Monthly Archives: August 2009

Aug 31 2009
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Economics, law

Welfare as a Property Right

Thomas Ross, professor of law at the University of Pittsburg, writes this in the June 1991 edition of the Georgetown Law Journal (.79 Geo. L.J. 1499). Hat Tip: Shawn Borich.

From the late 1950s through the early 1970s the Court decided cases that, both in result and in rhetoric, expressed a new respect for the poor. Justice William Brennan, writing for the majority in Goldberg v. Kelly, expressed this new vision of the constitutional status of poverty.

From its founding the Nation’s basic commitment has been to foster the dignity and well-being of all persons within its borders. We have come to recognize that forces not within the control of the poor contribute to their poverty. . . . Welfare, by meeting the basic demands of subsistence, can help bring within the reach of the poor the same opportunities that are available to others to participate meaningfully in the life of the community. . . . Public assistance, then, is not mere charity, but a means to “promote the general Welfare, and secure the Blessings of Liberty to ourselves and to our Posterity.”

Thus, the Court held in Goldberg that welfare benefits were a form of constitutionally protected “property” and could not be terminated without notice and the opportunity for a hearing. The Court’s decisions during this period that broke down some of the disparities in effective access to the courts on both criminal and civil matters are further evidence of the Warren Court’s new respect for the poor.

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Aug 24 2009
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Literature, pop culture

On Inglorious Basterds

Highly enjoyed this Tarantino flick, particularly the pop culture references that Americans wouldn’t get (and I’m not sure I’ve got them all). Close to my heart is the tribute to Francoise Villon’s famed Ballade (of the Ladies of Ancient Times) that reads in part:

Prince, n’enquerez de sepmaine
Ou elles sont, ne de cest an,
Qu’a ce reffrain ne vous remaine:
Mais ou sont les neiges d’antan?

Prince, don’t ask me in a week
or in a year what place they are;
I can only give you this refrain:
Where are the snows of yesteryear?

Villon does not typically translate well but this one does better than most.

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Aug 19 2009
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Economics, politics

Dale Carpenter on Ted Olson on SSM

Dale Carpenter from the Volokh Conspiracy blogged earlier today about a NYTimes profile of Ted Olson, a lawyer highly regarded in conservative circles and highly decorated for service for the Bush Administration. He has won 44 of 55 of the cases he has taken to the Supreme Court (including the decision responsible for Bush ascending to the White House after the Florida election debacle). Most recently he has taken up the cause of getting California’s Proposition 8 (banning same sex marriages) struck down in the courts, a journey that will likely lead to the Supreme Court. It is a worthwhile read and is the best treatment of national media to the core of the debate, which are about the rights of people to enter into binding contracts.

Dale Carpenter’s post is a noteworthy read too. He even extended the libertarian thinking at the core of Olson’s argument to its logical end:

The second suggestion is to identify libertarians as supporters of gay marriage. I think that’s descriptively true: libertarians are far more likely than traditional conservatives to support same-sex marriage. But as a substantive policy matter, it’s hard to see same-sex marriage as a genuinely libertarian cause. It enlarges the empire of marriage, and thus of state regulation. It’s true that one voluntarily enters this system of regulation, but the government offers many special advantages and inducements to enter it. From a libertarian perspective, marriage is a subsidy made available to encourage us lead a certain kind of life favored by the government, just as the state encourages us to own a home, go to college, contribute to charity, buy fuel-efficient cars, etc. In part because of its channelling and traditionalizing potential, same-sex marriage is a conservative cause, in my view, though I appear to be one of about five people in the country who actually believes this.

I of course have long advocated ending the state’s subsidy on marriage because I as a persistently single person have no access to the benefits governments give to married couples and frankly, I think it’s kind of unfair. Extend the subsidy to 100% of the people.

This is of course an argument that would be laughed at in most venues, and even if I’m not terribly serious about that advocacy, there is an argument there and people should understand it, particularly when they start extending the advocacy of subsidies to other things. Because you can never just subsidize ONE thing; people start getting jealous and demanding subsidies appealing to their most vested interests.

What is the socially optimal equilibrium in the market for subsidies?

Aug 17 2009
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Assorted Links

1. The mathematics of cake-cutting.

2. Bill Maher on how stupid the average American is. Lots of good lines here.

3. Christoph Waltz on making ‘Inglorious Basterds‘.

4. The economics of superhero franchising.

And: I’ll be blogging more often and on more subjects very soon, as I delve deeper into the literature on several subjects. Stay tuned.

Aug 14 2009
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law, politics, pop culture

Line of the Day: Fem IR and Hillary

“We have our own work to do at home,” Verveer told me. “We trivialize the importance too often of these issues: the ‘women’s issue’ — you put it in quotes, that little category over there, the box you check. What we have to do is realize these are the issues; if we want societies to prosper and if we want our own security, we have to raise the status of women.”

Women’s issues are being framed by this administration in terms of realpolitik: U.S. security depends on women’s empowerment. Global economic growth depends on women’s participation.

Women’s empowerment won’t be delivered at the end of a gun or through economic sanctions or even overt criticism, if it cuts into accepted cultural practices. This is messy stuff; some of our most sensitive allies have horrific records on women’s rights. Programs that show success tend to be slow-moving and incremental. Can all this complexity attract — much less sustain — the attention of the public?

Maybe — if we stop viewing everything Clinton does as entertainment.

From the NYT, here.

Aug 10 2009
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politics

Corruption at YDA and a Modest Proposal for Change

I was hoping to finish the political blogging from this weekend’s Young Democrats of America national convention and get back to economics blogging, but there are too many issues that I feel are unresolved. The most pertinent ones right now are the rather credible (in my eyes) allegations of voter intimidation, outright bribery, and other mechanisms of vote fraud that came out of the election.

The basic problems are these. Voting at the YDA elections happens via an open ballot as per DNC bylaws. What this allows is for state chairs to functionally control their voting delegates: there were numerous allegations of blatant voter intimidation that came to my ears. The basic scenario is that state presidents can control their delegates by holding things like the plane ticket home as leverage.

There are two solutions. The first is obviously moving from an open ballot to a secret ballot. However this involves changing the DNC national bylaws, which might not be politically possible given the resources of those concerned with YDA elections. The second is to introduce some kind of structural change to the election process itself, where the people (state presidents) who are in charge of their delegation’s votes can’t control their delegations. Allowing state presidents to be the ones signing off on the legitimacy of the votes cast by their delegates allows them to control those votes and auction them off to the highest bidder. In this election, that’s precisely what happened; I know personally that a political deal was struck that cut Missouri’s votes in half and I have heard very credible allegations that the delegation from Washington D.C. received $2,500 to vote one way.

So what kind of structural change would fit the bill? I have a suggestion: use Twitter to conduct elections. The basic framework is that you have delegates register their twitter names when they register for the national convention. As candidates come up for election, all eligible candidates tweet their vote using a randomly selected hashtag. Now we are looking at an election where votes are not filtered through state presidents and a system where vote fraud is a lot more difficult. You can only count votes from twitter handles that have been registered, so you can ensure that the people casting the votes are the people who registered. And you make all votes 100% transparent, which massively increases the amount of leverage that any single entity has to have over voters to control their votes.

There are a couple objections. First, it’s possible that outside parties could try to hijack the hashtag and spam votes. However, the use of hashtags that have been randomly selected immediately prior to the vote makes this difficult. And the fact that Twitter is searchable means that you could create a simple program to filter out only the votes cast by registered delegates. Second, not everyone has Twitter; but that’s not a truly meaningful criticism, since signup is easy and free and it takes less than a minute to learn how to vote.

This obviously wouldn’t work or necessarily be appropriate for real governmental elections, which are conducted by secret ballot. But YDA isn’t a governmental organization and it isn’t even that big so it’s not plausible to imagine anyone having the resources to make a serious attempt at rigging the vote or crashing Twitter. If Twitter got involved as an independent third party and and set up/managed the back end of open elections, we can eliminate all the problems associated with the status quo and the massive conflict of interests involved. This might even be a viable revenue stream for Twitter.

I will posting more emails from Martin Casas and the St. Louis Young Democrats bearing out my allegations of misconduct and corruption in that organization either today or tomorrow.  I don’t want him to be able to continue to operate in ways that are unethical if not blatantly illegal and hopefully my small corner of the internet will be a place where that can happen.

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Aug 07 2009
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politics

YouTube Videos of YDA Candidates

I have YouTube video of Chris Anderson, A’shanti, and Rick Puig here. Anderson is running for President; A’shanti is running for Executive VP, and Puig is running for VP. I’ve blogged about them below and we would appreciate the support of YDA delegates at the convention here in Chicago.

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Aug 06 2009
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politics

More YDA Blogging: Why I’m Voting Chris Anderson for YDA President

As part of my 2009 YDA convention blogging, here’s why I advocate electing Chris Anderson president of the Young Democrats of America. Chris is currently the Executive VP and is running on a ticket that includes A’shanti Fayshel Gholar of Nevada for Executive Vice President, Zack Hawkins, Rick Puig, andJen Bissett for Vice President, Amy Groya for Treasurer, and Amanda Nelson for Secretary. Here is YouTube of Chris Anderson’s 2007 YDA speech, accepting the nomination for Executive Vice President.

I am personally impressed with Chris’s drive and cool, even-handed personality. With a record of service with YDA that began with a role as founding Young Democrats chapters at his high school and college, he’s demonstrated a commitment to the YDA that has taken him through every level of the organization. To my knowledge, he’s been to every YDA national meeting, facilitating training sessions that are critical to getting American youths involved and empowered in the democratic process.

Chris is also part of the first openly gay leadership team to successfully run for executive office in the YDA national organization and a strong advocate for LGBT rights. In a nation where the Republican party refuses to even engage a meaningful or fair dialogue on LGBT rights (read: human rights), this is incredibly important.

I plan on voting for the ticket headed by Chris Anderson this weekend. It seems to me that the ticket as a whole (and particularly the candidates who I know personally) represent the qualities that Young Democrats need in leadership: motivation, perspective, and perhaps most importantly, intelligence. If that strikes you as a cause that you would like to support, I ask for your votes at the National Convention this weekend.

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Aug 06 2009
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Economics

Can Auction Theory Explain Asset Bubbles?

Assume an auction with a small and finite number of bidders with discrete values on the aggregate demand curve. Imagine this is a pure common values auction (wikipedia definition):

Some would call this a pure common value auction, using the term common values to describe any auction in which (i) bidders have different information and (ii) one bidder’s information would be informative to another bidder about the latter’s valuation for the good.

Imagine bids are public. Bids are consecutive and the bidder with the highest final bid wins the good. To call upon a basic economic definition, declared prices are signals that reveal information about bidder’s demand curves. The other implication of having common values is that valuations are correlated. In the auction, this implies bidders have dynamic valuations; when a bidder places a bid, the other auction participants are able to gain additional information that allows them to readjust their values for the asset and bid accordingly.

Quick note: can we assume risk-neutral participants? I need to return to that question later, but let’s make that assumption for now.

At this point, let’s bring in some numbers. Imagine an auction with 5 bidders, with bidder valuations being initially uniformly distributed from 0-100, inclusive, which means that bidder 1 values the good at 20, bidder 2 value is 40, bidder 3 has value 60, bidder 4 has value 80, and bidder 5 values the good at 100. The minimum bid increment is 1. This means that bidder 5 wins the auction at some price between 81-100. Where precisely depends on the correlation factor. A higher correlation factor means that the final price is closer to 100; a lower factor means that the final price is closer to 81.

Let’s loosen a parameter. Imagine instead of 5 bidders, there are 100. It’s obvious here that allowing dynamic bidding and (highly) correlated values means that the final price is at least 100; depending on the correlation function. Hypothesis: if you allow the correlation function to be an exponential greater than 1 for values contiguous to the high end of the distribution, you get an asset bubble, where increasing bids inflate exponentially (you need at least two bidders to get into a bidding war).

Can this provide a framework to thinking about bubbles like technology and housing? Does this make any sense to anyone else? The next step is to formulate this mathematically.

Aug 06 2009
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Economics

Quick Econ Hypothesis: Asset Bubbles

I just had this thought: Asset bubbles are far more probable and meaningful in large markets than in small markets. If this is true, is it obvious? I have a long set of thoughts to write down but since I’m tired, I’ll return to it in the morning. I get a lot of my intuitions from auction theory.

Aug 05 2009
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politics

On YDA 2009

Tomorrow I’ll be in in Chicago at the Young Democrats of America National Convention and will be (live)blogging about what I’m up to with the contingent from the University of Missouri-Columbia. I’ll also be suppporting the Chris Anderson/Rick Puig ticket as they present themselves for consideration for the presidential and vice-presential positions. I’ll follow later with a post about Anderson; for now I’d like to introduce my friend Rick Puig and his candidacy for vice president.

The story of how I met Rick is kind of boring, so I’ll skip that. What delegates voting at YDA should be familiar with is his academic and work record. Rick is one of 60-65 people who was awarded the Truman Scholarship , a very prestigious scholarship awarded by the Harry S Truman Scholarship Foundation in recognition of his exceptional commitment to public service. Here is the wiki on the Truman; the list of former recipients is fairly impressive.

Part of Rick’s work in the public sector has been for current US Senator Claire McCaskill (@ClaireCMC), current Missouri governor Jay Nixon, and current Missouri Attorney General Chris Koster. Those are fairly impressive credentials and should indicate to you that the people that Missouri has chosen to represent us both in the state government and on the national stage share my view that Rick is not only an exceptionally competent and intelligent person, but is also trustworthy and committed to public service.

Rick’s organizational work for YDA has also been impressive. He was formerly the president ofthe Missouri Young Democrats, and his organizational work in the South Central region was extremely meaningful in the last election cycle. Rick’s statement on his website is here.

I’ll be advocating strongly for Rick’s candidacy at the convention in Chicago. The position is a meaningful one; the Young Democrats of America face new challenges, both fiscal and political, as the next election cycle approaches. The goal here is to preserve the organization as a viable tool for democratic activism and youth mobilization and it’s my argument that Rick’s experience is a valuable thing for the Young Democrats of America to have.

We’ll see you in Chicago tomorrow; tonight I’ll be in my home city of St. Louis to see family and friends before our contingent heads to Chicago.

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Aug 04 2009
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Travel

Going to Chicago!

I’m leaving Wednesday for Chicago to attend a big emo convention the Young Democrats of America national convention. My friend Rick Puig is running for the Vice Presidency of the organization and I’ll blog later about what it means and why it’s important. If you have recommendations for restaurants and cultural things to do in Chicago, please leave them as comments on this post. I will be live tweeting and videoblogging from the conference and as I stumble around Chicago.

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Aug 04 2009
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Economics, Soccer

Prediction for FIFA 2010 or (un)Markets in Everything

I’m willing to bet a small sum (say $50) that the next version (to be released in 2010) of the popular soccer videogame FIFA will not include jerseys bearing the logo of American International Group (AIG).

Edit: Insurance company AON buys logo space on Manchester United jerseys to replace AIG.

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Aug 02 2009
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Line of the Day, Healthcare Edition

From Tyler Cowen:

Plan supporters are quite willing to admit “it’s not nearly as good as what we wanted,” but they’re in denial about how truly bad the proposed reforms are in absolute terms or as a matter of economic logic and by that term I mean the economic logic of good Democratic economics, not extreme libertarianism.

In the meantime, repeat this sentence after me: if we don’t solve the costs problem, in egalitarian terms things will only get worse, no matter how many people we cover.

The Republicans on this issue are (mostly) very bad and hypocritical but that doesn’t give the Democrats license to proceed without a solution.

Aug 01 2009
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Some Thoughts on Aesthetics

I have recently acquired a large-format Sony televison. Despite the low cost of cable television, I’ve decided firmly against getting cable; my time is valuable and cable is notoriously distracting, and I have lower-cost substitutes readily available through my laptop, which is easily connected to the 42 inch television screen in high definition, giving me oh so much more desktop space and access to much louder and better speakers. My first move was to utilize this increased capacity by playing Explosions in the Sky; the music is intense and the full emotive impact is easier accessed when the volume is very loud, which is something that my laptop can’t do very well.

I don’t think I’ll get cable. I don’t watch many shows on a regular basis and it is easy to find a friend with HBO for the weekly episode of Entourage. Besides, I can port a dvd or YouTube or Hulu to the big screen with ease. And I am excited that I can use the big screen to display interesting images of interesting things; right now my desktop background is a scan of Kafka’s first page of the Metamorphosis with Nabokov’s scribbles all over it, which is a fun conversation piece.