by Brian on September 22, 2005

Ted Barlow has just sent along word that he’s gotten out of Houston safely, and is now with his fiancee and dog in Washington, D.C.

I’m very pleased to hear that Ted is OK, and I hope everyone that everyone here knows will be just as safe in the days ahead.

Hey up everyone, it’s the Prospect Magazine Intellectual of the Year contest!! I’m afraid that everyone at CT forgot to put our forms in (again!) although I see that bloody Yusuf al-Qaradawi did (and Airmiles too). This is a real shame, since I recently became The Most Important Thinker In The World. As Tyler Cowen pointed out in a post on Ray Kurzweil, the previous holder of that title, the secret to being the Most Important Thinker In The World is a mastery of the expected utility rule.

No matter how ludicrous your predictions, if they are sufficiently wildly utopian, then your thinking has a greater expected value than anyone else’s (see here for the general idea). Thus, if Kurzweil reckons that we will upload our consciousness onto software and live for ever as pure energy on the internet, then I say all that and a pony too! Not just any old pony by the way, but a super technonanopony! Which eats racism and shits pure gasoline … on the internet! Oh yeh and we will constantly be having multiple orgasms … and not just the normal kind either (more details to come). You might say that it’s pretty unlikely and I’ve failed to spell out important details, but as long as there is at least some probability that I’m right, then I am more important than Ray Kurzweil to the tune nU^(-rT), where U is the utility of a magic pony, n is the probability I’m right, r is the discount rate and T is the time it will take to sort us all out with one. Keep reading CT folks, because in expected value terms, it is only going to become more important!!
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Latte Ordoliberals

by Henry Farrell on September 22, 2005

“Matt Yglesias”:http://www.tpmcafe.com/story/2005/9/18/222052/918 a couple of days ago:

bq. The other thing to say, though, is that even if you accept the main premise of [English language coverage of the German election results] — that Germany’s welfare spending and labor market rules are responsible for an inordinately high unemployment rate and low level of economic growth — the tone of indignation at the voters’ persistent refusal to vote for the dismantling of this situation is odd. After all, it’s not as if Germany is some sort of desperately impoverished country whose citizens are going to be doomed to misery unless they achieve rapid growth. It’s not Chad or China or even Chile.

“Jeffrey Gedmin”:http://news.ft.com/cms/s/29c1cfac-2a10-11da-b890-00000e2511c8.html, director of the Aspen Institute in Berlin, writes a quite jawdropping _reductio ad absurdum_ of this trope for the _Financial Times_ (sub required).

bq. Germans know [that they face a fundamental choice over their economy]. But they still love their “social-market” economy and have not yet decided whether allowing more market forces can be in tune with their values. Until now, it has been too easy for Germans to defer painful choices. The country has been doing – simply put – too well. In Berlin, a city with 19 per cent unemployment, the cafes are packed with people ­drinking over-priced café lattes, the employed and unemployed alike happily indulging themselves. Will economic circumstances soon hurt enough to give people the swift kick they apparently need?

I had to read this paragraph twice to be sure that my eyes weren’t deceiving me. The problem with the German economy is that it’s _doing too well_ for people to, like, actually want the cleansing winds of free-market reforms? That the unemployed can sip their café lattes too? I dunno whether this sort of Frummagem smacks more of Jonathan Swift or the Medium Lobster – but it speaks volumes about the motives of some of continental Europe’s would be ‘reformers.’

Update: non-paywalled version of link available “here”:http://www.aspenberlin.org/jeffgedmin.php?iGedminId=185&sShowMedia=0 (thanks to ‘luc’ in comments).

An “economic sham”

by Henry Farrell on September 22, 2005

Sounds as though Bill Frist isn’t the only prominent Republican in trouble over stock-market shenanigans. “P O’Neill”:http://bestofbothworlds.blogspot.com/2005_09_01_bestofbothworlds_archive.html#112736156774172634 links to an interesting story in the “Irish Times”:http://www.ireland.com/newspaper/ireland/2005/0922/1702575727HM9USAMBASSADOR.html (behind their paywall) that deserves more attention. Richard Egan, former US ambassador to Ireland and major Republican fundraiser is in very hot water with the IRS for tax avoidance.

bq. Following an investigation, the IRS claims that Mr Egan set up an “economic sham” whose principal use was to reduce his tax payments. The IRS said that Mr Egan, the billionaire co-founder of Massachusetts’ most valuable technology company, EMC Corp, used two companies to set up the scheme using a European-style options scheme as soon as he resigned as the head of EMC to become ambassador. Mr Egan and his family were the most successful fundraisers for President Bush’s re-election campaign and have long been major contributors to the Republican Party.

Like Mr. Frist, Egan seems to have set up this scheme in order to repackage the proceeds from selling shares in his family company. The Irish Times has been following Mr. Egan’s progress for a while; it ran a story last year on his and his family’s “selfless contributions”:http://www.ireland.com/newspaper/front/2004/0708/3003256094HM1AMBASSADOR.html to the campaign of their ideological opponent, Ralph Nader. From that story:

bq. The Egans, now known in the Republican Party as the “First Family of Fundraising”, are reportedly the only US family that has three members who have raised more than $200,000 (€161,767) each for Bush’s re-election campaign.

Silent majority

by Henry Farrell on September 22, 2005

“PZ Myers”:http://pharyngula.org/index/weblog/why_didnt_anyone_tell_me_its_lurker_day/ announces that it’s Lurker Day, that day of the blogospheric calendar where readers who usually never make comments tell us what they like about our blog, what they don’t like, who they are etc etc. Sounds like a good idea – we have no idea who y’all are, but would like to find out.

Merkel and the Markets

by John Q on September 22, 2005

Thinking about the German election outcome, it struck me that this would be an ideal test for betting markets. I’ve always thought that, if there’s a bias in such markets it would be towards the right, so the toughest test for them would be predicting a left-wing upset win like this one (I’m calling a win on the basis that left parties got a majority of the vote, not making a prediction about what goverment might emerge). A quick Google reveals that there is such a market, called Wahlstreet but my German isn’t good enough to deal with their site, which has lots of graphs bouncing around without an obvious control. Hopefully someone will be able to help me.

Anyway, if there’s a contract allowing a bet on the share of votes for the three left parties (SPD, Greens, Left party) and if, two weeks in advance, that market was predicting a vote share of more than 50 per cent (as actually happened), I’ll concede that the case for the superiority of betting markets over polls has been established, at least as a reasonable presumption. [I didn’t follow the polls closely but I had the impression that most of them were predicting a CDU/CSU win until the last days of the campaign].

Some Data on Families in the Workforce

by Kieran Healy on September 22, 2005

What with “all”:https://crookedtimber.org/2005/09/21/selecting-future-moms/ the “kerfuffle”:https://crookedtimber.org/2005/09/20/mommy-tracking-the-ivy-leaguers/ about the “NYT article”:http://www.nytimes.com/2005/09/20/national/20women.html?ei=5090&en=6a8e0c413c09c249&ex=1284868800&partner=rssuserland&emc=rss&pagewanted=all on Ivy League women and their labor market / parenting plans, I took a look at some “BLS”:http://www.bls.gov/ data on long-term trends in earnings patterns within families, and in mothers’ labor force participation. Here are a couple of figures I created that capture some of what’s been happening in these areas over the past thirty-odd years.

The first figure shows trends in earning patterns within families. (You can get it as a “PDF file”:http://www.kieranhealy.org/files/misc/fe-trends.pdf.) Here you can see that even in 1967, when the series starts, families where the Husband was the only earner were already a minority of all families. By the 1990s, there were almost as many families with no earners as families where only the Husband was working. The percentage of families where only the Wife was working rose from 1.7 to 5.2 percent from 1967 to 2003. The percentage of families where both the husband and wife were working peaked in 1999 (at just over 60 percent) and has fallen slightly since then. Note that this figure doesn’t tell you how earning patterns change once families have children, just the absolute numbers of each type, whether they have children or not.

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