Thursday, October 28, 2010


I had no idea that biofuel production was so far advanced.  They know how to make advanced kinds of fuel out of sugar at competitive prices, and the technology keeps getting better.  In the next few years, there will be enough biofuel refineries around to start driving down the price of fuel.

Here is an important sentence:

Today's cellulosic ethanol is competitive with the petrol it is supposed to displace only when the price of crude oil reaches $120 a barrel.

$120 a barrel is about 50% more than current oil prices.  The potential availability of ethanol effectively puts an upper limit on long-term gas prices. If oil ever got above $120 a barrel and stayed there, then we would be able to use current technology to make enough ethanol out of weeds to replace it at that price.

This means that fears of 'peak oil' are completely unfounded.  We already have the technology to replace oil if we need to, and the technology keeps getting better.  Yes, it would take several years to start scaling up production.  But even in the worst-case projections, it would take decades to run out of oil.

This is bad news for electric cars.  If biofuel technology advances faster than battery technology, there will be little point in replacing the internal combustion engine.

Name Auctions

When broadcasting was first introduced, the FCC gave out extraordinarily valuable chunks of radio spectrum for free to TV and radio companies.  In recent decades, they have learned from that mistake and started auctioning off the spectrum, raising millions of dollars and allocating the resource more efficiently.

It just occurred to me that ICANN, the private not-for-profit company that assigns web addresses, made exactly the same mistake.  A domain name like '' can sell for millions of dollars.  And yet ICANN gave out all of these names for free to anyone who registered them in the early days of the Internet.

The existence of 'aftermarket' domain name auctions makes the allocation efficient: the names go to whoever pays the most.  The issue of who gets the money is usually considered irrelevant in economic analysis; it is just a transfer payment from one person that leaves society as a whole.  However, there are transactions costs and wasted resources involved here.  People spend time and effort making these deals that could have been spent on more useful things.

If the Internet ever gets replaced or reconfigured so that a new system of names is set up, the people responsible for assigning names will probably do the smart thing and auction them off.  This would be more efficient, and would give the money to the people who actually run the system rather than random speculators.

There are a lot of other organizations that could raise money in similar ways.  For example, campus IT departments could probably raise a decent amount of cash by auctioning off the rights to email addresses like '' for a five-year period.  Any new email or blogging system with free registration usually has all the good names taken very quickly, while getting nothing for them.  A lot of otherwise smart organizations are leaving a lot of money on the table because of their failure to properly price valuable assets.

Wednesday, October 27, 2010

Balanced Budget

A long time ago, P.J. O'Rourke wrote a great article that contained the line "The good news is I balanced the [federal government] budget.  It took me all morning but I did it."  He then proceeded to detail exactly how the budget could be balanced.  That was an important lesson for me: A problem that generated a lot of noise and political squabbles was not really that big, and could be solved by a bit of clear thinking and willpower.

This process has been repeated.  A magazine gathered a five former senators and a former CBO director in a room for a few days and told them to balance the budget.  They did it.  Here are the proposed reforms and here is a diary of the proceedings.

I basically agree with everything they propose.  There was a lot of good economics and public policy here; they zoomed in on much of the worst and most wasteful spending to cut.  This was a very good thing to organize, and it shows what is possible.

It is also an example of how special interests keep our society away from good solutions.  People will fight each individual proposal here.  Politicians that tried to do it would lose votes.  The way to solve our problems is to create a commission like this, and agree ahead of time to do whatever they say, and do all of it at once.  People will lose the ability to fight for just their thing, and should realize that a balanced budget is worth the loss.

Tuesday, October 26, 2010

Arrow's Impossibility Theorem

One of the more interesting and not-well-understood things that economists know is Arrow's Impossibility Theorem.  An econ blog has recently made the claim that this needs to be popularized more.  Since this blog exists partly to share economics insights with my friends and family, and since I don't have anything else to write about today, I'll discuss this.

The theorem basically says that any mechanism for aggregating preferences into a choice will either be irrational, dictatorial, or potentially useless. It is impossible to design any voting system that satisfies a small set of requirements that most people would want a voting system to satisfy.

The definition of 'irrational' used here gets technical; there are several criteria involved.  I am not going to go through the proof here, nor will I explain things in too much detail*, but I will give an example.  All other examples I have seen are public choice example, analyzing groups of people trying to make a collective decision.  I will shake things up a bit:

Suppose that you are deciding who to marry.  The choices are Alex, Elliot, and Pat.  Also suppose that your instincts, emotions, and rationality have different rankings:

Your instincts, those animal desires that care about physical attractiveness, tell you that Pat is better than Elliot and both are better than Alex.
Your emotions tell you, based on feelings of trust and bonding, that Alex is better than Pat and both are better than Elliot.
Your rationality, which measures competence and character, tells you that Elliot is better than Alex and both are better than Pat.

So, to summarize:
Instinct says P>E>A
Emotion says A>P>E
Reason says E>A>P

It is impossible to choose a winner by looking at all of them at once, because each part of you has a different favorite.  A vote would be deadlocked.  Even if you did something more complicated, like assigning points for second place, they are still tied.

Now look at what happens if you choose two of them and compare them to each other:

If you compare Alex to Elliot, then both Instinct and Reason say Elliot is better, so Elliot wins.
If you compare Elliot to Pat, then both Instinct and Emotion say that Pat is better, so Pat wins.
If you compare Pat to Alex, then both Emotion and Reason say that Alex is better, so Alex wins.

Your preferences are, to use a technical term, non-transitive.  Elliot is better than Alex, who is better than Pat, who is better than Elliot.  You could chase this chain of reasoning in circles forever and get nowhere.

Most discussions of Arrow's Impossibility Theorem get to this point and start talking about how we just have to accept irregularities in voting systems and sports tournaments.  They also talk about how it is foolish to say 'what society wants' because society often has no clear preferences over multiple options.

I will use it to make a different, and more practical point.  The only way to be a sane and decisive human being is to simply anoint a dictator from among your various mental processes.  It is impossible to satisfy them all.  You have to choose one, or end up dithering endlessly, or act chaotically.

I have chosen rationality, and I suggest you do the same.  Just ignore the rest of your mental chatter, except in those cases where rationality has no preference.

*Go here and here if you are interested in more details.

Monday, October 25, 2010

New Elite

By coincidence, this article touches on issues that I wrote about earlier today:

That a New Elite has emerged over the past 30 years is not really controversial. That its members differ from former elites is not controversial. What sets the tea party apart from other observers of the New Elite is its hostility, rooted in the charge that elites are isolated from mainstream America and ignorant about the lives of ordinary Americans.

Let me propose that those allegations have merit.

One of the easiest ways to make the point is to start with the principal gateway to membership in the New Elite, the nation's most prestigious colleges and universities. In the idealized view of the meritocrats, those schools were once the bastion of the Northeastern Establishment, favoring bluebloods and the wealthy, but now they are peopled by youth from all backgrounds who have gained admittance through talent, pluck and hard work.

That idealized view is only half-right.  Over the past several decades, elite schools have indeed sought out academically talented students from all backgrounds. But the skyrocketing test scores of the freshman classes at Harvard, Yale, Stanford and other elite schools in the 1950s and 1960s were not accompanied by socioeconomic democratization.

I'd recommend reading the whole article.  I generally agree with what it said, and have said similar things in the past.  Increasingly, the thing that differentiates groups in our society is the way they think.  In the past, elite status was tied to inherited wealth and privilege, but today, elite status is closely tied to having a different culture, education, and way of thinking.

As a side note, I have seen two blog posts that react very negatively and emotionally to this article, while giving completely different reasons for the dislike.  That is often a sign that it contains a truth that people do not want to admit and think about.

Predicting People

This article on crime is interesting by itself, but it also leads to some deeper thoughts:

a team of researchers from the University of California, Los Angeles, adapted a computer program used by seismologists to calculate the likelihood of aftershocks. They then seeded it with actual LAPD data on 2,803 residential burglaries that occurred in an 18km-by-18km region of the San Fernando valley, one of the city's largest districts, during 2004. Using the seismological algorithms, the computer calculated which city blocks were likely to experience the highest number of burglaries the next day, and thus which 5% of homes within the area were at particular risk of being broken into.

We see more and more of this kind of thing all the time.  Computer programs and mathematical algorithms can do a very good job of predicting human behavior.  But most people do not have a real understanding of what this implies.  In this example, the behavior of humans was accurately predicted using equations designed for predicting the movement of rocks.  Think about that for a moment.

When human action can be calculated so accurately, as if we were just a collection of mindless natural objects, what does that say about self-determination and free will?

This problem has been around for over a century, starting when sociologists first started analyzing large data sets on human behavior.  The scientists of the time were shaken to their cores when they realized just how strong and robust the correlations were between things like childhood poverty and later criminality.

All of our social intuitions tell us to treat people as unique individuals, and to assume that their actions are determined entirely by their character traits and attitudes.  This makes sense when the world you are aware of only has a few hundred people and they all grew up in about the same situation.  But when there are millions of people, and they live in vastly different physical, social, and institutional environments, cold unfeeling math is far more useful at predicting what people will do.  At that scale of analysis, everything that humans instinctively care about and think of as important to predicting people's actions is reduced to meaningless statistical noise.

The impression I get is that people are a lot like gas molecules.  Physicists and chemists know that the future motion of a single gas molecule is completely impossible to predict.  Despite the fact that its movements are governed by very simple physical laws, you cannot know where it will end up after about 20 collisions with other gas molecules.  A tiny uncertainty in initial measurement will make a vast difference in outcomes, and the Heisenberg Uncertainty Principle guarantees that there will always be that tiny measurement error in it initial state.

However, the aggregate behavior of millions of gas molecules is very easy to predict in most situations.  A few simple equations involving temperature and pressure will tell you everything you need to know about what a gas will do in response to physical changes.  Things get a little more complex when chemical changes are involved, but with the right equations and data sources you can predict with extraordinary accuracy exactly what will happen when a gas comes in contact with just about anything.

Similarly, the behavior of a single human being is almost impossible to predict, but the aggregate behavior of large numbers of people follows very steady and predictable mathematical equations.  The equations can get a lot more complicated than the ones involving gas molecules, but they can still be learned, known, and applied usefully.

Of course, these equations will do nothing to help you navigate your relationships with the people in your life.  Your instincts are still valid for that.  But if you want to make smart decisions about running a country or economy or large business, you need to use the math that treats people as objects.

This means that the intellectual distance between powerful decision makers and ordinary people is likely to grow.  Even aside from the inherent fact that power corrupts, it is hard to retain your humanity when you must analyze people statistically.

Sunday, October 24, 2010

Gender Arbitrage

An American multinational banking firm pursues profits above all else while imposing American culture on the locals and overturning their traditional way of life:
South Korea is the ideal environment for gender arbitrage. The workplace may be sexist, but the education system is extremely meritocratic. Lots of brainy female graduates enter the job market each year. In time their careers are eclipsed by those of men of no greater ability. This makes them poachable. Goldman Sachs, an American investment bank, has more women than men in its office in Seoul.

Friday, October 22, 2010

Art Department Open House

I had fun today.  The art department had an open house where we could come in and try and watch various things.  

The email advertised 'carving a sand block' and I imagined creating a sculpture.  I was planning on making something that looked like an ancient artifact puzzle box.  But instead, what were were actually doing was carving a mold for a cast aluminium relief sculpture.  After some thought, I made something that looked like part of a keyboard with the keys labeled, 'Boon', 'Smite', 'Light', 'Dark', and bits of other words.  Mainly I wanted a 'Smite' button and the rest were decorations.  I did not realize it at the time, but I was probably subconsciously inspired by the Far Side Cartoon.

Of course, the trick with casting is that you have to carve the letters backwards, because the mold is a mirror of the cast, so it took a bit of sketching and planning to make it work right.  As I was working, I noticed someone else who was making something with text but had penciled in letters normally, and I told him about the mirroring in time for him to fix it.

After that, the pottery students and teachers held a contest.  First, they made bowls blindfolded, which was not really much of a handicap.  Then they had to make a bowl in pairs, with each person using only one hand.  That was a bigger challenge.  The teams had to do a lot of talking and communicating.  As the teacher watched this, he commented that this would be an excellent teaching tool, because it forced them to really think and talk about what they were doing.

The final challenge was one of sheer size.  Each of the four people started adding large mounds of clay to the wheel, one at a time, in a game of steady brinksmanship, until the wheels were completely covered with clay to a height of at least a foot.  Everyone in the crowd knew that this would end up being a contest of strength and endurance in addition to skill.  After ten minutes of solid work, each of the contestants ended up with something the size of a toilet bowl.

After the show, I learned how to throw pots.  I might have done okay if I did the simple thick things that the other beginners were doing, but I kept pushing the limits, trying to make it tall and thin, and then messing up at some point and ending up collapsing it, ripping it, or letting it become misshapen and wobbly.

After that, we went to watch them melt a crucible of aluminium in their furnace and pour it into our molds.  That was interesting to watch.  It was kind of like going back in time 100 years and watching an old factory process.  Mine came out pretty well, although I am going to have to scrape off some slag when I get home.  I also collected a little disk of aluminium formed when a drop of the molten stuff landed on a sand block, ran in a thin puddle, and cooled.

I was surprised that more people did not go to their event.  I always like watching demonstrations of technical or artistic skills like that, and getting to try it out was a nice touch.  Things like that are one of the great benefits of being at a college.

Thursday, October 21, 2010

More Current Events Discussion

All of my blog posts are imported into Facebook, and I responded to some questions there.  Since I do not have anything else to write about at the moment, and it is easy to do so, I will repost the explanations for people who did not see the earlier question thread:

Tax Plans:  We have to raise revenue somehow. No elected official's career could survive the spending cuts needed to balance the budget. I would prefer a tax on carbon, pollution, and other externalities, or alternatively a VAT, but without those, higher income taxes are inevitable. The best solution would be to keep the tax cuts for the bottom 98% and let the taxes on the top 2% rise.

More Detail on Health Care and Labor Markets:

Following the requirements of the health care law would mean that companies would have to pay costs per worker that are about $2.30 an hour for an individual health plan and $5.90 an hour for a family plan. Forcing companies to provide health insurance is like increasing the minimum wage by two to six dollars. If the fine for not providing insurance was larger than six dollars an hour, they would provide benefits to everyone, but otherwise, they will choose to pay the fine.

The problem with the mandate is that it is impossible to keep someone on staff if you are paying them more than the marginal value of their work to the company. You will go out of business if you do this too long. This is basically why GM went bankrupt; they paid their workers too much.

Specifically, if hiring a worker increases your profits by $8 an hour, then the maximum total value of their compensation package is $8 an hour. Any law that forces you to pay more than that in either money or benefits will result in the worker being laid off or the company going bankrupt.

This is true because workers are probably in the job that pays them the most possible money for their skills. If they could earn more doing something else, they would quit the job and take the better one. If any company could use them to generate marginal benefits that are more than they are currently being paid, that other company could increase profits by offering to hire then at higher wages.  If you can identify a group of people that is being systematically exploited, that means a massive profit opportunity.  You could could go into business competing with the exploiter, hire the workers away, pay them more, and make a good living.

The health care mandate will not help any workers in the long run. For people who are earning well above the minimum wage, it will cause their salaries to go down by the cost of the health care. For people earning slightly more than minimum wage, it will result in unemployment.

The South is full of textile and furniture mills that closed down because their wage bill was too high. Specifically, the wages were too high to compete with cheap overseas labor. Any business that is vulnerable to foreign competition is equally vulnerable to anything that increases wage costs in the USA. The health mandate will make the foreign competition and outsourcing situation even worse for the affected workers.

In the long run, this mandate will not pay more to lower-income workers and will therefore not stimulate the economy. In the short run, you can sometimes force a company to pay higher than the market wage for labor. They will operate as long as revenues can cover variable costs. But in the long run, when they have to renew their investments in fixed costs, they will exit the industry.

Executive Pay Controversies:

It is certainly possible that executives are earning more than they should, for a variety of reasons. There is a lot of debate about that.  Many executives do earn their salary. Differences in managerial skill can make millions of dollars difference in efficiency and corporate profits. Just look at Apple with and without Steve Jobs. The supply of people who can successfully run those companies is quite small. In the places where there are overpaid executives, the best way to deal with them is to make life easier for corporate raiders, private equity, and other people who do hostile takeovers to get rid of bad management. 

But in either case, large executive salaries do not mean that a government mandate will increase worker pay. Either the executives are being paid too much are they are not. If they are being paid a fair amount, then the company cannot function well if it paid them less. If they are using their power to get paid too much, then they will inevitably use their power to lay off workers rather than pay them more and suffer a pay cut.

Wednesday, October 20, 2010

Wrongful Deportation

This is disturbing, but, once I think about it, not very surprising:

A mentally disabled U.S. citizen who spoke no Spanish was deported to Mexico with little but a prison jumpsuit after immigration agents manipulated him into signing documents allowing his removal, a lawsuit filed Wednesday alleges. His lawyers say the agents ignored records showing his Social Security number, while prison officials wouldn't tell concerned relatives what happened.

However, the thing that really surprised me was this.

The ordeal began after Lyttle, now 33, was charged with inappropriately touching a female orderly at a psychiatric hospital. In August 2008, he was sentenced to 100 days in prison. 

This makes no sense.  If someone is mentally ill, then he should not be sent to prison for that kind of offense.  Maybe he actually did do something worse than 'inappropriately touching' and this was some kind of plea bargain, but even so, he won't understand the connection between behavior and result.  Either you ignore the incident or transfer him to a higher security wing of the psychiatric hospital, but moving him to the criminal justice system is probably the worst possible thing to do to him.

Tuesday, October 19, 2010

Obama's Economics

Last weekend, my father asked me what economists thought of recent political events.  So, here is a brief economic analysis of the government's economic actions of the last two years:

GM Bailout:  The administration has handled this amazingly well.  The only political interference, a command to keep certain auto dealers, came from Congress.  GM is now in much better shape then it was before.  The costs of reorganization were mainly paid by stockholders, creditors, and the labor union.  Saving the company prevented a lot of short-term economic pain, at a fairly low cost to the taxpayer.  If we let the company go bankrupt, the resulting unemployment benefits would have cost more than the money spent on the bailout.  There may be long-term moral hazard costs, and GM could still fail, but most economists and commentators call this a success.

TARP:  We will not know the full effects of the 'Wall Street Bailout' for years.  In the short term, most people agree that it prevented a financial collapse for a fairly low price tag.  Taxpayers will not spend anything near the $700 billion figure that was thrown about.  That number was like the coverage limit on an insurance policy; the actual cost to taxpayers will be much less.  There is some evidence that money flowed to politically connected banks, but overall it was handled about as well as it could have been handled, given the chaos and uncertainty of the time.  Moral hazard is an even bigger problem here; a pattern of bailouts might make future financial crises more likely if bankers take more risks.  But it is important to remember that the shape of TARP was decided mainly by the Bush administration, and Obama did not change it much, which was probably wise.

Stimulus package:  The general idea of government spending in a recession is a good one.  But the stimulus package that we got was a massive pile of pork and social engineering that did little to help the people hurt by the crisis.  It, like most spending and budget bills, was written and shaped almost entirely by Congress and not the executive branch.

Health Care Reform: There is a lot of uncertainty about this.  People are still analyzing it and making various predictions.  Congress turned it into a big muddled mess, but it could have been a lot worse.  The cost to the taxpayers will probably of the same order of magnitude as Bush's medicare drugs benefit.  On the business side, high-paid workers will not be affected much, and, assuming fines do not change, the main effect on low-end workers will be like raising the minimum wage by $1.  My prediction is that most companies will not offer health insurance, they will pay the fines, and reduce pay by about $1 an hour to compensate.  People making minimum wage will probably be laid off.  That is troublesome, and will increase unemployment, but not by much more than the average minimum wage hike.  Of course, if fines go up, the effects will be much more severe.

My overall evaluation is that the Obama administration is more competent in economic matters than the Bush administration was, and more competent than any other major presidential candidate would have been.  There are a lot of little things, like the people they appoint to various posts, that they have done very well.  I also think that Obama has not done any more damage to liberty than Bush did or that any plausible alternative would have done.  Congress is the main source of the problems and bad policy we observe.

If you have any other questions about similar issues, or anything really, feel free to ask them in the comments.

Monday, October 18, 2010

Debate: Power and Information

The last homework I assigned in my intro Econ class included the chapter on 'Economics, Ethics, and Public Policy'.  It was less analytical than most chapters, focusing on the big picture rather than definitions and math.  Normally, class is devoted to students asking me questions, but there would not be much for them to ask about here, aside from 'What is your opinion on X?'

So, for the last three class sessions, I replaced my normal class routine with a student-led debate.  Their assignment was to come in with a statement of what they believe and why, and then to discuss these, guided by the language of Economics that they have been learning in class.  It worked fairly well, but I would not want to do it too often.  Some students really liked it, some did not, and others looked as bored as always.  The good thing was that the students who liked the debate were not always the same ones who normally pay close attention to class, and several of these specifically thanked me for doing class this way.

There was a very clear difference between students who understood the concept of the debate and those who did not.  The good debaters always turned in their seat to address the class, or the person they were responding to.  They actually cared about making their voice heard, and communicating with their classmates.  They basically ignored me, the way I hoped they would.  The bad debaters, by contrast, always looked at me as they spoke, as if seeking approval for their comments.  They did not seem to care about their classmates.  There was a high correlation between people who looked at me as they talked and people who were trying to parrot me or the book.

The main thing I learned from this experiment was not about teaching, but about the nature of power.  Many of the students were obviously saying things simply because they thought it was what I wanted to hear.  I had anticipated this, and took steps to prevent it, but it still happened.  In the assignment instructions, I specifically told them not to say what they thought I believed.  When the class was in session, I sat in a chair rather than standing at a podium, keeping as low a profile as possible.  I moderated the discussion by keeping track of who raised their hand when, and pointing at them to speak in turn.  I tried very hard to keep my face neutral, not giving any sign of agreement or disagreement as students talked.

Despite this, many people seemed to care mainly about pleasing me, the person in the position of power.  It was very hard to extract an honest opinion from them.  This illustrates the massive problems that can come with positions of power and authority.  Even if you want honest information, it can be quite difficult to get it from people you have power over.  If you start to think that you are always right, if you cease to actively seek truth and criticism, then it becomes almost impossible for honest opinions and evaluations to get to you.  I have known this intellectually for some time, but this experience really showed the magnitude of the problem.

The last five semesters of teaching have taught me a lot about the dark art of wielding power.  You have to start by being honest about yourself and the situation.  When you are given power, you have to recognize that you do have a lot of power, and that you have a right and a duty to use that power.  You must recognize that the power must be used purposefully and precisely in order to guarantee a good outcome.  But most importantly, you have to understand the ability of that power to corrupt both you and the people under you, and take steps to guard against both of these types of corruption.

Friday, October 15, 2010

Math Terms

I just got an awesome email from one of the professors.  This guy is one of the main statisticians of the department, and so is even more likely to use math terminology than the average economist:

Dear Grad students,

If you are a member of the union of the sets {students not on the market this year}
and {students who received my test message described above}, please ignore
this message.  On the other hand, if you belong to the compliment [sic] of the union of
these sets, let me know.

Best regards,

In mathematics, 'union' is a fancy way of saying 'or'.  The union of two groups of people is anyone who fits in either group.*  'Complement' is a fancy way of saying 'not'.  The complement of a group is anyone that does not fit in that group.

The funny thing is that this mathematical language was an accurate and precise way of communicating what he meant, and that it will be easily understood by everyone who gets the email.

This also illustrates an important thing about math.  Learning math is a lot like learning a foreign language.  You have to be immersed in it, and use it daily, and communicate with people who know it well.  You get much better at math when you are in a community of people who know math and use it in everyday language.  Our educational system teaches math almost as badly as it teaches foreign languages, and for similar reasons.

*Conversely, 'intersection' means 'and'.  You are part of the intersection of two groups if you fit in both groups.

Thursday, October 14, 2010

Lies We Tell Kids

Long but Good  Here are some quotes:

One of the most remarkable things about the way we lie to kids is how broad the conspiracy is. All adults know what their culture lies to kids about: they're the questions you answer "Ask your parents." 

By 15 I was convinced the world was corrupt from end to end. That's why movies like The Matrix have such resonance. Every kid grows up in a fake world.

But few tell their kids about the differences between the real world and the cocoon they grew up in. Combine this with the confidence parents try to instill in their kids, and every year you get a new crop of 18 year olds who think they know how to run the world.

Don't all 18 year olds think they know how to run the world? Actually this seems to be a recent innovation, no more than about 100 years old. In preindustrial times teenage kids were junior members of the adult world and comparatively well aware of their shortcomings.

Public school textbooks represent a compromise between what various powerful groups want kids to be told. The lies are rarely overt. Usually they consist either of omissions or of over-emphasizing certain topics at the expense of others. The view of history we got in elementary school was a crude hagiography, with at least one representative of each powerful group.

Of all the reasons we lie to kids, the most powerful is probably the same mundane reason they lie to us.

Often when we lie to people it's not part of any conscious strategy, but because they'd react violently to the truth. Kids, almost by definition, lack self-control. They react violently to things—and so they get lied to a lot.

We arrive at adulthood with a kind of truth debt. We were told a lot of lies to get us (and our parents) through our childhood. Some may have been necessary. Some probably weren't. But we all arrive at adulthood with heads full of lies.

There's never a point where the adults sit you down and explain all the lies they told you. They've forgotten most of them. So if you're going to clear these lies out of your head, you're going to have to do it yourself.

Few do. Most people go through life with bits of packing material adhering to their minds and never know it. You probably never can completely undo the effects of lies you were told as a kid, but it's worth trying. I've found that whenever I've been able to undo a lie I was told, a lot of other things fell into place.

If you ask parents why kids shouldn't swear, the less educated ones usually reply with some question-begging answer like "it's inappropriate," while the more educated ones come up with elaborate rationalizations. In fact the less educated parents seem closer to the truth.


There is something fundamentally wrong with the following, which just appeared on my computer screen after completing an interlibrary loan request:

Your request for Clear and simple as the truth : writing classic prose / Francis-Noël Thomas & Mark Turner. was successful.

Item requested from Bob Jones University

Your request will be delivered to Cooper Library at C---* when it is available.

Why is it that they have this book but we do not?  The founder of the university, and his father-in-law, would be horrified to learn that the classical art of rhetoric was so neglected here.

Of course, on second thought, Bob Jones University is probably much closer to their beliefs of what a university should be like...

*I avoid using the name of my university in these blog posts to make it harder for a simple web search to find the blog and potentially unearth something that might be harmful to me or my department if taken out of context.

Wednesday, October 13, 2010

Gold Bubble

Market bubbles, where the price goes really high before falling, are hard to identify and almost impossible to time.  For example, back around 2006, I asked my grandfather, who used to work as a realtor part time, when he thought the housing market would crash.  He said "I thought it would crash several years ago."  This is a good summary of why bubbles persist: the fact of continuing high prices causes experts to doubt their own knowledge and think that something new is going on.

One of the best ways to identify a bubble is to look and see if the smart money is leaving the market.  People who know that the price is too high will want to sell out and earn some quick cash.  But they have to be careful.  If people see them selling, then they will know there is a bubble and the bubble might pop before the smart money can finish selling.  So they have to use various means, from advertising to shills, to keep the market propped up.  Since people can invent reasons to justify anything, the news will be full of people cheerleading the market and predicting higher prices.  The price can creep ever higher as the dumb money piles in and the smart money sells.

I have seen a lot of signs that the smart money is selling gold.  For example, today there was a big ad in the Wall Street Journal offering to sell the first ever gold coins produced by the Israeli central bank.  In other words, Israel's central bankers want to sell off a lot of their gold.  This is one of many examples.

In addition to this, I see no fundamental reason for gold prices to stay this high.  The economy is recovering, which should reduce demand.  The 'cultural Asian demand for gold' is probably a function of a historically undeveloped financial system; as their economies and institutions improve they should rely less on gold as a store of value.   More and more gold mines are coming online, so supply will increase a lot in the next few years.

Now, the bubble could easily continue for a couple more years.  Selling a house in 2007 would give you more money than selling in 2006.  Gold could do the same thing in the short term.  But selling a house in 2006 would be much better than staying in the market.  And in the long term,  real gold prices trend down, while house prices are about constant.

Basically, if you have gold hanging around that you are not using, my professional recommendation is to sell it soon.

Tuesday, October 12, 2010

Natural Law

When I was younger* there was an advice columnist in the newspaper called 'Marilyn vos Savant' who supposedly had an IQ of around 180.  I remember reading this column occasionally.  One day, she wrote something like "According to the laws of physics, a bumblebee cannot fly.  Its wings are too small.  But the bumblebee flies anyway because it does not know this."

I remember being amazed at the stupidity of this statement.  She was not commenting on our incomplete understanding of natural laws, she was seriously advocating that the person ignore expert advice and attempt to proceed in something through simple-minded willpower.

Even to my young mind, it was obvious that an insect cannot break or ignore the laws of physics.  I reasoned that a bumblebee flies the same way a helicopter does, with small 'wings' moving really fast.  If anyone said that the laws of physics did not allow the bee to fly, then those people were simply wrong and needed to do more research.  I knew, at a very deep level, that the laws of nature were the inviolable, that the only thing that could be broken was our understanding of them.

I now know that this understanding of the world is alarmingly rare.  It is not how most people naturally think.  Most people seem to operate under the assumption that the laws of physics and chemistry and biology are like the rules of a slacker parent, and can be ignored or argued against if you try hard enough.  They think that reality can be shaped by willpower or argument, the same way that the opinions of people can be shaped.

I am not sure why I understood the power and pervasiveness of the laws of science at such an early age.  Maybe it was the books my parents gave me to read, or maybe it was a quirk in my brain.  It was probably the latter.  Most people have tendency to anthropomorphize everything.  Little children tend to think that the sun, water, trees, and other natural objects have personalities and intentions.  Primitive religions also follow this pattern.  It takes a lot of education to convince most people that the mental systems they use for dealing with people should not be used for dealing with inanimate objects.  A lot of people, like that columnist, never seem to learn this lesson.  They go through life anthropomorphizing reality itself, with the result that they believe and say things that are incredibly dumb.

For some reason, I am not affected by this tendency to the extent that other people are, and this has been the case for as long as I can remember.**  It has been easy for me to understand and accept naturalistic explanations of things, and learn the laws and patterns of science.  What has been harder for me is understand that most people are handicapped by their own emotions and intuitions and unstated assumptions about the world, to the extent that they find it very difficult to understand and absorb scientific knowledge and apply it to their daily lives.

*Sometime in elementary or middle school.  I have a horribly bad memory for names, dates, and other such details in my own past.

**I have, however, made the mistake of overestimating the mental abilities of animals.  It was only very recently that I learned that cats cannot understand the significance of pointing at something.

Monday, October 11, 2010

Technology Growth

I just read an interview in the paper Wall Street journal with an investor named Peter Theil.  Theil was complaining that there has been no meaningful technological growth in the past few decades, aside from the IT revolution.  He said that the advances in things like medicine, nanotechnology, and robots have 'not met expectations'.  He talked about how our world does not look like old science-fiction visions of the future, and actually said something like 'Where are my flying cars?'

Notice the bait-and-switch equivocation.  He conflates 'no meaningful growth' with 'does not meet expectations' with 'does not look like imaginary fantasy worlds.'

Aside from being dishonest, these beliefs are blindness and madness.  Anyone who has been paying attention knows that our world has improved in an amazing number of ways in the past few decades, even ignoring computers and consumer electronics.  Automobiles are far safer and more reliable.  Most consumer goods are much cheaper and of better quality.  The quality and variety of food has improved dramatically, and it is much easier to find specialty items and things suitable for restricted diets.  There have been thousands of little improvements in health care, with clever gadgets that make things better for nurses and patients.

Some improvements may sound mundane, but they are important to people who use them, or important for our overall image of the world.  Gear for hiking and backpacking is far better than it was 30, 20, or even 10 years ago, and it keeps getting better.  Shoes and athletic equipment have improved in similar ways.  The quality of print and paper used in magazines and books has gone up dramatically, and they tend to have a lot more content, even though the price has basically kept pace with inflation.

A lot of the change is hidden from consumers, but still makes our world a much better place.  Safety and environmental regulations have transformed the world we live in.*  We are polluting far less than we were 30 years ago, and the things we buy have far fewer dangerous chemicals.  This makes things more expensive, but the environment is in a much better shape than it was.  To pick one example, there is far less lead floating around our homes and streets poisoning our children, and this is probably a big factor in increased health and life expectancies.

So why do people believe that things are not getting better?  Partly this is because the media loves to quote people like Theil and paint a picture of a world going nowhere.  When people are prompted to think about their own life, they almost always say things are getting better.  But when you prompt them with wildly inflated and unrealistic expectations, like personal robots and flying cars, you can fool them into thinking that things are not as good.

One of my favorite mantras is: "Never trust anyone who compares reality to an imaginary perfect world."  Fraudsters of all kinds will use an image of a utopia to make people lose track of reality and become dissatisfied with their lives.  If you use your own memory, and talk with your parents and grandparents, you will have a much better understanding of how the world has changed for the better.

The expectations we have are really amazing.  In the past, people were pleasantly surprised by the progress that we take for granted.  Now we seem disappointed if engineers do not hand us playthings suitable for gods.  In the past, a television was considered a luxury, something that middle-class families would have to save up for.  Now every 'poor' family complaining about how hard life is has several nice televisions and a monthly cable subscription.  We demanded so much more out of life than our ancestors could ever dream possible, and complain when our standard of living grows at an exponential rate that is somewhat lower than we have been led to expect.

*I will often argue that there are much better ways we could regulate these things.  But the fact that a command-and-control regulatory regime is incredibly inefficient and targeted taxes would be better does not change the fact that the environment is in much better shape as a result of the regulations.

Sunday, October 10, 2010

Government Failure

There are too many people who have a simplistic 'government is good' or 'government is bad' viewpoint.  Neither of these is helpful.  My view is this:

There are some things that it is absolutely essential for government to do, and to do right.  Voter attention and political oversight are limited resources.  Because of these two facts, the government should be small to maximize the chances that it fulfills its core functions and does them properly.

These children in Chicago do not need the government to try to provide them with more health care, food, money, or any other kind of welfare.  All of those things would be nice, but they are not the priority.  What they need, more than anything else, is more law and order.  They need the government to protect them from random violence.  They need to grow up in a place where the police protect them from the raper-man.  They need to grow up in a society where they can trust people, where they do not need to focus all of their skills and attention on forming social coalitions for self-protection.

Our government has failed them in a serious and profound way.  Their lives and futures are being ruined.  This is a disgrace.  The core, primary, and most important job of government is not being done.  They live in a state of anarchy, outside the protection of laws and civil society.  This makes unequal access to health care, education, and even food look about as irrelevant as unequal access to Ferraris.

All of our political discourse, all of our congressional debate, and all of our voter concerns should be directed at this issue above all else.  When government fails its core function of enforcing laws and providing security for its citizens, it puts the entire civilization at risk. These children have no reason at all to trust the government, or even consider themselves to be Americans, because the government has utterly failed in its primary responsibility to them.

A bad social situation like this is a cancer.  It will rot our country from the inside out, ruining countless lives and spreading poverty and misery, unless we deal with it.  While our politicians dither about random junk and our soldiers are sent out to do police work in foreign countries, many sections of our own country are suffering from a serious lack of political oversight and police protection.  Maybe this is happening because the Chicago police department is corrupt and incompetent, maybe it is happening because they simply do not have enough people and resources*.  I do not know or care.  This is what we elect our politicians to deal with.  This should be the number one priority.  Unless it is dealt with, anything else the government does or tries to do will be pointless.

Whenever the government grows, elected officials end up getting distracted with things that, in the end, do not matter.  This would be fine if you live in one of the few countries that do not have any problems with law and order.  The Swiss and Scandinavians can afford to mess around with a welfare state because they do not have this kind of entrenched lawlessness in any parts of their country.  We do not have that luxury.  The more time our voters, pundits, and elected officials spend debating the secondary functions of government, the less time they have for focusing on the primary functions.

Yes, it would be nice if the government gave everybody good education and food and health care and enough money to live on.  But unfortunately, the opportunity cost of doing these things is too high.  If people do not have security, if their lives and property are not protected from random thugs and/or corrupt government officials, then nothing else matters.  Time and effort and money spent providing welfare means those resources are not spent providing security.

We have seen that welfare without security helps nobody.  Decades of effort have proven that money or handouts will not help people improve their lives if they live in a horrible, toxic environment.  We have also seen that people can usually find ways of supporting themselves and improving their lives if they live in a stable society where the rule of law applies.

If we do not get the security situation fixed for these children, and thousand of others like them, they are our entire country will continue to have serious problems for a long time.  If we get the security situation fixed, most of the other problems they face would go away in a generation or two.  Fixing the security situation will probably require shrinking the scope of government so that we can focus on what really matters.

*This situation might also be happening because the good people of these communities are not allowed to own guns.  That is a different issue; I do not want the gun ownership issue to distract from my point that small government means better government.

Saturday, October 9, 2010


Yesterday I went on one of my quick walks around campus to get some fresh air. First I stopped by the art gallery. It was an impressive collection of photographs, but then I noticed the flyer that said that the two artists worked for two years on the project. I'm not sure how to interpret that, but it seems like an inefficient pace of work.

After that, I spent some time watching a construction site nearby. There was a guy breaking ground with an excavator and moving the dirt into a dump truck. It seemed to me that this activity displayed far more artistry than what I had seen in the gallery. He was moving the machine with incredible precision, playing it like a musical instrument. In about 15 seconds, a massive load of red clay was transferred from the ground to the truck, with very little spillage or wasted movement. I spent some time thinking of how many hours it would take me to move that dirt with a shovel, and how slow, clumsy, and dangerous I would be if I was in the cab of the excavator.

There is a certain sentiment that was avant-garde in the early days of the last century, but is now limited mainly to the 'unsophisticated' section of our society. That sentiment is the celebration of machinery, and the union of man and machinery. The buzz that surrounds new computer stuff today once surrounded things like steel mills and engines and railroads and steam shovels, the ancestors of the excavator I saw.

Now we take such things for granted, and the only people who get excited about machines are the people who go to demolition derbies and monster truck rallies. I think is is a shame that we have lost our appreciation of the massive labor-saving abilities of these machines. There is great value in what that excavator was doing; the man operating it probably contributed more to society in one hour than the artists did in their two-year project. But most people walk by it without caring; it is ignored, dismissed without thought as part of the background of life.

Friday, October 8, 2010


Emotional connections are funny things.  When I was younger, I was interested in collecting rocks.  One of them was an interesting banded specimen labeled 'Botswana Agate'.  Sometime in either elementary or middle school, we were assigned to write a report on an African country and could choose which one.  I chose Botswana solely because of the rock I owned.

At that time and grade, doing 'research' meant reading an encyclopedia article.  I went for the overachiever option and read an encyclopedia article and also a National Geographic article.  Both of them said that Botswana was, by African standards, a decent and well-run place.

Ever since then, I have been a fan of Botswana the way that most people are a fan of sports teams.  I always feel a completely irrational happiness when I see something like this ranking of African governance that put Botswana in third place, or first among mainland African countries.

The country is one of the few in Africa that has been a stable democracy for its entire existence.  It has free and fair elections and one of the lowest rates of corruption in Africa, and has enjoyed the economic benefits of these good institutions.

And now for a slight change of topic:  When looking over the Wikipedia pages, I noticed something that really emphasized the size difference between the USA and the little countries of the world.  It is easy to overlook or ignore economic numbers in the billions or population numbers in the  millions; the human brain does not really comprehend them.  But then I saw that the Botswana army has 12,000 people and costs 3.5% of their GDP.  'Over 30' of their officers are trained in the USA each year, almost their entire corps.

This is tiny.  This country is spending a large (by world standards) proportion of their economy on a force that probably could not succeed in invading the average rural American county.  In the county I grew up in, you could easily muster up 12,000 men and women who are armed, proficient with their firearms, and able and willing to fight.  That number would include several hundred with enough military experience to be officers.  And that is just the private individuals and the guns they own; add in the two National Guard Armories and all of the local police and you'd have a serious home defense force.  The Botswana army would be better trained and organized, at least at first, and could probably take the major population centers with their initial attack, but after that they would never manage to hold the rural areas and resulting insurgency would likely cripple them.

It really is amazing that I am able to speculate about the inhabitants of the area my mother does home health visits in taking on the armed forces of a well-run sovereign country that devotes a lot of money to its military.  The Botswana army is as competent as the rest of its government; they have experience with peacekeeping missions and are respected by anyone who knows them.  But the USA is just that big and that rich.  It is easy to forget how much power we have, and dangerous to take it for granted.

Social Game Theory

This is a quick read on why you should "Be open to enemies and potential friends, but hide from friends and potential enemies".

Of course, it ignores the potential benefits from improving the quality of friendships.  This is good advice if you want lots of people 'on your side' but do not care much about how close you are to them.

Thursday, October 7, 2010

Rationality Link

I don't have anything much to say, and nothing in the news jumped out at me, so here's something from the LessWrong archive:

The first few paragraphs are a mess, but then it gets better:

There's this thing called "Ricardo's Law of Comparative Advantage".  There's this idea called "professional specialization".  There's this notion of "economies of scale".  There's this concept of "gains from trade".  The whole reason why we have money is to realize the tremendous gains possible from each of us doing what we do best.

This is what grownups do.  This is what you do when you want something to actually get done.  You use money to employ full-time specialists.


To the extent that individuals fail to grasp this principle on a gut level, they may think that the use of money is somehow optional in the pursuit of things that merely seem morally desirable - as opposed to tasks like feeding ourselves, whose desirability seems to be treated oddly differently.  This factor may be sufficient by itself to prevent us from pursuing our collective common interest in groups larger than 40 people.

Wednesday, October 6, 2010

Your Econ-Fu is Strong

Here is a good article from NPR

This is a story about how an economist and his buddies tricked the people of Brazil into saving the country from rampant inflation. They had a crazy, unlikely plan, and it worked.

I can't really summarize the story, because it is already quite concise.  It is a good example of how desperation and a willingness to listen to experts can produce positive change.

Monday, October 4, 2010

Chickpea Hotcakes

I've recently discovered a new type of food.  It is healthy, cheap, quick and easy to prepare, filling, tasty, and requires no refrigerated ingredients.  And I recently discovered that it is not just one food, but potentially a whole class of foods, a base upon which I can experiment.

The key ingredient is chickpea flour, also known as gram flour or besan.  Unfortunately, this stuff is not in a typical grocery store.  I got mine from an Indian food store, the kind of place that caters to south Asian immigrants.  I do not remember the exact price but I think a 2 pound bag cost about $3.  They would probably also have it in a specialty or health food store (it is a gluten free food), but it would probably cost more.

To make chickpea hotcakes, you basically just mix one cup of the flour with 3/4 cup water, add spices, fry in olive oil, and eat.  Here's a more detailed recipe:

Sift one cup of chickpea flour into a mixing bowl.  If you have a flour sifter, use it, otherwise use a whisk to break up the clumps.
Add in 3/4 cup water and whip the mixture until there is no dry flour and it has the consistency of thin pancake batter.
Add spices: 1/4 teaspoon salt, a dash of pepper, and a mix of of mustard, coriander, tumeric, cumin, and red pepper.  I have a big cheap thing of 'curry powder' that combines the latter five spices, and use about 1/4 teaspoon of it.  Whip the mixture again.

Put a little olive oil into a frying pan* and heat it up.  There should be just enough to evenly cover all of the pan.  Don't use too much, or hot oil will end up on top of the hotcake and mess it up.  Take one third to one half cup of the batter and pour it into the pan, exactly as if you were making pancakes.  The batter will fry and solidify when it hits the oil, leaving liquid on top.  I prefer to tilt the pan so this liquid drains off into the rest of the pan and makes a larger, thinner hotcake that cooks faster.  After about a minute, it will be solid enough to move around.  You'll need to run a spatula under it, but then you will be able to make it slide around the pan to cook more evenly.  After another minute or so, there will be no liquid left and you can flip it.  Cook until it is, as the cliche goes, golden brown.  

Eat them while they are hot.  This recipe will make six medium hotcakes or four large ones, enough to make a meal for two or three normal humans, or one athletic bachelor grad student.

That is the basic recipe.  I recently discovered a new addition.  You can add finely chopped meats and vegetables to the batter before you cook it.  Last weekend, I added canned minced olives and canned shrimp.  Yes, canned shrimp.  My mother gave me a collection of interesting foods for my birthday, and this was part of the stash.  I have no idea where she got it or how much she paid.**  It is the size of a can of tuna, filled with the tiniest shrimp imaginable.  If they were alive, a dozen of them could dance on a quarter.  I only used about a forth of each of the cans.  I mixed them in the batter and then fried up something that is best described as a 'paella pancake'.  It was really good.

With this recipe, you could feed a good meal to ten people for about five dollars, and most of that cost is the canned meat and vegetables.  It makes a fun, unique, exotic food.

This is not just a recipe, it is an entire food idea, like 'stir fry'.  It has so much potential.  People who know more about cooking and spices than I do could probably come up with something really good after a little experimentation.  Minced tomatoes would probably do well, as would onions and peppers.  You'd probably want to use a food processor to get the veggies chopped finely enough for good consistency.  

Another option is to use these things like you would use a tortilla: as a wrap or base for other foods.  They do not have the structural integrity of tortillas, so you'd probably want to go with a quesadilla-like thing rather than a wrap, but it would be good.

I only learned about chickpea flour because of a friend on a gluten free diet.  I got the flour so she could cook her recipes when she visited, and one day I ended up at my apartment with no meal plan, so in a flash of inspiration, I grabbed the flour and tried making the hotcakes for a quick meal.  The first attempt was good, the second was a disaster (too thin batter, too much oil), and I've made it about half a dozen times since, refining the recipe and technique and spice choice.

The last couple of years have taught me just how limited the food experience of most Americans is.  Most of what we eat is some combination of wheat, corn, rice, beef, pork, chicken, cow dairy products, and a few selections of fruits, vegetables, and seafood.  There are entire dietary staples, like cassava and chickpeas, that are completely absent from our diet.  People are getting better at exploring the vast options of fruits and vegetables from around the world, but the basis of our diet is still sorely limited.  

Besan is not expensive fancy stuff.  A tiny little store sells it to immigrants for cheap.  If large American farms produced it and our grocery stores carried it, then it could be about as cheap as normal wheat flour.  The hotcakes are far more convenient than most 'traditional' American food, which typically requires perishable ingredients.  There are probably dozens of things like this that could be incorporated into our diet, letting us live healthier and more fun lives.

Thankfully, we live in a world where such things are available for those who seek them.  Explore and experiment, and enrich your life.

*I have a cast iron skillet that is well-seasoned, well-maintained, and has only been used to cook with olive oil.  It is, as far as I am concerned, the best frying pan in the world.  Nothing has ever stuck to it.  The recipe will probably not be as easy or convenient for those of you who only possess inferior items of cookware, but you are probably a more skilled cook then me so it balances out.

**Probably an ethnic food store, and probably not very much.

Sunday, October 3, 2010

Ignorant Consumption

Yesterday I went to the thrift store and bought four recent copies of The New Yorker that someone had donated, and read them while doing laundry.  Two of the articles were related, and worthy of discussion.  One was about authentication scandals and controversies in the art world, and another was about the business of selling fancy food to the upscale Las Vegas restaurants.

Most people know that the art world is full of crooks.  There are always forgeries, and rip-offs, and everybody seems to be suing everybody else.  This is the inevitable outcome of a process where the opinion of an expert can change the value of something by thousands or even millions of dollars.  Anyone who gets involved in this murky world by buying something as an 'investment' is probably going to end up losing money and getting mad.*

But it surprised me to learn that the fancy food industry has many of these same features.  Different food suppliers are always accusing each other of selling fake or adulterated food.  For example, one guy claimed that the saffron most of his competitors were selling was just random junk dyed red, and he offered to prove it with chemical analysis.  He also said that you could run a quick test by putting it in water; apparently the real stuff will not turn the water red but the fake dyed stuff will.  And from what I read, the chefs took him seriously.

If I had thought about the issue, I would have assumed that it would be impossible to sell fake spices to a good chef.  I would think that culinary schools and/or experience would teach them how to identify good ingredients by smell or taste.  And even if you could not tell the raw form apart, the difference should show up in the final dish.  It seems logical that, if you use a fake or adulterated spice, then the food will not be as good and someone in the kitchen will know why.  I would think that anyone who supplied bad ingredients would be quickly revealed as a fraud and driven out of business.  I would also assume that the chefs would react indignantly to anyone who suggested that they had been buying fakes.  But the article never quoted them saying anything like  "I know what real saffron tastes like and I know that I have been using the good stuff, so go away."

Apparently in the food world, just like the art world, only a few experts can tell the difference between real stuff and fakes.  Even the world-renowned chefs just have to take it on faith that their suppliers are honest.  This makes me wonder why they even bother spending the money on that kind of stuff.  If they cannot tell the difference, and they know that suppliers often cheat, why are they even buying it?

This is probably because fancy food is about image, not taste.  Numerous tests have shown that you can fool people by serving junky food in a fancy setting.  The chefs buy the fancy spices not because of what they taste like, but because it allows the waiter to give an impressive-sounding speech about the food.  People want to believe that they are eating the best food in the world, just like they want to believe that they have something from a world-famous artist.  It is all about status and image.

One good rule to follow in life is to always do whatever you can to avoid purchasing anything where you need an expert to tell you the identity or quality of what you are buying.  This includes almost anything that rich people play with, like fancy food and wine and art, as well as things like car repairs and medical treatment.  All of these things are full of fraud and waste; markets only work well when consumers are reasonably well informed.  Sometimes you have no choice, of course, but it is easy to avoid the former group.

* The only way you should buy art is to get it directly from a living artist, and only get something that you would like to see hanging up on a wall in your house.  Pay a few hundred to a couple thousand dollars, know that you are actually supporting the artist, and then get the lifelong benefits of making your home more attractive.

Friday, October 1, 2010

Health Care

A good series of blog posts on the costs of American health care has just been concluded.