Blog of the Allies

I got published in the Leeds Student

2011-10-03T10:56:00.000-07:00

They even made a cartoon just for the article!

Countdown

2011-09-18T02:08:00.000-07:00

Exactly in line with popular belief, it rains a lot in England. Two days ago I had to run 15 minutes through a total downpour. The strange thing, though, is how long things take to dry in England. My shoes are still wet. Does water have a higher boiling point in England? Is that why it rains so much?

My hall, or "flat," has six rooms on it that share a kitchen. So far, four of the rooms have been taken by Americans, and we were hoping British people would move into the other two. No such luck. Yesterday a girl from Ohio suddenly appeared in one of the rooms.

Why would they quarantine the Americans like this? It's not like we're Burmese or Estonian, some rare people who don't speak English and desperately need a home base of ethnic homogeneity. We are freaking Americans. Can we not live abroad unless we have someone within ten feet who knows about college football? I'm kind of annoyed. Getting invited to parties is going to be harder.

Change

2011-09-16T08:03:00.000-07:00

In the UK, some coins are worth an entire Five Hour Energy Drink. This is a big change. Whenever I go up to buy something, it takes me so long to sort out my change that the counter person usually just does it for me. I am thinking of acquiring some accent more exotic than an American accent to make people more sympathetic to my problem.

Most students here are undergrads. I had never anticipated how strange it would be to walk through life surrounded by people too young to have seen Pete and Pete. The other day, I met a group of british guys in the bathroom of a bar, and they invited me to their table to drink. The medley of hot girls at the table were uncharacteristically interested in me. When me and the main dude went to get beers, we had the following conversation:

British Bro: "Is the drinking age in the states still 21?"
Me: "Yeah, why?"
BB: "Well it must be exciting here to be able to drink right?"
Me: "I'm about to turn 25. How old are you?"
BB: "I'm 18. Don't worry though. Age is just in your mind once you get to uni."

It's pretty cute that he tried to console me, assuming I must be really tired and defeated after enduring an entire quarter century on the earth.

Leeds Arrival

2011-09-14T12:45:00.000-07:00

Today was my first day in the UK. I have this urge to ask any random british person literally any question about where things are, as if they're all employees at a big theme park.

I've been placed in a flat with three other Americans doing one-year masters programs. This is a setback. I pictured being invited to kick a soccer ball around by british flatmates. I just have to keep a stiff upper lip, as the british say. The flat across the hall is an all Chinese girls flat. This is not a setback.

Tonight I am going to a session where you learn British pub etiquette--an event that will combine manners, condescension, and pubs for a triple play of British stereotypes.

It's cool that I can speak the language here, but it's kind of like listening to fighter pilots speak. They're saying english words, but I can't actually understand what they mean. Like today at the store the only types of pillowcases were called "housewife pillowcases." It was a variety, not a brand name. But why would a housewife's pillowcases be different than those of a high-powered executive mother of three--in short, a woman who has it all?

The streets in Leeds do not have street signs on them. Day one at the institute for transport studies I am going to try to clear this up.

My body literally has no idea what time it is. I have slept in three 2 hour bursts over the last 24 hours. I took melatonin on the plane at what would be bedtime in leeds last night, to get my body adjusted, but then "King's Speech" came on.

The airline clearly arranged the movies to give us Americans an inferiority complex. Why else would they follow "Something Borrowed" with "King's Speech"?

Tropical Lagoon

2011-06-25T17:41:00.000-07:00

Freelancing day 6: Today I changed my desktop background to a picture of a tropical lagoon. My worries melted away.

Sympathy for the Savers

2011-05-26T12:30:00.000-07:00

Bloomberg news reports: "Savers May Be Hobbled for 15 Years: Gross"

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said investors may be at a disadvantage for as long as 15 years as the U.S. keeps borrowing rates low to reduce its debt burden.
“Savers are being disadvantaged” when compared with debtors, Gross said during an interview on Bloomberg Television’s “Surveillance Midday” with Tom Keene. “What policy makers are trying to do is rebalance this imbalance, in terms of too much debt and too attractive rates on savings. It’s basically called financial repression. We call it pocket picking.”

First, "investors" are not disadvantaged, as claimed in the first line. You can invest in stocks, bonds, commodities, currencies, etc. Gross means people cannot earn money simply by parking their money in a liquid, risk-free asset. You can still earn plenty of money by doing a good job at investing. Nothing entitles you to earn money by doing absolutely nothing other than having money.

If the real rate of return on money is low, that means many people want to hold safe, liquid assets. It's supply and demand. Saving might be a virtue, and you might feel entitled to a reward for delaying gratification. But the price system still holds and your virtue will be no more highly rewarded than will the industriousness of an unskilled Chinese laborer in a country full of industrious unskilled laborers.

Households have lost real estate value, which many people perceived as risk-free. Now they want to rebuild their supply of safe assets. Since many people want to buy safe assets, their price rises and their yield falls.

The Fed is not doing anything extraordinary to keep real returns low. If the Fed were acting extraordinarily, then nominal GDP would not be growing at a 3.9% rate, as disclosed today. Nominal GDP grew at a 5% rate for most of recent history.

Brett Arends Is Wrong

2011-05-25T11:12:00.000-07:00

It hurts my heart when I see people misleading amateur investors. So I'm going to write take-downs of bad columnists.

Last week award-winning finance columnist Brett Arends published an editorial on MarketWatch full of wrong assertions and contradictions about QE2. Here I'll call them out:

"[QE2] cost $600 billion of your money."

Actually QE2 didn't "cost" money. The Fed traded $600 billion of one financial asset for $600 billion of another financial asset. This could cost something if the transactions were still conducted on paper, since in that case you'd have to buy the paper. Fortunately they're on computers.

One day someone takes $100,000 out of a CD and buys $100,000 in savings bonds. Does he need to cut expenses, since the savings bonds "cost" $100,000? No, because now he has $100,000 in savings bonds. Savings are unchanged.

Later in the column he gives a shout-out to Austrians who advocate a gold standard. But even in a gold standard the monetary authorities have to purchase gold half the time to keep its value from falling. To my knowledge, no advocates of a gold standard would say this half of their policy "costs" anything.

"According to the U.S. Labor Department, since last August the number of full-time workers has gone up by just 700,000, from 111.8 million to 112.5 million.At a cost of $600 billion, that’s $850,000 a job."

Last August is when I moved into my new apartment in Shadyside. That's 700,000 jobs per apartment that I rent. Of course, you might say you can't draw one-to-one effects between any two things that happen simultaneously.

Imagine that instead of buying the assets over a number of months, the Fed bought assets over the course of 50 years and called it QE2. Over the next 50 years, the number of jobs will definitely increase by tens of millions. Obviously, by spacing out its purchases over 50 years, the Fed would make QE2 impotent. According to Brett Arends, though, it would make more jobs attributable to QE2, since more jobs would be created during the time QE2 was going on.

"Meanwhile QE2 has created an entirely artificial bubble in all dollar-based assets."

This is a fine claim to make. But Arends follows his claims with reasons the "bubble" is not, in fact, artificial.

"What’s really happened is a decline in the value of the dollars that the shares [of the stocks on the S&P 500] are measured in."

If the dollar is actually devalued, that is evidence against a bubble. If dollars are worse less--or are going to be worse less--then higher share prices are rational. Just like it was rational that, after Argentina devalued its currency against the dollar, tradable products in Argentina started to cost more pesos.

A bubble is when an asset price will predictably fall. So to say shares are in a bubble is to say that the dollar is down temporarily but it's right about to gain lots of value.

But I don't think Arends believes the dollar is about to gain lots of value. He just hasn't thought about his assertions. He's just saying "bubble" and "devalued" dollar together because they're both negative things you could say about QE2.

"Measured in hard currencies, the stock market boom has been much less impressive. In Swiss francs, the S&P has risen by just 8.4% since Aug. 27. In currencies like the Swedish krone and Australian dollars it’s even less. Measured in gold, the S&P 500 is up just 4.5%."

First, gold is not a currency. Show me a menu with prices in gold.

Second, there are many currencies in the world, and they go up and down every day. At any time, you can measure a price against one of the currencies that has risen and claim the rise is actually, deep down, invisibly unjustified. Have you ever heard someone say "That house seems expensive, but what's it worth in Swedish krones?" If so, then you have been to Sweden.

Third, is devaluation a result of QE2 or the continuation of a trend driven by real factors? Here is the USD vs. the Australian dollar over a ten year period.

Australia is a country with tons of natural resources and few people. In a world with growing population and a growing number of machines that require natural resources, demand for things in Australia will rise. The Australian central bank will either let prices rise in Australia, or it will let the Australian dollar rise.

"Meanwhile the illusion of a boom is causing all sorts of investors to take crazy risks. Witness LinkedIn’s IPO."

If LinkedIn's share price is so certifiably inflated that it can be used as a piece of evidence in another argument, then Arends should write a column telling everyone to sell LinkedIn. You can make a fortune if you know for a fact that a share price will fall. Look at John Paulson.

More importantly, there is no logical link between investor's appetite for particular stocks and the Fed's policies. QE2 should raise share prices on average, because it will raise expectations of future nominal spending and hence corporate profits. But Arends denies share prices are really up on average. And more importantly, the potential "bubble" aspect of LinkedIn's share prices exists in investors' perception of its future profits relative to the profit growth of all other companies.

Why QE2 would suddenly make investors turn "crazy" is unclear. If there is a reliable, provable link between fed policy and the ability of professional investors to pick stocks, then Arends could win the Nobel Memorial Prize in Economics for making the link indisputable.

You get the picture. Arends is wrong/illogical.

Good thing I paid my taxes

2010-05-05T13:39:00.001-07:00

Most livable city

2010-05-05T13:26:00.000-07:00

Pittsburgh is the most livable city again, according to Forbes magazine. The economist said this last year.

Maybe I'll buy a house here.

Also, the population is falling, but that's mainly cause this city is full of elderly people who die off.

second stimulus column

2010-02-10T13:03:00.001-08:00

According to a CNN poll, 54 percent of Americans believe that the American Recovery and Reinvestment Act (ARRA), or “the stimulus package,” has benefited bankers. Meanwhile, only one third believe the ARRA has benefited the poor, and only one out of four of Americans believe it has benefited the middle class. The overwhelming majority—three out of four—believe at least half of the stimulus money has been wasted.
This poll is the most depressing economic news I've heard lately. It means that very few Americans have any idea what congress put in the ARRA. I am pretty sure, because, once you understand what’s in the bill, it is impossible to believe that it benefitted bankers but not poor people, and it is unlikely that so many Americans would call half of the package "waste."
The following graph illustrates the ten most expensive items in the ARRA.

These ten items cost $470 billion. That's 60 percent of the stimulus. Obviously, none of this money went to bankers. That’s why CNN's polling director Keating Holland said, "It's possible that the belief that the stimulus bill has helped bankers and CEO's is due to the public confusing the stimulus bill with the various bailout bills."
Was this money wasted?
ARRA expenditures fit into three categories:
(1) Programs that directly aid individuals and families—such as tax cuts, unemployment payments, food stamps, COBRA insurance, and Pell Grants. To believe that this money is wasted, you have to believe that individuals are not very good at spending money or that health insurance is wasteful.
(2) Programs that enable states to stick to their long-term spending plans—such as the aid to state Medicaid and public education budgets. Voters deemed these programs necessary and productive for decades. Why would they suddenly have become wastes of money over the past two years?
Consider: every few years, Pennsylvanians ask, "How much do we want to spend on education?" The answer should depend on Pennsylvanians' priorities and the commonwealth’s long-term ability to generate income. No one would ever propose that it depend on house prices in Florida and California or the unemployment rate in Michigan. But if the recession forces hamstringed authorities to lay off teachers, postpone school upgrades, and cut financial aid, then the education of the commonwealth’s children really does depend on such arbitrary factors.
(3) Programs that fund specific projects—such as highway construction, medical records technology, “Smart Grid” upgrades to the electricity grid, broadband for rural areas, public transit upgrades, and tax credits for wind turbines. This category amounts for much of the spending not listed in the graph. This spending is doled out in small amounts to myriad causes.
It’s common sense that fast and complicated projects invite waste. But this whole category only composes a fraction of the ARRA. And the waste is often counterbalanced by huge gains on worthy projects: the $11 billion for a Smart Grid, for example, is desperately needed, unless you think it’s fine that unclipped trees in Ohio can induce an economic paralysis as severe as the Northeast Blackout of 2003.
There’s a perception that the entire ARRA was devoted to category (3). Rush Limbaugh, for example, recently argued for a hybrid stimulus plan: “…under the Obama-Limbaugh Stimulus Plan of 2009: 54% of the $900 billion -- $486 billion -- will be spent on infrastructure and pork as defined by Mr. Obama and the Democrats; 46% -- $414 billion -- will be directed toward tax cuts.”
The phrase “infrastructure and pork” implies the ARRA only funds construction projects. That’s a plain falsehood. While it is easy to believe that unions forced Democrats to spend all the money repaving roads, that narrative is more story than history.
Why isn’t the ARRA working?
The ARRA did a good job of stimulating spending—i.e. growing the GDP. And the ARRA did a good job of preventing human misery—i.e. keeping people fed, housed, healthy and educated. But it hasn’t stymied unemployment. So, it’s two for three.
This recession has been a perfect storm for employment. Consider: a housing bubble bursting causes lots of job losses in construction, which is an especially labor-intensive activity. And the places where job losses are worst are, by definition, also places with rapid declines in housing prices, which makes it almost impossible for unemployed workers to sell their houses and move to places with jobs. It’s hard to imagine a government policy that would reverse such a vicious cycle. Maybe the best we can do is to stimulate the economy generally and help people ride out the storm.
Of course, the ARRA isn’t perfect. There will be outrageous instances of waste. Employed workers ended up saving most of the $116 billion in tax credits they received. Not enough money went toward encouraging private-sector employers to hire. But believing the ARRA could have been better is very different from believing it was a bad idea to pass the bill.

Column Endorsing the Stimulus

2010-01-25T12:37:00.000-08:00

Lehe: I endorse economic stimulus

Right now, there is a weird asymmetry between the economics of politicians and the economics of economists. In the world of politicians, supporting economic stimulus is synonymous with stupidity, greed and shortsightedness. It’s as if the idea is so shockingly wrong that only moral or intellectual failure can explain someone’s support for the American Recovery and Reinvestment Act (ARRA).

Among economists, however, the case for stimulus enjoys support across the political spectrum, although the details of how best to execute a stimulus vary. In Tuesday’s Wall Street Journal, for example, Martin Feldstein, a Nobel Laureate economist who designed many of Reagan’s policies, advocated the need for stimulus, even as he distanced himself from the ARRA.

You might not agree with the case for stimulus. But I hope that hearing the case will calm some people down. Today, I endorse economic stimulus.

What is the theory of economic stimulus? It’s the idea that a government can pull the economy out of a recession by borrowing money and using it for tax cuts or deficit spending.

Why would that work?

It turns out that many parts of the economy are confidence games. Businesses hire workers and buy equipment based on today’s earnings. Consumers make purchases based on today’s household income. But the businesses’ hiring is the consumers’ income, and the consumers’ purchases are the businesses’ income. It’s a circle that depends on confidence.

If something happens that shakes our confidence, then consumers and businesses stop spending money in ways that depend on confidence — like buying new dishwashers or retrofitting old plants to make new chemicals. People save money instead. Up to a point, more savings will lower interest rates and increase business investment, but when the interest rate hits zero, then business investment maxes out. Higher savings lower business income, so businesses cut investment and employment, which lowers income for consumers and other businesses. It’s a vicious cycle.

One goal of a stimulus is to stop the self-fulfilling prophecy caused by a loss of confidence. Basically, the government says to the American people, “I will give you some government bonds if you give me some of your savings.” Then, the government just gives the money right back to the people via tax cuts and deficit spending. So the people’s total wealth — their money plus the stock and bonds they own — is unchanged, but the people’s present income is greater. A higher present income restores confidence.

Fine, but isn’t the stimulus expensive?

The Tea Party movement complains that stimulus spending burdens the U.S. with debt and will make the country poorer in the future. They are right to worry about the long-term budget outlook, since Medicare and Medicaid are insanely unsustainable, but wrong to worry that the stimulus has anything to do with it.

Why not?

First, investors have been scared to lend to consumers or corporations, so the government can borrow at ridiculously low interest rates — about 3.3 percent. Therefore, interest on the stimulus debt won’t impose noticeably higher taxes down the road. The Congressional Budget Office estimate from Jan. 2009 predicted about $347 billion in interest over 10 years. This is about $35 billion per year. Today’s GDP is $14.2 trillion.

Second, deficit spending is the cheapest way for the government to buy things it needs to buy anyway. Prices and wages fall during a recession. So, if the government is going to repave a road, it’s cheapest to buy the materials and workers during the recession.

Third, stimulus spending makes the U.S. wealthier. The nation’s wealth depends on its technology, work force and capital. Period. If the stimulus restores confidence, and thereby causes businesses to build more factories, offices, houses and machinery, then the nation will be wealthier. If the stimulus keeps people healthy and educated, then the nation will be wealthier.

It’s important to see through the illusion that debt can create in times like ours. The true cost of something is what must be given up to obtain it. And in normal times, when the government buys things, the cost is tangible. That is, the labor and factory capacity required go to government production, so they can’t go to private production.

But in a bad recession, workers are unemployed, and factories run far below capacity. Putting workers and factories to work doesn’t impose much of a real cost on society, because society wasn’t using them anyway.

The fact that the government will have to have to collect money from some Americans and then give it to others (the debt holders) is an accounting trick. The only effect by which the debt payments make America poorer is that the taxes required to raise $35 billion per year will reduce citizens’ work effort ever so slightly.

Why isn’t the stimulus working?

I have been talking about stimulus spending as a concept. The American Recovery and Reinvestment Act is a real bill, made by politicians in the messy real world. It has a lot of flaws. In my next column, I’ll talk about the specifics of the ARRA. I hope, though, that I’ve made the case that there is a case to be made for stimulus.

Unions Halting Progress

2010-01-19T13:32:00.000-08:00

From Maine:

Central Maine Power Co.'s proposal to install "smart meters," which transmit consumption information directly to the utility, has raised the concern of union officials, who say the new technology could mean a loss of 141 jobs, according to the Kennebec Journal. CMP won a $96 million U.S. Department of Energy grant to help fund the $190 million project and had planned to start installing smart meters early this year, with a completion date of mid-2012. But officials at the International Brotherhood of Electrical Workers Local 1837 are opposing the project and plan to speak out about it at a public hearing scheduled for Wednesday.

The realproblem, really, is electricity itself, which put millions of candlemakers out of work.

Shakira/Weezer Cover Band

2010-01-11T11:30:00.001-08:00

Ryan Morrison and I are launching a Shakira/Weezer cover band for Ryan's going away party in March. Vote on your fav name. That means you, ladies!

Candidates:

Surf Wax South America
The Suerte Song ("Suerte" is Spanish for "Whenever, Wherever.")
She Weezer
Jamie vs. Jaime
Shakeezer
Say It Ain't South America
Surf Wax Colombia
Al Shazeera (nothing to do w/ weezer, but still tight.)
Me Llamo Jonas ("Me llamo" = My name is)
El Scorcho ("The Sorcho")
Los El Scorcho's ("The El Scorchos")
Say it Ain't Shakira
Hips Don't Like Weezer

P.S. Both Weezer and Shakira have done songs with Lil' Wayne in the past six months. Should Lil' Wayne be in our cover band? What instrument should he play? How about the xylophone?

RULES:
Leave a post with your top two favs. Even though, according to Arrow's Impossibility Theorem, this is not guaranteed to give the socially optimal outcome.

Giving the people what they want

2010-01-10T19:27:00.000-08:00

"Avatar" box office hits $1.3 billion worldwide

"Avatar" passed the $1.12 billion tally of "The Lord of the Rings: The Return of the King" last Wednesday to become the second-highest worldwide release ever, trailing only "Titanic" with worldwide sales of $1.84 billion in 1997-1998. Data are not adjusted for inflation, and "Avatar" sales are also inflated by premium prices for 3-D screenings.

The North American contribution rose to $429 million, with weekend sales of $48.5 million propelling the movie to the No. 7 slot in the record books.

James Cameron will have made the #1 movie of all time and the number 2 movie of all time. I guess people really really like graphics. Even though it had bad dialogue, that movie was awesome.

Alcoholic Energy Drinks

2010-01-10T19:20:00.000-08:00

Apparently in November the FDA started investigating the safety of alcoholic energy drinks, after letters from a bunch of doctors and state attorneys:

FDA killing buzz on alcohol energy drinks (from Reuters)

The FDA took action after 18 attorneys general from states, including New York and Arizona, wrote the agency raising questions about the drinks' safety. A city attorney from San Francisco also signed the letter.

A group of five scientists who study college students' drinking habits also wrote a letter saying there was no evidence to support the claim that caffeine was "generally recognized as safe" for use in alcohol drinks.

"Being wide awake and drunk at the same time increases the risk of engaging in several forms of violent or other high-risk physical behaviors that can cause injury," wrote the scientists, who come from such institutions as Johns Hopkins University School of Medicine and Wake Forest University School of Medicine.

The FDA only approves caffeine as an additive for soft drinks and has not approved its use in alcoholic beverages.

I'd say that a ban on alcoholic energy drinks is too much government. You can drink an energy drink and an alcoholic beverage at the same time. All that a ban would do would be to keep a company from mixing it for you. That's inconsistent and it won't accomplish anything. Also, notice the quote:

"Being wide awake and drunk at the same time increases the risk of engaging in several forms of violent or other high-risk physical behaviors that can cause injury."

So, they are not so much worried that the drink will hurt you as they are worried that you will hurt yourself because you can't control yourself.

Isn't the FDA's role to protect people when they don't have enough information to make a decision? I feel like everyone defintiely has enough information to decide whether he or she can handle being drunk and wide awake at the same time.

My Piece on The Shop

2010-01-06T13:21:00.000-08:00

I wrote some long pieces for Intensive Reporting last semester. This is the best one, with pictures from my roommate Vaughn Wallace:

South Oakland barbershop a time capsule of neighborhood history

In the print edition, it was called "Little Shop of Hairs."

New Blog

2010-01-05T15:03:00.001-08:00

Hey I made a new blog about making a documentary about congestion pricing.

The Blogumentary

This is my favorite song right now

2010-01-04T17:39:00.000-08:00

This Is Why We Will Lose in Afghanistan

2009-12-22T22:14:00.001-08:00

So this plan of a plan of a million plans is going to be carried out by people who, by self-selection, are more enthusiastic and saavy about fighting people than talking to villagers and administering budgets, and who will be paid the same regardless of whether the plan succeeds or not. Hmmm. If someone expects this plan to succeed, why wouldn't they expect a military-run hospital, steel-mill, or, hell, graphic design firm to succeed? To believe this war will work, you have to be the most committed type of socialist: one who believes anyone can do any job and that mere enthusiasm, pride in work, and sense of duty to society can drive people to excellence consistently and for a long time---so, you have to be Karl Marx.

I am calling it: Failure in Afghanistan even with the 30,000 troops.

Is Education Going Digital?

2009-12-18T12:35:00.000-08:00

How the iPhone Could Reboot Education @ wired.com

This is a cool article. At Abelene Christian University, they give the freshmen iphones and ipod touches, then incorporate them into the learning in a way that actually seems useful, instead of just using technology for technology's sake. I especially think this is a good idea for the huge number of kids who are shy, or a little behind their peers, but still eager to learn:

In some classrooms, professors project discussion questions onscreen in a PowerPoint presentation. Then, using polling software that Abilene coded for the iPhone, students can answer the questions anonymously by sending responses electronically with their iPhones. The software can also quickly quiz students to gauge whether they’re understanding the lesson.
Most importantly, by allowing the students to participate in polls anonymously with the iPhone, it relieves them of any social pressure to appear intelligent in front of their peers. If they answer wrong, nobody will know who it was, ridding students of humiliation. And if students don’t understand a lesson, they can ask the teacher to repeat it by simply tapping a button on the iPhone.
“Polling opens up new realms for people for discussion,” said Tyler Sutphen, an ACU sophomore who has participated in the iPhone initiative for a year. “It’s a lot more interactive for those who aren’t as willing to jump up and throw out their answer in class. Instead, you push a button on the iPhone.”

Column on Shower Radios

2009-12-10T09:58:00.000-08:00

Lehe: By Showering, learn community happenings, rap music

I am trying to find the words to describe my shower radio without being disrespectful.

If you didn’t catch that, I just made a very timely pop culture reference. In Akon’s new song, he croons that he’s “tryna find the words to describe this girl without being disrespectful.” Apparently, he didn’t find the words, because the song is titled “Sexy B*tch.”

I am able to make cutting-edge references because I have a shower radio. Today, I endorse shower radios. A shower radio is the best way to connect to the popular culture of the United States as well as the local goings-on of Pittsburgh.

I used to feel inferior when other people made pop music references. The people who were the life of the party always seemed to be getting all excited when songs I’d never heard came blaring out of the speakers. These kids would sing the words and do special dance moves. As for me, I just hung my head in shame, convinced I was an ignoramus. “How do people know about all this pop stuff?” I wondered while sobbing into my pillow every night.

It used to be that I learned everything I knew about celebrities from reading US Weekly in the grocery store line at Giant Eagle. But the line is only so long, and I wasn’t familiar with half of the celebrities’ output — so even the most sordid affairs just didn’t resonate. Nor does US Weekly help you sing lyrics out loud at a party.

Then I moved into a room on the third floor of a 100-year-old house in South Oakland. During the winter, the temperature on my floor drops to 50 degrees, so I started taking longer showers — procrastinating the frosty and depressing moment when I would exit the shower’s steamy womb. And as luck would have it, the first time I stepped into said shower there was a little shower radio waiting for me on the floor. Here, bundled up in the most unlikely of places, was my salvation from a life lived without pop music savvy.

With just 20 minutes of listening per day, I soon became an expert on the latest and greatest from Rihanna, Lady Gaga, Sean Kingston, Jay Z and, of course, Mr. Akon himself. It marked a turning point in my life. I am a new man now — a man whose tastes are similar to those of a 12-year-old girl.

Knowing the lyrics made me personally invested in the astrology of the stars of pop music. Thanks to the shower radio, I felt honestly appalled that Chris Brown beat up the girl who sang “Disturbia” and “Please Don’t Stop the Music,” instead of mildly interested that this really young guy beat up the girl from the makeup commercial.

I’m going through the trouble of telling you about the shower radio today, though, not just because I like talking about myself and because I have to write something every week. I’m telling you about the shower radio, because I want you to get ahead in the world.

Long ago, before VH1, people used to get by through quoting Shakespeare and talking about the latest Dostoevsky translation. Book knowledge provided your ticket to swanky parties, good jobs and beautiful women, unless you were a beautiful woman, in which case it was your ticket to feeling extremely constrained as a housewife. The way of the world was that people gave and received props for the kinds of things people who don’t go to college imagine that people who do go to college learn at college.

In the year 2009, you’ll still get some props for knowing about good writing, but those props will pale in comparison with the props due to anyone who can rap the verses of “Empire State of Mind.” Of course, listening to the shower radio won’t equip you to rap whole verses, but, after repeated exposure, you will gain the ability to move your mouth in such a way that, if the song is playing loudly, it will plausibly look like you are rapping the real words.

The shower radio isn’t just a lifeline to the national consciousness, though. It’s also a great way to find out what is happening in your community. And as I’ve discovered, one of the main things happening in your community is a hilarious morning show called the 96.1 KISS Morning Freak Show with Mikey and Big Bob. Many a day I find myself with wrinkled hands because I stayed in the shower extra long to hear more of Mikey and Big Bob’s antics on the airwaves. A real couple of cut-ups, if you ask me!

On Friday, I went to Monroeville and left a Barbie doll in an empty school bus. It wasn’t as creepy as it sounds, because Mikey and Big Bob were sponsoring an event called “Stuff a Bus,” where KISS helps fill school buses with toys for children without advantages like Nerf crossbows and Bratz dolls. I never would have helped those needy children if it hadn’t been for Mikey and Big Bob broadcasting live from the Miracle Mile shopping center.

Driving back from Monroeville, I thought of all those toys for the tots ... how happy the tots would be on Christmas morning. And I realized that I could make people I knew, who weren’t even tots, just as happy with a simple inexpensive gift. This Christmas, I’m giving shower radios. It’s the perfect way to say whatever I’m trying to find the words to say.

My Column On Airsoft Guns

2009-12-10T09:56:00.000-08:00

Lehe: Settling Our Differences One Airsoft Pellet At a Time

Today, I endorse airsoft guns.

A few weeks ago, my parents came to visit. I wanted my house to look nice, so I issued an ultimatum to my housemates. I wrote it on the dry erase board we have in the kitchen:

1. Every item you leave out in the common areas I will hide in the basement.
2. I will shoot you one time with my airsoft gun for every item you leave out.

The second threat was just a joke. Who would shoot someone with an airsoft gun? An airsoft gun is a toy gun that shoots plastic BBs. It hurts about as bad as a bee sting that you got two days ago. Unless you’re in an airsoft battle, it’s not polite to shoot people.

Still, I figured the first threat was strong enough.

I was wrong. I ended up having to hide a lot of miscellany in the basement.

Everyone has cleaned up after roommates. It’s always the same. Every piece of clutter seems like an intentional gesture of disrespect.

It’s like your floor is strewn with middle fingers. Later on, you retaliate by leaving dishes in the sink. The contest escalates silently, like the Cold War arms race.

This time was different.

While I carried things down the stairs to hide in the cellar darkness, a funny thought cropped up: What if I really do shoot my housemates with an airsoft gun?

I resolved to carry out threat No. 2. My whole attitude changed immediately.

When each sock, box or bike tool strewn on the floor is a little ticket to shooting someone with an airsoft gun, the week-old, half-empty glass of Coke you have to pour out starts to look half full.

Later, as I trained the bead of my airsoft shotgun on my delinquent housemate, I realized I felt no resentment.

“This was just the way things had to be,” I thought. “The course of nature compels me to light up this dude’s a** with an airsoft gun.”

For the first time, I understood what Mr. T means when he says he pities the fool. Mr. T feels so sure he will have justice that he doesn’t even know about resentment.

He also seems to think that crossing him is not so much a matter of villainy as it is foolishness, because crossing Mr. T will definitely not pay off. It is a matter of fact. Hence, Mr. T knows only pity. Pity is a better emotion than bitterness.

I propose we shoot our friends with airsoft guns whenever we’re disrespected, betrayed, ignored or disappointed — whenever they do pretty much anything that would otherwise spark smoldering resentment.

Shooting friends with airsoft guns would prevent petty acts of vengeance, venting behind our friends’ backs and volcanic outbursts of anger that don’t make any sense in context.

It would let us look our friends in the eyes, because they would all be equals, instead of people who unwittingly owe secret debts. It’s a way to resurrect the age-old practice of dueling, but without the accompanying age-old practice of dying.

I can imagine two objections to my proposal:

1. Wouldn’t people get their eyes shot out? We would have to wear sunglasses all day.
2. What if someone gets shot but doesn’t feel the shot was justified? He would feel resentful and therefore shoot back. It’s another cycle of escalation.

The answer to these objections is that everyone wants to live in a world where people wear sunglasses and shoot one another with airsoft pellets all day. That world is awesome.

The pleasure of airsoft guns has only started recently, but it feels as ancient and natural as kissing.
It is innate, like the pleasures of dipping your hands in bowls of tiny beads, hunting through mixed nuts for the cashews or peeling off really big pieces of skin when you get sunburned.

Airsoft warfare is so fun because it offers unique experiences, such as frantically loading, peering around corners, avoiding creaky steps and diving into rooms.

The diving is especially important, because you seldom get the chance to make a fully justified dive in ordinary life — most diving in pick-up football or ultimate Frisbee is unnecessary.

So with that, let’s make it a more awesome world. Grab an airsoft gun, don your shades and take aim.

Column on My Health Insurance Experience

2009-12-10T09:55:00.000-08:00

Your vertebrae don’t just stack on top of one another like Jenga blocks. Cushy little cartilage beer coasters called discs sit between the vertebrae. But sometimes, a disc slips out a little bit and puts pressure on the sciatic nerve, and that hurts like a b*tch, it turns out.

I know about slipped discs because the bottom disc in my lumbar spine slipped out a little bit back in April. The pain was pulsing and horrible.

“Et tu, vertabrae?” I asked, gasping. I felt stabbed in the back — both proverbially and otherwise — by my own spine. Like most people, I’m aware that my body depends on all kinds of behind-the-scenes finesses, but I expect little invisible miracles like posture to run smoothly as long as I don’t smoke, get fat or sit too close to the TV.

As if this disappointment wasn’t hard enough, I also had to face the failures of another invisible system I’d always just assumed would be there for me — my insurance company. My testimonial goes like this:
When I first felt pain, I went to Student Health. They sent me to the emergency room, where a doctor told me that I had all the signs of a slipped disc in the lowermost vertebrae. She ordered an X-ray.

When the X-rays came back, the doctor said that I would need an MRI. In order to get an MRI, I needed to be evaluated by a doctor at Student Health, she said.

A few days later, at Student Health, the doctor told me that she also believed I had a slipped disc in my lowermost vertebrae. She wrote a prescription for an MRI. I called my insurer and asked about getting the MRI, but the insurer said I needed a special authorization, which was different than a prescription.

To get this authorization, the insurer needed my primary care physician’s tax ID number, since my insurance is from Tennessee, because my mom’s law firm that buys our insurance is based in Tennessee, although my mom lives in Birmingham, Ala., and I live in Pittsburgh, Pa., and Birmingham is called “the Pittsburgh of the South.”

At this point, I had not been to a doctor since high school, so I didn’t have a primary care physician. I called my pediatrician’s practice anyway and found out he was retired. Then I called Student Health, but the doctor would not give me her tax ID number.

By then, several weeks had passed since my slipped disc. I was still in pretty bad pain, so I scheduled an MRI and decided to just wing it. When I got to the radiology office, I pretended I had no idea what all this authorization business was about. I held up my prescription with a devil-may-care nonchalance that proved irresistible to the radiology industry. I don’t know what happened, but from the waiting room, I could see a knock-down, drag-out phone battle going on in the little office area between Student Health, the insurer and the radiologists. Eventually, they gave me an MRI.

After carefully examining my MRI results, two orthopedists concluded that I had a slipped disc in my lowermost vertebrae. They gave me a prescription for pain meds and a list of physical therapy centers I could contact. Four weeks after my disc first turned on me, I started physical therapy.

Later, I started to receive bills. Often the insurer would deny that I was covered until we called a second time. This happened every time I went for physical therapy. For several weeks, I dreaded going to the mailbox or answering my phone for fear of bills. The insurance company gained this weird power to reach into my life and steal one hour of my time at random.

Living under siege, I started to fantasize about “health insurance insurance.” It would be an insurance plan where you paid a premium, and if you ever had to actually use your health insurance company, the “health insurance insurance” company would call the health insurance company and yell until it did its job.
I’m writing about all this because my experience is pretty illustrative of two problems with the U.S. health system that afflict even those lucky enough to have insurance: cost and inconvenience. Why did I have to get thousands of dollars in tests when the common sense diagnosis was that I had a slipped disc in my lowermost vertebrae? Why was it my responsibility to get a tax ID number?

Some say that President Barack Obama and the Democratic congress are moving us in a socialist direction on health care. Looking at the legislation, I would agree. But looking at my experience, I have to disagree. To say we are moving in a socialist direction on health care implies that today we are in a somewhat market-oriented position. A prerequisite for a market is that individuals are aware of the incentives and outcomes they face from various choices. Life in a market should be better than random.

Everything You Need to Know About Health Care

2009-11-24T07:56:00.000-08:00

Recently, there have been a ton of good pieces of media about health care.

This American Life: More Is Less This is part 1 of 2-part series about what's causing growth in health costs. Focuses on the incentives doctors face, because they want to make money and because patients are so risk-averse and because people will sue them.

This American Life: Someone Else's Money Part 2 of the series. Focuses on health insurance companies, although not as a cost-driver. Mainly as just confusing.

If Health Care Is Going to Change, Dr. Brent James's Ideas Will Change It An 8-page article from the New York Times about evidence-based medicine and this guy named Dr. Brent James who has totally remade this hospital system in Utah to save money and improve outcomes.

The Henry Ford of Heart Surgery A short piece in the Wall Street Journal about this guy in India named Dr. Shetty, who has created these factory hospitals where doctors specialize and they use economies of scale to keep costs down and prevent errors.

The point of all these pieces is that we need to stop pretending our doctors are all-knowing sages.

My Real Column On Forties

2009-11-09T13:26:00.000-08:00

This is my Pitt News column for Monday, 9 November 2009. The version in Pitt News is awkward and horrible, because editors have a fascist gag reflex to natural sentence construction. Anyway...

This column is addressed to gentlemen but may be pleasant and edifying to the ladies as well.

I read somewhere that you should marry your best friend. I don't know if that's true, but the idea behind it is definitely true of beer. That is why I endorse the forty ounce bottle of malt liquor--a.k.a. "the forty"--a.k.a. "the fo dog"--a.k.a.--your best friend and life-long companion for party-going.

The forty might not be the most elegant, charming or sexy choice of beverage. Hell, it might be kind of fat. But everyone needs something to hold onto, and the forty is always there, through thick and thin. You don't have to be rich to cut up with the forty. It accepts you and $3.25 just as you and $3.25 are deep down inside.

First off, what is a forty? I know some of you have not yet passed 21 years on the Earth and therefore have no familiarity with strong drink. So, I will elaborate.

Malt liquor is a type of beer, but whereas what we always call "beer" is brewed from barley, oat, hops, and other weird horse foods, malt liquor comes from real food that men eat, like corn and wheat. It is like the Franzia of beer. It's also got about 8% alcohol, instead of a mere 5% like beer.

Now, for some reason, in every place and every age that man has wet his gullet with malt liquor, he has preferred to drink it in the largest possible containers. It is a rule.

Sometimes, malt liquor comes in 16 oz. cans--heavy enough to exercise with--which is the biggest size of can in the whole world. Other times, malt liquor comes in titanic 40 oz. bottles--drums, if you will. This is 3.5 times a normal beer bottle, for a consumer who is 3.5 the man. And since there's 50% more alcohol, this means the forty packs the punch of 5 or 6 beers.

A forty is so big that you keep the forty in the paper bad it's sold in, so you can hold on better. But the paper bag is not just a practical necessity. It engenders mystique.

Wine also comes in big bottles, but no one ever walks around with a bottle of wine in a paper bag. Even drinking wine straight from the bottle feels weird; you want to pour it in a glass no matter how cheap the wine is.

On the other hand, a paper bag is the forty's natural gown. It's naked without the paper bag--and if you go so far as to peel the label off...well, that's just pornographic. Meanwhile, it is a historical fact that malt liquor has never been poured into a glass. Go ahead and say it: "I'll have a tall glass of "Four O" Brand Malt Liquor, please." It sticks in the throat.

Now, when you roll up in the party with the forty in hand, literally every dude will gape and nod at the forty. It's like you walked in with a falcoln on your shoulder. They'll say, "What up?! Rockin the forty ounce!" Though all smiles, these dudes fear the forty, for it is grand and linked to rappers of fierce renown...awesome men who replenish their fluids with little else.

Others at the party will have good beers, which everyone calls "brews," because these are the only types of beer that are brewed. They have names like, "Sand Bag Summer-in-a-Leap-Year Chrysanthemum Ale." The problem with brews is that people constantly ask to take a sip and steal them from the fridge. Mononucleosis and heist are the brew's constant company.

In contrast, once you start on your forty, no one asks to take a sip. Partly it is that the specter of backwash is too glaring, but mainly it is that the signature taste of malt liquor sears the dainty palates of lesser men. Everyone who can handle the forty already has one.

Another peril of beers is that you have to be careful what you wish for, because some beers are made especially for dandy ladymen. Sipping on the wrong beverage can get you banned from the armed forces.

Not so for forties. As long as you clutch a fo-dog of any make at all, you can trapse--nay, skip--merrily through a Klan meeting in a "Sexy She-Devil Costume" and evoke naught but the deepest awe in your fellows.

There is simply no Ladyman Major at Forty Ounce University, no direct flights to Ladyman International Airport on Forty Ounce Airways, no hit single from The Ladymen on the Top Forty Ounce Countdown. That's because, while brewing malt liquor to strength does depend on copious amounts of sugar, spice and everything nice are kept at great distance--replaced by lion piss and everything needlessly aggressive.

The most important thing you can learn about forties, though, is to drink responsibly. With just one forty, you're already drinking like a man. There's no need to die like one.

Who Wants to be a Millionaire?

2009-11-05T06:51:00.001-08:00

This is a pretty awesome WaPost article about the Nobel Prize winner Daniel Kahneman:

How Rich People Spend Their Time:

People who make less than $20,000 a year, for example, told Kahneman and his colleagues that they spend more than a third of their time in passive leisure -- watching television, for example. Those making more than $100,000 spent less than one-fifth of their time in this way -- putting their legs up and relaxing. Rich people spent much more time commuting and engaging in activities that were required as opposed to optional. The richest people spent nearly twice as much time as the poorest people in leisure activities that were active, structured and often stressful -- shopping, child care and exercise.

Kahneman and his colleagues argued that many people mistakenly allocate enormous amounts of their time and psychological focus to getting rich because of a mental illusion: When they think about what it would mean to be wealthy, they think about how enjoyable it would be to watch a flat-screen TV set, play lots of sports or get a lot of pampering -- our stereotypical beliefs of how the rich spend their time.

What I think is weird about this is that you would think that rich people aren't just people who make more money per year. They also make more money per hour. So, you'd think that they would just work less hours.

But I guess life doesn't work out that way. I guess you have to work like 60 hours/week in order for each hour to be worth $400 to an employer. There's like economies of scale with our time.

Scary Scary

2009-11-05T05:49:00.000-08:00

From Paul Krugman:

Super Spooky Halloween Special

2009-11-02T07:11:00.000-08:00

This is my Halloween column, two days after Halloween:

The Story of the Ghost Story.
Last year I took a graduate course in game theory. I failed the midterm so I had to study hard for the final. I cooped myself up for about a week in the kitchen copying solutions to problems and then trying to solve the problems myself. Pretty soon my kitchen table was piled high with papers covered in cryptic Greek letters.

Then one night, there was a thunderstorm. Suddenly, a crash of thunder shook the whole house, and a gust of cold air extinguished my old whale oil lamp. When I finally lit a candle, I noticed something was awry with my papers. The Greek letters were drifting about on the page. At first, I thought that a ghost was making corrections, but the Greek letters turned out to block up in paragraphs. The Greek, of course, was Greek to me, so I took the pages over to my neighbor Old Dame Kalopolis, to whom it was also Greek but nevertheless readable, because she knows Greek.

Old Dame Kalopolis, reading by the dance of candlelight, voice straining over the din of thunderclaps, translated the ghost’s message. It was a story, albeit not a very good one. It was hard to follow and the scenes were not rendered vividly. About halfway through we put it down.

“I’ve got to wrap up studying,” I said.

“Yeah. And I was gonna watch ‘Golden Girls’,” Old Dame Kalopolis said.

Sometimes I wish I remembered the story better. The next day Old Dame Kalopolis died of self-inflicted strangulation and then my house burned down, so the ghost’s story was lost. If I can’t remember, though, maybe it just goes to show how forgettable the story was — at least the first half.

Ghost Cell Phones.

Have you ever had a phone die while you were roaming? Well, death is just the beginning for that cell phone, just a gateway. The cell phone is destined to roam across the land.

You know how, when you’re around speakers and the cell phone rings it makes that weird sound in the speakers? Well, have you ever heard the weird sound, but then your cell phone didn’t ring? That’s a ghost getting a phone call on a ghost cell phone. And later on, you’ll find some discrepancies in the phone bill, and if you call the phone company, they’ll give you the run around. They’re in on it with the ghosts, I tell you.

Ghosts of Girlfriends Past.
This is also the title of a popular ghost porno movie.

Ghost of the Ghosts.
One time I lived in a haunted house on Meyran Avenue. It was so lousy with ghosts that I got a priest to come in and exorcise the joint. But he was only an Episcopal priest, so he only got one of the ghosts.

Some days later, I was eating some cereal and I lifted my spoon to my mouth, but much to my chagrin it was full of blood. I spat and knocked over my cereal bowl. The milk in the bowl had turned to blood, as well. It was blood galore everywhere. The spilled blood spelled out, “Help me.” I started to cry over the spilled blood, which was, I would like to point out, not spilled milk anymore. Then it said, “I’m a ghost.” I said, “Duh!” Then it said, “The one ghost you exorcised is haunting the sh*t out of us.” I told the ghost that now he knew firsthand what it felt like to be haunted by a ghost, but later on I was nice and I got a zombie priest to come in and exorcise the ghost of the ghost. Afterward, the zombie priest and I watched “The Exorcist,” but I had to turn it off cause he kept snorting and saying, “This is so unrealistic!”

Ghost of Roommates Past.
Dimitri was a good friend. A week after he was gone, I put up a plaque on his door that said, “In memoriam, Dimitri Gouldov.” But the plaque only emphasized how empty the room seemed without him.

Empty ... until one day it was abuzz with activity. The lights would turn on and off. On a warm evening, we would find the window open. Dimitri’s bed would be unmade at night, but then every morning made neatly, with the signature geometry that our old friend used to bring to the task. And as a final declaration that Dimitri was, in a sinister way, still with us, one night a dreadful creaking roused us all to find the memorial plaque turned around on the door. The black backside faced out, denying any change had come.

That was it. I didn’t want to hurt Dimitri, but how would the wounds heal with the restless haunt settled ever more cozily? So, I called up Dimitri. I said, “I know you’re busy in Memphis at Teach for America, but you gotta come back here and take care your damn ghost. It’s not paying rent, and we can’t get someone to sublet.”

Dimitri came home and chatted up the ghost. He explained that Memphis has new friends and new bars and new adventures waiting. Life is more than fun, Dimitri said. It’s also about giving others the opportunities, like college, that we enjoyed so much. The ghost moved on.
After that, Dimitri and I had a talk about the plaque, which he found much weirder than the ghost.

Black Action Society Responds

2009-10-29T09:51:00.000-07:00

Jahmaiah Lewis, president of Black Action Society, wrote the following Letter to the Editor about my column Monday:

To the editor,

As representation for black students on this campus, the Black Action Society does not agree with or subscribe to the definitions of Blackness described in Lewis Lehe’s Oct. 26 column, “Cultural identity separate from race.” Blackness is not something that can be easily defined. Unfortunately, Lehe applies a rather simple definition.

In many circles Black is used to describe black people of the diaspora. In others, it’s used to describe people who are descendants of those enslaved in the mid-Atlantic slave trade. And in some circles, as I’m led to believe in the article, Black is used to describe people who participate in typical “black” activities, like moving to innercity Chicago, going to a black church and marrying a black woman. It is a term some people identify themselves with, while others prefer not to. There is not a typical experience one must have to be Black. People who identify themselves as Black in Harlem will grow up with an experience completely different from a black person raised in Portugal, Tanzania, Cuba or Paris.

It must be noted that identification is a choice, an individual choice that should not be judged by anyone else. The article tries to justify the most appropriate and convenient way to categorize a very large group of people. It is not people of African descent that it is trying to categorize. People of African descent come in all racial and cultural backgrounds. It is people with a shade of brown skin and coarse hair that the article attempts to categorize. Unfortunately, though it may be inconvenient, there is no proper term to identify us all.

This act of endorsing the term “Black” over “African-American” itself is irresponsible. It is not our place to tell anyone who they are — or who they were. At most we can educate and learn from one another. Let’s engage one another in dialogue. If we are curious as to how someone identifies, we should simply ask.

Jahmaiah Lewis
President, Black Action Society

I think she makes some valid points. Especially when I talked about Obama, I might it seem like there was a check-list for Blackness. That is pretty offensive. Overall, my column was not as tight as it could have been. I have to write very fast about things I think will be interesting, in a way that will make people want to read it.

But I disagree that the meaning of a word can be whether or not someone uses it to describe his or herself. That doesn't seem like a useful definition of a word. I still think that a word we use all the time like Black ought to be a descriptor, so it should be grounded in actions and circumstances. Oh well. Not everyone is going to agree.

Column on Black vs. African American

2009-10-26T07:25:00.000-07:00

From the Pitt News:

Lehe: Terminology not a Black and White issue

In 2004, Alan Keyes was running against an upstart lawyer named Barack Obama in a U.S. Senate race. Down for the count, swinging wildly, Keyes made the following accusation:

“Barack Obama claims an African-American heritage ... Barack Obama and I have the same race — that is, physical characteristics. We are not from the same heritage ... My ancestors toiled in slavery in this country.”

Obama not an African-American? It is hard to argue that you are an African-American only if your great-great-great-great grandfather was born in Africa, but not if your dad was. Are you only an Irish-American if your ancestors fled the potato famine? The denial rings especially false from Keyes’ lips: He believes Obama was born in Kenya.

Keyes is clearly fumbling for a word, though. His quip illustrates the need for a word that means more than “an American of African descent” — something like what W.E.B. Du Bois had in mind when he titled his book “The Souls of Black Folk.” Fortunately, we do have such a word. The word is “Black.” As in “Black people.”

Today I endorse saying “Black” sometimes, instead of saying “African-American” in every case. Here is what I mean by Black:

First of all, Black is a capitalized word. Black people are not black.What makes Black people Black is that they participate in Black culture — the culture that has evolved from the culture of West Africans who were brought over to the New World as slaves.Black people aren’t just Americans, if by “American” we mean “United States of America.” Black people live all over the Western hemisphere.

Here are a few reasons to embrace “Black” over “African-American:”

First, it takes a long time to say “African-American.” The phrase has seven syllables — one more than just outright saying “of African descent.” It’s rare that a noun elongates its own definition.

Second, because of how awkward it is to say, “African-American” has become a phrase White people use when they are afraid of offending Black people. It says, “Look how much effort I’m spending to show I respect you.” But respect is something better revealed in actions, not word choice. Black and White friends nearly always say “Black.”

Third, replacing “Black” with “African-American” implies that all people of African descent participate in Black culture, and thereby cut-and-pastes an identity onto African immigrants. These people are African-Americans, but might not want to be Black.

Fourth, if we use “African-American” to denote exclusively what I call “Black,” as Alan Keyes does, then what will we call recent arrivals from Africa? We would have to call them “African-African Americans,” or “American-Africans” or something else stupid that no one will ever actually say.

Fifth, “Black” preserves conformity across languages and places. “Negro” is the word used in Latin American Spanish and Brazilian Portuguese. it translates directly as “Black.” These are two of the three languages that Black people speak in numbers, so they should influence the English usage. In the United States, we have gotten away with confusing “African-American” and “Black” only because the United States happens to not share borders with countries that have many Black people — all the Black people we meet are also African-Americans. But elsewhere, Black cultures span national borders. Should we expect Colombians to call a woman Afro-Colombiana when she is in Colombia and then Afro-Venezuelana when she crosses the border 10 miles to visit her sister in Venezuela on the weekend?

Finally, cutting “Black” from the language leaves an asymmetry, since no one actually says “Caucasian-Americans.” I could never explain to my child that he is White — at least half — but that his friends are African-Americans. And if you can’t explain such a common word to a child, to hell with it.

Now for the question you’ve been waiting to take offense at. Is Obama a Black man? I say that Obama is, today, a Black man. He has become Black by moving to Chicago’s South Side, marrying a Black woman, joining a Black church and immersing himself in Black culture. So, he participates in Black culture. But he grew up in Indonesia and Hawaii, outside of Black culture. So, I would say that, before he was in his 20s, no, Obama was not Black.

However, there is plenty of room for ambiguity. Who’s to say for sure a man is African-American, African, American, Caribbean, Latino or Black? Words are just useful tools we have. And language, therefore, is never African-American or White.

E-mail Lewis at ljl10@pitt.edu.

A Whale of a Penis Time

2009-10-22T13:48:00.000-07:00

Hat tip to Marginal Revolution:

The 4WD with seats made of whale penis

A Russian armoured-car builder is boasting that its latest vehicle has seats covered with “whale-penis leather”...
The leather is not the only tacky accessory on the Prombron, which Dartz claims is the world’s most expensive SUV.

The bulletproof windows are gold-plated, the exhaust is made of tungsten, the gauges are encrusted with diamonds and rubies and the exterior has a Kevlar coating.

The car also comes with three bottles of the world’s most expensive Vodka, RussoBaltique, although the website does warn prospective buyers not to drink and drive.

If this is what Russians do when they get rich, then no wonder they had a revolution.

If whales were sentient enough to find out about this thing, would this be the most horrible sight ever beheld by anything? The character Leatherface from Texas Chainsaw Massacre is bad enough. What if someone chopped up our penises just to sit on?

Wall Street Journal, Please Polish Up

2009-10-20T16:32:00.000-07:00

Here is the Wall Street Journal editorial page on March 6, 2009:

Obama's Radicalism Is Killing the Dow
by Michael Boskin

It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.

Since this came out the S&P 500 is up 60%. This happened because Barack Obama resigned the presidency shortly after this article was published. Wait, nevermind that didn't happen.

Everyone knows that authors don't pick the headlines. The editors at the Wall Street Journal picked this headline. This is especially obvious, because there is nothing in the whole editorial about the stock market. Why not? Because Michael Boskin is a real economist at Stanford who spends most of his time writing papers like: "Regression Analysis when the Dependent Variable is Truncated Lognormal: with an Application to the Determinants of the Duration of Welfare Dependency," which he actually did write. This paper is about long-term growth trends under the stress of higher taxes and spending. He makes a good, conservative argument. The editors just thought, "Damn this article looks boring to the stock people who read this paper. Let's just put stock market stuff in the headline!"

I have rengineered some headlines along these lines:

Pope Sets Plan for Disaffected Anglicans to Join Catholics-->
Warren Buffet Sets Plan for Disaffected Anglicans to Join Dow Jones Industrial Average

N.B.A. and Referees Near a Deal-->
N.B.A. and Referees Near to Realizing Obama's "New, New Deal" Will Undermine the Dow Jones Industrial Average

College Cost Keep Rising-->
College Cost Keep Rising, Just like the Dow Jones Industrial Average

A Voucher by Any Other Name

2009-10-20T05:33:00.000-07:00

Here in Pittsburgh, America continues its bizarre love/hate relationship with vouchers and cash incentives. From the PG:

Pittsburgh schools like enrollment trend

The 2 percent enrollment decline the Pittsburgh Public Schools reported yesterday was one of the lowest drops in a decade, a moderation attributed partly to enthusiasm for the Pittsburgh Promise and stepped-up recruitment of kindergarten students...

Mr. Roosevelt and Mayor Luke Ravenstahl created the Promise not only to help students afford college, but to boost the city's population and shore up the district's enrollment. Graduates of city high schools and charter schools are eligible for up to $20,000 in scholarships, provided they meet certain enrollment, academic and behavioral guidelines.

Read more: http://postgazette.com/pg/09293/1006841-298.stm#ixzz0UTlATmU2

The Pittsburgh Promise scholarship is a cash incentive for being good, staying in school, and studying. It's not paid in cash, of course, but it is money linked directly to prespecified, fully objective outcomes. It's not one of those scholarships based on an essay or "character," where you don't know if you can win. I wonder what the effect on behavior has been?

And it's working.The Kalamazoo Promise program in Michigan boosted enrollment by 15%.

Also, notice another feature of the Pittsburgh Promise Scholarship: The kids can choose where they go to school. Sounds like a voucher to me, but a voucher for college.

I think the way forward for Pittsburgh's public schools is more tireless campaigning for Pittsburgh Promise funds. There's no reason that, 10 years hence, the Promise couldn't award $50,000, given the rising cost of tuition.

But it's a little imperfect, because not every kid want to go to college. There has to be a way to reach the troubled kids who know they're not going to college, and it's not to try and make them think about college; the way is direct cash payments for grades, attendance, and behavior, or something similar, like cell-phone minutes or gift cards to clothing stores or gasoline.

My Column on Afghanistan

2009-10-19T05:39:00.001-07:00

I usually don't write about foreign policy, so I decided to write about foreign policy.

Lehe: Controlling Kabul key to advancing war in Afghanistan

In May, Afghan authorities locked up Khanzir. The public was scared he might give somebody the H1N1 virus.

It was unlikely that Khanzir was a threat, though. Who would give him the virus in the first place? After all, ever since his domestic partner died two years ago, Khanzir has lived a lonely existence as the only pig in Afghanistan — a country equal in size to Texas minus Massachusetts and Vermont. He lives in the Kabul zoo.

Khanzir is the only pig in Afghanistan because the strict interpretation of Islamic law in most of Afghanistan prohibits the sale of pigs. This is how powerful sharia is in Afghanistan, even eight years after our invasion. On the other side of the Earth, President Barack Obama is considering what to do about more serious threats than H1N1. In the rural areas beyond Khanzir’s zoo, the Taliban is winning.

Unfortunately, the proposed 40,000-soldier surge will not work, because the goals of the troops already in place are too vague. The Taliban will keep winning until we know how things would look if we won.

The U.S. strategy seems more focused on doing things that feel like war than on achieving specified goals. When we send out patrols, just so the patrols can get ambushed and maybe kill a few enemies, we are like people who go to Philadelphia and eat cheese steaks because that feels like a Philly thing to do: Here we are, killing enemies. Feels like a war to me!

Are we trying to kill everyone in the Taliban? That’s not feasible. Are we trying to make the Taliban surrender? It is unclear in what sense the Taliban can surrender. Taliban leaders cannot issue surrender orders without undermining the legitimacy of their own authority.

Therefore, I’m laying out a specified, achievable goal: Maintain peace and order in Kabul and the surrounding Kabul province, where 5 million of the 32 million Afghans live.

Why just Kabul?

First, Kabul is a single city and not a huge one. Controlling Kabul is plausible.

Second, although no one makes it official, the United States is trying to change Afghan culture. For Kabul, this change is not a revolution, but a counterrevolution.

In the 1960s and ’70s, Kabul was called the “Paris of Central Asia.” It was peaceful and rich. Kabuli women were allowed to attend university and even wear what they wanted. Beautiful urban gardens drew tourists from across the world. This era ended because the Soviet Union invaded, and militant Islam was what people needed to stop the Evil Empire — not because Kabulis turned on rationality and the good life.

Third, controlling Kabul would not risk those fiascoes where a plane blows up a wedding party.
Why will this work?

On the combat side, from a base in Kabul province, we could still destroy large-scale threats as they form in the provinces. Air strikes destroyed most of the terrorist training camps within weeks. Also, by taking the focus off the Taliban, U.S. forces could better occupy themselves with defeating al-Qaida — a threat to our own peace and order. The Afghanistan mission could focus on intelligence and excursions that quash threats as they form, rather than playing “Call of Duty” in valleys across Afghanistan.

On the cultural side, the U.S. military would never be able to sow the seeds of a foreign ideology like democracy, but it can provide a rich soil where Afghans can grow their own flavor of democratic values. That soil is a city where property rights are protected and no one lives in fear of physical violence — a city where people can think about investment and enjoyment instead of thinking about surviving this life for rewards in the next.

In a sense, my idea is to make Kabul a larger version of Khanzir — a unique speck of the outside world upon which all Afghans can gaze.
It would happen bit by bit.

First, Kabuli teens will watch YouTube videos, learn foreign languages and play campaigns with Swedes in “World of Warcraft.” Later, parents would consider encouraging careers like engineering to their daughters. As long as peace reigns, nothing can stop the global society from creeping into a city like an H1N1 strand with no vaccine.

Of course, Afghans will fear Kabul at first, just like they fear Khanzir. But there is a mere exposure effect.

Kabulis will get wealthier and freer. The attraction will become too strong. Folks will move into Kabul province or demand liberal reforms in their own regions.
Like the East Germans ripping down the Berlin Wall, Afghans will tear down walls in their own minds.

Like a Phoenix, Riding from the Ashes

2009-10-16T06:10:00.000-07:00

Phoenix, Arizona just got a light rail system and it is a runaway success. This article is super cool:

The Rise of Light Rail in Phoenix

And now comes Valley Metro in Phoenix, one of the most apparently unpromising locations for transit of all, and it’s working, though not quite the way transit does in, say, New York, Boston, or Washington. Every day, Valley Metro attracts some 33,000 riders—way above the 26,000 that were originally projected. But what’s especially interesting is the clientele. Unlike systems elsewhere, which are used principally by commuters, the 20 miles of rail in Phoenix running along the central spines of Phoenix and then through Tempe to Mesa are used largely by students shuttling between Arizona State University’s downtown and Tempe campuses, and people going to restaurants, bars, ball games, and cultural events downtown. Only 27 percent of the system’s riders use it for getting to work (compared to 60 percent elsewhere), which suggests that, for now at least, the Phoenix light rail will flourish as a sort of jitney service supporting a post-industrial metropolis’s ongoing cultivation of a classic entertainment district downtown, higher education there and in Tempe, and associated nodes of new and intensified development along Central Avenue.

Now, the question is: What can we Pittsburghers learn from this?

I think it shows that our light-rail system is misconceived. Instead of running to places with bars and restaurants, it goes downtown, where there is almost nothing going on at night. Instead of running from places where people don't have cars--like Oakland and Shadyside--it runs from the South Hills. I don't know exactly how the North Shore connector fits into all this. Is there supposed to be an entertainment district on the North Side? At least the federal government paid for most of it.

Most of the investment in the T is sunk cost, though. Looking toward the future, I think we could talk about bus rapid transit and where it should go. We built the giant West Busway to take people downtown to go to work, but no one uses it. How about bus rapid transit between Oakland, Shadyside, downtown, and the South Side? The city could make the college kids pay for fares if it was a special express system. This would likely be used frequently, because college kids get drunk at these places and can't drive home, or they don't have cars in the first place.

Unicycle First Day

2009-10-14T09:04:00.000-07:00

I will be blogging learning to unicycle.

Today was the first day. The sky was overcast. The temperature was a cool 42 degrees. Across the neighborhood, the lights flickered, and it was clear to all that something grand was afoot.

Overall, things went well. I mounted the unicycle and practiced rocking back and forth for about fifteen minutes. One thing no one expects about unicycling is that it is very inconvenient for your testicles, at least when you don't know what you're doing, because it smashes them in a different direction every time you move. That is something I'm going to have to correct.

Vaughn filmed the affair. This is for my documentary.

Already, I am looking forward to tomorrow's practice.

Today I Start Learning to Unicycle

2009-10-14T08:25:00.000-07:00

Column on The Shuttle System

2009-10-14T05:38:00.001-07:00

I am starting a series where I endorse things. It's called "Lewis Lehe Endorses Things." Sorry there are so many stupid line breaks. I don't know why the editors put those in there. This is the first issue:

Joviality, warmth abounds on Pitt shuttles

There are so many things that it is difficult to know which ones to pick. Luckily, I am here to help you sort through all the things — not things to buy, for which there are magazines and blogs aplenty, but rather things you experience, wait around in, look at askance, make small talk about or just encounter.

This column begins a series about things I endorse and why I endorse them.

Today, I endorse the Pitt shuttle system.

What can rival the joy that blooms when, after several minutes of standing alone in the cold with an uncharged iPod, you at last discern the shuttle’s chubby face coming ‘round the bend?

As the shuttle door swings open, it is surprising to see a driver behind it all.

In my mind, the shuttle is a sentient being. Huffing and panting over the cracked blacktop of Oakland, he is eager to help his friends, the humans. He does not want slush to numb their delicate, pink human feet.

In fact, nothing gives him more pleasure than to restore us with a den of warmth and safety, like a cozy log cabin roving far and wide across the land, perhaps built by Abe Lincoln himself. That is how I fancy he fancies himself.

Maybe the shuttle is a she, though. I guess there’s nothing to stop a woman from being a bus.

The fun has just begun, though. Through those squeaky glass doors is a cast of characters you’ll never forget. It’s like the TV show “Cheers,” except no one knows your name, because you never talk to one another.

But you would for sure fraternize grandly if the shuttle had a bar. Beer is sort of an unfair advantage that “Cheers” has over the Pitt shuttle system, and I would endorse any measures to close the disparity.

Beer or no beer, you are all comrades, if not acquaintances. You are in this thing together. Whenever something weird or funny happens to the shuttle as a whole — old women arguing in the road or a hostage crisis, for example — the shuttle is soon abuzz with comment, as if the passengers were old union men in a barber shop.

It is this subterranean camaraderie that makes the shuttle system a jewel in the crown of civilization. A jewel restored at long last!

A beautiful quality of our grandparents’ generation was the capacity to do anything with total strangers, except have sex. Back then, a typical American man would hitchhike, fix a truck, shower, play Jew’s harp and shoot at the Axis powers with fellows whose first names he did not know — all in one day.

Nowadays, unless the draft or the parish system make a comeback, the shuttle is a rare chance to course with a random sample of the Pitt student body. It forces us to look at our neighbors up close — in total innocence — just looking at them and making observations, because we’re bored and therefore curious:

“The girl with elaborate purple boots has now purchased an elaborate purple hat. How far can she take this?”

“The dude who once told a knee-slapping hilarious story on his cell phone is taking out his cell phone. Will he repeat the achievement?”

“The Mexicans are speaking Spanish again. I want to signal that I speak Spanish, too, so I can look smart. Maybe I should laugh at that joke, but it wasn’t actually funny enough for me to laugh without it being obvious that I just laughed to show I understood ... Mierda!”

The shuttle ride even has an epilogue that leaves the heart as warm as June.

Just when you thought the fun supply was done, as you alight, the driver tells you to have a nice day. He does so with a degree of sincerity that is amazing, given the number of nice days he bids in an eight-hour shift.

If you are lucky, cool and a dude, then the driver will even call you “my man.”

In return, every rider thanks the shuttle driver. A simple “thanks” suffices. It is not necessary to read the poem Walt Whitman wrote about Pitt shuttle drivers called “Oh Captain! My Captain!” in unison with the other riders, for example.

But as forced and awkward as it might seem, trading thanks is a moment of shared humanity rare outside of an underdog sports team. That is what the shuttle is all about: bringing people together. And also loud rap music.

For Whom the Road Tolls

2009-10-13T05:48:00.000-07:00

From the Pittsburgh Post-Gazette:

GROVE CITY, Pa. -- Opponents of tolling Interstate 80 yesterday vowed to continue fighting what they see as a scheme to siphon money to Pittsburgh and Philadelphia from the state's rural northern tier.
Tracy C. Miller, an associate professor of economics at Grove City College who was asked by tolling opponents to study the issue, said trucks and cars that use I-80 already generate $130 million in fuel taxes and fees per year, well above the $80 million that the Pennsylvania Department of Transportation spends on maintaining the highway.

Dr. Miller also asserted that truck traffic diverted onto secondary roads to avoid the tolls would increase crashes, causing two to four additional deaths and 100 to 200 more injuries per year.

"Trucks do divert to avoid tolls that reduce their income," he said.

Man! A bonafide associate economics professor at Grove City College has released a report. If an economics professor releases a report, then what the report contains is probably objective truth, handed down from God. This is especially likely when you read the description of the Grove City College economics department from their website:

Beginning from a Christian understanding of man and nature, courses in economics develop the theories of how prosperity is generated in an unhampered market economy, destroyed in a socialist economy, and suppressed under government interventions such as monetary inflation and credit expansion, taxing and subsidizing, wealth redistribution schemes, and regulation. Interdisciplinary courses demonstrate how a market economy is sustained within a larger free society where the liberty and private property that provide its foundation are defended by government and used to establish a variety of voluntary associations to provide what the market economy cannot. Other courses examine the efficacy of voluntary solutions to social problems.

So, if every time someone sits down to look at a problem, you know ex ante that they will discover that less government is better, then is their opinion really worth anything? Isn't this person kind of like a warning light that's always on? Incapable of communicating useful information, because it has no capacity for variance? I wonder if Professor Miller also discovered that the best way to pay for transportation infrastructure is with voluntary associations. Maybe after church we could all go down and have a little barn-raising, and then a bridge raising or two.

Free-market olling opponents really irk me, because their oppositions basically rests on the premise that the government has to offer its assets for free, and that it is larger government when the government uses its assets in a way that a business would. The opposite is actually true. Tolls are not taxes. You are paying to use a service, just like you pay to use public universities, public courts, national parks, and public health insurance. Just because the government raises more money from the asset than it spends on the asset doesn't mean it's being interventionist. It's just acting like any smart owner of the asset would. This is simply a case of people not wanting to pay money, because, well, they will have less money.

I do understand that they are concerned about their money flowing into the coffers of the Philadelphia and Pittsburgh Port Authorities. But this is an argument unto itself. We should have tolls, and we should not use statewide tolls to fund buses in Philadelphia in Pittsburgh. But tolls themselves are still a great way to raise government revenue for transportation infrastructure across Pennsylvania. I am sure there are bridges across the state that are falling down. Even if the money from I80 funds bridges and tunnels and the like in Pittsburgh in Philadelphia, this is still a fair use of the money, given that so much of the traffic running along I80 will wind up running through the cities.

Parker Parallel Trailers

2009-10-13T05:43:00.000-07:00

Trailers for the now-dead, soon-to-be-resurrected movie "The Legend of Parker Parallel." Come out to Brillo Box for the fundraiser Thursday November 12, 2009. $3 cover. Not-too-expensive drinks.

The Unions Were a Bad Investment, Obama

2009-10-13T05:31:00.000-07:00

Let's face it: Obama saved the auto companies for the unions. The unions are ungrateful. They are opposing the "Cadillac Tax" on expensive, employers provided health insurance, which is really a way to recoup the mistake that employer-provided health insurance is completely tax deductible.

From the New York Times:

Leaders of organized labor, which in recent years has often negotiated for benefits in place of raises, descended on Capitol Hill last week to lobby against the tax, which could hit many health plans covering unionized workers. Larry Cohen, president of the Communications Workers of America, said at least half his members would be in health plans subject to the tax in 2013.

Also, the teachers unions:

John P. Yrchik, executive director of the Connecticut Education Association, has lobbied Mr. Courtney and other members of the state’s Congressional delegation, noting that the tax would affect teachers in 30 percent of Connecticut towns. In some towns, Mr. Yrchik said, health insurance premiums for teachers’ family policies already exceed $25,000.

Since when is $25,000 a year health insurance something everyone else should have to sacrifice to save? Is this an argument? Oh! These teachers in Connecticut will have to pay more to receive something that is very expensive and unnecessary. I didn't realize. Excuse me for wanting to restore America's long-run fiscal health.

There is something wrong in America when argument like this are being thrown around:

“Employers and insurers will reduce their benefits to avoid paying the proposed tax,” said Representative Pete Stark, the California Democrat who heads the Ways and Means Subcommittee on Health. “As a result, middle-class families will be forced to pay more for health care.”

This supposed disadvantage is the whole point of the legislation. To get people off of the most expensive health insurance plans, which cause us to lose a lot of tax money via deductions and lead to over-utilization of health resources by a few at the expense of the many. Note that this is not interventionist: these people would not be on these Cadillac plans if the government had not persuaded them to with tax deductibility. No middle class family would ever think: I would rather have a $25K health insurance plan than an $18K one and an extra $7K in income.

The alternative to passing the costs on to middle class families, and having them choose a cheaper policy if they want to, is for the government to start regulating what insurance companies can offer. This would hide the fact that a sacrifice is being made, but it would be much less efficient and more interventionist, by ending any semblance of a choice. But I bet that's what we're going to get, and politicians like Pete Stark are going to vote for it.

Pittiful News Website

2009-10-11T09:39:00.001-07:00

I am now the web editor for The Pittiful News. It basically means updating a fancy blogger site with PDF's of their issues. It's www.pittifulnews.com

Anyway, Pittiful News is the hilarious satirical newspaper for University of Pittsburgh. I write for it. Check it out! Dining Dollars Soar in Morning Trading

Slowly but surely I'll be uploading all the old issues of the Pittiful News to the website and tagging them. In the meantime, it will have the weekly updates. Enjoy!

Baucus at the Margin

2009-10-11T06:04:00.000-07:00

Now the CBO (congressional budget office) is talking about the implicit tax rates in the Buacus bill. From Greg Mankiw:

According to the CBO, a family of four making $54,000 would pay $4,800 for health insurance. The rest of the premium would come from government subsidies. If the family's income rises to $66,000, the subsidy falls, and the cost of health insurance rises to $7,600. In other words, earning an additional $12,000 requires the family to pay an additional $2,800. The implicit marginal tax rate is $2,800/$12,000, or 23 percent.

Similarly, a single person earning $26,500 would pay $2,300 for health insurance, but if his income rises to $32,400, his premium rises to $3,700. This yields an implicit marginal rate rate of 24 percent.

This is really bad. Not that it means these people will get poorer. It's that they'll see less reason to get richer. After all, if you are a single dude earning $26,500, like I might be soon, and you are thinking about the job that pays $32,400, you're going to factor in that you only get to spend like 60% of the extra money you earn. There's the 24% implicit tax rate. Then the 6.5% payroll tax rate. Then the 6% sales tax when you spend your money. And the state income taxes and federal income taxes. Maybe it's less than 60%. Anyway, if it's a lot of extra work to earn that additional money, I might think "Nevermind. I'll just watch How I Met Your Mother."

Again, this goes to show how the number one priority is to make health insurance cheaper. The cheaper health insurance gets, then the less penalty there is for the people who lose the subsidy.

What about creepy motels with flickering signs?

2009-10-10T11:44:00.000-07:00

Apparently vacancy has us surrounded. Here is this awesome blogpost from Calculated Risk that I know you won't read but I will summarize:

From Bloomberg: U.S. Office Vacancies Reach Five-Year High of 16.5%, Reis Says
From Reuters: US apartment vacancy rate hits 23-year high-report
From Reuters: Shopping center vacancy rate hits 17-year high: report

I guestimate this is different than the housing bubble, because there is a stabilizing effect for commercial real estate that didn't exist with housing:

Since vacancy is high, rents will drop. Just like how housing prices dropped. But the problem with housing is that this started a feedback loop: your neighbors got foreclosed on, so they moved out, and that made your house less valuable, so you were like "Screw this, I'm walking away from this mortgage that is worth more than my house," so you got foreclosed on.

The thing with commercial real estate is that these properties aren't owner-occupied. My Dad rents office space for Lehe Planning, LLC. If vacancies force the owner of his building to lower rents in order to fill the building, and he can't make bank at the lower rent levels, and he goes bankrupt, my Dad is still in the building. In fact, the building is full, because we assumed that he lowered rent enough to fill the building. And there's no reason to kick out the tenants just because the owner went bankrupt.

So, externalities on the neighborhood of my dad's building are zilch--the restaurants nearby, the other office buildings that don't want to be next to an abadoned dump, etc--those guys are all fine. The big difference is that now the building is owned by the creditors (banks), who will probably sell it to a commercial real estate company. Another difference is that I think it's safe to assume banks (the creditors who own the building) are better at selling a few big properties like office buildings than unloading thousands of homes. They could even run them themselves for a while with a temporary management company.

On the whole, this is not a gloomy scenario. It means three things: 1. Rents will go down. 2. Banks will lose a bunch of money. 3. No one's gonna build commercial real estate any time soon.

(Implicit) Taxes On the Poor

2009-10-08T05:48:00.000-07:00

This is from Greg Mankiw:

Jim Capretta looks at the Baucus healthcare bill and concludes that, because the subsidies phase out as income rises, it imposes an effective marginal tax rate on income of about 30 percent for many families. Add that figure to the income tax, the payroll tax, and the phase-out of the EITC and "the effective, implicit tax rate for workers between 100 and 200 percent of the federal poverty line would quickly approach 70 percent — not even counting food stamps and housing vouchers."

Indeed, Jim seems to understate matters, as he includes only the employee half of the payroll tax. Including both the employee and employer halves, as economic theory says is appropriate, appears to give a marginal tax rate closer to 80 percent. And, of course, many states impose income and sales taxes as well, and these would further raise the overall marginal tax rate.

How can we design a plan that covers more Americans but doesn't introduce these massive disincentives for poor people to work? Will we return to the days of the 1980's, when welfare queens were always in the news? Not that this is welfare, but it has a similar message: You only get to keep precious little of what you make by working.

This is an advantage that the social democracies have: By providing health care to everyone via the government for free, there is no implicit tax rate. As you earn more money, you get to keep your benefits. Of course, they have heavy income taxes. Just pointing out that health care provision is not a tax in itself there.

In the end, the only thing that will really help are advances that reduce the cost of health insurance.

This Lady Obviously Won the Nobel Prize

2009-10-08T05:39:00.001-07:00

Has there ever been anyone who looked more deserving of the Nobel Prize for literature than this lady? She looks like she eats and books smokes ten packs per day. She could be a bad guy in a James Bond movie.

Apparently, she won, because she "depicts the landscapes of the dispossessed." No surprise there.

Column on Cocaine

2009-10-05T14:30:00.000-07:00

Here is my new column, on why you shouldn't do cocaine:

In August, I went on a month-long tour of Colombia. Whenever I tell people about my trip, they ask if I went there to do cocaine. The answer is no. I went to Colombia so that I could bring it up in conversation later and seem awesome. Today I would like to have one of those conversations with you. We will be talking about why doing cocaine is uncool.

In the center of Medellin, Colombia’s second-biggest city, lies the classiest park I’ve ever seen. The park has exhibits to teach kids about science. A music building is open for musicians to practice. Children splash around in water jets, enjoying themselves to an unrealistic degree — like in a ’90s Coca-Cola commercial when the hydrant bursts.

At the park’s center stands an inconspicuous bamboo patch. As I strolled closer to the bamboo, a flash of movement revealed that it was full of camouflaged police holding assault rifles. I struck up a conversation with one. After talking a minute, I noticed he had a bandolier of grenades across his chest. Then I looked down at this gun. He was holding a grenade launcher. An actual grenade launcher. The kind that launches grenades.

Although I’d read about Colombia’s history of violence, meeting a guy my own age strapped with 10 grenades and camouflaged in a children’s park brought home how real the danger is for everyday Colombians. And while politics is the match that lights the fire of violence, narcotics trafficking is the kerosene that keeps it burning. Drugs, especially cocaine, are why Colombian cops at the park look like they’re on the set of “Shakira vs. Predator.”

One of the ironies of our enlightened, Obama-era college culture is that some of the same trend-setters who buy Fair Trade coffee also buy cocaine, while some of the same peasants who benefit from Fair Trade coffee suffer the most from the cocaine trade. Why is consumer consciousness moot for illegal purchases? Why do the savvy shoppers who boycott Taco Bell for exploiting tomato pickers also patronize the bosses that exploit coca farmers?

It has been 19 years since Chuck Norris acted in “Delta Force 2: The Colombian Connection.” Maybe today no one knows what drug violence means in Colombia. So, here is a sample of what I learned while hostel-hopping: On one side are leftist guerrillas, carrying out an ongoing war against the Colombian government. The guerillas conscript teenagers, leave landmines in villages, kidnap and ransom wealthy people, kill dissidents and set off rockets — which they build themselves and don’t know how to aim — in dense urban areas.

Opposing the guerillas are the “paras,” private paramilitaries. Although founded to protect rural folk from left-wing terrorism, the paras have come to perpetrate their own, ultra-right-wing brand of terrorism. They hold witch hunts, accusing everyone in a village of supporting leftists. Then, like a modern Spanish Inquisition, they chop up suspected men alive with chainsaws and commit unprintable horrors against women.

For the last six years, though, a refreshing peace has prevailed, thanks to a president named Alvaro Uribe who takes a hard line against violence. Most of Colombia is now as safe as Peru or Ecuador, and the country is even starting to enjoy those countries’ levels of tourism — life-sustaining commerce is impossible without peace. But the peace is fragile. The guerillas and the paras are still out there, holding out for a comeback.

Colombia’s future has moral implications for us kids, because, while the guerillas and the paras claim a political raison d’etre, they have a modus operandi based on extorting money from drug traffickers. With no drug money to skim, though, neither side could finance their arsenals or the tens of thousands of soldiers they employ.

So, if you indulge in cocaine, consider the money you pay. Part of the money will end up in the hands of sweaty men with mustaches — yes, these men actually have pit stains and mustaches — who earn their keep making others miserable. You are on the bad guy’s team, and snubbing Wal-Mart for a lifetime won’t change it.

Even the abstemious can protect the peace, though, with a tool always at arm’s length: the power to define what’s cool. The quest for coolness drives people to use Linux, eat organic, watch the British version of “The Office” and backpack around underrated countries that everyone mistakes as dangerous. We all want to seem awesome in conversation.

For peace’s sake, then, let’s make cocaine uncool. If someone at a party mentions doing cocaine, don’t chastise; don’t lecture; don’t tell anyone about your anti-drug. Just make a petty smirk, throw a smug look at an attractive companion and say, “Cocaine ... Right.” With enough “Cocaine ... Right,” we can make cocaine wrong.

Back to the Future

2009-07-14T11:30:00.000-07:00

This ad confirms something I have suspected: America is reentering the climate of values that mainly prevailed during the 1940's and 50's, the period just after the Great Depression. Pride in country. Optimism. Emphasis on civic virtues. Quest for wealth, especially collective wealth. Emphasis on equality. Distrust of the unfettered market. Proportioning social praise to strong and responsible individuals.

Some people will say we are entering the climate of values that prevailed during the 60's. Conservatism is on the fall. Social boundaries for gay Americans are subsiding. We are stuck in a war that, however successfully it goes, is a losing proposition.

I disagree. The new climate doesn't degrade rules, it emphasizes rules. Whereas sex seems more liberated, there are all types of sanctions and invisible lines about being safe, physically and emotionally, and respecting partners that this generation calls standard protocol--that is, you are ridiculed for breaking these rules. I think that extramarital affairs and divorces where children are involved will be frowned upon much more. I will also go out on a limb and say that abortion will be more frowned upon--although not criminalized. The battle now is for gays to marry--with the proudest images being boring, professional gays who adopt children and raise them in boring suburban atmospheres. Nobody thinks it's cool or free to have an orgy and set things on fire and turn bleary on drugs. Nobody is a Marxist or even a democratic socialist.

This ad shows some features of 1940's/50's culture. It is very patriotic, obviously, with the fireworks and such. But also, we see the black dude kissing the white girl. Being proud of racial unity is very American, because it is still rare in the world and, at least in our collective consciousness, we like to think it is something distinctly ours, that Americans of both races fought and won. It is like the way the 40's/50's generation took pride in American democracy in contrast to totalitarianism. Also, the dude is a hipster black dude, and he's in a Levi's commercial. Something new in my generation is that choice-of-style matters more than in-born characteristics.

Confederate Flag Column

2009-07-01T07:53:00.000-07:00

Lehe: Don't tread on Lehe

wednesday, july 1 2009

People are always getting upset about Confederate flags. Why do Southerners fly the stars and bars on their trucks? Today, I’ll speak to that.

You might say I have some authority on the subject. I was born in Virginia, moved to Alabama when I was six months old and lived there until I went off to college. My family has been in Alabama for hundreds of years. Several of my ancestors fought in the Civil War and wore Klan robes. By any objective measure, I’m a Southerner.

Really, though, you don’t have to be a Southerner to grasp why people fly Confederate flags. You just have to understand human nature.
All people want to feel novel. As much as we try to fit into the larger, blandly American community during middle school, from high school and onward we want to fill a small niche within the community.

But for certain white males, there is no niche. We are not so much normal as we are plain. Out of all the different white people in the United States, we are the ones to whom you just throw up your hands and call “white folk.”

This isn’t necessarily a bad situation. We face few expectations imposed from birth. Whether he is talking about straight-laced Baptists or West-Coast New-Agers, millionaire bankers or trailer-dwellers, electro disc jockeys or country musicians, a black comedian will get laughs by asking, “What is up with white people!?”

He doesn’t mean that both ends of these spectrums are typical — they contradict — but that any extreme is plausible for whites, and that this is so exclusively a white thing you should laugh out of shock of recognition. Ha.

The sense of plainness is most acute in the South.

Southern whites are almost all descended from the Scots-Irish. We aren’t Polish or Italian or Irish or any of the peoples who have food festivals and cool stuff like that. Our ancestors came to the United States long ago and didn’t value record-keeping; we have no formal cultural memory.

Wikipedia, of all places, says it best: “Interestingly, the areas where the most Americans reported themselves in the 2000 Census only as ‘American’ with no further qualification ... are largely the areas where many Scotch-Irish [sic] settled.”

The Scots-Irish are descended from certain clans in lower Scotland. The clans were so unapologetically Calvinist and violent that they were made to leave Scotland for Northern Ireland and then Ireland for Appalachia.

That’s why they call it “the Klan,” like a Scottish clan. That’s why the Confederate flag is a St. Andrew’s cross, like the Scottish flag. That’s why we drink whiskey, like Scotch whiskey. That’s why we still have a culture of honor and hence more murder and less property crime.

But these legacies aren’t conscious or purposeful. We don’t realize they exist.

The result is that Southern whites live in a novelty vacuum. If society is a hotel, we sleep in the hallway — open to everyone, but no good for partying. There is no conversation topic always on hand, no happy instance of solidarity when someone you meet shares this meaningless-yet-somehow-worth-talking-about characteristic, no satisfying narrative to explain parts of yourself as “classic X.” Our identity is the sum of our actions. We are involuntary existentialists. And so there is the natural anxiety, dread, angst, etc.

Unless we put Confederate flags on our trucks. Then, thanks to a war fought 150 years ago, we become, a priori, somebodies — with an essence that precedes existence. Now we have a “thing.” It is like we were making a shirt out of a bedsheet, then someone gave us a sewing pattern. That pattern is the Confederate flag.

The fact that people get upset about the Confederate flag only boosts its power to mold an identity. The flag is not only something to be defended, but it is pretty much the only thing about a Southerner that can be defended — nothing else is directly under attack. It’s like how Catholicism was more serious in Soviet Poland than in modern Poland.

The flag’s apologists say the flag stands for heritage and not racism. But many of the people who fly the flag actually are racist. However, please remember that the stereotypical racism came after the flag’s creation. Racism is an oft-highlighted part of Southern history. If you are trying to fashion yourself into a “typical Southerner,” a touch of racism will seem to complement your efforts.

My theory explains why white people nationwide fly the Confederate flag. They are not Southern, but they might have family down South. So Southern is the closest thing to an ethnicity they have, their best shot at novelty.

As long as humans want to feel novel, Southerners will keep flying Confederate flags. Of course, maybe you don’t want to live in a country where people fly Confederate flags, but let me remind you: My ancestors did not want you to live in a country where people fly Confederate flags, either. They wanted you to live to the north of that country.

Inscrutable SPAM

2009-06-28T20:01:00.000-07:00

Today I got some inscrutable SPAM. The sender was "Percival." The text was:

motley polarography
malnutrition wafer crossroad

The sender was "ScottymalnutritionHorn@whittierdailynews.com."

I wonder why this SPAM goes out? What is the motivation? Where does it come from? Is there a computer gone wrong?

LA Times Timely

2009-06-18T06:29:00.000-07:00

Peter Gordon, a professor at USC, has a great piece on congesiton pricing in today's LA Times.

Congestion Pricing--the only thing that works

A sample:

Third, Rutten's objection to pricing is based on his concerns over "equity." But the poorest of the poor would not be tolled, as most of them use transit. Buses on tolled freeways would move faster and be attractive to more people. And sacrificing bus service to build rail, as we have been doing, is surely inequitable. Financing expensive rail transit via sales taxes is hugely regressive.

I think he really nails it with his defense of the equity. Not enough has been made of how important congestion pricing is for bus transit. Because of their maneuverability, buses are disproportionately slowed by traffic, and thus become much more reliable and faster when congestion pricing lowers traffic. Buses are also the transportation of choice for many low-income people. And, because more people will use bus transit when there is congestion pricing--because driving is prider and buses run better--then fares can pay for more bus service. It's a virtuous cycle. Obviously, it's not a virtuous cycle that goes on forever. But the spillover to the poor from more middle-class people wanting to buy what they buy is substantial.

Column on Akon

2009-06-16T09:39:00.000-07:00

It would be wrong to say Akon is the most important artist of our time, because Akon is from the future. In the music video for "Beautiful," we can see all the elements of the post-modern, globalized culture we are all headed towards.

First, let's talk about Akon. Akon is one of the first big-time artists to completely abandon all the scruples we usually expect even bubble gume pop stars to heed. Audiences that watch American Idol, for example, only vote for contestants who sing well, even though the signed winners will have their voices run through technology that could make narwhals sound like Otis Redding. We're in on the scam, but the artist has to respect us enough to be discrete--it's like we're the police and singers are underage drinkers.

Not so with Akon. The voice on the tracks is not so much the voice of a man called Akon, as the voice of a machine. And it's blatantly obvious. Akon just contributes the consonants that we still can't get computers to make--for now, at least.

Now, given how much Akon relies on the vocoder, the problem arises that there might not even be an "Akon" without the vocoder--because, deep down, is what we call "Akon" the man or the machine? Maybe the ambiguity is why we don't especially notice that the name "Akon" is extremely weird and sounds more appropriate for a camera than an R&B singer: "I was going to get a Nikon, but they had this good deal on the Akon 800's."

Things really start jumping off, though, when you look at Akon's personal life. Akon has developed a concise narrative for his past. In his own words, Akon "did three years for being the ringleader of a notorious car theft operation." He "owned four chop shops." While he was incarcerated, Akon started writing songs that became popular throughout the prison. "That's when I decided music was better than stealing cars," he says. These songs made him a superstar.

This story sounds incredible and deserves your incredulity. In truth, Akon was once arrested for receiving stolen property--a BMW--and spent five months in prison. He was arrested again later on for gun possession, but only served probation. He never received the fabled three-year term, and even fathered a child during the time he claims to have been in jail.

Akon matters culturally, because he has used the media to fabricate a new person and used him for wild financial success. He is a mastermind of postmodernism. What's more, there's no show of hiding this bait-and-switch. The facts of life of the man--facts like singing ability and criminal history--are only marginally relevant for the persona in music videos. Reconsider the quote "I did three years for being the ringleader of a notorious car theft operation." This sounds like the treatment for a screenplay, not the words of a crooning thug speaking off-the-cuff. Life gave Akon lemons, and he rewrote the script to make himself CEO of Countrytime.

Now Akon has released "Beautiful." Looking at "Beautiful" we can see Akon at the helm, deftly slicing the seas of global capitalism.

Akon released "Beautiful" to wide success in the American marketplace. Then, he literally just chopped out the middle of the song, replaced it with vocals by a Mexican pop singer named Dulce Maria, and released it again for the Spanish market. Then, Akon did the same thing with Brazilian singer Negra Li for the Portuguese market. Then, he did the same thing with the Dutch artist Brace for European markets.

Akon's music is more like a template than a piece of art. He satisfies one market, then changes it slightly for the tastes of a different market--all for maximum appeal, popularity, and profit. But then again, we've seen this before. Christina Aguilera made a Spanish CD. Shakira made an English CD. Why is "Beautiful" so special?

"Beautiful" should interest us, because Akon actually made different versions of the music video for the different markets. The music videos all are centered around a few images: beautiful women before a white backdrop, Akon in a chair wearing a shiny suit, and Akon with the singers in front of the white backdrop.

Everything about the video is designed for global appeal. The beautiful women and lights and clothes will innately wow teenagers everywhere. The dancing women aren't your typical video vixens: they're at once ethnically diverse and ethnically ambiguous--everyone is going to relate to at least one of those women as natively beautiful. And most importantly, the white backdrop concept makes it easy to cut-and-paste new accompaniment. You just fly in Brace, Dulce Maria, or Negra Li and put them in front of this white backdrop with Akon--that's an hour or two of Akon's time for a whole new market segment.

It's unusual for artists to make different versions of the music video along with the remixes for other languages. But Akon was willing to go the extra mile, because satisfying the consumer--every possible consumer--is what Akon is all about. He's not making art--at least not in the traditional "inspiration-->product-->let's hope they like it" workflow. He's cutting product for markets. And, more importantly, there's zero attempt to cover tracks on Akon's musical globetrotting, as he jumps oceans and cultures spilling consumer surplus everywhere and gobbling up the producer surplus.

In 1902, Joseph Conrad published "Heart of Darkness" about a trip to Africa, where white men dared go and exploit people, only to exploit themselves. In 2009, a Senegalese-American, having conquered the US market, is setting his sights on global economic domination. The difference? The former is imperialism, the latter is capitalism; the former is stealing cars, the latter is making music. Akon, I salute your courage and insight and wish you well. You stand for meeting people on their own terms in free exchange, the power of the long-neglected Third World consumers, and the promise of variety that America still holds. It is beautiful, really. So damn beautiful.

My Oakland Primer

2009-06-14T12:09:00.001-07:00

I made this to orient the new kids to Oakland. Let me know what you think. It's now the most popular thing on the new Pitt News website. Also, the new Pitt News website is awesome.

Pig Column

2009-06-14T12:06:00.000-07:00

This is my column for June 2, about why I don't eat pigs.

Lehe: Put the pig barnhouse out to pasture

I don’t eat pigs, because they’re too smart. That is my whole reason. A pig is smarter than a dog or a young child. Look that up on the Internet.

The clincher isn’t killing an intelligent animal, though. An immutable part of nature is that animals eat other animals. The lesson is basic enough to merit a musical number in “The Lion King,” even if it disturbs kids. How could I claim it’s OK for a lion to eat a pig, but not for me? The convincing reason to not kill an animal is that the species it perpetuates is endangered, which isn’t the case for pigs. And were pigs endangered, I would want to keep other animals from eating pigs, too ... if only out of jealousy.

So, it’s not the slaughterhouse that nauseates me; it’s the barnhouse — if the noun “barnhouse” is really vague enough to signify both the folksy structure that Amish families raise and the gymnasium of torture where pigs are kept. What spoils pigflesh for me is how pigs are treated while they’re alive.

Farmers incarcerate pigs in group cells so tight the pigs cannot turn around. They stand smeared with their own shit, urine and vomit all day. They rarely glimpse sunshine. The air they breath is polluted enough for workers to need masks. Worst of all, although pigs are complex, social creatures, they cannot enjoy relationships or utilize their intelligence. The lack of stimulation induces masochistic behavior such as biting metal bars.

The pigs’ world is damp, dim, rotting, boring and fixed against a backdrop of ceaseless shrieking. If pigs made music, they’d record box sets of the darkest black-metal albums ever conceived. Because pigs are intelligent and social land mammals, we shouldn’t pretend that the pigs’ experience in the factory farm differs much from what we ourselves — or at least a young child — would feel in the same conditions. So, take a moment and imagine. The eventual slaughter is actually an act of mercy. It’s the kindness of putting down a dog with cancer, but a cancer that has never ceased to pain the dog since birth.

Maybe you don’t care about the pig experience like I do. But you should recognize you are inconsistent, and I would hope the cognitive dissonance would be enough to make bacon more of a headache than it’s worth.

The ethics and legislation of animal cruelty suffer from a gaping pig-shaped blindspot. A common bumper sticker reminds us, “Abuse an animal, go to jail!” But apparently the maxim doesn’t apply when the animal in question is delicious — though not so nutritious. If police bust into a cavernous warehouse of caged dogs, knee-deep in shit, bloated and deformed, chewing on metal bars in a frenzy of nervous depression, then the people responsible would spend years in prisons that boast only slightly better conditions.

Why do we legislate better treatment for dogs than for other animals? Presumably, because dogs are intelligent and have human-like emotions ... like pigs, except dogs are dumber than pigs. Sadly, the difference seems to be that dogs sting at our sappy side, but this is only because dogs have evolved and been bred to worship us and replicate our facial expressions.

Some people say I’m inconsistent, because I will eat other animals besides pigs. The truth is that it makes me uncomfortable how chickens and cows are treated. But I’m not inconsistent. I’ve just drawn a line that goes, “Dogs and above” on the “intelligence-and-human-emotions” scale and won’t eat anything above it, be they dolphins, orangutans or pigs. The line might strike you as arbitrary, but even a vegetarian or vegan position is arbitrary in that it depends on the “animal/plant” divider — as if something eternal took place when zoologists drew up their charts.

I think the best way to think about these distinctions is that they are good things you want to buy when you have the choice. It is a matter of light ethics that borders on personal taste. Almost everyone wants to treat some types of non-human life differently, even if there’s no holy book or rigorous philosophy handing down mandates about which life forms to leave out traps for and which to leave alone. We don’t have to be ashamed — or feel like bleeding-heart liberal softies — for respecting these distinctions any more than we are ashamed of not buying certain toothpaste flavors.

Individuals in other countries can’t make these choices because they are poorer. But ours is an affluent society. We have a nimble free market that pivots on our choices. Because of the variety this market offers, I have gone years without eating pork. More importantly, I have gone years realizing an ethically consistent, benevolent, civilized lifestyle choice. I’m proud.

In the end, I haven’t even really made a sacrifice. Pork is bad for you. Turkey bacon tastes fine. Beef franks taste much better than pork hot dogs. A chicken biscuit doesn’t give you bad breath like a sausage biscuit does. So, why not give up pig today?

Go Team Australia

2009-05-06T16:27:00.000-07:00

A Prius That Gives Back to the Grid

This helps solve a problem most people don't know about:

We pay a constant price/kilowatt hour the electricity that comes into our homes and business. But it actually costs drastically different amounts of money for the power company to produce and transmit one kilowatt hour to us, depending on what time of day it is. It is like ten thousand people are all trying to get on one subway car--if we could smooth our power usage, then we could have the same amount of power for less money. But none of us as individuals will or even knows how to smooth power usage, because we don't have information about cost in real time.

The Prius can help solve the problem like this:

The Prius hooks up to a smart meter in your home or business. The smart meter tells the Prius when power is above the average daily price and when it is below. When power is cheap, the Prius sucks up electricity into its little battery. When power is expensive, your home or business stops drawing as much power from the power company and starts getting it from the Prius' battery. It's basically "buy low/sell high." It's a small scale, but on a large scale, it would mean easier energy consumption, and less need to build new power plants and new transmission lines. And it would make the grid safer against blackouts.

When people think about the future of energy, they always imagine biofuels and maybe windmills. But it's the more technical solutions like these, that aren't inuitive, that will probably provide most of the savings.

Go Team America

2009-05-06T16:19:00.000-07:00

Ford Hybrid Goes 1,445 Miles On a Single Tank

It's the new Ford Fusion. That means an average of 81.5 mpg. How did he do it?

by keeping the car below 47 mph whenever possible to maximize all-electric driving, accelerating and braking smoothly, keeping the windows up to reduce drag and coasting to a stop at traffic signals. The team spent three days driving a route in and around Washington, D.C. that included elevation changes, the George Washington Parkway and a three-mile stretch of road marked by 30 traffic lights. The drivers spent two or three hours behind the wheel before handing the car off to the next guy.

Of course, the EPA rating is much lower: 41 mpg in the city and 36 on the highway. That's about what my car is rated for, only my car is a diesel and hence pollutes more and has pricier fuel.

Ford is an awesome company it turns out. They still aren't under government or UAW (the united auto workers union) ownership, like General Motors and Chrysler. There is a solution to the problem of these three companies all being necessary to support the suppliers, and it is this: Ford growing a lot and General Motors shrinking one day.

No Hope for the Gas Tax

2009-04-29T10:31:00.000-07:00

This is really depressing news. Via Streetsblog:

Steven Chu Forced to Recant Belief in Higher Gas Prices

Stearns to Chu: Last September you made a statement that somehow we have to boost the price of gasoline to the levels of Europe, which at the time exceeded $8 per gallon. As Secretary of Energy would you speak for or against any measures to raise the price of gasoline?

Chu: The Secretary of Energy, especially now in today's economic climate, would be completely unwise to want to increase the price of gasoline. We're looking forward to reducing the cost of transportation in the American family. This is done by encouraging more fuel efficient cars. This is done by developing alternative forms of fuel like biofuels that can lead to a separate source, an independent source of transportation fuel.

Stearns: You can't honestly believe that you want the American people to pay for gasoline at the prices the level in Europe.

Chu: No we don't.

Stearns: Your statement that gas prices ought to rise to the level of Europe, doesn't that sound a little bit silly, in retrospect, for you to say that?

Chu: Yes.

What the Republican Party is basically asserting is that the American family is composed of little children with no ability to adapt to the most minor changes in lifestyle. Somehow, the price of health insurance doubles in a decade and the Republican Party has full faith in our ability to cope, but we are incapable and incompetent as private citizens before the terrible force of gasoline prices.

Also, if market forces double the price, so that revenue accrues to producers, then the American family is highly adaptive, but if a tax doubles the price, so that revenue accrues to government, then the American family is a beached fish sucking for air. If you don't believe me that the Republicans are completely coddling the American family, take a look at this:

GDP Per Capita (Purchasing Power Parity) / Gas Prices ($/gal)

United States $46,859 / $1.89
Switzerland $42,783 / $4.50
Denmark $37,266 / $5.91
Sweden $37,245 / $5.30
Germany $35,442 / $6.13
France $34,208 / $5.75
Japan $34,100 / $5.19
UK $36,523 / $4.85
Finland $36,217 / $6.13
Spain $30,621 / $4.73
Italy $30,581 / $5.98
Belgium $36,235 / $6.06

So, in terms of purchasing power, Americans are richer--much richer--than counterparts in Europe. Something to be proud of, and, to me, evidence of the superiority of our economic system. But Europeans pay not twice, but three times as much for gasoline. It's also completely irrelevant that the income equality is better in Europe, given that low-income Americans still pay some taxes (sales, payroll, and some income), and that these taxes could be reduced substanitally if gas taxes were increased. It's further irrelavant that Europeans have more alternatives to driving. We would have more alternatives also, if driving were more expensive. If you go to a world without Gatorade, you wouldn't be surprised that atheltes don't die of thirst--they drink water.

The most depressing thing about this whole affair, is that Dr. Chu has no visible reason to reverse his stance. He is highly respected, having won the Nobel Prize in physics. He works for a wildly popular president. He has no friends in the oil and gas industries. The Democratic Party is totally dominant, having just picked off Arlen Specter for 60 votes in the Senate. And there is a popular mandate for change in energy. Of course, hardly any voters support higher gas taxes, but that's not a reason that Dr. Chu wouldn't: he's not an elected representative.

Why is Dr. Chu caving?

Lock in to a Fixed-Rate Mortgage Now!

2009-04-14T13:38:00.001-07:00

From the blog Macro and Other Musings by an econ prof at Texas State....

There Is No Free Lunch in Central Banking

Many observers, including myself, have questioned whether the Fed has the will to reverse the expansion of its balance sheet--the projected $2 trillion plus increase in the monetary base--once the economy starts recovering. While this monetary expansion is necessary now, a failure to reverse it in the future could lead to 1970s-type inflationary pressures. To do so, though, requires a large contraction of the monetary base--whose expansion has largely taken the form of a buildup in banks' excess reserves--which could knock the economic recovery down just as it is getting started...

Once the economy begins to recover I see four potential paths the Fed could take with regards to the large buildup of excess reserves:

The Fed could do nothing and allow the inflationary pressures to emerge.
The Fed could reverse the buildup of excess reserves and in the process stall the economic recovery.
The Fed could pay even higher rates on the excess reserves and potentially incur large fiscal costs.
The Fed could pray for super-robust economic growth that would allow the economy to quickly grow (i.e. increase real money demand) into the money supply. This would be the cure all solution--no need to reign in the buildup of excess reserves and no need to worry about inflation.

This is depressing. Could this be helped by a tidal wave of immigration? Or an expected sustained jump in the long run annual rate of immigration? Immigrants would help us pay off the baby boomers' Medicare and Social Security debts, as well as demand a lot of that money. Immigrants would also help our productivity growth, most likely. The only actual way to solve this problem would be another productivity boom similar to the 90s.

Orange You Glad Toll Roads Reflect Market Conditions?

2009-04-14T13:30:00.000-07:00

OC Toll Road Price Drops to Attract Commuters

Orange County transportation officials Thursday announced reductions to the tolls to enter the 91 Freeway Express Lanes, citing less traffic due to unemployment and the soured economy.

Starting Wednesday, the cost of the 10-mile commute will drop 50 cents during seven time slots throughout the day, ranging from $1.25 during the lightly traveled nighttime hours to $9.55 for a rush hour commute to Riverside. At rush hour, the toll on the Express Lanes is one of the highest per-mile rates in the nation.

Trips along the commuter-heavy corridor have dipped nearly 15% over the last eight months, with revenue falling 12.5%, officials said.

This is very positive news. It shows that, even when run b y governments, a toll road can reflect market conditions, rather than just biases or political demands of the state legislature. The real question, though, will be: once the economy is back on its feet, and there is more tax revenue available to fill budget gaps, will the government have the political will to raise the toll back up to the market-clearing level?

Column on Outrage Over Bonuses

2009-04-06T05:21:00.000-07:00

This is my Pitt News column for Monday, April 6:

These last few weeks, you’ve been able to turn on C-SPAN and see politicians having the times of their lives. Righteous indignation is exhilarating and gratifying: instead of controlling your anger, the moral impetus is on letting it flow, like giving a urine sample of emotion. It even seems like some senators have been holding their anger all these years, just to make it that much more impressive when they let loose all over your TV screen.

And if there’s one thing everyone can get righteously indignant about, it’s bonuses at AIG.

It’s not the first time this year our congresspersons showed off how mad they can get over other people making money. Today the Left is wringing its hands over bonuses, but a few months ago it was the Right freaking out over the $70 per hour that UAW workers were raking in. This $70 is sort of a mythical figure — both in its impact and in its loose relation to reality — but it makes you wonder:

Who are we to decide — or even care — how much someone else makes? If an autoworker or a CEO can finagle a few suckers, why should we care more compared to when someone wins the lottery? No one makes you buy stock or products from AIG or GM.

The truth is that we usually don’t care how much other people earn. Americans are almost unique among the world’s peoples for a laissez-faire attitude toward their neighbors’ pay stubs. Generally, Americans want to take some of the rich people’s money in taxes to buy public services, but Americans don’t actually begrudge rich people for making money in the first place.

When the money at stake is our tax dollars, though, it’s a different story. Look at the outrage over the midnight raises Pennsylvania’s congresspersons gave themselves. We not only feel an interest, we even start to feel an audacious expertise. “Such and such is just too much for an unskilled worker to make!” you’d hear someone say about the autoworkers, just like now you hear that CEO compensation is “obscene.”

Suddenly, millions of average folks — who don’t lay claim to any special edge in deciding the best price for sulfuric acid, printer paper, semiconductors or any of the other things businesses have to buy to make the products we want — feel qualified to discern the proper price of an autoworker’s or a CEO’s labor. We are stabbing in the dark, and feeling scarily confident about our aim.

The experience of the past year should etch an important warning in our memories. The cost of government intervention is measured in more than just the expenditures of tax dollars. It is also the strife our society has to bear to take collective action. Citizens who used to not care about each other are now at each other’s throats. The old argument, “It’s none of your business,” loses most of its punch when the business in question — AIG or General Motors — actually is your business, if you’re a citizen of America.

Hence, the post-bailout world is haunted by new strains of logic, like:

1. Some corporations got bailouts.

2. Some rich people have some kind of fuzzy association with corporations.

3. All the rich people and corporations owe us all their money.

If you’ve spent much time abroad, you might have noticed the absence of violent protests that happen in America. That’s because in America, there’s less incentive to have a protest. Protests are to get public attention, but when your remuneration isn’t a public matter, there’s nothing gained by a protest. In South America, by contrast, you can go out in the streets and see the taxi drivers upset over what the government has regulated their raises to be this year.

The protests we’re seeing now over CEO compensation, like the strikes we’re sure to see when it comes time to slice and dice General Motors and Chrysler — to the necessary misery of thousands of autoworkers — are a consequence of a situation when protesting could actually yield the individuals protesting a sizable profit. And the time wasted protesting, lobbying, arguing on TV news and writing articles like this one are a real cost on society. I wish I could’ve written a funny article today. But duty called.

Is Congestion Pricing Going Viral?

2009-04-02T08:40:00.000-07:00

I have a feeling congestion pricing is about to be a very big deal. Maybe you can tell something is about to go viral, if it is coming from several sources. Like how science discoveries are often pioneered by several people working at the same time who have no idea what each other are doing. So far Utah, Connecticut, Dubai, Melbourne, and now Uganda are weighing in.

Also, I am working on a movie about congestion pricing that is going to be huge and hilarious.

How Many People Work at General Motors?

2009-04-02T07:08:00.000-07:00

Here's an article: China Vies to Be Leader in Electric Vehicles. This means more competition, i.e. cheaper, better electric cars coming out sooner. Hooray for China.

But what struck me is this passage:

“China is well positioned to lead in this,” said David Tulauskas, director of China government policy at General Motors.

How many people have to work at a company before it has a "director of China government policy"?

New York Times Loves Pittsburgh

2009-04-02T06:58:00.000-07:00

Today the New York Times, my favorite newspaper, came out with an article. The Greening of Pittsburgh. It's really positive and basically says Pittsburgh is awesome for achieving slow, steady growth. No housing bubble around here.

But what's interesting is that it seems to me like NYTimes is obsessed with Pittsburgh. Here are some more articles:

For Pittsburgh, There's Life After Steel
36 Hours in Pittsburgh
Ten Reasons to Like the Pittsburgh Steelers
What's Doing In; Pittsburgh
Revenge of the Rust Belt

Someone in New York just loves us I guess!

Medical Tourism

2009-03-29T11:09:00.001-07:00

From the New York Times. Why isn't medical tourism getting more attention as a way to control costs?

South Oakland Subsections Vol 3: Rivendell

2009-03-28T08:29:00.000-07:00

Where Bouquet runs into Dawson, there is a step street going down to Boundary St. A handful of little apartment buildings cling to the side of the hill, and the settlement runs down into Panther Hollow.

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Some people call it Panther Hollow. That's wrong. That's the geographic area. The community that starts at the steps and fills that little nook in Panther Hollow is Rivendell, the coziest place in Oakland. It stands out for feeling like a lush getaway right in the heart of the city. There's steps, trees, and elves everywhere. Here is a history of the place from Wikipedia:

Rivendell was founded in Second Age 1697 when a force sent by Gil-galad from Lindon and led by Elrond rescued the refugees of Eregion from Sauron's army and was driven into the hills of Rhudaur. Sauron's forces subsequently laid siege to the refuge for three years until a relief army sent by Gil-galad attacked the besieging force in conjunction with the defenders and annihilated it. Rivendell was next attacked in the fourteenth century of the Third Age when the Armies of the Witch-king of Angmar attacked the refuge. After some years they were driven off when reinforcements were sent from Lothlórien. Rivendell is protected by the powers of its lord, Elrond Half-Elven, and his ring Vilya.

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Pitt Trash

2009-03-28T08:26:00.001-07:00

So here is a website made by a concerned south oaklander: www.pitttrash.com. It has lots of beautiful pictures of trash everywhere.

Increasing Returns and Poverty

2009-03-23T11:20:00.000-07:00

The Tata Nano is a new car that sells for $2000 in India. You can get the story here...

What's notable is that there's a spiral visible: as purchasing power for everyone in your class rises, economies of scale make new products available in your price range and make existing products cheaper. That boosts your purchasing power.

Does this justify policies to strengthen the middle class? A boost to their purchasing power (payroll tax cut, etc.) might be thought of as some kind of R&D expenditure since there can (in this case there is) TFP-boosting spill-over from their simple consumption. Maybe the reason that middle class incomes have been falling slightly, instead of rising as income rises fast, is that a lot of new product development/corporate efficiency initiatives/economies of scale has been geared towards luxury goods (purchasing power of high-income household), and the resources that drive such development are relatively scarce in the short run. I don't know of much research concerning productivity of specific baskets, though.

Hyundai Is Smart

2009-03-23T06:52:00.000-07:00

From the New York Times, about Hyundai...

The company’s market share nearly doubled last month as sales rose 14 percent, the largest year-over-year increase that any big automaker has posted in the United States since last May...

One reason for the jump in January, after a dismal December, appears to be Hyundai’s new marketing strategy of promising to let buyers return their vehicles, at no cost in most cases and with no penalty to their credit rating, if they lose their job or income within a year...
The guarantee covers the difference between the value of the car and the amount the buyer owes, or negative equity, up to a maximum of $7,500.
“It doesn’t matter how many zillion dollars you put in rebates, or what A.P.R. you give them,” Mr. Zuchowski said. “If people are worried about their job, they don’t really care and they’re just not going to get off the fence. But we had to walk a really fine line. We wanted to make sure we didn’t come off as panicked or distressed.”

We are seeing behavioral economics in action. What's interesting is this is unfolding in the private sector, not as a university experiment, and on a grand scale so the results are very significant. The behavioral economics application is this: that the implicit discount Hyundai offers, which is [initial value of car] x (1 - [losing your job probability cdf at time t <1 year] x ([rate of depreciation] x [time t]) - [transaction costs], is apparently much less than the amount of discount it would take to induce people to buy an equal number of cars. We can say much less, because the program is exotic and Hyundia would only undertake it if the jump was large.

The other interesting thing is that this is basically an insurance program built into the car market from the seller's side. It's as if Hyundia just offered a discount d and then there was an insurance company offering job loss insurance that you could buy into for price d. The problem with that insurance, of course, would be adverse selection problems, since people know a lot about their probability of losing their jobs. But since the insurance here is built in to the car purchase--i.e. it is mandatory--, the transaction fees and adverse selection are minimized, just like a lot of people claim is the case with mandatory national health insurance.

Meanwhile, let's ask ourselves, "How much better off are America's consumers now that foreign companies, not good old American brands like the Big Three, can compete in our marketplace?" Anyone with sense would answer, "A lot." And for all those who would complain about the American jobs shipped abroad, I say look at this:

Sales of the Hyundai Sonata, a full-size sedan that costs less than $20,000, surged 85 percent in January, making it one of the country’s top-selling vehicles. And Hyundai sold more passenger cars last month than Chrysler, which has four times as many dealers.

And now look at this:

Hyundai Motor Manufacturing Alabama, LLC

My Column Against Couch Burning

2009-03-23T06:40:00.000-07:00

From the Pitt News...3/23/2009

Behold City Council’s recent commandment: It is now illegal to put a couch on your front porch in Pittsburgh.

The law sounds ominously like the climax of an unlikely slippery slope argument. Imagine: You’re talking to some right-wing militia nutjob about building codes. “Some basic safety ordinances are called for,” you say. And nutjob says, in a fit of paranoia, “Building codes are fine. But before long, they’ll make it illegal to put a damn couch on your own front porch!” You throw up your hands in disgust because the idea is so preposterous.

Well, here we are.

The newspaper coverage and the City Council members themselves make it clear that the ban is to prevent couch burning. The logic is, at first glance, infallible. But something about it irked me. So I lit a pipe, put on a tweed coat, and ruminated all afternoon. After hours of cold deduction I came to a surprising conclusion: You can burn a couch that isn’t on your porch. Clearly, a porch couch can be stolen and burned by someone besides the owner, but I would submit that the City Council instead take the radical step of making theft illegal.

For every infringement on people’s liberty, the extent of imposition has to be weighed against the severity and commonness of the problem the infringement tries to pre-empt. For example, we can safely say that the prospect of desperate crackheads stealing to get crack, and naive kids ruining their lives after trying crack just a couple of times, is severe enough to justify a ban on crack cocaine.

But the couch-burning problem is not serious. It rarely happens. Only a dozen or so of the many thousands of couches that sit on Pittsburgh’s porches year round are set afire. Obviously couch burning should be illegal, but the act is not especially damaging either. The porch couch ban is equivalent to putting stop signs at every single intersection in Pittsburgh, because statistically over one year the stop signs might save a life.

Meanwhile, couches on porches form part of a distinctive culture. The weather here is awful usually, but on sunny days, I’d rather be in Pittsburgh than anywhere else. You can stroll down busy streets and see people sitting out, sipping coffee, drinking beers and chatting. The beat-up old porch couches pass from hand-to-hand over generations of renters, and provide a characteristic backdrop to these practices.

Bruce Kraus, Oakland’s councilman, holds the opposite view. From the Post-Gazette:

“Rome is burning, and we just wasted a week,” he said, shortly after showing video of a blazing couch on Semple Street.

This viewpoint is disconnected from reality. Oakland is not burning. All of the damage happened in one night, not all week long. The damage done by couch burning is also negligible compared with the overturned cars, bus stop collapses and bonfires that people set with trash cans and wooden debris, not couches. It is downright amazing what people can burn when they put their minds to it. That’s Yankee ingenuity in action.

Kraus also makes a non sequitur: “One idiot decides to place an accelerant on the wood of that porch, and that whole row of houses could go up.” This is to say that, if someone covers a porch in gasoline and lights up a couch that’s on the porch, then the porch will catch on fire.

Supporters talk about other reasons, such as rodents and insects that infest couches. This is a classic case of a solution in search of a problem. It’s like people who argue for lower speed limits because driving your car fast hurts its gas mileage, which causes global warming and terrorism and supports governments hostile to women’s rights.

No one believes Pittsburgh suffers from serious rodent problems, or that any such problems are due to porch couches. No one was biting their nails over rat problems before the Super Bowl. Besides, the consequences of vermin infestation fall mainly on those who possess the couches.

Show me the upstanding Pittsburghers who shake their fists at fate and cry: “I did everything right! I keep a clean household! But my neighbor has a couch on his porch that rats use as a springboard for swarm attacks on my home.”

Those who say porch couches are a fire hazard forget that this is only true to the extent that couches in general are fire hazards. The danger doesn’t go away inside the house. A couch actually seems more dangerous inside, where it is dry, can burn a long time with no one noticing, and sits among carpets and other fire-prone upholstered furniture. Is a ban on all couches next? This is a silly, slippery slope. Yet, if you had told the average person five months ago about a porch-couch ban to stop rioting, she would have thought you silly then as well.

The important thing about these complaints — couch theft, couch burning, rodent infestations, fires — is that they are already illegal. More people calling the police, and better police response, would solve these problems surgically.

South Oakland Subsections Vol 2: The Second World

2009-03-22T19:16:00.000-07:00

Have you ever taken a wrong turn off Bates and ended up in East Berlin, 1984?

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Don't be scared. No time warps here.The stretch of South Oakland radiating out from Ward/Zulema just happens to look like a place where property rights are ill-defined and you have to make some bribes to get your street cleaned. I call it The Second World. It doesn't look so much like a Third World country as a very recently former soviet satellite.

You know when people you're doodling around in class and you draw little cross hatches on buildings to show that they're run down? The cross hatches always look way too extreme, but not for these buildings. The first thing you'll notice about the Second World is that the buildings are truthfully covered in real life cross hatches. It would take hundreds of little up-side motions with a roller ball pen to do them any justice. See for yourself...

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This isn't to diss the area, though. The Second World is something unique and special that we should be proud of, a symbol of the organic nature of city living. Even if it looks seedy, it's all character, like distressed jeans. There's actually not much more crime here than anywhere else in South Oakland, which is to say, not much crime at all given the density and low rent of the place. Pittsburgh is just as safe dirty as clean. We salute you, comrades of The Second World.

South Oakland Subsections Vol 1: The Lost City

2009-03-22T13:19:00.000-07:00

I take a walk everyday, and have come to think of different parts of the barrio as having unique characters. This is an ongoing review of subsections of South/Central Oakland.

Probably the most distinct subsection is the little neighborhood, which most people have probably never even been to before, down off Bates Street by 376. I today christen it The Lost City. Here's where I'm talking about:

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As you can see, this part of the neighborhood is almost totally disconnected. It can only be accessed via the Frazier street step extension, or via a step street coming down from Lawn St that's so little it doesn't even show up on Google Maps. The Lost City is nestled in a hollow, and feels like you're in rural West Virginia if you just close your ears. Similar to Panther Hollow, but even more bizarre because there's this giant interstate there. It's amazing, really. Here's what it looks like...

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Andy Warhol's Church

2009-03-20T14:46:00.001-07:00

Andy Warhol was a South Oakland native. Click on the photo here for beautiful photos from Andy Warhol's childhood church, St. John Chrystostam Byzantine Catholic Church, located in Greenfield, just to the south of South Oakland. Did this art influence Andy Warhol's art?

Interesting tidbit from Andy Warhol's wikipedia page:

Warhol was a practicing member of the Byzantine Rite Ruthenian Catholic Church. He regularly volunteered at homeless shelters in New York, particularly during the busier times of the year, and described himself as a religious person.^[26] Several of Warhol's later works depicted religious subjects, including two series, Details of Renaissance Paintings (1984) and The Last Supper (1986). In addition, a body of religious-themed works was found posthumously in his estate.^[26]

During his life, Warhol regularly attended Mass, and the priest at Warhol's church, Saint Vincent's, said that the artist went there almost daily.^[26] His art is noticeably influenced by the eastern Christian iconographic tradition which was so evident in his places of worship.^{[citation needed]}

Warhol's brother has described the artist as "really religious, but he didn't want people to know about that because [it was] private." Despite the private nature of his faith, in Warhol's eulogy John Richardson depicted it as devout: "To my certain knowledge, he was responsible for at least one conversion. He took considerable pride in financing his nephew's studies for the priesthood."^[26]

South Oakland Shuttle Captain Reviews Vol 1

2009-03-20T13:21:00.001-07:00

My highly speculative reviews of the Pitt shuttle drivers who go through South Oakland. The names and back stories are imagined, but inspired by strong intutitions. I call the drivers captains.

PlaidCap 30A morning: The older Caucasian fellow in a plaid cap. Always listens to NPR, especially jazz. I hypothesize PlaidCap was a music teacher at an inner city school where his tough love approach help him stay sane and turn a kid's life around now and then. Now he's retired, but he drives the bus to stay active and because his wife got sick with the cancer. He keeps up the perky demeanor of a decent yankee American. Watch out: PlaidCap is a stickler. When capacity on the bus is reached, he will drive by people shivering in the snow, without slowing down to explain the situation or even let them see the bus is full. If you ask him to bend the rules, he will call you, "Buddy" and deny the petition. Once, when we were blocked by a horde of pedestrians on Bigelow for ten minutes, I asked him to get off right there, and he said, "I know you're joking with me," and winked. I wasn't joking, but then I pretended like I had been joking to save face. A hot girl looked at me like I was an idiot. However, if he does pass people in the cold, he will often call to Bus Shuttle HQ and request the disability shuttle or something go and get them, thus revealing a heart of gold beneath his Puritanical veneer.

Cheers 30B anytime: The happy African American dude. Perhaps the greatest shuttle driver of them all, Cheers makes the bus feel like the Cheers sports bar, a place where everybody knows your name. I can't guarantee he will actually remember your name, but he will remember almost everything you tell him about yourself. If you want friend, learn one sports fact and bring it up on the bus. Cheers loves to talk about sports, and has many engrossing theories about trades and strategies for all of Pittsburgh's teams. He talks on his cell phone sometimes, but even halfway through a cell phone conversation, he will stop and tell you to have a great day when you get off at your stop. His cell conversations are usually advice-oriented, and I imagine he is sort of a sage to those lucky enough to count him as a friend in his beyond-the-bus life.

BlueBlood 30A evening/30C: Longer hair. Definitely a Pittsburgh local (Is Yinzer sort of a slur? Can only yinzers ouright call other people "yinzer" without it being offensive? I dunno, but I'm playing it safe.) BlueBlood is awesome. He usually listens to hard rock of the 70s, and he just has a badass, devil-may-care, feel to him. If the zombie apocalypse happens, and South Oakland is going to hell in a handbasket, you can count on this guy to pull up at the Ward/Cato stop at 11:35PM, right on schedule, with a big smile and a revolving barrel shotgun. BlueBlood's not the type that demands a Pitt ID, but he does demand you're not a zombie, and if you were a zombie he would probably not think twice about giving it to you right there in the brains with a 12 guague. "This weather!" he'd say to the frightened passengers. This is all speculation of course.
However, once I was involved in a sticky situation in which the course of action BlueBlood chose can only be described as Taking Matters Into Your Own Hands. We were stuck on Meyran halfway between Louisa and Bates, behind a car that someone had left in the middle of the road with its blinkers on. The car's driver was nowhere to be found, and the cars were piling up behind us. The clock was ticking. BlueBlood honked and honked, until finally this asian guy runs out of a house and up to the bus window. Now, both the asian kid and BlueBlood have thick accents, so communication is strained, but after a while the kid gets it across that he has locked his keys in the car. The kid runs inside to look for help or something, leaving BlueBlood, a bro, and myself on stranded on Meyran with none but the most badass of options.
BlueBlood tells me to look out the right window and proceeds to outflank the stalled Mazda. Be appraised: Meyran is a thin little street, and the car was parked right in the midle, so many Good Americans would cry "madness" at a flank attempt undertaken by anything bigger than a Honda Fit. But BlueBlood is undeterred in this titanic ThunderShuttle 5000. I am watching dutifully, aware that this is something glorious he and I will be able to mull over for years. However, I get nervous, and just when we are almost free, I don't notice that the back of the bus bulges slightly. I tell BlueBlood that we are good to go, but when we lurch forward, there's a snap as the ThunderShuttle 5000 snaps the sideview mirror off the Mazda. "F***!" cries BlueBlood, and I realize we will never bond over this moment, that I have ruined it all failing at even the humble sentinal duty with which I have been entrusted. BlueBlood parks the shuttle, and inspects the car. He says the thing can be repaired and charges on.

The Don 30A afternoon: Older fellow, smokes a cigar. The Don projects a certain mystique with his hat and his cigars. Who knows what he's thinking? I have nothing to say about this bastion of mystery.

Pitt News "Headlines"

2009-03-20T13:18:00.000-07:00

In the Pitt News, March 2 2009:

Sorority Promotes Eating Disorder Awareness

If it weren't for sororities, a lot of people might not have even heard of eating disorders!

Changing Focus

2009-03-20T12:11:00.001-07:00

Not many people are visiting this blog, so I have decided to switch to being mainly a South Oakland/Pitt living blog, instead of an economics blog.

Wal-Mart Strangling Small Businesses in Fit of Bloodlust

2009-03-11T14:16:00.000-07:00

Most people don't get that Wal-Mart's success is only halfway due to aggressive buying strategies. The other half is that Wal-Mart was the first store to really get into information technology to track and distribute its goods. Here is Paul Krugman from an anti-Wal-Mart post...

Wal-Mart can claim, with considerable justice, that its business practices make America as a whole richer. The fact is that ... its low prices aren't solely or even mainly the result of the low wages it pays. Wal-Mart has been able to reduce prices largely because it has brought genuine technological and organizational innovation to the retail business.

Now, Obama is really into applying information technology to health care. The most obvious way is medical records keeping, for which they've included $19 billion in the stimulus package. It's silly that Wal-Mart has scanners that tell you everything ever about a crayon box, but I have to fill out three pages of charts from fuzzy recollection at the doctor.

Maybe it's no surprise, then, that Wal-Mart is taking the lead in health care the way it did in retail...

Wal Mart Plans to Market Digital Health Records System

...Wal-Mart says its package deal of hardware, software, installation, maintenance and training will make the technology more accessible and affordable, undercutting rival health information technology suppliers by as much as half.
“We’re a high-volume, low-cost company,” said Marcus Osborne, senior director for health care business development at Wal-Mart. “And I would argue that mentality is sorely lacking in the health care industry.” ...

The use of electronic health records is widespread in large physician groups, but three-fourths of the nation’s doctors work in small practices of 10 physicians or fewer.Wal-Mart, however, has the potential to bring not only lower costs but also an efficient distribution channel to cater to small physician groups. Traditional health technology suppliers, experts say, have tended to shun the small physician offices because it has been costly to sell to them. Taken together, they make up a large market, but they are scattered.

You may think it's awful that Wal-Mart is cutting out the downhome mom-and-pop medical records technology suppliers, but in the end we will save money and have better health care. So it goes, mom-and-pop medical records technology suppliers.

Is there anyone intelligent who still believes WalMart is bad for poor people, I mean genuinely poor people, like the handicapped and immigrants?

For all the moaning and groaning over lost jobs shipped abroad, here is some research I swiped off Dani Rodrik's blog...

the rise of Chinese trade has helped reduce the relative price index of the poor by around 0.3 percentage points per year. This effect alone can offset around 30 percent of the rise in official inequality we have seen over this period. [from Broda and Romalis]

In English: What these people did was look at price inflation, not for the basket of goods that we use to measure general inflation, but for a basket of goods tailored specifically to what poor people buy. Trade with China had a price-cutting impact that was especially strong for poor people's goods, which is kind of a duh phenomenon if you have ever been to WalMart.

WalMart is also the company that brought $4 generic prescription drugs to the masses, and maybe more importantly than the price or access, Wal-Mart advertising and offering generic drugs as a plan made generic drugs a thing on the radar for lots of people who might have otherwise doddled along paying for name-brand drugs needlessly. In a sense, they did the same thing for drugs that they'd already done for shoes: made it occur to people to buy something they'd never heard advertised before.

Meanwhile, WalMart is also on the cutting edge of retail medicine, meaning low-cost clinics staffed by Nurse Practicioners who provide very basic health care for very cheap, paid out of pocket. This makes life better for people without health-insurance, and gives the lavish medical establishment a run for its money.

My Pitt Political Review Article on Farm Subsidies

2009-03-10T15:38:00.001-07:00

Pitt Political Review is online now at www.pittpoliticalreview.org. I have a long piece about farm subsidies and their hazards. Here is a tease:

A joke runs, “If you laid all the economists in the world end to end, you still wouldn’t reach a conclusion.” Economists are famous for disagreeing on fundamental questions, from health care to taxes to interest rates. So it’s worth listening when 87.5% of the American Economics Association agree the government should end farm subsidies .

and here is the rest. enjoy

Bad Econ Journalism

2009-03-03T14:06:00.000-08:00

I found this at Paul Krugman's spot, who got it from Media Matters, but here it is on my blog:

Upper-Income Taxpayers Look for Ways to Sidestep Obama Tax-Hike Plan
President Would Slap More Taxes on Those Who Make Over $250K to Fund Health Care

Here's some quotes:

A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law.

"We are going to try to figure out how to make our income $249,999.00," she said. The attorney says that in order to decrease her income she'll have to let go of clients, some of whom she's been counseling for more than a decade.
"This means I'll have to tell some of my clients we can't help them and being more selective in general about who we help," she said. "I hate to do it."
Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama's plan.
"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."

All in all, I'd say it's a good thing that these people are working less, because they are stupid and were probably harming their customers--entangling their properties and mangling their faces.

If you jump into the 35% marginal tax bracket, then only the money you earn over the line is taxed at 35%. All your previous money is taxed at the previous rates. In short: you always make make more money by making more money.

What's interesting about this story is that liberals say people aren't as calculating as economics models prescribe--that they generally want to make more money without real sharp regard to what the after-tax return is, and that they will generally just kind of work 40 or so hours a week, depending on their personality or something.

Conservatives paint people are more rational, more calculating. They believe people are like adding up dollars and making hour-by-hour decisions about what to do with their time, and that they have lots of flexibility in choosing their hours and effort.

This article clashes with both viewpoints, because the people involved are both calculating and completely irrational.

Even more important, though, is the poor quality of economics journalism.

Column On Newspaper Advertising

2009-03-03T13:34:00.001-08:00

You probably won't read, "Newspapers are all going out of business," typed in boldface across the top of your favorite newspaper. This dreary headline will not trouble your breakfast table, or soak up your coffee spill, or clutter your refrigerator. In fact, you probably don't even read a print newspaper. And that's the story behind the headline.

Newspapers across America are laying off staff. Some are closing up shop. They are losing subscriptions and ad money fist over fist.

Why subscribe, when most papers let you read content for free online? Some critics say papers are shooting themselves in the foot by going online, but that's not true for a particular paper. If you stay print-only, but a competitor is free online, folks will cancel their subscription for your paper anyway.

Meanwhile, costs are escalating. Take the Detroit News. There's paper, ink, electricity, of course. Plus every week, trucks cover 250,000 miles just to distribute the papers. It's enough to make a paper quit printing altogether.

And that is what's happening. Home of the Lions, the Big Three automakers, and a parish named for the patron saint of lost causes, Detroit is not a place where people quit just because they're losing horribly. Times are tough, then, when the Detroit News is ending home delivery.

The problem is that there's still no viable business model for the free online newspaper. How will it earn money?

Everyone is scrambling for answers, because so far I have not put all the answers in my column. Now, I am offering my million dollar idea for free to the public, because I will be fabulously wealthy from many other sources, including Nobel Prize awards and football endorsements.

Some say a micropayment service, like ITunes, will save our papers. I disagree, and I am correct. A newspaper ITunes won't work, because the product is so copy-and-pastable; and, again, there'd better be something real special about your content, if only a few other newspapers are free online.

Instead of ITunes, newspapers should turn to Hulu, which earns all its money from ads. The genius of Hulu is that viewers willingly put themselves in a position where they cannot avoid watching ads, because they can watch any episode of any show, anytime, without the hassle and poor quality of file sharing, or the long commercial breaks of regular TV.

Unfortunately, the way papers have been going about their ads is nothing like Hulu. Readers can easily avoid looking at ads on the sides of pages. And the ads disappear when the article is reproduced on blogs.

Instead, newspapers should sell ads embedded in their articles. Like, this article would go:

"Newspapers across America are laying off staff. Buffalo Rock Ginger Ale tastes spectacular and produces a profound sense of well-being deep in the thorax. Some are closing up shop."

Companies would pay a lot for in-line ad blurbs, especially ones as catchy as my example. Why? PNC banks offers thousands of free ATMs. First, readers will definitely consume its message. Second, the ad remains even if the article is splattered across a dozen blogs. Meanwhile, the cost is low, since it doesn't take layout teams to insert it, or a fancy ad agency to design it.TGIFridays is a casual spot where you can really let your hair down.

What's more, the fonts themselves of articles are fertile ground. What if all the o's were Pepsi logos? What if every one of your gerunds ended with the logo of Dutch insurance conglomerate ING? Is that selling out?

What if companies could sponsor issues and news items like bowl games? "Obama's cap-and-trade program is sure to make an impact on Amazon.com presents climate change." CitiBank could sponsor the word "bailout."

Of course, people will complain when my idea is implemented in every paper in America. But imagine another world where my idea is the common practice. Something happens, and they can't do in-line ads anymore. Despair.

But a visionary says, "How about big pictures ads all over the sides of the pages?"

Everyone shouts him down: "Dedicating huge swaths to picture ads? So commercial!"

Companies wonder, "But if the ad isn't right in the article, how do we know people will read it?"

Pundits fuss over accuracy: "Everyone knows that the in-line ad blurb isn't part of the reporting. But folks will think these picture ads are the paper's photography. Pictures are worth a thousand words, so it's subliminal brainwashing."

I realize that my idea is probably not really the solution we need. Talk to your doctor about Amatril. It's important, though, that technical problems kill mine other fresh revenue ideas--not an icky feeling that they're are beneath us. Practices like charging interest, paying professors, and picture ads all felt cheap and "common," until they became common. PittNews.com now offers multimedia coverage of the stories that shape your world. Hilarious Lewis Lehe commentary on life and economics at www.blogoftheallies.blogspot.com.

What I Think about the Stimulus Part 2

2009-02-26T16:02:00.000-08:00

So in Part 1 I started talking about stimulus spending I think is wasteful. I just talked about little items that are easy to make a case against.

Now for two big items that I argue are waste:

Money for Highways and Bridges 27.5 billion Provide money to states to repair or construct highways or bridges, reallocating money that is not spent quickly.

Our country already has tons of road and bridges. The problem is the number of cars driving on ththem. Saying that construction is the answer to traffic is like saying more roller coasters is the answer to long lines at Six Flags. The solution to our infrastructure funding problems is also the solution to our traffic problems: congestion pricing.

This funding softens the incentive for states and municipalities to switch to congestion pricing. Really, it is only kicking the funding issue down the road, but it's harder to sell the case "let's toll our bridges to pay interest on debt" than it is to say "let's toll our bridges to pay for our bridge repairs," even when the debt is from bridge repairs.

Create Bonds for Improvements in Education $10.9 billion Create $22 billion of new tax credit bonds for the construction and repair of public school facilities or to acquire land for construction of new public schools. Authorize states and local governments to issue another $1.4 billion in bonds to finance improvements in low-income school districts.

Our problems with education are structural, and by that I don't mean that they are lacking in nice structures. If you go to Third World countries, kids are learning significantly faster and better, in buildings that'd be condemned here. I know there are lots of factors at play, like they don't educate everyone and blah blah, but none of these factors explains such a massive achievement gap proportionate to an equally-massive-but-reversed gap in funding.

Public education is sedentary. We need more comparative effectiveness in research, especially research grappling how to teach differently to kids whose parents don't like education, and research on motivating poor kids to do well, and research on grading teachers like we do baseball players.

Meanwhile, as for waste, this article that Mankiw posted says it all:

Milwaukee Public Schools would reap $88.6 million over two years for new construction under the economic stimulus package just passed by the U.S. House of Representatives - even though the district has 15 vacant school buildings, a large surplus of property and no plans for new construction.

What's interesting is that these empty structures are part of a "neighborhood school" initiative to build little schools all around Milwaukee. It was a good idea, but it failed because parents who would send kids to these schools preferred the vouchers that Milwaukee provides.

San Francisco Not as Progressive as Utah

2009-02-25T06:48:00.000-08:00

Riceroni comprises 30% of my caloric intake. That said, San Francisco is shooting itself in the foot...

Public Wary of Congestion Pricing Plans

Looking at successful models in international cities such as Rome and London, the San Francisco County Transportation Authority, a planning and funding agency, has suggested a possible $3 charge for drivers during the morning and evening commutes. The funding could generate $35 million to $65 million a year, and would be used to improve public transportation...

In the study released by the chamber — which has publicly expressed skepticism about the congestion-pricing plan — 61 percent of the 508 people polled were opposed to the proposal to charge drivers entering downtown during commute times. That number rose to 72 percent concerning the fee for the extended downtown section.

The weird thing is that San Francisco has really high taxes. So they can stand paying, when they get their paychecks, and when they own or improve property, and when they buy things. But they cannot stand paying to drive a car?

And if you ask most SF residents, I am sure they think there should be better public transit and less traffic. So are they for better public transit, but against investing in public transit? I think it's the case that if you ask the most conservative person in the world, "Would you accept better public transit if you don't have to pay anything?" they will answer in the affirmative. So a pro-transit position is a meaningless signal unless it means pro-investing-in-transit, which specifies a course of action in a situation with trade offs.

Additionally, San Francisco is a place where coffee usually costs more than three dollars. Is these people's time really worth so little compared to their coffee? The stereotype of liberals is that they waste time talking a lot and drinking lattes. I guess it's not so inaccurate.

Meanwhile, Utah trudges on towards progress, and Reno starts to open its eyes.

What I Think about the Stimulus Part 1

2009-02-24T08:53:00.000-08:00

Last night, my good friend Ryan Johnson asked me what I thought about the stimulus. I am like a little baby economist, so I won't question whether the stimulus was needed or not, or how big it should have been. I do know that even Martin Feldstein from the Reagan administration said $800 billion was about right, though.

So, I have some commentary about specific parts of the stimulus plan.

Here is a breakdown of the stimulus from the New York Times.

I have two main rubriks for stimulus money worthiness. They are:

1. Preventing people from helplessly falling into what would otherwise be inhumane conditions without the help--the kind of things that are just embarassing to happen in America.

2. Boosting long-term productivity growth and spurring cost-saving technologies.

The worst stimulus money is these items:

Tax break for buying a car: 1.7 billion. I don't think we should be subsidizing industries that are already developed, since there is no public good of spillovers from technological progress from people buying more regular cars. I also doubt $500 will cause many people to buy cars who wouldn't have otherwise. My roommate Dave Goode is an exception, though. Also,

Thanks to a late push by lawmakers, motorcycles and other recreational vehicles also are eligible for the tax break. That added about $100 million to the cost of the tax break, according to calculations based on revenue estimates by the congressional Joint Committee on Taxation.

Provide tax break to General Motors: $3.2 billion. This is like the car tax break, but worse, because it is only for one company, which is the company that makes the least fuel efficient and reliable cars. Also, it is twice as expensive as the car buying tax break. Keeping GM workers from dying and starving is what Medicaid, COBRA, Unemployment, and Food Stamps are for. But we have no national pregoragtive to keep them in a particular quality of life that they're attached to. This is delaying the inevitable.

Incentive for first-time homebuyers: $6.6 billion. Housing is a sector with tax subsidies for mortgage interest, capital gains exemptions, two mammoth nationalized companies that subsidize its debt, property tax deductions, and much, much more.

This is a program for people who are able to get credit for buying a home, and make up to $150,000 as a couple, but have never bought a home before. Mainly, they are young people with secure jobs. The best way to help such people, if we want to, would be with a payroll tax cut, which would incentivize working harder and let them spend the money how it will help them the best. But it's unclear why we are willing to borrow money and give it to people who are in good shape.

I have to go to class now, but I will post again about some wastes that are more controversial and demand more explanation. Specifically, I think most of the infrastructure spending, and almost all of the education spending is unworthy.

Gross Domestic Pizzo

2009-02-23T08:47:00.000-08:00

This is what happens when the credit system freezes up, or when laws make certain interest rates illegal. You get loan sharks...

Jan. 30 (Bloomberg) -- Revenue raked in by Italy’s mob surged 40 percent last year, turning crime into the nation’s No. 1 business, Eurispes said in its annual report.

Organized crime groups siphon 92 billion euros, about 6 percent of Italy’s gross domestic product, from Italian businesses a year through protection payments, usurious interest rates on loans and other forms of extortion, Eurispes estimates. That works out to 250 million euros a day and 10 million euros an hour, Eurispes said

“With people more desperate, loan sharks thrive,” Amedeo Vitagliano, an Italian crime expert at Eurispses, said in a telephone interview. “While the country is on its knees, the mob rejoices.”

Comparative Effectiveness Column

2009-02-23T08:42:00.000-08:00

My Pitt News Column for Monday 23 February 2009:

Lately, Republican pundits have vilified the most well-spent billion dollars in the whole $800 billion stimulus: $1.1 billion for “comparative effectiveness research.” Conservative commentator Betsy McCaughey even wrote an article called, “Ruin Your Health With the Obama Stimulus Plan.”

Comparative effectiveness research is a type of medical research. Like current medical research, it uses statistics and trials to compare several treatments to see which treatment usually works best against a given ailment. But comparative effectiveness research goes further because it also factors the costs of treatments into comparisons.

For example, let’s say that there are two medicines that cure the common cold. MedA cures 50 percent of cases and MedB cures 51 percent. But MedB is 20 times as expensive as MedA.

Comparative effectiveness research would not tell a doctor to prescribe MedA or MedB. But it lets us ask, “Is curing an extra 1 percent of patients worth spending an extra 1,900 percent on all patients?” Maybe, maybe not.

This type of questioning has two uses: First, it informs patients about how an extra dollar will likely affect their situation. You might find yourself choosing between spinal surgery and muscle therapy. But without these statistics, you or your doctor will have to act on a gut instinct that’s statistically no better than a coin toss. It’s like gambling, but with much more money at stake than most people will toss around during a whole week in Vegas.

Additionally, the system rations government health spending. “Rationing” means that the government would only pay for treatments deemed cost-effective. Your doctor might prescribe a treatment, like MedB, but the government program that provides your health insurance will refuse to pay for the treatment. For the record, Medicare, Medicaid, Veterans Affairs and SCHIP are sources of government health insurance.

It’s this rationing that has Republicans frothing:

“If the federal government spends, as this does, $1.1 billion to begin to figure out what treatments or drugs are more expensive, it’s going to use that information to deny you and your doctor the right to get those treatments,” said Rep. John Shadegg, R-Ariz.

“Federal bureaucrats will misuse this research to ration care, to deny life-saving treatments to seniors and disabled people,” said Rep. Charles Boustany Jr., R-La.

I sympathize with Republican concerns about big government. I do not want the United States to be like France or Britain, where government intervenes to make sure everyone has equal access to health care. These governments will sometimes prevent or delay one person’s treatment so that another person can get treatment.

However, the claim, “It’s going to use that information to deny you and your doctor the right to get those treatments” is fundamentally a lie. There is nothing tyrannical about government rationing government health care.

If you’re on Medicare and the government refuses to pay for a knee surgery, your right to health care is intact. You can still go get 10 knee surgeries if you want to, it’s just that taxes will not pay for them.

Taxes will also not buy you a car, even if your doctor is sure it will cure cancer. This example sounds ridiculous, but cancer doctors recently lobbied successfully for Medicare to start covering “off-label” cancer drugs — meaning drugs that are prescribed for conditions they are not approved to treat, and for which there is no clinical evidence that the drugs will work. Some off-label drugs cost $10,000 per month, so in a sense it would be better for taxpayers and patients alike if Medicare really did buy cars for cancer patients.

Plus, we already have rationing. Medicare will not pay for your treatment if you are not elderly. And Medicaid won’t pay if you are not impoverished.

Yet Republicans don’t advocate extending Medicare or Medicaid to more Americans. Their position seems to be this: Few people should have government insurance because it’s socialist for the government to buy health care. However, should someone have government health insurance, it’s socialist for the government to not buy them health care indiscriminately.

Republicans should be smarter than to fret over the “R-word.” Comparative effectiveness is something sober conservatives embrace: It cuts useless spending. Plus, conservatives have always advocated using stats to fire lazy teachers, slash regulations and restructure welfare.

If Republicans resist rationing for government health care, will they also start fighting studies that learn how much traffic on a highway will be eased by a new bridge? I guess Republicans are set on applying their “Bridge to Nowhere” ethos to health care.

A Good Man Is Hard to Fund

2009-02-19T13:46:00.000-08:00

Budget to kick off health care rewrite

Harry Reid talks about economist Peter Orszag (Obama's director of Office of Management and Budget) working on the stimulus...

“Sen. Reid seemed particularly surprised that I was effective,” Orszag recalled... “He kept saying, like, ‘Aren’t you an academic?’”

"In my mind, if there is a hero in all of this, it is Peter Orszag,” said Reid.

Orszag is one reason we are doing comparative effectiveness research. He is the Atticus Finch of economics, doing the boring, crucial work no other progressive that high up finds sexy enough to do.

My question is, how much does a guy like Dr. Orszag say about the value of education funding?

We subsidize education heavily. We throw a hundred thousand each at lots of kids that literally learn nothing or even get dumber and cocksure. You can learn more about life and language on a crab-schooner than in many English courses. Plus, we fund tons of professors doing research that is useless or even inaccurate, who often hate teaching or even hate students.

But every once in a while, we get an Orszag. Orszag's committment, craft, and attention to detail help us make decisions about health care worth thousands of times a state's total annual education budget. This comparative effectiveness thing, plus info about retirement age and payroll taxes, could save like trillions of dollars.

The university that taught Orszag would still be cost effective if it fed all the other students leadpaint and taught that five is two and two for twenty years before he graduated.

So if you get depressed looking around a classroom, you're probably in the wrong mindset. Education funding isn't like car-making, it's like gold-prospecting. Same with immigration: Orszag doesn't sound English, German, or even Socts-irish for that matter. Chances are his grandparents got here in one of those huddled masses, and it may have taken generations for their whole ship's progeny to make a difference, but Orszag is probably worth a thousand statue of liberties. Here's to the dorks.

Argentine Spainglish

2009-02-17T07:09:00.000-08:00

I'm still a member of Blockbuster Argentina, so I get these emails. The one today cracked me up, though...

China Buys American

2009-02-17T06:55:00.000-08:00

China is teaching us about free markets. I got this off Mankiw's Blog, from the AP:

BEIJING (AP) — Measures in a $789 billion U.S. stimulus package that favor American goods are a "poison" that will hurt efforts solve the financial crisis, an editorial by China's official news agency said...

"History and economics have told us, facing a global financial crisis, trade protectionism is not a solution, but a poison to the solution," the editorial said...

China has promised to avoid "Buy China" protectionist measures in its own multibillion-dollar stimulus effort, and appealed to other governments to support free trade. Deputy Commerce Minister Jiang Zengwei said in early February that China would "treat domestic and foreign goods equally so long as we need them."

Utah, the Progressive Alternative to New York City

2009-02-13T07:32:00.001-08:00

The future is here, in Utah:

State to Implement Congestion Pricing on I-15

The state hopes a new system that would charge drivers who use express lanes based on how many cars are using them will ultimately decrease congestion on a major Utah freeway.

The "congestion pricing" system means that when more cars are in an express lane, the price to use it goes up. The system will be implemented beginning in fall 2010 on I-15.
Stuart Adams, chairman of the Utah Transportation Commission, says that the pricing system can help the state better use existing infrastructure, instead of having to build additional road systems just for peak drive times.

Utah people (Utahans? Utites?) are rational and open-minded in a way New Yorkers cannot seem to be.

And the force behind these tolls seems to be...drum roll...people who want low taxes! The conservative group Utah Taxpayers Association has been a huge advocate of congestion pricing for some time.

"People who oppose this are quietly saying we should raise the sales tax," says Mike Jerman of the Utah Taxpayers Association.

If only all conservatives were as reasonable

Competition

2009-02-13T07:27:00.000-08:00

Microsoft is opening a chain of Microsoft stores like Apple did with Mac Stores. I love the Mac store, but I welcome this news as the competition will probably make it even better. Hopefully, this will also make Microsoft able to think ahead a little better about its consumer's problems, as now they will be showing up at a store to yell at Microsoft employees instead of just over the phone.

Despite Recession, Microsoft stars plans to open stores

New Yorkers: Taxes Over Tolls

2009-02-13T05:56:00.000-08:00

Earlier this year, Mayor Bloomberg of NY City proposed establishing congestion pricing on Manhattan, to raise revenues for public transit and to reduce traffic and carbon emissions. But the plan failed.

Many New Yorkers deeply hated the idea of paying to drive on bridges and roads. Something about roads, in their minds, makes it high tyranny for the government to charge for its road goods with user fees the way it does its transit, courts, vaccinations, Medicare, Medicaid, or state colleges.

Now, New Yorkers are finding out that there's no such thing as a free lunch. Their government is running a deficit, and because they do not have revenues from those tolls...

Bloomberg Will Seek Increase In Sales Taxes

he menu of budget options Mr. Bloomberg and his aides released in November called for a sales tax increase to 8.75 percent, generating almost $900 million. ..New York City already has one of the highest sales taxes in the nation, at 8.375 percent...

Mr. Bloomberg would eliminate the $400 property tax rebate, for an approximate savings of $250 million...

In December, Mr. Bloomberg and the Council also approved an increase in the hotel tax, to 5.875 percent from 5 percent per room...

What makes me upset is that the main arguments that opponents of congestion pricing used was that tolling roads would hurt poor and middle income people.

Well here's a surprise: The sales tax is the most regressive tax we use, regressive meaning that the tax falls more heavily on the poor (regressive=share of income paid in tax is inversely proportional to income itself).

And when the Metropolitan Transit Authority started going bust, Richard Ravitch unveiled a plan that included tolls and a payroll tax increase, which he calls the "Mobility Tax."

The regional mobility tax — 33 cents on every $100 of payroll — would provide $1.5 billion a year, and the tolls would produce $600 million in net revenue a year ($1 billion a year in gross revenue minus expenses), Mr. Ravitch said.

So the heart of the MTA funding will actually be penalty on working to provide goods and services to other people. The less you work, the less you pay. While tolls will be only a quarter of the revenue, although they are a tax on traffic congestion and carbon emission. The less you drive, the less you pay. But some New Yorkers still haven't learned...

Rory I. Lancman, a Queens assemblyman, said that Mr. Ravitch received an earful about the tolls at a meeting with Assembly Democrats last month.
As an alternative, Mr. Lancman has suggested dropping the tolls from the plan and increasing the payroll tax, to 45 cents for every $100 of wages.

Drug Companies: Smaller Government Is Socialist

2009-02-12T12:18:00.001-08:00

Here at SFGate and here at the Wall Street Journal is the story. In a nutshell...

The drug and medical-device industries are mobilizing to gut a provision in the stimulus bill that would spend $1.1 billion on research comparing medical treatments, portraying it as the first step to government rationing.

The government spends about a third its budget on health care. Poor people, many children, and old people receive socialized health insurance. You'd think it'd make sense to use statistics to make sure we're only spending money on treatments that work best.

No! That would be rationing, according to drug makers, just like in European countries, where the government denies people certain treatments or makes them wait...

David Mi Martino, spokesman for the group, wouldn't even utter the "r" word. "We just don't think the government should be in the business of determining what people can and can't have for health care options," he said.

But is the government determining what you can and can't have? Or is it just deciding what it will it won't pay for?

Let's back up and ask ourselves, "Is it socialist when the government won't buy you something?" Of course, it would be Big Government if the government was saying, "You cannot receive these treatments," but the only thing in question is the government not paying for your treatments.

The government also doesn't buy you pencils. Is that socialist rationing? Don't you have a right to choose your pencils? What if the doctor has an intuition that a pencil will help your health? The government will not buy it for you! The government is coming between you and your doctor!

Here is another illustration of just how darkly dishonest people become when government money is at stake:

A coalition called the Partnership to Improve Patient Care, which includes medical device manufacturers and pharmaceutical companies along with patient and provider groups, says it supports comparative effectiveness research - as long as the information is not used to make decisions about cost.

What is the point of the research then? Whereas now, we know money is being wasted, I guess the research will help us know exactly when we are wasting the money, but we have to keep on wasting it. Thanks to this research, we can now mail doctors checks that literally have "For: waste or whatever" printed on them.

When do you get to the point in your life when you can look at people right in the eye and say something shamelessly parasitic as "I demand you buy things from my company that you know full-well are not useful."?

Instead of using statistics, the government basically operates on a with-doctor system, wherein witch-doctors correspond roughly to what we call "doctors." Someone becomes a doctor by going through an excruciating right-of-passage, that often has nothing to do with what they will actually have to face in their careers. But eventually they achieve the rank of "doctor."

Once they are granted the elusive "doctor" status, the witch-doctors can command the government to buy hundreds of billions of dollars in medicine, tests, and treatments, often based only on their intuitions and sympathy for the patients involved. Therefore, the US health system is extremely expensive and doesn't do better than the Canadian system. Until we can get past buzzword politics like "the r-word," our country will waste itself into second-rate status. We'll have high taxes and we won't really know why.

Cloversteeled

2009-02-12T11:57:00.000-08:00

new and improved documentary of my night during Super Bowl 2009. Features the expected fire, but also friendship! and an original soundtrack composed just for this documentary.

Butch Cassidy and the Sundance Kid Column

2009-02-12T09:22:00.000-08:00

Have you ever seen “Butch Cassidy and the Sundance Kid”? If you’re about to watch it for the first time, bring along some essential items:

1. At least 100 trash cans

2. Bottled water

3. Robert Redford

4. Popcorn

And another pointer, do not view it with any Bolivians.

Once prepared, you can put in the DVD and begin viewing this timeless classic. The film begins with a gambling scene. The Sundance Kid is cheating, and this guy asks, “What’s your secret?” and the Sundance Kid replies, “Prayer.” For the characters, this is a joke, but for the viewer it is a suggestion that you pray — something like, “Lord, help me bear the cross of watching the worst movie ever made.”

I instructed you to bring the trash cans because you will want to vomit constantly at every stupid line in this cinematic massacre. I told you to bring 100 because you will want to vomit about 100 times in each of the trash cans. Don’t worry; the bottled water will keep you hydrated.

Don’t forget, you’ll want Robert Redford there. Every few lines you’ll have an urge to shake Robert Redford violently and demand, “Why did you take this role?” until he moans shamed in sackcloth and ashes.

The popcorn will come in handy ... because popcorn goes great with movies!

Here is a quick plot summary: First, Butch Cassidy and the Sundance Kid are in Utah. They rob trains left and right, yet they never kill anybody. They go to great lengths to avoid killing people, and for this, they are beloved by the people and on good terms with the bumbling sheriff. They even blow one guy up with dynamite, twice, but he still doesn’t die. They knew he wouldn’t die because they are at once masters of both demolition and human physiology. The two even develop quite the rapport with this fellow they keep blowing up!

Why don’t these outlaws kill? Because Butch Cassidy has a heart of gold, as evidenced by how he is so beloved by whores. These whores have hearts of gold, too, evidenced by how deeply they love Butch Cassidy.

Then, when things get risky because someone other than a Barney Fife derivative gets up high and mighty on a soapbox and tries inhibiting the respectable train-robbing vocation, Butch Cassidy and the Sundance Kid decide to “turn straight.”

For these lovable rascals, turning straight means taking the town’s only teacher and carrying out an assault on Bolivia. In Bolivia, they start robbing banks where the impoverished Andean townsfolk store their savings for the hard times and get loans for basic investments.

The unbreakable scruples that bound Butch Cassidy back in the U.S. dissolve entirely when, instead of white people, he faces dark-skinned Andeans. The supposed gentlemen start gunning down Andean people right and left. Bam, bam, bam! There’s no end to it! The only thing missing is a scene where they sing “One little, two little, three little Indians.”

Throughout the whole blood-curdling crapfest, the tone is light-hearted and gay. You could make a good movie, using this same dialogue, which would turn out quite dark and probing — probably about how people can be charming but also very vicious.

Instead, the director hits us with “Raindrops Keep Falling On my Head” and insists we love these shallow bastards. Butch Cassidy and the Sundance Kid are supposed to be flawed but affable Huck Finns. Who are we to judge their lifestyle, rich in larceny and mass murder as it might be?

Apart from its pronounced racism and immorality, “Butch Cassidy and the Sundance Kid” is a horrible movie for reasons that would make Francisco Pizarro turn it off.

The movie poses no dramatic question to its viewers. You never wonder whether they will really “turn straight.” Even in “Napoleon Dynamite” — a movie almost totally devoid of plot — I wondered if Pedro would win class president. “Butch Cassidy and the Sundance Kid” could literally end at any random time. After all, the movie just repeats the same boring scene:

BUTCH CASSIDY and THE SUNDANCE KID crouch behind [insert]. Bullets whiz past.

THE SUNDANCE KID

Think of a way to get out of this fix.

BUTCH CASSIDY

[clever comment]

They escape.

The Bolivians are not the true victims, however. After all, many Bolivians don’t have DVD players. The real crime is against good Americans, who will watch this movie because there is a heinous lie going around that “Butch Cassidy and the Sundance Kid” has anything on “Gigli.” I now see why Paul Newman gave so much to charity: nagging guilt over inflicting “Butch Cassidy and the Sundance Kid” on millions.

In a free republic like ours, the first line of defense is the citizens themselves. Tell your friends, “Don’t watch this awful movie.”

Hotdog Carts...The Next Microsoft?

2009-02-05T22:01:00.000-08:00

http://www.hotdogcartsecrets.com/

It turns out the displaced workers I was talking about in my previous post are all going into the hotdog carts sector. Making hotdog carts, selling hotdogs, and most of all, telling people secrets about hotdog carts.

According to the flash video on the Hotdog Carts Secrets homepage, the hotdog cart industry can earn you up to $1500 per day. If you make $1500 per day everyday of the year, you can make more than a CEO at a bank that receives a bailout is allowed to make. It is going to become essential to raise that salary cap or else all the CEOs will go into the hotdog cart game. We will be a nation that's cash poor, but hotdog comfortable, and stinking wealthy in hotdog carts!

From the looks of things, the hotdog sector is ready to blow up. Big time! It has all the characteristics of a sector in ascendence: supernormal returns to unskilled labor, pricing power by a few firms in an area, no brand names or consumer loyalty, and thin government oversight.

Productivity Is Up!

2009-02-05T14:13:00.000-08:00

U.S. Economy: Jobless Claims Soar, Productivity Rises

Productivity, a measure of employee output per hour, rose at a 3.2 percent annual rate in October to December as employers cut 1.5 million from payrolls and slashed working hours by the most since 1975, the department said.

Employees are getting laid off, so much that the ones left are now having to make more stuff per hour, and that's part of growing productivity. This is bad for everyone that loses their job, obviously. Losing a job is demeaning and you sometimes lose health insurance.

But it's good that employers trimming the fat, in my opinion. 3.2 percent is fast growth. The Bloomberg survey had economists predicting 1.6 percent. Productivity grew 2.8 percent in 2008, which was also considered fast.

The faster productivity growth is, the less we have to worry about the stimulus package being too big. We have productive workers out there unemployed, and extra manufacturing capacity. The government buying up those workers and capacities won't cause inflation. And if the boost can get the economy humming along, like an engine kickstart, then we'll have higher future tax revenues and the debt isn't a big deal. The danger is if the economy shrinks hard and prices start falling without stopping. Then the debt we already owe becomes more unpayable than the debt we scorned at accumulating.

Also, look at this:

Companies from Macy’s Inc. to PNC Financial Services Group Inc. are announcing job cuts as consumers and businesses rein in spending, and that’s likely to prompt even further pullbacks in coming weeks.
Estee Lauder Cos., the maker of Clinique and Bobbi Brown cosmetics, said today it plans to eliminate 2,000 jobs after declines in makeup and perfume sales reduced second-quarter profit.

People have been complaining about two things for a while now: First, Americans buy stuff they don't need and can't afford. Second, the financial sector is bloated.

Now workers are shifting out of retail and financials. Obviously, workers are shifting out of housing, too. But where are they all going? That's a trillion dollar question. Literally, if you know for certain you can make a trillion dollars right now.

I hope the government doesn't try to stop the shifts with things like tax breaks for car buying and house buying. We should be stimulating purchasing in general to keep national income up. But we shouldn't stumlate purchasing of particular things so that workers can postpone a correction. That's just delaying the inevitable, and in some sense an infringement on consumer freedom.

The biggest productivity growth is still ahead of us, in the medical sector. The medical sector is breathtakingly wasteful. If that gets solved, America will be the economic titan of yore. And people won't die of treatable illnesses all the time.

Paying For Itself

2009-02-05T10:20:00.000-08:00

Senate Back Tax Breaks for Car Buyers In Stimulus

The $11.5 billion auto amendment, adopted 71-26, would give an income-tax deduction to car buyers for both sales taxes and interest payments on auto loans.

So here's the setup:
America faces a rising deficit, traffic problems, and stifling consumer debt.

Here's the punchline:
And the Senate proposes an income tax deduction for people who finance the hell out of cars.

The issue is hidden in this quote:

"Everyone wants to save auto manufacturers, but no matter how much government aid we give to the Big Three auto makers, they can't survive if consumers don't start buying cars," said Sen. Barbara Mikulski (D., Md.).

I don't think any Democrats were desperate for more cars and consumer debt six months ago. But now, a policy that would sound stupid in a pre-bailout environment has become reasonable in a post-bailout environment.

The automakers now owe the government a lot of money. So, a tax deduction for car buying sounds fine, because if automakers go under, they won't be able to pay the government back. But the deduction was paid for by tax money, so it's really sucking a bucket of water from the deep end of the pool and dumping it in the shallow end.

The other thing is that if we're serious about green vehicles, we should want people to delay their auto purchases until down the line, when green vehicles actually exist. This proposal sends a signal that the status quo is just fine.

Maybe the worst thing about this proposal is that it's written as a tax deduction. In a progressive tax system like ours, any deduction is more valuable to people who face higher tax rates. So this proposal will mainly subsidize car-buying by upper income earners. Also, what if you are a mass-transit rider? You are now implicitly taking on public debt so that other people can buy cars.

Meanwhile...

Amid the ebb and flow Tuesday, a high-profile amendment that would have added $25 billion to the bill for highway, mass-transit and sewer construction stalled on the Senate floor.

How great that we are getting people to buy cars, but not suitable highways to drive on. And how nice that we would spend the same amount of money on public transit in the stimulus as on a tax break for car buyers. That's a New Deal alright.

The Hundred Hours Trade War

2009-02-05T09:39:00.000-08:00

A narrative in headlines:

Thank you foreigners and greedy multinationals for making America do something good for itself!

Smart Politicians

2009-02-03T13:34:00.000-08:00

Paul Krugman and Nick Rowe at Worthwhile Canadian Initiative are fighting about the Buy America clauses in the stimulus package. Those clauses make sure the government only buys supplies from America companies. They are fighting over whether it can theoretically raise economic welfare for America. But they agree it is a bad idea, because of the interaction between economics and politics.

Meanwhile, The Knowing and Making blog points out a cool provision in the stimulus package.

SEC. 1110. USE OF AMERICAN IRON AND STEEL.

(a) IN GENERAL. None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron and steel used in the project is produced in the United States.

(b) EXCEPTIONS. Subsection (a) shall not apply in any case in which the head of the Federal department or agency involved finds that
(1) applying subsection (a) would be inconsistent with the public interest;

The Buy America provision doesn't apply if the federal department doing the spending chooses not to apply it! That was true anyway, the same way the department could choose to only buy from non-American companies if it felt like it for some reason. Hopefully, the departments will use this clause to choose whatever suppliers gets us the best deal on our stimulus spending, so we can have the most, best things.

National Anthem Column

2009-02-03T07:25:00.000-08:00

here is my Pitt News column for Monday 2 February 2009:

I’m an Eagle Scout. That tells two things about me:

1. I love the United States.

2. I have ceremonially burned a flag.

Flag-burning isn’t a requirement for an Eagle Scout, but if you stick around in Boy Scouts long enough you’ll end up in the elaborate ceremony we use to retire a worn-out flag.

In contrast to protest burning, a proper flag-burning ceremony evinces total respect for the flag and what it represents. The flag is only burned when it gets soiled or torn, so the burning is an act of honor — a mercy killing.

The flag wouldn’t want to go on living anymore in such a shameful state. It’s like when one samurai beheads his samurai friend after a ninja assassinates his friend’s lord.

The ceremony is an essential, invisible watermark in the design of Old Glory. And now, just as we lovingly retire our beloved star-spangled banner when it completes its mission, it is time to cremate the song “The Star-Spangled Banner.”

Irrelevance and impracticality has pummeled our current national anthem. — like a flag so badly torn you can’t count the stars, its broad stripes sun-bleached to cream and tangerine.

To start with, seemingly nobody has any idea what the national anthem is talking about. Take the beginning:

“Oh, say, can you see, by the dawn’s early light,

What so proudly we hail’d at the twilight’s last gleaming?

Whose broad stripes and bright stars, thro’ the perilous fight,

O’er the ramparts we watch’d, were so gallantly streaming?”

As a kid, I was confused about the plural subject of “were so gallantly streaming.” This effect is compounded by how the melody obliterates any sign the fourth line is a question, and not just a dangling prepositional phrase.

Now I know it’s the broad stripes and bright stars doing the streaming, but the stars and bars are twice removed by commas from the “were.” So I always assumed it was the ramparts that were gallantly streaming. Vaguely aware that ramparts were something on the ground, I pictured them streaming with blood.

While writing this column, I asked a room full of college kids what a rampart was. One self-proclaimed steadfast patriot said it was a ramp where you drove the ships up onto the land for repairs: “They had these horse trains that would haul the ship up there, rolling on big logs, so the engineers could fix the holes.”

Actually, a rampart is “a broad embankment raised as a fortification and usually surmounted by a parapet,” as defined by Merriam-Webster. Many Americans are familiar with ramparts, especially Americans who live in St. Augustine, Fla. But for the millions who don’t reside in places known only for colonial battlements, a rampart is something sketched vaguely in the last gleaming of a smoky twilight.

Also, the national anthem is sung in two octaves. That’s not right. It shouldn’t be the case that only a trained singer can hit all the notes in a country’s anthem without sounding like a pubescent male chain-smoker. Macy Gray got booed once for messing up the national anthem, and she had a No. 1 hit — I guess she tried to say, “rampart” and choked!

The whole idea of a national anthem is to pump up “The People”, but “The People” can’t get too excited if they don’t know what they’re saying and can’t even hum the notes properly.

In fact, it’s not surprising Americans are belligerent when the anthem’s only comprehensible and sing-along lines are about bombs exploding and rockets en route to splatter some Briton across ramparts like an undercooked meat pudding.

Not much of a liberal myself, I’ve never been one to point to Canada for solutions to American problems. Yet I have to admit Canada’s anthem is way better than ours:

“O Canada!

Our home and native land!

True patriot love in all thy sons command.

With glowing hearts we see thee rise,

The True North strong and free!

From far and wide,

O Canada, we stand on guard for thee.

God keep our land glorious and free!

O Canada, we stand on guard for thee.”

Every time I hear the Canadian anthem right after the American anthem, I feel the same inadequacy a lot of Canadians probably feel when they see their flag next to ours. This is obviously a detriment to our hockey teams, but also to our national pride.

America could do much better, given that the melody “The Star-Spangled Banner” derived from an English drinking song. Since that fateful dawn when Francis Scott Key scribbled his rhymes, Americans have invented or improved almost every genre of modern music, especially if you count Puerto Rico.

From gospel to jazz to blues to bluegrass to country to rock to hip-hop to salsa to indie, America has been at the top of the charts musically. We have awesome songs like “America the Beautiful” that everyone already knows and sings.

It won’t be easy to put down “The Star-Spangled Banner,” and to say goodbye to an old friend. Change can be scary. But fortunately, this is the land of the brave.

Electric Cars are Harbingers of Imperialism and Sacrifice

2009-02-03T05:48:00.000-08:00

Here's an awesome piece in today's NYTimes: In Bolivia, Untapped Bounty Meets Nationalism.

It turns out electric cars use large amounts of lithium. Almost all the world's lithium is in Bolivia, right there under the salt flats. Now, companies from France, Japan, and the US are trying to get at the lithium. But indigenous groups have claim to much of this land, and Bolivia has been very hostile about foreign companies exploiting its natural resource like oil and natural gas in the past. The movie Quantum of Solace was about a conspiracy to control Bolivia's water supply after all. The bad guys did not win. And water is way cheaper than Lithium. Also, Bolivia has never had kind relations with the US: have you seen Butch Cassidy and the Sundance Kid?

This is part of the reality check about "green energy." It doesn't use oil, but alternative sources require other resources. Otherwise, no one would've been forking over money for oil the past century. It's been a simple case of "the grass is always greener."

Ultimately, Americans have to drop their infantile attitude with regard to energy sources. Reducing consumption with methods we already know about, not exploiting alternatives, is the most promising avenue for conservation.

These methods are carpooling, busing, bicycling, insulating our homes, living in different places, recycling, buying more services and less manufactured goods, buying more durable and less disposable goods, actually using and and other lifestyle changes that middle and upper-middle class people in developing countries get by with comfortably. We could also use a few more Slankets. If you're not familiar, the Slanket is "THE BEST BLANKET EVER."

In general, the debate over resource consumption assumes that America is a nation of little bitches. The Bolivians should make a movie about us called Little-Bitch Cassidy and the Sundance Man-Child. "Working families can't afford..." we hear. Then how do they now in other countries? Even "working families"--in contrast to the lawyers and professors who don't work--in the US are among the wealthiest people in the world. Maybe when we're strip-mining their ancestral land, we could ask the Bolivians how they manage.

This language of "too much" and "impossible demands" and "can't afford" you hear most often from Republicans. But man do they love rhetoric of sacrifice when it comes to war. They can't get enough sacrifice! And boy are they willing to sacrifice men and women who come almost entirely from "working families."

We need to man up to the fact that using less actually means using less. Somehow, the nation that rationed and volunteered and grew Liberty Gardens throughout World War II is insanely committed to not giving an inch on the energy front. If the enemy is not a group of humans, somehow only limp-wristed California tree-huggers should have to sacrifice. Our fear of losing unlimited cheap energy is not the defense of a natural human entitlement--our grandparents, after all, lived in cold houses near their jobs and hardly every drove or used hot water. And like Clint Eastwood Gran Torino, they all prided themselves on fixing things.

All of these changes will happen without government planning, if the government implements a carbon tax--just like how the price run-up from a shortage in carrots leads people to buy less carrots until people only want the number of carrots that there actually are. People working in their self interest will cut consumption, without fairy tales like "corn-based ethanol" or other stupid schemes that interest groups dream up to comfort us.

And the receipts from a carbon tax can be rebated to working families via a payroll tax cut. So however much they have to change their lifestyles, everyday Americans will have more income to do it with, and millions of fellow Americans with better incentives to go to work to help them.