Transition

This is not what a macroeconomic transition is supposed to look like. My iterative procedure begins with a couple straight or smooth lines. It shows some smooth sensibility over the first dozen iterations. Then it starts to go astray, and doesn't stop.

Weekend Delight

Heading out to Finger Lakes National Forest this weekend with three good friends. We're hoping to be pleasantly dry on land and pleasantly wet when swimming. Hope your weekend is a fun one, too.

Music to a Professor's Ear

I'm tooting my own horn here, but comments like these validate my approach to teaching:

Beside anything, one thing is clear. I learned more stuff on Economics from your [class] than any other economics courses. I thank you for teaching though this course may appear as the lowest grade in my transcript. Hope you to have good summer.

Rigorous instruction and tough grading aren't popular, but they produce better students - who will go on to make up the difference by having better grades in future classes and perform better in professional environments.

Insight

David Ignatius has the most informative column I've read anywhere in quite a while, writing a piece sufficiently researched to be credible, but insufficiently sourced to be a news article. The result is an optimistic and very interesting discussion of the mysterious Syria-Israel talks that have been going on in Turkey. Ignatius' piece is worth a read, but here's his last, best point:

(5) What about Syria's secret nuclear reactor, which was destroyed by the Israelis on Sept. 6, 2007?

Oddly enough, that attack on what CIA analysts called the "Enigma Building" may have helped the peace talks. The Israelis felt that their decisive action helped restore the credibility of their deterrence policy. The Syrians appreciated that Israeli and American silence allowed them time to cover their tracks. Finally, the fact that Assad kept the nuclear effort a secret, and that he managed the post-attack pressures, showed Israelis that he was truly master of his own house, and thus a plausible negotiating partner.

An Unwritten Tribute

Curt Schilling blogged a preliminary goodbye to his fans today. You can tell his worship of hero Lou Gehrig is real - he'll use Gehrig's number, even his name, but not these words, which he notably does not use to say goodbye:

today I consider myself the luckiest man on the face of the earth

Instead, Schilling tips his cap with a near-paraphrase:

Not a thing in the world to be upset about.

Gehrig's words are forever his own. Imitation - not parroting - remains the highest form of flattery. Godspeed to Schilling and Dr. Joe Morgan as they prepare for surgery on the pitcher's shoulder.

Distinctly Droll

Washington Post film critic Stephen Harper goes to town with his writer's block in discussing Steve Carrell's latest work. Here's the lede:

The trick here is adjective selection. (Don't try this at home, kids, it can be dangerous.) Is "Get Smart" "incredibly" funny? No, not hardly. "Incredibly" connotes that oxygen-deprived state of strangled panic, when the laugh has become your enemy and strives to kill you.

So is it "pretty" funny? Um, it's more than "pretty," because there's a tinge of patronization to "pretty," as if the commentator is annoyed that something so primitive and vulgar goosed him into grins. Equally true of "sort of" or "kind of" or "occasionally." What about "intermittently" funny? Nah. It's more than intermittent, if not quite "consistently" funny. Is it, then, "rather" funny. No. Sounds British. The reviewer is just back from doing his Rhodes work at Oxford and wants everybody to know.

It's "darned" funny?

El Perfecto! Bull's-eye! No wonder we won a Pulitzer! "Damned" would be too strong, but "darned" fits the movie's innocence, its earnestness (qualities of star Steve Carell as well), its pleasing lack of sophistication, its good nature.

After lengthy consideration, Global Review has deemed the above distinctly droll.

Computers for the Poor

Remember the digital divide? Maybe it wasn't such a bad thing after all. From economists Ofer Malamud and Kiki Pop-Eleches:

This paper examines the effect of access to a home computer on educational and behavioral outcomes among low-income children and adolescents. Using data that we collected through in-depth household interviews during 2007, we implement a regression discontinuity design and estimate the impact of winning a government-funded voucher worth 200 Euros towards the purchase of personal computer in 2005...

We …find that children who won a voucher spent signi…ficantly less time watching television and doing homework. Moreover, the effect on homework appears to have had real consequences for school performance. We find evidence indicating that children who won a voucher had lower school grades. Parents reported that these children had a signi…ficantly lower expectation of going to college. Finally, we also find suggestive evidence that winning a voucher is associated with negative behavioral outcomes. These …findings indicate that providing home computers to low-income children in Romania led them to experience worse outcomes.

Sometimes evaluation is important.

Bananas!

Besides being a helpful acronym for the NIMBY corollary, "Build Absolutely Nothing Anywhere Near Anyone", a banana is a tasty, nutritious and unbelievably cheap staple of world diets. It is mindboggling that all year round, bananas are cheaper, pound for pound, than the apples native to my region, even after being shipped thousands of miles in refrigerated containers.

Banana maven Dan Koeppel writes a succinct if elegiac paean to the cheap banana, fearing that rising fuel costs and a newly powerful fungus may sunder the days of 49 cent per pound bananas. So eat your bananas while you still can!

South Africa in Black and White

How well does affirmative action work? In India, Gujjars rioted and killed dozens because the government classed them in the second-lowest rank of castes. They wanted to be in the lowest rank.

In India, the caste system is explicitly unconstitutional.

Now, in South Africa, 200,000 people previously considered "white" are now classified as "black". This is good to know, as I'm planning to enjoy some good traditional white black food at my friend Chen Yi's home tonight. The newly black in South Africa are thrilled - now they can be considered for government quotas for 'blacks' in government, education, and business. It may be a little hard to follow all this, so I've helpfully posted a picture of a black South African.

The Republic of South Africa was founded on the premise of racial equality.

Euroweenies

A friend used the phrase "Euroweenies" to refer to the LA Lakers. And then Dan Shaughnessy put this touch in his NBA finals recap exultation:

...role players named James Posey, Eddie House, and P.J. Brown helped the starters methodically erase the Lakers. Don Cherry would have loved it. Kobe Bryant scored 22 for the losers, but ultimately LA just had too many Europeans.

Judgment Day

Global Review today cheekily joins the ranks of the intolerant and moronic by proclaiming the flooding in Iowa THE VENGEANCE OF GOD!!

New Orleans allegedly got flooded for its lust and wrath. Likewise 9/11. And the Civil War may have been God's just punishment for slavery, according to President Lincoln.

But what about the current "tragedies"? In Iowa, boy scouts were killed and injured by a tornado and massive floods are destroying cities and crops there this week. Aren't these what insurance companies call "acts of God"? But what has God got against Iowa?

Maybe this. And this. Iowans have benefited from high food prices around the world - which they caused by leveraging a first-in-the-nation presidential caucus into massive subsidies for a swindle called "ethanol".

Iowans' avarice has come home to roost: except, where Iowans used the weakness of the Federal government and the world to screw them over, demanding ever larger farm payouts when food prices were highest, the U.S. is likely to come to Iowa's aid, with federal money and private volunteers in Iowa's hour of need. Maybe Iowans will remember this and stop fleecing America for their private benefit. But don't count on it - even ancient Israel didn't learn from God's judgment on their greed.

On a Manifestation of Inexperience

Just as John McCain's strongest and weakest points are his Washington experience and associations, Barack Obama's strongest and weakest points are his lack of Washington associations and experience. But exactly how do these generalizations manifest themselves? In the past few months we have already seen one way.

Obama in the past month has left his church of 20 years and fired his Veep Vetter - two rather drastic and abrupt dissociations. Is Obama really that much slimier than the average politician in the company he keeps? Personally, I suspect not. But he's had less time than the average presidential candidate to cull his circle of confidants.

In the course of human affairs, we all make friends with some unsavory types. And in the course of political affairs, some of those friends are ratted out. Some politicians (like McCain) move sharply away from anyone they suspect is dirty; others (like the Clintons) move sharply away from those who can't effectively hide their dirt. Others (like President Harding) never move away and get burned - often badly.

With his meteoric rise from State Senator to odds-on 44th POTUS, Obama has had just a few years to relegate to the past some worrying types - Rev. Wright, Fr. Pfleger, and William Ayers. In addition, he has not been in Washington long enough to learn who is really pukka sahib and who is likely to have sleaze in every pocket. The resignation of Jim Johnson reveals either very bad luck or very poor knowledge of Johnson's character and reputation. Opinion Journal reviews the damage, and suggests further inquiry into the Veep Vetting team.

Obama's campaign is running low on excuses for its friends. But in reality, the between-the-lines message should be, "Hey, we're new at this game. We're getting rid of the slimy types as soon as we identify them." Whether they'll purge out such characters (and, more importantly, such behavior) quickly enough to govern effectively is, I think, a judgment fairly left with the voters.

Neither side in this game of "gotcha" should get too prickly: public officials and those who advise them are absolutely fair game for revelations of past malfeasance, whether in public service, business, or private life. At the same time, a campaign or administration should not be judged harshly for ignorance, as long as it acts promptly when the truth is revealed. McCain's response to the Keating Five scandal - immediate apology and sharp dissociation - is model behavior; the Clinton's cat-and-mouse games and last-minute pardons of friends and contributors are model misbehavior. Here's hoping Obama is more of a statesman than a politician.

Who Are Y'All?

The last couple days, I've been getting a slew of visitors who are referred here from a Google search for Global Review. You're in the right place... but how did you hear about this blog? And why do most of you live in downstate New York? Just curious.

SCOOPER BOWL!

All of you who are lucky enough to live in the Hub of the Universe, get yourselves out to the Scooper Bowl in Govahment Centah today and tomorrow. This is seriously the high point of the Boston calendar year: all the ice cream you can eat, from all the best New England ice creameries, for $7 or so. Info here. Plus, two free tips from Global Review: pee before you go into the event (no bathrooms) and smuggle a small metal spoon in with you. It's easier and classier to eat with than the plastic one they give you, and it won't break.

Bush Refuses To Rule Out Trojan Rabbit

Discussing Iran's nuclear program while in Germany, President Bush would not rule out using the "Trojan Rabbit" gambit against the Iranian Mullahrchy.

And yes, I did just make up the term Mullahrchy, but I'm not the first. This term ought to be in wider circulation!

Free Encyclopedias

This is posted for free on Rochester Craig's List. If you agree with me, go tag it "Best of Craig's List".

Is It Time to Put Unemployment Out to Pasture?

A workhorse of economics, journalism, and politics over the past century has been the unemployment rate. It's a deceptively simple statistic: the number of people who don't have work but are looking for it divided by the entire labor force.

But what is the labor force? Ah, there's the rub. Last month's unemployment figures (via Drudge) exhibit the vagaries of the labor force:

The unemployment rate soared from 5 percent in April to 5.5 percent in May. That was the biggest one-month jump in the rate since February 1986. The increase left the jobless rate at its highest since October 2004.

Yikes! With a labor force of about 170 million, a half-percentage point rise means that nearly a million people lost their jobs. That's a huge economic crash! But wait, the numbers don't quite line up:

...nervous employers cut 49,000 jobs.

In an economy where millions of jobs are cut and created every month ("churning", we call it), a paltry 49,000 were lost, on net? That's 0.028% of all jobs. So where does a change 18 times that size come from?

The government said the number of unemployed people grew by 861,000 in May... The over-the-month jump in unemployment reflected more workers losing their jobs as well as an increase in those coming into the job market -- especially younger people -- to look for work, the Bureau of Labor Statistics said. [emphasis added]

The headline should read: Labor Force Grows Sharply. Nearly a million non-workers looking for jobs is big news - but it's much different news than nearly a million workers losing jobs. Economists have long known that people move in and out of the labor force freely. If a 20-year-old college student starts looking for a part-time job, he's in the labor force. When he decides it's not worth it, he's out. The young, the recently retired, and married women are the most often switchers - and their participation can be read more than one way.

If young people keep joining the labor force, and jobs never materialize, that's a sign of a weak economy, and the increase in unemployment correctly implies a downturn. However, if wages go up (as they did in May) and more non-workers decide it's a good time to look for a job, it's harder to interpret the increase in unemployment. The new job seekers did not, after all, find jobs, so we're not seeing evidence of a boom. But they did decide that looking for work is better than not looking, so they can't be completely pessimistic about their chances.

The bottom line is that unemployment rate as it's currently measured - like some statistics in baseball and elsewhere - is not a great metric of what it claims to measure. We might want to put this old horse out to pasture and let labor economists fight over a better summary statistic of labor force dynamics.

Sick, Sick People

Somebody on Craig's List wants to trade a chestnut tree for an old lady!

The Dumbest Idea Since Segregation

Baseball wants to honor black ballplayers who made the Negro Leagues an amazing venue of American sports during the first half of the 20th century. The best Negro League players are already in Cooperstown, and many others who could have excelled in the Major Leagues also deserve recognition. But not like this:

[Twenty-nine] former Negro Leaguers will be drafted in a pre-draft ceremony, a tribute formulated by Hall-of-Famer Dave Winfield and embraced by Major League Baseball.

There are two basic problems with a tribute in the form of a draft. First, black ballplayers went undrafted during segregation not because they were black, but because there was no amateur draft. The amateur draft was created in 1965; before that there was a minor league draft, which could have been a route from the Negro Leagues to the Major Leagues. However, Jackie Robinson and those who followed signed as free agents - exactly the way any player would want to.

Even if a draft existed, why would a player want to be drafted? The draft has been compared to involuntary servitude, and is always a means of keeping player salaries or bonuses down. By stripping players of their right to negotiate with any club (like a free agent), the teams protect their profit margins. Being drafted may mean access to professional baseball, but largely on the team's terms.

Perhaps MLB is unintentionally revealing its regrets over not including Negro League players earlier in its history: All that lost revenue...

Extra Credit

In an effort to explain the equilibrium concept of optimal response, I offered my students the chance to earn a point of extra credit by winning the following game:

Pick a number between 1 and 100. The highest number in the class gets a point of extra credit

The answers?

100
100
100
23
100
36

I awarded four students extra credit for performing better than a random number generator. It's a good thing I teach at a school that's been called a "New Ivy League" institution.

The Name's Bonds... Barry Bonds

Soxaholix today suggests a replacement for the injured David Ortiz. It's so obvious, yet so unpalatable.

Baseball's all-time home run leader, a first-ballot hall of famer, is not apparently in serious decline. Barry hit for a 1.045 OPS last season, virtually equaling his career average. He's 43 years old, so he could chat with Wakefield and Schilling about... nah, never mind. And with no contract this late in the season, he won't cost more than $1 million guaranteed.

Is this seriously doable? Would the fan reaction be so overwhelmingly negative? Not if the team and Bonds play their cards right. Boston more than any other MLB team has a history of racism (see Green, Pumpsie), and Bonds more than any other current player has (occasionally) used the race card to defend himself. By signing an angry black man, the Sox would be distancing themselves from the old Yawkey ownership, whose antebellum attitudes kept the Sox from winning a world series for half a century. At a minimum, that storyline distracts from the more obvious "mercenary" storyline which would be the only story at any other ballpark. And maybe Boston could shed, once and for all, the old trope about being an unfriendly place for black ballplayers.

And suppose Bonds succeeded in Boston, hitting 20 homers and winning a clutch game or two over New York Tampa Bay? We all know he's clean now, so that's not an issue. And baseball has always been about winning uber alles - that's what led to the integration of the sport in the first place.