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Wednesday, September 29, 2010

Diversion: After Volcanic Eruptions Come Volcanic Cyclones

For more, see After Volcanic Eruptions Come Volcanic Cyclones by Rebecca Horne, September 20, 2010 at Discover Magazine blogs.

Mind: Brain Scans May Help Fix Criminal Responsibility

Will we ever get to the point where a brain study will cause someone to be restrained because it is proven that he will some day do something bad?

A few years ago, 17-year-old Christopher Simmons was convicted of breaking into Shirley Crook's house in St Louis, Missouri, tying her up and throwing her off a bridge. The evidence was overwhelming and Simmons confessed to the murder. When the jury recommended a death sentence, Simmons's defence referred to scientific papers that suggested a the brain of a typical 17-year-old was not yet fully mature. Not only did Simmons escape the death penalty, the US Supreme Court changed the law so that only those over 18 can face death row.

Now neuroscientists claim we are closer to being able to estimate brain maturity using brain scans, which might prompt lawyers to offer a defence of immaturity based on an accused individual's own brain scan.

"It's not to do with knowing the difference between right and wrong," counters Blakemore. The group argue that because the prefrontal cortex (PFC) is the last part of the brain to mature, a child is unable to understand the long-term consequences of their actions. A child may be unable to suppress potentially dangerous behaviour, and make bad decisions. "It's the PFC that stops you doing 200 miles an hour down the motorway," says Blakemore.

For more, see Brain Scans May Help Fix Criminal Responsibility by Jessica Hamzelou, September 22, 2010 at NewScientist.

Misc: Trends in Air Pollution, Crime, and Welfare

This week marked the 40th anniversary of [the Clean Air Act's] passage with scarcely any observance of the magnitude of progress under the legislation.

For more, see Two Cheers for the Clean Air Act by Steven F. Hayward, September 17, 2010 at The American Enterprise Institute.

Politics: Disliking Republicans, Voting for Them Anyway

KEVIN DRUM relates the seemingly odd temper of the American voter:
Americans trust Democrats more to handle the country's problems, they think Democrats represent their values better, they think Democrats are more concerned with the needs of people like them, and they think Democrats deserve to be reelected at a higher rate than Republicans. They also think...that George Bush is substantially more to blame for our economic woes than Barack Obama.

And the result of all this? They say they plan to vote for Republicans by landslide numbers. It's the economy, stupid.

Does this make any sense? Andrew Gelman, a Columbia University political scientist, thinks so:
Those 10% or so of voters who plan to vote Republican—even while thinking that the Democrats will do a better job—are not necessarily being so unreasonable. The Democrats control the presidency and both houses of Congress, and so it's a completely reasonable stance to prefer them to the Republicans yet still think they've gone too far and need a check on their power.

For more, see Disliking Republicans, Voting for Them Anyway by W.W., September 8, 2010 at The Economist.

Economics: How Did President Obama's Outgoing Economic Team Do?

With Peter Orszag having left the Office of Management and Budget, Christina Romer departing from the Council of Economic Advisers and Lawrence Summers stepping down from the National Economic Council, The Post asked experts to rate the work of President Obama's outgoing economic team.
Going forward, the biggest risk to the economy is that we expect too much from policymakers. They can't save us from several years of depressingly slow growth, and too much pressure on them to pull magic rabbits out of their hats will lead only to counterproductive quick fixes.

For much more, see How Did President Obama's Outgoing Economic Team Do? by Mark Zandi, N. Gregory Mankiw, Dino KOS, Diane LIM Rogers, Douglas Holtz-Eakin and Sebastian Mallaby, September 26, 2010 at The Washington Post.

Mind: Brain's Anatomy Predicts Level of Introspection

The anatomy of your brain reflects your introspective capacity, or ability to self-judge the merits of your decisions, new research indicates.

The study found that people with stronger reflective, or introspective, ability appear to have a higher volume of gray matter, the outer layer of the brain, in the part of their brains sitting behind their eyes. This region is called the anterior prefrontal cortex.

This discovery fits with previous work that showed people with damage to this brain region had trouble assessing their own decision-making, even though their performances on a task were unimpaired.

For more, see Brain's Anatomy Predicts Level of Introspection by Wynne Parry, September 16, 2010 at Live Science.

Society: Most hazardous Jobs in America & What They Pay

From Society: Most hazardous Jobs in America & What They Pay, September, 2010 at Focus.

Security: Venezuela, More Deadly than Iraq, Wonders Why

In Iraq, a country with about the same population as Venezuela, there were 4,644 civilian deaths from violence in 2009, according to Iraq Body Count; in Venezuela that year, the number of murders climbed above 16,000.

Even Mexico's infamous drug war has claimed fewer lives.

Venezuela is struggling with a decade-long surge in homicides, with about 118,541 since President Hugo Chávez took office in 1999, according to the Venezuelan Violence Observatory, a group that compiles figures based on police files.
There have been 43,792 homicides in Venezuela since 2007, according to the violence observatory, compared with about 28,000 deaths from drug-related violence in Mexico since that country's assault on cartels began in late 2006.
Caracas itself is almost unrivaled among large cities in the Americas for its homicide rate, which currently stands at around 200 per 100,000 inhabitants, according to Roberto Briceño-León, the sociologist at the Central University of Venezuela who directs the violence observatory.

That compares with recent measures of 22.7 per 100,000 people in Bogotá, Colombia's capital, and 14 per 100,000 in São Paulo, Brazil's largest city.

As Mr. Chávez's government often points out, Venezuela's crime problem did not emerge overnight, and the concern over murders preceded his rise to power.

But scholars here describe the climb in homicides in the past decade as unprecedented in Venezuelan history; the number of homicides last year was more than three times higher than when Mr. Chávez was elected in 1998.

For more, see Venezuela, More Deadly than Iraq, Wonders Why by Simon Romero, August 22, 2010 at The New York Times.

Thursday, September 23, 2010

Politics: The Angry Rich

These are terrible times for many people in this country. Poverty, especially acute poverty, has soared in the economic slump; millions of people have lost their homes. Young people can't find jobs; laid-off 50-somethings fear that they'll never work again.

Yet if you want to find real political rage — the kind of rage that makes people compare President Obama to Hitler, or accuse him of treason — you won't find it among these suffering Americans. You'll find it instead among the very privileged, people who don't have to worry about losing their jobs, their homes, or their health insurance, but who are outraged, outraged, at the thought of paying modestly higher taxes.

And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they'll say; we all have to be willing to make sacrifices.

For much more, see The Angry Rich by Paul Krugman, September 19, 2010, at The New York Times.

Society: It's Good to Be a College Student (or Grad, or Professor)

Here is a graph showing the percentage of each industrialized country's population that has a college degree:

From It's Good to Be a College Student (or Grad, or Professor) by September 17, 2010, Catherine Rampell, at Exonomix Blog, New York Times.

Society: Afghan Boys Are Prized, So Girls Live the Part

There are no statistics about how many Afghan girls masquerade as boys. But when asked, Afghans of several generations can often tell a story of a female relative, friend, neighbor or co-worker who grew up disguised as a boy. To those who know, these children are often referred to as neither “daughter” nor “son” in conversation, but as “bacha posh,” which literally means “dressed up as a boy” in Dari.

Through dozens of interviews conducted over several months, where many people wanted to remain anonymous or to use only first names for fear of exposing their families, it was possible to trace a practice that has remained mostly obscured to outsiders. Yet it cuts across class, education, ethnicity and geography, and has endured even through Afghanistan's many wars and governments.

For much more, see Afghan Boys Are Prized, So Girls Live the Part by Jenny Nordberg, September 20, 2010 at The New York Times.

Politics: The Obama Administration's Pipe Dreams

Obama lovers may enjoy the defense of his accomplishments at The Obama Administration's Pipe Dreams by Ezra Klein, September 17, 2010 at The Washington Post.

Society: Tea Party: 71% Say It's My Way or the Highway

For more, see Many Say Ending Tax Cuts for Wealthy Would Hurt Economy, September 20, 2010 at The Pew Research Center for the People and the Press.

Tuesday, September 21, 2010

Mind: Why Are Terrorists Often Engineers?

With terrorism back in the news, so, too, is a curious footnote: Of the hundreds of individuals involved in political violence, nearly half of those with degrees have been engineers. This finding, first published in 2008, has been substantiated by two years of additional research by Oxford sociologist Diego Gambetta and political scientist Steffen Hertog, of the London School of Economics.

From Why Are Terrorists Often Engineers? by September 15, 2010, Steven Cherry, at IEEE Spectrum.

California: UCSB Ranked No. 29 in World University Rankings

UC Santa Barbara has been ranked number 29 in a list of the world's top 200 universities released today by Times Higher Education, a British periodical.

For more, see UCSB Ranked No. 29 in World University Rankings, September 17, 2010, at The Santa Barbara Independent.

Politics: Meg Whitman's Claims about Businesses Leaving California

"You probably read that Northrop Grumman just left Long Beach to go to Virginia," said Whitman in a campaign appearance outside Sacramento last month. It wasn't the first time she's mentioned the major aerospace and defense contractor, which announced in January that its corporate headquarters was headed to northern Virginia, just outside of Washington, D.C.

But while Northrop Grumman's top executives are moving, the company's not actually leaving the state of California. In a series of emails this week, company spokesman Dan McClain confirmed that some 30,000 employees -- one quarter of the company's worldwide staff -- are still here. That means that only slightly more than 1% of the total workforce was relocated.

Whitman also told her audience last month that the CEO of Northrop Grumman told her that no one from state government tried to stop them. Spokesman McClain says the company doesn't comment on whether conversations with folks like the GOP candidate take place. But contrary to Whitman's comment, McClain says state officials did talk to Northrop Grumman when the HQ relocation was announced. And he says that the company told those state officials that there could be a silver lining to the decision.

"We explained to them that the move was intended to bring us closer to our U.S. government customers," wrote spokesman McClain in an email, "and that one of our objectives in moving is to be able to better serve our customers' needs and hopefully win more business for our California operations."

The Whitman campaign, even when told of the company's comments, insisted this afternoon that geographic proximity to DC isn't the whole story. "Anyone who thinks Northrop Grumman moving their corporate headquarters to another state had nothing to do with California's terrible business climate is living in a fantasy world," wrote Whitman's spokesperson Sarah Pompei in an email.

The "bleeding of jobs" -- the notion that a large number of jobs are businesses are fleeing California -- is a familiar talking point in state politics these days, especially among Republicans. But in the only broad, longitudinal nonpartisan study out there, the numbers don't match the rhetoric.
Nonetheless, there is a sense that California's business climate needs a face lift, but that it requires broad policy changes, not special treatment (financial packages, etc.) for individual companies -- a process some have likened to 'ransom' demanded by those companies and willingly paid by other states.

For more, see Campaign Check: A Business Exodus? by John Myers, September 17, 2010, at KQED.

Society: Millionaire Population Soars — Again

According to a new survey from Phoenix Marketing International's Affluent Market Practice, the number of American households with investible assets of $1 million or more rose 8% in the 12 months ended in June. The survey says there now are 5.55 million U.S. households with investible assets of $1 million or more.

That follows two years of declines and brings the millionaire count back to 2006 levels. Of course, that is still below the peak of 5.97 million in 2007 and the current growth rate is well below pre-financial crisis levels, when the millionaire population increased as much as 35% a year.

Still, the numbers offer further evidence that the wealthy may have decoupled from the rest of the economy. The study's authors say high salary growth, rather than investments, are the main drivers of the millionaire expansion.

For more, see Millionaire Population Soars — Again by Robert Frank, September 16, 2010, at The Wall Street Journal.

Science: Diamond Star Thrills Astronomers

Twinkling in the sky is a diamond star of 10 billion trillion trillion carats, astronomers have discovered.

The cosmic diamond is a chunk of crystallised carbon, 4,000 km across, some 50 light-years from the Earth in the constellation Centaurus.

It's the compressed heart of an old star that was once bright like our Sun but has since faded and shrunk.

Astronomers have decided to call the star "Lucy" after the Beatles song, Lucy in the Sky with Diamonds.

From Diamond Star Thrills Astronomers, February 16, 2004, at BBC News.

Economics: Banks' Self-Dealing Super-Charged Financial Crisis

Over the last two years of the housing bubble, Wall Street bankers perpetrated one of the greatest episodes of self-dealing in financial history.

Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses:

They created fake demand.

A ProPublica analysis shows for the first time the extent to which banks -- primarily Merrill Lynch, but also Citigroup, UBS and others -- bought their own products and cranked up an assembly line that otherwise should have flagged.

The products they were buying and selling were at the heart of the 2008 meltdown -- collections of mortgage bonds known as collateralized debt obligations, or CDOs.

Individual instances of these questionable trades have been reported before, but ProPublica's investigation, done in partnership with NPR's Planet Money, shows that by late 2006 they became a common industry practice.
An analysis by research firm Thetica Systems, commissioned by ProPublica, shows that in the last years of the boom, CDOs had become the dominant purchaser of key, risky parts of other CDOs, largely replacing real investors like pension funds. By 2007, 67 percent of those slices were bought by other CDOs, up from 36 percent just three years earlier. The banks often orchestrated these purchases. In the last two years of the boom, nearly half of all CDOs sponsored by market leader Merrill Lynch bought significant portions of other Merrill CDOs.

ProPublica also found 85 instances during 2006 and 2007 in which two CDOs bought pieces of each other's unsold inventory. These trades, which involved $107 billion worth of CDOs, underscore the extent to which the market lacked real buyers. Often the CDOs that swapped purchases closed within days of each other, the analysis shows.

There were supposed to be protections against this sort of abuse. While banks provided the blueprint for the CDOs and marketed them, they typically selected independent managers who chose the specific bonds to go inside them. The managers had a legal obligation to do what was best for the CDO. They were paid by the CDO, not the bank, and were supposed to serve as a bulwark against self-dealing by the banks, which had the fullest understanding of the complex and lightly regulated mortgage bonds.

It rarely worked out that way. The managers were beholden to the banks that sent them the business. On a billion-dollar deal, managers could earn a million dollars in fees, with little risk. Some small firms did several billion dollars of CDOs in a matter of months.

For much more, see Banks' Self-Dealing Super-Charged Financial Crisis by Jake Bernstein and Jesse Eisinger, August 26, 2010, at ProPublica.

Also see Economics: How Magnetar Made Money by Betting Against Securities It Helped Create, April 19, 2010 at NewsAndOld.

Sunday, September 19, 2010

Security: Password Reuse

Are you a possible victim?

From Password Reuse, September 14, 2010, at , at xkcd.com.

Politics: Rally to Restore Sanity

Jon Stewart snnounced ...

Rational people will gather on the National Mall in DC to spread a timeless message -- take it down a notch for America.

They'll provide signs if you don't want to bring your own, such as:

  • I disagree with you, but I'm pretty sure you're not Hitler.
  • Got competence?
  • 911 was an outside job.
  • I'm not afraid of muslims / Tea Partiers / Socialists / Immigrants / Gun Owners / Gays.
  • Take it down a notch for America.

From Rally to Restore Sanity, September 16, 2010, at The Daily Show.

Mind: Anti-Gay Attitudes Undeterred by Golden Rule

It seems, on the face of it, a clever retort to conservative Christians who express prejudicial attitudes toward gays and lesbians. Respond by quoting the words of Jesus Christ — specifically, his admonition, “Do unto others as you would have them do unto you.”

There's just one problem: According to a new study, such reminders of the golden rule are utterly ineffective at changing minds or hearts. And if you emphasize the universality of this message of tolerance by quoting the leader of a different religion, anti-gay attitudes actually harden.

To begin the experiment, the participants filled in missing words from a series of quotations. For one-third of of the participants, two of the five quotes were variations on the golden rule, which were attributed to Jesus.

Another third were presented with the same golden rule-related quotations, only in their case, the sayings were attributed to the Buddah. The final third filled in words from unrelated quotes.

Their explicit and implicit attitudes toward gay people were then measured in a series of tests. In addition, they reported their political ideology and level of religiosity.

“We predicted that priming the golden rule would decrease negativity toward gay people, especially when it was attributed to the leader of one's own religion,” the researchers write. “Instead, the golden rule priming had no effect when communicated by one's own religious leader.

“However, when the golden rule messages were attributed to the Buddha, Christians self-reported being more explicitly negative toward gay people and more likely to believe that homosexuality is a choice,” they add. “The results suggest that when a tolerant message comes from a religious out-group figure, it does not increase, but may decrease tolerance toward another out-group.”

For more, see Anti-Gay Attitudes Undeterred by Golden Rule by September 13, 2010, Tom Jacobs, at Miller-McCune.

Politics: Tarp: A Success None Dare Mention

The Obama administration this week will mark the second anniversary of the collapse of Lehman Brothers and the ensuing Wall Street meltdown with an ironic bit of bipartisanship: letters of thanks to some of the congressional Republicans who helped fashion the government's response in fall 2008.

No one in the Treasury Department is expecting any appreciation from House Minority Leader John Boehner, Senate Minority Leader Mitch McConnell or former House Minority Whip Roy Blunt for the gesture. In a reversal of the old adage quoted by President John F. Kennedy, that victory has a thousand fathers, there's hardly a Republican who wants to be associated with perhaps the most successful and least popular American economic policy in the past decade: TARP, or as it is generally known, the bank bailout.

The Troubled Asset Relief Program is widely viewed as the original sin of the Obama administration — though it was put together under President George W. Bush and succeeded far beyond expectations. It's widely seen as the tipping point for disgust with elites and insiders of all kinds — though it could also be seen as those insiders' finest moment, a successful attempt to at least partially fix their own mistakes.

“The TARP is probably the most effective large-scale government program that the public has vehemently decided was a bad idea, and, therefore, has only the most tepid political defenders,” said the Brookings Institution's Douglas Elliott. “Unfortunately, the right thing to do for the public just sounds so wrong to Main Street in this case.”
Polls suggest the public has only the haziest view of what TARP was. It's often conflated — not least by politicians who voted for it and now seek to muddy the waters — with the stimulus, a piece of policy whose supporters and foes have fallen into a much more familiar debate about the role of government and public spending.

Even Nevada GOP Senate nominee Sharron Angle at one point referred to TARP as “the stimulus.” And few Americans seem to know that the banks at the center of TARP have paid the money back — with interest.

Pollster Ann Selzer asked voters this summer, “Do you think the Troubled Asset Relief Program, known as TARP, was necessary to prevent the financial industry from failing and drastically hurting the U.S. economy, or was it an unneeded bailout?”

Fifty-eight percent of Americans said TARP was unneeded. Only 28 percent called it “necessary.”

The consensus of economists and policymakers at the time of the original TARP was that the U.S. government couldn't afford to experiment with an economic collapse. That view in mainstream economic circles has, if anything, only hardened with the program's success in recouping the federal spending.

A study this summer by former Fed Vice Chairman Alan Blinder and Moody's chief economist Mark Zandi was representative of that consensus. They projected that without federal action — TARP and the stimulus — America's gross domestic product would have fallen more than 7 percent in 2009 and almost 4 percent in 2010, compared with the actual combined decline of about 4 percent.

“It would not be surprising if the underemployment rate approached one-fourth of the labor force,” they wrote of their scenario. “With outright deflation in prices and wages in 2009-11, this dark scenario constitutes a 1930s-like depression.

For more, see Tarp: A Success None Dare Mention by Ben Smith, September 14, 2010, at Politico.

Economics: The Last Half

If the US is going to really attempt to balance the budget over time, reduce our personal leverage, and save more, then we have to address the glaring fact that we import $300 billion in oil (give or take, depending on the price of oil).

This can only partially be done by offshore drilling. The real key is to reduce the need for oil. Nuclear power, renewables, and a shift to electric cars will be most helpful. Let us suggest something a little more radical. When the price of oil approached $4 a few years ago, Americans changed their driving and car-buying habits.

Perhaps we need to see the price of oil rise. What if we increased the price of oil with an increase in gas taxes by 2 cents a gallon each and every month until the demand for oil dropped to the point where we did not need foreign oil? If we had European gas-mileage standards, that would be the case now.

And take that 2 cents a month and dedicate it to fixing our infrastructure, which is badly in need of repair. In fact, the US Infrastructure Report Card (www.infrastructurereportcard.org), by the American Society of Civil Engineers, which grades the US on a variety of factors (the link has a very informative short video), gave our infrastructure the following grades in 2009: Aviation (D), Bridges (C), Dams (D), Drinking Water (D-), Energy (D+), Hazardous Waste (D), Inland Waterways (D-), Levees (D-), Public Parks and Recreation (C-), Rail (C-), Roads (D-), Schools (D), Solid Waste (C+), Transit (D), and Wastewater (D-).

Overall, America's Infrastructure GPA was graded a "D." To get to an "A" would requires a 5-year infrastructure investment of 2.2 trillion dollars.

That infrastructure has to be paid for. And we need to buy less oil. And we know price makes a difference. The majority of that 2 cents would need to stay in the states where it was taxed, and forbidden to be used on anything other than infrastructure.

For much more, see The Last Half by John Mauldin, September 10, 2010, at Thoughts from the Frontline.

Friday, September 17, 2010

Economics: Why Did the Rich Get So Much Richer?

For more, see Why Did the Rich Get So Much Richer? by Jacob Goldstein, September 8, 2010, at National Public Radio.

Politics: Meg Whitman: The Politics of Personal Animosity

Behold: the most profoundly pessimistic attack ad of 2010. Meg Whitman has delivered unto us a masterpiece of dirty politics.
Bill Clinton, in a 1992 debate, sits face-to-face with Jerry Brown. Brown looks at Clinton like a kid called to the principal's office. Clinton blasts Brown as a tax-raising liar: "CNN, not me, CNN says his assertion about his tax record was, quote, 'just plain wrong.' He raised taxes as Governor of California. He doesn't tell the people the truth." That's two levels of surrogate Whitman is hiding behind, for those of you keeping track. On its own, the ad is devastating.

There's just one little problem: That CNN report turned out to be "just plain wrong," and Whitman's campaign--like all interested parties--has been fully aware of that for some time.

For more, see The Politics of Personal Animosity by Larry Womack, September 13, 2010, at The Huffington Post.

Diversion: 3-D Printing Spurs a Manufacturing Revolution

A 3-D printer, which has nothing to do with paper printers, creates an object by stacking one layer of material — typically plastic or metal — on top of another, much the same way a pastry chef makes baklava with sheets of phyllo dough.

The technology has been radically transformed from its origins as a tool used by manufacturers and designers to build prototypes.

These days it is giving rise to a string of never-before-possible businesses that are selling iPhone cases, lamps, doorknobs, jewelry, handbags, perfume bottles, clothing and architectural models. And while some wonder how successfully the technology will make the transition from manufacturing applications to producing consumer goods, its use is exploding.

A California start-up is even working on building houses. Its printer, which would fit on a tractor-trailer, would use patterns delivered by computer, squirt out layers of special concrete and build entire walls that could be connected to form the basis of a house.

For more, see 3-D Printing Spurs a Manufacturing Revolution by Ashlee Vance, September 13, 2010, at The New York Times. Thank you, Martha.

Politics: Obama's Not a Kenyan, Anti-Colonialist

Regarding Newt Gingrich: Obama's ‘Kenyan, Anti-Colonial' Worldview ...

If Obama is a Kenyan anti-colonialist for supporting financial regulation, than Scott Brown is a Kenyan anti-colonialist. If Obama is a Kenyan anti-colonialist for supporting the proposed Islamic community center near Ground Zero, then Michael Bloomberg is a Kenyan anti-colonialist. If Obama is a Kenyan anti-Colonialist for supporting health care insurance reform, then Ben Nelson is a Kenyan anti-colonialist. The Center for American Progress is a Kenyan anti-colonialist think tank, MoveOn is a Kenyan anti-colonialist advocacy organization, and Peter Orszag is a Kenyan anti-colonialist intellectual, - Adam Serwer.

For more, see Quote for the Day, September 13, 2010, at The Daily Dish.

Politics: The Day After Tomorrow

As Paul Ryan and Arthur Brooks put it in The Wall Street Journal on Monday, “The road to serfdom in America does not involve a knock in the night or a jack-booted thug. It starts with smooth-talking politicians offering seemingly innocuous compromises, and an opportunistic leadership that chooses not to stand up for America's enduring principles of freedom and entrepreneurship.”

Ryan and Brooks are two of the most important conservative thinkers today. Ryan is the leading Republican policy entrepreneur in the House. Brooks is president of the highly influential American Enterprise Institute and a much-cited author. My admiration for both is unbounded.

Yet the story Republicans are telling each other, which Ryan and Brooks have reinforced, is an oversimplified version of American history, with dangerous implications.

The fact is, the American story is not just the story of limited governments; it is the story of limited but energetic governments that used aggressive federal power to promote growth and social mobility. George Washington used industrial policy, trade policy and federal research dollars to build a manufacturing economy alongside the agricultural one. The Whig Party used federal dollars to promote a development project called the American System.

Abraham Lincoln supported state-sponsored banks to encourage development, lavish infrastructure projects, increased spending on public education. Franklin Roosevelt provided basic security so people were freer to move and dare. The Republican sponsors of welfare reform increased regulations and government spending — demanding work in exchange for dollars.

Throughout American history, in other words, there have been leaders who regarded government like fire — a useful tool when used judiciously and a dangerous menace when it gets out of control. They didn't build their political philosophy on whether government was big or not. Government is a means, not an end. They built their philosophy on making America virtuous, dynamic and great. They supported government action when it furthered those ends and opposed it when it didn't.

For more, see The Day After Tomorrow by David Brooks, September 13, 2010, at The New York Times.

Society: The Foxification of the Republican Party

For more, see The Foxification of the Republican Party by Kevin Drum, September 12, 2010, at Mother Jones.

Wednesday, September 15, 2010

Economics: Less Large Tax Cuts for Top-Earners?

For much more, see Conservative Media Cry "Class Warfare" At Prospect of Less Large Tax Cuts for Top-Earners by M.F.B., September 8, 2010, at MediaMatters.

Politics: Time for This Big Dog to Bite Back

A good analysis of Obama's political position.

No, he can't. President Obama can't reverse the unemployment numbers by Election Day. He can't get even a modest new stimulus bill past the Party of No, and even if he could, there would be few jobs to show for it until (maybe) 2011. Nor can he rewrite the history of his administration. Its signal accomplishments to date are an initial stimulus package that was overrun by the calamity at hand and a marathon health care battle as yet better known for its unseemly orgy of backroom wrangling than its concrete results. While that brawl raged, the White House seemed indifferent to the mounting number of Americans being tossed onto the Great Recession scrapheap.

...

End of story.

Unless it's not.

For much more, see Time for This Big Dog to Bite Back by Frank Rich, September 11, 2010, at The New York Times.

Healthcare: Health Care Spending Will Continue Rising, but Modestly

In a new report that's sure to provide fresh ammunition to both sides of the health reform debate, a government estimate released today finds that the new health reform law will not curb the rising costs of care once it takes effect but will not substantially raise them either.
More than 32 million people will get new coverage under the law, according to the estimate.
According to the actuaries, Americans will spend an average of $13,652 per person a year on health care in 2019. Without the health care reform law, they said, about $13,387 would have been spent per person. Overall, health care will cost about $265 more per American under the health care overhaul.

For more, see Study: Health Care Spending Will Continue Rising, but Modestly by Betty Ann Bowser, September 9, 2010, at PBS.

Politics: Newt Gingrich: Obama's ‘Kenyan, Anti-Colonial' Worldview

More proof Obama isn't U.S. born ...

“What if Obama is so outside our comprehension, that only if you understand Kenyan, anti-colonial behavior, can you begin to piece together his actions?” Gingrich asks. “That is the most accurate, predictive model for his behavior.”

“This is a person who is fundamentally out of touch with how the world works, who happened to have played a wonderful con, as a result of which he is now president,” Gingrich tells us.

“I think he worked very hard at being a person who is normal, reasonable, moderate, bipartisan, transparent, accommodating — none of which was true,” Gingrich continues. “In the Alinksy tradition, he was being the person he needed to be in order to achieve the position he needed to achieve . . . He was authentically dishonest.”

For more, see Gingrich: Obama's ‘Kenyan, Anti-Colonial' Worldview by Robert Costa, September 11, 2010, at National Review Online.

Society: Illegal Immigration: What's the Real Cost to Taxpayers?

The most insightful study remains one done by the National Research Council in 1997. It gauged federal, state and local fiscal costs and contributions over the lifetime of an immigrant in 1996 dollars. Citizen children were included.

The study found that an immigrant high school dropout -- which characterizes nearly half of today's unauthorized people -- received $89,000 more in services than he paid in taxes in his life. But an immigrant with at least some college -- a quarter of today's unauthorized -- gave $105,000 more than he got. For the high school graduates left, those who arrived during their teens or earlier were slightly profitable for the government, while the children of those who arrived later paid off the small deficit of their parents.

The orders of magnitude are more important than the precise numbers. A tough federal law passed in 1996 has since cut almost all benefits to unauthorized immigrants. Even the Center for Immigration Studies, which advocates forcing out immigrants here illegally, acknowledged that the average undocumented household in 2002 received fully 46 percent less in federal benefits than an American one. But this likely would go up with legalization.

For more, see Illegal Immigration: What's the Real Cost to Taxpayers? by Edward Schumacher-Matos, September 9, 2010, at The Washington Post.

Politics: Jon Stewart vs FOX, MSNBC, and CNN

Economics: Adding It up: How Much Tax Does a Taxpayer Pay?

For more, see Adding It up: How Much Tax Does a Taxpayer Pay? by Tamara Keith, September 8, 2010, at National Public Radio.

Politics: Meg Whitman's Tale of Woe Is Bull

In a softball interview with Fox News sycophant host Neil Cavuto last May, Meg Whitman explained what it is about the sorry state of things that made her decide that she must “refuse to let California fail.”

Said eMeg: “The first thing we have to do is, we have to streamline government.” And to make it easier for business to grow? “Well, the first thing you do is, we have got to streamline regulation.

“The permitting process, the competing agencies that try to regulate — we built a building in Sunnyvale for PayPal, two-and-a-half years to break ground. We had to hire three consultants to navigate the labyrinth of California regulations.”

... we tried repeatedly to get clarification or comment about any of this from Sarah Pompei, Whitman's spokeswoman, and from eBay and PayPal. Despite many, many phone calls and emails, we got nothing.
... the folks at City Hall in Sunnyvale aren't too happy about Meg slandering their building-permit process. Especially since the PayPal expansion wasn't in Sunnyvale — it was in San Jose.
According to City of San Jose records, which Santa Clara County Supervisor David Cortese, formerly the vice-mayor of San Jose, got his hands on only after submitting a public records request, eBay submitted its preliminary review for a General Plan change (to alter the then-existing height-limitation in the North San Jose Industrial Redevelopment Area) on May 8, 2003.

eBay submitted its actual GP amendment change on June 2. A site development permit was submitted a month later, and environment impact review was circulated starting August 29 and by December 2, when the council considered GP amendments, eBay's development permit was approved.

For those who don't follow city planning, Cortese explains: “It's a huge deal to change the general plan. That's the blueprint for how the city is going to be built out over a 10 to 20 year horizon.” eBay's GP change sped through the process like grass through a goose.

Once the general plan had been changed, it was up to eBay (not the city or any state agency) to develop building plans for the project — adding to their existing facility to accommodate PayPal. eBay didn't submit building, electrical, plumbing and mechanical plans to San Jose until March 2006; fire and haz-mat plans came shortly thereafter. After the typical process of submissions, review, resubmissions and sign-offs, eBay's building permit was approved July 28, 2006 and the final fire approval was made August 21.

We don't know how many consultants eBay hired. Frankly, who cares? And yes, the general plan change was submitted in June 2003 and the building permit was issued in July 2006. That's not just two-and-a-half years — it's three years.

And excessive regulations (and Sunnyvale) had exactly nothing to do with any of it.

For more, see eMeg's Tale of Woe About Paypal Expansion Is Bull, September 8, 2010, at Calbuzz.

Mind: Money Can Buy You Happiness — Up to a Point

Comparing people's happiness against income, the researchers found that the more money people earned, the higher their overall life satisfaction. But people's day-to-day emotional state rose with average annual income only until about $75,000, after which additional income made no further difference (Proceedings of the National Academy of Sciences, DOI: 10.1073/pnas.1011492107).

People's emotional state may stabilise above $75,000 because they no longer have to worry about meeting basic necessities, Deaton says. This allows them to settle into whatever innate level of moment-to-moment happiness their personality permits, he says.

Economic policy-makers need to be aware of the difference between these two forms of happiness, says Deaton. "Should public policy concern itself with emotional wellbeing, or with people's evaluation of their life?" Most likely, the answer will be some combination of the two. "The good life contains several things, and feelings are just one part of it," says Marc Fleurbaey, an economist at the University of Paris-Descartes.

For more, see Money Can Buy You Happiness — Up to a Point by Bob Holmes, September 7, 2010, at NewScientist.

Economics: How Wealthy Countries Tax Their Citizens

For more, see How Wealthy Countries Tax Their Citizens, January, 2010, at visualeconomics.

Monday, September 13, 2010

Misc: To My Faithful Readers

Now that some of you comment on various posts, I've added a Recent Comments area at the top right of the blog which makes noticing them easier.

And sorry about my infrequent posts of recent days. I've had a hard time fitting U.S. Open tennis into my busy schedule.

-- Doug

Mind: We Relate to Our Computers as We Do to Humans

Sociologist Clifford Nass, who's just published the book “The Man Who Lied to his Laptop“, says we're treating our machines as if they were human.
Participants in one experiment interacted with a program that said something like “Most PCs these days have at 2MB of memory. Being an older model I only have 1MB. What do you feel inadequate about?” Participants were much more likely to reveal personal information in this case then when the program simply stated the specs of the machine.

The same was true when a search program was configured to be “helpful” or “unhelpful” in some search tasks participants performed. When people were then asked to help optimize the screen resolution on a computer where the program had been “helpful”, they were much more likely to do so than with the less helpful version

For more, see New Book Says We Relate to Our Computers like Humans by Ciara Byrne, September 6, 2010, at VentureBeat.

Economics: 1938 in 2010

Here's the situation: The U.S. economy has been crippled by a financial crisis. The president's policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections.

The president in question is Franklin Delano Roosevelt; the year is 1938.

From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.

Had anyone proposed spending even a fraction that much before the war, people would have said the same things they're saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.

But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.

... it's slightly sickening to realize that the big winners in the midterm elections are likely to be the very people who first got us into this mess, then did everything in their power to block action to get us out.

For more, see 1938 in 2010 by Paul Krugman, September 5, 2010, at The New York Times.

Mind: Forget What You Know About Good Study Habits

... psychologists have discovered that some of the most hallowed advice on study habits is flat wrong. For instance, many study skills courses insist that students find a specific place, a study room or a quiet corner of the library, to take their work. The research finds just the opposite. In one classic 1978 experiment, psychologists found that college students who studied a list of 40 vocabulary words in two different rooms — one windowless and cluttered, the other modern, with a view on a courtyard — did far better on a test than students who studied the words twice, in the same room. Later studies have confirmed the finding, for a variety of topics.
Varying the type of material studied in a single sitting — alternating, for example, among vocabulary, reading and speaking in a new language — seems to leave a deeper impression on the brain than does concentrating on just one skill at a time. Musicians have known this for years, and their practice sessions often include a mix of scales, musical pieces and rhythmic work.

For much more, see Forget What You Know About Good Study Habits by Benedict Carey, September 6, 2010, at The New York Times. Thank you, Martha.

Economics: The Dubious Benefits of Being No. 1

After World War II, America picked up the pieces of a shattered world. It restored order and economic health to Europe and Japan while keeping the Russian bear and Chinese dragon at bay. America became the world's leading economic and military power. Proud achievements, but what does it mean to be the “greatest” nation on earth? What has being No. 1 done for most Americans, and where has it left us today?

With a mind-numbing national debt of $13 trillion and growing, the nation is flirting with financial disaster. Every American man, woman and child would need to fork over $43,000 to pay off that debt — a debt that grows greater every day. About half of that titanic debt has been incurred paying for the insatiable U.S. military behemoth, and for chronic wars of questionable rationale and cloudy conclusions. When veterans' benefits and debt service are included, military spending is now more than $1.4 trillion per year and consumes more than 50 percent of the total federal budget.

America has military bases in more than 120 countries scattered around the world — and rather than being reimbursed for protecting these countries — from enemies real or perceived — we actually pay rent to them. For some nations, our military presence has become a source of resentment, even festering into terrorist violence against us. For other nations, our military presence has become more a matter of economics than of their national security. Our military bases generate vibrant economies for the locals.

Meanwhile, our financial house of cards teeters precariously on loans from China and on paper dollars furiously churned out by the overheated printing presses of the U.S. Treasury. We are risking the financial health of the nation to remain the biggest dog in the kennel. Why?

North Korea proves that even a small nation without a global military presence can protect itself from enemies. It only needs enough nuclear weapons to deter aggression. America could abandon its foreign bases, slash its military spending to a fraction of what it is now and still protect itself from potential enemies as long as it maintains its capability to deliver nuclear annihilation against any place on earth.

For more, see Randy Alcorn: The Dubious Benefits of Being No. 1 by Randy Alcorn, September 4, 2010, at Noozhawk.

Society: The United States of Inequality

Today, the richest 1 percent account for 24 percent of the nation's income.
It's generally understood that we live in a time of growing income inequality, but "the ordinary person is not really aware of how big it is," Krugman told me. During the late 1980s and the late 1990s, the United States experienced two unprecedentedly long periods of sustained economic growth—the "seven fat years" and the "long boom." Yet from 1980 to 2005, more than 80 percent of total increase in Americans' income went to the top 1 percent. Economic growth was more sluggish in the aughts, but the decade saw productivity increase by about 20 percent. Yet virtually none of the increase translated into wage growth at middle and lower incomes, an outcome that left many economists scratching their heads. [Emphasis added].
Why don't Americans pay more attention to growing income disparity? One reason may be our enduring belief in social mobility. Economic inequality is less troubling if you live in a country where any child, no matter how humble his or her origins, can grow up to be president. In a survey of 27 nations conducted from 1998 to 2001, the country where the highest proportion agreed with the statement "people are rewarded for intelligence and skill" was, of course, the United States. (69 percent). But when it comes to real as opposed to imagined social mobility, surveys find less in the United States than in much of (what we consider) the class-bound Old World. France, Germany, Sweden, Denmark, Spain—not to mention some newer nations like Canada and Australia—are all places where your chances of rising from the bottom are better than they are in the land of Horatio Alger's Ragged Dick.
All my life I've heard Latin America described as a failed society (or collection of failed societies) because of its grotesque maldistribution of wealth. Peasants in rags beg for food outside the high walls of opulent villas, and so on. But according to the Central Intelligence Agency (whose patriotism I hesitate to question), income distribution in the United States is more unequal than in Guyana, Nicaragua, and Venezuela, and roughly on par with Uruguay, Argentina, and Ecuador. Income inequality is actually declining in Latin America even as it continues to increase in the United States. Economically speaking, the richest nation on earth is starting to resemble a banana republic.

For much more, see The United States of Inequality by Timothy Noah, September 3, 2010, at Slate.

Politics: America's History of Fear

Screeds against Catholics from the 19th century sounded just like the invective today against the Not-at-Ground-Zero Mosque. The starting point isn't hatred but fear: an alarm among patriots that newcomers don't share their values, don't believe in democracy, and may harm innocent Americans.

Followers of these movements against Irish, Germans, Italians, Chinese and other immigrants were mostly decent, well-meaning people trying to protect their country. But they were manipulated by demagogues playing upon their fears — the 19th- and 20th-century equivalents of Glenn Beck.

Most Americans stayed on the sidelines during these spasms of bigotry, and only a small number of hoodlums killed or tormented Catholics, Mormons or others. But the assaults were possible because so many middle-of-the-road Americans were ambivalent.

Historically, unreal suspicions were sometimes rooted in genuine and significant differences. Many new Catholic immigrants lacked experience in democracy. Mormons were engaged in polygamy. And today some extremist Muslims do plot to blow up planes, and Islam has real problems to work out about the rights of women. The pattern has been for demagogues to take real abuses and exaggerate them, portraying, for example, the most venal wing of the Catholic Church as representative of all Catholicism — just as fundamentalist Wahabis today are caricatured as more representative of Islam than the incomparably more numerous moderate Muslims of Indonesia (who have elected a woman as president before Americans have).

Americans have called on moderates in Muslim countries to speak out against extremists, to stand up for the tolerance they say they believe in. We should all have the guts do the same at home.

For much more, see America's History of Fear by Nicholas D. Kristof, September 4, 2010, at The New York Times.

Society: Union Membership Rates

For more, see Union or Not, Government Workers Squeezed by Alan Greenblatt, September 3, 2010, at National Public Radio.

Friday, September 10, 2010

Economics: The Slog

For more, see The Slog by David Leonhardt, September 3, 2010, at Exonomix Blog, New York Times.

Economics: Obama Is Repeating the Mistakes of the 1937 Economic Collapse

An opposing opinion ...

Does the 1937-38 economic collapse, the so-called "depression within the Depression" offer any lessons on what we should do now? In 1937, it seemed that things were improving, some light was seen in the Great Depression, but unemployment suddenly jumped from 14.3 percent in June 1937 to 19 percent in June 1938.
Some conservatives, such as Newt Gingrich, have recently focused on the new Social Security taxes that started in 1938 as the problem. "If we have large tax increases in January, this economy will sink deeper into recession," Newt Gingrich told Newsmax in late July. "This was exactly the mistake made in 1937 and 1938, and it created a second mini-depression."

Yet, while taxes surely hurt economic growth, there were other major economic events that both these discussions completely ignore. The late Milton Friedman pointed to new banking regulations that went into effect from March through May 1937. President Roosevelt had accused banks of "hoarding" money and his solution was to increase the reserve requirement with the Federal Reserve, dramatically reasoning that the government could make sure that the banks' money was properly spent. Of course, banks had not just been "hoarding" extra reserves for no reason.

The real lesson from the 1937-38 is that government made the situation much worse by always trying to fix things. Unfortunately, this is precisely what we have seen under Mr. Obama's presidency with the failed stimulus spending and all the regulatory chaos they have created.

For more, see Obama Is Repeating the Mistakes of the 1937 Economic Collapse by John Lott, September 3, 2010, at FoxNews.com.

Science: Changing One of Nature's Constants?

Studying the pattern in which gas clouds absorb the light from distant quasars, astronomers say they have found evidence that one of nature's physical constants changes in a lopsided manner.

Along one direction the fine-structure constant, which governs the strength of the electromagnetic force, grows slightly weaker with time, while in the other direction it grows slightly stronger. The research, by John Webb of the University of New South Wales in Sydney, Australia, and his colleagues, was posted online at arXiv.org on August 25 (http://arxiv.org/abs/1008.3907). The work is the latest in a series of controversial studies on the fine-structure constant, also known as alpha, that the researchers have conducted since 1999.

If the study is correct, it would force physicists to reconsider many of their most cherished ideas about the universe, including the notion, touted by Einstein, that the laws of physics are the same everywhere in the cosmos.

“This would be sensational if it were real, but I'm still not completely convinced that it's not simply systematic errors” in the data, comments cosmologist Max Tegmark of MIT. Craig Hogan of the University of Chicago and the Fermi National Accelerator Laboratory in Batavia, Ill., acknowledges that “it's a competent team and a thorough analysis.” But because the work has such profound implications for physics and requires such a high level of precision measurements, “it needs more proof before we'll believe it.”

For more, see Changing One of Nature's Constants by Ron Cowen, September 3, 2010 at ScienceNews.

Economics: The Real Story

When Mr. Obama first proposed $800 billion in fiscal stimulus [in Spring/2009], there were two groups of critics. Both argued that unemployment would stay high — but for very different reasons.

One group — the group that got almost all the attention — declared that the stimulus was much too large, and would lead to disaster. If you were, say, reading The Wall Street Journal's opinion pages in early 2009, you would have been repeatedly informed that the Obama plan would lead to skyrocketing interest rates and soaring inflation.

The other group, which included yours truly, warned that the plan was much too small given the economic forecasts then available. As I pointed out in February 2009, the Congressional Budget Office was predicting a $2.9 trillion hole in the economy over the next two years; an $800 billion program, partly consisting of tax cuts that would have happened anyway, just wasn't up to the task of filling that hole.

Critics in the second camp were particularly worried about what would happen this year, since the stimulus would have its maximum effect on growth in late 2009 then gradually fade out. Last year, many of us were already warning that the economy might stall in the second half of 2010.

Oh, and don't tell me that Germany proves that austerity, not stimulus, is the way to go. Germany actually did quite a lot of stimulus — the austerity is all in the future. Also, it never had a housing bubble that burst. And with all that, German G.D.P. is still further below its precrisis peak than American G.D.P. True, Germany has done better in terms of employment — but that's because strong unions and government policy have prevented American-style mass layoffs.

For more, see The Real Story by Paul Krugman, September 2, 2010, at The New York Times.

Mind: Digital Devices Deprive Brain of Needed Downtime

In gyms and elsewhere, people use phones and other electronic devices to get work done — and as a reliable antidote to boredom.

Cellphones, which in the last few years have become full-fledged computers with high-speed Internet connections, let people relieve the tedium of exercising, the grocery store line, stoplights or lulls in the dinner conversation.

The technology makes the tiniest windows of time entertaining, and potentially productive. But scientists point to an unanticipated side effect: when people keep their brains busy with digital input, they are forfeiting downtime that could allow them to better learn and remember information, or come up with new ideas.

“Almost certainly, downtime lets the brain go over experiences it's had, solidify them and turn them into permanent long-term memories,” said Loren Frank, assistant professor in the department of physiology at the university, where he specializes in learning and memory. He said he believed that when the brain was constantly stimulated, “you prevent this learning process.”

At the University of Michigan, a study found that people learned significantly better after a walk in nature than after a walk in a dense urban environment, suggesting that processing a barrage of information leaves people fatigued.

Even though people feel entertained, even relaxed, when they multitask while exercising, or pass a moment at the bus stop by catching a quick video clip, they might be taxing their brains, scientists say.

“People think they're refreshing themselves, but they're fatiguing themselves,” said Marc Berman, a University of Michigan neuroscientist.

For more, see Digital Devices Deprive Brain of Needed Downtime by Matt Richtel, August 24, 2010, at The New York Times. Thank you, Martha.

Thursday, September 9, 2010

Diversion: Deep Cover

From Deep Cover by Tim Eagan, September 2, 2010, at GoComics.

Economics: Tax Cuts That Make a Difference

Republicans argue that a permanent cut in tax rates is the best form of stimulus. Allowing any of the Bush cuts to expire, John Boehner, the top House Republican, said in a speech last week laying out the party's economic agenda, is “a recipe for disaster.”

As theories go, this isn't a bad one. You can certainly imagine how a tax increase on the affluent could hurt the economy or how a tax cut for them would lift growth. Theories aside, though, consider what has actually happened in the last three decades.

Mr. Bush signed his original tax cut in June 2001, when the economy had been losing jobs for four months. It then shed jobs for two more years. In the decade that followed the tax cut, economic growth was slower than in any decade since World War II.

If the goal is short-term stimulus, even Ronald Reagan's much-lauded 1981 tax cut doesn't appear to have worked. After he signed it, the economy lost jobs for 16 straight months. It didn't start gaining jobs until after he had raised taxes, to reduce the deficit, in late 1982.

For much more, see Tax Cuts That Make a Difference by David Leonhardt, August 31, 2010, at The New York Times.

Climate: Bjørn Lomborg: $100bn a Year Needed to Fight Climate Change

The world's most high-profile climate change sceptic is to declare that global warming is "undoubtedly one of the chief concerns facing the world today" and "a challenge humanity must confront", in an apparent U-turn that will give a huge boost to the embattled environmental lobby.

Bjørn Lomborg, the self-styled "sceptical environmentalist" once compared to Adolf Hitler by the UN's climate chief, is famous for attacking climate scientists, campaigners, the media and others for exaggerating the rate of global warming and its effects on humans, and the costly waste of policies to stop the problem.

But in a new book to be published next month, Lomborg will call for tens of billions of dollars a year to be invested in tackling climate change. "Investing $100bn annually would mean that we could essentially resolve the climate change problem by the end of this century," the book concludes.

Lomborg denies he has performed a volte face, pointing out that even in his first book he accepted the existence of man-made global warming. "The point I've always been making is it's not the end of the world," he told the Guardian. "That's why we should be measuring up to what everybody else says, which is we should be spending our money well."

But he said the crucial turning point in his argument was the Copenhagen Consensus project, in which a group of economists were asked to consider how best to spend $50bn. The first results, in 2004, put global warming near the bottom of the list, arguing instead for policies such as fighting malaria and HIV/Aids. But a repeat analysis in 2008 included new ideas for reducing the temperature rise, some of which emerged about halfway up the ranking. Lomborg said he then decided to consider a much wider variety of policies to reduce global warming, "so it wouldn't end up at the bottom".

The difference was made by examining not just the dominant international policy to cut carbon emissions, but also seven other "solutions" including more investment in technology, climate engineering, and planting more trees and reducing soot and methane, also significant contributors to climate change, said Lomborg.

"If the world is going to spend hundreds of millions to treat climate, where could you get the most bang for your buck?" was the question posed, he added. After the analyses, five economists were asked to rank the 15 possible policies which emerged. Current policies to cut carbon emissions through taxes - of which Lomborg has long been critical - were ranked largely at the bottom of four of the lists. At the top were more direct public investment in research and development rather than spending money on low carbon energy now, and climate engineering.

For more, see Bjørn Lomborg: $100bn a Year Needed to Fight Climate Change by Juliette Jowit, August 30, 2010, at guardian.co.uk.

Government: One Woman I-Team Sacks Tax Board

Mega-kudos to Laura Mahoney, Sacramento correspondent for the Daily Tax Report and the winner of the Calbuzz Little Pulitzer for Investigative Reporting, for a superb, 25,000-word probe of the powerful, under-the-radar state Board of Equalization.

The only journalist who regularly covers the board, she spent 18 months reporting and writing the five-part series, which reveals an incontrovertible pay-to-play connection between campaign contributions to its elected members and the outcome of tax appeals on which they rule.

“I realized when (the project) took me as long as it did to gestate my babies, I was in trouble,” said Mahoney, a mother of two.

Known as “the Board of Eeek!” to generations of California reporters who quake with fear at the mere thought of covering complex financial stories, the BOE not only administers billions of dollars of tax collections, but also adjudicates disputes about them between the state and corporations or individuals.

A summary of her findings begins:
Taxpayers with complex tax dispute cases before the California State Board of Equalization were more likely to win their cases if they or their representatives made campaign contributions to the elected board members, either directly or through political action committees, according to a detailed examination by Daily Tax Report, a BNA publication.

In a series of reports, BNA examined the outcomes of 70 complex, high-stakes cases argued before the board between 2002 and 2009, and compared those cases to publicly available campaign finance records.

BNA found more than $1 million in contributions to board members from taxpayers or their representatives who argue those cases before the board. All of the contributions were legal and contributors who spoke to BNA denied any causality between their contributions and success before the board.

We just bet they did. Check this:
However, a correlation appears to exist between contribution levels and success before the board, based on BNA's original research. BNA found that 20 of the 70 cases examined had less than $250 tied to them, and those taxpayers won their cases 30 percent of the time.

Success rates rose with higher contribution rates. Dividing the remaining cases in equal groups, BNA found another 17 cases had between $250 and $16,000 in contributions tied to them, and those taxpayers won 53 percent of the time. The next group of 16 cases had $16,000 to $50,000 tied to them, and those taxpayers won 75 percent of the time. The last group of 16 cases had $50,000 to $137,000 tied to them, and those taxpayers won 88 percent of the time.

For more, see Press Clips: One Woman I-Team Sacks Tax Board, by August 27, 2010 at , at Calbuzz.

Economics: Corporate Profits near Pre-Recession Peak

Corporate profits are near their pre-recession peak, according to a report released today by the Bureau of Economic Analysis.

From Corporate Profits near PRE-Recession Peak by Catherine Rampell, August 27, 2010, at Exonomix Blog, New York Times.

Economics: Young Firms, Not Small Ones, Are the Engines of Job Growth

Small businesses are the engines of job growth. So the conventional wisdom goes.

A new paper, by John C. Haltiwanger, Ron S. Jarmin and Javier Miranda, challenges this view, arguing instead that start-ups and other young firms are the disproportionate source of new jobs.

"... our main finding is that once we control for firm age there is no systematic relationship between firm size and growth."

For more, see Young Firms, Not Small Ones, Are the Engines of Job Growth by Catherine Rampell, August 26, 2010, at Exonomix Blog, New York Times.