You haven’t seen it reported elsewhere, but on the Iowa Electronic Markets”, Kerry overtook Bush a couple of days ago. I don’t know if this is a “convention pop”; needless to say it would be pretty bad news for market efficiency if it were. In related news, the Kerry vote-share contract I bought a while ago is now back into profit, and I am still long. If/when I can be bothered reproducing the files, I will update my system’s equity curve – to be honest it doesn’t look that great, although one might argue that the system did the right thing in keeping me long.
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Daniel
This is more of a footnote to John’s post on the subject than a substantive contribution, but it struck me that, despite John having made the point otherwise, the debate in comments (here and on Asymmetrical Information still seemed to be based on a few commonly held fallacies about the efficient markets theory;
- that it is basically a neutral, academic theory with few implications for the real world
- that it is basically all about the stock market (to be honest, most of the discussion revolved around the US stock market)
- and that, to quote James Surowiecki, “whether or not markets are perfectly efficient, they’re better than any other capital allocation method that you can think of.
None of these are true.
Ken Lay, Jeffrey Skilling and Andrew Fastow will all shortly be going on trial for their liberty over the Enron bankruptcy fiasco. I have to say that it seems to me that it would be a little bit unfair if any of them were to go to jail in the current political climate.
Given the number of irregular verbs in the English language, it’s nice to know that one commonly used phrase is at least well-behaved:
Some might argue that the modern meaning of the phrase “accept responsibility” is irksome in that it has only illocutionary significance; without the announcement that X has “accepted responsibility”, one would have the very devil of a job working out that it had happened. Might I suggest that what we ought to do is to coin a generalised version of Douglas Adams’ useful neologism “dogdyke” from his excellent book, “The Meaning of Liff”:
DOGDYKE (vb.)
Of dog-owners, to adopt the absurd pretence that the animal shitting in the gutter is nothing to do with them.
Onward to hell we all go …
I haven’t seen that Michael Moore film yet; there were special previews in London on Sunday, but you couldn’t get a ticket for love nor money[1]. It strikes me, however, that those critics of the film who are currently doing such a sterling job (by using words like “deceits”, “cunningness”[2] and “misleading”) in convincing me that there are no actual factual errors in it, are failing to look at the big picture.
The big advantage of the “he’s implying this without saying it” critique, and the main reason I use I myself so often, is that since he isn’t saying it, you can chosse for yourself what you want to claim he’s implying. For example Jane Galt is cutting up rough about the timing of various Carlyle Group investments, compared with the timing of George Bush Senior joining the board. And indeed, Moore’s film would be deserving of censure if he had been attempting to make the claim that there were specific quids pro quo on those specific deals. But he doesn’t actually make that claim, as far as I can see. Now he might have been attempting to imply that claim without making it, which would be bad. But he might just have been using the revolving door between defence contractors, large investors and the highest echelons of government, to support the following assertion:
Wealthy individuals and capital have far too much influence in American politics, and members of the Bush family have provided numerous examples of this proposition.
Which would not be bad. Pace my esteemed colleague Mr. Bertram, the reason why Bush’s misleading implications are not on the same footing as Moore’s tendentious use of the facts, is that Bush was attempting to establish a specfic false claim (that Saddam Hussein was a threat to the USA) while Moore is attempting to support a general claim of opinion (that Bush as President has been bad for the USA and Americans should vote for someone else).
Footnote:
[1]Although actually, I can’t be sure of this since I only really offered money.
[2]The word is “cunning”, btw.
If you have a coffee break today, why not spend it reading this wonderful piece. RA Radford was an economics don who ended up in a POW camp toward the back end of the second world war, and wrote this article in Economica describing the experience from the economic point of view. If you’ve already read it then congratulations; you clearly went to the right kind of university. Otherwise, it’s a treat.
While chasing up the Radford reference, I happened across this blog btw. I happen to know a couple of things about Chavez-era Venezuela, and this news source, pretty uniquely, checks out as honest on all the areas where I was able to check. The author is a bit less charitable toward Chavez than I am inclined to be (so hate me, I’m inclined to cut totalitarian socialist regimes a bit more slack when they’re faced with massive externally-funded subversion), but he gets the big picture right; Chavez, like modern Castro, is a narcissist and a very poor poster-child for Socialism indeed, but his opposition is woefully lacking in any positive policy prescriptions other than handing everything over to foreign vested interests. Rather a long coffee break if you decide to read both of these, I admit.
Daniel Drezner is busy having his head turned by a book called “The Power of Productivity”, written by someone who used to run the McKinsey Global Institute. I have a number of horses in this race in the form of personal prejudices:
1. “Productivity” is almost always used in economic rhetoric in contexts in which it is, quite strictly, meaningless.
2. The McKinsey organisation has a record as lang’s yer arm when it comes to taking uses of the word productivity from one context (specifically, the context of flogging management consultancy services) and trying to apply them in another (specifically, the making of windy public policy pronouncements).
3. The belief that the collection of lots of anecdotes from individual industries creates a “pointillist picture” which is a substitute for general equilibrium analysis is one which has been the source of large amounts of avoidable error in the past.
And a quick glance at Drezner’s review reveals that this book looks like a fine example of the genre (for example, it appears to be pushing the line that “services” generate “much less pollution than manufacturing”, in which context I note that waste management, airlines, and road freight are all services).
But for the time being, I’m only interested in one particular point on the picture which has been bugging me for a while; the idolatry of Walmart.
This question comes via Rob Schaap and a letter to the Guardian, but it’s an issue on which I have a sorta-kinda claim to first publication.
The issue is this; does the current “sovereign” Iraqi government have sufficient sovereignty to enter into financial contracts which would be considered binding on future Iraqi governments? In particular, does it have the power to sell state assets, to allocate telecommunications licenses and to incur debts? And if it does, then given that it is not a democratically elected government, but one appointed by two countries (the US and the UK) with substantial economic interests in Iraq, is this not something of a scandal? I’d be very grateful if any readers who know more about Iraq than me could shed some light on this one.
On this sacred day of democracy, two old posts of mine putting forward the case for not taking part in this complete farrago. I would add two points in the context of the current UK elections:
1) Given the large-scale use of postal ballots, the “electoral bezzle” (the proportion of the turnout which consists of fictional characters who are the result of electoral fraud) is probably much larger this time than in previous elections.
2) As the FT points out today, the list system used in the European elections means that there are substantial numbers of political hacks and placemen who will get elected no matter what, making it even more pointless to bother voting.
Don’t encourage them.
I can never resist a challenge. So when Normblog passed on the folowing put-up-or-shut-up from John Keegan:
I couldn’t resist putting up, even at the cost of perhaps repeating myself
(ahem)
I wish Saddam Hussein was still in power in Baghdad because if this were the case, then about 3,000 Iraqis would have been murdered by his regime and would be dead, the roughly 10,000 Iraqis we killed ourselves would still be alive, and we would most likely be well on our way to formulating a credible, sensible, properly resourced plan for getting rid of him and handling the aftermath.
In other words, this was not a “humanitarian intervention”, in the sense which Human Rights Watch uses the term, and it is entirely defensible to maintain principled opposition to the war without having to be painted as an apologist for mass graves. Norm has his own, somewhat more inclusive standard for what constitutes a humanitarian intervention, which I intend to write something about soon. But I simply don’t believe that this issue is anything like as cut and dried as the Keegan quote suggests; if one is using a standard which makes Saddamites of Human Rights Watch, then one is using a wrong standard.
In case anyone’s suffering a burst of Invisible Adjunct nostalgia, here’s a story about bright-eyed young things being lured into expensive an time-consuming graduate programs with unrealistic hopes of rewarding employment at the far end, and here’s the first rumblings of discontent from “the academy”. Yup, and pace a lot of grass-is-greener talk by commentors on the old IA site, MBA programs are subject to more or less exactly the same supply and demand economics as the fine arts brigade. I would be an avid reader, btw, of an “Invisible Associate” site if a lowly MBA-grunt at a managment consultancy were to set one up to gripe about the vagaries of consultant life and the difficulty of getting on the partner track. But I don’t think there is one … yet.
Structured procrastination, oh yeh. I have an unfinished review of Doug Henwood’s “After the New Economy” on the computer in front of me, which is looking like taking me longer to write than he took to write the book, plus James Surowiecki‘s new book is out, covering a couple of areas which he’s argued with us about on CT[1]. And what am I reading and reviewing? The latest work by that noted metaphysician, David Icke. “Tales from the Time Loop”. Icke is a bit of a guilty pleasure for many of us here at CT, and a few others. But I’m rather afraid that with this latest one, he’s jumped the shark. See below the fold for my Amazon review, which to be honest I’m not anticipating getting posted. I’ve added a few links so that non-Icke fans can get up to speed. I don’t know why I’m so bright and breezy today btw, it’s actually rather sad.
Update Richard Kahn in comments points me to this forthcoming paper for the Journal of Utopian Studies. Opinions on this kind of free-wheeling, name-dropping postmodern cultural studies writing are somewhat split on CT, but I’m inclined to be a bit softer than the median. When this sort of thing comes off, it’s really good, and I rather think that Richard’s Icke paper comes off pretty well.
And further into the envelope madness …
Although I started out on the side of John and Bill Carone in believing that there was something funny about the two-envelope problem, I’ve always been suspicious of claims that the class of inifinty paradoxes (even Zeno’s Paradox) can really be tamed by asserting that they disappear if you know how to take limits properly. With that in mind, I mercilessly torture some of Greg Chaitin‘s work to create a version of the two-envelope paradox in which I don’t think there are any limit arguments to make use of. Once more into Socratic dialogue ….
John Kay has a pretty decent column in the FT today. The actual message will eb pretty familiar to anyone who’s been folowing the Cassandra-like wailings of people like Wynne Godley and (on some occasions) me about the unusustainability of the US current account deficit, but he has some quality jokes in it. In particular, he recruits JK Galbraith’s concept of “the bezzle” to illustrate his thesis about overconsumption and asset price inflation:
John Kenneth Galbraith’s greatest contribution to economics is the concept of the bezzle – the increment to wealth that occurs during the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not understand that he has lost it. The gross national bezzle has never been larger than in the past decade.
Further to my comments last week on this subject, an update on Mr Wolfensohn’s progress toward the holy grail of Rights Based Lending. As of yesterday, China has a “winning formula” that the rest of the world ought to copy, while Israel can go screw itself. Something for everyone here, I think.
(The second of those two links is, IMO, disgraceful. Lord knows I’m not exactly a fan of the actions of the State of Israel in the territory it has annexed, but where the heck does Wolfensohn get off deciding to have a Middle East policy? Note that his comments appear to have no relevance to the action project involved; the Gaza Palestinians are just going to be made to wait for their new houses because of Wolfensohn’s amour propre, “as a Jew”. OTOH, it looks like he flip-flopped again shortly after that Ma’ariv interview and the discussions are still live after all. Lord, what a clown show)