Measuring the dependency of different variables
September 27th, 2008 — Politics
Yesterday, before the debate, Obama stood at 55.2 on intrade (meaning that it cost $.552 to buy a piece of paper that pays $1 if Obama wins—meaning that the markets estimate that he had a 55.2% chance of winning).
At then end of the debate, he had dropped to 53.5% (costing me a beer—I had my own bet going on). He is now at 57.2%.
Therefore, the markets recon that he did better on the post-debate than in the actual debate.
September 26th, 2008 — Politics
From the ongoing series when I grow up I want to be like Andrew Sullivan:
Here’s a funny video. It’s a taxi driver that, by mistake, took the place of an expert in a BBC interview:
This came to mind after hearing Gov Palin’s interview.
She always reminds me of a bad movie, in which a small town mayor finds himself suddenly on the national stage. Of course, in the movies, it turns out that the small town mayor, with his folksy wisdom is better than the experts. In real life, we have Sarah.
September 25th, 2008 — Politics
If only we had the right regulation in place, there would be no financial crisis. This NY Times article from 1999, illustrates how difficult it would have been to get the right regulation in-place:
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
[...]
”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
(via Coyote)
Now, you tell me, how would it be politically feasible to pass legislation making it harder to lend money to the poor?
September 22nd, 2008 — Politics
From the ongoing series utilitarianism leads to strange conclusions:
A 2004 study by Frank Sloan and Jan Ostermann at Duke University found that heavy drinkers contribute slightly more to Social Security, through their higher average lifetime earnings, than nondrinkers do. What’s more, since alcohol abusers tend to die sooner than moderate or nondrinkers, they draw less money, over time, from the Social Security trust fund.
Their conclusion: the elimination of heavy drinking (three or more drinks a day) from each successive group of American 25-year-olds would cost the Social Security trust fund $3 billion over the cohort’s lifetime.
(in freakonomics blog via free exchange)
Should we have heavy drinking campaigns? Binge drinking is patriotic (maybe binge drinking better than paying taxes).
It’s not uncommon for health improvements to have bad impacts on social security. Smoking also seems to be good for the health of the state. Dying young is patriotic.
September 21st, 2008 — Politics
From the on-going series small-c conservatism does not always argue for traditional values:
The day after the California Court decision to legalise Gay Marriage, I heard what sounded like an older woman on NPR saying something to the effect of Marriage should be between a man and a woman. It’s the Law of the land!
A remarkably large number of people take moral clues from legislation. As I see it, legislation can be downstream from morality, but never upstream from it (i.e., legislation derives from morality, which may cause them to be similar; but one should never derive morality from legislation).
In this particular case, it was extra curious because the ruling had just changed the law. If anything, the woman should be shouting Marriage is between two people of any sex. It’s the Law of the land!
In general, the “law=morality” heuristic (“heuristic” is a fancy word for “rule of thumb”) has the effect of adding a lot of inertia to political systems, which is most often not a bad thing. In this particular case, it is arguing for gay marriage.
Therefore, it doesn’t surprise me that support for Proposition 8, which would over-ride this ruling and deny gays the right to marry, is waning. People are taking their cues from the law, acting small-c conservatively, and accepting gay marriage.
September 19th, 2008 — Politics
From the ongoing series I like to disagree with Libertarians by quoting Hayek to them:
Bob Barr, the Libertarian Party’s nominee for president, has filed a lawsuit in Texas demanding Senators John McCain and Barack Obama be removed from the ballot after they missed the official filing deadline.
[...]
Texas election code §192.031 requires that the “written certification” of the “party’s nominees” be delivered “before 5 p.m. of the 70th day before election day.” Because neither candidate had been nominated by the official filing deadline, the Barr campaign argues it was impossible for the candidates to file under state law.
[...]
“The facts of the case are not in dispute,” says Russell Verney, manager of the Barr campaign. “Republicans and Democrats missed the deadline, but were still allowed on the ballot. Third parties are not allowed on the ballot for missing deadlines, as was the case for our campaign in West Virginia, yet the Texas secretary of state’s office believes Republicans and Democrats to be above the law.”
Funny people, these Libertarians.
If they read some Hayek, they would perhaps appreciate that there is a fundamental difference between legislation (that which is written and passed by legislatures) and Law (that which one is expected to follow). While legislation certainly posits that all parties are equal and may even mandated that both major parties be taken of the ballot, the law is that the two major parties are different and will never be taken off the ballot.
They are, of course, correct in complaining that the Law (and often, the legislation) is discriminatory against third parties. This lawsuit is about showing this discrimination more than anything else.
However, such tactics rely on their being some amount of grass-roots outrage that the Libertarian Party (or the Constitution Party or some other Guns-and-Bitterness Party) was taken off the ballot. There isn’t any. This is no more than amusement.
September 14th, 2008 — Politics
The price of gas is spiking in the South (I just filled up at 3.59 in PA, so no problems here). I wonder if this isn’t going to push Obama back into the race in states like Florida, which had been running away from him.
September 12th, 2008 — Politics
So what is the “key difference” between the parties? Rhetoric. When Republicans advocate a small contraction of the welfare state, Democrats claim that Republicans totally oppose the welfare state. And many Republicans oblige them by standing up for “liberty” and “responsibility.” Similarly, when Democrats advocate a small expansion in the welfare state, Republican claim that Democrats oppose free markets. And many Democrats oblige them by saying things like “markets only benefit the rich.”
This rhetorical illusion is so powerful that when a Democrat like Clinton adopts many pro-market reforms, Republicans still hate him as a 60s radical. And when Bush II sharply expands the welfare state, Democrats still hate him as a billionaire’s lackey.
I have wondered about this myself. If Clinton was the best Republican president since the war (as Greenspan said), then Bush personified many of the things that Republicans say they fear from a Democratic administration: he expanded the entitlements of the welfare state (the biggest expansion for decades), he bust the budget (which Clinton had sent into surplus), he increased the national debt, and he expanded the bureaucracy of the Department of Education to meddle into the affairs of local school. He did all of this with encouragement from a Republican Congress. The same Republican Congress passed the highly anti-business and meddlesome Sarbanes-Oxley Act. Yet, Republicans can still claim with a straight face to stand for smaller government and not be laughed out of the room.
Frankly, I don’t fully understand it.
September 11th, 2008 — Politics
On intrade, McCain passed the 50% mark: the betting markets now think it more likely that he, rather than Barack Obama, will win the Presidential election.
September 9th, 2008 — Politics
People have wonder whether the post-convention bump is a real thing (what Russ Roberts has called the scary idea that people would change their minds on something so devoid of real content as a convention) or whether it’s simply a matter of the energised faithful replying to pollsters more (without any change in the number of people who actually plan to vote for any one candidate).
At least the betting markets seem to believe that McCain has got a real boost from his convention: he was trading at 49% earlier in the day(i.e., the consensus view of the market is that he has a 49% chance of becoming president). This is better than it ever was for him.
