02 Nov 2009

I’m Neither Smart Nor Devious Enough to Work for Goldman Sachs

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What the heck does this even mean?

Goldman Sachs Group is in talks to buy millions of dollars of tax credits from Fannie Mae, but the U.S. Treasury could block the deal, The Wall Street Journal reported on Sunday.

Goldman hopes to win approval this week, but the administration is wary about approving a deal that would help the bank reduce its tax bill, the Journal reported on its website.

“Treasury is reviewing and will not let it proceed unless it is clearly in the taxpayers’ interest,” Treasury spokesman Andrew Williams said, without providing further comment or details.

Somebody please explain this to me. E.g. can I sell Goldman Sachs my child tax credit? But I would insist on getting at least $1001 for it, and presumably they would only buy it for less than $1000.

So the only thing I can figure is that this either has to do with present value accounting and a dumb tax regulation, OR Fannie is going to sell something for less than it’s worth, and then Goldman will return the favor (diluted) to the people who signed off on the dumb sale.

02 Nov 2009

Faux Economic Profundities

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There are a lot of faux economic profundities floating around. I don’t remember who said this one–I’m thinking I read it in a Landsburg book in Barnes & Noble, but I could be wrong–but I have in mind assertions like this:

If you never miss a flight, you spend too much time in airports.

Wow, that’s heavy Ogre.

Is it too cute if I just say, “Prove it”? What if I make some comparable assertions instead? Will that give my complaint more oomph?

* If you never get audited, you’re reporting too much income.

* If you never get hit by a bus, you’re waiting too long to enter crosswalks.

* If you never experience an unwanted pregnancy, you’re spending too much on condoms.

Shall I continue, or do you get the idea? Don’t get me wrong, I love the whole economist pop book genre. It’s the first thing I check out when I’m browsing in a book store. But a lot of the deep thoughts you get there, consist in taking a neoclassical model, assuming away the real-world considerations that motivate actual people, and then declaring that the optimizing agent in the model outperforms the morons reading the book.

Want more? Try this and this.

02 Nov 2009

Potpourri

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* Mario Rizzo deconstructs the “contributions” to the 3Q GDP figures: “[A]t least 2.5 percentage points of the 3.5 percent increase are suspect on their own terms. And then there are the future costs to bear.”

* Not only did Paul Krugman (or his lackey) approve my comment on this post, but it was the first one! That actually concerns me that I managed to get in the first comment on a Krugman blog post. Surely that means I check his blog far more than the optimal frequency.

* Speaking of that Krugman post, Scott Sumner does a great job blowing up Krugman with his own petard (or something). Namely, Krugman is complaining about the slow recovery (and the need for more stimulus), by comparing our present recovery with previous episodes in which the economy bounced back quickly with much smaller deficit spending. This is the flip-side of the point I always make: When people say, “The government hasn’t done this since the Great Depression…” why is that supposed to inspire confidence?!

* Tom Palmer vs. Tom Woods.

* An interesting idea from one of the blogs you readers suggested in the other thread: Mencius Moldbug says:

Here at UR [Unqualified Reservations], we deal with the sacred-oath thing by shifting our words slightly. Instead of USG, we use the slightly more neutral name Washcorp. This reminds us that USG is no more than a corporation in the strict sense of the word, ie, an organization with a virtual identity. In a slightly more outré move, we translate the old Viking word for USG’s continent as Plainland, its subjects thus being Plainlanders. Thus rather than trying to free the US from the evil clutches of USG – an almost oxymoronic task – we are trying to free Plainland from Washcorp.

Perhaps you remember how confused you were in high school when you read Hamlet, and found Claudius being called “Denmark”? Did a little lightbulb go off in your head when you realized how nice it is for a monarchy, if its subjects use the same word for both king and country? And when you saluted the flag that morning, which were you feeling? Warm ties of love and loyalty to Plainland, or warm ties of love and loyalty to Washcorp? It’s these little Jedi mind tricks that hold the whole thing together. They’re small, but they add up.

01 Nov 2009

Isn’t a Christian Better Off Dead?

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In the comments of a recent blog post–and I’m sorry but I can’t seem to find it–a reader said something like: “You can’t possibly believe this religious stuff, right? I mean, my five-year-old showed how silly it was the other day when he said, ‘If you believe in heaven, why not just kill yourself and get there right away?’”

Putting aside issues of sin–you could also ask, “Why not become a mass murderer of Christians and bring euphoria to as many of them as possible before the idiot police put a stop to your altruism?”–I think I have a more profound answer.

Once I was taking a walk and something really “deep” occurred to me. I can’t remember now what it was, but really, it was a really cool idea and I was very pleased with myself. In fact, I was so impressed with the awesome idea that I had just come up with, that I actually reflected on my narcissism and realized it was unseemly. I don’t remember the exact words, but I think I acknowledged this pridefulness to God along the lines of, “Yeah I know we’re just punks, but c’mon, that was a pretty good idea I just had.”

In that moment, “out of nowhere”–and this had absolutely nothing to do with whatever trivial thing I was thinking about–it suddenly occurred to me that when one accepts that God is real and you give Him your consent to spend eternity with Him in paradise, then BOOM you are saved and that’s that. You have just done all you need to do to get into heaven.

However, He asks you to spend some more time on this (comparative) hell-hole earth, with all its suffering and injustice, in order to rescue as many of your non-believing brothers and sisters as possible. He has done all He can. There are still plenty of people who literally don’t even think He exists. So to convince them, it will take fellow humans to try to explain it.

(For those who are continually astounded by how such an ostensibly rational guy like me can spout all this ridiculous Jesus talk, it’s because of experiences like the above. If a God did exist, isn’t that just the kind of thing He would do? Isn’t that hilarious? He didn’t have a bird poop on my head in order to punish me for thinking I was hot stuff. No, He injected perhaps the most beautiful explanation of the meaning of life I have ever processed into my puny mind, such that I can’t even remember now what it was I was so excited about five seconds earlier.)

31 Oct 2009

Blog Bask

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OK I’m getting bugged clicking on the same old list. I need to find a new place where the kids are hip.

Regular Free Advice readers have a good sense of my tastes, sense of humor, and so forth. If you could name just one blog that you think I should be checking daily, what is it?

31 Oct 2009

Now I Know How Cliff Clavin Felt

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I’m so conservative I probably wouldn’t have risked it all on the Daily Double… Duh.

(Every econoblogger is featuring this, but I think I saw it first from Boettke. And this is the reference in my post title. UPDATE: I just noticed a mistake at around 4:22 in the Cheers clip. Amateurs.)

31 Oct 2009

Does Anyone Really Know What Time It Is?

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Jeff Hummel passes along this op ed by William Shugart on daylight saving:

Although daylight-saving time was sold politically as an energy-conservation measure, it does no such thing. Studies conducted in Indiana prior to 2006, when that state operated under three different time regimes, show either no difference in energy consumption or a small increase in power usage during the months after clocks were moved one hour ahead.

Yet the costs of switching between daylight-saving and standard time go far beyond the hassles of “losing” an hour in the springtime and “gaining” it back in the fall.

A Swedish study…reports increases in the incidence of myocardial infarction (heart attack) after the beginning of daylight-saving time and the subsequent return to standard time. Depending on whether the shift occurred in the fall or spring, men and women were found to vary in the extent to which their heart attack risks were increased, but the study’s authors concluded from the clinical evidence that time change triggered more myocardial infarctions in the two groups overall than they would have suffered otherwise.

It would be cold comfort were only a small fraction of the population subject to the untoward health consequences of time shifting. That is because, as the Swedish study notes, more than 1.5 billion people around the globe are exposed to the transitions demanded of them at the beginning and ending of daylight-saving time. Many of the companies located overseas that provide technical support or other services to U.S. businesses operate on New York time. Workers in Manila, Mumbai and elsewhere therefore must adjust their clocks twice a year even if their own nations have not officially adopted the institution of what in some places is called summer time.

Adding to the bill, some students of daylight-saving time suggest that accidents involving pedestrians spike immediately after the return to standard time as well, because drivers have not yet adjusted to commuting home in the dark.

There are few, if any, measurable benefits from switching to daylight-saving time in the spring and back to standard time at the end of October. But time shifting imposes some very real costs.

Those costs, we now suspect, are not limited to feeling out of sorts temporarily or investing effort in adjusting clocks rather than doing something more enjoyable or productive. The twice-a-year ritual of time travel actually kills.

I cannot prove it, and I suspect no one ever will, but I think the primary reason for the “daylight saving” nonsense is that it reinforces the notion that the State is omnipotent.

“We are the government. We certify your birth, marriage, and death. Any amount of the paycheck with your name on it, that you get to keep, is a ‘tax expenditure’ on our part. If you fail to pay sufficient property taxes–the amount being decided by us, not you–then we take our rightful property away from you. We are the State. You don’t even know what time it is until we tell you.”

31 Oct 2009

Murphy PIGs: Everything Must Go! The Prices Are Insane!

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When I give a talk somewhere, I don’t want to carry a bunch of books on me, so I just buy some directly from the publisher and have them shipped to the site. Of course I err on the side of optimism (better to come back with extra books rather than turn people away empty-handed), which means that over time I accumulate a bunch of inventory.

Consequently, while supplies last, I will sign and ship either of my Politically Incorrect Guides (see links in the left margin) for $15 plus shipping. Note that that’s only a buck more than Amazon charges for the Great Depression book, and my signature has gotta be worth at least $2.50.

Like I said, this is “while supplies last,” since I’m just trying to clean out my inventory, rather than start a side business exploiting my author’s discount. If you are interested, send me an email with “PIG Order” in the subject line, and I’ll let you know if I still have any in stock. (I have a lot more Depression ones than Capitalism ones.)

Makes a great holiday gift!