Hello mother, hello father

Here I am at Keynes-erama!

All your grasping — has me squirming –

And I’d rather keep the money that I’m earning.

Without further comment:

(Hat tip: Below the Beltway)

It’s so nice to see divided government

(Previously.)

Somewhere around the time that Pelosi’s Congress and Reid’s Senate caved in to the Bush 43 executive on an overenthusiastic FISA domestic-espionage bill, I made a few snarky comments* about how a Democratic “sweep” of the executive and legislative branches would be closer to true divided government than what we had at the time.

I thought I was joking.

• Byrd: Obama in power grab (Politico)

Sen. Robert Byrd (D-W.Va.), the longest-serving Democratic senator, is criticizing President Obama’s appointment of White House “czars” to oversee federal policy, saying these executive positions amount to a power grab by the executive branch.

Not that power grabs by the executive branch are anything new, mind.  Still, it’s a little odd to see Democratic senators complaining about Obama’s power grabs after eight years of doing nothing substantial about Bush’s.

This isn’t an isolated incident, either.  According to this next piece, Obama’s been keen on appointing a “task force” to reëxamine** Social Security and do something about its “looming shortfall” (which is a rather nice way of saying that post-Boomer generations are gonna get screwed).  But, y’see, we can’t have that:

• Democrats resisting Obama on Social Security (New York Times)

And on the subject of Presidential initiatives running into trouble from Congressional Democrats, the “mortgage relief” plan isn’t doing so well either:

• Dem spat delays mortgage relief bill in House (SFGate)

The measure, backed by President Barack Obama, is the most controversial part of a broader housing package that had been expected to pass the House this week.  It hit a snag after a group of moderates expressed concerns in a closed-door meeting of House Democrats about how the bill would affect homeowners who are still struggling to make their mortgage payments.

[...]

“There’s an equity question here,” said Rep. Ed Perlmutter, D-Colo., another member of the [business-minded New Democrat***] coalition. “The discussion has got to be, what’s the benefit to the guy next door who is struggling to pay the bills, is paying the bills and isn’t filing for bankruptcy?”

Funny, that’s what a lot of us have been wondering since Bush 43 started the bailout bonanza last fall.  Glad you finally caught up with us, Rep. Perlmutter.

Not everyone’s being so diplomatic — or sticking to such small targets:

• Dem blasts Obama’s budget (CNN Political Ticker)

Mississippi Democratic Rep. Gene Taylor blasted the budget outline President Obama submitted to Capitol Hill today, saying “I don’t like it…change is not running up even bigger deficits that George Bush did.”

I’m compelled to point out that adopting the Republican “borrow and spend” model is a bit of a change for modern Democrats, who usually operate on the “tax and spend” model, but Rep. Taylor’s point stands.

I saved the best for last (it’s a traditional thing to do for a reason).  As most of the blogosphere has already mentioned, Obama’s AG — one Eric Holder — has recently floated the idea of reinstating the astoundingly ineffectual Assault Weapons Ban.  This has not been met with unanimous approval, even among Democratic politicians.  One such politician took an unexpectedly hard line against the idea:

• Pelosi throws cold water on weapons ban (TheHill.com)

Nancy Pelosi — N a n c y.  P e l o s i. — went on:

“On that score, I think we need to enforce the laws we have right now,” Pelosi said at her weekly news conference. “I think it’s clear the Bush administration didn’t do that.”

It’s been almost two years since I last agreed this strongly with the Speaker.

Update: Looks like Harry Reid’s not too happy with a reinstated AWB either:

• Democratic leaders oppose return of “Assault Weapons” ban (The Liberty Papers)

Mataconis points out that this is a matter of politics rather than principle, but neither one of us finds that surprising.

This sort of internecine bickering almost never happens in Canada, where lockstep party loyalty is ruthlessly enforced, and that’s a damn shame.

——

* Though not on this blog

** Like that?  I’m getting pretentious with my grammar geekery

*** From a Canadian political perspective, the idea of “business-minded New Democrats” is rather a mindfuck

Mid-week misanthropy, vol. 32

(Special power-of-two edition!)

——

One of my standard complaints about government-provided services is that government doesn’t — and can’t — know what’s best for people better than the people themselves.  Consider nutrition guidelines, for example: milk is (generally speaking) plenty healthy, but if you’re lactose-intolerant it does you no good to be told to drink more milk by a well-meaning and highly-trained government-employed expert.

Oops, sorry: slip of the fingers, there.  I wrote “well-meaning and highly-trained expert” when I meant to write “lobbyist”.

• Kids’ nutrition choices made by lobbyists, not doctors (The Liberty Papers)

Brian Warbiany explains how it works:

Americans idealize government. We act as if it’s populated by well-meaning experts, who want nothing more than to provide humanity with their expertise and are looking out for us. We view them as able to integrate the demands of a wide-ranging polity into optimum policy, using their judgement and experience to improve life for all. Even more, we think they care about us.

The reality, on the other hand, is that government is a job. You do your job to satisfy your customers, which in politics is more often lobbyists than the general public. Why is dairy such a high component of WIC? Because the dairy lobby is enormous. Why did carrots — rather than broccoli, or asparagus, or cauliflower — get such favor? Because the carrot lobby, as strange as it may seem, is powerful. Seriously… CARROT LOBBY! If those two words placed in that order don’t disgust people about the arbitrary and capricious nature of government decision-making, you need to wake up.

The first step to mentally breaking with the government is to understand that government bureaucrats have their own interests — not yours — at heart. [...] We understand in most commercial situations that we need to look out for ourselves, but then assume that the government is “looking out for us” in all others. When you assume the best about government bureaucrats, it blinds you to the fact that you’re giving these people coercive power and you can’t be sure that they’re going to use it in your interests.

Yeah, that’s pretty much the Mk. 1 mod 0 standard-issue libertarian rant, but that doesn’t make it wrong.

——

Some readers may remember the saga of The Complete Angler in Clearwater, FL, whose mural of a fish was deemed to be a billboard-without-permit and therefore a gateway to public pornography.  The owner covered up the offending mural with a (large) copy of the First Amendment.  Well, that’s not going so well either:

• ACLU backs Florida bait shop ticketed for displaying US Constitution (ABA Journal)

The city maintains that they’re doing the right thing.  At this point, though, it’s fairly obvious that they got caught rent-seeking and don’t want to admit that they’re wrong.  Perhaps they have OJ Simposon and Rod Blagojevich as role models?

——

Of course, when government confronts citizens, it’s not always the forces of government who’re infested with the dumbworms:

• Shut up, college: The painfully ridiculous end to the NYU revolution (Gawker)

“You may not come in here. This is student’s free space,” says the cameraman, as a security guard pulls apart the flimsy barricade that the administration had chosen to leave in place for the past two days. As soon as the guard sets foot in the food court: “Excuse me, brutality here. You are on camera…Do not use brutality. You may not detain us, you are on camera!” This, as two security guard were moving away from him.

I’m fascinated by this guy’s apparent conviction that his camera is a magic talisman against authority.  I’m also laughing my fool ass off.

(There’s video at the link.  I’d suggest you treat it as you might one of H.P. Lovecraft’s notional monographs, as it has enough eldritch idiocy from beyond the stars to destroy your mind utterly.)

——

And speaking of magical thinking:

• Rename law?  No wisecrack is left behind. (New York Times)

WASHINGTON — Two years ago, an effort to fix No Child Left Behind, the main federal law on public schools, provoked a grueling slugfest in Congress, leading Representative George Miller, Democrat of California, to say the law had become “the most negative brand in America.”

Y’know, something’s wrong when you start to think about legislation purely in terms of branding.  But let’s continue:

Education Secretary Arne Duncan agrees. “Let’s rebrand it,” he said in an interview. “Give it a new name.”

Of all the things to fix in NCLB, its name is far from the top of my list.

Naturally, other people feel the same:

But a lot of wise guys have gotten in on the act too, with suggestions like the All American Children Are Above Average Act. Alternatives are popping up every day on the Eduwonk.com blog, where Andrew Rotherham, a former Clinton administration official, is sponsoring a rename-the-law contest.  One entry, alluding to the bank bailout program, suggests that it be called the Mental Asset Recovery Plan. Another proposal: the Act to Help Children Read Gooder.

I suppose “No School Left Standing” wouldn’t promote the right brand associations, would it, Miller?

(Hat tip: Below the Beltway)

The value of a house

Well, after hinting in comments that I have an opinion about housing prices (and I realize that’s a massive shock to my readers), I can’t very well not write about it, now can I?

When we last left our intrepid glib dilettante, he was ranting about people whose pricing model is independent of customers: price = overhead + profit.  (He wasn’t writing in the third person when we left him, but this is his blog and he can change narrative voice when he pleases.)  We learned — from the example of an e-b0ok reader — that we can better model prices as being set by the seller’s idea of what their customers will pay, and that this annoys people who feel they shouldn’t have to pay that price*.

House prices (real estate prices in general, really) are an interesting example of where this happy fantasy model breaks so spectacularly that just about everyone’s forced to put it back on the shelf — temporarily, at least.  If I’m looking to buy a house, there’s no way I can get away with the “overhead + profit”  model.  The houses I’m looking at are priced largely by the location of the real estate they occupy, the value of which is massively external to anything that’s gone into the house itself.  If the house is near a highly-decorated school and a beautiful park**, it’s likely to be expensive.  If the house is in Detroit, it’s likely to be cheaper than a new pair of boots.  I decide what I’m willing to pay for a house, what features I want and what I can live without, and I examine my options.  (This is in fact what I do every time I buy something, but when buying houses it’s made particularly explicit.)  I’m not going to start complaining that the house for which I’m making an offer was far cheaper to build than the seller’s asking price if it’s in a really nice part of town.

On the other hand, once I’ve bought the house I’m free to be an ignorant dipshit again.

Y’see, now that I’ve bought a house — which counts as an investment, natch, because real estate only ever goes up — I have a good idea of “overhead”: overhead is what I paid for the house.  I can go back to my overhead+profit pricing model, since all the external factors are neatly tied up in the big number labeled “principal” on my mortgage.  The “value” of my house, under this model, is what I paid for it plus a modest profit.  Therefore, if I put in granite countertops and stainless steel appliances and paint the bathroom and build a deck, I can remain morally certain that the value of my house is going up — never mind the fact that when I was buying the house, I didn’t give even half a fuck about how much the seller paid for it.

Now, a funny thing happens: the housing bubble implodes.

• The renter/owner divide (Megan McArdle)

I think that most of the people supporting the mortgage plan really do feel like falling home prices is an obvious catastrophe.  I also think that most of them own homes.  Because, of course, if prices stay high, where is the money coming from to support them?  Well, from people like me, who do not currently have a home to sell, but would like to acquire one in the not-terribly distant future.  Keeping people and banks from selling at a loss requires that I buy a house which is overpriced.  With the exception of Detroit, all 10 cities broken out by the Case/Shiller house price index show that as of December, home prices were still at least 15% higher than they were in January 2000; their 20-city composite index was still up over 50%.

(I’d considered ranting about Obama’s mortgage plan, but other people who’re better at this sort of thing than I am did it sooner and more eloquently — hit those “economics” links on the sidebar for some examples.)

Since the housing market — in good times and in bad — is so critically dependent upon the prices people are willing to pay, this bit should come as no great surprise:

One of the things that I think is badly understood is that the government cannot do much to prevent house prices from falling.

That’s not quite true — the government did a spectacular (if temporary) job of keeping the housing bubble inflated — but in this case it’s plenty good enough.  Staving off foreclosures and giving people your money and mine so that they can keep paying their mortgages will allow homeowners looking to sell to list their houses way above what people will pay for a little bit longer, but it won’t change the fact that buyers are no longer willing simply to plunk down half a mil on a cookie-cutter house in the suburbs.

The fact that [foreclosing banks] can’t get much reflects the fact that the areas with the most foreclosures are the areas with the most marginal buyers–i.e., the areas with the most marginal demand.  Real estate declines are lumpy; the houses with the best locations hold much of their value, while the places on the fringes, the exurbs and the gentrifying neighborhoods, plummet.

[...]

Playing with mortgage terms cannot prop up prices, because it cannot create more homebuyers, nor convince them to pay more than they want for a house.

To put it another way:  if the current occupants cannot afford their house at anything close to the price they paid for it, the chances are that no one else can, either.

Particularly if our wealth is being redistributed to cover for those who got in over their heads on mortgages and credit default swaps.

——

* They are of course free to not pay that price.  Since we’re talking about Kindles, not taxes, no-one from a three letter agency is going to kick in your door and shoot your dog if you refuse to shell out for one.  But these people still want whatever it is they’re unwilling to pay for, so they whine about it on the internet.

** And likely at least three Starbucks locations, one of which will inevitably be inside a bookstore.

The cost of a Kindle

(I’m dead certain that I’ve ranted about this before, but I can’t find it.)

People have a pretty strong intuitive model for how prices are set:

Price = Cost of materials + Cost of labour + Fraction of overhead + Modest profit

As a model, it works pretty well most of the time — most prices end up somewhere around what you’d expect from this simple formula.  Here’s a better one, though:

Price = What the seller thinks customers will pay

Profit = Price – (Cost of materials + Cost of labour + Fraction of overhead)

(This is how, for example, GM and Toyota can sell the same number of cars — Toyota at a significant profit, GM at a huge loss.)

The first model is nice and simple (we don’t have to model the thought processes of someone trying to model our thought processes, for example) and it lends itself to fairy-tale thinking (higher-than-expected prices must be a result of some evil greedy guy jacking up “Modest profit” into “Monstrous profit”).  The latter point makes it particularly attractive: people in general love telling stories, and fairy tales make for much more compelling stories than extended networks of hypotheticals about market characteristics and demand curves.

Note in particular that in the first model, prices are buyer-independent: they’re set by external costs and whatever the modeler thinks constitutes an appropriately modest profit.  In the second model, however, prices are highly dependent upon the individual buyers: they’re set by a feedback loop between the seller’s mental model of customers and actual customer behaviour.

This is where Coyote Blog comes in:

• Price and Value

I was perusing a number of “reviews” of the Kindle 2 today.  Pre-release reviews can have a really wide spread, as they tend to be populated either by insiders who are trying to promote the product, or by folks who haven’t used the product but have some problem with its basic concept (or manufacturer) they want to vent on.  Which makes pre-release reviews worthless.

One such person in the second category is “Bohemian,” who seems to want to vent on Kindle because it is not open source, DRM-free, etc.  He is also upset that it does not have built-in solar power, lol.  But the line that really caught my eye is this one:

Overpriced – should be around $100

That is hilarious to me.  The Kindle has been absolutely sold out (at the current price of $300-$400) for months and months.  There is a waiting list, particularly since Oprah recommend it.  So how is the price too high?  My take on it would be the price is too low, since even at $359 demand is exceeding supply.

This is a common mistake by people across the political spectrum — mistaking one’s own personal assessment of value with what a price “should” be.  The correct statement for this review would have been “I would not pay more than $100 for this product.”  And in a free society, he doesn’t have to buy it.  But obviously there are a lot of people, in fact more people than Amazon can currently satisfy, who think the Kindle is worth at least $359.

Now, I don’t give a shit about the Kindle — you’d have to pay me to use a Kindle, simply because I could use the time it’d take to set it up to do something I’d enjoy more.  At the same time, I agree that the Kindle is underpriced at $359, for precisely the reasons mentioned above.

I wish we could get smarter about this sort of thing.

Miscellaneous Monday motorsports mumblings, vol. 8

It’s looking more and more like an 18-car season:

• Honda: Various offers but no serious buyers (Planet-F1)

Seriously: once the rumour mill got around to fingering Virgin*, I wrote the whole thing off as a farce.  I suppose there’s nothing too implausible about Richard Branson buying a Formula One team — seems like he has one of everything else — but at this point it just seems like desperation on the part of the fans: “Who has lots of money and might want to buy Honda F1?  Carlos Slim?  No… I got it!  Richard Branson!“

Given Honda’s recent performance in F1, I’m not surprised that they’re having trouble finding a buyer.  I imagine they’ll go a couple years on the sidelines, then either start again with a clean slate or buy STR or USF1.

——

Speaking of Formula One and starting from scratch, here’s a pretty decent article on the new aero rules:

• Visualising the aerodynamic rules of 2009 (F1 Technical)

Unfortunately, they sell the story with a nifty colour-plot CFD image, but the article itself is all about the geometric regulations rather than their effects.  My inner aero nerd is sorely disappointed.

——

In tin-top news, the Le Mans Series roster from Planet Le Mans looks decidedly odd this year:

• The Le Mans Series Entry List (so far…)

No, it’s not the lack of a factory Audi presence in LMP1 (from what Audi Motorsport have said, they’ve only committed to Sebring and Le Mans itself).  Look at the GT2 list: only two Porsches! There are more Aston Martin entries than there are 997s.  That’s a sign of the End Times, I’m sure of it.

——

In “actual racing” (rather than “speculative racing”) news, I watched bits and pieces of the Auto Club 500 yesterday, and while circle-track racing is starting to make more sense to me I’m still a bit confused.  For one thing, it seemed like a lot of drivers ran very high lines off the apexes.  Yeah, I know, “go where the grip is” and all that, but the drivers who went where their grip was tended to get passed — a lot — by the drivers who ran a better geometric line and consequently carried a lot more speed out of the corners.  Why doesn’t everyone do that?

I’m still rather shocked by the way everyone tolerates 20-minute rain delays to blow-dry a few sprinkles off of one end of the track rather than insisting that the drivers put on their big boy pants and pit for wets.  Is this a budget issue, such that the tire suppliers don’t have to develop intermediate- and wet-pattern tires, or what?

——

* Sorry, couldn’t resist

Journalism and the profit motive

(Previously.)

Journalism is sort of like medicine in that — in popular myth, at least — its practitioners are expected to be motivated by idealism rather than by self-interest.  We react with horrified dismay when someone like Jayson Blair gets caught falsifying his stories.  By and large, we trust journalists*, and when one of them is revealed to be untrustworthy we react rather badly.

Similarly, we don’t take very well to the idea that journalists might be motivated by profit (rather than, as above, glory).  For example:

• Greed is not a defence (Matt Yglesias)

Yglesias takes issue with Ezra Klein’s defence of The Politico — which amounts to “Sure it’s shallow, but there’s a big market for shallow and you can’t blame them for trying to fill it”.  In response, Yglesias writes:

This is true, but it seems more like a rationalization for bad behavior than a reason to do it. These are hard times for the journalism business, but that doesn’t mean that people in the media should stop holding each other to any kind of reasonable standards of quality and responsibility. I don’t think the existence of a market economy should be seen as giving everyone ethical carte blanche to totally ignore the welfare of their fellow citizens when going about their business.

Rather than a rationalization, I’d accept it as an explanation.  (The word “reason” in the above is ambiguous: it can be read as “objective cause” or as “moral justification”.)  And of course the profit motive isn’t a moral justification for vomiting forth the political equivalent of daytime TV.  The folks at Politico are well within their rights to do so, but having the right to do something doesn’t mean you’re not an asshole for doing it.

Regardless, the profit motive in private journalism has always been around, and it’s not going away any time soon.  It affects journalists — like anyone else — to varying degrees, along with the usual assortment of other motives (altruism, pride, shame, and so on).  By this point, no-one should seriously expect to find an utterly unbiased and completely impartial reporter: we know that, for example, Sean Hannity falls off one side of the fence, and that Chris Matthews falls off the other.  Why are we shocked (shocked!) to discover that journos respond just as strongly to motives like “having a job” (uh, sorry: “greed”)?

It seems to me that the problem isn’t profit-motivated journalists, but rather our expectation — as consumers of journalism — that they ought to be steadfastly unswayed by the filthy lucre.

——

* Stop snickering!  If you read that Wikipedia article, you’ll find out that it’s based on… wait for it… news media citations.  We can look for independent verification and broader perspectives all we want, but at some basic level we have to be willing to take a bunch of journos pretty much at their words.

Mid-week misanthropy, vol. 31

Q: What’s the difference between Britain and Zimbabwe?

A: Smaller than yesterday.

• Bank of England gives full support to printing money (Guardian.co.uk)

Policymakers at the Bank of England voted unanimously earlier this month to start the process of quantitative easing by buying gilts and other securities.

[...]

Quantitative easing is what non-economists call “turning on the printing press” – the authorities buy up bonds either from banks or from the commercial sector to boost the supply of money in the economy.

Well, sort of.  Here’s a quick video on quantitative easing from Greg Mankiw’s blog (which is really rather depressing in hindsight) — in theory, quantitative easing is slightly more principled than simply printing a bunch of money and throwing it out of a helicopter.  It is, however, just as inflationary.

——

Speaking of Britain and Zimbabwe:

• $250B hotel tip worthless in Britain (UPI)

Can you see this coming?

Employees at a British hotel said they were ecstatic to receive a $250 billion tip — until they discovered the money was Zimbabwean and worthless in Britain.

Heh.  Was this before or after they dropped 12 zeroes from the currency?

——

And on the subject of paper that’s damn near worthless:

• New York Times’ share price less than Sunday newspaper price (Crossing Wall Street)

Shares of NYT (NYT) dropped 29 cents today to close at $3.77. The Sunday paper goes for $4 at the newsstand.

That’s gotta suck.

——

Let’s give the poor Grey Lady some ad hits with this next story:

• Student expectations seen as causing grade disputes (New York Times)

A recent study by researchers at the University of California, Irvine, found that a third of students surveyed said that they expected B’s just for attending lectures, and 40 percent said they deserved a B for completing the required reading.

(They expected B’s what just for attending lectures?  Oh, never mind.  All Max Roosevelt does is write for a living — why should he be expected to be able to distinguish possessives from plurals?)

I have a few epic rants brewing about the state of post-secondary education, but for now I’ll stick to this bit:

“I think putting in a lot of effort should merit a high grade,” [Jason Greenwood, a senior kinesiology major at the University of Maryland] said. “What else is there really than the effort that you put in?”

“If you put in all the effort you have and get a C, what is the point?” he added. “If someone goes to every class and reads every chapter in the book and does everything the teacher asks of them and more, then they should be getting an A like their effort deserves. If your maximum effort can only be average in a teacher’s mind, then something is wrong.”

Alas, this is magical thinking.  Go to class, do the reading, do the homework, get an A.  “Putting in the effort” becomes the spell you have to cast in order to get an A — but here in real life it’s just a means to the end.  What’s missing here?  Understanding. If you’re a kinesiology student, say, who puts in “maximum effort” but still can’t tell flexion from extension, you don’t get an A.  If you’re an engineering major who puts in “maximum effort” but still can’t solve PDEs, or a Comp. Sci. major who puts in “maximum effort” but still can’t write code, you’re likely to be very frustrated but you still don’t get an A. That “maximum effort” is a means toward the end of understanding, not an end in itself.

Conversely, if you manage to grok linear algebra the first time around, master your assignments, and ace your exams — you get an A regardless of how much you have or haven’t suffered to achieve that level of understanding.

The grade you get when you exit a course is a rough indicator of how well you’ve mastered the material.  It has nothing to do — at least not directly — with how much effort you put in.

——

And finally:

• Yes, Virginia, there is a magenta (Ars Technica)

This whole kerfuffle started with this post:

• Magenta ain’t a colour (biotele.com)

…which probably ought to be titled “Magenta ain’t a wavelength”.  (Yeah, sine functions?  It turns out you can add them together.)  This was well-explained in the biotele.com post, but got conveniently dropped from the ZOMG magenta is a lie! bullshit slopping around this series of tubes.  Ars Tech lays down some smack and gives the CIE colour space a mention as well.