Friday, December 25, 2015

A Great Face-Lift - Done by Our Son

Here is an example of a great face-lift, done by our son, Jose Soler-Baillo, a plastic surgeon.

You can reach Jose at ResultsMD, (305) 661-1996.


Thursday, December 24, 2015

Rodney Dangerfield Jokes



I'm not a sexy guy. I went to a hooker. I dropped my pants. She dropped her price.

I tell you, with my doctor, I don't get no respect. I told him, "I've swallowed a bottle of sleeping pills." He told me to have a few drinks and get some rest.

I tell ya when I was a kid, all I knew was rejection. My yo-yo, it never came back!

When I was a kid I got no respect. The time I was kidnapped, and the kidnappers sent my parents a note they said, "We want five thousand dollars or you'll see your kid again."

Some dog I got too. We call him Egypt because he leaves a pyramid in every room.

With my dog I don't get no respect. He keeps barking at the front door. He don't want to go out. He wants me to leave.

What a dog I got. His favorite bone is in my arm!

Last week I saw my psychiatrist. I told him, "Doc, I keep thinking I'm a dog." He told me to get off his couch.

I worked in a pet store and people kept asking how big I'd get.

My wife and I were happy for twenty years. Then we met.

I'll tell ya, my wife and I, we don't think alike. She donates money to the homeless, and I donate money to the topless!

One night I came home. I figured, let my wife come on. I'll play it cool. Let her make the first move. She went to Florida.

I asked my old man if I could go ice-skating on the lake. He told me, "Wait til it gets warmer."

My doctor told me to watch my drinking. Now I drink in front of a mirror.

Monday, December 21, 2015

The Armed Citizen


John Cochrane describes how we are going downhill - and why

Here is a link to a talk by John Cochrane, "Institutions and Experience".

John has an interesting perspective that is on target.

A snippet:

Our theme is “learning from experience.” I want to reflect on how we as a society learn from experience, with special focus on economic affairs. Most of these thoughts reflect things I learned from George, directly or indirectly, but in the interest of time I won’t bore you with the stories.

An English baron in 1342 tramples his farmers’ lands while hunting. The farmers starve. Then, insecure in their land, they don’t keep it up, they move away, and soon both baron and farmers are poor.

How does our society remember thousands of years of lessons like these? When, say, the EPA decides the puddle in your backyard is a wetland, or — I choose a tiny example just to emphasize how pervasive the issues are — when the City of Palo Alto wants to grab a trailer park, how does our society remember the hunter baron’s experience?

The answer: Experience is encoded in our institutions. We live on a thousand years of slow development of the rule of law, rights of individuals, property rights, contracts, limited government, checks and balances. By operating within this great institutional machinery, these “structures” as senator Bradley called them last night, these “guardrails” as Kim Strassel called them in this morning’s Wall Street Journal, our society remembers Baron hunter’s experience in 1342, though each individual has forgotten it.
------------------------------------
In this regard, I fear we live in an era of great forgetting.

Foreign policy increasingly seems unhinged from simplest lessons of history as well as from the carefully built institutions of the postwar order. Eisenhower and Roosevelt did not call a press conference, announce the US putting 5000 soldiers on Omaha beach, and promise the soldiers would be out by July. They set a goal, and promised to unleash whatever resources are needed for that goal. As senator Bradley reminded us, they knew that managing the peace is just as important as winning the war.

As John Taylor reminds us in his remarks today, monetary and financial policy has veered away from its traditional base in both domestic and international institutions and institutional limitations.

In economic and domestic affairs, the administration and its regulatory agencies are more and more telling people and businesses what to do, unconstrained by conventional rule-of-law restrictions and protections.

But what will happen on a change of administration? Will a new administration retreat, say we must restore rights and rule of law? Or will a new administration — once again — admire an expanded set of tools for ramming through its agenda, punishing political enemies, demanding cooperation of people and business, and set to work institutionally grabbing power for itself?

The temptation will be strong: To direct Lois Lerner’s successor to blackball different applications; to use campaign laws to persecute a different set of officials; to have its environmental, health care, and financial regulators demand the same tribute and that a different set of doors revolve; to wipe out its predecessors executive orders and issue new ones.

Or will it say, no, we eschew these methods, we will go back to respect and rebuild institutional limits, though it will take a long time and reduce our hold on power? Once the traditional restraints are broken, it’s awfully hard to go back.

The leading candidates have already promised which way they’re going. For example, Ms. Clinton, quoted by Kim Strassel, promises to use Treasury regulation to punish companies that legally reduce taxes by moving abroad. And Mr. Trump outrages the law and constitution daily.

Wednesday, December 16, 2015

Pi in Music

Here is a link to a musical piece created by matching pi's digits in a twelve base number system to our twelve note base system of music.

Enjoy it.

Lost in the Fifties

Here is a link for all of you who were coming of age in the fifties.  Being an old guy, I remember all of it.

Monday, December 14, 2015

Saturday, December 12, 2015

Do Canadians really believe that they live in a free country? Do we in the US believe we do?

Here is an example of heavy-handed Government taking away its citizens' freedom, under the guise of helping them.

Canada is a major producer of maple syrup.  Canada's Government has created a Cartel designed to help keep maple syrup prices higher than its free market price.  That helps maple syrup producers and hurts consumers.  To ensure the Cartel's "success", all maple syrup producers are forced to comply with the Cartel's edicts and pay its fees.  Maple syrup producers that wish to sell their maple syrup at free market prices face heavy fines and jail.

This kind of economic servitude exists in plenty of other areas of Canada's economy.

Some free country.

The same goes for the United States.

A snippet:


Redheaded grandmother Angele Grenier doesn't look much like a criminal, but she is one of Canada's most wanted women.

And as such, she faces the likelihood of lengthy jail time, and fines of about 500,000 Canadian dollars ($368,000; £245,000).

Her crime? She's a self-confessed smuggler and illegal dealer, someone who sells contraband across province lines.

But what exactly is she selling that has so incensed the Canadian authorities, and seen the police search her property? Drugs? Guns?

Nope, maple syrup - the lovely, sweet stuff that you pour on your breakfast pancakes, or add to your biscuit recipes.

The problem for Mrs Grenier, and Quebec's other so-called "maple syrup rebels", is that they cannot freely sell their syrup.

Instead, since 1990 they have been legally required to hand over the bulk of what they produce to the Federation of Quebec Maple Syrup Producers (which in French-speaking Quebec is abbreviated to FPAQ).

Backed by the Canadian civil courts, the federation has the monopoly for selling Quebecois maple syrup on the wholesale market, and for exporting it outside the province. It sets the price for how much it pays producers, and it charges them a 12% fee per pound of syrup.

Wednesday, December 09, 2015

What ISIS Really Wants

Here is a nice article in The Atlantic giving some perspective about ISIS.

Watch Out.

The arrogance and conceit of the "elite"

I receive the "Columbia Today" magazine, because I graduated from Columbia College.

The Winter 2015 issue contains a short article by Jennifer S. Hirsch, professor of public health at Columbia's mailman School, condensed from an October 8 op-ed published in USA Today.  It reads as follows.

At the rural New York library that I frequent during summer months, my librarian was chatting with a patron as she checked out a volume on guns.  Casually, the patron asked how many guns she owned.  My librarian replied with a smile, saying she had eight, one for each room in the house.

I was stunned, to put it mildly.  Never would I have imagined that this lovely woman with whom I linger to \chat about books would be a gun enthusiast.  But after my initial astonishment, her words made me think: Could there be more common ground than I've assumed between "us" and "them"?

Where deeply held beliefs are concerned, all of us think we have good reason to hold the ones that we do.

Those of us who demand change must seek out and embrace opportunities to talk with individual gun owners.  Thousands of those conversations across the country will help build the political support needed to accomplish what our lawmakers have so consistently failed to do.  It's time to talk with my librarian about more than recommended reading.

Professor Hirsch's is "stunned" because she views gun owners, like her librarian, as aberrant.  Her view that the gun issue is a matter of "deeply held beliefs" ignores the abundant statistical evidence that guns in the hands of law abiding citizens saves lives.  She has no idea that gun owners have facts to back them up and that she has none (except for the myths perpetuated by anti-gunners).  Nor does she appear to understand self-defense strategy and tactics (either wearing a gun or having one readily available is necessary for an effective defense against home invasion).

Professor Hirsch comes across, to me (a retired professor), as arrogant and conceited.  My experience with academia is that such arrogance and conceit are common.

The academic elite is all too ready to tell me how to live, and to punish me if I do not live as they decree.

All this is one of the reasons why I have never contributed money to Columbia College, and never will.

Tuesday, December 08, 2015

How Not To Prevent The Next Financial Meltdown

An article by Allan H. Meltzer



The large market declines and increased volatility of the past few months have prompted concerns that we may be headed toward financial chaos again. The 2010 Dodd-Frank law was the supposed solution to prevent that from happening, but as Milton Friedman cautioned, “the government solution to a problem is usually as bad as the problem and very often makes the problem worse.”

Case in point: Dodd-Frank’s Financial Stability Oversight Council has subjected several U.S. banks and nonbank financial institutions to special regulatory scrutiny based on the idea that their failure could lead to another crisis. But the theory behind so-called systemically important financial institutions, or SIFIs, is fundamentally flawed. Financial crises are pathologies of an entire system, not of a few key firms. Reducing the likelihood of another panic requires treating the system as a whole, which will provide greater safety than having the government micromanage a number of private companies.

The risks to a system are most pronounced when financial institutions borrow heavily to finance investments. If the value of the assets falls or becomes highly uncertain, creditors—who include depositors—will rush to pull out their money. The institution fails when it is unable to find a new source of funds to meet these obligations.

The collapse of Bear Stearns and the Lehman Brothers bankruptcy are prime examples. Before the 2008 crisis, some firms had leverage ratios of 25:1 or higher, meaning that for every $26 of investment, the firm needed to borrow $25. This required banks to obtain large amounts daily to pay off previous creditors. But when the value of their investments fell—which in the last crisis included a large share of mortgage and other asset-backed securities—the banks could not borrow and had to raise money quickly by selling their assets, sometimes at fire-sale prices. This turned seemingly solvent firms into insolvent ones.

A bank’s inability to pay off its creditors can be transmitted to others. The mechanism can be direct: The debtor bank defaults, and its creditors cannot repay their creditors, etc. But the mechanism can be indirect. The suspicion that similar assets held by other institutions are subject to the same downward pressure can start a run at even an unrelated financial institution.

However, this domino effect has less to do with the so-called interconnectedness of the financial institutions than with weaknesses in the system itself. To understand why, consider the contrast between the 2008 financial crisis and the dot-com crash in the late 1990s and early 2000s.

The bursting of the dot-com bubble and subsequent failure of many Internet-based companies had serious repercussions for investors, but not for the financial sector. That’s because the failed firms were financed primarily through equity, not borrowed money. Investors took big losses when the value of tech companies fell precipitously. But there were no runs.

Mutual funds are similar. Many are large and hold assets that may be risky, but they don’t fail when the value of their assets falls. The liabilities move one-for-one with the value of the assets because the fund does not promise to pay off any fixed amount to its investors. There is no reason for a run: Getting money out first serves no purpose to investors nor does withdrawal of funds cause significant distress. The fund simply sells the assets at the market price and returns that amount to investors.

These factors suggest that instead of trying to divine which firms are systemically important, banks should be required to get a larger share of the funds they invest by selling stock. Bank investment funded by equity avoids the danger of a run: If the value of a bank’s assets falls, so too does the value of its liabilities. There is no advantage in getting to the bank before others do.

Using higher equity requirements to reduce systemic risk has been suggested on these pages by Allan Meltzer, and in “The Bankers’ New Clothes: What’s Wrong with Banking and What to Do About It,” a recent book by Anat Admati and Martin Hellwig that has received much attention.

This reasoning also implies that deposits—the checking and saving accounts that are bank liabilities—should be invested only in short-maturity secure assets, like Treasury bills. A bank’s long-term investments, in mortgages or stocks, can then experience big losses or even fail. Bad for the bank and its investors, but not for the financial system or for depositors, whose deposits are backed by virtually risk-free assets.

The Federal Reserve seems to be wising up, and may require higher equity capital for the SIFIs and place less emphasis on regulation. Fed Chair Janet Yellen told the Senate Banking Committee on July 16 that she is open to raising the threshold on the asset level warranting SIFI status and scrutiny. Additionally, the international Financial Stability Board announced on July 31 that it would set aside work on designating funds or asset managers as systemically important to focus instead on whether their activities or products were systemically important.

Dodd-Frank’s method of protecting the financial system is based on a misdiagnosis of what led to the 2008 financial crisis. A more rules-based approach that focuses primarily on equity and leverage would provide better certainty and a higher cost-benefit ratio than designating firms as SIFIs.

Sunday, December 06, 2015

Comparing death rates from mass public shootings and mass public violence in the US and Europe

Here is an article by John Lott that shows how misleading are Obama and the media about where the United States stands on mass public shootings and mass public violence.  It is nowhere near as bad as they say.

The purveyors of these lies know better.  You should, too - so hear is something from Lott that is more accurate.

A snippet.




Wednesday, December 02, 2015

One liner jewish jokes from the Masters

I just got from a pleasure trip.  I took my mother-in-law to the airport.

I've been in love with the same woman for 49 years.  If my wife finds out, she'll kill me.

We always hold hands.  If I let go, she shops.

My wife was at the beauty shop for two hours.  That was only for the estimate.  She got a mud pack and looked great for two days.  Then the mud fell off.

Patient:  "I have ringing in my ears."
Doctor:  "Don't answer."

There is a big controversy on the Jewish view of when life begins.  In Jewish tradition, the fetus is not considered viable until it graduates from law school.

Have you seen the newest Jewish-American-Princess horror movie?  It is called "Debbie Does Dishes."


Saturday, November 28, 2015

Tech Support

A list of economic myths from Don Boudreaux

Here is a list of economic myths from Don Boudreaux.  You can view them as a test of your understanding of basic microeconomics.

– prices and wages on markets are simply “set” by businesses;

– steep increases in the prices of fuel and bottle water in the aftermaths of natural disasters are caused simply by “greed,” and that government-imposed prohibitions on such “price gouging” simply make these goods more affordable and accessible;

– rent control obviously makes apartments more affordable;

– a hike in the minimum wage is a simple and obvious way to help all low-skilled workers;

– stricter government safety regulations obviously make people safer;

– imports from low-wage countries obviously reduce average wages in the U.S. or reduce overall employment in the U.S. (or both);

– trading with foreigners is of course economically different than trading with fellow citizens;

– taxes are obviously paid by the individuals and businesses that government makes responsible for paying the taxes;

– of course the chief source of economic strength and growth is consumer spending, and reductions in consumer spending are inevitably harmful;

– the interests of businesses are obviously at odds with those of consumers and workers;

– advocates of laissez faire simply are “pro-business” and (hence) “anti-consumer” and “anti-labor”;

– of course the rich get richer and the poor get poorer;

– government officials’ chief intention, of course, is to improve the well-being of the public;

– the consequences of any action are simply determined by the intentions of the actor.

Monday, November 23, 2015

John Cochrane critiques Professor Noah Smith on inflation

Here is a link to John Cochrane's critique of Professor (of economics) Noah Smith on inflation - and a few other things.

As usual, John is on target.

A snippet:

Noah Smith has an interesting Bloomberg View piece on Japanese inflation. Three crucial paragraph struck me

... Japanese unemployment is very low, and the economy is expanding at or above its long-term potential growth rate of around 0.5 percent to 1 percent. So according to mainstream theory, inflation would be an unnecessary and pointless negative for Japan’s economy. Why, then, are there always voices calling for Japan to raise its inflation rate?

Actually, there are several reasons. The main one is that inflation reduces the burden of debt. Japan’s enormous government debt represents the government’s promise to transfer resources from young people (who work and pay taxes) to old people (who own government bonds). Since Japan is an aging society, there are more old people than young people. That makes the burden especially difficult to bear. Young people also tend to have mortgages, the repayment of which is another burden.


Sustained higher inflation would represent a net transfer of resources from the old to the young. That would increase optimism, and hopefully raise the fertility rate, helping with demographic stabilization. It would also decrease the risk that the Japanese government will eventually have to take extreme measures to stabilize the debt.


I like these paragraphs because they so neatly distill the language used by the standard policy establishment to advocate inflation. Noah clearly separates the usual "stimulus" arguments from the new "debt" argument, which helps greatly.

Debt is a "burden." Sort of like snow on your roof, debt appears from the sky somehow and then represents a "burden" requiring "lifting," which would be beneficial to all.

Debt "represents the government’s promise to transfer resources from young people ... to old people.." Apparently, the government woke up one morning, and said "we promise to grab about two and a half years worth of income from young people and give it to old people." Undoing such an ill-advised promise does indeed sound worthy.

But, lest these soothing words lull you into idiocy, let us remember where debt actually comes from. The Japanese government borrowed a lot of money from people who are now old, when they were young. Those people consumed less -- they lived in small houses, made do with fewer and smaller cars, ate simply, lived frugally -- to give the government this money. The promise they received was that their money would be returned, with interest, to fund their retirements, and to fund their estates which young people will inherit.

Noah is advocating nothing more or less than a massive government default on this promise, engineered by inflation. The words "default," "theft," "seizure of life savings," apply as well as the anodyne "transfer." I guess Stalin just "transferred resources."

Sunday, November 22, 2015

The True Nature of Government

Here is a link to an article by George Will, who describes a typical example of how Government is in the business of taking away your freedom, not enhancing it.  George is on target.

If you understand George's point, you will appreciate that this kind of Government behavior is widespread and costs you tremendously, both in dollars and freedom.

A snippet:

Dr. Ron Hines, 72, of Brownsville, is a licensed veterinarian with a PhD in microbiology. He is physically disabled but eager to continue dispensing his healing wisdom worldwide, which he does using the Internet and telephone. He estimates that about 5 percent of those he speaks to are in Texas. He neither dispenses nor prescribes medications. But in 2005, the Texas legislature, with time on its hands and nothing better to do to perfect the state, criminalized such electronic veterinary advice.

Students of contemporary government will instantly understand that this was not done to protect pets, none of whom has complained about, or been reported injured by, people like Hines. Rather, the legislature acted to protect those veterinarians who were vocally peeved because potential customers were getting online advice that, even when not free, is acquired at less expense and more conveniently than that gained from visits to a veterinarian’s office.

This is rent-seeking, the use of public power to confer private benefits on one economic interest by handicapping another interest. Rent-seeking is what the political class rewards when it is not brooding about why people think the political class is disreputable.

Saturday, November 21, 2015

Thursday, November 19, 2015

Math Jokes

Why did the chicken cross the Mobius Strip?

     Answer 1:  To get to the same side.

     Answer 2:  Too get to the other . . . um . . .

A bicycle can't stand alone because it is two-tired.

A hungry clock goes back four seconds.

A calendar's days are numbered.

Old mathematicians never die; they just lose some of their functions.

The man whose best buddy is an abacus has a friend he can count on.

Statistics show that those who celebrate more birthdays live longer.

Without Geometry, life is pointless.

Phone operator:  "I'm sorry, the number you have dialed is imaginary.  Please rotate your phone 90 degrees and dial the number again."

There are 10 kinds of people:  those who understand binary, and those who don't.

Wednesday, November 18, 2015

Don Boudreaux - Why he opposes a minimum wage

Here is a link to a well written explanation by Don Boudreaux about why he opposes the minimum wage.  Don is on target.

A snippet:

First, I trust that everyone here shares the goal of having low-skilled workers paid incomes as high as possible with no one forced into the ranks of the unemployed or obliged to suffer other negative consequences. That is the value judgment that I carry with me throughout tonight’s discussion and in every discussion that I have about the minimum wage.

Second, my concern is exclusively for the well-being of low-skilled workers. My assessment of the minimum wage turns only on how well or how poorly it is likely to benefit such workers. I don’t care about the effects of the minimum wage on the welfare of employers, business owners, or investors.

You might disagree with my conclusions, but that disagreement will be over the predicted consequences of the minimum wage and not over values or goals.

I oppose the minimum wage. I oppose it in part because my economic reasoning makes me worry about its consequences for low-skilled workers.

I worry that, by raising employers’ costs of employing low-skilled workers, it makes the employment of such workers less attractive and, thus, reduces and worsens their employment options. The result is unintended harm to at least some – and perhaps many – low-skilled workers.

I worry, further, that the effects of the minimum wage – both positive and negative – are not distributed randomly. By reducing the number of jobs for low-skilled workers while simultaneously drawing more workers into the pool of those who compete for minimum-wage jobs, the risk is real that those who get and keep jobs at the higher minimum wage are workers who need higher incomes the least, and the workers who are denied jobs are those who need any incomes the most.

Choosing from a larger pool of applicants for a smaller number of jobs – a pool of applicants that includes college students and retirees drawn into the workforce by the higher minimum wage – employers are too likely, too often, to choose the ‘safe’ applicant over the recent immigrant, the single mom, or the inner-city minority teen.

Finally, I worry that this ignorance of the possibility that minimum wages actuallyharm some low-skilled workers – and harms those who can least afford to be harmed – causes voters and government officials to assess minimum-wage legislation more favorably than they would assess it were the possibility of such harm more widely recognized.

Sunday, November 15, 2015

Matt Ridley sticks it to the wind power activists - and rightly so

Here is Matt Ridley's article.

By preventing investment in gas, the dash for wind has done real harm

My Times article on wind power is below. An astonishingly poor attack on the article was made in The Guardian by Mark Lynas. He failed to address all the main points I made: he failed to challenge the argument that wind power has not cut emissions, failed to challenge the argument that wind power has raised the cost of electricity, he failed to challenge my argument that wind speeds are correlated across Europe. And he made a hash of attempting to criticise my argument that wind has made the system less reliable. The gist of his case was that the recent short-term emergency that gave rise to price spikes was caused by coal-fired power station outages. But the point was that these coincided with a windless day. In a system of coal and gas, the weather would not matter, but in a system dependent on wind, then coal outages on a windless day cause problems. Surely this was not too difficult to understand, Mark? Note that Germany had a windless day too.

Mark Lynas then took to twitter boasting in troll-fashion that he had debunked my article where he was joined by the usual green cheerleaders. They have shot themselves in the foot, I am afraid. I remain astonished at the fervour with which greens like Mark defend wind power at all costs, despite growing evidence that it does real environmental harm, rewards the rich at the expense of the poor and does not cut carbon dioxide emissions significantly if at all. It might even make them worse, as I argue here. If they really are worried about emissions, why do greens love wind? It isn't helping.

Anyway, here's the article

Suppose that a government policy had caused shortages of bread, so the price of a loaf had shot up and was spiking even higher on certain days. Suppose that the high price of bread was causing massive job losses. Suppose that the policy was justified on the grounds that the bread was now coming from farmers whose practices were better for the environment, but it turned out they were probably worse for the environment instead. There would be a rethink, right?

For bread, read electricity. The government needs to rethink its electricity policy. Last week’s emergency was a harbinger of worse to come: because the wind was not blowing on a mild autumn day, the National Grid had to call for some large electricity consumers to switch off, and in addition offered to pay up to £2,500 a megawatt-hour — 40 times the normal price — for generators capable of stepping into the breach at short notice.

Among other lessons, this teaches us that letting Liberal Democrats run the Department of Energy and Climate Change (DECC) for five years was an expensive mistake. What puzzles me is how little the current government seems to realise it must make a U-turn or get the blame itself.

The coalition promised secure, affordable and low-carbon power, but instead gave us unreliable, expensive and high-carbon power. What is worse, this outcome was “wholly predictable but wholly unanticipated by policymakers”, in the words of Rupert Darwall of the Centre for Policy Studies, speaking to a House of Lords committee (on which I sit) earlier this year.

Mr Darwall’s argument is that wind farms, which cost a lot to build and maintain but pay nothing for fuel, can sell electricity for very low prices when the wind’s blowing. Being intermittent, this power therefore destroys incentives to invest in highly efficient “combined-cycle” gas turbines (CCGTs).

If, when the wind blows, a new gas plant has to switch off, then the return on investment in gas is negative. Combined-cycle plants are sophisticated machines and don’t like being switched on and off. Therefore the gradual replacement of coal-fired power by much more efficient gas-fired power has stalled as a direct result of the wind-power boom.

To solve this problem, the government came up with a “capacity mechanism”, a fancy name for subsidising fossil fuels. But this further impost on the hard-pressed bill payers (likely to exceed £1.3 billion by 2020), instead of bringing forward new gas turbines, last year went mostly to keep old coal-fired stations going. The next auction, due in December, has brought a rash of bids from diesel generators. This is madness: wind power has made the country more reliant on dirty, high-carbon coal and diesel. (I declare my usual interest in coal, but note that coal has probably benefited from the policy I am criticising.)

Meanwhile, the old coal stations that have not attracted a subsidy are closing because of the coalition’s unilateral carbon tax (sorry, “floor price”). Eggborough, for instance, tried to switch to subsidised biomass, better known as wood — a fuel that emits even more carbon dioxide than coal per unit of energy — but was refused and so is closing. Thus, when the wind drops, we are plunged into crisis.

Wind’s advocates have long argued that cables to Europe would help on windless days because we could suck in power from Germany when the wind’s blowing there but not here. Yet last week, as we were debating this very issue in the Lords, I checked and wind was generating about 1 per cent of our electricity, and even less of Germany’s. Studies by the Renewable Energy Foundation published as long ago as 2008 have shown that wind speeds are well correlated across Europe most of the time. Was anyone listening?

Prices charged to electricity consumers have been rising because of the high cost of subsidies for wind power, especially offshore wind. The DECC’s numbers show that small businesses will be paying 77 per cent more per unit for electricity by 2020 than they would be if we were not subsidising renewables. The cost of the subsidies is on track to hit roughly £10 billion a year in 2020 and that’s before paying for the fleet of diesel generators being subsidised under the capacity mechanism and extra grid infrastructure costs. What are we getting for that money? A less reliable electricity system, a big increase in cost, lost jobs in the aluminium and steel industries and no discernible cuts in carbon dioxide emissions.

If that last claim seems far fetched, consider the following calculation. According to the wind industry, a 2-megawatt onshore wind turbine could cut emissions by about 1,800 tonnes a year in average conditions, offshore a bit more. With about 13 gigawatts of wind now in service, that would mean the total wind fleet can displace at most 15 million tonnes, or 2 per cent of our 700 million tonnes of total annual emissions.

But, since the effect of the wind boom (solar production, by the way, is an irrelevance lost in the decimal points) has been to deter new gas and prolong the life of inefficient coal, and since it wastes power to get a fossil-fuelled power station up to speed when the wind drops, and since expensive wind power has driven energy-intensive industries abroad to more carbon-intensive countries, the actual emissions savings achieved by wind are lower and probably negative. We would have been far better off buying new gas or “clean-coal” capacity instead: replacing coal with gas more than halves emissions.

After Wednesday’s near emergency, ministers must surely realise that we cannot rely on the weather to produce the right amount of electricity, and gas is far cheaper and more environmentally friendly than the DECC’s dirty diesel solution. As for nuclear power, Hinkley C was supposed to help with the supply crunch, but it will only come on stream in the mid-2020s, and at a gigantic cost.

The poor and the elderly are hardest hit by high electricity bills. What Chris Huhne and Ed Davey have done to our electricity supply, following the lead of Tony Blair’s foolish 2007 decision to accept a European Union target for renewables, is bonkers.

It has cost wealth, jobs, landscapes, wildlife, security of supply: and all for nothing in terms of emissions savings. It is no comfort to know that some of us have been predicting this for years.

Don Boudreaux: A Sufficient Reason To Oppose The Minimum Wage

Don Boudreaux gets it right again.  Here is his comment.

In my opinion as an economist and as a human being who believes that no one has a right to use force to extract unbargained-for benefits from anyone else, a sufficient reason to oppose the minimum wage is that it prices some people out of jobs that they would otherwise have voluntarily chosen to take. The number of people priced out of jobs is, for me, irrelevant to this assessment (although, of course, the greater the number of people priced out of jobs by the minimum wage, the worse is the magnitude of its undesirable and unwarranted effects).

Even if only one person is priced out of a job by the minimum wage (or more precisely, even if only one person is priced out of the job that he or she would have chosen to take in the absence of the minimum wage), I have sufficient reason to oppose it.

Moreover, I believe that most people – or, at least, most Americans – share my normative view. The reason for this belief is that nearly all politicians and popular pundits in the U.S. who endorse the minimum wage insist that it has no ill consequences for low-skilled workers. I have never heard the likes of Barack Obama, Hillary Clinton, Bernie Sanders, Andrew Cuomo, Jerry Brown, or Robert Reich ever, when pleading for a higher minimum wage, say something akin to “Many of you low-skilled workers will get a raise but some of you will be priced out of your preferred jobs. Indeed, some of you low-skilled workers are likely actually to be cast indefinitely into the ranks of the unemployed. But worry not, I’m guessing that each of you prefers to have a higher chance of being indefinitely unemployed because this higher chance of being unemployed comes along with a higher wage in the event that you do find jobs.

At least the above announcement would be more honest than is the typical announcement that portrays the minimum wage either as a miraculous free lunch or as a policy the full costs of which are borne exclusively by people other than low-skilled workers. [By the way, the above announcement would be even more honest if the pol or pundit making it would add that the increased prospects of being rendered unemployed by the minimum wage are not randomly distributed. In fact, those workers who are disproportionately likely to be rendered unemployed are workers who are least-attractive at the higher wage to employers (workers, say, such as inner-city minority single moms with neither high-school diplomas nor reliable means of personal transportation) while those workers who are disproportionately likely to remain employed at the higher wage are the ones who are most-attractive at the higher wage to employers (workers, say, such as retirees with long work experience who are drawn out of retirement by the higher minimum wage).]

If most Americans did not share my normative view – that is, if most Americans believe it to be just dandy if government arbitrarily raises the wages of some low-skilled workers with a policy that is admitted to arbitrarily render other low-skilled workers unemployable – we’d likely have no evidence of reluctance by pro-minimum-wage pols and pundits to make this admission publicly.

Further, no matter what are the relative numbers of workers earning higher wages compared to the number of workers earning $0 per hour because they are now unemployed – no matter what is the aggregate size of the income gains enjoyed by the former, fortunate group of workers compared to the size of the income losses suffered by the latter, unfortunate group of workers – the economy as a whole is made poorer. Total output declines. The pie is made smaller. Andsomeone or some group must bear this loss.

How can the economic pie here not be made smaller? Some people who would otherwise be voluntarily employed and producing are instead involuntarily unemployed and not producing. That this diminution in total output likely remains undetectable in the quantitative data in no way means that this diminution isn’t real. Only the most naive empiricist economist – someone who, in effect, believes that the economy is only that which is quantitatively detectable by human students of the economy – would deny that a policy that causes some resources that would otherwise be productively employed to be unemployed does not shrink total output.*

A final note: many people – foe and friend – ask me why I spend so much energy and pixels on the minimum wage. My reasons are four:

(1) politicians and ‘activists’ spend lots of energy defending the minimum wage; such efforts warrant responses;

(2) the ill-effects of the minimum-wage are especially pernicious; the harm it inflicts is concentrated on those individuals who can least afford to be harmed, and this harm is largely invisible to eyes not equipped with a clear economics lens; this combination makes the minimum wage a policy tool especially useful to those who would unjustly steal benefits for themselves from others;

(3) discussing the minimum wage is an excellent way to teach basic economics because those who support the minimum wage commit an unusually large number of fallacies – economic, methodological, logical, philosophical, factual, statistical, and historical – when mustering their arguments in support of this policy; and

(4) if proponents of the minimum wage get away with their fallacies, these proponents will not only prop up a policy that harms society’s most-vulnerable individuals, but they will also help to spread the very dangerous fallacy that market prices are arbitrary figures that can be forced up or down by government diktat with no, or only minimal, unintended and unseen negative consequences. (In short, here, to expose the fallacies spread by minimum-wage proponents is to defend scientific economics from man-in-the-street superstitions masquerading as scientific economics.)

….

* It’s possible that a higher minimum wage can, by causing many minimum-wage jobs to be more onerous than they would otherwise be for the workers who hold them, cause total output to rise. Any such increase in output, however, still represents a diminution of total economic prosperity because it is the result of the exertion of super-optimal work effort by low-skilled workers.

UPDATE: As the always-insightful young economist Jon Murphy points out in a comment to this post, a Reason-Rupe poll finds support for the claim that Americans’ support for the minimum wage plummets if they belief that it will cause some workers to lose jobs.

Saturday, November 14, 2015

The First Amendment is Dying

From Reason.com, written by David Harsanyi.

David is on target.  Too few people appreciate what is freedom.

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;"


Unless we're talking about a white chocolate-paneled cake for a gay wedding or perpetual funding for "women's health" clinics because it's the "right thing to do."
"or abridging the freedom of speech;"


Unless that speech is used by boorish climate change denialists to peddle dirty fossil fuels and run capitalist death machines that wreck the Earth, by anyone engaging in upsetting hate speech or other forms of "aggression," by a wealthy person supporting candidates who undermine "progress," by a pro-life protester who makes people feel uncomfortable about their life decisions, by a cisnormative white male who displays insufficient appreciation for the "systematic oppression" that minorities experience in places of higher learning or by anyone who has a desire to undermine the state-protected union monopolies that help fund political parties.
"or of the press, or the right of the people peaceably to assemble,"
Unless the press invades safe spaces designated by mobs or writes about incorrect topics at incorrect times.
"and to petition the Government for a redress of grievances."
Unless someone is a member of a predesignated special interest group, he should report to the IRS before doing so.
That's pretty much the state of the First Amendment today. Climate change, abortion, gay marriage, race, taxes, what have you, even in mainstream political debate, these interests outweigh your piddling concerns about the First Amendment. So the notion that a bunch of students and leftist professors would agitate to shut down free expression in a public space in Missouri because they feel their special issue trumps your antiquated list of rules is not particularly surprising.
Now, we shouldn't overstate the problem. Most of us are able to freely engage in arguments and express ourselves without worrying about the state's interfering. This will not end tomorrow. But it is difficult to ignore how creeping illiberalism has infected our discourse and how not many people seem to care.
The thousands of other University of Missouri students, for example, could have held a counter-protest against dimwitted fascists cloistered in safe spaces. Where are those student groups? Why was there no pushback from those kids—and really, there was none as far as I can tell, at either Missouri or Yale—against the bullies who want administrators fired for thought crimes? It can mean that students are too intimidated, too uninterested or not very idealistic about these freedoms. None of those things bodes well for the future.
And where is the faculty, those brave souls who value the freedom to debate and champion sometimes-controversial ideas when mobs of students are making wild accusations against their school without any real evidence? Where are they when students shut down conservative, libertarian or not-progressive-enough Democrats from speaking at their schools?
In fact, the campus police—not the hissy-fitting communications professor or the would-be authoritarian student—asked students to call authorities and report "incidents of hateful and/or hurtful speech" in detail. A school, the place where young people supposedly ponder challenging ideas, now has students reporting any instances of unsavory speech. What does "hurtful speech" entail anyway? Is it enough for someone to challenge your priggish worldview? Is it enough for someone to hurt your brittle feelings? And what is the consequence?
You may also remember when Chris Cuomo of CNN, a lawyer, tweeted (since deleted) that "hate speech is excluded from protection" under the First Amendment. He wasn't alone.
Not long ago, 51 percent of Democrats in a YouGov poll claimed to support criminalizing "hate speech." (A third of Republicans did so, as well.) Another study, by the First Amendment Center a few years back, found that nearly 40 percent of Americans said the First Amendment "goes too far" guaranteeing rights—a record high.
People are scared. They're scared to be accused of bigotry or racism, an ugly accusation that is easy to level but impossible to disprove. It's a lazy but effective method of intimidation.
So we can laugh at the confused millennial J-school major, but he is not alone. When the mayors of Chicago and Boston used their positions of power to keep Chick-fil-A out of their cities because of the CEO's thoughts on same-sex marriage, they were working under the same notion as kids who want to be in safe spaces where their worldviews remain unchallenged. (Using the state to punish a person or company for its beliefs is even worse.) When Bill Nye argues that climate change skeptics are nuts who hate science and should be ignored by any right-thinking person, he is attempting to convince you of something. When Nye contends that America needs to drum climate change skeptics completely "out of our discourse," he's no longer a liberal.
Because what's happening on college campuses hasn't happened in a vacuum.

Saturday, November 07, 2015

Math Jokes

How are mathematicians like the Air Force?

     They both use pi lots.

What does a mathematician use to measure the weight of trees?

     A log scale.

What do you call the matching shirt and pants of an Eskimo?

     Polar coordinates.

What does a logician pick when faced with a choice between ham salad and eternal bliss?

     Ham salad - because nothing is better than eternal bliss, and ham salad is better than nothing.

What is the value of the contour integral around Western Europe?

     Zero, because all poles are in Eastern Europe.

How do you make one burn?

     Differentiate log(fire).

What is a mathematician's shortest joke?

     Let e<0.

Why do mathematicians often confuse Christmas and Halloween?

   Because Oct 31 = Dec 25.


Friday, November 06, 2015

Don Boudreaux on the Obama Administration's Labor Economics

A great comment from Don Boudreaux.

My former GMU student (and SUNY-Purchase economics professor) Liya Palagashvili and I just completed writing the first draft of a paper (to be published by the Mercatus Center) analyzing the likely economic consequences of the recent proposal by the Obama administration to extend what it calls “overtime protections” to millions of workers in America who have had the good fortune until now to be exempt from such “protections.” These workers’ good fortune is about to expire. Uncle Sam will soon impose on them and their employers labor-contract terms that will at best fail to improve the well-being of the targeted workers and, more likely, harm nearly all of them. (But what the heck?! The proposal [1] appeals to economically uninformed pundits, professors, and voters, [2] is likely to artificially increase the demand for highly paid workers, and, [3] creates more work for officious bureaucrats and opportunistic lawyers.)

In this post I’ll not discuss the main points of Liya’s and my paper. Instead, I write now only to flag a deep inconsistency in the Obama administration’s labor economics.

The administration’s overtime proposal will force millions of workers who do not currently charge their employers extra for any overtime hours that these workers work (that is, for hours worked in excess of 40 hours weekly) to charge their employers a minimum wage of time-and-a-half for each and every such hour worked. Although some of the public commentary on this proposal asserts that it will raise the annual incomes of the affected workers, the proposal itself argues that the principal effect of forcing workers to charge 1.5X overtime will not be to increase these workers’ incomes but, instead, to incite these workers’ employers to hire other workers to perform the tasks that were previously performed by the affected workers when they worked more than 40 hours weekly.

In short, the proposal argues – boasts! – that, by forcing up the cost of using worker Jones to perform certain tasks, the government will cause employers to substitute worker Smith for worker Jones. (Quoting page 14 of the proposal: “The first [objective of the proposal] is to spread employment by incentivizing employers to hire more employees rather than requiring existing employees to work longer hours, thereby reducing involuntary unemployment.”)

What a fascinating prediction coming from an administration that, in arguing elsewhere for raising the minimum wage, insists that a higher minimum wage willnot discourage the use of workers whose wages are thereby increased.

That is, in pushing for subjecting more workers to government’s so-called “overtime protections,” the administration argues that employers, being sensitive to the higher cost of using worker Jones to perform task OT, will be led by the higher cost of using Jones to perform OT to substitute away from using Jones to perform OT by opting for lower-cost alternatives – such as worker Smith – to perform OT. But in arguing for raising the minimum wage, the administration dismisses as faulty predictions that the higher wage will cause employers of the affected workers to substitute away from using these workers.

Wow.

What reason have we to believe that forcing up the price of a worker in situation A will cause no substitution away from that worker in situation A, while forcing up the price of a worker in situation B will indeed cause substitution away from that worker in situation B? I see no good reason to entertain any such fanciful belief.

Yes, yes, yes – clever boys and girls can (and will) attempt to impress us with displays of analytical acrobatics that show that, under juuusst the right set of circumstances with juuusst the right set of finely calibrated wage hikes, substantial substitution occurs in one situation while no (or de minimus) substitution occurs in the other. But the burden of intellectual proof is heavily on the Obama administration to explain this glaring apparent contradiction in its labor economics – a contradiction that, I suspect, it does not even notice. Obama & Co. certainly gives no evidence of even attempting to explain it.

What If There Were No Prices

A nice video - "What If There Were No Prices?"  Very well done and makes the valid point that an economy without market prices is one that doesn't work.

Walter Williams on Minimum Wage Laws

Here is a link to a short interview of Walter Williams, who explains why minimum wage laws hurt the people they are intended to help.

Thursday, November 05, 2015

John Lott: Twisting Statistics to Smear Cops

Here is an article by John Lott that shows the kind of bias you are likely to run across in the media.  In this case, Nicholas Kristof showed that, for him, agenda trumps facts.

False claims about police brutality are poisoning race relations.

This feeling of “unfairness,” as President Obama noted in his weekly address on May 16, is “fuel(ing) the kind of unrest that we've seen in places like Baltimore, Ferguson and New York.”

The riots it incites threaten people's lives and destroy businesses. Police officers' lives are put at greater risk.

And even though, as in Baltimore, many of the police officers involved are black, the debate has inflamed tensions between whites and blacks.

“It's outrageous when officers use excessive force against young, unarmed African-American men, who are 21 times as likely to be shot dead by the police as young white men,” claimed Nicholas Kristof in a recent New York Times op-ed.

If this claim were indeed true, it would surely be outrageous. But the claim originating from ProPublica and further exaggerated by Kristof is completely false. This is not based on national data but comes from a couple hundred police departments (217 in 2012, just 1.2 percent of all the departments in the country). Nor that these few departments are unusual: They are predominantly in urban areas, which have much higher concentrations of blacks. This skews the numbers to over-represent black deaths.

But other factors also must be taken into account. Nationally, black male teenagers were nine times more likely to commit murder than were their white counterparts, thus presumably posing more of a risk to police. Adjusting for that and that the data are from heavily black areas leaves no significant difference in the risk that police pose for young black and white men.

ProPublica justified the flawed claim by quoting Professor David Klinger of the University of Missouri-St. Louis. But it turns out that he never viewed the data as reliable. Indeed, last October, Klinger complained to me that he had strongly warned ProPublica against using the FBI Uniform Crime Report data on justifiable police homicide.

Like other academics who have worked with this data, he labeled it as “no good.” (One ProPublica author, Ryan Gabrielson, denied to me that Professor Klinger told them this.)

Yet, Klinger repeatedly has stated that ProPublica misquoted him. In a later interview with St. Louis National Public Radio, Klinger was very clear: “The ProPublica thing needs to be shut down. They cherry-picked the three years that had the worst disparity instead of being honest about the whole picture. The ProPublica analysis is absolute garbage because it is based on the FBI's supplemental homicide reports. I told them, don't do it because the stats are (expletive deleted).”

Yet, as misleading as ProPublica's outrageous claim already was, Kristof managed to make it even more inflammatory. He added his own twist and put the term “unarmed” in front of “African-American men.”

The actual claim, however, did not refer to unarmed men but to justifiable police homicides. And those justifiable homicides involve people threatening others with death or serious injury — usually attackers armed with some type of weapon.

What terrible reporting. Kristof and The New York Times could have discovered these errors by fact checking on the Internet.

Still, despite being personally told of these errors, Kristof still has not posted a correction. And The New York Times never published a letter pointing out these errors.

Journalists need to be careful about the supposed facts they use. Mistakes that “fuel” feelings of “unfairness” can have dire consequences on the streets.

John R. Lott Jr., president of the Crime Prevention Research Center, is author of “More Guns, Less Crime” (University of Chicago Press, 2010).

John Lott: The New York Times Keeps Getting Its Gun Facts Shockingly Wrong

Here is a link to an op-ed by John Lott that shows how disingenuous the New York Times is when it comes to guns.  For the New York Times, facts don't matter if they conflict with agenda.

A snippet:

Last week, a New York Times editorial shockingly claimed that American concealed handgun permit holders have been responsible for 763 non-self-defense deaths since 2007. The Times editorial cites these numbers as proof of the “myth of the vigilant citizen” and “foolhardy notion of quick-draw resistance.”

But the numbers they rely on from the Violence Policy Center are fatally flawed, quadruple counting legitimate self-defense cases as criminal murders and blaming suicides on permits when the suicides don’t even involve guns. More disturbing, the Times has been called on using these same numbers before, but they keep on using the numbers and never acknowledge any of the problems.

Tuesday, November 03, 2015

Math Jokes

Why is 6 afraid of 7?
     Because 7 8 9.

How do you make 7 even?
     Take away the "s".

What do you call 3 feet of trash?
     A junk yard.

What is the difference between a new nickel and an old dime?
     Five cents.

How much do pirates pay for corn?
     A buccaneer.

How much does it cost to buy sixty female pigs and forty male deer?
     One hundred sows and bucks.

What type of lingerie does a math mermaid wear?
     An algae-bra.

Although horses may be able to add, why shouldn't you try to teach them analytic geometry?
     You shouldn't put Descartes before the horse.

What's the only cure for a bad case of right angles?
     The Pythagorean serum.

Have you heard the latest statistics joke?
     Probably

Saturday, October 31, 2015

Matt Ridley on climate change

Here is a link to an important article by Matt Ridley.

Matt points out the unscientific nature of the climate change discussion.  In particular, that concern about global warming has been blown out of proportion.

Reading Matt's article should convince you, if you can be objective, that much of what you hear about the near term disasters global warming will bring is questionable.

Thursday, October 29, 2015

Heavy handed Government down under

Another example of how Governments are bad news.

Governments' solutions tend to reduce freedom, cost a lot, and make things worse - all under the guise of making things safer, cheaper, etc.

The Libertarians are on the right track.

The sad truth is that Government gets to create all the mess because most voters encourage it, through intolerance (insisting that others live the way you think they should), adversarial attitudes with respect to others (demanding equality - i.e., theft), lack of understanding (e.g., thinking a high minimum wage makes things better), intellectual arrogance (not appreciating how little you know), etc.

As Pogo said:  "We have met the enemy and he is us"

From Savvy Aviator News: Ghosts in the Machine

You might like to see something about general aviation engine analysis.  The link takes you to an article by Joe Godfrey in the Savvy Aviator News.

Tuesday, October 27, 2015

Meat and Colorectal Cancer

The media has concluded that there is a link between meat and colorectal cancer (CRC).  The basis for this conclusion is various statistical studies relating colorectal cancer rates to consumption of red and/or processed meats.  None of the studies are randomized controlled studies, which are the type that are most reliable.

No doubt, there will be much hype about the need for reducing meat consumption.  The hype is likely to ignore that even a large increase in relative risk does not imply a large increase in risk if the original risk is small enough.  For example, if the lifetime risk of dying from disease X is increased from 1% to 2%, a relative risk of 2, by giving up an enjoyable activity, does that make it sensible to give up the activity?  Not necessarily (drinking, driving, sports, etc.).

Here is a link to one such article that summarizes the results of various studies.  Here is an excerpt from the article.

 A cohort of 30,000 men and women in Japan was studied by Oba et al. (2006), with 231 CRC cases.

To sum up these recent prospective studies, they bring some support to the conclusions of Larsson’s metaanalysis that processed meat intake is associated with increased risk, and the RR is in the range 1.5–2. However, the link was not found in all sub-groups (male/female, colon/rectum), and the risk associated with dietary patterns cannot be attributed to processed meat alone.

The fact that processed meat intake increases colorectal cancer risk seems established from the published meta-analyses of epidemiologic studies. The evidence is weak, however, since the RRs were all less than 2, and observational studies never fully avoid biases and confounders. The excess risk in the highest category of processed meat-eaters is comprised between 20 and 50% compared with non-eaters, which is modest compared with established risk factors like cigarette smoking for lung cancer (RR=20). However, the excess risk per gram of intake is clearly higher than that of fresh red meat.

Assume that the studies' relative risks are correct.  Then eating red meat or processed meat increases the risk of getting colorectal cancer by about 20% and 50%, respectively.  This sounds really bad, but should be put in perspective.  For example, the Japanese study quoted in the article notes 231 CRC cases in 30,000 people over the period from 1992 to 2000.  That suggests a probability of about 231/30,000=0.77% of developing CRC over eight years, or a probability of about 7.4% of developing CRC over 80 years. Relative risks of 20% and 50% increase these probabilities to about 8.9% and 11.0%, respectively.  Thus, eating red meat or processed meat increases the probability of lifetime CRC by about 1.4  and 2.6 percentage points, respectively.  Considering the likely improvement in the production processes for both meats and the likely improvement in CRC detection and treatment, risk increases of this magnitude may be acceptable vs. giving up meat.

Finally, what if meat reduces the death rate from some causes?  Shouldn't the decision to eat meat or not be based on the relationship between meat and the death rate from all causes, not just colorectal cancer?

Monday, October 26, 2015

John Cochrane on growth - why it's necessary and how the Government (and you) are preventing it

Here is a link to an important article by John Cochrane.

John is on target.  Our Government is the problem, and it is able to be the problem because of you.

Here are some excerpts.

Our economy is like a garden, but the garden is choked with weeds. Rather than look for some great new fertilizer to throw on it, why don’t we get down on our knees and pull up the weeds? At least we know weeding works!

But it is a big idea, a big program, and one that needs and will reward the courageous leadership of great politicians. Everybody has to give up their little deal, protection, tax break and subsidy; everyone has to allow their businesses or profession to be open to competition. Each person must understand that the small loss that he or she will experience directly will be more than made up by everyone else giving up theirs. Politically, rather than fall back on “I’ll support your little deal, you support mine,” everyone has to become part of the coalition that supports reform — “no, I’m not getting mine, so I’m not going to support you getting yours.”

Wednesday, October 21, 2015

The Armed Citizen

Did Australia's 1996 gun confiscation work?

You hear a lot from the media and Obama about how well Australia's 1996 gun confiscation worked, claiming that it reduced homicides and suicides.  The facts show otherwise.

Take a look at Mark Wright's article in the National Review for a laymen's explanation of why the evidence shows no impact from the law.

Link between comet and asteroid showers and mass extinctions



From the Royal Astronomical Society

If you are worried about global warming, this should really get to you.

Here is the link.

Sunday, October 18, 2015

Wondering about immigrants, illegal immigrants, outsourcing, exports and imports

Many US citizens have unfounded economic concerns because the media, politicians, and powerful special interests (e.g., unions) inundate them with misinformation and bad economics.  If you hear too many people saying the same wrong things, you are likely to believe them – unless you are educated enough to understand why they are wrong.  People used to think that the world was flat.  That changed only when they became educated.  When it comes to economics, Flat Earthers are alive and well – and are in the majority.

Here are some things for the Flat Earthers to consider.

If more illegal Mexicans working in the US implies less work for US citizens, doesn’t a US birth rate that exceeds the death rate also mean less work for US citizens as children grow up?

Illegal Mexican workers can be eliminated by providing them with work permits.

If Mexican working in the US eliminate US jobs, how about annexing Mexico as a 51st State?

If Mexicans working in the US is bad, does that mean that Mexicans working in Mexico is good?  If so, isn’t it good when US firms outsource to or build plants in Mexico?

If US exports are good, aren’t US imports good, too?  Where would foreigners get dollars to pay for US exports if there were no US imports?

If it were possible, wouldn’t US imports without US exports be preferable to US exports without US imports?  Wouldn’t you rather receive Japanese cars free than give American cars to the Japanese free?


Do you think that a new car factory that produces cars at less cost is desirable?  Imagine a car factory in San Francisco where you put corn in and get cars out cheaper than making the same cars in Detroit.  Is this good or bad?  If you choose bad, please call me.  I have things to sell at exorbitant mark ups.  If you choose good, do you care how the corn is converted into cars?  If not, what if the factory in San Francisco is a pier where corn is shipped to Japan and cars are received from Japan?

Don Boudreaux and Deirdre McCloskey: Minimum wage laws and jobs

Here is a link to a insightful comment by Don Boudreaux, citing Diedre McCloskey, about minimum wage laws and jobs.

DB is on target - data analysis is important, but not the whole story. If the data analysis is inconsistent with good theory, question the data analysis.

Saturday, October 17, 2015

Steve Landsburg on Cardinal Timothy Dolan

Steve Landsburg shows how little Cardinal Timothy Dolan knows about economics.  Here is Steve's comment.

Pope Francis is coming to New York, and Cardinal Timothy Dolan is disturbed about ticket-scalping:

“Tickets for events with Pope Francis are distributed free [via lottery] for a reason — to enable as many New Yorkers as possible, including those of modest means, to be able to participate in the Holy Father’s visit to New York,” Cardinal Dolan, the archbishop of New York, said in a statement. “To attempt to resell the tickets and profit from his time in New York goes against everything Pope Francis stands for.”

So according to Cardinal Dolan, “everything Pope Francis stands for” consists of the proposition that for New Yorkers of modest means, nothing should take precedence over turning out to see Pope Francis — not groceries, not medicine, not car repairs, not any of the other things that people can buy with the proceeds from selling their tickets.


I doubt that Pope Francis is quite as egomaniacal as the Cardinal paints him. But apparently the Cardinal himself would rather see poor people cheering for the Pope than improving their lives.


Richard Epstein: The Economic Fantasies Of Robert Reich

Here is Richard Epstein's article about Robert Reich's economic savvy.

The United States has seen better days. The political and economic fabric of the country is unraveling, yet there is little agreement about how best to move the country forward. My own position has long been that the culprits of slow growth and social discontent are the increased levels of taxation and regulation that suck the productive lifeblood out of society. That position today is in the minority. A vocal group of progressive thinkers are plumping for the opposite course—and prominent among them is Robert Reich, former Secretary of Labor for Bill Clinton. In his new book “Saving Capitalism: For the Many, Not the Few”, he argues for a set of policies that would cripple the American economy. A better title for his book would be”Dooming Capitalism, For Everybody”.

George Will: Impeach the IRS Director

Here is a link to a good article by George Will.


A snippet:

“Look,”wrote Lois Lerner, echoing Horace Greeley, “my view is that Lincoln was our worst president not our best. He should [have] let the [S]outh go. We really do seem to have 2 totally different mindsets.” Greeley, editor of the New York Tribune, was referring to Southern secessionist states when he urged President-elect Lincoln to “let the erring sisters go in peace.”

Greeley favored separating the nation from certain mind-sets; Lerner favors suppressing certain mind-sets. At the Internal Revenue Service, she participated in delaying for up to five years — effectively denying — tax-exempt status for, and hence restricting political activity by, groups with conservative mind-sets. She retired after refusing to testify to congressional committees, invoking Fifth Amendment protection against self-incrimination.



Friday, October 09, 2015

Government's "solutions" can make things worse



An article by Allan H. Meltzer illustrates how well the Government's "solutions" can miss the point and either not help or make things worse.

The large market declines and increased volatility of the past few months have prompted concerns that we may be headed toward financial chaos again. The 2010 Dodd-Frank law was the supposed solution to prevent that from happening, but as Milton Friedmancautioned, “the government solution to a problem is usually as bad as the problem and very often makes the problem worse.”

Case in point: Dodd-Frank’s Financial Stability Oversight Council has subjected several U.S. banks and nonbank financial institutions to special regulatory scrutiny based on the idea that their failure could lead to another crisis. But the theory behind so-called systemically important financial institutions, or SIFIs, is fundamentally flawed. Financial crises are pathologies of an entire system, not of a few key firms. Reducing the likelihood of another panic requires treating the system as a whole, which will provide greater safety than having the government micromanage a number of private companies.

The risks to a system are most pronounced when financial institutions borrow heavily to finance investments. If the value of the assets falls or becomes highly uncertain, creditors—who include depositors—will rush to pull out their money. The institution fails when it is unable to find a new source of funds to meet these obligations.

The collapse of Bear Stearns and the Lehman Brothers bankruptcy are prime examples. Before the 2008 crisis, some firms had leverage ratios of 25:1 or higher, meaning that for every $26 of investment, the firm needed to borrow $25. This required banks to obtain large amounts daily to pay off previous creditors. But when the value of their investments fell—which in the last crisis included a large share of mortgage and other asset-backed securities—the banks could not borrow and had to raise money quickly by selling their assets, sometimes at fire-sale prices. This turned seemingly solvent firms into insolvent ones.

A bank’s inability to pay off its creditors can be transmitted to others. The mechanism can be direct: The debtor bank defaults, and its creditors cannot repay their creditors, etc. But the mechanism can be indirect. The suspicion that similar assets held by other institutions are subject to the same downward pressure can start a run at even an unrelated financial institution.

However, this domino effect has less to do with the so-called interconnectedness of the financial institutions than with weaknesses in the system itself. To understand why, consider the contrast between the 2008 financial crisis and the dot-com crash in the late 1990s and early 2000s.

The bursting of the dot-com bubble and subsequent failure of many Internet-based companies had serious repercussions for investors, but not for the financial sector. That’s because the failed firms were financed primarily through equity, not borrowed money. Investors took big losses when the value of tech companies fell precipitously. But there were no runs.

Mutual funds are similar. Many are large and hold assets that may be risky, but they don’t fail when the value of their assets falls. The liabilities move one-for-one with the value of the assets because the fund does not promise to pay off any fixed amount to its investors. There is no reason for a run: Getting money out first serves no purpose to investors nor does withdrawal of funds cause significant distress. The fund simply sells the assets at the market price and returns that amount to investors.

These factors suggest that instead of trying to divine which firms are systemically important, banks should be required to get a larger share of the funds they invest by selling stock. Bank investment funded by equity avoids the danger of a run: If the value of a bank’s assets falls, so too does the value of its liabilities. There is no advantage in getting to the bank before others do.

Using higher equity requirements to reduce systemic risk has been suggested on these pages by Allan Meltzer, and in “The Bankers’ New Clothes: What’s Wrong with Banking and What to Do About It,” a recent book by Anat Admati and Martin Hellwig that has received much attention.

This reasoning also implies that deposits—the checking and saving accounts that are bank liabilities—should be invested only in short-maturity secure assets, like Treasury bills. A bank’s long-term investments, in mortgages or stocks, can then experience big losses or even fail. Bad for the bank and its investors, but not for the financial system or for depositors, whose deposits are backed by virtually risk-free assets.

The Federal Reserve seems to be wising up, and may require higher equity capital for the SIFIs and place less emphasis on regulation. Fed Chair Janet Yellen told the Senate Banking Committee on July 16 that she is open to raising the threshold on the asset level warranting SIFI status and scrutiny. Additionally, the international Financial Stability Board announced on July 31 that it would set aside work on designating funds or asset managers as systemically important to focus instead on whether their activities or products were systemically important.

Dodd-Frank’s method of protecting the financial system is based on a misdiagnosis of what led to the 2008 financial crisis. A more rules-based approach that focuses primarily on equity and leverage would provide better certainty and a higher cost-benefit ratio than designating firms as SIFIs.

Monday, October 05, 2015

From Bloomberg: Clinton's Plan to Mess Up Prescription Economics

From Bloomberg, by Megan McArdie.

Hillary Clinton thinks drug development should be riskier, and less profitable. Also, your health insurance premiums should be higher. And there should be fewer drugs available.

This is not, of course, how the Clinton campaign would put it. The official line is that Americans are just paying too darn much for drugs, and she has a plan to stop that:

Sunday, October 04, 2015

A gun accessible to children can save lives

Here is a link to a column by John Lott.


John is on target.

Why would anyone buy recycled paper?

Thanks to John Lott for the picture and idea.

Here is a picture that Nikki Goeser took earlier today from a Staples store in the Nashville area.



There is a huge difference in price, so why would anyone want to buy recycled copy paper?  One answer you may hear is that it saves trees.  However, that is doubtful.  Furthermore, there are other adverse effects that those who want to save trees may not like.  Consider the following, for example.

  • If people use enough paper products from trees, the only way to get enough trees is to raise trees.  The result will be more trees than there would be if people did not use paper products or used recycled paper products.


Why do you think there are so many chickens, so much corn, for example?

  • Recycling paper adds pollution and increases global warming.  Raising trees decreases pollution and decreases global warming.


Raising trees uses mostly clean energy, e.g., sunlight through photosynthesis that decreases pollution and decreases global warming (photosynthesis removes carbon dioxide from and adds oxygen to the atmosphere).  Recycling paper uses mostly “dirty” fuels that add substances to the atmosphere, e.g., carbon dioxide, that increase pollution and increase global warming.


  • Recycling requires additional “dirty” energy to segregate and gather the used paper, including the use of petroleum based fuels, and additional methane produced by humans due to the energy they use to perform various recycling tasks.

Tuesday, September 29, 2015

Don Boudreaux illustrates how wrong a Professor of Philosophy can be on Economics

The moral of Don's comment, below, illustrates that people with advanced degrees and high academic status can miss the point just as effectively as someone who never went to college.  I conjecture that the difference between the two is that the latter may be more likely to appreciate that he may be wrong than the former.



 Princeton University Press generously sent to me a copy of Princeton University philosopher Harry Frankfurt’s hot-off-the-press book, On Inequality.  This book is very short and so, although I’m an exceptionally slow reader, I’ve already read about half of it.

Depending upon my time and inclination, I might or might not in the near future blog more on this book.  But I here wish to quote a passage in it that occurs very early on (on page 4):

"In extracting from the economic wealth of the nation much more than they require in order to live well, those who are excessively affluent are guilty of a kind of economic gluttony."

While I agree with what I (so far) detect to be a principal theme of Frankfurt’s book – namely, that income inequality itself is morally unobjectionable – this quoted statement conveys in about as short a compass as I’ve ever encountered the deep misunderstanding of the economy that is shared by far too many people.  What follows is only a partial review of the errors that infect the above quotation:

(1) Wealth in a market economy is not ‘extracted.’  Instead, wealth is created and produced.

(2) Therefore, there is no “economic wealth of the nation” that exists independently of the efforts of entrepreneurs, innovators, and producers to create such wealth.  Such wealth, once created, can be stolen from its creators and producers.  But it is a fundamental conceptual error to suppose that there is some national wealth that exists in natura, independently of human innovative and productive efforts.

(3)  The nation in such a discussion is of no relevance.  Even if (contrary to fact) wealth is created by nature and is simply ‘extracted’ from the earth by humans, why focus on the nation rather than on the globe?  Surely nature cares not a whit for the arbitrary political boundaries that her human spawn draw (and alter over time).  Surely nature regards an epsilon increase or decrease in the well-being of an individual who resides in nation X with no more or less interest than she regards an epsilon increase or decrease in the well-being of an individual who resides in nation Y or in nation Z.

(4) There is no objective meaning to the phrase “require in order to live well.”  “Require” could – indeed, strictly does – mean only “enough to subsist.”  As such, therefore, no one requires aspirin.  No one requires hard (as opposed to thatched) roofs.  No one requires more than one change of clothing.  No one requires literacy, or numeracy beyond a grasp of basic arithmetic.  No one requires running water or flush toilets or telephony or access to electrical power or artificial lighting or inexpensive birth-control methods or that the “digital divide” be bridged.  (Indeed, the vast majority of human beings throughout history have never experienced such luxuries.)

(5) So to accuse someone of being “excessively affluent” inevitably is to make what amounts only to a value judgment rather than to refer to some colorably objective criterion.

(6) The “economic gluttony” ending of the above quotation reveals that its author has, if not strictly a fixed-in-size-pie view of wealth, a view in which wealth is seen to be largely independent of human creativity, effort, risk-taking, gumption, and choice.  Someone who becomes very rich is, in this view, someone who gluttonously grabbed more from the common store than is his or her due.

In short, the conception of human prosperity conveyed by the above-quoted statement is horribly, totally, and calamitously mistaken.  Yet it is a conception held by, I’m sure, at least 80 percent of the world’s population.  Sad.  And scary

Sunday, September 27, 2015

Women in Combat Units

Ray Mabus, current SecNav, has “made it clear he opposes the proposal from Marine Gen. Joseph Dunford and has recommended that women be allowed to compete for any Navy or Marine Corps combat jobs (Lolita C. Baldor, WashPost.com, September 19, 2015).” This was predictable and there is no practical value of railing against his decision. There is, however, a sound alternative to integrating women into mixed combat units.

We should form all-female combat units. The SecNav and others claim that women who meet standards are equal to the men who meet the same standards. Based on this assertion, the combat efficiency of an all-female unit should be equal to any all-male unit and any argument to the contrary would weaken their opening assumptions.

There are some very serious reasons for doing this:

·         There is an inherent protectiveness on the part of most men toward women and this could get men killed if they treat a female comrade any differently than they would a male comrade. While the frequency would be hard to predict, it is certain that this would happen at least occasionally in integrated units.

·         It is impossible in any mixed organization for attractions not to emerge between men and women and the bonding (especially if it is sexual) will be different than male-male bonding (unless this too is sexual). In addition, sexual harassment, while regrettable and criminal is pervasive in all of our society and will not be different in integrated units.

·         There is an inherent intimacy that is associated with the normal elimination of bodily waste. Men have a preference for privacy relative to other men and this is much more important for men in the presence of women and women in the presence of men. In live combat, this is near impossible.

Each of the above seriously impacts unit cohesion and unit effectiveness and all-female units are seen as the best way of addressing these concerns.

Over time, opportunities for promotion for women in combat arms would be available and increase proportionally as the number and size of all-female units increased. Further, female commanders certainly could be considered for command of company level and larger units comprised of all male platoons or a combination of male and female platoons so there would be no discrimination in the opportunities for promotion.

John R. Powers

Colonel   USMCR (ret.)