Archive for September, 2009



23
Sep
09

Canadian delegation walks out on Ahmadinejad at UN

-blink-

That’s funny.  I just felt — no, it can’t be a hangover, it’s too late in the day for that.  It’s hard to describe.  I don’t think I’ve felt this way in a long time, if ever.

Holy shit.

I’m proud of my government.

From the second article:

The U.S. delegation that walked out later described the speech as “hateful, offensive, anti-Semetic rhetoric.”

The Canadian delegation, led by Foreign Minister Lawrence Cannon, said in advance it would walk out of the chamber before Mr. Ahmadinejad began talking.

And, from the first, which prompted the walkout:

“President Ahmadinejad has said things particularly about the state of Israel, the Jewish people and the Holocaust that are absolutely repugnant. It is unfitting that somebody like that would be giving those kinds of remarks before the United Nations General Assembly,” the Prime Minister said.

“Canada does not want to be equivocal at all in terms of our view on that. We find it disgraceful, unacceptable and we’re going to be absolutely clear on that.”

(Well, given the UN’s track record, it’s entirely fitting that “somebody like that would be &c.“, but let’s not quibble.)

Well done, Mr. Harper.  (There’s a sentence that doesn’t get much exercise around here.)

23
Sep
09

Mid-week misanthropy, vol. 49

Holy shit; I’ve been writing these for a long time.

——

I’ve written a couple times (here and here) about the “little” risks of big government.  Most moderate statists, when confronted with a liberal* suspicion of centralized authority, argue against an Orwellian straw-man: if I’m suspicious of surveillance cameras, it must be because I really honestly believe that there’s a short and slippery slope from talking cameras on lamp-posts to telescreens in every room.  That’s the “big” risk of big government: systemic totalitarianism.  It’s also rather unlikely.

The “little” risk, however, is trusted agents abusing and exploiting their position.  This isn’t about vast tyrannical conspiracies or goose-stepping legions of jackbooted enforcers — it only takes one person to seriously fuck you up when that person has access to the tools of government.  And it’s not usually a demagogic leader, but a clerk.

Pretty much what it says on the tin:

Two Canada Revenue Agency bureaucrats siphoned hundreds of thousands of dollars from Ottawa’s coffers by filing fraudulent tax returns and diverting refunds and related benefit payments to their personal bank accounts.

“[F]rom Ottawa’s coffers”, hmm?  Where do you suppose Ottawa got that money in the first place?

You betcha.

Now, given that Ottawa’s money inevitably derives from the people it purports to represent, they immediately made the fraud public once the investigation concluded, didn’t they?  After all, if you can’t trust the taxman, who can you trust?

The tax collection agency, which uncovered the fraud in 2008, kept news of it from going public for more than a year, until the facts were released through a request under access-to-information law.

That’s special.  Well, this was an internal matter, right?  I mean, it’s not like these two crooks could have, I dunno, stolen anyone’s Social Insurance Number or anything, is it?

The two facilitated this by snooping through taxpayer records – using invasive database searches that, among other things, grant access to Canadians’ social insurance numbers.  It was heavy use of some searches that caught the eye of investigators.

fuck!

Well, surely these fraudsters are safely behind bars and well away from this invasive database?

On Wednesday, the Canada Revenue Agency refused to name the fraudsters or reveal whether they were fired or charged and convicted, saying that to identify them would violate privacy law.

Oh.  Well, I guess privacy for fraudulent tax agents is more important than privacy for thirty million tax-paying Canadians.

“Little” risks aren’t “negligible” risks.

——

Now on to the topic of mitigating “little” risks.  First we have these stories, both from the CBC, concerning police departments investigating themselves:

From the first, we find this:

A senior B.C. Mountie says police in the province should not investigate themselves anymore because the public no longer believes they are doing a good job.

“We are not perceived publicly to be able to investigate ourselves. The perception and the reporting that occurs is unwinnable,” RCMP Supt. Wayne Rideout told the Braidwood Inquiry, which resumed Tuesday its probe into the 2007 death of Robert Dziekanski at Vancouver airport.

From the second:

RCMP Supt. Bill McKinnon said the new civilian lead agency is needed to restore public confidence in police in the province following several controversial investigations of police-involved deaths, including that of Robert Dziekanski in Vancouver and Ian Bush in Houston, in the northern Interior.

I’m a bit annoyed by the hedging here — the problem isn’t merely public perception of corruption when the RCMP investigates itself and says “Yeah, we’re cool”, but the blatantly obvious incentive for bias when a police force polices itself.  But given that the Braidwood Inquiry hasn’t yet concluded, I suppose we ought to give the horsie cops in question the benefit of the doubt.

In any case, a little separation of power seems like a good idea.

——

While I’m on the subject of abuse of government authority… anyone remember Wally Oppal?  He’s the slimy scumfuck former Attorney General who tried to rig the last provincial election and tried to shield his prosecutors from criminal incompetence.  Well, he was also in the business of shopping around for prosecutors: when two of them refused to press charges against a guy he didn’t like, he found a third who would.

That situation has been cleared up, largely because Oppal’s prosecutor-shopping bit him right in the ass.

A B.C. court has thrown out polygamy charges against two religious leaders, ruling former B.C. attorney general Wally Oppal was wrong to ask a third special prosecutor to take the case after the first two prosecutors decided the men should not be charged.

Sometimes the good guys do win.

Polygamy tends to get talked about only when it also involves pædophilia, which of course makes it difficult to discuss rationally.  The accused polygamists in Bountiful don’t seem to have been fucking any kids, which leaves me somewhat perplexed by precisely why the government feels the need to fuck with them.  Look: I’m not gonna tell people they can’t get married because they’re gay, and for the same reason I’m not gonna tell people that they can’t get married in parallel rather than in series.  It’s none of my business, and it’s none of the government’s business.

That article also provides some comic relief near the end:

Special prosecutors are used in B.C. to replace regular Crown counsel in politically sensitive cases, to avoid the possibility of political interference.

(Emphasis added.)

That worked pretty well for ya, didn’t it?

——

Finally, some schadenfreude: batshit-insane wingnut extraordinaire Orly Taitz discovers the internet.  YA RLY.**

Straight from the owl’s beak**:

I added Google Adsense adds to this blog in order to get some advertising dollars, which would help me cover the expenses of Obama eligibility law suits. Amazingly, the very first add that appeared, was an add from Obama’s website “Fight the smears”, saying that he was born in HI, don’t believe the lies.

NO WAI!**

Can you believe it? Do you think it’s random?

Let me explain how Google AdSense works, sweetheart: it, in Google’s own words, “[o]ffers a contextual advertising solution to web publishers”.  The key word here is “contextual”.  You spend your whole blog ranting about Obama’s birthplace, and guess what it’s going to find for you?  Ads about Obama’s birthplace!

Unbefuckinglievable.

——

* I’m gonna keep using that word properly until the rest of the world gets it.  Windmills Giants in sight: charge!

** Sorry; couldn’t help it.

22
Sep
09

Quote of the day^Wdecade

I’m not a big fan of “quote of the day” or “lookit the stupid search term” posts — they feel just a little too easy, and hence don’t give me the sort of accomplishment rush that I really ought to be getting from writing a paper abstract today.  But since this one’s had me giggling helplessly for the last twenty minutes, and it involves mocking the current Dear Leader of the Liberal* Party of Canada, I’m happy to make an exception:

The Grits only have 77 seats, and about 45 of them would be safe even if videotape emerged of Michael Ignatieff dousing a family in lighter fluid, setting them on fire, and raping the charred, smoking remains. His vote would probably go up in the Greater Toronto Area under those circumstances. On the other hand, that would likely alienate the Pickton vote in British Columbia, so it could be a wash.

Postcards of the Hanging:Just Liberals Being Liberals

The whole article’s like that.  RTWT.

——

* Note the capital ell.  The LPC calling themselves Liberals is much the same as McDonalds listing “100% Real Beeftm” as a burger-patty ingredient.

22
Sep
09

Perverse incentives in protectionism

The basic tenet of protectionism is that poor people are better off when they’re forced to buy overpriced domestically-produced goods in favour of cheaper foreign goods.  This is, of course, not true: it’s only well-connected domestic interests — corporations and labour unions — that benefit from protectionism in their part of the market.   However, every once in a while, even they end up wasting money:

(Hat tip: Greg Mankiw.)

Here’s what’s going on: Ford builds Transit Connect cargo vans in Turkey.  Ford ships these vans from Turkey to the United States.  Then:

[The vans'] windows, never squeegeed at a gas station, and seats, never touched by human backsides, are promptly ripped out.  The fabric is shredded, the steel parts are broken down, and everything is sent off along with the glass to be recycled.

Well, that’s stupid, you might point out.  Why does Ford build its Turkish vans with side windows and rear seats if they’re going to end up hauling cargo?

Because importing a cargo van from Turkey — from Europe in general — incurs a 25% tariff, while importing a “wagon” incurs only a 2.5% fee.  And all this goes back to a bout of protectionist dick-slapping from the ’60s:

In the early 1960s, Europe put high tariffs on imported chicken, taking aim at rising U.S. sales to West Germany. President Johnson retaliated in 1963, in part by targeting German-made Volkswagens with a tax on imports of foreign-made trucks and commercial vans.The 1960s went the way of love beads and sitar records, but the chicken tax never died. Europe still has a tariff on imports of U.S. chicken, and the U.S. still hits delivery vans imported from overseas with a 25% tariff. American companies have to pay, too, which puts Ford in the weird position of circumventing U.S. trade rules that for years have protected U.S. auto makers’ market for trucks.

I just don’t get it.  “Europe” starts off by telling the United States: “We’re so angry at you, we’ll force our people to pay more for chicken!”  And Johnson fires back with: “Oh yeah? Well I’m going to force my people to pay more for trucks! So there!

This is what passes for reasoned discourse in the halls of government.

So the end result — at least in this facet of the market — is that a bunch of Turks still have jobs building trucks, but Ford Turkey has higher overhead from the extra glass and seats it’s forced to buy and install.  A bunch of Americans can still buy Ford Transit Connect cargo vans at lower prices than they’d otherwise be able to, but they still have to pay higher prices than they might if LBJ had been a bit less insecure about the size of his penis trade deficit.  And a bunch of recycling depots that would otherwise be able to process Cash for Clunkers casualties have to deal with Ford’s utterly useless shredded broken-down upholstery.

Super.

21
Sep
09

Miscellaneous Monday motorsports mumblings, vol. 21

Lotus is coming back to Formula One.

Let me repeat that.

LOTUS IS COMING BACK TO FORMULA ONE.

Yeah, I’m excited.

There’s some interesting political wrangling going on behind the scenes, too:

Although the Lotus team is based in Norfolk, it is funded by a partnership between the Malaysian Government and a consortium of Malaysian entrepreneurs, spearheaded by team principal Tony Fernandes, who is the founder and CEO of the Malaysian-based Tune Group, owner of the Air Asia airline.

[...]

Mike Gascoyne also returns to F1 as the team’s technical director, with 20 years experience in the sport after working with Jordan, Renault, Toyota, and most recently Force India.

The team will use the RTN facility in Norfolk, which was built by Toyota for its initial Formula One programme and then used by Bentley for its successful Le Mans programme. However, the team’s future design, research and development, manufacturing and technical centre will be purpose built at Malaysia’s Sepang International Circuit.

2010 looks like it’ll be an interesting season.

——

Meanwhile, after BMW dropped their F1 team in what I can only account for as a fit of pique, an enigmatic Swiss foundation has picked it up:

That’s rather a relief — I’m glad we won’t have to wade through the sort of bullshit that surrounded Honda’s F1 team eventually turning into BrawnGP.

——

While I’m at it, here’s some nerd candy on F1 engines.

20
Sep
09

Sunday night sports-cars: Bentley Speed 8

Bentley-speed-8

If I were to mention successful British marques at the 24 Heures du Mans endurance race, you might think of Aston Martin and Jaguar.  You’d be right to do so: those nameplates have graced some legendary Le Mans winners, and the former has recently returned to contest the overall win with a trio of cars bearing equally-legendary Gulf liveries.  But the most recent British car to take an overall victory at Le Mans was neither an Aston nor a Jag: it was a Bentley Speed 8 in 2003, and it wore British Racing Green rather than Gulf blue or Silk Cut purple.

Bentley’s run at the 2003 Le Mans win started in 2001 with the EXP Speed 8, a closed-top prototype in an era of open-top cars.  Designed by RTN, the same company that produced Audi’s closed-top R8C prototype and powered by an Audi V8, the 2001 car finished 3rd at Le Mans in the hands of Andy Wallace, Eric van de Poele, and Butch Leitzinger.  The next year, Bentley gave the car a more efficient rear wing and a V8 engine of their own, and the same team of drivers took the car to a 4th overall.

For 2003, the team started over with a clean sheet of paper.  Carrying over the same twin-turbo V8 but little else, the 2003 Bentley Speed 8 found nearly a third more downforce in high-speed corners, including 75% more aero grip at the front of the car.  Partly this was due to the very tightly faired front suspension, limiting the amount of air passing over the front of the car and thus the bodywork’s tendency to act like an airfoil.  2003 ACO regulations insisted that suspension components be obscured by bodywork from the front, side, and top, but they said nothing about separate fairings for the top A-arms.

Bentley-BC15

Running a high-downforce “sprint” package, the Speed 8s finished 3rd and 4th at the 2003 12 Hours of Sebring.  Later that year at Le Mans, Rinaldo Capello, Tom Kristensen, and Guy Smith drove the #7 Bentley Speed 8 to an overall win in the 24 Heures du Mans, with Johnny Herbert, David Brabham, and Mark Blundell taking second overall in the #8 sister car.

Bently-7-at-le-mansImage link goes to Racing Sports Cars gallery.

Compare the deep endplates on the #7 car’s rear wing to the much smaller endplates on the #8 car in the first photo.  We tend to think of two cars of the same model as being identical, but the two 2003 Speed 8s were different enough to prefer different rear wing aero.

It seems odd, particularly in light of visually idiosyncratic cars like the Audi R15, to think that one of the biggest design criteria for the Speed 8 was that it look pretty — but it’s true.  According to the Speed 8’s designer, Peter Elleray, the Speed 8’s closed-top design was at least partly motivated by aesthetic concerns, and the folks at Bentley who were paying the bills “were always very pleased to hear that we were considered to have the best looking car.”  Considering that Bentley is a luxury brand that sells an image as much as it does a product, one cannot remain surprised.

2003 was the last year for the Bentley LMGTP programme.  Once the Speed 8s were mothballed, Audi’s open-topped prototypes — first (and again) the gas-burning R8, then the diesel-powered R10 — dominated Le Mans in particular (and sports-car racing in general) until 2009, when a closed-top Peugeot 908 took the win at the 24 Heures du Mans… again after three years of development.

——

References:

20
Sep
09

Iconoclasm from another blog

Well, since I linked to a bunch of Offsetting Behaviour articles the other day, I might as well link to a bunch of Marginal Revolution articles this afternoon.

(Hat tip: Marginal Revolution)

Let’s start with the premise:

Soon forthcoming in the top-ranked Quarterly Journal of Economics is a very well- received paper by four economists with convincing evidence of what many believe was the primary cause of the subprime boom and bust: That securitization took away the incentive for lenders to properly vet borrowers.

But there’s some new evidence questioning the paper’s findings.

That first assertion, if I’m getting this right, states that since a bunch of players on the secondary mortgage market were buying up loans (and securitized, tranched, risk-reduced, folded-spindled-and-mutilated loans at that), so loan agencies (“originators”, in the terms of the TNR article) would game the secondary market — they were more interested in selling off their debt than in making sure that it was good.

The claim here is that originators would classify borrowers by the credit-score heuristics used by the secondary market.  If Alice came into the First National Bank of Matt with a FICO score of 621, her mortgage would light up the “above 620, probably good” heuristic and the FNBM, knowing that Fannie Mae or someone would blithely buy it up, would simply rubber-stamp the application.  If Bob brought his 619 FICO into the FNBM, however, we’d want to do a much more assiduous job of vetting Bob and his capacity to repay the damn loan: Fannie Mae wouldn’t just jump on Bob’s mortgage the way they would Alice’s.

The upshot is that securitization, and its loose standards for mortgage quality, gave originators a great big hairy incentive to accept an assload of mortgages they really shouldn’t have, thus leading to boom and bust.  If only mortgages hadn’t been securitized, the theory goes, banks would have applied their usual level of critical analysis to all of their loans and poor people wouldn’t have been able to buy houses the evil greedy fat-cat investment bankers wouldn’t have crashed the economy.

Turns out this isn’t so obvious.

In a new paper, two Harvard PhD candidates — Ryan Bubb and Alex Kaufman — take an academic swipe at the big boys and point out the following: Although there is a big jump in mortgages at the 620 credit score, there isn’t a commensurate jump in mortgages that get securitized at that score.

[...]

This suggests that securitizers weren’t relying on the rule of thumb en masse; rather, it was the originators who were relying on it.

This suggests, in other words, that the originator banks weren’t modeling the securitizers’  behaviour when they rubber-stamped Alice’s application and gave Bob the third degree: they were genuinely persuaded themselves that a 621 FICO was just that much better than a 619.  The securitizers, on the other hand, saw a 621 and a 619 about the same way.  (So what happened to the non-securitized mortgages that passed the originators’ heuristics with a 621?)

That isn’t to say a decline in lending standards didn’t happen, just that securitization might not be to blame for it. (There is other research making this point.)

The last time I dug into this stuff, it seemed like the social-engineering regulatory structure surrounding the rating agencies from which these securities were built was a major cause of the decline in lending standards.  I’m not talking about borrowers getting 630 FICOs when they deserve 490s, here, but blocks of mortgages getting AAA ratings when they deserve Bs.  If that’s the case, then surely securitization’s involved somewhere in the decline of lending standards, no?

(This is probably about where my glib dilettantism drops off the cliff of usefulness and a real economist should take over.)

——

Next we have a short book review:

Why does this count as iconoclasm?

Market data do not, upon examination, show a close connection between risk and return, at least not once you start moving out on the risk spectrum beyond T-Bills and the like.  It’s not just the famous Fama and French papers, it is worse than you think.

That may be old news to trained economists, but it’s ground-up sacred-cowburger to me.  (And sacred cows make the best hamburger.)

——

Finally, Greg Mankiw barbecues the notion that preventative care is necessarily cheaper:

(Hat tip: Guess who.)

Mankiw proposes a seemingly absurd thought experiment:

Imagine that someone invented a pill even better than the one I take. Let’s call it the Dorian Gray pill, after the Oscar Wilde character. Every day that you take the Dorian Gray, you will not die, get sick, or even age. Absolutely guaranteed. The catch? A year’s supply costs $150,000.

Anyone who is able to afford this new treatment can live forever. Certainly, Bill Gates can afford it. Most likely, thousands of upper-income Americans would gladly shell out $150,000 a year for immortality.

Most Americans, however, would not be so lucky. Because the price of these new pills well exceeds average income, it would be impossible to provide them for everyone, even if all the economy’s resources were devoted to producing Dorian Gray tablets.

So here is the hard question: How should we, as a society, decide who gets the benefits of this medical breakthrough? Are we going to be health care egalitarians and try to prohibit Bill Gates from using his wealth to outlive Joe Sixpack? Or are we going to learn to live (and die) with vast differences in health outcomes?

(We should recall that thought experiments are meant to explore absurd limit cases.)  The obvious answer — obvious if you’ve been paying attention at all to what I’ve written in the past — is that we “as a society” have no business telling anyone how they should spend their money on themselves.  But it’s easy to take hard-line extremes of position in thought experiments that are themselves rather extreme.

There is, of course, a catch.  Dr. Mankiw didn’t wait until after his thought experiment to bring it up — he introduced it, gently, from the beginning.  I’m more of a dick, so I saved it for later as a “gotcha” moment:

EVERY morning, I take a small white pill that makes me think deep philosophical thoughts about the American health care system, the value of life, and the relationship between man and state. [...]

The pill is a statin — a type of pharmaceutical developed over the last few decades to lower a person’s cholesterol. My father died of cardiovascular disease, and unfortunately I inherited his genetic predisposition. Yet I am hoping that modern medicine will help me avoid his fate. So like millions of middle-age men, I take my little pill every morning.

Here is the question I ask as the pill passes through my lips: Is it worth it?

Now you might be tempted to say, “Of course it is.” Most people would prefer to avoid an early death. If the wonders of modern science might put off the inevitable for a while longer, why not give it a shot?

And that is, indeed, how I thought about the decision when my doctor recommended the treatment. One thing I did not consider was the price. Like most consumers of health care, I was insulated from economic concerns. I knew that the insurance company — and, indirectly, all its policyholders — would pick up most of the tab. This arrangement, encouraged by the tax system, ensures that I get the benefit of the pills while paying little of the extra costs they generate.

[...]

Not long ago, I read that a physician estimated that statins cost $150,000 for each year of life saved. That approximate figure reflects not only the dollars patients and insurance companies spend on the treatment but also — and just as important — an estimate of how effective it is in prolonging life.

(Emphasis added.)

That thought experiment isn’t so absurd any more, is it?




anarchocapitalist agitprop

Be advised

I say fuck a lot

Categories

Archives

Statistics FTW


Follow

Get every new post delivered to your Inbox.