good people to ensure operational capacity, if they accept funds from government they should accept that their salaries are also subject to political scrutiny. Further, a look at Charity Navigator rates them significant below comparable organizations and gives them only a 2 star rating largely for their organizational capacity though significantly below other comparable organizations.

Happy Pi Day

from Greg Mankiw: "Fun fact of the day: MIT releases its undergraduate admission decisions at 1:59 pm today. (That is, at 3.14159)."

Startups and Growth

While it comes a day late from my little guest speaking gig in my old high school economics class - I've long believed that building businesses that solve problems is the best vehicle for change for those who want to make a difference in the world.

It's a bit of a pet peeve of mine that some people label and elevate certain problems over others with the label of "social" entrepreneurship. Using the label more insidiously also causes some to reduce expectations of performance of their business as if profit must be sacrificed to achieve a social mission when the reality is profit comes from fulfilling a social mission.

My sister (thanks Beata!) forwarded a blog post by Ben Casnocha on entrepreneurs - pointing out that all entrepreneurs are social as he quotes from Carl Schramm in the Stanford Social Innovation Review:

...regular entrepreneurs create thousands of jobs, improve the quality of goods and services available to consumers, and ultimately raise standards of living. Indeed, the intertwined histories of business and health in the United States suggests that all entrepreneurship is social entrepreneurship. [...]

Entrepreneurs typically generate a surplus benefit above and beyond the profits they reap, finds the...economist William Nordhaus. Nordhaus has calculated that entrepreneurs capture only about 2 percent of this surplus, with the remainder passed on to society in the form of jobs, wages, and value.

To this end, one thing that I worry about is that the US - one of the leaders in entrepreneurship, will kill the seeds of ambition and innovation in the guise of social reforms and regulated rigidity. On the other hand, there are efforts like this: visas for foreign entrepreneurs (BusinessWeek).

The Price of "Doing Something"

It's become a common refrain for those who defend the Democrats and the Obama Administration that one year not enough time to judge their respective performances especially after the mess that the previous administration left behind with wars and bailouts. Didn't Obama have to "do something" after all?

One defense is that it was Bush's budget that was implemented in 2009 though the Obama transition team played a significant role in crafting the response by the government to the financial crisis after the 2008 election (Wall Street Journal). Another argument is that the Bush Administration 'borrowed money to pay for tax cuts to the rich' which has resulted in significant deficits. As of this year, the Bush tax cuts have 'expired' - so presumably the deficits should be gone or at the very least considerably reduced? Besides, how much more could Obama possibly spend more than Bush given that the Iraq war seems to be winding down and the engagement in Afghanistan is much smaller by comparison?

From the Washington Post - Projected Deficits, as of March 21, 2009:

Of course, a lot has changed in the span of a year. From The Hill (emphasis my own): "Annual deficits under Obama’s budget plan would be about $976 billion from 2011 through 2020, according to a CBO analysis of Obama's plan released Friday. [...] The independent CBO and Obama expect a similar amount of government spending over the next 10 years -- about $45 trillion. But the CBO expects Obama's policies to bring in $35.5 trillion in tax receipts, less than the $37.3 trillion expected by the White House." And yes, this data includes all war spending.

But what of "stimulus spending". Presumably that had an effect? Ignoring for a moment the numerous documented bizarre earmarks and spending under the guise of stimulus, at least insofar as 2009 goes, from a study by Joshua Aizanman and Gurnain Kaur Pasricha (Marginal Revolution) - the effect on the economy has been "close to zero":

This note shows that the aggregate fiscal expenditure stimulus in the United States, properly adjusted for the declining fiscal expenditure of the fifty states, was close to zero in 2009. While the Federal government stimulus prevented a net decline in aggregate fiscal expenditure, it did not stimulate the aggregate expenditure above its predicted mean.

Things will only get worse with the mounting unfunded liabilities because of retiring baby boomers and doesn't include any healthcare plan that they're hoping to pass. Definitely not fun times for US taxpayers. Any equivalence to deficits during the times of the Bush Administration (which I also disagreed with and were largely the result of wasteful spending) should and can be rejected on their face and with extreme prejudice. The current administration very much owns their recovery plan and response to the financial crisis upon which I believe they've used as justification for significant spending on a much larger and arguably radical agenda.

Update (March 17, 2010): "Over the last five decades, most forms of government spending have grown. The main exception is military spending, which fell after the end of the Vietnam War and the cold war." (NYT)

Five Lies about the American Economy

Instead of some of the hyperpartisan bickering - from a relatively neutral (libertarian) source: "Five lies about the American economy" (Reason). Of course on the plus side, Americans don't seem to be believing them as evidenced by the, er, popularity of Congress (Rasmussen).

This explains a lot...

"What's our priority for aviation infrastructure? Safety. (Not efficiency)" (Infrastructurist) - I didn't realize that the tradeoff was that great.

Lawyers, Land Rights and Disaster Recovery

Underscoring the need for land rights in the aftermath (not to mention during the recovery) of a natural disaster from Marginal Revolution:

Haiti right now has a massive scarcity of land -- in the legally usable sense -- and is facing a massive recalculation problem as a result. Keep in mind that in relative terms, land is a more important part of the Haitian economy than almost anywhere else. After food, land is arguably the most important market in the Haitian economy and that has ceased to work.

As much as it might sometimes pain me to say this (some times more than others), lawyers can indeed play an important role in development. One of sad truths of extreme poverty is that it's self inflicted by bad governments and compounded by bad policies.

Economics Exemplified in a Picture

For a laugh - from Greg Mankiw:

Boone Pickens on US Energy Policy: 'We're the Dumbest People in the World'

Governments distort markets even when they favor one technology over another - in this case, wind and solar over natural gas. This, despite the fact natural gas could mean that the US could become energy independent and dramatically reduce greenhouse gas emissions not to mention dramatically cheaper (h/t Paul Kedrosky) - imagine filling your car up for under $1 a gallon:

Too Awesome for Words

There's something amazing about Rube Goldberg Machines - I can't even imagine the number of hours of resetting to get it to go right - from OK Go's new video:

Oh, and the music ain't half bad either. Imagine the efforts to get the timing let alone everything to work out right. (And if you're curious, the outsourced the production of the machine itself to Synn Labs).