Monday, January 31, 2011


Mubarak offers to negotiate with opposition groups. He might as well save everyone’s time and flee in exile with several suitcases packed full of cash money at this point.

Gates Foundation announces its desire to eradicate polio. Sounds just as good as all of their other announcements!

NIMBY comes to our smart meters.

South Africa is an interesting picture into emerging markets worldwide (first trade surplus since 2003):
The rapid growth in exports over the year is largely due to strong global demand for South African commodities. Exports of gold, precious stones, metals and minerals made up the bulk of the trade surplus.

Imports, meanwhile, continue to consist largely of manufactured goods. South African demand for foreign machinery and appliances, textiles and transport equipment has been particularly strong.

While Asia accounts for much of the growth in export demand, South Africa continues to run a huge trade deficit with the region, mostly fuelled by cheap Chinese manufactures. This reached 2.1bn rand ($0.3bn) in December.

More details in the Kabul Bank collapse.

Thought this debate raised some good points:

Considerations on density and productivity.


Breathless is justly famous, but I noticed two little funny things about it:

The locations: if an American made Breathless that American would be accused of inauthenticity, of hanging around all the wrong locations—it seems like half of the movie takes place on the Champs Elyssee, which describes the average Parisian life as much as a movie set in New York devoting half of its footage to Times Square would describe the average New Yorker’s life.

The language: I’m far from an expert in the French language, but I’m good enough to listen to the original French and compare it to the subtitled English—and the subtitled English is far more expressive in one respect, so much so that it doesn’t quite know what to do with the flat French: insults/swear words. The all-purpose French insult is “con” which does duty in English as idiot, asshole, jerk, crook, etc.—and it must be uttered like fifty thousand times during the film. A close second place to “d├ęgeulasse,” which rather famously closes out the film—that mostly just means “disgusting,” although what it is that’s supposed to be disgusting is unclear.

You’d think for a language which has produced so many impenetrable authors, critics and philosophers that it would come loaded with expressive words that humble old English can’t match, and yet French doesn’t quite do the job. (The other big French expletive is “putain” which has naughty connotations if translated to English but can be successfully applied from anything from how much you hate Nicolas Sarkozy to your disgust at missing the train to your idiot boyfriend cheating on you. And in all situations it is completely acceptable around all sorts of company. While it’s kind of fun to curse without social repercussions, it quickly loses its charm—the whole fun of cursing is that you’re being very mildly transgressive and yet “putain” is not that. I assume the French have some unspeakably awful words, but I have not as yet learned them.)

What's Next?

To continue on this little China groove we’ve been on—I posted a New York Times article re: Chinese inflation and how that might either pass on to us or lead to a lower trade deficit with China, or all these other consequences which are endless and impossible to predict. As must be traditional with these big-picture trend stories, there’s at least one detail in the article that deserves more attention:
Some companies have responded by moving factories deeper into China’s interior, said Stanley Lau, the deputy chairman of the Federation of Hong Kong Industries, which represents exporters employing 10 million mainland Chinese workers. But inland wages are starting to catch up with coastal pay rates, Mr. Lau said, while higher transportation costs frequently offset the wage savings from moving to the interior.

Coach, the American company that is one of the largest marketers of luxury handbags and other accessories, announced on Tuesday that it planned to reduce its reliance on China to less than half of its products, from more than 80 percent now. It will shift output to Vietnam and India, particularly for smaller, more labor-intensive leather goods.

But Mike Devine, the company’s executive vice president and chief financial officer, said that it would take four years to carry out the shift.

Trying to move production elsewhere, some retailers are finding many factories are already fully booked: Vietnam and Thailand each have populations smaller than some Chinese provinces, while Cambodia and Laos have smaller populations than some Chinese cities.

I wish there were more detail here. Coach—the actually-named company—says it’ll take about four years to shift to Vietnam and India; but what’s going on with the “some retailers”? The sentence implies that the shift is pretty nimble—if you’re calling someone to see if their factory has space because your current arrangements in China are subject to too much inflation, that’s a pretty rapid reaction to circumstances.

Too rapid, perhaps: it’s awfully good for capital and for consumers that the lowest possible prices are being sought out, at least in the short term, but the long-term consequences are pretty troubling, I think. There’s the Chinese workers, of course, but then there’s the fact that China has (presumably) spent a while optimizing its infrastructure to account for the needs of these retailers, an optimization that will probably prove ineffective for whatever they want to do next. And that optimization also probably implies some degree of path dependence—it’s not as if China can just switch to what’s next with a snap of the fingers. So the rapid switch of country-to-country is fairly destabilizing, if my guess is right.

And, all that said, I think some degree of inflation is inevitable: Chinese inflation is driven by high wages and high prices for commodities (well, that and their currency regime). Well, high wages are both desirable and probably inevitable—if these retailers do a good job, their employees will be doing a good job and hence be justified in demanding higher pay. High-priced commodities are also a natural consequence of a more-productive world—there’s only so much stuff to go around. We might just be putting of the thought-work of what comes after that world.

Everything's Better In China

The Wall Street Journal seems to be on a one-newspaper mission to convince us that everything Chinese is wonderful, awesome, and just plain better than us. Yes, you’ve heard of Amy Chua’s “Why Chinese Mothers Are Superior,” but the Journal seems to have continued the series with this:

I guess the era of American anxiety re: China is in full swing, which is kind of goofy—everyone does realize that the per capita Chinese GDP is $7,518, right?—and probably ultimately damaging, geopolitically. But for satire—boom times. I can’t wait until the Journal writes such things as:

Why Chinese Kitchen Appliances Are Superior
Why Chinese Football Players Are Superior
Why Chinese Apple Pies Are Superior
Why Chinese Sushi Is Superior
Why Chinese Feng Shui Is Superior
Why Chinese Wall Street Journal Is Superior

And, of course:
Why Chinese America Is Superior

Sunday, January 30, 2011


Will Chinese inflation keep down the US-China bilateral trade deficit?

ALERT: overly optimistic op-ed—“The Carbon Tax Miracle Cure.”

The financial crisis of 2015.

What will the Egyptian military do? How did Egyptian public opinion affect the unrest?

Will we ever catch Osama bin Laden?

The kitchen test: how far has innovation really advanced?

Why Norway deported its “Norwegian of the Year.”

The historical trends of the action film

The Fugitive is an interesting historical piece for a couple reasons. For one, Harrison Ford’s ridiculous beard:

The sole reason for Ford to be wearing this beard is for him to shave it off when he becomes a fugitive. Well, that and the unintentional comedy.

Unintentional comedy doesn’t jibe well with the rest of the movie, which often traffics in pretty funny intentional humor, as well as excellently-written action and thrillerish stuff. (It bogs down in the second half, as movies with a mystery at their center so often do: mysteries are almost always more interesting unsolved.) The acting is dominated by Tommy Lee Jones, who gives a fine performance in that much-loved Hollywood boss type: the charismatic asshole. Always compelling, always in charge—we love that.

The question, then, is why don’t they make action/thriller movies like this anymore? The Fugitive isn’t an all-time classic, even by the standards of the genre. It is, however, much better than most of the movies of its type released these days. The only movies of a similar type released in the aughts that offer similar thrills are--The Transporter series, Christopher Nolan’s Batman series, Collateral and Casino Royale. (Also: parts of No Country for Old Men, though that’s a movie made with a different intent. Same for parts of The Hurt Locker. ) That’s a fairly meager return for the decade, I’d say.

I don’t believe that movies made these days are necessarily that much worse, if they’re worse at all, than movies of previous eras. On the contrary, there are more than enough movies made recently to satisfy most viewers for a pretty long time. But it’s curious that the decade has delivered so few really good action movies, let alone out-and-out classics. Curious, because the summer blockbuster and big, action-filled tentpole has become almost everything for studios. They’re releasing more movies, so by the odds they should be releasing at least a few really good movies that make you feel tense the whole way through. But they aren’t, and I can’t really explain why.

I suppose it might just be a historical trend—has there been a better decade than the forties for romantic comedies?—but that feels unsatisfactory somehow. Still, it’s maybe the best explanation I can come up with.

Afghanistan Notes

The apparent failure of the Kabul Bank seems to connect two of the great American hubristic acts of the past decade: reckless finance and reckless foreign adventurism. It seems the director of the bank was a bit of a corrupt guy, appropriating money for his own use and taking money from Afghan governmental workers (the Kabul Bank was apparently the government’s appointed bank for financial matters) and not paying them on-time (the old overnight-accounts trick). Frankly, the corruption is not particularly disturbing—if there were no corruption in the Afghan government, it might be a sign that the Afghan government was doing nowhere near enough, or even less than it currently is. Still, the reported deficit of $900 million is a big one for an impoverished country to deal with.

I do, however, find this an interesting detail:
The spotlight on how political and economic interests in Afghanistan are intertwined threatens to further undermine President Hamid Karzai’s government. The bank is also the prime conduit for paying Afghan security forces, leaving the American military, which pays the salaries, looking for new banks to process the $800 million payroll.

I suppose one way or another America’s paying the bills for the Afghan government, but it’s kind of odd to be seeing the Americans directly paying for the country’s security forces. It underscores the point that Afghanistan is one of those coma patients: it can be sustained indefinitely and artificially; the question is: is it at all worth it?

Businessy Type Questions

I mostly have questions about this online coupon trend that seems to be in high tide recently. For one, does it not seem as if the adoption-to-masses cycle goes much faster these days than it did before? I remember when Facebook was a pretty small thing—in fact, I was one of the early adopters of Facebook, back when it was limited to, like, Harvard, Stanford, etc.—and it didn’t make it really big until I had left college. In fact, I remember arguing whether it would make money as recently as 2007. Twitter was faster than Facebook, but not as fast as Groupon. It seems as if each internet trend is additive to the last one—that is, Facebook speeds the adoption of Twitter, both of which speeds the adoption of whatever’s next…

My second question is this: what’s to stop people from competing effectively with the leaders, Groupon and Living Social? Unlike Facebook and Twitter, the network effects don’t seem nearly as strong with those coupon sites. That question’s prompted by the radio, of all things: one of the crummy top 40 local radio stations has apparently begun its own, local coupon service—who knows how successful it is; of course advertising campaigns are no guarantees of actual success, as Bing can doubtlessly tell you.

But what’s the equilibrium? Not a huge business guy—but who captures the surplus from the coupon sites? Consumers, right?

Saturday, January 29, 2011


The travails of Also: Google still talking with the DOJ about the ITA deal. It’s the deal that will never happen but never not happen either.

Innovation these days isn’t doing much for incomes.

Good news! Afghanistan announces it’ll stop recruiting child police, among other depraved child-related practices.

A Marxist interpretation of the financial crisis.

A first-hand account of some of the Cairo troubles.

Sundance partners with Kickstarter to get indie films financed by the masses.

Fun!: Arizona lawmaker proposes law to deny children of illegal immigrants citizenship.

Chinese are hoarding…cotton:
Yu Lianmin, a cotton farmer in Huji, China, harvested 6,600 pounds of cotton this year. Despite record cotton prices, he didn't sell any of it.

Instead, mounds of cotton are piled up in two empty rooms of Mr. Yu's home, and the homes of many of the farmers in his small township of Yujia, which is part of the bigger township of Huji in northern Shandong province, 220 miles southeast of Beijing. The farmers are holding out for higher prices, aiming to help overcome higher costs of labor and fertilizer, which are up about 20% in the past year.

Very Small Egypt Notes:

I'm in no way qualified to comment specifically about Egypt. But I do have a couple small things to say about peripheral issues.

One, whenever there are stories like this on crises, it always annoys me when I see points like this (from the morning's Los Angeles Times):
I hate the faux precision here: there's no way the crowd was exactly 50,000, and there's no way--given the chaos--that the paper could have a good reason to believe that exactly 38 people had died. It's a bit of a pet peeve, but I think it reveals a weakness: reporters and news organizations, like most people, believe they know more than they really know, and faux precision like this may just reinforce that idea in some small way.

Two, I found this an interesting little idea, from Matt Yglesias: "If you were an elderly dictator wracked by protests wouldn't you like to just go retire someplace nice? Turks & Caicos are lovely." Why wouldn't you? Sure, maybe you're addicted to power--but this story can only end badly, worse than the way everyone's stories end. Why not, while you still have power, take some large sum of money and go into exile?

So what would disrupted health care look like?

Any successful health care change is going to be disruptive—on balance, better, but with distinct and often blameless losers. Thinking about this is probably getting ahead of ourselves—it’s uncertain whether conditions, political and business-wise, are right for it—but still, an interesting thing to think about. Atul Gawande’s article in the New Yorker sums up most of the hot ideas in health care reform (accountable care organizations, minimizing hospital visits, concentrating on high-cost patients) and includes this comparative historical point:
Two decades ago, for instance, Denmark had more than a hundred and fifty hospitals for its five million people. The country then made changes to strengthen the quality and availability of outpatient primary-care services (including payments to encourage physicians to provide e-mail access, off-hours consultation, and nurse managers for complex care). Today, the number of hospitals has shrunk to seventy-one. Within five years, fewer than forty are expected to be required. A smart hospital might position itself to be one of the last ones standing.

I don’t want to speak for all health care reformers, but more health care needs to take place in clinics rather than hospitals; more health care (probably) by nurses than by doctors; more health care by primary care physicians than specialists. All of these imply smaller and fewer hospitals, which implies massive change on the part of the economy.

I was lucky enough to attend a talk by the CEO of Geisinger a few days back, and he made the point that his hospital system was able to “backfill” in otherwise-sick patients into his system (the empty space was left by successfully-treated patients who never needed to go to the hospital at all), which kept the system transitioning gradually from a fee-for-service one, where payment is based on episodes of care, to a population-based system where payment is based overall care. That’s fine if one hospital system is doing it and no one else is, but it’s not an equilibrium everyone can balance on.

If everyone did—and we want everyone to, eventually—then we’d have problems. Good problems, but problems. Problems like: what happens to all of those big hospital buildings? What happens to all of those specialists? Are there as many hospital administrators before? What about support staff? It’ll be a complicated world.

Friday, January 28, 2011


The truth about Kobe Bryant in crunch time.

Is the end of China’s trade balance coming soon?

Interesting tidbit in this article arguing we’ve overrated India’s progress:
India has many outstanding minds and a reputation for producing world-class engineers. But a review this month of a three-year government program called INSPIRE, which offered scholarships to about 10,000 top science students, found that 85% of the scholarships went unused. The suspected reason: Students are increasingly bypassing science for business in search of a quick buck.

Prime Minister Manmohan Singh, an economist by training, this month criticized the grip that he said vested interests have on scientific innovation in India.

"Liberate Indian science from the shackles and deadweight of bureaucratism and in-house favoritism," he said.

How Steve Jobs beat Sony by out-Japanning Japan.

China introduces first property tax.

Information feudalism a-coming?

An Egyptian revolutionary manual, translated.

Hospice care increasingly taking over America.

So, this song:

Isn't it a problem that the Devil's part is cooler than Johnny's?

Too Funny

So I thought this was funny:

After thinking about it, it’s still funny—but I guess I have, what would you call it, ethical concerns? I’m not quite sure how to put it, but it doesn’t quite work for a few reasons:

The Target: We all hate customer service, I think. The number of really good customer service experiences I’ve had are few, and mostly thrive in comparison to all of the terrible ones. So, it’s a fertile target; on the other hand, it’s also fairly trivial. A society that can complain about customer service is either ignoring substantial problems or doesn’t have any.

The Target, Part II: The other issue I have with the target is the specific person targeted. The exact authority of the security guy isn’t revealed—is he just a regular security guard or is he some sort of head of security?—but it’s fairly bad either way. It’s worse if he’s just some average guy, because he’s just trying to do his job, which is in no way related to the ultimately rather trivial complaints these guys have.

I suppose you could make the argument that the capriciousness of inflicting this situation on the security guard mimics the capriciousness of a poor customer service interaction—in that your life is placed at the whim of someone who, it appears, is operating by rules designed by someone who has not thought of your interests at all, and it’s unclear whether that someone intended to—which I suppose is a rather literary effect but not really all there from the effectiveness end of the scale. Moreover, it seems gratuitously cruel to inflict a dilemma on someone who has no power whatsoever.*

*(You might ask: how big a problem was this for him anyway? I’d argue a big one: people have been fired for less.)

If he is the head of security, the same argument holds, although to a lesser degree.

The Execution: The effect is Kafkaesque: a man cannot escape troubles that are in no way his design and appear tantalizingly possible to solve, except they will never, ever be. It’s funny—for the viewer—but the message is, what, precisely for the people involved? Make sure you don’t get large containers dropped in front of your parking lot, buddies! How helpful!

This may or may not be scrutinizing this sequence too heavily; it’s just supposed to be a joke. But it’s a specific kind—satire—that’s cutting and cruel and therefore ought to be used with a bit of caution. I’m not sure humor is an end in of itself; like everything else there’s a balance there.

But it is really funny. Did you see the end?

Catching Up

I have not yet read Tyler Cowen’s book, but I felt this review needed some expanding upon:
There are two kinds of economic growth possible in this world. One can take good ideas already in use elsewhere, adopt them, and make use of underused stocks of people and capital. That's what China and India are currently doing, and we shouldn't mistake their rapid growth for something it's not. Or one can come up with new ideas and apply them in ways that allow the economy to grow.

…improvements in rich world living standards may, for the moment at least, come from the capture of policy low-hanging fruit. In other words, the rich world should focus on getting rid of blatantly foolish and costly policies. Moving from taxes on goods, like income, to bads, like traffic congestion, would be a good start. Not spending so much on medical treatments with dubious benefits would be another possibility. Cutting out policy foolishness like agriculture subsidies and the mortgage-interest deduction would be another positive step. Amid rapid growth, really silly policy choices could be tolerated, since surpluses continued to rise. As growth rates slow, the failure to cut out bad policies will mean continued stagnation or declines in living standards for some.

I agree with this thought—there are a lot of weird-to-crazy policies most developed countries have, and more to the point, they’re mostly different—different countries have different weird ideas. This suggests that best practices on a governmental level is nowhere near ubiquitous and that most countries have a degree of catch-up growth available. You can say the same thing about heavily-government-influenced sectors like health care that are (for various reasons) resistant to innovation or even to incorporating other countries’ good ideas. (e.g. joint registries in health care.)

This was my thought at least—and I wanted to supplement with this little factoid:
85 percent-plus of pharmacies are equipped to receive electronic prescriptions, yet only one-third of the nation’s prescribers use this system.
The existence of that fact is pretty dumb, but on the other hand: how consequential is it really? The estimate in the article is that 7,000 lives are lost yearly from bad handwriting, which is a tragedy, but—by the standards of folly worldwide—a pretty minor one, all things considered.

You look at the odd policies of countries with really dysfunctional political systems and you see that whatever catch-up growth we’re due from optimizing our governmental policies are comparatively minor as compared to the big effects of, say, getting a functioning post office system.

(My guesses as to the most profitable American catch-up governmental changes: more infrastructure investment, health care, more favoritism to density, criminal justice reform—hopefully to figure out the less crime/fewer prisoners equilibrium.)

Thursday, January 27, 2011


Michael Lind gets his protectionism on and argues that education and innovation aren’t the problems at all with the American economy. I’m dubious about his argument.

Japan: also has a lost generation of youth.

This will definitely work:
The president of USC is warning students not to attend raves, saying use of the illegal drug Ecstasy at the massive dance parties "can create a ripple effect of dangers that lead to catastrophic consequences."

Does Facebook make people sad (by making it seem as if other people are happy)?

Senate filibuster reform, really dead for the moment; how bad?

The African Union’s institutional weakness.

Haven’t read, assume is excellent: Atul Gawande on a novel way of containing health care costs.

Why do Italians tolerate Berlusconi?

Does Google need to get smaller?


As usual, I have not seen all of the movies nominated for the Oscars; as usual, I can complain about one specific movie: The Black Swan’s Oscar endorsement, with the three most important nominations—Picture, Director, Actress. Here was my mini-review from a little while back, which encapsulates most of my issues with the movie then.

The real question is, why do the Oscar people consistently fall for the same kinds of movie? The Academy’s well-known affection for message movies is thoroughly mocked by this point, but The Black Swan doesn’t really fall under that category. The Academy does tend to like self-referential movies about art that dramatize the process of being arty, but that’s only a surface element of the movie—the main character’s suffering is more because she’s screwed up than any artistic suffering per se.

I think last year’s Precious nomination is a bit of a clue here—yeah, it’s a “message” movie (message: being an obese black girl who’s raped by her father etc., etc. is a very bad thing), but it’s also highly stylized and over-the-top, just as The Black Swan is. People who like to think of themselves as highbrow enjoy that; they just prefer to enjoy it secretly, as it were. Hence the glomming on of other elements. Just a guess.

No Politics

This passage from the Michael Bloomberg profile is very important:
Mike Bloomberg has become important because he represents a great American dream, not the one about owning a home or becoming more successful than your father but the one beneath all of those, the foundational American dream — the dream of freedom from politics. Freedom from the ugliness and corruption and compromise of democracy, with its raised voices and perpetual fights over who is more equal than the others. Bloomberg is the ultimate independent, the calm modern technocrat rooted in metrics and cleansed of ideology, come to drain the swamps of government with his amazing modern business-management techniques ... unless he's actually just an old-fashioned autocrat looking down on us from above and tinkering with our lives like a science experiment, stripping our noisy polis of all its native poetry. Unless the messiness we want to get rid of is actually our soul. We've never tried someone like him before — someone with his beneficence and his highly evolved notions for the rest of us and more money than most countries. Able to spend hundreds of millions out of his own pocket on a mere city office.

We may not have tried someone exactly like Mike Bloomberg before, but we’ve certainly tried a couple people who are close, temperamentally—say, Woodrow Wilson. Bloomberg basically looks like an old-fashioned Progressive, that’s all I’m saying.

The Progressives were conflicted on a few points: on one hand, they were not particularly democratic or egalitarian (they were the ones behind, say, the city manager position that was the actual executive of many American cities—before everyone decided this wasn’t a hot idea); on the other hand, they were also behind such brilliant ideas as the initiative system, which has given California its enlightened brand of government.

But Progressives were basically, at heart, technocrats who really loved data and figured that its use would usually if not always work and used data usually to justify rooting out corruption on one hand or coming up with tons of regulations on the other.

So: someone who looks a lot like Mike Bloomberg.

The problem with the Progressives’ desire to take out politics out of democracy is that it’s impossible—by definition. As long as you’ve got any significant number of people stuffed together in the country, there will be disagreement about the best policies to guide the country; these are politics. So the desire to take the politics out of government is a desire to take the people of out government.

Wednesday, January 26, 2011


International economic competition: real.

Startup visa: good but not good enough.

The New York Times executive editor reveals what it’s like to deal with Julian Assange.

Afghan parliament sworn in. All problems solved!

Myth of innovation nation in the U.S.?

Where have all the geniuses gone?

Do camera phones raise intellectual property issues?

Vladimir Nabokov: champ novelist, butterfly science trailblazer.

Revealed: top five sentences…ever.


This is really worth your time:

(via Ezra Klein)

The cliff’s notes version here is that Thomas Goetz, the speaker, wants to redesign medical data. You may have noticed in your life of going to doctors that test data is rarely presented in a particularly helpful way for you, the patient. Not presenting the data in a helpful way reduces the odds that you, the patient, will act on said data in the most helpful way, and that creates a problem that’s pretty common to medicine: how to make sure people follow through on their prescriptions in the desired way. (Common, and huge: to take one problem that we haven’t really had to deal yet in the way doommongers predict—super bacteria that are invincible against any of the antibacterial that we know of.)

So Mr. Goetz makes what he presents as a modest, yet very difficult solution (have you heard this phrase about health care before?): redesign the data using color and other presentational tricks to put data in context and reveal your risk for, say, heart disease or diabetes and the like. It’s pretty compelling.

Compelling, but, as I say, modest—because what we should really be doing with data is much greater than that. What we should really be doing with data is: a) digitizing it; b) making it interactive. We’re familiar with the benefits in day-to-day life of interactivity with digital data—you might have heard of this Facebook company once or twice—and of course it’s an important part of many businesses. Data rules everything around us, except for health care.

So let’s expand on Goetz’s proposal and imagine a hypothetical Facebook of medical data. And let’s say you’re a diabetic. You have a test one day and you get the results, which are also posted on your online profile, where you can access and reference them from any computer at any time. Being a diabetic, you’re prone to testing yourself for your insulin levels frequently; what you might not be prone to is inputting them into your online medical profile. As you do that, the profile is able to make various calculations and update you as to your health—and your doctor. If your data gets crazily out of line, your doctor knows—perhaps your profile automatically schedules you for an appointment. You’re able to leave messages for your doctor and communicate as to what’s going on with your life. And so on and so forth. If you test yourself in other ways at home, you’re free to put that data in your profile too, and that’s linked up to all of the rest of the various tests and data that’s been going on with your life.

There’s so much medical data about each and every individual out there, but by and large it floats uncollected, like so much litter in the ocean. There’d be a big impact if they were to be collected.

Coaching Trees

One of the idiosyncratic measurements that football likes to throw up that other sports don’t for its coaches is the “coaching tree.” The coaching tree is like a family tree—assistants who get promoted to head coaches along the line get credited back to the original coach’s coaching tree and the thing grows and grows that way. The overall message is clear—football is about having a strong organization with a lot of people contributing to success—but the implications are not (might some coaches be good at merely recognizing and recruiting coaching talent? Or is there actual value-added, i.e. do some coaches make the coaches they’re with better)? Maybe the most famous coaching tree is Bill Walsh’s, which has some pretty good names there.

I think the most interesting coaching tree, though, is Bill Belichick’s—you can see it here. It’s a weird one: basically all of Belichick’s NFL coaches have been failures; but he’s had a number of really successful college football branches—Pat Hill, Kirk Ferentz, and Nick Saban, probably the best college coach around right now. And just as impressive than his coaching branches is his front-office branches: there are four Belichick-sponsored general managers or equivalents in the NFL, and their teams all made the playoffs, for one, and for two, they’re a who’s who of NFL general managers—Ozzie Newsome (Ravens), Scott Pioli (Chiefs), Thomas Dimitroff (Falcons), and Mike Tanenbaum (Jets).

The question is: why?

Provisional theory: Belichick’s edge comes from the total control he has over his team. His advantages aren’t so much schematic as his ability to match player to scheme well. A coach who leaves Belichick for another NFL job under another general manager inherits some degree of Belichick’s schematic advantages but not his personnel-picking ones; one that goes to college gets both the schematic and personnel advantages; and someone who goes into a front office gets to pick a coach with a harmonious philosophy and thereby gets the schematic and personnel advantages. Or something.

Get Off My Lawn!

Is the first angry old man rap song?

First I can think of certainly. Rap’s becoming an old genre—more ways than one.

Tuesday, January 25, 2011


Filibuster reform dies a quiet death.

Is the era of the publicly-owned company ending?

Changing the way we value trade statistics.

The ethics of slumming.

New Republicans, same militarism?

Have Tunisians succeeded where Iranians failed?

The Super Bowl matchup—a rebuke to big business?

David Brooks had a pretty good column, I think.

Obama and Chamber of Commerce team up to lobby for South Korea free trade pact.

Esquire profiles Michael Bloomberg; worth reading.

The National Review interviews Peter Thiel—provocative, right or wrong.

Lives of the Innovators

Most readers will know the name of Voros McCracken from Michael Lewis’s justly famous Moneyball, which in its tour of the world of advanced baseball statistics pointed out the innovations of the aforementioned McCracken. A followup article reveals McCracken has sustained the fate of many innovators the world ‘round.

Start with the innovation, or epiphany, or whatever you want to call it: McCracken realized that pitchers have very little control over what happens to the ball after it makes contact with the bat; some pitchers get more flyballs, some get more groundballs, but there’s not a whole lot of control. In fact, there’s a large degree of luck to that lack of control—sometimes pitchers will give up a lot of hits and sometimes a lot of outs through no fault of his home.

Anyway, McCracken’s big idea ended up changing baseball forever and changing the way baseball general managers evaluate pitchers and fielders and so on and so forth. McCracken did not make a lot of money from this realization:
… one great idea guarantees nothing.

Not prominence. McCracken spends his days and nights analyzing European soccer. He won't say for what or whom or where. The client appreciates anonymity.

Wealth is absent, too. McCracken lives paycheck to paycheck. He couldn't make rent on his apartment last year.

"If I give DIPS away for free once, that's fine," he says. "I came up with an idea that was monetized to the hundreds of millions of dollars, and I'm broke. I'm glad I did it. Can't do it anymore. I've done enough to prove I can at least do something. Boy, that's a revolutionary idea that changed baseball. Can you do it again? No. I can't do it again unless you pay me.”

There’s a powerful impulse in most people to feel sorry for McCracken more so than they’d feel sorry for the average impoverished person—how can someone so gifted be broke? A gifted impoverished person like McCracken creates so much and takes so little; it feels intuitively unfair.

Even the rich gifted innovators often create more value than they take. Google’s principals have made billions; the company itself is—in total economic impact, with all the secondary and tertiary stuff added in—worth what, trillions? Many of the other big ideas and innovations have, once you consider all of the knock-on effects, created much more than they took. The scope is hard to contemplate, but it shouldn’t be surprising: the world is much richer than it was fifty, one hundred, whatever years ago and it wouldn’t be possible unless people’s ideas made more than just one person rich.

This might appear to be an argument for unrestrained benefits to innovators—the right-wing argument—but I’m not so sure; it’s just an argument that it’s always going to be unfair. Fairness can be overrated; what’s best for everyone?

Innovators are often passionate about whatever it is they’re innovating in, which suggests it’s more than money that motivates them. Some people will do it whatever the financial rewards. If you look at the history of the Industrial Revolution, you’ll see a history of innovators dying in penury; Gregory Clark’s Farewell to Alms claimed being a prominent innovator was actually worse for personal financial well-being than the alternative.

I think a surprising number of innovators will come from the hobbyists or part-timers of the world, at least in the sectors that simply rely on having a decent computer and a compelling idea and that’s it. If there are barriers to entry, legal or financial—there will be frustrating bottlenecks where we wonder why people aren’t doing the obvious thing. So, yeah, we’ll see hobbyist mathematics people and hobbyist writers and hobbyist stat-crunchers…but not hobbyist television reformers* or hobbyist medical innovators or something.

* for example: ESPN was essentially founded by a guy, Bill Rasmussen, who had a real good idea and no substantive experience in TV. At all. Fortunately the field he got into—cable—had a bunch of people who also had no idea what was going on which kept entrenched groups from pushing him out. Rasmussen was able to buy his spot on the airwaves from the FCC; because the FCC honored applications in the order they came in, Rasmussen got his spot ahead of some of the big boys. Somehow I suspect it wouldn’t happen that way these days.  (Apparently not: see comments).

I feel quite confident in saying that...

This will never, ever, ever work:
A news-aggregation service backed by the New York Times Co., Washington Post Co. and Gannett Co. went live on Tuesday morning, a venture that will begin to answer a key question among publishers: Will consumers pay to have otherwise free news neatly packaged in a single place? is a website that lets subscribers choose from over a dozen papers and other sources to create a personalized news site where they can organize and share material.

Ongo Inc., of Cupertino, Calif., charges $6.99 per month for access to the New York Times, USA Today, Washington Post, Associated Press and Financial Times. Subscribers get one additional news source for free, and for each title beyond that, they have to pay a price set by the publisher of that title. Other titles currently available include the Guardian, the Boston Globe and Miami Herald. Ongo will share revenue with the publishers based on what consumers sign up to read.

And I probably shouldn’t have to explain why.

What’s interesting here, I think, is that publishers have continued to do this kind of magical-thinking stuff despite common sense indicating next to no one will use this service (since $6.99/mo is cheaper than the Financial Times’s subscription rate of $99/year I suppose some might take that, but otherwise…), despite the end of the really bad stuff in the economy, which was the key driver in most of these outlet’s troubles.

Interesting True Tales

Interesting true tales of lobbying—this time, on the Department of Education’s possible new rules regulating for-profit colleges:
The process of writing laws and regulations has long attracted intense lobbying from companies whose prospects are at stake. Much less common is for investors such as hedge funds to do so. But some have moved to beef up their presence in Washington, especially since the financial crisis led the government more deeply into the private sector.

Short-sellers are far from the biggest force weighing in. Among groups lobbying for tougher regulation of for-profit colleges are the National Consumer Law Center, the American Association of Collegiate Registrars and Admissions Officers, the United States Student Association and U.S. PIRG, the federation of state Public Interest Research Groups.

Meanwhile, lobbying by the for-profits has surged, according to the nonpartisan Center for Responsive Politics.

But the investors' involvement has riled political players. A group called Citizens for Responsibility and Ethics in Washington, or CREW, wrote to Education Secretary Arne Duncan last week that "certain hedge fund managers had direct and sustained input into the regulatory process."

At first I wanted to argue the influx of short sellers—who have shorted the stocks of various for-profit colleges, e.g. University of Phoenix—was worse than your run-of-the-mill lobbyist, but I’ve come to reconsider this: is it really worse than the most lobbying? The short seller’s material interest is perfectly clear; they have been public about what they dislike about for-profit colleges (and what leads them to short the stock); and is therefore like most lobbying, in which the interests of lobbyists are perfectly clear to everyone involved. (In fact, in some respects it might be better than most lobbying—the short sellers appear to be personally lobbying and testifying, which means less of a principal-agent problem.)

The issue here, I suppose, is the bad reputation hedge funds enjoy these days and short sellers have enjoyed since the invention of the idea. It’s easy to resort to scapegoats, and while hedge funds are an integral part of the troubling financial networks in the world these days, short sellers are relatively more benign. Anyway, whatever you think of the utility of short sellers and hedge funds, it doesn’t mean they’re always wrong and they have a point here.

Monday, January 24, 2011


Interesting facts here:
One-third of the nation’s physicians are over 65, and that proportion is expected to rise. As doctors in the baby boom generation reach 65, many are under increasing financial pressures that make them reluctant to retire.

Many doctors, of course, retain their skills and sharpness of mind into their 70s and beyond. But physicians are hardly immune to dementia, Parkinson’s disease, stroke and other ills of aging. And some experts warn that there are too few safeguards to protect patients against those who should no longer be practicing. “My guess is that John Q. Public thinks there is some fail-safe mechanism to protect him from incompetent physicians,” Dr. Norcross said. “There is not.”
The aging of doctors probably has other significant knock-on effects besides declining performance. Resistance to change, for example, or technological illiteracy; these are traits that will be significant obstacles to health care innovation and reform.

Emerging nations trying to tackle food costs.

Will the Stuxnet virus backfire?

This won’t work: Eric Schmidt talking to CNN about a talk show.

A pretty excellent essay defending Jay Cutler.

An interview with Bill Watterson, the Calvin and Hobbes creator.

Wise civic expenditures: mayor of Ogden, Utah, interested in purchasing an unmanned surveillance blimp. Profiles in amusement the whole way through.

The secret life of a Chinese princeling in Australia.

Why people should be worried about deflation.

Short-term thinking in action in Afghanistan.

Key Strategic Priorities

This is kind of funny:
It is the most popular show US music cable network MTV has ever had. Now the broadcaster is bringing its hit reality show Jersey Shore, in which eight impeccably groomed twentysomethings share a beach house on New Jersey's Atlantic coast, to the UK. The twist is that it will be based in Newcastle and renamed ... Geordie Shore.

MTV said it chose to base the series in the north-east because its residents know how to have a good time come rain or shine. "Jersey Shore is set in the summer and it is always summer in the north-east," said Kerry Taylor, the director of television for MTV Networks UK and Ireland. "No one wears a coat and Geordie girls are always out in their miniskirts."

It’d probably take too long to explain what a Geordie is—I suppose roughly similar to the people in Jersey Shore, which is the point, natch, of the show—but what I find interesting here is the US-to-England migration of televisual concepts. It seems to me the U.S. has been borrowing many more TV concepts from England than vice versa, and, like the British Invasion, a clear sign of declining American power in a once-dominant arena. We need to remedy our declining competitiveness at producing trashy shows of all types.

Reality Shows: we know America does not lack for fame-obsessed, startlingly and cluelessly self-absorbed individuals willing to subject his/her life to a media microscope in a show of questionable merit. Why aren’t these Americans being deployed in innovative fashions? We have the raw resources; we know that no one can out-compete an American for tasteless gestures, whether they be of a sexist, racist, just generally unempathetic or generally debauched variety; why are these Americans not appealing to the schadenfreude of other nations?

Genre Shows: Americans used to be on top of the world when it came to terrible-yet-good exploitation/”B” films, etc. Now all we do is remake the same cop show with the same soulless serial killers (YOU MEAN HE DOESN’T CARE/KILLS FOR THRILLS? HOW INHUMAN!) and all our action movies feature stuff blowing up real good. The best action star working today is Jason Statham, and he’s English. Terrible! We recently were forced to release action films headlined with Sylvester Stallone and Bruce Willis, each in their own ways fine action stars—I maintain “Die Hard” is the best action movie ever—but clearly past their prime, or in Stallone’s case, past his new face’s warranties. America needs to give out subsidies to the wooden-acting, terse-quipping action stars of the future.

Look: America has a challenge. We can either sit back, and snuggle deep into our couches and let other countries control us with their trashy entertainment while teaching their children the finer points of cold fusion, or we can sit back and snuggle deep in to our couches and let ourselves control us with our trashy entertainment while other countries teach their children the finer points of cold fusion. USA #1 God Bless America love it or leave it these colors don’t run.


There’s always been a component of mystery in the Spurs’ success, and now that their main guys are pushing into old-bones territory, the mystery is bigger, more enigmatic: how are they still doing it?

Duncan is less effective than he used to be. Before he was like a robot-from-the-future—he killed you with absolute repeatability; every move was exactly the same as the one before, mechanistically, but the ability he had was more than just endless drills: Tim Duncan is clearly someone who is able to repeat things over and over again, uncannily. Now he’s repeating things out of weariness, like an old couple that has movie night on Thursday night every Thursday night because they’ve always had movie night on Thursday night, and what better time to have movie night than Thursday night? His jumping, in particular, looks labored. So he doesn’t have much athletic ability, which doesn’t matter because his anticipation and positioning is just as good as it always was. So Duncan is effective, and he’s given plenty of time to chill out by the foresighted Gregg Popovich, who’s only playing him 28 minutes per game.

Which is something like the other mystery: the Spurs’ strategy since forever has been to purposefully win fewer games in the regular season in exchange for more postseason wins; yeah, everyone tries that but the Spurs have a deliberate method: playing their star players far less than they actually could. Unlike, say, the Lakers, whose regular season slacking seems derived from their essential craziness/laziness and therefore always seems as if it might not be repeatable this time around (me being one of them—I predicted the Lakers out last year but thought they’d win their two previous trips to the Finals. And of course I believe that this year it won’t happen), the Spurs’ sandbagging is pretty much predictable and repeatable.

That sandbagging never includes Manu Ginobili, who seems to believe it’s his personal mission to assault his opposition with as much determined flair as possible. He’s someone’s national treasure, that’s for sure. And it’s somewhat incredible that he’s able to fling himself about and still summon that magic at his advanced age which leads me to this theory…


…are athletes getting better, relative to their ancestors, at being old? Right now I’m watching Federer plow Stan Wawrinka under (speaking of mysteries: has anyone ever come up with a satisfactory explanation for this?), and it’s kind of odd to watch because Federer in many ways looks exactly the same as he did before—still gliding about the court and hitting impossible shots—but that he’s 29 and doing it. Sure, there was a slump before, but it’s somewhat incredible for a tennis player to still be dominating players as routinely as he did when he was young at his age. Two examples don’t a trend make, but, you know, it’s worth thinking about…

On Competitiveness

So while Paul Krugman’s column today criticizing Obama’s “competitiveness” fetish is mostly spot-on, I disagree with this, kind of:
…while America is running a trade deficit, this deficit is smaller than it was before the Great Recession began. It would help if we could make it smaller still. But ultimately, we’re in a mess because we had a financial crisis, not because American companies have lost their ability to compete with foreign rivals.

But isn’t it at least somewhat useful to think of our nation as if it were America Inc., competing in the global marketplace? No.

Consider: A corporate leader who increases profits by slashing his work force is thought to be successful. Well, that’s more or less what has happened in America recently: employment is way down, but profits are hitting new records. Who, exactly, considers this economic success?

The trade deficit is like the regular deficit is like your weight problem: it won’t kill you right away, and it’s definitely a problem, but it can be dealt with…eventually. Obviously the trade deficit can be sustained for as long as foreigners are willing to finance our spendthrift ways, and ending that soon would be only slightly less disastrous for those foreign lenders than it would be for us.

And of course it depends on what, exactly, we mean by competitiveness. Are we just cutting jobs? That’s a bad idea for the economy. Does it mean substantially reducing health care costs, which would certainly allow American workers to compete with European ones more effectively? If so, that’s probably a good thing—depending, as always, on how you go about doing that substantial reduction. Does increasing competitiveness mean repealing goofy regulations? (For example: America is not competitive on tourism regulations. You have to get all sorts of visas and get fingerprinted, etc., etc. and surely this means that fewer people visit America and spend their cash money here than they would prefer.) If so, good! And so on…

Sunday, January 23, 2011


The odd little world of “fitness models,” and how their lives have been changed by taste and technology.

The Guardian has leaked “The Palestine Papers,” on the Middle East peace process. Very much worth reading.

Good article on the presumed successor to Hu Jintao, Xi Jinping.

Frank Rich has an interesting essay on True Grit and The Social Network that I’m guessing I’ll write about sooner or later.

Perfect seasonal fare: the Los Angeles Times publishes an article about traversing the Erie Canal by boat—a magical, hovering one.

An excellent essay critiquing the writing of the ideal sentence.

A couple of good essays on drugs: one on a sensible drug policy; the other on why Afghanistan has turned to poppy farming.

Does New York have a geek gap?

…And Jean-Claude Trichet is back to his austerity-pushing ways.

An interesting NIH reorganization proposal to do drug development in realms ignored by big pharma.

This Week in Poor Decision-Making

One of the things journalists admonish sports owners for from time to time is interfering in the business of their employees—who presumably know the game so much more than their employers do; I can’t comment on the general truth of that idea, but I can say the idea doesn’t seem to be totally true when it comes to basketball: Mark Cuban does a pretty good job and the available evidence on the rest of the NBA indicates owners are just as incompetent as general managers when it comes to selecting players. Many fans—especially when drunk, in bars—believe they are smarter than coaches and general managers and the like, and the great thing about the NBA is that they are so often right: I’m pretty confident that the most NBA-obsessed of my friends could do a better job at being a general manager than a sizeable minority of actual general managers.

To wit: the column that came out a while back in which new Warriors owner Joe Lacob said this:
Lacob said he loves the offensive firepower of the Warriors' Monta Ellis-Stephen Curry backcourt, but had questions about the duo's ability to hold up defensively.

"I really like those guys as individuals, and I like them as players," Lacob said. "But I have to be honest, it depends. If we got offered a great situation, would I break it up? Yes."

I’m with you so far Joe; playing two short, defensively-challenged, ball-dominating guards together isn’t a great idea at all. But you need to choose one or the other: care to elaborate further?:
The owner called Ellis "our core, franchise player," and agreed that Curry has not played to the standards of last season.

"Does that mean that Curry would be traded, or more likely to be traded than Ellis? Not necessarily," Lacob said. "It really depends. "... This is all dependent on what you're going to get in return."

Noooooooooooo! Lacob’s been seduced by the comfort of headline statistics—Ellis’s 25.8 ppg suggests he is a very good player; but his modest efficiency and turnover numbers (54.9 TS%; NBA average is around 53% and 10.7 TO%) mean that that’s a bit deceiving. Ellis is, of course, a good player, but he’s paradoxically not good enough for the role he plays: if you’re going to be the floor-denting overdribbler, you’d better be an incredible scorer, and Ellis isn’t an incredible scorer.

Meanwhile, Curry—who’s more than two years younger than Ellis, and is more marketable—is an offensive savant, as close to Steve Nash as anyone not named Steve Nash in the NBA. Curry is working on a 58.1 TS% in his second year in the NBA, and it’s not out of the question he could get to 60%. (And Curry’s offensive statistics have improved dramatically: he is taking up more possessions, while turning the ball over less and shooting better. That’s the sign of a potential franchise player; Ellis has all of the signs who plays for three or four teams, getting overvalued in each and every trade. Note also that Curry’s plus/minus is +5.9; Ellis’s is -2. A bit too neat for a small sample size, but, well, it’s pretty obvious to the naked eye.)

So even considering the idea is crazy, and you have to consider such ideas as: are the Warriors cursed? The Warriors have, at the moment, a unique position in the Bay Area sports market—the other major leagues are forced to split the region, usually along East Bay/South Bay+SF lines, and have proceeded to utterly waste it. The high sales price fetched for the Warriors—an NBA record—reflected that potential; it’s not surprising to learn Lacob is a venture capitalist by trade, as the purchase is a shrewd bet on hope. Well, until Lacob got some bad ideas into his head, like hiring his son for his first NBA job in a nice position in the general manager’s office,* or like retaining the previous regime’s incompetent general manager, or like floating the possibility that your marketable, potential franchise player might be traded to make room for a player whose type every NBA fan has seen before, several times, and knows how the story ends with that type: mediocrity accompanied by shocked disappointment that the preordained outcome had the temerity to arrive despite the attitude that this time might be different (or, worse, not even realizing that this story’s a hackneyed genre by now). The only new and interesting twist on this story is that usually the disfavored player requires some projection or guesswork, whereas Curry is pretty much here, as anyone who’s watched him once or twice knows.

*(Note: Lacob claims that the job is at the "bottom of the rung" in the general manager's office, but if that's so, why is he called the "director of basketball operations"? That would be the most absurd mismatch I've seen in a long while between title and authority, if so.)

Enjoy, Bay Area sports fans!

Positive Thoughts

This is a potentially important move:
"The widely held sentiment among Tea Party Patriot members is that every item in the budget, including military spending and foreign aid, must be on the table," said Mark Meckler, co-founder of the Tea Party Patriots. "It is time to get serious about preserving the country for our posterity. The mentality that certain programs are 'off the table' must be taken off the table."

Former House Majority Leader Dick Armey and Matt Kibbe, leaders of the group FreedomWorks, recently wrote in a Wall Street Journal editorial that "defense spending should not be exempt from scrutiny." On Gates' proposed savings of $145 billion over five years, they said, "That's a start."

"Everything is ultimately on the table," said Rep. Jon Runyan of New Jersey, a freshman Republican and a tea party favorite.

The question is: how serious are they, for one, and how serious are they about sticking to the details? I can’t answer to the first, but the second—with my mind on the high-minded, highly factual health care debate—worries me. Calling Gates’s proposed defense savings a “start” is like calling a nutrition plan that switches my ice cream consumption to donut consumption a “diet”: Gates’s savings are all reinvested in the defense budget.

But I’m willing to think positive thoughts, at least for the moment.

Saturday, January 22, 2011


Apparently bath salts are the newest drug problem, and if our experience with cough medicines are any experiences, we will see panic-induced bans in our near future.

Is Angela Merkel’s party in trouble?

This New York Times article about one man’s private CIA with its own agenda in Afghanistan is great reporting with a touch of the absurd. The absurd: this private intelligence agency has a house blogger who’s, like, a thriller writer and, well, this:
And associates said that Mr. Clarridge, determined to make the information public, arranged for it to get to Mr. Thor, a square-jawed writer of thrillers, a blogger and a regular guest on Mr. Beck’s program on Fox News.

Most of Mr. Thor’s books are yarns about the heroic exploits of Special Operations troops. In interviews, he said he was once embedded with a “black special ops team” and helped expose “a Taliban pornography/murder ring.”
Yes, his name is “Mr. Thor,” and reports are out whether it’s a stage name/what he thought a totally awesome name would be when he was, like, 12. (Actually it might have been: Magnus Thor.) Also: he claims to have exposed a Taliban pornography ring, because anyone with the slightest familiarity with the group knows that numero uno on its list of cool things to do is pornography.

The New York Times website turned 15 yesterday!!!!

Why is Ricky Rubio struggling?

Did we really build too many houses during the bubble?

Can Google do better to stop content farms?

Eisenhower’s defense budget points updated for today’s times.

Are we nearing a commodities chokepoint?

Eurosclerosis, then and now.

An Exception That Disproves The Rule?

If there’s one thing that’s close to an article of faith among Americans, it’s that we don’t and shouldn’t do that whole government-helping-business thing and when it happens it’s an absolute abomination and a stain on the escutcheon of free enterprise. People call it “corporate welfare” and academics call it “industrial policy” and often they’re right that it’s bad—but I wonder if we’re practicing selective memory. Let’s take this article comparing the rise of China these days to the rise of Japan in days past, and let’s look at this section on the semiconductor industry (which was under siege from high-quality, low-cost alternatives from Japan):
IN the 1980s, the United States government’s semiconductor policy focused the minds of industry leaders facing the demise of their industry. There is still considerable debate over the effectiveness of a consortium, created by the federal government and several companies. Called Semiconductor Manufacturing Technology, or Sematech, it shared the costs and risks of developing computer chip-making skills. But the partial lifting of antitrust and collusion restrictions gave companies a chance to innovate.

“In semiconductors, we got organized to defend and stay ahead,” says William A. Reinsch, a foreign trade expert and the chairman of the United States-China Economic and Security Review Commission, a bipartisan advisory group to Congress. “In that industry, there was a considerable amount of cooperation between the U.S. government and business. The computer chip industry was deemed too important to lose…”

When I read stuff like this, my mind flashes back to that Economist article on industrial policy that declared it a complete failure with no exceptions imagined or possible, except for the small matter of the internet.

So my thinking is that we tend to place successes into the inevitable-success category or—in this country—into another special category which renders success ignored by popular economic thought. Here’s the end to the sentence that I cut off from the excerpt above: “…not least because of all the military applications of computer chip technology.” Of course! If it’s national security at stake, it just doesn’t count.

I can report that...

Some people may have said "Awww...." when reading this news:
President Barack Obama's nine-year-old daughter, Sasha, wanted to test her developing Chinese skills this week while Hu Jintao was in town.

Just whom did she want to practice them with?...The Chinese president himself, according to a White House official who recounted the story on Thursday after a formal state dinner the previous night.
Sasha attended Hu's welcoming ceremony on the White House lawn on Wednesday morning with friends and could be seen waving a Chinese flag excitedly as her father and Hu walked around the grounds...The two presidents paused to visit when they reached the nine-year-old and her friends behind the rope line.
 Readers curious to know what was said can end their curiosity by reading this post: after extensive conversations with high-level sources close to Sasha Obama, I can exclusively reveal, with 100% accuracy, what was said and thought during this conversation, with stunning, if not shocking implications. Here's an absolutely faithful transcript:

Hu: [Chinese] Well hello! 
Sasha: [Chinese] It's come to my attention that China is overinvesting in capacity and is overreliant on exports, leading to depressed Chinese wages, rampant inflation, and the creation of vacant so-called ghost cities that are being built with no reference to the needs of actual Chinese people. Would you care to comment briefly?
Hu: [English] What?
Sasha: [English] Huh?
Hu: [Chinese] Happy to help you practice Chinese. 
Sasha: [Chinese] Sayonara!
Hu: to himself: don't correct her...
Sasha: to herself: This is so cool! 

Friday, January 21, 2011


Moqtada al-Sadr has returned to Iran. Curious—he basically showed up in Iraq, gave a couple of fiery speeches, and returned to Iran.

Stephen Breyer recalls airline deregulation from his time as an aide to Ted Kennedy.

Fun with voter fraud: around a third of registered voters in Zimbabwe are dead and more than 2000 have ages between 100 and 110 years old—in a country with a life expectancy of 43.

Why the mafia—the Italian one—is still able to hang on after all these years.

A really fantastic piece in the Financial Times about a strange art forger. Go read it.

Inflation in India.

On Borders’ disintegration.

The economics of scamming and AOL:
I think this sort of issue deserves more attention in part because as the economic pie grows bigger and bigger, the number of hours in the day doesn’t grow. So in many cases the opportunity cost of taking the time to really check things out is rising. That means more and more often it’ll be the case for consumers to be rationally ignorant about what exactly they’re doing, and it’ll more and more make sense for firms to exploit that. Meanwhile, across the developed world the number of scam-prone elderly people is increasing and rapid growth in the developing world is creating a potentially giant class of marks who don’t have generations of inoculation to the panoply of modern marketing techniques.

A piece arguing why Jeff Immelt is unsuited to be Obama’s economic advisor; and one on G.E.’s financialization. (the latter is particularly good).

An interesting profile of Turkey’s foreign minister that is perhaps a bit too admiring.

The Awl imagines what would be the most emailed New York Times article ever.

A nice post on Portugal’s drug experiments.

The No Fun Leagues

I suppose you could take the announcement of Roger Goodell’s plan to crack down on trash talk several ways. The most extreme—probably too extreme, but definitely on to something—is to put it into context with a large number of rules of professional sports leagues that appear to be aimed at convincing the older gentlemen of America that those young black people are not out of control. (other examples include: David Stern’s dress conduct policy, with the semi-explicit point that they were after hip-hop clothing; the NBA’s tightened technicals policy; the NFL’s anti-touchdown-celebration policy; the NFL’s rigorously-enforced uniform policy, to ensure that such dangerous displays of individualism as wearing your socks a quarter-inch too high are caught early). Then there’s the thought that what sports leagues are caught in this incredible bind: on one hand, personality sells; on the other, it distracts and becomes a problem.

I’m not always one to care overly much about one’s off-court personality, but it would be foolish to argue that this isn’t a problem for other people out there, and sports leagues—as the last really mass phenomenon in society these days—have to, like the networks of old, be responsible for the least of complaints. TV got beyond it with cable networks, which were free to show interesting niche content on the theory that people who were so prone to complain about everything that goes on could just avoid it, or at least be overwhelmed by the variety. There isn’t a comparable solution for sports, at least at their current expense structure.

So they have to appeal to the youth and the old and coastal and central America all at once. And, unlike the politicians of old, they can’t speak in different ways in different publications—the new media environment has eliminated such arbitrage. Hence the tendency to command and control.

The problem with the command-and-control from a business perspective (besides the questionable ethics of attempting to control large swathes of your employees’ lives, even outside the workplace), is that this particular business is showbusiness; it relies and requires personalities, and interesting ones. Trash talk is a part of games from youth on, and the conceit of sports is that they just don’t like each other. Otherwise it’s just Niners-Panthers in the middle of a dreary regular season (or Wolves-Warriors or equivalent). In fact, it’s best if—while disliking each other—each side seems to represent diametrically opposite ideologies and outlooks on life. The best sports rivalries, the ones that drive coverage and imprint themselves on the collective memory, generally work this way. And yet by disrupting this process from the beginning leagues are, in effect, diminishing their futures.

Plus that, it’s less fun. It’s less fun. And that’s what it’s supposed to be about, right?

Afghanistan Abides

Recently in disruptive Afganistan news, we’ve found out that Hamid Karzai has delayed seating Parliament so that an anti-fraud investigatory tribunal can do its thing and start throwing out people who won their elections. Some speculate that Karzai finds the Parliament insufficiently accommodating to him, Hamid Karzai, and the Times adds this:
Mr. Karzai, who has been in Russia, invited parliament members to lunch Saturday to discuss the situation, and Western diplomats said they hoped he would use the chance to work out a deal that allows the parliament to open, but also lets everyone save face.

However, it is far from clear what kind of deal is even possible at this point. The appointment of the special court, which was done by the Supreme Court at the request of the attorney general, raised the hopes of scores of losing candidates that the election will be annulled.

The Times also speculates that violence might result if the Parliament insists on meeting—apparently they’re planning on it Sunday—which is just great.

In some ways it’s hard to distinguish who’s right here: on one hand, the move does look like a power grab; on the other, you really do need to combat fraud and abuse if you’re going to have a serious democracy. But that’s all theoretical—it would seem foolish, if you’re an Afghan MP, to banter about in theoretical arguments while people are planning a putsch against you. And if that’s the mentality of the median Afghan MP, then the whole enterprise is doomed anyway—democracy is a shared agreement with a lot of trust required; if there’s no trust, then it doesn’t work.

From the western perspective, this whole situation underscores that however tragic events are likely to get, there’s not much that can be done that stands a real chance of working sustainably. Which is an argument for not doing it in the first place; and moreover, it’s an argument for changing policy as soon as practicable.

Thursday, January 20, 2011


Some good comments about the labor market here and some totally wrong ones too. See if you can guess which is which!

WSJ has some interesting details on how L’Oreal is trying to break into the Brazilian market.

Did you know?: many blueberries found in food are fake blueberries.

On Eric Schmidt stepping down from the CEO spot: Felix Salmon and Venture Beat.

Myths about the Chinese Communist Party (very good).

Apparently many animals besides humans practice agriculture.

A slideshow of different professional options for romantic comedy heroines.

Ryan Lizza’s profile of GOP Congressman Darrell Issa is revealing--of a very odd guy. Pretty good profile.

Al-Jazeera and the Tunisia situation.

Blackberry to block porn in Indonesia.

Dread Norse Socialism

Inc. has a really excellent article about why Norway has so many more entrepreneurs despite its being a socialist economy—something that shouldn’t happen, according to the high priests of the economy. It doesn’t really propose an answer, but I think I’ve got one—it’s because of culture. Culture interacts with politics interacts with economics to create a society and in many ways Norway’s is friendlier than ours.

The cornerstone of any socialist system that’s going to work is high taxes. How do the Norse feel about it?:
"The tax system is good—it's fair," he tells me. "What we're doing when we are paying taxes is buying a product. So the question isn't how you pay for the product; it's the quality of the product." Dalmo likes the government's services, and he believes that he is paying a fair price.
Another CEO calls the tax system an “investment in our future.” Do Americans feel this way? We’ve been conditioned to believe that our government stinks at delivering its services—are we correct, relative to Norway? Certainly it seems that way in the middle of a DMV line. Is the government bad at delivering service because we expect it to be bad at delivering service? (That is—we starve the government beast and finds that an emaciated beast isn’t quite able to deliver the same bite.)

Part of the issue here is cultural, I suspect; if your culture has a high degree of solidarity, political scientists tell us, it’s easy to get to socialism. America, which has been feuding with itself periodically, doesn’t necessarily have that. (Though the period where it seemed to have the most solidarity—the fifties—America was, not coincidentally, most socialist/corporatist.)

I wonder, also, whether Norway’s taxes—while higher than ours—are more efficient. For example, the article points out in other place that Norway’s corporate tax rate is 28% while ours is 40%. This may be nominally true, but the number of loopholes in the American tax code means that any company with means spends its time getting around it and paying lower rates, with the consequence that the U.S. ranks quite low in terms of revenue raised by corporate tax, even though its rate is nominally high. There’s two consequences to that—one, it’s a transfer of wealth from small companies to big ones; two, it’s a huge time waster for those companies that do it, time that could be spent more productively.

And then there’s other, personal hobbyhorse issues which reveal huge problems. Just read this:
Holte's American subsidiary pays annual health care premiums that make his head spin—more than $23,000 per employee for a family plan—and that make the cost of employing a software developer in the United States substantially higher than it is in Norway, even after taxes.
Look: if you’re going for the whole low-tax, easy-on-business thing, you ought to actually be low on taxes and easy for business. But that whole $23,000 per emploee—that’s not actually easy on business, or for that matter easy on employees or the rest of the economy.

While I don’t expect the U.S. to go and change and be Norway—there’s just too much of a gap—it’s an article that makes you think that there are quite a few things that need changing.

Actual Headlines In Actual Newspapers

No way Los Angeles Times, I refuse to believe this:

Scarcity Isn't Scarce

Robert Skidelsky has a pretty interesting argument here, but I’m not sure if it’s the right time:
…Capitalism has always had crises, and will go on having them. Rather, it comes from the feeling that Western civilization is increasingly unsatisfying, saddled with a system of incentives that are essential for accumulating wealth, but that undermine our capacity to enjoy it. Capitalism may be close to exhausting its potential to create a better life – at least in the world’s rich countries.

By “better,” I mean better ethically, not materially. Material gains may continue, though evidence shows that they no longer make people happier. My discontent is with the quality of a civilization in which the production and consumption of unnecessary goods has become most people’s main occupation.

This is not to denigrate capitalism. It was, and is, a superb system for overcoming scarcity. By organising production efficiently, and directing it to the pursuit of welfare rather than power, it has lifted a large part of the world out of poverty.

Yet what happens to such a system when scarcity has been turned to plenty? Does it just go on producing more of the same, stimulating jaded appetites with new gadgets, thrills, and excitements? How much longer can this continue? Do we spend the next century wallowing in triviality?

Skidelsky said his thoughts weren’t necessarily prompted by the current crisis, but it’s worth thinking about the times: the crisis is general over the western world, whether we’re talking about the quality-of-life-oriented precincts of Europe or the relatively-capitalist U.S. Everyone’s got problems, big ones.

And while Skidelsky might protest that Europe is being measured by hyper-capitalist standards, it’s not: the machine has to go on somehow, and if it’s stopped by debt, it doesn’t work. The thoughts that Europe might have to abandon the Euro aren’t idle and have very serious consequences if pursued. And the only real way to avoid being crushed by debt is to grow out of your problems, which implies an appreciation of many of the virtues that Skidelsky thinks capitalism has.

The other problem is that while Skidelsky seems to think the west is approaching an end to economic history, there are broad swaths of the world that would still benefit from capitalism’s ability to make do with scarcity. Perhaps Skidelsky prefers a world that’s half-socialist and half-capitalist, but what would that do for the capitalist parts? Would they grow?

Unfortunately, it’s a short essay, but one that’s too interesting to be so short. (For example, Skidelsky has the somewhat-Marxist suggestion at the end that “Perhaps socialism was not an alternative to capitalism, but its heir.”) Oh well—worth thinking about.