Sunday, February 03, 2008

If I Was President...

One of my first laws would be to require all companies to provide any customer with all data linked to their account/name, on demand, for free. Ideally they would make it web-accessible -- the smart ones, at least, would, because sending it out manually would cost more money.

Further, they would have to delete it on demand as long as doing so doesn't conflict with other laws.

Friday, February 01, 2008

Long-term tax rates

It's hard for me to see the value added in some of financial innovations and institutions. Credit card companies often simply allow people to indebt themselves more. Insurance companies must have had crazy margins before Geico started this price war. Did this rate swap add value to the situation?

What if we had a tax structure that encouraged real long-term investing? We already have long-term taxes rates for 1+ year of owning a stock; how about additional tax breaks for 5 or 10-year ownership? Or how about higher short-term rates and a more gradual long-term rate?

The short-term craziness of financial markets today is a real distraction from what matters. People don't think for the long-term. That's why we had these dumb loans: the people in charge of these companies were only thinking a few years into the future.

Sunday, December 09, 2007

The Effect of the Drug War

Increasingly, the young murder suspects coming to the station for questioning seem to lack basic morality, said Sgt. Tim Nolan, who has been investigating Oakland homicides for 17 years.

"There are more and more families where there's less and less structure," he said. "Talking to these suspects day in and out, there's a higher percentage today with no sense of right and wrong. It's frightening, but we are creating super-criminals."

- http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/09/MNS1RBLQ5.DTL

Morality is woven into the fabric of a society, creating a structure of normative rules. Morality is functional. When society changes, those rules change, within range of certain biological limits...

Saturday, December 08, 2007

Traveler's Dilemma

The Traveler's Dilemma, unless I'm missing something, is another example of Ivory Tower logic gone too far in the wrong direction.

UPDATE: Really, the Traveler's Dilemma could be viewed as a good critique of Nash equilibrium, and for that it works well.

Monday, August 20, 2007

Six Existential Thinkers

I just finished reading one of the most arcane books ever - Six Existential Thinkers by H.J. Blackham. Wikipedia says it "became a popular university textbook" -- and I must say I pity those students who had to read it. Only 160 pages but it felt like it took me a lifetime because, for the life of me, I could not understand a thing that was being said in many places. It felt to me that he was constantly trying to be intelligent by repeating the same thing over and over. For example, the Preface:
    The purpose of this book is exposition, not criticism nor advocacy.

I hadn't even meant to use this part of the Preface, but look at the first sentence of the entire book!

Next:
    There have been enough popular accounts of the general ideas of existentialists. It is time to discriminate between these thinkers; they are not exponents of of a school, and yet not the least impressive thing ... is the interrelatedness of their thinking: they lead into each other; they form a natural family; each throws light on the others, and together they develop the content of certain common themes.
And:
    Finally, the general reader who is interested enough to want to acquaint himself with existentialism should be told at the outset that there is nothing in this book which he cannot understand if he really wants to. There are difficulties, but they are not technical, and they are likely to oppress the philosopher even more than the general reader.

Does that make me a philosopher? I don't think so.

The second word of the book is "pertinaciously". I had to look it up.

To be fair, the Kierkegaard, Nietzsche, and to some extent Jaspers sections are readable. The middle section, Marcel, is OK, but the last two sections on Heidegger and Sartre are likely the most opaque things I have ever read...

Sunday, August 19, 2007

Speculative Bubbles

In a world where many academic (Chicago School) economists believe that markets are "perfectly efficient", (makes you wonder what high-level mathematics does to one's brain), there was at least one voice of "rationality" -- "an obscure economist"...

Saturday, August 18, 2007

Crazy Love

Puppy Love Makes Teenagers Lose The Plot

"Love: A temporary insanity curable by marriage or by the removal of the patient from the influences under which he incurred the disorder. This disease, like caries and many other ailments, is prevalent only among civilized races living under artificial conditions; barbarous nations breathing pure air and eating simple food enjoy immunity from its ravages. It is sometimes fatal, but more frequently to the physician than to the patient." - Ambrose Bierce, The Devil's Dictionary

What is the undergroundman?

Notes from Underground: A book about a man constantly battling himself -- and losing.

He falls into a small set of people who always know how they should act, but do not periodically act in that way. This distinction between knowledge and action is said to produce free will, and those people who know right but act wrong are thought to be morally responsible for their actions.

"If I know what is right, I can act right is" is apparently the syllogism with which which we judge people daily. In other words, all people who know what is right can act right. But doesn't that fly in the face of all empirics or logical sense? (By the way, I say only those who know -- what of sociopaths? Do they know the sin of murder any better than a cat knows the sin of murdering a mouse? What if a sociopath's brain is significantly different, as it likely is?)

Thursday, August 16, 2007

The Trouble With Rational Choice Economics

Again and again, people will choose short-term benefits in exchange for long-term pain. While strict rationalists will admit vaguely that people do not act rationally all the time, their theoristic "rationalism" underpins many of their other theories, leading them to believe that the freedom of the market is more effective in preventing crises and getting things done that it really is. Markets need to be regulated because people are stupid and greedy.

Piling On

This is some great advice for handling people from Jack Welch in Straight From The Gut, the former CEO of General Electric:
When people make mistakes, the last thing they need is discipline. It's time for encouragement and confidence-building. The job at this point is to restore self-confidence. I think "piling on" when someone is down is one of the worst things any of us can do. It's a standard joke during GE operating reviews that if one of the business CEOs is getting heat and someone in the room jumps on the bandwagon, the staff team will typically pull out the white handkerchief, toss it in the air, and flag the person for piling.

For people (at least those like me, who become embarrassed) the mistake is punishment enough, and people realize that if they continue to make mistakes, something has to happen -- needling people is unnecessary.

Friday, August 10, 2007

Close-Minded Fanatics Win Over Theorists

Throughout history the close-minded have always ruled over the open-minded -- in large part because the close-minded can easily act. They have their minds made up and they know what the right policy is. Their assurance is reassuring to the masses, and the masses themselves are foolishly confident in their close-minded opinions.

Today I was reading about the French Revolution, an event which ended in a pivotal disaster and set back human progress immeasurably. The Girondists, which included high-minded intellectual theorists such as Marqis de Condorcet, who came up with the lamentably unknown Condorcet Method, and a host of other intellectuals such as Thomas Paine. Condorcet, like many other Girondists, were driven to death by suspicious circumstances (as is the case of Condorcet, who was found dead in his cell) or by outright execution by the ruling Montagnards and their leader Robespierre.

If the Girondists had kept power throughout the French Revolution, Napoleon would never have come to power. Instead we might have seen a prefential voting system in France, and a meritocratic, well-ruled government.

In the US we were more lucky in our beginning, but intellectuals haven't had real power in Washington since the Founding Fathers, although we've had a very small handful of genuinely smart Presidents (Teddy Roosevelt and Grover Cleveland).

Saturday, August 04, 2007

The End of the Chinese Miracle?

Good article on the problems facing China as it continues to push for double-digit GDP growth. Environmental costs are not factored into the GDP, just like the external cost which businesses impose upon society is not factored into their costs of producing. While Jagdish Bhagwati would like you to believe that environmental damage is negligible and overblown, the exact opposite is likely more true.

The good news is that concern for the environment rises with GDP per capita - as people have more material wealth, they begin to value their health and environmental beauty, which is relatively scarce, more. Thus, you're seeing a lot more environmental concern in China right now. The Chinese government, paradoxically, seems perhaps more economically aware than the US government, and they are working to slow down environmental damage. With their power they can do a lot. One might think that with China's authoritarian regime, it could stop environmental damage faster than the US -- but that's probably not true. The best policy will always be subsidies for clean energy and energy conservation and taxes on pollution.

For those looking to cash in on the possible clean-energy boom, the solar stocks are definitely worth watching: JASO (a favorite of mine), FSLR, SPWR, STP, and even little DLSL, which does solar water heaters -- possibly the most cost-efficient solar if subsidies are eliminated. These stocks are down on speculation that Germany, the main purchaser of solar power, will cut subsidies. Right now it's risky to hold them, as any day Germany could cut subsidies and you'd see a severe drop in them...that could be buying time. I expect JASO and others to jump on earnings, although it's hard to say.

PUDC washes coking coal and FTEK provides a fuel additive which reduces nitrous oxide pollution (N2Ox) among other things.

Disclosure: Long JASO for a trade.

Badscience.net author on accessing science

Here is an interesting little blurb by a scientist on the absurdity of scientific access -- he has an Athens account (/envy), but he can't access the latest research (funded by the Department of Health), which is being written about by journalists across the world, because it hasn't actually been published yet.

This means that the media – of all people - are a class privileged over academia, doctors and the public when it comes to access to the data; that for the whole of the media storm across Friday and Saturday, no interested academic, or member of the public, or blogger could participate, unless they were part of the chosen set, because they simply couldn’t see the paper.

...

Time and again we’ve covered the venality and incompetence of the media: and yet laughably the popular debate on this publicly funded academic work is conducted exclusively behind closed doors - by oldmedia employees - in a privileged world from which you, all doctors, and all academics are deliberately excluded.


The often scientifically confused journalists of the mainstream media are the people targeted in his blog -- and yet they have exclusive access to the latest research which is making headlines. Bit strange.

The paper in question, by the way, is on the correlation between marijuana and psychosis, specifically (I believe) schizophrenia. While the risk of schizophrenia may be increased by marijuana (I read it may cause an extra 600 cases in Britain, a country of 60 million), the prohibition of it has clearly been a failure.

It's important to note (as some journalists have, but as the Guardian article here does not) that correlation does not mean causation. The researchers noted that there is a distinct possibility that marijuana use and schizophrenia are driven by a third variable -- that is, people who use marijuana could be less mentally stable, use other drugs more, or could be driven by their psychoses to self-medicate. There's any number of things.

See Also:

http://en.wikipedia.org/wiki/Correlation_causation

http://en.wikipedia.org/wiki/Post_hoc_ergo_propter_hoc

Media Confuses Percentages Again and Again

"There is a large growth in shopping in December, followed by Christmas. Therefore growth in shopping causes Christmas."

Thursday, July 19, 2007

Seeing Through Ron Paul

The "libertarian" who "would have" voted for Defense of Marriage Act? See here.

Anecdotes from Moore's Sicko

I just saw these on Wikipedia's entry. For those too lazy to check the link:

1. Rick, who accidentally sawed off the tops of his middle and ring fingers on one hand while working at home. He had no insurance and limited funds at his disposal, so he was asked by the hospital to choose whether to have the end of his middle finger reattached for $60,000 or the end of his ring finger for $12,000. He chose the ring finger.[6]

2.
Doug Noe. Noe's insurance provider, Cigna Healthcare, approved a cochlear ear implant for only the left ear of Noe's toddler daughter, Annette, who was born with an acute hearing disability. Cigna argued that a two-ear operation was "experimental." After Noe alerted Cigna that Moore was making a movie about the US Healthcare system, and that Noe's case would be featured in it, Noe was contacted by Cigna, and they agreed to approve the second implant.[7] This occurred before Moore had actually heard of Noe's case, so Noe acted independently of Moore.

Cigna, incidentally, is a publicly traded company (NYSE:CI). Stock is up nearly 60% for the year.

3. A woman gets stuck with the ambulance bill after a car accident because she didn't clear the charge with her insurer before requesting the ambulance; the accident had immediately rendered her unconscious and unable to request approval.[6]

4.
Tracy Pierce died from kidney cancer after his insurer denied numerous treatments recommended by his doctor, including a possibly life-saving bone-marrow transplant.[6]

5.
One woman's insurance provider denied coverage after an operation, because she didn't mention a minor, previous yeast infection on her application; they retroactively cancelled her coverage on that basis. [6]

6.
Accounts of four fully-insured American women being denied crucial specialist referrals, diagnostic and therapeutic procedures. Two of the women died of cancer as a result, and one eventually sued her HMO after the diagnosis of her brain tumour in Japan (her American HMO told her the tumour doesn't exist). A footage of the director of her HMO testifying is shown.

7. Homeless dumping. Homeless patients, still in hospital gowns and some with IV tubes in their arms, were abandoned at homeless shelters by Los Angeles hospitals after they had received incomplete medical treatment.[8][9] Mike Huffman is seen in the film describing the dumping of a woman at the Union Rescue Mission in Los Angeles' Skid Row.

So, for those naive optimists who think that bad things don't happen, especially in America -- there you go. You're full of shit, as usual. It's like the attack on conspiracy theorists: "people are too good for that" or "it's too hard to keep secrets". Yeah, right. Your average American doesn't know the difference between Sunnis and Shiites and thinks microwaves cause cancer. Morons have no sense for what is plausible and what isn't.

Wednesday, July 18, 2007

UnitedHealth tries to rate doctors

When I read the summary of this article I was annoyed, but as I read it I realized that the attorney general made a very good call. UnitedHealth has a conflict of interest rating doctors.

UnitedHealth is No.21 on the Fortune 500. They stand to profit nicely if Hillary Clinton mandates that everyone receive private health insurance -- please God let's hope that doesn't happen.

Polling Economists

I've read a few of these, but they've been in (closed -- of course) scientific journals, so I couldn't exactly link to them for discussion. This one is pretty basic, with a very small sample size of 81.

Notice that a fairly significant portion (40-45%) is consistently liberal -- that's not uncommon among academic economists. Universal healthcare in the US receives an agreement of 44.7%, with 15.7% neutral. Most of these economists are probably thinking of the conventional single-payer system rather than a government-funded HSA system, as I've discussed here and which Adam Rawlings describeshere, because the idea of a government-funded HSA + a high-deductible health insurance and coverage for the chronically ill hasn't caught fire with too many economists yet. It also gets a bad rap because conservatives are trying to spin it as a solution without government subsidy, which probably won't work.

Things which receive Doomsday attention like the Social Security crisis among the media have a simple solution among economists: 77.2% would simply raise the retirement age.

35.7% of economists also opposed Bush's proposal to partly change Social Security into a mandated retirement account which is invested in the market. Some of that may be attributed to the wording of the statement which says that "the best way to deal with the Social Security long-term funding gap is mandatory personal accounts." There's no way that it is a solution to the funding gap. In the long-run it would be beneficial, but in the short-run it would cause a budget shortfall which would have to covered by the youth. It runs the risk of giving idiots too much freedom, I suppose, and those idiots who lost all their money would have to be covered by the government -- but it could be run like a state pension system, which allows you to invest in certain areas (smallcap, growth, value) but doesn't allow you to pick individual stocks on your own.

Anyway, check it out and check out some of the other Berkeley Electronic press articles as well -- they are fairly open access.

Floating Ideas

I've had a few ideas for posts floating around:
  1. An examination of the real economic value of things - beyond just its exchange value.
  2. The valuable functions that investing in equities performs (or does not).
  3. How much I despise G.E. Moore's "naturalistic fallacy".
  4. Hillary Clinton sucks.
  5. I love Mike Gravel. Visit gravel2008.com to figure out why.
Instead I've been lazily researching stocks and tooling around on Reddit, trying to educate people in economics and promote Mike Gravel under my new alias, censored. So far I've been moderately successful, but I'm about ready to give up. I find it depressing that Conde Nast(y) has already bought Reddit, which is much nicer than Digg.

Coming up with usernames is perhaps the biggest hurdle I have to overcome when getting involved with websites -- I'm still not very involved with Wikipedia because I don't have a good username. (I have several, none of which I like.) That's probably a good thing because I am an expert in nothing, and Wikipedia should get the attention of experts -- meh, that's a dumb excuse. Wikipedia needs my help.

Sunday, July 15, 2007

An Important Paradox

Sometimes it seems like philosophy is, or at least has been, largely a study of intractable paradoxes. The greatest of these is certainly not the paradox of God -- that is a paradox based upon a fictional, contradictory concept, so it's no surprise that it is paradoxical.

A more important paradox is the illusion of free will in a deterministic world. Yet at a closer glance this does not seem to be a real paradox either -- it is based upon another fiction; that is, that people have free will. People can "choose" on a whim to act a certain way.

I haven't heard any convincing arguments resolving this paradox. There is no easy answer. Compatibilism essentially says that lack of ultimate freedom to choose "doesn't matter", but clearly when you are morally blaming people for actions which they were completely compelled to do, it does matter. It's hard to understand why the compulsion of a gun to the head is more meaningful than the compulsion of Hard determinists hit closest to the truth -- and the main argument against them is seemingly that they are "too pessimistic".

People should be held morally responsible for their underlying nature (perhaps genes) rather than their actions because their genetics are at the core of who they are. That means that those who are by their nature criminal (that is, genetically) are more blameworthy than those who are driven into criminal behavior through environmental pressures, such as, perhaps, child molesters. Neither should be regarded as "evil" -- both are "bad" from the perspective of the . They should be regarded with pity. The former is a flawed human being from the start while the latter's potential has been (seemingly irrecoverably) destroyed. If their guilt was sufficiently proven (that is, zero doubt) I would have zero trouble with their execution.

The the perpetual "free will" illusion has a pragmatic, self-fulfilling - when everyone believes that everyone has free will and that people who commit wrong acts do that willfully, it imposes a deterrence on immoral and criminal acts. Lifting the veil could potentially revoke that deterrence and allow people to act even worse than they currently do, if you can imagine that. But is that really likely? I don't think so. The deterrence does not seem to be very effective. The veil, as an obvious fiction, is already under subtle attack and has been since the beginning of human history. The distorted view of responsibility confuses people. The first step to recovery is to stop denying.

Some people may think Social Darwinism when I say genetics. While that may be a concern twenty or thirty years down the road, I don't mean to endorse that view at all. The study of how genes affect behavior seems like it always be an imperfect science because of all the variables. Furthermore, if someone is told that they are genetically dishonest or sociopathic -- is it possible for them to then consciously overcome that? I don't know.

Some may notice that this argument is essentially just a secular repacking of Calvinism. Just as Calvinists felt heavy pressure to prove themselves as God's chosen, so people today may feel the pressure to prove themselves as good genetically.

Friday, July 13, 2007

Spending By Executive Office of President

This has to been seen to be believed. The budget for the office of the President rose by an astounding 768% in 2004, and then by another 100% in the next year. Discovered this via Digg here.

I'd seen the outlays by function before, but missed the outlays by agency (actually, it's still on my desktop in Excel format)... going to try to look up the primary source for this right now.

UPDATE: The US government has a shoddy website, but I found the budget without too much trouble. Here is the budget, but you won't find that table there. If you click on the Executive Office of the President you can see a (very limited) breakdown of where his money went for the year 2008, and it seems, surprise, that the Iraq war gobbled most of it.

Scroll to the bottom of that page. and you can list all spreadsheets, where, at Section 4, you'll find Outlays by Agency. I'm looking at it and that picture is correct. The budget for the Executive Office of the President went from far below .05% in 2003 to .1% in 2004, and then up to .3% in 2005.

It's hard to know for sure what's going on with these spreadsheets because there is no legend. In the President Office budget the total BA (Budget Allocated?) is only 341 million but the "outlays" (expenditures) are 5379. Ditto for the next two years. What's going on? How is the White House able to overspend by so much? It reminds me of the extension of some law (Parkinson's, maybe) which states that spending will always exceed income.

Need it be said that the Republicans' rhetoric has never matched their record? They are the War and Business Handout Party, not the Small Government Party -- in contrast, the Democrats are the Farm-Labor Handout Party (in the forms of tariffs, often).