Friday, March 16, 2018

On the Culture's Watchtower

Jews in the New Germany of the 1930s were not allowed to play the music of Mozart or other "Aryan" composers.

They probably thought it was Cultural Appropriation.

Thursday, March 15, 2018

Balence of Payments

Every year, year after year, once we account for all international transactions including the buying/selling of goods, services, and assets, and investment income payments, there is NO “trade imbalance” and the Balance of Payments = 0 (and total cash outflows = total cash inflows).

And U.S. trade deficits:

Wednesday, March 14, 2018


 A ship in port is safe; but that is not what ships are built for. -Grace Hopper, computer scientist and US Navy Rear Admiral (1906-1992)

The original Bill of Rights were a clarification of the rules of the Constitution. They limited government in a time of anxiety over a powerful central government. This was a battle then, (Adams and Hamilton against Jefferson) and is the origin of the States Rights movement as well as the Slavery debate and, more recently, sanctuary cities.
Roosevelt proposed a "Second Bill of Rights," arguing that "people in need are not free." Those "Rights," which never passed, expanded the role of government.

Aluminum makes up 0.1% of the U.S. GDP, autos 4%.

A little known consequence of the new tax law is that refinancing of municipal debt will, in many cases, not be allowed. This will increase community costs, decrease inventory and shrink the premiums brokers are able to add on to costs.

The loud, preposterous moral crusades that so endlessly rock the republic against the rum demon, against Sunday baseball, against Sunday moving-pictures, against dancing, against fornication, against the cigarette, against all things sinful and charming these astounding Methodist jehads offer fat clinical material to the student of mobocracy.  In the long run, nearly all of them must succeed, for the mob is eternally virtuous, and the only thing necessary to get it in favor of some new and super-oppressive law is to convince it that that law will be distasteful to the minority that it envies and hates.--Mencken

Who is....Umair Haque?

J&J lost a patent suit over Zytiga, its monster prostate cancer drug. The patent is due to expire in 2027. Argentum and other generic drug makers have been blocked from launching their own versions of the cancer drug until its expiration date.
Zytiga generated nearly $2.3 billion in sales for Johnson & Johnson in 2016.

A recent U.N. report on "Poverty in America" has some detractors. Worstall notes it measures cash payments, a concept that was eliminated by Reagan in favor of more indirect payments:
Just to emphasize this when they talk about child poverty (para 25) were told that 18 percent of children live in poverty, 13.3 million. Then in paragraph 29, were told that food stamps (SNAP) lift 5 million out of poverty, the EITC another 5 million.
So, the number of children living in povertyis not 13.3 million, is it its 3.3 million. That comes out to just 4.5 percent of children living in poverty,after the effects of just two of the things we do to reduce poverty.
In their own report, the U.N. is detailing how their claims of the number in poverty in the U.S. are entirely wrong codswallop in fact.

Can you imagine those sound-truck democracies writing about the U.S. economy.


At 11:38 a.m. EST, on January 28, 1986, the space shuttle Challenger lifted off from Cape Canaveral, Florida. Seventy-three seconds later the shuttle broke up in a forking plume of smoke and fire. Millions watched the tragedy unfold on live television. There were no survivors.  One of the victims was Christa McAuliffe, on her way to becoming the first ordinary U.S. civilian to travel into space. McAuliffe, a 37-year-old high school social studies teacher from New Hampshire, won a competition that earned her a place among the seven-member crew of the Challenger

Drinks and foods marketed to help us maintain weight may have been helping us to gain it, says WSJ Health Expert Harlan Krumholz. (wsj)

Misis: “…the root of the opposition to liberalism cannot be reached by resort to the method of reason. This opposition does not stem from the reason, but from a pathological mental attitude—from resentment....Many of those who attack capitalism know very well that their situation under any other economic system will be less favorable. Nevertheless, with full knowledge of this fact, they advocate a reform, e.g., socialism, because they hope that the rich, whom they envy, will also suffer under it.”

Geologists matching rocks from opposite sides of the globe have found that part of Australia was once attached to North America 1.7 billion years ago. We want it back.

In 1968 the USS Pueblo was captured by the North Koreans. I think this shocked both sides and raised the question of what a power was willing to risk in the nuclear age. Suddenly technology became a disadvantage and so emerged the era of the Little Bully.

If Melania moves out, Trump will lose his best asset.

The country that claims great concern for its children has sentenced the Olympic child abuser after decades of abuse and ignoring complaints.


Golden oldie:
Brad Meltzer, is a prolific fiction writer with a new book called "History Decoded," a book on famous mysteries, each section with a goofy ...

Many had sympathy with the Umair Haque article. Some thinks America is just too hard. Life is indeed hard and, temporarily at least, I think she is right; it is harder in the U.S.. But there is a tension that exists, regardless of the system. The division coarsely can be seen in the two great revolutions of the West (vs. those of Russia and China), the American and the French. Both were uprisings against an oppressive status quo with the vision of an ideal end-point. In the Americans' the end-point was liberty, in the French equality. Both have created relatively successful cultures but, in truth, it is early. No culture can survive if it is non-human. It may be that liberty is not a natural state for man but I think equality is less likely a basis.

The traditional “Out of Africa” model holds that humans first traveled from the continent between 130,000 and 115,000 years ago, towards the Middle East.
A newly-discovered fossil in the Middle East is estimated to be between 170,000 and 190,000 years old. Before now, the earliest remains found in Israel were dated between 90,000 and 120,000 years old. This means humans reached the region at least 50,000 years earlier than expected.

The disdain the world has for America is a bit hard for me to explain but I think it is true. One factor is the astonishing hatred the entertainment industry has for Trump--as if his election were some weird accident and not the result of domestic unhappiness. The Grammys and the Oscars were a nonstop belittling of Trump that is broadcast all over the world.
One element of Trump's election was this very problem: I think the U.S. does not feel it is getting the respect it deserves for its input into the world. There are huge philosophical enemies of the West, political and religious, and none of the Western nations has much of an investment in resisting other than the U.S.. I can not say we have done a great job--Iraq, the esteemed Arab Spring, or our infectious economic disasters for examples--but I for one would be happy to see one of the other Western nations offer advice, currency and manpower to shoulder some of the burden in a better way. I think the Obama administration, after some significant disasters, decided to do this unilaterally but I did not see anyone else step up. (One common suggestion is that there is no global threat to the West, that the Americans are sort of paranoid.)

Watched the Grammys and the Oscars. It's no wonder the youth is upset. The only enjoyable characteristic was rhythm and a few winning smiles. A lot of unintelligible lyrics and some tremendous, implied angst. Even the ads implied oppression. I have no idea what the general response will be--I am certainly not the target audience--but it looked like a cultural Dark Age to me.
(The way some of these people reached success--especially through YouTube--was very interesting, though.)

North Korea’s armed forces have scaled back their annual winter military exercises this year, U.S. officials said, a development they believe reflects pressure from international sanctions on the North’s economy and its military preparedness. (wsj)

AAAAaaaaaaaannnnnndddddddd......a graph:

Image result for economics interesting graphs

Tuesday, March 13, 2018

A Reaction to Pinker

An article in the NYT recently focused on psychology professor Steven Pinker and was illuminating in content and attitude.

The author, Brooks, writes:

"In part, but not totally. Pinker’s philosophical lens prevents him from seeing where the real problems lie. He calls himself an Enlightenment man, but he’s really a scientific rationalist. He puts tremendous emphasis on the value of individual reason. The key to progress is information — making ourselves better informed. The key sin in the world is a result either of entropy, the randomness that is built into any system, or faith — dogma clouding reason.

For example, we’re all aware of the gloomy statistics around wage stagnation and income inequality, but Pinker contends that we should not be nostalgic for the economy of the 1950s, when jobs were plentiful and unions strong. A third of American children lived in poverty. Sixty percent of seniors had incomes below $1,000 a year. Only half the population had any savings in the bank at all.
Between 1979 and 2014, meanwhile, the percentage of poor Americans dropped to 20 percent from 24 percent. The percentage of lower-middle-class Americans dropped to 17 from 24. The percentage of Americans who were upper middle class (earning $100,000 to $350,000) shot upward to 30 percent from 13 percent."

So far, so good. Now the really interesting part. The writer continues:

"The big problem with his rationalistic worldview is that while he charts the way individuals have benefited over the centuries, he spends barely any time on the quality of the relationships between individuals.
That is to say, Pinker doesn’t spend much time on the decline of social trust, the breakdown of family life, the polarization of national life, the spread of tribal mentalities, the rise of narcissism, the decline of social capital, the rising alienation from institutions or the decline of citizenship and neighborliness. It’s simply impossible to tell any good-news story when looking at the data from these moral, social and emotional spheres."

Those are big, proud aims.
While it might be true we tend to measure those things we can quantify, it is also true that such areas are the only areas that can be meaningfully compared. How do we define "social trust?" How should we place it in the social contentment pie chart? Is "social trust" now better or worse than in 1860? Can you add "social trust" in Kansas to "social trust" in Chicago? Is it more important than "polarization?" Should "driving distance to work" be included? How about "weather."

Life is disordered. We all have priorities. The great promise of the Enlightenment was that human liberty, ingenuity and energy would result in progress.
What if that is untrue?

Monday, March 12, 2018

Growth and Wages

While the economy continues to grow and worker production increases, the wages have stagnated or declined. This has been of concern to economists. A recent article by Tepper has some stats, if not explanations. (an important distinction.)

Disconnect between productivity and typical worker’s compensation

(Source: Economic Cycle Research Institute)

American company profits are certainly up. But much of the profits have gone to stock buybacks or dividends, earnings and stock prices often being connected to executive pay.
Another explanation is the growth of monopolies.

Two corporations control 90% of the beer Americans drink.
When it comes to high-speed internet access, almost all markets are local monopolies; over 75 percent of households have no choice with only one provider.
Four airlines completely dominate airline traffic, often enjoying local monopolies or duopolies in their regional hubs. Five banks control about half of the nation’s banking assets.
Many states have health insurance markets where the top two insurers have 80-90% market share. For example, in Alabama one company has 84% market share and in Hawaii one has 65% market share.
Four players control the entire US beef market.
After two mergers this year, three companies will control 70 percent of the world’s pesticide market and 80 percent of the US corn-seed market.
(Source: Pine Capital)

Over half of all public firms have disappeared over the last twenty years. There is a virtual a collapse of publicly listed companies. Astonishingly, according to a study by Credit Suisse, “between 1996 and 2016, the number of publicly-listed stocks in the U.S. fell by roughly 50% from more than 7,300 to fewer than 3,600 while rising by about 50% in other developed nations.” It is not lower growth or the global Financial Crisis that caused fewer IPOs. This is distinctly an American phenomenon.
The decline in listed companies has been so spectacular that the number lower is than it was in the early 1970s, when the real GDP in the US was just one third of what it is today.  America’s economy grows ever year, but the number of listed companies shrinks. On this trend, by 2070 we will only have one company per industry.

Another is the decline in farm pay, influenced also by dominance of rural areas by a single industry or company.
In 1980, if you lived in Washington D.C., your per-capita income was 29 percent above the average American; in 2013 you would be 68 percent above. In New York City, the income was 80 percent above the national average in 1980 and skyrocketed to 172 percent above by 2013

Saturday, March 10, 2018


On March 11, 2011, a massive earthquake and tsunami hit the northeast coast of Japan, killing 20,000 people. Another 160,000 then fled the radiation in Fukushima. It was the world’s worst nuclear disaster since Chernobyl, and according to some it would be far worse, if the Japanese government did not cover up the true severity of the devastation. At least 100,000 people from the region have not yet returned to their homes. A full cleanup of the site is expected to take at least 40 years. 40 years.

Today, the radiation at the Fukushima plant is still so powerful it has proven impossible to get into its bowels to find and remove the extremely dangerous blobs of melted fuel rods.

The plant's operator, Tokyo Electric Power has made some progress, such as removing hundreds of spent fuel roads in one damaged building. But the technology needed to establish the location of the melted fuel rods in the other three reactors at the plant has not been developed.

The fuel rods melted through their containment vessels in the reactors, and no one knows exactly where they are now. This part of the plant is so dangerous to humans, Tepco has been developing robots, which can swim under water and negotiate obstacles in damaged tunnels and piping to search for the melted fuel rods.

But as soon as they get close to the reactors, the radiation destroys their wiring and renders them useless.

The reactors continue to bleed radiation into the ground water and thence into the Pacific Ocean but the company has built a wall that has diminished the contamination considerably.

Another problem: Much of the work involves pumping a steady torrent of water into the wrecked and highly radiated reactors to cool them down. Afterward, the radiated water is then pumped out of the plant and stored in tanks that are proliferating around the site. What to do with the nearly million tonnes of radioactive water is one of the biggest challenges, said the site manager. He is “deeply worried” the storage tanks will leak radioactive water in the sea - as they have done several times before.
The company hopes to get permission to do exactly that, to release the contaminated water into the sea.

"The future existence of Japan as a whole was at stake," admitted Japan's prime minister regarding the time of the 2011 quake and tsunami, revealing that the country came within a "paper-thin margin" of a nuclear disaster requiring the evacuation of 50 million people.

Conservation group Greenpeace warned that "signs of mutations in trees and DNA-damaged worms beginning to appear," while "vast stocks of radiation" mean that forests cannot be decontaminated.

This is from an old blog but the point remains: This is the result of well made plans and engineering with intense government oversight. One could become opposed to human efforts or just cynical. But one must understand that projects do not always go as directed and caution should be everyone's by-word.


In science consensus is irrelevant. What is relevant is reproducible results. --michael crichton 

Stalin believed that heavy industry was the key to gaining parity with western nations and so imposed on feudal Russia an enormous industrialization program focused on steel, coal, and oil. "Comrades" were dragooned into working in heavy industry; many literally became slaves. One government project, the White Sea Canal, used hundreds of thousands of slave laborers. During the years of the canal's construction, between 100,000 and 200,000 laborers (many of whom were women) died or were shot. The massive development of steel and other heavy industry did indeed increase the USSR's output, but the vast bulk of the production went to military uses while basic consumer goods like clothing, refrigerators and washing machines remained extremely scarce.
Food too.

From a letter to the NYT on "Trade War:" How stupid.  In a real war, foreigners literally kill us by shooting bullets and bombs our way; in a so-called “trade war,” foreigners literally enrich us by shipping goods and services our way – on terms that are especially attractive to us, and which each of us remains free to accept or to reject.
Another difference: in a real war, our government dispatches armed troops abroad to use violence to subdue and subjugate citizens of other nations – to subdue and subjugate ‘them.’  In a “trade war” our government dispatches armed customs agents domestically to use violence to subdue and subjugate citizens of our own nation – to subdue and subjugate us.

Ferguson has a metaphor of "Squares and Towers" that is probably going to catch on in discussion.

He pictures an ancient city, and the difference between squares, where people meet, and towers, where the power resides. For tech optimists, things did not go quite as they planned. An increasingly connected world should have led to an awesome world, but it didn’t work out that way. The power was not shifted to the “squares.” The obvious question is, why should connecting the entire world make it a better place? Connectedness has instead disrupted political hierarchies. Without tools like Twitter, campaigns like Donald Trump’s would not have won. Social media made the difference. Connectedness has created huge, monopolistic networks, Ferguson said, “and it will take a network to defeat a network.” In the network battlefield, the winner takes all. The financial crisis was a global network crisis. In a hyper-connected world, is the status quo sustainable?

In a lab setting, scientists have been able to reverse the aging process in cells. This cell process is now firmly under human control.

What is...The Promise Program?

Arie Luyendyk Jr. angered fans for pulling a fiance swap on The Bachelor finale this week. His brutal breakup to Becca Kurfin was aired unedited on Monday's finale, and then on Tuesday, he proposed to his runner-up, Lauren Burnham, on After the Rose. In doing so, he earned the dubious honor of becoming the first Bachelor to propose to two women in one season.
Becca wasn't the only person angered. Minnesota Representative Drew Christensen was so annoyed by Arie, he authored a bill banning Arie from his state. Becca is from Prior Lake, Minnesota, which is repped by Christensen. 
"I’m a man of my word—here’s the bill banning Arie," Christensen tweeted along with photos of the bill for the act, as well as his signature on it.
"The state of Minnesota hereby adopts a policy of zero tolerance of Arie Luyendyk, Jr. from season 22 of The Bachelor," his letter reads. "It is state policy that every person in the state has a right to live free from the presence of Arie Luyendyk, Jr. in the state." 

There is a crazy debate going on over the Pirates. For some reason some people feel that the owners should spend more money on them. The problem is very simple: The owners will spend only what the franchise can support. Other owners spend more money because their communities support them better--through higher populations and other franchises. (The Yankees have their own TV station.) The conundrum is this: The Pirates are worth a lot of money--but elsewhere. If they are to stay here, they are always going to be a bargain, build from the bottom up franchise. If more money is to be spent--or if the Nuttings cash out--it will not be in this town. The Nuttings should be supported, not vilified. That said, the problem has been that the Pirates, when they were drafting in the top five--sometimes first--have had very little to show for it. Remember Lincoln? Sanchez? Even Cole?

The Romans and Greeks would literally float a piece of burnt toast on top of the wine at events. The reason for this was that the toast took away some of the wine’s acridity. In early history wine was made and stored in animal skins, as well as many other things, so it was not nearly as good as it is today. This tradition involved offering the toast to the gods by standing up and extending the drink toward the sky while saying a prayer. Hence, "Toast!" Or so it is said.

From Goldfield's book, nostalgic for real liberalism: Not until 1943 did the government remove the racial classification "Hebrew" from immigration forms. Cornell University's president promised to prevent Jewish enrollment from making the school "unpleasant for first-class Gentile students." When Jonas Salk, who would invent the polio vaccine, applied for a fellowship, one of his recommenders wrote, "Dr. Salk is a member of the Jewish race but has, I believe, a very great capacity to get on with people."

According to Marketwatch, 1 in 3 young Americans spent more on coffee last year than they invested.

Sowell has a book on what he calls "Cosmic Justice,"  – the idea that humanity has any shot at fair, just, equal outcomes. It's not that he disagrees with the ideals of fairness, equality, or justice. He simply disagrees with the mindless implementation of them, the quasi-religious pursuit of them at all costs. He once wrote, "Justice Oliver Wendell Holmes said that a good catchword can stop thought for 50 years. The phrase “social justice” has stopped many people from thinking for at least a century — and counting." Justice, according to Sowell, is rooted in process. And when a cosmic injustice--plague, brigands, climate, genetics--arises, efforts to make the cosmic right invariably undermine the basics of daily justice. ""We cannot simply `do something' whenever we are morally indignant, while disdaining to consider the costs entailed."

One of the best and craziest signs I have seen: "We are the grandchildren of the witches you could not burn." One of the elements of modern life is the ability of someone to make an impact--and be appreciated--despite being overtly nuts.

The 14th Century China imperial court prohibited any foreign trade (without official permission) for about two centuries after 1371, even going so far as to forbid the construction of new seagoing ships in 1436.

Golden oldie:

Pigs were domesticated in China around 4900 B.C. (although some experts claim 7000 to 6000 B.C. in Western Asia) and were being raised i...

There is an interesting twist to the Florida shooting story called The Promise Program. It's worth a look. Another self-defeating Good Idea that hampers the system trying to identify risky people.

On "Paid Family Leave" being funded by Social Security: "The first problem is that this would shift the burden of providing the benefit from the private economy to government. Academic evidence shows that family leave keeps employees in their jobs and can make them happier or more productive, which is one reason many companies pay for it. But why pay when the government offers 12 weeks?" (wsj)

It seems there were armed law agents in defensive mode outside the Florida school shooting as they allowed the children inside to fight it out themselves. So to the illusion of opportunity and the myth of liberty we can add the deception of protection.

Stats are difficult when they lead to metrics. The gun discussion will show this. There are many lovely examples.  When you start grading surgeons on outcomes, they start shying away from the tougher cases.  A school district can improve its national test scores by having their poorer students stay home on the day of the tests. And this great example from McArdle:
"I once temped for a firm where some overzealous office manager had decided to crack down on office supply leakage by issuing an edict that employees could take only one pen, notebook and so forth at a time. To be issued another from the locked supply room, you had to show the one you’d used up. Did this save the company money? Well, they spent less on pens. But as you can imagine, eventually someone accidentally carried a pen out of the office and lost it. Naturally, they stole someone else’s pen. That person then began prowling neighboring desks for a replacement. By the time I arrived, normal business activity seemed to have made way for full-time careers in petty theft. Even at minimum wage, it seems unlikely that this expenditure of human resources was a net gain to the firm."

An armed high school teacher in Georgia barricaded himself alone inside his classroom and fired a gunshot when the principal tried to force open the door, but no one was seriously injured, police said after the instructor was arrested. Oh, good. They're already armed.

AAAAaaaaaaaannnnnndddddd.....a graph:

(Source: Economic Cycle Research Institute)