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Sunday, July 25, 2010

Politics: Rachel Maddow vs Bill O'Reilly

From The Rachel Maddow Show July 22, 2010 at MSNBC.

Climate: China Trades Carbon

Just as the U.S. Senate was abandoning plans for a U.S. cap-and-trade system, this article ran in The China Daily: “BEIJING — The country is set to begin domestic carbon trading programs during its 12th Five-Year Plan period (2011-2015) to help it meet its 2020 carbon intensity target. The decision was made at a closed-door meeting chaired by Xie Zhenhua, deputy director of the National Development and Reform Commission ... Putting a price on carbon is a crucial step for the country to employ the market to reduce its carbon emissions and genuinely shift to a low-carbon economy, industry analysts said.”

For more, see We're Gonna Be Sorry by Thomas L. Friedman, July 24, 2010, at The New York Times.

Education: D.C. Schools Chief Fires 241 Teachers

Washington, D.C. schools Chancellor Michelle Rhee announced Friday the firing of 241 teachers who did not meet standards set forth by a new district-wide evaluation system.
The firings, which put D.C. at the center of a national debate over teacher performance and accountability, come on the heels of a long-awaited contract agreement reached between the Washington Teachers' Union and Chancellor Rhee last month. The contract increases new teacher salaries by 21 percent but gets rid of teachers' seniority designations. Instead, teachers will be evaluated based on students' classroom performance and are eligible for $20,000 to $30,000 in "performance pay" if their students exceed expectations on standardized tests and if they meet other benchmarks.

Chancellor Rhee said in a statement that "Every child in a District of Columbia public school has a right to a highly effective teacher -- in every classroom, of every school, of every neighborhood, of every ward, in this city.That is our commitment. Today, with the release of the first year of results from IMPACT, the educator assessment system, we take another step toward making that commitment a reality."

For more, see D.C. Schools Chief Rhee Fires 241 Teachers Using New Evaluation System by Veronica Devore and Imani M. Cheers, July 23, 2010, at PBS.

Economics: Economic Insecurity: The Long View

One in five Americans, a new report for the Rockefeller Foundation found, has experienced a decline of 25 percent or more in available household income. The typical American experiencing such a plunge will require six to eight years just to climb back to previous levels of income.
The report, which draws on a variety of Census and Federal Reserve data, notes that in 1985, 12.2 percent of Americans experienced an economic loss sufficient to render them economically insecure. During the recession of the early 2000s, the insecurity rose to 17 percent; today it is 25 percent.

The narrative arc is not reassuring.

“The ‘new normal' in each subsequent economic cycle has featured a higher level of economic insecurity,” the foundation's Web site notes.

There are many factors complicit in the increased agitation of the American middle class, from declining real wages to the three-decade erosion of pensions and health plans and the new insistence of corporate boards on reducing company matches for 401(k) plans.

Overall income and family wealth has grown during this time. But the gains are far from equal. After-tax income rose by 21 percent for the middle fifth of American households, but increased by 112 percent for the richest 10 percent of households and by 256 percent for the top 1 percent, according to Mr. Hacker's report.

With the national economy now sitting becalmed, and many indicators hinting at a downward trend, some commentators have tended to talk of psychological factors, as if to suggest that Americans need only to snap out of their funk.

This report suggests that this funk is grounded in prosaic reality far more than many want to acknowledge.

For more, see Economic Insecurity: The Long View by Michael Powell, July 23, 2010, at Exonomix Blog, New York Times, and Economic Security at Risk by Jacob S. Hacker, et al, July 2010.

Politics: Rush Limbaugh: Fox 'Caved' on Shirley Sherrod

Rush Limbaugh is blasting Fox News for its coverage of Shirley Sherrod, saying that one of the network's anchors “caved” by not showing the original misleading video fragment that led to the firing of Shirley Sherrod. [Emphasis added].

The video, posted and promoted by Andrew Breitbart as a display of racism, was a sensation in conservative corners of the internet, but Fox News host Shepard Smith explained Wednesday that his show had decided to not show the video.

“We on Studio B did not run the video and did not reference the story in any way for many reasons,” Smith said. “Among them: We didn't know who shot it, we didn't know when it was shot, we didn't know the context of the statement, and because the history of the videos on the site where it was posted. In short-we did not and do not trust the source.”

On his show Thursday, Limbaugh blasted Smith for not showing the video, suggesting that Smith only showed restraint because he didn't have the “guts” to show it.

“This regime is tribalizing this country,” he said. “They are dividing this country. It's not just enough to say that they are dividing us. They are tribalizing this country. We aren't Americans anymore. We're all members of different racial tribes, and we are to be pitted against each other: Black Americans, White Americans, Asian Americans, Hispanic Americans. We're all being divided up racially, by tribes.”

For more, see Rush Limbaugh: Fox 'Caved' on Shirley Sherrod by Andy Barr, July 23, 2010, at Politico.

Economics: Loan Plan Defies GOP Tarp Attacks

A Treasury-backed loan facility for small business showed surprising strength in the Senate Thursday night, winning a 60-37 vote despite withering Republican attacks likening the proposal to the oft-criticized TARP bailout of Wall Street banks amid the 2008 financial crisis.
As now proposed, the $30 billion loan facility would be an option for smaller community banks, enabling them to increase their capital and be rewarded with lower interest charges if they turn around and increase their small business lending. Critics contend that taxpayers could lose as much as $6 billion, but the Congressional Budget Office has said the facility will more than pay for itself with new revenues. And in its statement Thursday afternoon, NFIB said the “lending fund has the potential to help credit-worthy small businesses that have had difficulties obtaining credit, which is a good thing.” [Emphasis added].

For more, see Loan Plan Defies Gop Tarp Attacks by David Rogers, July 23, 2010, at Politico.

Economics: Eliminate Fannie Mae & Freddy Mac

The Treasury says it will put out proposals on the future of Fannie and Freddie early next year but there are few signs that politicians are prepared to get rid of them altogether.

They should. The GSEs' mission is to provide “liquidity, stability and affordability” to America's mortgage market. Set aside the fact that these aims tend to conflict: cheerleading for cheap mortgages is likely to produce instability, for example. The bigger question is why Fannie and Freddie are needed to achieve them. America's obsession with home ownership is itself questionable, especially now that the trap of negative equity has hampered workers' ability to move in search of jobs. Even if it were a valid goal, there are plenty of countries (Australia, Britain and Canada among them) that have similar or higher levels of home ownership with far less, and in some cases no, systemic government support (see article).

As for liquidity, the argument that America needs Fannie and Freddie because private securitisation markets do not exist to take their place is circular. The GSEs have guidelines for the types of home loans they can guarantee: these let Fannie and Freddie colonise the safest, “conforming” bits of the mortgage market (before expanding into dodgier bits), leaving private lenders to swerve around them into ever-riskier areas. If the GSEs were not there to securitise and guarantee prime American mortgages, private firms would take their place.

A gradual withdrawal is needed. The first step is to run off or sell their retained portfolios of mortgages. A second would be to squeeze the definitions of conforming mortgages over time, so that bit by bit Fannie and Freddie lose control of chunks of the prime market. American housing would, unfortunately, still have lots of props—agencies such as the Federal Housing Administration and subsidies like tax relief on mortgage interest. But the GSEs should go.

For more, see Unnecessary Evils by A, July 22, 2010, at The Economist.

Mind: Depressed People Really Do See a Gray World

The world really does look gray to depressed people, at least on a subconscious level, new research suggests.
The new study, published in the journal Biological Psychiatry, relies on an objective measure of the retina, suggesting depressed people may see the world in a different way from the non-depressed.
The research team had 40 patients with major depression and 40 healthy individuals view a sequence of five black-and-white checkerboards of different contrasts. Each checkerboard flickered (with a black square turning white and white turning black) 12 times per second on a computer screen.

Meanwhile, the researchers used an objective measure called the pattern electroretinogram, which is similar to an electrocardiogram (ECG) of the retina of the eye. The retina ECG shows the response of neurons inside the retinal cells. "That's not conscious vision, it's much earlier than you conscioulsy (sic) perceive something, within milliseconds," said lead researcher Dr. Ludger Tebartz van Elst.

The depressed patients had dramatically lower retinal responses to the varying black-and-white contrasts than healthy individuals. The results held regardless of whether patients were taking antidepressants.

While the researchers aren't sure exactly why depressed people might sort of "see the world as gray," they have a strong hypothesis. Here's how they figure it works: Contrast vision relies on so-called amacrine cells within the retina, which horizontally connect the retina's neurons called ganglion cells with each other. These cells rely on dopamine, a substance known to be important for drive and attention — when lacking, two main symptoms of depression.

"We think the retina is some sort of outpost marker of the integrity of the dopaminergic system in the whole brain," van Elst said. So the dopamine is linked with both the vision and the depression.

For more, see Depressed People Really Do See a Gray World by Jeanna Bryner, July 20, 2010, at Live Science.

Government: Federal Agencies Bolster Transparency Plans

Federal agencies have beefed up plans for how they will be more open to the public after a consortium of transparency groups gave failing grades to some.
OpentheGovernment.gov released the evaluations of the revised plans today.

For more, see Federal Agencies Bolster Transparency Plans by Jennifer Lafleur, July 20, 2010, at ProPublica.

Economics: The Stupidity and Hypocrisy of the Austerity Movement

According to the Bureau of Public Debt, the US has been running a structural deficit for the last ten years, not just the last year. Here is a chart of the total amount of federal debt outstanding at the end of each federal fiscal year for the last ten years:


09/30/2009 $ 11,909,829,003,511.75
09/30/2008 $ 10,024,724,896,912.49
09/30/2007 $ 9,007,653,372,262.48
09/30/2006 $ 8,506,973,899,215.23
09/30/2005 $ 7,932,709,661,723.50
09/30/2004 $ 7,379,052,696,330.32
09/30/2003 $ 6,783,231,062,743.62
09/30/2002 $ 6,228,235,965,597.16
09/30/2001 $ 5,807,463,412,200.06
09/30/2000 $ 5,674,178,209,886.86

The reason for this yearly increase of at least $400 billion in net new federal debt/year is simple: the US cut taxes but didn't make a proportionate cut in spending. As a result, total debt outstanding increased.

If the austerity movement was really about the increase in federal debt, it would have emerged sometime after 2004-2005 when the US' structural deficit issue started to emerge in the data.

Much like Spain, Ireland and the UK, the Baltic states were badly hit by the bursting of a credit bubble in 2008 that sent their economies into freefall and their budget deficits soaring.

While others cushioned the impact with stimulus spending, the Baltic trio plunged straight into austerity. As a result, they suffered the deepest recessions in the European Union last year, with Latvia's economy shrinking by 18 per cent.

Nearly two years ago, an economic collapse forced Ireland to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.

“When our public finance situation blew wide open, the dominant consideration was ensuring that there was international investor confidence in Ireland so we could continue to borrow,” said Alan Barrett, chief economist at the Economic and Social Research Institute of Ireland. “A lot of the argument was, ‘Let's get this over with quickly.' ”

Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession.

Joblessness in this country of 4.5 million is above 13 percent, and the ranks of the long-term unemployed — those out of work for a year or more — have more than doubled, to 5.3 percent.

And what about the countries that use massive government stimulus? China spent $586 billion on their stimulus plan to thwart the Great Recession. Now they are having to put the brakes on their expansion to prevent overheating.

For more, see The Stupidity and Hypocrisy of the Austerity Movement by Hale "Bonddad" Stewart, July 18, 2010, at FiveThirtyEight.

Economics: The Financial Reform Bill

This article contains a short summary of a slightly preliminary version of the recently passed bill.

It is touted as the biggest overhaul of American finance since the Great Depression. The 2,319-page Dodd-Frank Wall Street Reform and Consumer Protection Act, now nearing the end of its odyssey through Congress, tackles almost every aspect of American finance from municipal bonds to executive pay. Its success, however, rests on a simple question: does it make another crisis significantly less likely?

The reform does make progress in three critical areas: regulatory oversight, derivatives and dealing with troubled banks that are too big to fail. Yet by itself, this bill, whose passage in the Senate is still not quite secure, is an incomplete remedy (see article). Much depends on how American regulators implement its provisions. Congress left several meaty matters for later, including the crippled mortgage giants, Fannie Mae and Freddie Mac. And even more is riding on how the Basel club of international banking supervisors compel banks to raise their buffers of capital and liquidity.

For more, see A Decent Start July 1, 2010, at The Economist.

Friday, July 23, 2010

Mind: How Facts Backfire

Sorry about the very long post, but this (with previous posts) explains so many of our political problems.

Recently, a few political scientists have begun to discover a human tendency deeply discouraging to anyone with faith in the power of information. It's this: Facts don't necessarily have the power to change our minds. In fact, quite the opposite. In a series of studies in 2005 and 2006, researchers at the University of Michigan found that when misinformed people, particularly political partisans, were exposed to corrected facts in news stories, they rarely changed their minds. In fact, they often became even more strongly set in their beliefs. Facts, they found, were not curing misinformation. Like an underpowered antibiotic, facts could actually make misinformation even stronger.

This bodes ill for a democracy, because most voters — the people making decisions about how the country runs — aren't blank slates. They already have beliefs, and a set of facts lodged in their minds. The problem is that sometimes the things they think they know are objectively, provably false. And in the presence of the correct information, such people react very, very differently than the merely uninformed. Instead of changing their minds to reflect the correct information, they can entrench themselves even deeper.

“The general idea is that it's absolutely threatening to admit you're wrong,” says political scientist Brendan Nyhan, the lead researcher on the Michigan study. The phenomenon — known as “backfire” — is “a natural defense mechanism to avoid that cognitive dissonance.”

People ignorant of the facts could simply choose not to vote. But instead, it appears that misinformed people often have some of the strongest political opinions. A striking recent example was a study done in the year 2000, led by James Kuklinski of the University of Illinois at Urbana-Champaign. He led an influential experiment in which more than 1,000 Illinois residents were asked questions about welfare — the percentage of the federal budget spent on welfare, the number of people enrolled in the program, the percentage of enrollees who are black, and the average payout. More than half indicated that they were confident that their answers were correct — but in fact only 3 percent of the people got more than half of the questions right. Perhaps more disturbingly, the ones who were the most confident they were right were by and large the ones who knew the least about the topic. (Most of these participants expressed views that suggested a strong antiwelfare bias.)

Studies by other researchers have observed similar phenomena when addressing education, health care reform, immigration, affirmative action, gun control, and other issues that tend to attract strong partisan opinion. Kuklinski calls this sort of response the “I know I'm right” syndrome, and considers it a “potentially formidable problem” in a democratic system. “It implies not only that most people will resist correcting their factual beliefs,” he wrote, “but also that the very people who most need to correct them will be least likely to do so.”

What's going on? How can we have things so wrong, and be so sure that we're right? Part of the answer lies in the way our brains are wired. Generally, people tend to seek consistency. There is a substantial body of psychological research showing that people tend to interpret information with an eye toward reinforcing their preexisting views. If we believe something about the world, we are more likely to passively accept as truth any information that confirms our beliefs, and actively dismiss information that doesn't. This is known as “motivated reasoning.” Whether or not the consistent information is accurate, we might accept it as fact, as confirmation of our beliefs. This makes us more confident in said beliefs, and even less likely to entertain facts that contradict them.

New research, published in the journal Political Behavior last month, suggests that once those facts — or “facts” — are internalized, they are very difficult to budge. In 2005, amid the strident calls for better media fact-checking in the wake of the Iraq war, Michigan's Nyhan and a colleague devised an experiment in which participants were given mock news stories, each of which contained a provably false, though nonetheless widespread, claim made by a political figure: that there were WMDs found in Iraq (there weren't), that the Bush tax cuts increased government revenues (revenues actually fell), and that the Bush administration imposed a total ban on stem cell research (only certain federal funding was restricted). Nyhan inserted a clear, direct correction after each piece of misinformation, and then measured the study participants to see if the correction took.

For the most part, it didn't. The participants who self-identified as conservative believed the misinformation on WMD and taxes even more strongly after being given the correction. With those two issues, the more strongly the participant cared about the topic — a factor known as salience — the stronger the backfire. The effect was slightly different on self-identified liberals: When they read corrected stories about stem cells, the corrections didn't backfire, but the readers did still ignore the inconvenient fact that the Bush administration's restrictions weren't total.

Nyhan worked on one study in which he showed that people who were given a self-affirmation exercise were more likely to consider new information than people who had not. In other words, if you feel good about yourself, you'll listen — and if you feel insecure or threatened, you won't. This would also explain why demagogues benefit from keeping people agitated. The more threatened people feel, the less likely they are to listen to dissenting opinions, and the more easily controlled they are.

For more, see How Facts Backfire by Joe Keohane, July 11, 2010, at The Boston Globe.

Society: Rent a Friend for $10 an Hour

Scott Rosenbaum, 30, has a database of 218,000 men and women who members of his site Rent a Friend can hire "to hang out with, go to a movie or restaurant with", or be "someone to show you around an unfamiliar town".

The US-based site already has around 2,000 members, each paying up to £16 a month ($25) to access the site.

When they see a friend they like the look of, they can rent them for as little as £6.50 ($10) an hour.

Rosenbaum said he wanted to "go a step back" from dating sites and offer a service that was, in the words of his website "strictly platonic".

From Rent a Friend for £6.50 an Hour July 19, 2010, at Telegraph.

Economics: The Debt Supercycle

More on total debt (vs government debt).

... the Debt Supercycle is the decades-long growth of debt from small and easily-dealt-with levels, to a point where bond markets rebel and the debt has to be restructured or reduced or a program of austerity must be undertaken to bring the debt back to manageable proportions.
How did we get here? We simply kept borrowing ever greater amounts of money at an increasingly rapid pace. Look at the chart below. It is about six months old, but not much has changed.
And it is not just the US. Take a look at the chart of G-7 debt (courtesy of GMO, more about which later). That is one ugly and unsustainable chart. In 1950 the G7 countries were recovering from very large war-time debts. Now we don't have that excuse. Nor do we have the option of doing what they did. They cut military spending, inflated a little in nominal terms, and grew their way out of the problem.

For much more, see The Debt Supercycle by John Mauldin, July 17, 2010, at Thoughts from the Frontline.

Economics: When Debt Flies Off the Charts

The CBO baseline uses spending and revenue provisions as they exist under current law. Under this scenario, the Bush tax cuts are allowed to expire, the alternative minimum tax remains un-indexed to inflation, and revenue and spending in the healthcare bill occur as planned (note that these promises have already begun to be broken—projected cuts in Medicare reimbursement have been put off three times already this year). Even CBO finds this scenario highly unlikely.

This is why the scenario in black projects what CBO deems more likely. In the world of the alternative scenario, widely expected policy changes occur. These include:

• A gradual increase in the reimbursement rates of Medicare physicians

• Elimination of pay-as-you-go rules that control spending

• Congress protects middle-class families from the alternative minimum tax.

As you can see, things look bad in this case. But when the dynamic effects of government debt on the economy are incorporated, things look even worse. When government borrows money, there is less money available for the private sector to invest in capital; this results in decreased economic output in the long run. Economists refer to this effect as crowding out. The red line shown above captures the most likely projection of debt as a percentage of GDP, incorporating crowding-out effects.

For more, see When Debt Flies Off the Charts by Veronique De Rugy, July 15, 2010, at The American Enterprise Institute.

Science: Plants 'Can Think and Remember'

Plants, scientists say, transmit information about light intensity and quality from leaf to leaf in a very similar way to our own nervous systems.

These "electro-chemical signals" are carried by cells that act as "nerves" of the plants. Fluorescence image of Arabidopsis plant The researchers used fluorescence imaging to watch the plants respond

In their experiment, the scientists showed that light shone on ... one leaf caused the whole plant to respond.

And the response, which took the form of light-induced chemical reactions in the leaves, continued in the dark.

This showed, they said, that the plant "remembered" the information encoded in light.

"And the changes proceeded when the light was off... This was a complete surprise."

In previous work, Professor Karpinski found that chemical signals could be passed throughout whole plants - allowing them to respond to and survive changes and stresses in their environment.

But in this new study, he and his colleagues discovered that when light stimulated a chemical reaction in one leaf cell, this caused a "cascade" of events and that this was immediately signalled to the rest of the plant by via specific type of cell called a "bundle sheath cell".

The scientists measured the electrical signals from these cells, which are present in every leaf. They likened the discovery to finding the plants' "nervous system".

He said that plants used information encrypted in the light to immunise themselves against seasonal pathogens.

For more, see Plants 'Can Think and Remember' by Victoria Gill, July 14, 2010, at BBC.

Mind: Has the "Gay Gene" Been Found in Female Mice?

A group of Korean geneticists has altered the sexual preferences of female mice by removing a single gene linked to reproductive behavior. Without the gene, the mice gravitated toward mice of the same sex.

For more, see Has the "Gay Gene" Been Found in Female Mice? by Mara Hvistendahl, July 14, 2010, at Popular Science.

Science: Remote Terahertz Scanners Could See What's in Your Pockets from Miles Away

If those new airport X-ray scanners offend your modest sensibilities, you may not want to read this. A new terahertz remote sensor may soon be able to see through walls, packaging materials, and even clothing from thousands of feet away, identifying materials contained inside through their unique spectral signatures.

For more, see Remote Terahertz Scanners Could See What's in Your Pockets from Miles Away by Clay Dillow, July 13, 2010, at Popular Science.

Economics: The Billion Dollar-O-Gram 2009

It's good to look at things in perspective occasionally.

This image arose out of frustration with media reporting of billion dollar amounts. That is, that they're meaningless without context. But they're continually reported as self-evident facts. 500 billion for this war. 50 billion for this pipeline. Literally mind-boggling amounts of money.

So here we've scraped reported figures from The New York Times, The Guardian, and other news outlets and visualized them as a treemap (?). So you can see in one place figures that would otherwise be scattered across multiple news reports.

Note the bottom box.

For more, see The Billion Dollar-O-Gram 2009 by David Mccandless, Matthew Sawh, Caroline Flyn, James Key, July 14, 2010, at Information Is Beautiful.

Economics: Repent at Leisure

This article contributes to the discussion by looking at total debt instead of the more discussed public (government) debt. It is a strong warning to get indebtedness under control even though it does not consider the larger future obligations such as Medicare.

Debt increased at every level, from consumers to companies to banks to whole countries. The effect varied from country to country, but a survey by the McKinsey Global Institute found that average total debt (private and public sector combined) in ten mature economies rose from 200% of GDP in 1995 to 300% in 2008 .... There were even more startling rises in Iceland and Ireland, where debt-to-GDP ratios reached 1,200% and 700% respectively. The burdens proved too much for those two countries, plunging them into financial crisis. [Emphasis added].
This is particularly troublesome if the economy slips into deflation, as happened globally in the 1930s and in Japan in the 1990s. Debt levels are fixed in nominal terms whereas asset prices can go up or down. So falling prices create a spiral in which assets are sold off to repay debts, triggering further price falls and further sales. Irving Fisher, an economist who worked in the first half of the 20th century, called this the debt deflation trap.

Another reason why debt matters is to do with the role of banks in the economy. By their nature, banks borrow short (from depositors or the wholesale markets) and lend long. The business depends on confidence; no bank can survive if its depositors (or its wholesale lenders) all want their money back at once. If banks struggle to meet their own debts, they have no choice but to reduce their lending. If this happens on a large scale, as it did in the 1930s, the ripple effect for the economy as a whole can be devastating.

Both of these effects were seen in the debt crisis of 2007-08. Falling property prices caused defaults and a liquidity crisis in the banking system so severe that the authorities feared the cash machines would stop working. Hence the unprecedented largesse of the bank bail-out.

Hyman Minsky, an American economist who has become more fashionable since his death in 1996, argued that these debt crises were both inherent in the capitalist system and cyclical. Prosperous times encourage individuals and companies to take on more risk, meaning more debt. Initially such speculation is successful and encourages others to follow suit; eventually credit is extended to those who will be able to repay the debt only if asset prices keep rising (a succinct description of the subprime-lending boom). In the end the pyramid collapses.

In the aftermath of the latest collapse it is clear that the distinction between debt in the private and public sector has become blurred. If the private sector suffers, the public sector may be forced to step in and assume, or guarantee, the debt, as happened in 2008. Otherwise the economy may suffer a deep recession which will cut the tax revenues governments need to service their own debt.

For much more, see Repent at Leisure by Philip Coggan, June 24, 2010, at The Economist.

And from World Debt by Buttonwood, June 24, 2010, at The Economist is:

We have also updated a sovereign debt table we published in February, ranking countries in terms of their primary budget balance, debt-to-GDP ratios plus the relationship between the yield on their debt and economic growth (if the former is larger than the latter, the debt burden is getting steadily worse). Spain has now taken over from Greece as the country in the worst position. Here's the table:

Wednesday, July 21, 2010

Economics: Redo That Voodoo

For a while, leading Republicans posed as stern foes of federal red ink. Two weeks ago, in the official G.O.P. response to President Obama’s weekly radio address, Senator Saxby Chambliss devoted his entire time to the evils of government debt, “one of the most dangerous threats confronting America today.” He went on, “At some point we have to say ‘enough is enough.’ ”

But this past Monday Jon Kyl of Arizona, the second-ranking Republican in the Senate, was asked the obvious question: if deficits are so worrisome, what about the budgetary cost of extending the Bush tax cuts for the wealthy, which the Obama administration wants to let expire but Republicans want to make permanent? What should replace $650 billion or more in lost revenue over the next decade?

His answer was breathtaking: “You do need to offset the cost of increased spending. And that’s what Republicans object to. But you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans.” So $30 billion in aid to the unemployed is unaffordable, but 20 times that much in tax cuts for the rich doesn’t count.

The next day, Mitch McConnell, the Senate minority leader, confirmed that Mr. Kyl was giving the official party line: “There’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.”

Now there are many things one could call the Bush economy, an economy that, even before recession struck, was characterized by sluggish job growth and stagnant family incomes; “vibrant” isn’t one of them. But the real news here is the confirmation that Republicans remain committed to deep voodoo, the claim that cutting taxes actually increases revenues.

It’s not true, of course. Ronald Reagan said that his tax cuts would reduce deficits, then presided over a near-tripling of federal debt. When Bill Clinton raised taxes on top incomes, conservatives predicted economic disaster; what actually followed was an economic boom and a remarkable swing from budget deficit to surplus. Then the Bush tax cuts came along, helping turn that surplus into a persistent deficit, even before the crash.

It's amazing they are so successful getting away with this.

For more, see Redo That Voodoo by Paul Krugman, July 15, 2010, at The New York Times.

Energy: What 7 Republicans Could Do

The energy bill now being discussed in the Senate — which would raise energy-efficiency standards, require utilities to get 15 percent or more of their power from renewable sources, like wind and solar, and create a limited cap on carbon emissions from power plants — is already watered down just to get 53 or so Democratic votes. But at least it gets us started on ending our addiction to oil and mitigating climate change. Unfortunately, right now it is not clear that a single Republican senator will even vote for this watered-down bill.

That is pathetic. Rather than think seriously about our endless dependence on oil, the G.O.P. has focused its energies on making “climate change” a four-letter word and labeling any Democrat who supports legislation that would in any way raise energy prices to diminish our dependence on oil as a “carbon taxer.”

Unfortunately, Obama and the Democrats never effectively fought back.

If we take that threat seriously now and pass an energy bill that begins to end our oil addiction, we can shrink the piles of money we send to the worst regimes in the world, strengthen our dollar by keeping more at home, clean up our air, take away money from the people who finance the mosques and madrassas that keep many Muslim youths backward, angry and anti-American and stimulate a whole new industry — one China is already leapfrogging us on — clean-tech.

For more, see What 7 Republicans Could Do by Thomas L. Friedman, July 20, 2010, at The New York Times.

Politics: Activist GOP Judges Are Saving Gay Marriage

Last week, a U.S. District Court judge in Boston struck down a significant portion of the Defense of Marriage Act, ruling that the controversial 1996 federal law violates the equal protection clause of the Constitution by denying gay and lesbian couples the federal benefits afforded to straight couples. Although Massachusetts legalized gay marriage in 2004, couples who wed were prohibited from claiming Social Security survivors' benefits, filing joint tax returns, and leaving work to care for a sick spouse. The court ruled that the federal government must treat the state's gay married couples the same way as everyone else. "The Constitution 'neither knows nor tolerates classes among citizens,'" the court opined, echoing the words of Justice John Harlan, the lone dissenter in Plessy v. Ferguson, the notorious 1896 Supreme Court case that upheld racial segregation.

Nearly as significant as the decision itself is the political affiliation of the judge who made it: 79-year-old Joseph Tauro, the longest-serving appointee of Richard Nixon. Why is this significant? Because while the recent confirmation hearings for Elena Kagan dwelt on whether "activist" liberal judges appointed by Democrats would trample legal precedent, the judges who have begun the constitutional protection of same-sex marriage have mostly been Republican appointees like Tauro.

For more, see How the GOP Is Saving Gay Marriage by Joshua Green, July 14, 2010, at The Atlantic.

Economics: Limitations of Behavioral Economics

It seems that every week a new book or major newspaper article appears showing that irrational decision-making helped cause the housing bubble or the rise in health care costs.

Such insights draw on behavioral economics, an increasingly popular field that incorporates elements from psychology to explain why people make seemingly irrational decisions, at least according to traditional economic theory and its emphasis on rational choice. Behavioral economics helps to explain why, for example, people under-save for retirement, why they eat too much and exercise too little and why they buy energy-inefficient light bulbs and appliances. And, by understanding the causes of these problems, behavioral economics has spawned a number of creative interventions to deal with them.

But the field has its limits. As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address. Indeed, it seems in some cases that behavioral economics is being used as a political expedient, allowing policymakers to avoid painful but more effective solutions rooted in traditional economics.

For more, see Economics Behaving Badly by George Loewenstein and Peter Ubel, July 14, 2010, at The New York Times.

Climate: The Climategate Whitewash Continues

Global warming alarmists claim vindication after last year's data manipulation scandal. Don't believe the 'independent' reviews.

For more, see The Climategate Whitewash Continues by Patrick J. Michaels, July 12, 2010, at Cato Institute and The Wall Street Journal which is a response to Climate: British Panel Clears Climate Scientists.

Monday, July 19, 2010

Security: Make Your Wireless Router's Password Strong Soon

Security expert Craig Heffner from Seismic, a company specializing in security consulting, will be sharing the details of a security flaw that opens up many common household routers to a hack. The revelation will be part of the Black Hat Conference in Las Vegas at the end of the month.

For more, see How to Secure Your Router Against a Hack Compromising Many Popular Routers by Kevin Purcell, July 15, 2010, at Notebooks.com.

Friday, July 16, 2010

Economics: No Garden-Variety Public Pension Crisis

... in addition to the New Jersey, Illinois, Connecticut, and Indiana pensions that could run short before 2020, another 16 states could run out of funds by 2025.

From a Monte Carlo simulation ...

For more, see No Garden-Variety Public Pension Crisis by Andrew G. Biggs, July 10, 2010, at The American Enterprise Institute.

Science: Custard Armor Is Better than a Kevlar Vest

Liquid armor has been shown to stop bullets more effectively than plain Kevlar, according to British firm BAE Systems.
Materials scientists combined a shear-thickening liquid with traditional Kevlar to make a bulletproof material that absorbs the force of a bullet strike by becoming thicker and stickier.
Shear-thickening liquids are composed of hard nanoparticles suspended in a liquid, which turns rigid after being struck with a bullet or shrapnel.

From British-Designed ‘Bulletproof Custard' Liquid Armor Is Better than a Kevlar Vest by Rebecca Boyle, July 9, 2010, at Popular Science.

Science: Robins Can Literally See Magnetic Fields

Thanks to special molecules in their retinas, birds like the European robins can literally see magnetic fields. The fields appear as patterns of light and shade, or even colour, superimposed onto what they normally see.

For more, see Robins Can Literally See Magnetic Fields, but Only If Their Vision Is Sharp by Ed Yong, July 8, 2010, at Discover Magazine blogs.

Mind: Anxiety May Be at Root of Religious Extremism

Anxiety and uncertainty can cause us to become more idealistic and more radical in our religious beliefs, according to new findings by York University researchers, published in this month's issue of the Journal of Personality and Social Psychology.
Across all studies, anxious conditions caused participants to become more eagerly engaged in their ideals and extreme in their religious convictions. In one study, mulling over a personal dilemma caused a general surge toward more idealistic personal goals. In another, struggling with a confusing mathematical passage caused a spike in radical religious extremes. In yet another, reflecting on relationship uncertainties caused the same religious zeal reaction.

Researchers found that religious zeal reactions were most pronounced among participants with bold personalities (defined as having high self-esteem and being action-oriented, eager and tenacious), who were already vulnerable to anxiety, and felt most hopeless about their daily goals in life.

For more, see Anxiety May Be at Root of Religious Extremism, Researchers Find July 6, 2010, at ScienceDaily.

Monday, July 12, 2010

Politics: Muslims in Space (and Here!)

Fox disagrees with Obama and Reagan again. It also says noone should live under laws based on a religion other than their own (except Christianity).

From July 7, 2010: Wish You Weren't Here by The Daily Show, July 7, 2010, at The Daily Show.

Society: Female Veterans Struggle to Stay off Streets

More than 240,000 female service members have been deployed to the wars in Iraq and Afghanistan, but for many, reintegrating into civilian life and trying to find employment is not within their reach.

The Department of Veteran Affairs has acknowledged that women are nearly four times as likely as men to end up homeless.

For more, see Female Veterans Struggle to Stay off Streets by Gloria Hillard, July 11, 2010, at National Public Radio.

Economics: Number of the Week: Euro Zone Debt Is Coming Due

Throughout the recession and recovery, many European banks have sought to sweep their problems under the carpet in the hopes that they could solve them in a better and more profitable future. Now, though, they’re running out of time.

As investors fret about European banks’ exposures to Greece and other financially troubled countries, those banks’ borrowing costs are rising sharply. That wouldn’t be a problem if they didn’t need to borrow, but as it happens they need to borrow quite a lot: This year and next, some $1.7 trillion in euro-area bank debt will come due, far more than among banks in the U.S., the U.K. or elsewhere.

For more, see Number of the Week: Euro Zone Debt Is Coming Due by Mark Whitehouse, July 10, 2010, at The Wall Street Journal.

Climate: British Panel Clears Climate Scientists

A British panel issued a sweeping exoneration on Wednesday of scientists caught up in the controversy known as Climategate, saying it found no evidence that they had manipulated their research to support preconceived ideas about global warming.
The review was the fifth to come to essentially the same conclusion about the e-mail messages sent by Dr. Jones and other scientists, though it was the most comprehensive and eagerly awaited of the investigations.

From British Panel Clears Climate Scientists by Justin Gillis, July 7, 2010, at The New York Times.

Saturday, July 10, 2010

Economics: Are Kids Doing Better than Their Parents?

On average, a boy needs a 4+ year college degree to earn more than his father did.

From Are Kids Doing Better than Their Parents? by Doing, July 7, 2010, at The Daily Dish.

Mind: Money Makes You Less Likely to Savor Small Pleasures

The notion that money can’t buy happiness has, in recent years, been backed up by a lot of psychological research. But this confirmation of time-honored wisdom begs the question: Why the hell not?
Affluent individuals, and less-wealthy people with money on their minds, are less likely to slow down and savor the Snickers.

...

In other words, that rich guy undoubtedly gets a kick out of driving his Porsche to the beach. But once he meets you there, you’re more likely to get a genuine thrill out of the gorgeous sunset.

Quoidbach and his colleagues reached this conclusion after conducting two studies.

...

The second experiment featured 40 volunteers, who ostensibly participated in a taste-testing study featuring varieties of chocolate. All began by filling out a survey; in the process of doing so, half were exposed to a photograph of money. [Emphasis added].

As they consumed pieces of chocolate, the test subjects were surreptitiously observed by two researchers who used stopwatches to measure the time they spent savoring each treat. The researchers also evaluated how much joy the participants showed on their faces as they tasted the chocolate.

After controlling for gender (to no one’s surprise, the men ate more quickly) and overall attitudes toward chocolate, the researchers found those who had been exposed to the photo of cash “spent significantly less time eating the chocolate, and displayed significantly less enjoyment.”

From Money Makes You Less Likely to Savor Small Pleasures by Tom Jacobs, May 24, 2010, at Miller-McCune.

Economics: Pity the Poor C.E.O.'S

All the buzz lately is that the Obama administration is “antibusiness.” And there are widespread claims that fears about taxes, regulation and budget deficits are holding down business spending and blocking economic recovery.

How much truth is there to these claims? None. Business spending is indeed low, but no lower than one would have expected given widespread overcapacity and weak consumer spending.

So where’s the evidence that an antibusiness climate is depressing spending? The answer, supposedly, is that this is what you hear when you talk to entrepreneurs. But don’t believe it. Yes, when you talk to business people they complain about taxes, regulations and the deficit; they always do. But the Obama’s-socialist-policies-are-wrecking-the-economy chorus isn’t coming from businesses; it’s coming from business lobbyists, which isn’t at all the same thing.
It turns out that business is less concerned about taxes and regulation than during the 1990s, an era of booming investment. Concerns about poor sales, on the other hand, have surged. The weak economy, not fear about government actions, is what’s holding investment down.

For more, see Pity the Poor C.E.O.'S by Paul Krugman, July 8, 2010, at The New York Times.

Economics: House Budget Plan? A Dereliction of Duty

... the House of Representatives passed a one-year budget resolution rather than the normal blueprint committing the government to a fiscal plan of at least five years.
The terrible irony in all this? More and more people are seeing that what this agonizing situation requires is a limited and temporary measure to pump more life into the economy and create jobs, along with a serious commitment to impose real spending discipline and hold down deficits in the long term -- exactly what a five-year budget resolution could provide.

Gregg and Conrad agree that such a resolution could "unleash huge energy back into the economy," because corporations are hoarding $1.8 trillion in their treasuries and consumers are sitting on billions more.

Of all the times for Congress to abandon its responsibility for long-term fiscal planning, this is the worst.

For more, see House Budget Plan? A Dereliction of Duty by David S. Broder, July 8, 2010, at The Washington Post.

Friday, July 9, 2010

Economics: Poor Social Mobility in the U.S.

As Rich Lowry and Ramesh Ponnuru wrote in an important statement for National Review about the superiority of the U.S. over the European model:
American attitudes toward wealth and its creation stand out within the developed world. Our income gap is greater than that in European countries, but not because our poor are worse off. In fact, they are better off than, say, the bottom 10 percent of Britons. It’s just that our rich are phenomenally wealthy.

This is a source of political tension, but not as much as foreign observers might expect, thanks partly to a typically American attitude. A 2003 Gallup survey found that 31 percent of Americans expect to get rich, including 51 percent of young people and more than 20 percent of Americans making less than $30,000 a year. This isn’t just cockeyed optimism. America remains a fluid society, with more than half of people in the bottom quintile pulling themselves out of it within a decade.

But what if it turns out that America is not really such a fluid society?

I’ve referred before to this Brookings Institution study, published in 2009.

Pay special attention to this chart from page 5.

Only the UK does worse than the US among the 9 countries surveyed — and the social democratic countries of Scandinavia all do better.

This is not an argument in favor of the European way of doing things. I agree with Lowry and Ponnuru — and Charles Murray too — that American freedom and individualism are important national values to be celebrated and defended.

But let’s not flatter ourselves: Those values exact a social cost — and they would be easier to defend if the cost were less high. And the fact that this cost is not being paid by my children or (probably) yours does not make the cost less real to the one-third of America whose children do pay it.

For more, see Losing the Fight Against Child Poverty by David Frum, July 6, 2010, at Frum Forum.

Another of the interesting charts from the study, Economic Mobility: Is the American Dream Alive and Well? by Isabel Sawhill and John E. Morton, 2009, at The Economic Mobility Project is:

Economics: Greater Fools

Unsurprisingly, the less people know, the more they run into trouble. Gary Rivlin’s blistering new examination of the subprime economy, “Broke, U.S.A.,” is full of stories of financially ignorant people bamboozled into making bad decisions—refinancing out of low-interest mortgages, say, or buying overpriced credit insurance—by a consumer finance industry adept at creating confusing products. Such stories are backed up by the numbers. A study by economists at the Atlanta Fed found that thirty per cent of people in the lowest quartile of financial literacy thought they had a fixed-rate mortgage when in fact they had an adjustable-rate one. A study of subprime borrowers in the Northeast found that, of the people who scored in the bottom quartile on a very basic test of calculation skills, a full twenty per cent had been foreclosed on, compared with just five per cent of those in the top quartile.

What can be done? One solution is regulation: the financial-reform bill now before Congress will create a consumer financial-protection agency that should help curb the finance industry’s most predatory excesses. Another solution is to tinker with “choice architecture”—doing things like enrolling people in 401(k)s automatically—in order to “nudge” them toward better decisions. Both of these strategies are necessary, but they’re not enough on their own, because financially illiterate consumers are always going to be easy victims. We also urgently need proper financial education. [Emphasis added].

For more, see Greater Fools by James Surowiecki, July 5, 2010, at The New Yorker.

Immigration: Immigrants and Crime: Perception Vs. Reality

Data show immigrants are less likely to commit crimes than the native-born ...

For more, see Immigrants and Crime: Perception Vs. Reality (PDF) by Stuart Anderson, June, 2010, at The Cato Institute.

Economics: Motivating States While Stimulating the Economy

An interesting idea ...

... you (the U.S. government) need to mitigate the pain caused by the state governments that are slashing spending. You need a program modeled on Race to the Top. You will provide federal money now to states that pass responsible long-term budget plans that will reduce spending and pension commitments. That would save public-sector jobs and ease contractionary pressures without throwing the country into a fiscal-debt spiral.

From A Little Economic Realism by David Brooks, July 5, 2010, at The New York Times.

Economics: Growing Income Disparity

For much more, see Economic Mobility: Is the American Dream Alive and Well? by Isabel Sawhill and John E. Morton, 2009, at The Economic Mobility Project.

Wednesday, July 7, 2010

Science: Robot Personal Helpers

A good, long article on robot helpers is A Soft Spot for Circuitry by Amy Harmon, July 4, 2010, at nytimes.com.

Economics: Punishing the Jobless

It's amazing how many people's prescriptions for solving our debt problems ignore the fact that we're still recovering from the Great Recession, as described in ...

Today, American workers face the worst job market since the Great Depression, with five job seekers for every job opening, with the average spell of unemployment now at 35 weeks. Yet the Senate went home for the holiday weekend without extending benefits. How was that possible?
Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. ... it’s a real effect when the economy is doing well. [Emphasis added]

But it’s an effect that is completely irrelevant to our current situation. When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. But as you may have noticed, right now the economy isn’t booming — again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work — but they can’t take jobs that aren’t there.

Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.

But won’t extending unemployment benefits worsen the budget deficit? Yes, slightly — but as I and others have been arguing at length, penny-pinching in the midst of a severely depressed economy is no way to deal with our long-run budget problems. And penny-pinching at the expense of the unemployed is cruel as well as misguided.

From Punishing the Jobless by Paul Krugman, July 4, 2010, at nytimes.com.

Politics: It Depends on What the Definition of ‘Austerity' Is

Republicans say Democrats are the big government people, and yet ...

Using Bureau of Labor Statistics data, the chart below compares recent changes in government expenditures—or federal, state, and local government purchases of labor, goods, and services—and private domestic investment.

From It Depends on What the Definition of ‘Austerity' Is by Veronique De Rugy, July 1, 2010, at the American Enterprise Institute.

Politics: Lindsey Graham, This Year's Maverick

A good, long article on Lindsey Graham is Lindsey Graham, This Year's Maverick by Robert Draper, June 28, 2010, at nytimes.com.

Monday, July 5, 2010

Government: Time's up for Term Limits

In 1990, I voted for term limits.
Now, 20 years later, the experiment has failed. My disgust in 1990 has become despair in 2010, as the [California] Legislature’s performance has worsened. The failure may be ascribed to four reasons.

First, while limits opened up seats for capable newcomers, they also booted out valuable incumbents. For example, Kuehl replaced Terry Freidman, who was himself a relative newcomer. Friedman was a bright, thoughtful legislator and could have served with distinction — and increasing experience — for years. Instead, faced with term limits, Freidman successfully ran for a seat on the Superior Court, where he served for 15 years. The caricature of an invulnerable, out-of-touch lifer who deserved to be forced out was often false.

...

Second, while legislators are forced out, lobbyists and staff remain. The result is that term limits are a hoax: California still has entrenched political leaders, but, as lobbyists and staff, they are even less accountable than incumbents.

Third, the theory that term limits would foster more independence and less partisanship appears unsupported by evidence. Republican and former legislator Tom Campbell has spoken of his own survey of legislators’ voting records. Contrary to the theory of limits, legislators in their last terms, when they are not running again, are more likely to adhere to the straight party line. Certainly in California, post-term-limits legislators appear to be more partisan than their predecessors.

Fourth, California’s problems, particularly budget crises, have been years in the making. Decisions made years or even decades ago — enacting an automatic cost-of-living adjustment, foregoing revenue, creating an unfunded mandate and so forth — all have contributed to today’s deep, structural problems. However, legislators who cast the key votes years ago have been termed out and are not being held accountable for their misdeeds. California needs to plan for the long term, but term limits discourage such planning.

Even Republicans’ hopes that terms limits would benefit them have been dashed. The state’s Senate and the Assembly each have fewer Republicans now than in 1990.

Finally, maybe the need for term limits has abated. To the extent that gerrymandered districts unfairly benefited incumbents, the neutral redistricting initiative approved by voters in 2008 eliminated this benefit

From Time's up for Term Limits by John S. Caragozian, June 27, 2010, at miller-mccune.com.

Economics: Asking Companies to Reflect Shareholders' Politics

Ever since the Supreme Court endorsed the political free-speech rights of corporations in January in the contentious Citizens United case, the decision’s critics have been searching for ways to blunt the ruling’s impact — preferably before the test case of this fall’s midterm elections.
If shareholders are the true owners of a company, shouldn’t they be the ones to decide if that company dabbles in politics, and on which candidates it bets?

Enter the “shareholder protection act.”

Under the act, a majority of shareholders would have to approve a company’s political budget every year. The U.K. passed a similar law in 2000, although it’s seen but one case in 10 years of shareholders voting down political spending.

The U.S. version, however, would be much stricter: Instead of winning a majority of shareholders who show up or vote by proxy at the annual meeting, companies would have to win a majority of all shareholders, likely polling them by mail. Non-responses would count as “no” votes. Institutional investors such as 401(k) managers would also have to inform their members of how they voted on their behalf.

If a company gets over those hurdles, there are two more. Each specific expenditure from the political budget would then have to be approved by the board of directors, and each of those expenditures would ultimately have to be disclosed to the SEC for public scrutiny.

For more, see Asking Companies to Reflect Shareholders' Politics by Emily Badger, April 21, 2010, at miller-mccune.com.

Mind: The down Side of Self-Control

Participants who [did not have to exercise much self control in a previous experiment] claimed 25 percent more correct answers in the self-scoring condition, which “suggests some dishonesty,” the researchers note. But those who [did have to control themselves earlier] claimed more than twice as many correct answers than their counterparts. This suggests “self-control research depletion led to dishonest behavior,” the researchers conclude.

A second, similar test found that participants who had been forced to exercise self-control were not only more likely to cheat, but also more prone “to put themselves in a situation that enabled cheating.” Those self-control-depleted people cheated three times as much as members of a control group.

In related research published last year, University of Minnesota psychologist Kathleen Vohs reported that the act of making decisions makes it more difficult to control one’s impulses. She noted at the time that “almost all of our previous research on this model has found that if you engage in self-control in one domain, you’ll have less self-control in another domain.”

Together, these studies suggest that if you’ve been successfully engaging in self-control all day — say, by avoiding that plate of pastries in the workplace lunchroom — it’s best to avoid contact with any type of temptation that evening. You may find yourself unable to resist.

From The down Side of Self-Control by Tom Jacobs, February 26, 2009, at miller-mccune.com.

Thursday, July 1, 2010

Politics: Another Odd Lie?

From a speech delivered at the International Bowl Expo in Las Vegas yesterday:
Palin recalled her youth when her father set pins in Idaho. "My Dad was on a Thursday night bowling league," she said. "He bonded with his buddies. I have memories of that point of my life which mean very, very much to me."
Palin was three months old when she left Idaho.

From Another Odd Lie? by Andrew Sullivan, July 1, 2010, at theatlantic.com.

Mind: Money Can Buy One Form of Happiness

Pulling in the big bucks makes people more likely to say they are happy with their lives overall -- whether they are young or old, male or female, or living in cities or remote villages, the survey of more than 136,000 people in 132 countries found.

But the survey also showed that a key element of what many people consider happiness -- positive feelings -- is much more strongly affected by factors other than cold, hard cash, such as feeling respected, being in control of your life and having friends and family to rely on in a pinch.

"Yes, money makes you happy -- we see the effect of income on life satisfaction is very strong and virtually ubiquitous and universal around the world," said Ed Diener, a professor emeritus of psychology at the University of Illinois who led the study. "But it makes you more satisfied than it makes you feel good. Positive feelings are less affected by money and more affected by the things people are doing day to day."

"What we didn't know before is the extent to which life evaluation and emotional well-being are so distinct," Kahneman said. "When you look at the books about well-being, you see one word -- it's happiness. People do not distinguish."

For more, see Money Can Buy One Form of Happiness, Massive Global Study Concludes by Rob Stein, July 1, 2010, at washingtonpost.com.

Economics: Federal Debt Will Exceed It's All Time High by 2025

In its latest long-term forecast, the nonpartisan Congressional Budget Office predicted that the national debt, which has surged to nearly 60 percent of annual economic output in the wake of the recession, would continue rising in the coming decades despite cost-containment measures in the health overhaul Obama signed this spring.

"Growth in spending on health-care programs remains the central fiscal challenge," CBO Director Douglas W. Elmendorf said in a presentation to Obama's bipartisan deficit commission. "In CBO's judgment, the health-care legislation enacted earlier this year made a dent in the problem, but did not substantially diminish that challenge."

... the CBO said the national debt would soar to 87 percent of gross domestic product by 2020, exceed its historical peak of 109 percent by 2025 and hit 185 percent by 2035 -- "uncharted territory," Elmendorf said, that could include higher interest rates, more foreign borrowing, less private investment and lower income growth, if not a full-blown fiscal crisis. [Emphasis mine]

Elmendorf said the gloomy long-term picture is not an argument for rejecting additional spending now to bolster the economic recovery. Indeed, he said, "enacting cuts in spending or increases in taxes now would probably slow the recovery."

However, Elmendorf said developing a credible and certain deficit-reduction plan to take effect after the economy has recovered could provide a significant boost to public confidence by reducing "uncertainty" about what is bound to be a painful future path.

From CBO Tells Obama Deficit Panel That Forecast Remains Bleak by Lori Montgomery, July 1, 2010, at washingtonpost.com, and The Long-Term Budget Outlook by Congressional Budget Office, June, 2010, at cbo.gov.

Economics: Mortgage Rates Drop to Lowest Rate in 50 Years

... the average rate for 30-year fixed loans sank to 4.58 percent this week.

From Mortgage Rates Drop to Lowest Rate in 50 Years by AP, July 1, 2010, at cnbc.com.

Humor: Pickles

From Pickles by Brian Crane, June 30, 2010, at gocomics.com.

Science: When Intuition and Math Probably Look Wrong

I have two children, one of whom is a son born on a Tuesday. What is the probability that I have two boys?

Gary Foshee, a puzzle designer from Issaquah, Wash., posed this puzzle during his talk this past March at Gathering 4 Gardner, a convention of mathematicians, magicians and puzzle enthusiasts held biannually in Atlanta. The convention is inspired by Martin Gardner, the recreational mathematician, expositor and philosopher who died May 22 at age 95. Foshee’s riddle is a beautiful example of the kind of simple, surprising and sometimes controversial bits of mathematics that Gardner prized and shared with others.

For much more, see When Intuition and Math Probably Look Wrong by Julie Rehmeyer, June 28, 2010, at sciencenews.org.