Lobbyists' Disclosures Via the Internet: "If the Senate already had a user-friendly LDA disclosure program, why didn't the House leadership confer with them and coordinate a 'joint but separate' type of system? I heard that the Senate even offered to work with the House on that very point but was rejected early on.Remember, both houses are controlled by the Republicans, which is the party that believes in efficiency in government.
Don't you think that the separate filing points lend confusion to the process?
Jeffrey Birnbaum: Thank you.
I also heard that the Senate offered to work with the House to make all this right, but for whatever reason, nothing much has happened.
I don't know who's right or wrong, but I think that the lack of cooperation could lead to a breakdown in a system that already is pretty crippled."
Tuesday, November 01, 2005
We Expect Republicans to Govern Well?
Jeff Birnbaum had a column in the Post on the process of filing Lobbyist Disclosure Act data with the House and Senate. It seems both places have or are moving to an all-internet process, but with incompatible requirements and software. He then had a discussion on the Post website today which included the following:
The Advantages of Confusion--Greenspan
Confusion and ambiguity in the style of Chairman Greenspan has its advantages, so the forthcoming change to Dr. Bernanke with its gain in clarity, as described in the NYTimes, may not be totally advantageous.
What's the advantage to ambiguity? Perhaps several, but the one I'd point to is flexibility. One thing we can be sure of is the the Fed board is going to be wrong at some point. Unfortunately we Washingtonians, unlike the rest of the country, usually respond to error by repeating our error, by coverup and concealment. See our current (and past) President for proof. It's a human thing--in times of uncertainty (and error equals uncertainty) you (I) seek the security of the known.
Unfortunately sometimes the world gets locked in feedback cycles, in vicious circles so we need what the great liberal and bureaucrat J.K. Galbraith called "countervailing power". In sailing terms familiar to readers of Forester and O'Brian, it's "coming around on the opposite tack".
So, if a change of course is needed to break a vicious circle who is more likely to do so: someone who has staked out a clear position and rationale and committed to a model supporting the position, or someone who operates behind a smokescreen (forgive the mixed metaphors)?
What's the advantage to ambiguity? Perhaps several, but the one I'd point to is flexibility. One thing we can be sure of is the the Fed board is going to be wrong at some point. Unfortunately we Washingtonians, unlike the rest of the country, usually respond to error by repeating our error, by coverup and concealment. See our current (and past) President for proof. It's a human thing--in times of uncertainty (and error equals uncertainty) you (I) seek the security of the known.
Unfortunately sometimes the world gets locked in feedback cycles, in vicious circles so we need what the great liberal and bureaucrat J.K. Galbraith called "countervailing power". In sailing terms familiar to readers of Forester and O'Brian, it's "coming around on the opposite tack".
So, if a change of course is needed to break a vicious circle who is more likely to do so: someone who has staked out a clear position and rationale and committed to a model supporting the position, or someone who operates behind a smokescreen (forgive the mixed metaphors)?
Monday, October 31, 2005
Rebuilding Iraq
Dan Drezner blogs on the report of the inspector general for the Iraq Reconstruction effort here.
The report is here.
The lead to the report highlights the shortfall in the number of projects that are being done. Our great aspirations in summer 2003 are sadly trimmed in the gray October of 2005.
Dan cites the criticism of the planning for the effort. I'd like to focus on another area, one that liberals often ignore. It's true, as was cited in a Post article on Katrina reconstruction, that doing stuff for people is lots worse than having people do stuff for themselves. It's a lesson I've seen over and over, whether in the results of much foreign aid from the 1950's on or in a bureaucracy, whether building things or building software.
Why--take an example of rebuilding the Kabul/Kandahar highway in Afghanistan. Very worthwhile, successfully completed, not controversial. But. Highways require maintenance, maintenance requires money, money requires either continuing foreign aid or a functioning tax system. Maintenance also requires equipment and contractors. To the extent that the reconstruction meant developing a base of Afghani expertise and contractors, the highway can be maintained. But reports from Afghanistan don't show the development of an effective bureaucracy that can assess and collect taxes (not even a government that can do a tax law that is complied with).
Similar logic applies in Iraq, whether it's hospitals or schools. Unfortunately, maintenance is not a "sexy" subject. Politicians and political scientists put their time and thought into the policy decisions, but fail to recognize that for a long term achievement you need the supporting web of bureaucracy and resources. Even the inspector general is likely to be focussed on the building, not the maintenance.
The report is here.
The lead to the report highlights the shortfall in the number of projects that are being done. Our great aspirations in summer 2003 are sadly trimmed in the gray October of 2005.
Dan cites the criticism of the planning for the effort. I'd like to focus on another area, one that liberals often ignore. It's true, as was cited in a Post article on Katrina reconstruction, that doing stuff for people is lots worse than having people do stuff for themselves. It's a lesson I've seen over and over, whether in the results of much foreign aid from the 1950's on or in a bureaucracy, whether building things or building software.
Why--take an example of rebuilding the Kabul/Kandahar highway in Afghanistan. Very worthwhile, successfully completed, not controversial. But. Highways require maintenance, maintenance requires money, money requires either continuing foreign aid or a functioning tax system. Maintenance also requires equipment and contractors. To the extent that the reconstruction meant developing a base of Afghani expertise and contractors, the highway can be maintained. But reports from Afghanistan don't show the development of an effective bureaucracy that can assess and collect taxes (not even a government that can do a tax law that is complied with).
Similar logic applies in Iraq, whether it's hospitals or schools. Unfortunately, maintenance is not a "sexy" subject. Politicians and political scientists put their time and thought into the policy decisions, but fail to recognize that for a long term achievement you need the supporting web of bureaucracy and resources. Even the inspector general is likely to be focussed on the building, not the maintenance.
Social Learning
Sebastian Mallaby in the Post writes a column, Do Seniors Need Saving?, that raises many questions. The theme is that with globalization and longer lives, and the decline of pensions (see NYT magazine) people should be saving more now, but instead they're saving less.
He addresses a liberal strawman--that the "hidden persuaders" of the 1950's are making people spend more and save less:
But another way to look at this is as an arms race between consumers and commerce, with each side searching for advantage. Advertising has been around for centuries, getting more sophisticated all the time. Consumers have been around for a while, also getting more sophisticated all the time. Unfortunately Mr. Mallaby is a whippersnapper, with no personal memory of the 40's and 50's. There's more and more choice of products, more and more personalized advertising, more and more product placement. For example, I don't remember any vending machines in my high school, nor do I remember Disney doing a lot of product tie-ins when Cinderella was released.
My bottom line: in a race between people who have a direct and immediate financial incentive [to sell] and those whose incentive [to save by not consuming]is more diffuse and more delayed, I'd place my bets on the first.
Postscript: Thomas Schelling, whom I seem to cite repeatedly these days, did work on the idea of two people in one skin--the one who craves immediate gratification versus the one who plans and saves. Rereading that work would be interesting.
He addresses a liberal strawman--that the "hidden persuaders" of the 1950's are making people spend more and save less:
"But people managed to save back in the 1950s, so they could also save today. Indeed, the hidden persuaders are surely less insidious now than they were then: People have gotten better at zoning out their messages."I think it's true that societies learn. Supposedly that's the case for crack: people, particularly young people, in the inner cities saw the ravages of the crack epidemic of the 1980's and decided not to use it. A similar explanation may have been offered for the decline in teenage pregnancies, crime, etc.
But another way to look at this is as an arms race between consumers and commerce, with each side searching for advantage. Advertising has been around for centuries, getting more sophisticated all the time. Consumers have been around for a while, also getting more sophisticated all the time. Unfortunately Mr. Mallaby is a whippersnapper, with no personal memory of the 40's and 50's. There's more and more choice of products, more and more personalized advertising, more and more product placement. For example, I don't remember any vending machines in my high school, nor do I remember Disney doing a lot of product tie-ins when Cinderella was released.
My bottom line: in a race between people who have a direct and immediate financial incentive [to sell] and those whose incentive [to save by not consuming]is more diffuse and more delayed, I'd place my bets on the first.
Postscript: Thomas Schelling, whom I seem to cite repeatedly these days, did work on the idea of two people in one skin--the one who craves immediate gratification versus the one who plans and saves. Rereading that work would be interesting.
Saturday, October 29, 2005
Where Is the Economic Man
Economists use the concept of the "economic man", who is a rational seeker of maximum utility.
An exchange with a reader here about real estate prices reminds me of some other articles that challenge this. One was an article in the NYTimes about medical savings accounts. The idea is that of economic man--allow a person to tax shelter money to be used for medical expenses. People will use their money more wisely than if their medical expenses are covered by insurance. It's win/win: better health at a lower cost. The problem is, speaking as someone who each year for the last 30+ has had the chance to change insurance plans, people don't necessarily maximize utility. I just keep renewing my plan; it's much easier than spending the time to compare plans each year. (In that sense, I am maximizing utility.)
Similarly, Henry Blodgett in Slate looked at the investment strategy of Ben Bernanke, Greenspan's replacement as head of the Federal Reserve. Turns out he's not a rational economic man either, at least by academic standards.
The problem is, not that people aren't rational, but people are more multiudinous (see Walt Whitman) than economics, or the law, or other disciplines admit.
An exchange with a reader here about real estate prices reminds me of some other articles that challenge this. One was an article in the NYTimes about medical savings accounts. The idea is that of economic man--allow a person to tax shelter money to be used for medical expenses. People will use their money more wisely than if their medical expenses are covered by insurance. It's win/win: better health at a lower cost. The problem is, speaking as someone who each year for the last 30+ has had the chance to change insurance plans, people don't necessarily maximize utility. I just keep renewing my plan; it's much easier than spending the time to compare plans each year. (In that sense, I am maximizing utility.)
Similarly, Henry Blodgett in Slate looked at the investment strategy of Ben Bernanke, Greenspan's replacement as head of the Federal Reserve. Turns out he's not a rational economic man either, at least by academic standards.
The problem is, not that people aren't rational, but people are more multiudinous (see Walt Whitman) than economics, or the law, or other disciplines admit.
We See Only With Our Eyes
Today the NYTimes Editorial Page includes two pieces commenting on the indictment of Scooter Libbery that prove the point of my title--that we see only with the aid of our background and experience:
- Robert Ray, successor to Ken Starr, uses Fitzgerald to say that regular prosecutors can do the job of investigating an administration's wrongdoings.
- Lanny Davis, attorney and spin doctor for Clinton, shows sympathy for the Bush people, remembering that he never worried about the classification status of the information he used to spin the story. He says both sides are using double standards and worrying about motives instead of facts. He also sees them as falling into the same trap of covering up and spinning, as opposed to admission.
Friday, October 28, 2005
In Praise of Freecycle
I wonder if the economists in the government are taking freecycle into account? Freecycle, for those who don't know, is a no-cost classified ad concept implemented in Yahoo groups. For example, I'm in the Reston/Herndon freecycle group, so I get an e-mail digest containing "Offers" and "Wanted" postings. The Offers are of things still possibly usable but unwanted. For example, I just posted a series of offers, including an old (14 year old) PC and some homemade furniture. To my surprise, I've some interest from people.
Economically, the point is that freecycle (and craigslist.com, which operates slightly differently) lubricates the reallocation of assets, of "productive" stuff. By extending the useful life of products, it increases their value without requiring resources to produce. It's one of the rare instances where you can get something for nothing, or nearly nothing (since you do invest the time needed to coordinate the pickup).
Economically, the point is that freecycle (and craigslist.com, which operates slightly differently) lubricates the reallocation of assets, of "productive" stuff. By extending the useful life of products, it increases their value without requiring resources to produce. It's one of the rare instances where you can get something for nothing, or nearly nothing (since you do invest the time needed to coordinate the pickup).
Real Estate Bubble Ends?
I think it does. Yesterday I saw by the "for sale" sign in my townhouse cluster that they'd reduced the price on the house. Houses in the cluster have been selling for steadily climbing values since the millennium. Seems to me we started at about $100K, the most recent houses have been selling for $300+, and this house was priced for about $390K originally. It's in an area near the toll road in Reston--it's sort of on the fringe in an area with lots of townhouses and condos.
I've lived here for almost 30 years, buying back in a previous bubble in the 70's when land values and housing prices were taking off, before the crash that came with Reagan (a "crash" for ag land and office buildings, a leveling for houses). Back then the townhouses were good first homes, though there was a development of real small single family houses (like 800 sq. ft) that went for about $10K less. Over the years we've had problems with crime, lack of maintenance, renters, etc. (They seem to be over for the moment, although as people crowd multiple families into a single house and MS-13 becomes present, they may reemerge.) Prices took 25 years to double, which isn't a good return on investment, but now they've increased 200 percent more in 5 years.
It's sad--who can buy a house at $300K, much less the 900K for single family houses? It used to be a house was 2 1/2 times your gross. Today I think they're using a higher multiple, perhaps because basic living costs (food, etc.) take a smaller share of one's income. But still, a teacher who earns $50K has no hope. But with no kids I've only an academic interest in the health of the schools, but I've a greater interest in coffee. The local Safeway has big problems in hiring people for their Starbucks. Many of their clerks have worked there for a good while, so they're ensconced somewhere they can maybe afford. But Starbucks is new, takes a significant number of employees to staff, and the turnover has been tremendou. It's worrisome, because my coffee is essential to my health and sanity.
I've lived here for almost 30 years, buying back in a previous bubble in the 70's when land values and housing prices were taking off, before the crash that came with Reagan (a "crash" for ag land and office buildings, a leveling for houses). Back then the townhouses were good first homes, though there was a development of real small single family houses (like 800 sq. ft) that went for about $10K less. Over the years we've had problems with crime, lack of maintenance, renters, etc. (They seem to be over for the moment, although as people crowd multiple families into a single house and MS-13 becomes present, they may reemerge.) Prices took 25 years to double, which isn't a good return on investment, but now they've increased 200 percent more in 5 years.
It's sad--who can buy a house at $300K, much less the 900K for single family houses? It used to be a house was 2 1/2 times your gross. Today I think they're using a higher multiple, perhaps because basic living costs (food, etc.) take a smaller share of one's income. But still, a teacher who earns $50K has no hope. But with no kids I've only an academic interest in the health of the schools, but I've a greater interest in coffee. The local Safeway has big problems in hiring people for their Starbucks. Many of their clerks have worked there for a good while, so they're ensconced somewhere they can maybe afford. But Starbucks is new, takes a significant number of employees to staff, and the turnover has been tremendou. It's worrisome, because my coffee is essential to my health and sanity.
Wednesday, October 26, 2005
Ebbs and Flows--the Tide of Creative Destruction
The NY Times today has an article mostly on the scattering of the New Orleans labor force. However, it notes that some have migrated to New Orleans:
One of my platitudes is that there are always tradeoffs, and it's true here. The farming way of life has changed/been destroyed in many areas, but the loss here is focussed and more visible. But, as in the case of the closing of some military bases, the new may seem better on balance than the old.
Its Work Force Scattered, New Orleans Wrestles With Job Crisis - New York Times: "Large numbers of workers who lived in New Orleans are now scattered throughout Louisiana or neighboring states, unable to return to flood-damaged houses and leaving hundreds of businesses unable to reopen or operating below capacity. Many are out of contact, or have settled elsewhere to enroll their children in schools.
Some positions are being filled by people from other states looking for new job opportunities in construction or, as in the case of the Five O'Clock Grille, service jobs."
One of my platitudes is that there are always tradeoffs, and it's true here. The farming way of life has changed/been destroyed in many areas, but the loss here is focussed and more visible. But, as in the case of the closing of some military bases, the new may seem better on balance than the old.
Gift That Keeps on Giving, or George Will Misleads
What is the gift that keeps on giving? For social commentators, otherwise known as the chattering class (thanks G. Will), it's the concept of the social ladder. Why? Because it works for both left and right and it's so vague you can make anything of it, as George Will does here
"America's economy is so dynamic that in any five-year period, approximately 45 percent of Americans move from one income quintile to another. Twenty percent move up from the bottom quintile in any 12-month period, and 40 to 50 percent move up over 10 to 20 years."
What are the ambiguities? Let me count the ways:
"America's economy is so dynamic that in any five-year period, approximately 45 percent of Americans move from one income quintile to another. Twenty percent move up from the bottom quintile in any 12-month period, and 40 to 50 percent move up over 10 to 20 years."
What are the ambiguities? Let me count the ways:
- The distinction between "income" and "wealth/assets"--the former is more variable, due to bonuses, separation pay, lottery winnings, commissions, etc. while the latter is more stable and usually more socially significant. (I've seen reports of research that says when you compare black and whites of equal family wealth, differences in test scores evaporate.)
- Using quintiles, or deciles (or whatever) means that every move up is matched by a move down which is why I say it works for both left and right. Mr. Will here uses "up"; in her recent book, Bait and Switch, Barbara Ehrenreich focuses on the "down".
- The difference between individuals and society. The modal individual in our society has an income curve that starts low, based on entry level pay in his or her occupation, then rises to a peak, then falls, rapidly or gradually depending on retirement benefits, etc. If you could visualize society over time, it's rather like seeing a school of fish: some leaping into the air, some in the water, some unseen below the surface, lots of activity and churning.
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