Sunday, 23 January 2005

New blog on the block

Opinio Juris is a new blog that covers international law. I'll be watching with interest; especially Julian Ku. Hopefully they will address the procedure for handling treaties, which doesn't seem to get a lot of coverage elsewhere.

Among my questions:

  • How are treaties enforced?
  • Do they get reviewed by courts? If so, which courts?
  • Can courts overturn them if they conflict with the constitution?
  • Do treaties require enabling legislation to have force of law in the U.S.?
Hopefully these items will be addressed some time. A very good read so far.

Why having the right enemies matters

President Bush manages to enrage most of his critics in this country and he has a similar knack with terrorists abroad. Zarqawi has been suckered into declaring war on democracy, which is how most people envision freedom (þ: Instapundit). This puts him where we want him for the long haul.

Similarly, President Bush placed us where we want to be over the long haul as well. He has even managed to bring over some past skeptics:

The fight against terrorists must still remain the overriding focus of American national security efforts, because the price of failing to stop future terrorist attacks is unacceptably high. But the war on terrorism was never a sufficient paradigm for American foreign policy. It was too narrow, too limited and less than ideal for mustering the support of others around the world. Conservatives and realists in America and nervous Europeans will recoil at Bush’s new boldness. But the pragmatic virtue of basing American foreign policy on the timeless principles of the Declaration of Independence is that they do reflect universal aspirations. Such a policy may attract wider support abroad than the war on terrorism has and a more durable support at home for an internationalist foreign policy. That is the higher realism that Bush now proclaims.
(þ: Powerline)

P.S. The Steelers are driving me nuts.

Saturday, 22 January 2005

Grade inflation

Leopold Stotch at OTB is indignant over Princeton’s new policy of capping the number of A’s at 35% of the class. I’m a little new to academia, but I’m not sure the policy is as objectionable as he seems to think.

Administrators are limited in their ability to judge the performance of professors. The problem—and the reason many administrators will default to grade distributions as a measure of grade inflation—is that educational outputs aren’t easily observable, whereas grades are easily observable. To make educational outputs observable, administrators have to overcome a great deal of uncertainty and cost. The attempts include taking student surveys—which, not surprisingly, are strongly correlated (positively) with grades—and observing professors in class. This last item is quite expensive and may just result in the professor being on his best behavior when the auditors are present.

One of the reasons that research universities use publication to make tenure decisions is that publication is easily observable, as is the quality of the publication (an ‘A’ journal, ‘B’ journal, and so forth). In any case, this is a topic that will be with us a while, if not forever.

Social security reform

People really need to get their terminology straight. Apparently these LaRouchies think that privatizing part of Social Security is both fascist and anti-capitalist:

No organization is more responsible for the forced-march drive to privatize Social Security—stealing trillions of dollars of its funds for Wall Street accounts—than the Cato Institute, a multi-million dollar Washington, D.C. think tank. During the past 20 years, Cato has had more than a quarter of a billion dollars lavished on it in contributions by the most powerful Wall Street banks, and largest right-wing think tanks—led by the ultra-right-wing Koch group of foundations. Cato has spent this money on a host of projects intended to destroy the sovereign nation-state and implement fascist economic austerity. But the lion’s share has gone into the privatization of Social Security.
The title of the post: Cato Institute: Anti-Capitalist Clique Leads the Attack on Social Security.

With all of the partial information and misinformation out there, it’s tough to get a handle on the scope of the problem, and what should be done. Lately I’ve been opposed to the idea of private accounts, and remain so. They will have to be funded and will not reduce the unfunded liability.

Still, the case for reform is a good one and consider this from an earlier post about a NYT story (excerpt from original story):

Seniors now get an initial benefit that is tied to a fixed portion of their pre-retirement wages. If the index was changed, their pensions would be pegged to a fixed portion of a previous generation’s income. If this standard had been in force since the beginning, retirees today would be living like those in the 1940’s—like Ida Fuller, which would mean $300 a month in today’s dollars, as opposed to roughly $1,200 a month.
This raises a good normative question: how fair is it to expect workers to fund standard-of-living increases—and pay increasingly higher taxes—for each succeeding generation, especially with the baby boomers set to retire, when seniors are already a very wealthy demographic? One solution would be to just begin increasing benefits to keep up with the cost of living; another solution would be to give them half of the increase in real wages, instead of the whole as they get now. The second idea would reduce the amount of the unfunded liability while still raising the standard of living for retirees; just not at the pace of wage increases. It would lighten the burden on the economy as a whole.

Of course, any attempt at reform—including reductions in the automatic increases will be fiercely opposed by the AARP. Yet another reason I won’t be joining that organization when I hit fifty.

Hydrogen roundup

Lately I’ve been daydreaming a bit about the possibilities of replacing oil with hydrogen for fuel. A check of the news brings me back down to earth:

High-volume hydrogen-powered fuel cell cars are at least 25 years away, says Toyota Motor Sales U.S.A.‘s top fuel cell expert.

Even General Motors, which had been pushing for fuel cell vehicles by decade end, seems to be backing off from its goal of mass production of fuel cell vehicles by 2010.

It’s a tad disappointing, but we’ve been surprised in the past. Hydrogen cars, as with everything from ink pens to the original cars, may start out as a luxury item in a few years and morph into a mass-market product a few years later. Here’s the POV of the GM tech guy:
“The Sequel is a real car and it’s doable in a manufacturing sense, but it’s still 10 times more costly than we would need it to be for volume production; we need to get down to about $50 per kW. By 2010 I really do believe that we will have a validated power system that will be down to $50 per KW. That’s what my boss has instructed me to do.

“I’m feeling confident because we’ve started to validate our feelings about the project. The fuel-cell vehicle has a tenth as many moving parts as an internal combustion car and engineers will tell you that moving parts are expensive to test and make.

He also adds this hopebul tidbit:
“Hydrogen infrastructure is not as big a deal as people seem to think it is. If you have hydrogen supplied at, say, 12,000 gas stations, which is about 10 per cent of all US gas stations, then 70 per cent of the population of the US would be within two miles of a hydrogen pump.

“That’s hydrogen available in the 100 largest cities and a station every 25 miles on the freeway. The cost would be $12 billion, which is half the cost of the Alaskan pipeline. Now why wouldn’t a US government want to do that?

We won’t replace $1.2 trillion worth of infrastructure (gas stations) overnight, but we can do it over a couple of decades. However, I don’t see why the government needs to be funding it, as he suggests at the end there. It seems the energy companies could handle that themselves.

In the more immediate future, we should have fuel-cell batteries within a few years:

THE day of the battery may finally be over as manufacturers usher in the age of the fuel-cell. To prove the point, an engineer from the Japanese electronics company Hitachi yesterday showed the world the pack that will power tomorrow’s mobile phone, laptop computer and personal organiser.

From his pocket he produced a miniature fuel cell consisting of a plastic canister of liquid gas slightly smaller than a cigarette lighter and plugged it into a metallic box slightly larger than a packet of cigarettes.

The cell, which will be on sale in about 18 months, will run all three machines for the length of a short-haul flight.

Of course, there will be a transition time—and regular batteries will remain useful for a lot of applications—but it’s good to see that some progress is being made.

Statism and the like

A couple of posts from Samizdata to consider. First:

This is yet another part of moving Britain into the more Napoleonic traditional in which the state is the core around which everything rotates in a politicised fashion and the highest virtue is political engagement (not a view I share, to put it mildly, given my view of politics).
A friend and I were discussing the low voter participation rate the other day. He’s from a foreign country—one that has not experienced liberal democracy yet—and was astounded by our low voter participation rate. He also sees the Iraqi election as being hopeful with a high participation rate. I mentioned that we have been an established democracy for centuries and there’s a tendency to take it for granted after a while. I also mentioned that there are a lot of people that shouldn’t vote because they don’t follow the issues.

I should have mentioned another point: though I’m a political junkie, as with the Samizdata quote above, I’m not too keen on the idea of having the world rotate around politics. It’s good that most people don’t have to make public policy a priority and can focus on their families and other interests. It’s a sign of our health as a nation.

An extension of the earlier quote, from another post:

When the state, as distinct from any political party, takes on the role of encouraging people to have the correct views and oppose the right habits, the liberty of everyone is made immediately more precarious. There is a very great supply of petty nannies with a favoured cause, and altogether more dangerous authoritarians and social engineeers with their own pet projects, who would love to get their hands on the power the NHS is now abusing. Rest assured, they will find ways of doing so if the precedent now being set is not reversed.
Lately I’ve been seeing a lot of material related to this idea, and I’m always reminded of the great C.S. Lewis quote:
Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.
So true, and one of the reasons I’m glad that many of my fellow citizens are not fixated on politics, or even become quite angry when others try to lecture them on it. Three cheers for complacency!!

Thursday, 20 January 2005

I like this guy

Ali, formerly of Iraq The Model, has written one of the best explanations for the Iraqi invasion, and its relationship to the war on terror, that I’ve seen:

In Iraq the agenda of the Arab and Muslim dictators came to lie in Parallel with that of Bin Laden. He found himself in great need for their support in order to fight the “infidels” in Iraq and they found him useful to hinder America’s plans there. This makes the question about America’s security on its own land not what the terrorists want, but rather what those dictatorships want. Any attack on the American soil will only result in the American people asking for justice and favoring an operation similar to what happened in Iraq and Afghanistan, which is what the American administration wish for but can’t find the necessary support inside and outside America. The reaction of the international community would be not very important at such circumstances, but America is expected to get some good support if it’s attacked again. Now the terrorist are stupid and insane people, but their leaders and most importantly their financier are not that stupid when it comes to risking their power and control over their countries. So if the terrorist decide to act alone they would not only lose the support of these dictatorships but also would risk that those regimes might well, hunt them down in their countries and hand all the info they have about the terrorist to America just to prove their innocence and avoid a very probable serious American strike.

Bin Laden realized that his hands are cuffed now and he has lost the initiative and thus came his reactionary speech just before the elections in trying to retrieve some initiative or to excuse his cowardice for other Muslims who might still support him, saying that he’s not Attacking America because now there are two Americas and one of them is friendly! All he could do and all he can do as long as he’s depending on Arab governments in his finance and logistic support is to keep threatining America but he knows that he can never turn these threats into asctions. This makes Bush’s repeated statements that American troops are in Iraq to fight terrorism so that Americans won’t have to fight it in America very true with only slight error.

American troops are actually fighting dictatorship now in Iraq and terrorism has become just a tool in a war that was directed against it in the first place. Once America leave Iraq without finishing the job, the war would stop being a war on dictatorship and would be again a WoT with the difference that it would be a war against a phenomena rather than its origin. The terrorists would be free to attack America again, as Arab and Muslim dictators won’t fear a military strike similar to what happened in Iraq and Afghanistan after seeing America recognize Iraq war as a mistake.

He’s exactly right. By attacking Iraq, and threatening other state sponsors of terror, we explicitly tied the fate of the terrorists to that of their sponsors. It puts a large burden on our military—and there are limits to what we can do—but it’s the best strategy to deal with the terrorists that I’ve seen.

Well, would you look how that worked out

From “Reuters”:

Global warming and not a giant asteroid may have nearly wiped out life on Earth some 250 million years ago, an international team of scientists said on Thursday.

The mass extinction, known as the “Great Dying,” extinguished 90 percent of sea life and nearly three-quarters of land-based plants and animals.

There has been recent evidence that a big asteroid or meteor hit the Earth and triggered the catastrophe, but researchers say they now have evidence that something much more long-term—global warming—was the culprit.

It may be true, but there’s obviously reason to be skeptical. Very skeptical.

Monday, 17 January 2005

MLK day

There’s not much, if anything, I can add to Dr. King’s great I Have A Dream speech, so I’ll provide an excerpt, starting from my favorite section and going to the end:

I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character. I have a dream today!

I have a dream that one day, down in Alabama, with its vicious racists, with its governor having his lips dripping with the words of interposition and nullification; one day right down in Alabama little black boys and black girls will be able to join hands with little white boys and white girls as sisters and brothers. I have a dream today!

I have a dream that one day every valley shall be exalted, and every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight, and the glory of the Lord shall be revealed and all flesh shall see it together.

This is our hope. This is the faith that I will go back to the South with. With this faith we will be able to hew out of the mountain of despair a stone of hope. With this faith we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day. And this will be the day, this will be the day when all of God’s children will be able to sing with new meaning, “My country ‘tis of thee, sweet land of liberty, of thee I sing. Land where my fathers died, land of the Pilgrim’s pride, from every mountainside, let freedom ring!” And if America is to be a great nation, this must become true.

And so let freedom ring—from the prodigious hilltops of New Hampshire.

Let freedom ring—from the mighty mountains of New York.

Let freedom ring—from the heightening Alleghenies of Pennsylvania.

Let freedom ring—from the snow-capped Rockies of Colorado.

Let freedom ring—from the curvaceous slopes of California.

But not only that.

Let freedom ring—from Stone Mountain of Georgia.

Let freedom ring—from Lookout Mountain of Tennessee.

Let freedom ring—from every hill and molehill of Mississippi, from every mountainside, let freedom ring!

And when this happens, when we allow freedom to ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God’s children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual,

“Free at last, free at last. Thank God Almighty, we are free at last.”

Delivered roughly 100 years or so after Lincoln’s Emancipation Proclamation went into effect.

Social security indexing again

This issue is now all the rage. It’s quite amazing how your understanding of an issue this big has to be pieced together. Take a look at the following:

The 1970s were a time of social turmoil, rampant inflation, and falling real wages. Gerald Ford was president in 1976 and Alan Greenspan was his chairman of economic advisors. To this day Mr. Greenspan no doubt has painful memories of those wacky “Whip Inflation Now” (WIN) buttons that came to symbolize economic policy disarray. Inflation in 1974 and 1975 had been running at about 10% per annum. Many voters were extremely distressed about the impact that inflation might have on the value of their Social Security and other pension benefits.

There was strong bipartisan support at that time for indexing initial benefits to inflation, but a great deal of confusion about how to do it. Should the government use indexes of wages or of consumer prices to adjust future initial benefits? If so, what specific index should be used? It was a given among economists then—and still is—that wages are likely to rise faster than consumer prices over the long run based on the long-term trend toward higher labor productivity.

Be sure to read that again and then consider: if Congress and President Ford had chosen to index Social Security to inflation in 1976, there would be no problem today. They chose wage indexing because real wages were falling at the time, so they saved some money in the short term and screwed us in the longer term, with little or no discussion at the time:
Whatever one’s opinion on that monumental policy shift may be, the remarkable thing is that it occurred with virtually no public discussion. A search on Lexis-Nexis of major U.S. newspapers during the 1975 to 1977 period turns up few editorials or news analysis of any substance dealing with the massive shift in policy. The mainstream media clearly seemed to be missing in action on the entire story. If there was a substantive debate on wage indexation in 1976 it seems to have been entirely an inside-the-beltway affair.
Read the whole thing, and weep.

Sunday, 16 January 2005

Social security history

Though the author’s sympathies lean heavily towards doing nothing about SS, there’s an excellent history of the program at the NYT.

The article also makes clear that each generation receives more benefits than the previous generation, due to the link to inflation-adjusted wage growth. Seeing the program lift the elderly out of poverty is well enough, but at some point it would make sense to simply link it to inflation to minimize the burden to younger generations. The elderly would keep their current purchasing power and taxes could be reduced (or would be less than they otherwise might). In fact, this whole controversey could probably be done away with—and private accounts ignored—with this one simple change. Here’s the relevant graf:

Since wages generally rise faster than inflation, retirees in each generation get more in real dollars than those in previous ones. Contemporary critics, like Kasich and the Bush council, would slow the rate of future increases by linking benefits only to inflation. Though this would save a lot of money, its effect on retirees should be understood.

Seniors now get an initial benefit that is tied to a fixed portion of their pre-retirement wages. If the index was changed, their pensions would be pegged to a fixed portion of a previous generation’s income. If this standard had been in force since the beginning, retirees today would be living like those in the 1940’s—like Ida Fuller, which would mean $300 a month in today’s dollars, as opposed to roughly $1,200 a month.

As a means of lifting the elderly out of poverty, SS has succeeded quite nicely. Not increasing the burden on future generations of workers would be a big improvement over the current situation.

Dorothy Parker

I love ridgerunners who know Dorothy Parker quotes.

Friday, 14 January 2005

Reports of Clapton's death have been greatly exaggerated

Clapton has been a favorite of mine for well over twenty years now. The article below seems a little odd to me, since I take the opposite view of Clapton’s work in recent years. From 1974 to 1994 he was largely marking time, rather than using his talent to good effect. Don’t get me wrong. He had numerous good songs (“Motherless Children”, “Crosscut Saw”) during the time, and the best of them, like the two I listed, were covers of old blues standards.

In 1994 he released ”From The Cradle”, a fabulous album and the best he had done since the early 1970s. With the exception of Pilgrim, he’s done pretty well in recent years. Me & Mr. Johnson is a particularly good addition to his recent work.

Clapton’s now working on a Cream reunion and if I lived in London I would probably attend. The critic below is way too, er, critical, in my view:

I don’t think there’s an artist of Eric Clapton’s stature (and we’re talking about someone who’s jostling around at the Jimmy Page, Stevie Wonder level of things) who has urinated so ruinously over his own legacy. Why is it that David Bowie can spend decades releasing tosh, with seemingly no effect on our estimation of his ‘great works’, and yet Eric Clapton seemingly has the power to do things which make us despise the whole creature.

We could easily have forgiven him for getting tangled up with Phil Collins in the mid-1980s (that whole the August / Behind the Mask no-jacket-requiredy era) but it was when he started “doing the blues” again that it all started to stink. I remember hearing one of his Royal Albert Hall blues get-togethers on Radio 2 (I think). It was the 1990 one, which had Eric Clapton, Buddy Guy, Robert Cray and Jimmy Vaughn on guitar (how many cooks do you need to spoil the blues?) and Phil Collins on tambourine.

Neuroeconomics

There’s an interesting article in The Economist (should be a free link) about neuroeconomics. They don’t mention it explicitly, but much of what they discuss is considered part of experimental economics as well. Here’s an excerpt:

ALTHOUGH Plato compared the human soul to a chariot pulled by the two horses of reason and emotion, modern economics has mostly been a one-horse show. It has been obsessed with reason. In decisions from how much to produce to whether to save and invest, humans have been assumed to be coolly rational calculators of their own self-interest. Over the past few years, however, evidence from psychology has persuaded many economists that reason does not always have its way. Now, judging from a series of presentations at the American Economic Association meetings in Philadelphia last weekend, a burgeoning new field dubbed “neuroeconomics” seems poised to provide fresh insights on how the two horses together produce economic behaviour.

The current bout of research is made possible by the arrival of new technologies such as functional magnetic-resonance imaging, which allows second-by-second observation of brain activity. At several American universities, economists and their collaborators in the neurosciences have been placing human subjects in such brain scanners and asking them to perform a variety of economic tasks and games.

(þ: OTB)

Political scientists have credentials?

Well, yeah, especially if they have PhD’s, like Chris. However, excommunication seems like an astonishingly authoritarian move and inappropriate to a field such as political science. The same goes for economics. That’s why I tend to refer to economics and political science as disciplines, or fields, rather than professions, like law, medicine and accounting where you are afforded state-supported credentials that bar others from entry. Removing a person from an association for an ethical breech—plagiarism comes to mind—is one thing; preventing them from working is another.

Alexandra Samuel seems to be proposing exactly that. It appears that receiving her degree has gone to her head.

Eugene Volokh and Jim Lindgren have more.

Update (from CNL): Dr. Samuel has a response to the conspirators.

Hydrogen again

Steven Taylor has a link to a story from Iceland about the use of hydrogen fuel cells, similar to what I mentioned earlier. If my earlier post is correct, though it is very optimistic, the US could be well ahead of other countries in adopting hydrogen, at least in cars.

Of course, “Reuters” couldn’t avoid a gratuitous swipe at President Bush, though they did mention the emmission of water and the problems it might cause in Iceland:

Washington says new technologies like hydrogen are a better long-term way to cut pollution and combat global warming than the U.N.‘s 128-nation Kyoto protocol.

Bush dismayed even U.S. allies by pulling out of Kyoto in 2001. Kyoto seeks to rein in emissions of heat-trapping gases, mainly released by burning oil and gas in factories, cars and power plants.

[....]

Among other problems, some scientists say the atmosphere might simply become too cloudy in a hydrogen economy, emitting vast amounts of water vapor, perhaps reflecting sunlight back to space or trapping it and warming the globe.

Thursday, 13 January 2005

Graphic novel inventor dies

Will Eisner, inventor of the graphic novel, passed away. I’ve never actually read a graphic novel, but the movies based on them have been astounding, especially Road To Perdition. That movie managed to both look beautiful and have a great story. From Hell was a good movie, but not as well received. OK, The League of Extraordinary Gentlemen was an embarrassment storywise, but it looked fabulous. How could it not? The storyboards were done in advance. Here’s a bit from the obituary, which is in The Economist and I believe is a free link:

Mr Eisner’s first teenage comic strips were what most teenagers might produce: a buccaneer saga called “Hawks of the Seas”, and the six-inch-high “Doll Man”. This sort of pulp was churned out in various studio partnerships, including collaborations with Jack Kirby, who later devised “X-Men”, and Bob Kane, who would create “Batman”. Mr Eisner’s career did not take off until “The Spirit”, and even that was interrupted for three years during the second world war, while warrant officer Eisner drew a character called “Joe Dope” to instruct soldiers in the use of their equipment. After that came his corporate career, until the conversation in New York.

Towards the end of his life Mr Eisner tackled anti-Semitism, a subject which had dogged him from his boyhood. He wrote a sympathetic biography of Fagin, and his last graphic novel, “The Plot” (to be published in May), was about the forging of “The Protocols of the Elders of Zion”. Mr Eisner saw that anti-Semitism was returning in the 21st century, and believed that comics were strong enough to be ammunition against it.

It constantly bothered him that art critics would not put him in the same category as “real” artists, such as Jackson Pollock or Willem de Kooning. Cartoonists, he complained, “have lived with the stigma, or the mark of Cain”, because their medium was regarded as inferior. “You are now seeing the beginning of a great maturity in this material,” he told a journalist in 2002. “And it will achieve acceptance.” His words implied, however, that there was still some way to go.

Wednesday, 12 January 2005

Global Warming, Yet Again

This isn’t exactly reassuring:

Cutting down on fossil fuel pollution could accelerate global warming and help turn parts of Europe into desert by 2100, according to research to be aired on British television on Thursday. “Global Dimming”, a BBC Horizon documentary, will describe research suggesting fossil fuel by-products like sulphur dioxide particles reflect the sun’s rays, “dimming” temperatures and almost cancelling out the greenhouse effect.

The researchers say cutting down on the burning of coal and oil, one of the main goals of international environmental agreements, will drastically heat rather than cool climate.

So, the climate either will, or will not, be warming. It may, or may not, be helped by the reduction of fossil fuel use. Yeah, this makes me feel much better about the global warming science.

Tell me this: if we switch to hydrogen, will all of the residual water it creates mean additional cloud cover and a lower temperature for the earth? Is it possible that the climate is too complex for us to model right now?

The Armstrong Williams fiasco

Michelle Malkin has a post that explains why Armstrong Williams has done a disservice to people who are both minorities and conservative: the rhetoric from their political opponents—the ones that are also intolerant of minorities that do their own thinking—will likely be more hostile, and it’s no picnic now. There’s some very rough language in the post. Click at your own risk.

(þ: OTB)

Drug companies

Richard Epstein has a detailed book review in Legal Affairs that addresses attacks on current drug industry practices. I haven’t read the whole thing—one of the nice things about having a blog (or partnering with someone who does) is that you can capture links and such for later reading—but here’s an excerpt of what appears to be a couple of compelling paragraphs:

Kassirer argues that drug marketing corrupts the companies that do the pushing and the doctors who yield to their blandishments. A doctor with undivided loyalty to his patients cannot resist temptation when a zealous sales force pushes overpriced and often dangerous products onto the market. Angell echoes these concerns and offers a more extended indictment. Pharmaceutical firms have been the beneficiaries of government largesse. They grievously overstate the costs of bringing new drugs to market in hopes of wringing extortionate payments from desperate patients. They adopt foolish strategies for research and development, producing “me-too” or copycat products with little medical benefit while falsely taking credit for scientific innovations underwritten by the National Science Foundation and the Institute of Medicine. The pharmaceutical companies benefit from a patent system that they can game and from a lax FDA process for drug approval. And they use devilish advertising campaigns to promote their wares.

In response to these perceived failings, Angell favors a stiff dose of price controls, tougher FDA approval procedures, restrictions on advertisements, and sharp limitations on drug patent protections. She would undo both the Hatch-Waxman Act of 1984, which extends the patent life of all drugs in order to partially offset the lost sales from those that have been patented but await FDA approval, and the reforms that allow drug companies to help finance the costs of the FDA‘s new drug applications. Drugs are a complex business, and each of Angell’s proposed reforms would produce a myriad of unintended and often destructive side effects. Remove industry payments to expedite FDA review, for example, and desired new drugs will take longer to reach the market. That in turn will truncate the life of a patent and reduce innovation. Experts in the field ponder the trade-offs. Angell and Kassirer write as if the trade-offs do not exist.

Social security reform

Of course, SS reform has been a big topic lately. Alex Tabarrok has a great post on the argument about the fairness of the current SS system. I likewise agree with his endosement of Tyler’s solution—make it, explicitly, a poverty program for the elderly.

The gist of Alex’s post is that, as long as we are pretending SS is a pension system, rather than a welfare program, the argument against a regressive payroll tax falls flat. However, if we admit that it’s a welfare program, we should treat it as such. This, of course, would open it to things such as means testing, eliminating the automatic increases and the like.

In the mean time, as long as we are calling it a pension (or retirement) system, arguments about the fairness of regressive taxes should be ignored.*

Robert Heilbroner Dies

An excellent write-up in the NYT on the passing of Robert Heilbroner:

Dr. Heilbroner’s first book, “The Worldly Philosophers: The Lives, Times and Ideas of the Great Economic Thinkers,” written before he received his doctorate, is one of the most widely read economics books of all time. He was also a prominent lecturer as well as the author of 19 other books, which sold more than 10 million copies and, in many cases, became standard college textbooks.

A witty writer, he called himself a “radical conservative,” an oxymoron suggesting that, like Don Quixote, he wanted to rush rapidly forward, break the mold – and end up right where he was. But in that he was only half joking. He did indeed want to conserve the basic separation of the national economy from the national government, as suggested by Adam Smith in the 18th century. But he believed, too, that when the economy was hit with severe recessions or high unemployment or yawning income gaps, for example, government had to intervene with public spending that stimulated economic activity and generated jobs and the construction of public works that contributed to higher living standards.

Although popular with students and the general reader, he was regarded by mainstream economists as a popularizer and historian whose insights made no great contribution to the study of the field. He, in turn, saw their reliance on mathematics and computer modeling as narrow in vision and as losing sight of the very purpose of economics – to help improve the well-being of people at work and of the society they work in.

“The worldly philosophers,” Dr. Heilbroner said in a 1999 interview, “thought their task was to model all the complexities of an economic system – the political, the sociological, the psychological, the moral, the historical. And modern economists, au contraire, do not want so complex a vision. They favor two-dimensional models that in trying to be scientific leave out too much and leave modern economists without a true understanding of how the system works.”

The article goes on to mention, quite prominently, that Heilbroner criticized capitalism, and the neoclassical model, for its failure to address negative externalities (mainly pollution). I don’t know the full extent of his comments on this issue, but I believe the issue has actually been addressed. Few economists disagree with notion of forcing the full cost of externalities on producers, thus embedding them in prices. That argument was settled at least as far back as 1990, with the amendments to the Clean Air Act. Economists just favor market mechanisms that allow the producers to determine the best way to eliminate pollution, rather than, say, requiring them to install scrubbers—a solution that was favored by coal interests in West Virginia, IIRC.

Heilbroner's other criticisms of economics these days are a matter of ongoing debate, particularly by New Institutionalists. Great piece. RTWT.

Tuesday, 11 January 2005

Economic liberty and the constitution

Eugene Volokh has a good post on IJ's relentless attempt to overturn the Slaughterhouse Cases. I don't know enough about the constitutional issues to say if it's right or not, though I'm certainly sympathetic to the ends. In any case, I agree with Volokh that it's a bad idea to legislate economic rents for private interests.

Sunday, 9 January 2005

The tsunami

Tsunami news has been all over the place and I haven’t commented much. I think we’ve reacted well, thus far, and have played an indispensable role. Only the U.S. is capable of deploying the assets needed in the immediate aftermath of that kind of disaster.

This has led to some unfortunate debates on the merits of the U.S. vis-a-vis the rest of the world—we don’t give as much annual aid to UN-related institutions, though we do well in responding to crises. It’s an approach I approve of since these organizations—the World Health Organization, the UN (their response has been laughable), the World Bank, the IMF, and so forth—don’t acquit themselves very well over the long term. I tend to prefer that we assist in well-defined projects where we can get unambiguous measures of progress and the Asian tsunami fits the bill.

I don’t even really care whether we get any “credit” as long as we are doing what we think is right. It seems to me that some Europeans got a little carried away in their hatred of President Bush and a Hindi guy set them straight:

“Can you let your hatred of George Bush end for just one minute? There are people dying! And what are your countries doing? Amazon.com has helped more than France has. You all have a role to play in the world, why can’t you see that? Thank God for the US Navy, they dont have to come and help, but they are. They helped you once and you should all thank God they did. They didnt have to, and no one but them would have done so. I’m ashamed of you all…”
Reagan said something along the lines of “we can accomplish great things as long as we don’t care who takes credit”. These days we’ll have to settle for getting no credit and doing the right thing anyway.

As for myself, I would rather America be right than be loved.

(þ: The Professor)

Update: The guys at Powerline found a great article that demonstrates the BBC's, and other MSM outlets, biased coverage:

The real story of the week should thus have been the startling contrast between the impotence of the international organisations, the UN and the EU, and the remarkable efficiency of the US and Australian military on the ground. Here and there, news organisations have tried to report this, such as the Frankfurter Allgemeine in Germany, and even the China News Agency, not to mention various weblogs, such as the wonderfully outspoken Diplomad, run undercover by members of the US State Department, and our own www.eureferendum.blogspot.com. But when even Communist China's news agency tells us more about what is really going on than the BBC, we see just how strange the world has become.
Remember: in spite of the media coverage, we've continued to do the right thing while the UN has had numerous pre-planning meetings, which have had a net benefit of zero for the people of the region.

Common law versus civil law

Or, that perennial battle between the French and the British.

A couple of weeks ago, a person from Legal Affairs actually emailed us to let us know about this article on the apparent prosperity of countries that follow the British common law versus the French civil law. Chris handed the article off to me and I promptly forgot about it.

Today’s Boston Globe has a brief version of the article here, which reminded me of it. The argument in favor of the LLSV research seems pretty persuasive to me—indeed, the French have begun looking into it themselves, according to the Globe—but I suspect it will be argued about for some time to come before a real conclusion is reached. In the mean time it appears to me that the British common law is winning.

They use Malaysia (common law) and Indonesia (civil law) as examples; the former is prospering, the latter is not. The LLSV authors attribute the difference to the British common law and its protection of shareholder rights, among other things. The key graf, to me, is this one from the Globe:

Yet for all its mathematical sophistication, LLSV‘s research has not gone unchallenged by their fellow number-crunchers. According to Luigi Zingales of the University of Chicago, the economic differences among countries may not come from something intrinsic to common law or civil law, but rather from some other correlated factor. Common law countries, for example, tend to speak English, tend to be Protestant, and tend not to have been decimated by World War II. The English, furthermore, may have done a better job than the French of finding economically viable locations to set up colonies.
As with most statistical studies, there’s the rub: show causality, rather than just correlation. The LLSV authors claim to have addressed these factors:
The LLSV scholars counter that their regression models try to take all of these variables into account, showing for example that civil law origin has much more of an impact on markets than religion does. They also note that at least they’ve found something that can be reformed. Legal origin may not explain everything, but changing laws is much easier than converting a country from Catholicism to Protestantism.

In the end, what LLSV has done is provide a giant statistical brief in support of the ideas of John Locke, James Madison, and Adam Smith, and they’ve updated those ideas for a world that’s as interested in economic success as in liberty. Creating a judicial branch that can check the executive and the legislature doesn’t just protect individual rights and prevent political persecution. It also improves your stock market and can transform your future. At least, that’s the theory.

I know where my sympathies lie—with the Brits, Adam Smith and John Locke, of course—but I’ll wait and see how the LLSV guys do at defending their research in the future. If I get time, I might even look the stuff up myself. I have some of the same questions as the LLSV guys when it comes to Haiti and the Dominican Republic: how can two countries that share the same spit of land be so dramatically different? In this case I imagine it has to do with more than just legal codes (DR is French, Haiti is unknown to me).

BTW, hell school resumes tomorrow and the impact on my own blogging can only be negative. Tough semester in front of me, with qualifying exams to come in May.