The Only Winning Move

I’m a big fan of EconTalk, a weekly pro-market podcast on basic Economics out of George Mason University hosted by Russ Roberts. I should add that I’m a new fan - having only started listening about two and a half weeks ago. However, in that time I’ve made it through about 80 of the 110 or so podcasts posted in the archives. What can I say? It’s entertaining and informative.

It’s rare that one gets under my skin, but I do have some minor gripes about the one I heard today. It features Larry Iannaccone, also of GMU, discussing the Economics of Religion.

“Economics of Religion???” Oh but yes - that’s one of the great things about EconTalk. In the fine tradition of Gary Becker, it assumes that Economic insights apply to - indeed are at home with - everyday activities as much as (perhaps more than) they do to financial decisions.

So what does Economics have to say about religion? Quite a lot, as it turns out. For example - studies have shown that deregulation has the same magical effect on religious belief that it does on “consumption” of just about everything else. In nations with a central, government-sponsored church, religious belief and participation rates tend to be lower. Contrast that with places like the United States, which has a completely unregulated “market” in religion, and there is a huge availability of religious choices with the consequence that a lot more people participate. Another example: why do so many religions impose goofy requirements on their believers? Take keeping kosher. It’s silly, right? Eat only foods from this list prepared in this way? The idea is that this imposes a barrier to entry that is important to keep the community cohesive. As with any communal activity, there’s a real danger of freeloading in religion. Someone might show up just long enough to receive the benefits without doing his part to provide them to other believers. And so religions impose these kinds of sacrifices and stigmata on believers so keep the whole business honest, as it were. (And indeed, there was a great interview with a rabbi in The Guardian at one point - I’m having trouble finiding it now - where he admits that the whole point of keeping kosher is that it’s silly. If it made any sense at all, it would be a health choice rather than a sign of devotion. Reasonable.)

Ok, so no real complaints with taking this kind of approach to religion. What kind of got me annoyed was the speaker’s approach to atheism.

Quite frankly, I’m not sure that Iannaccone is an impartial observer here - for a couple of reasons. Let’s start with the demographics of atheism. Here, Iannaccone admits that he enjoys taking some “digs” at his anti-religious colleagues by pointing out that the demographics of atheists don’t fit the stereotypes - or at least don’t fit the image that a lot of academic atheists have of themselves. Academic atheists like to see themselves as representing a kind of vanguard - more intelligent and emotionally stable (in the sense of not having to lean on a fiction as a crutch) than the rest of the population. According to Iannaccone’s data, that’s not true. Atheists are slightly less educated than the average population and tend to be young, male and alienated. So what? Well, as far as taking a dig as his colleauges, fair enough. If that’s what the data say and the colleagues he has in mind do indeed suffer from the vanity that they’re more intelligent and objective than believers, then I see no problem with Iannaccone enjoying pointing this out to them. My bone to pick here is that he brings this up in response to a question from Roberts about whether atheists are made up of that segment of the population that doesn’t need group attachments as much. This is a sensible question. If the “benefit” to religion is a kind of solid community attachment - as Iannaccone maintains throughout the talk - then it stands to reason that atheists will disproportionately be people who don’t value this kind of attachment as much as others. To which Iannaccone responds that “no, they’re not people who value attachment less, they’re people who are more alienated.” Ahem - circularity much? He then goes on to discuss Objectivism - the “Ayn Rand Cult” - as a counterexample to the stereotype that atheists are rugged individualists who value attachment less than normal people. Certainly a lot of people there at the time - not just Murray Rothbard - characterized Rand and her social group as a cult, but what of it? Do we really need to explain to this researcher of sociological phenomena that a single example does not a general trend make? Roberts even challenged him a bit on this one, pointing out that Cult of Rand followers don’t have the normal sacrifices and stigmata that Iannaccone explained as “barriers to entry” earlier in the talk, to which Iannaccone gives the flippant reply that they have distinguishing characteristics. They do, of course - they adopt manners of speaking and arguing characteristic of the group. But there is nothing ritualistic or required about these in the way that keeping kosher is required of orthodox Jews, or wearing robes and chanting is required of Hare Krishnas. There is an obvious difference between a willful sacrifice that separates members from outsiders and the everyday phenomenon of adopting the speaking habits of one’s friends that Iannaccone found useful earlier in the podcast and now discards to save his example. But I think the most frustrating point was that he’s skimming over what is surely at the crux of the matter. Let’s assume that “The Collective”, as it’s sometimes called, was indeed analogous to a religious “cult” in the requisite sense (and I see no reason to doubt that it was - most participatns have described it that way). That being the case, then it would seem that one hardly needs religion to gain the social benefits that Economics leverages in analyzing why some sects succeed and others fail. We’re missing a key ingredient here, in other words.

And indeed, that’s really my objection to Iannaccone’s characterization of atheism in general. When the subject comes up, he is quick to point out that atheists are actually in the minority, and that the supposedly “standard” view whereby religion is the aberration and non-belief the default is therefore backwards. But COME ON - if we’re giving an economic analysis of any good then the decision not to purchase the product of interest is by definition the default. Any economic analysis assumes that the people trading in a good find it useful in some way - and characterizing that utility is the whole goram point. It’s no more relevant that atheists are in the minority to explaining why Zoroastrianism isn’t doing as well as Christianity as it is to note that most people own vacuum cleaners when explaining why Bissel is outselling Hoover! The question of what features one finds useful in his particular religion is surely a separate question from whether religion is in general useful!

And despite all the discussing around the topic, the truth is that by the end of the talk, Iannaccone hasn’t actually said anything that sheds much light on why there is religion at all. He’s happy and insightful discussing brand competition between denominations, but when all is said and done he does an awfully poor job characterizing the usefulness of the product in general.

I think a lot of mysteries remain here. If, as his Objectivism example demonstrates, actual supernatural belief isn’t a required ingredient, then what he’s really studying is the economics of sects (or more generically of “social group membership”), and not the economics of “religion.” The question of why someone needs the supernatural dimension remains unanswered, and yet surely this is the relevant question if it’s really “religion,” per se, that we’re talking about? Why does the overwhelming majority of humanity willfully choose to deny the evidence of their senses and experiences and embrace a belief in something that is neither confirmed by their experiences nor even verifiable by controlled experiment? It can’t be “community,” since even atheists can form cults for the purpose of “community.” Indeed, Iannaccone hasn’t even supplied the relevant data to support his assertions. For example, has anyone shown that Sweden, his paradigmatic example of the modern secular society, shows more alienation and lack of community attachment than the United States? Is there really a correlation here? And if not, what is it that religion is REALLY peddling? What explains the punishment of apostates? Why, for example, do many people in Muslim countries think that it is not only permissible but in fact a duty to kill people who reject Islam? If it’s about “community,” then why does exactly every religion in the whole world that I’m aware of (save possibly Shinto) center around a cosmology? If it were really community, then surely the moral code would be front and center instead, and cosmologies would more typically be features of some religions but not others, right?

I dunno. On the whole, I came away with the feeling that while the concept of an “Economics of Religion” is indeed quite a useful one for understanding the subject, this particular researcher isn’t approaching his subject with the objectivity it deserves. Perhaps I’m being unfair, and perhaps a cursory read through some of his papers will change my impression, but he comes across like one of those people in Literature Departments who study Star Trek not so much because they’re fascinated by it as a cultural phenomenon, but because they fancied the life of a Lit Professor and have found a way to make one of their hobbies pay within the framework of their chosen lifestyle. The methodology and framework here is useful, but the questions Iannaccone raises seem to be selective scratches at the surface - not a real engagement with the subject on any meaningful or fundamental level.

The silver lining in our “post-racial” candidate playing the race card this week is that the McCain campaign had the balls to call him on it. It does raise an interesting question, though. Why is Obama playing the victim all of a sudden? Surely this would have gotten him more mileage back in the spring when he was still jockeying for front-man status in the white guilt party? Back then he showed an admirable restraint on this score, given the temptation. Why now? I don’t really know - but I can’t help but think it’s that he’s nervous about a Bradley effect. Most respectable polls these days show the race at about 47-41 for Obama. With a 3% margin of error, that’s technically flirting with “statistical tie” status - but only on the extreme margins for both candidates. That is, it’s a tie only if the reports have overestimated Obama’s support by the error margin and underestimated McCain’s support by the same margin. In all other cases, it’s a win for Obama, were the election held tomorrow. Most candidates would be OK with that and happily campaign as the front-runner. But Obama, as a black man, has cause to be nervous. And that’s because if the polls are systematically overestimating the size of his support, it would hardly be the first time that’s happened to a black man. White voters, it seems, have a tendency to tell polllsters they’re voting for the black guy even if they have no intention of doing so.

There’s a lot of research out there these days into this and similar phenomena. It isn’t just white guys not wanting the pollster to think them racist - people lie about everything in polls, it seems. The link goes to a Wall Street Journal article about research showing serious discrepancies between what people say to a telephone pollster and what they say when taking a computer survey. For example, a 2006 Harris poll found that 78% of people claim to brush their teeth twice a day in telephone interviews, but only 64% make the same claim on computer surveys. Apparently the presence of a real person on the other end of the conversation has a not-so-minor shaming effect.

Nothing too surprising about that, I guess - though it does raise uncomfortable questions for pollsters. Here’s what interested me. Out of the six examples that the Wall Street Journal choose to publish, the biggest effect by far was on the subject of religion. 56% of respondants claimed to go to church/synagogue/mosque at least once most weeks when interviewed by phone, but only 25% made the same assertion online. That’s more than a 30-point spread - with over twice as many claiming to be religious on the phone as on the computer. To put that in perspective, all of the other five were within 7-14 points, the sole exception being health (58% say they exercise regularly when asked over the phone; only 35% when responding to a computer), which showed a 23-point difference. Another way of thinking about it: 40% of the people who say they are regular exercisers on the phone will say something different to a computer; the corresponding number for religion is a whopping 64%.

So aside from a possible honorable mention for exercise, religion is the stand-out lie-inducing category here. People lie about everything to protect their image, but they lie about religion to a much greater degree. Isn’t that interesting? That suggests to me something very hopeful - namely that religion is a house of cards. It’s motivated by social shame more than by actual belief. People are more concerned with displeasing their interviewer by failing to be sufficiently religious than they are with displeasing God by not going to church every week.

I’ve said before many times on this blog that I think religion is on the skids as a cultural phenomenon. It’s not so easy to see that just yet with the religious right screaming louder than ever - but I think we’ve definitely passed into the first stages of the end. Most of the current generation uses religion as a culture statement. They don’t pay any actual attention to its teachings, and they certainly don’t turn to it for answers to Life’s Big Questions. People are Jewish or Catholic these days because it gives them an identity - and that’s all. Religion isn’t pulling the weight it used to.

Does that mean religion is vanishing from politics? Yes, but probably not in the short term. If anything, it means that it will be more of a thorn in our sides for a little while. That’s because people who are pretending to believe in something, or kidding themselves about believing in something, are often more ostentatious in showing their allegiance than the true believers. I think we’re all familiar with the pop psychology explanation for why Christian wannabes are much more likely to push blue laws than people who honestly think there’s a Jesus who doesn’t want them to drink, for example. It’s the same kind of cognitive dissonance that explains the anti-smoking puritanism.

But this is just the night getting darkest before the dawn. Religion gets to have its dying gasp - the point is that that’s all it is. In the quiet of their own minds, people aren’t actually all that religious anymore. Eventually, political religion is going to have an “Emperor’s New Clothes” moment - when some person with no horse in the race states the simple truth in public and the whole thing comes crashing down. All it would really take, at this point, is one successful atheist candidate. He doesn’t even have to win - he just has to come close. It would make the religious right mad as hell, of course, but for a much greater number of people it would be liberating. I expect to see it in my lifetime.

Since it’s become something of an institution around here to call the IDS out on their bogus reporting on rape, here’s a takedown of the latest installment.

Much to their apparent chagrin, reported incidents of rape are way down on campus this year. Only 3 reports so far - as opposed to 9 by this time last year. But never fear - rapes in Bloomington in general are “up.” See, there were 26 reports of rape in Bloomington last year, and there have been exactly that many so far this year. The IDS’ conclusion?

While the number for the city increases, the number of reported rapes for campus has decreased somewhat, said IU Police Department Sgt. Leslie Slone, who suspects reports do not reflect the true statistics.

Gotta love the “somewhat.” Reported rapes are down almost 70% from this time last year, a drop which never qualified as “somewhat” in anyone’s book. But alright - to be fair, when your number is as low as 9 out of a student population of 40,000 - i.e. a report rate of 0.02% - then actually, statistically speaking, there is no meaningful difference between 3 and 9. Technically, the rate of rape reports is down 66% or so, but with a baseline as small as 9, any change seems significant. More realistic is just to say that report rates of 0.007% and of 0.02% are both low enough to qualify as “rare.” My bone to pick with Sgt. Slone is more that I kinda doubt, somehow, that if IDS interviews her next year and the rate of reports is 15 rather than 3 (or 9), she’s gonna say that the rape is “up somewhat” but that the increase doesn’t reflect the true statistic. It seems more likely that she’ll be blustering about a “500% increase” and calling rape on campus an “epidemic.”

The reason that I think Sgt. Slone is scaremongering is this.

Slone said she doesn’t think the number of actual rapes is decreasing - people are simply not reporting them.

Oh? And how does Sgt. Slone know this? Her magic 8-ball told her? C’mon - there is very little in the world that is less professional than reporting as fact something that, by definition, can’t be measured. Sgt. Slone’s impressions don’t even count as useful conjecture unless she can give us some kind of reason to adopt her view. Absent such a thing, she’s the textbook single-issue cop - you know, the kind that thinks that all teenaged punks are on drugs, or the kind that preferentially pulls over black drivers because “they’re all up to no good.” If you’ve decided that the underlying rape rate never changes no matter what the surface report statistics say, then why bother keeping numbers on the reports at all?

It gets better:

“This last year [forcible rapes] have been terribly under-reported, and of the incidents reported to us, 99.9 percent are located indoors, with someone who is known to the victim, and involves alcohol,” Slone said.

“Terribly under-reported,” ladies and gentlemen. It isn’t just that she “suspects” that rape is under-reported, she in fact knows it and knows that the problem is so pervasive it can reasonably be described as “terrible.” Not only that, but she uses her excellent math skills to tell us that 99.9% of the cases that are reported “are located indoors.” Taken literally, that means that out of 3 cases exactly 0.003 of them were outdoors, a number which doesn’t even round up to 1! She can hardly have meant that 1 out of the 3 was a stranger rape, right? ‘Cause that would be 33%, not 0.1%. So I think she means to say that all 3 reports so far this year were daterape incidents. What I still don’t get is how that has anything to do with her supposition that there were, in actual fact, much more than 3 rapes this year? I mean, what does the fact that the reports were all of daterape have to do with anything? I should think that rape of the “Central Park Jogger” variety is more likely to be reported than the daterape kind, no? The classic feminist suppositions about why rape is underreported are generally these: that the victim either unfairly blames herself for having sent false signals, or feels ashamed and doesn’t want the public humiliation, or else cares enough about her attacker that she doesn’t want to get him in trouble. ALL of these explanations (with the possible exception of the public humiliation one - though in that case the “penalty” is nevertheless surely greater for daterape since she presumably travels in the same social circles with her attacker and will have to deal with his friends) only really work for daterape. Which means that we can’t look at the 3 cases so far this year, notice that none of them were stranger rape and conclude from that that rape must be underreported because acquaintance rape is overrepresented!

Actually, let me be a bit more precise - using some of Noah’s General Recognition Theory framework (an idea he put me onto in a comment on an earlier one of these posts - to give credit where it’s due). A criminologist studying rape would be interested in four types of situation on the part of a citizen: a truthful report of rape, a false report of rape, a failure to report a real rape, and a correct decision not to report a rape when none has occurred. Obviously any criminal policy will want to maximize truthful reports of rape and (and I admit that this one sounds odd to naive ears) restraint from falsely reporting rape. Likewise, any criminal policy will want to minimize false reports of rape and also minimize failure to report real rapes. Now - the police, as such, can really only deal directly with reported rapes, so they’re mostly interested in distinguishing between false and true reports. (Of course, it’s a bit more complicated than that in reality: given a report that they believe is true, they also have to decide whether it’s worth prosecuting, but let’s leave that aside for the moment.) If the standard psychological arguments are to be believed, then acquaintance rape is the problematic kind - both because it is likely to be underreported, and also because it is likely to be overreported. I’m just guessing here, of course, but I suppose that little work needs to be done maximizing the number of true reports of stranger rape and minimizing the number of false reports. I guess both failure to report and inventing stories (a la Tawana Brawley) are comparatively rare for this kind of rape. For acquaintance rape, however, the situation is murkier. There is more motivation to underreport this kind of rape (because the social consequences of reporting are presumably higher within your own social circle for the reasons outlined above). Perhaps paradoxically, there is also more motivation to falsely report it - partly because signals really do get misunderstood in situations involving flirting acquaintances and alcohol, and partly because there are also nontrivial social consequences for a girl who sleeps with someone ill-advisedly. An unscrupulous girl may try to protect herself from these by putting all the blame on the guy.

So what? Well, let’s assume that what Sgt. Slone means by connecting her conjecture that rape is “terribly underreported” to the fact that all the reports so far this year have been of acquaintance rape is that since we know that acquaintance rape is likely to be underreported we can surmise that for each of these reported rapes, there were many more than went unreported. Fair enough - but by the same token, of course, we have to assume that some of the reported rapes are also false reports. That is, at least some of these 3 reports won’t pan out.

Which is to say - we just don’t know from these numbers how many acquaintance rapes there were on campus this year. It could’ve been 3, could’ve been 9, could’ve been 15, could’ve been 0. Sgt. Slone is out of line to draw conclusions based on evidence she doesn’t have about a crime whose actual occurrence rate is notoriously decoupled from the rate of reporting.

No doubt Sgt. Slone means well. She’s trying to encourage victims who haven’t yet to come forward so that the police can do their job. Unfortunately, her good intentions come at a price. If the police give the impression that they are nothing but sympathetic to reports of rape they will only encourage false reports. And let’s make no bones about it - false reports are real, they’re common, and they’re damaging. Certainly we want to encourage people to come forward if they have, in fact, been raped, but there is a tradeoff here that should not be ignored.

But of course, the reason why I constantly harp on IDS reports of campus rape is because they are in the business of ignoring it. They do it so consistently, in fact, that it can only be deliberate. I repeat what I’ve said before: I’ve been following these reports in the IDS for 3 years, and not once have I seen a mention of the consequences false reports. This is inexcusable.

And in many ways, this article is the biggest culprit I’ve seen so far. Consider this:

Sixty percent of sexual assaults are not reported to the police, even though reporting has increased by one-third since 1993, according to the RAINN Web site.

I have no idea which method of parapsychology RAINN itself is using to get these numbers, of course, so I can’t really comment on its accuracy. The point is that the IDS seems to take the numbers as accurate, which sort of commits them to a belief in a trend where reports are dramatically higher than a decade ago. By implication, that also either commits them to the position that a fall in the rate of reporting is coupled with a fall in the actual rate, or that the increase in reports is at least partly accounted for by false reports. But apparently Sgt. Slone’s spider sense is better than logic.

Later, there is a quote from a BPD officer warning that false reports make the police’s job difficult. Great, right? They’re mentioning the problem? Erm, not exactly. Lest you take Sgt. Canada’s statement to mean that people sometimes report rapes that never happened, the IDS is there to clear it up for you in the next sentence:

In some situations the victim denies drinking and thus makes their case more difficult to take to court. The credibility of a victim is paramount to the legislative process that occurs after an investigation, Canada said.

So you see, the nice Sgt. Canada didn’t mean that anyone would make up stories, ’cause that never happens. He was just advising that you level with him about the embarrassing facts so that the police can do their best to help you prosecute your absolutely true and never-in-doubt accusation.

One of these days I guess we’ll get an actual discussion about rape that’s concerned about all citizens, and not just the special class of them this reporter is concerned with. For the moment, however, IDS seems to be sticking to its standard routine of backing the feminist politicization of the issue. Disgusting.

Aleks Jakulin has a really interesting page on political data mining. Not so much on the subject itself, but just some really intersting graphics on Senate votes in the US from what I assume is the 2003 roll.

One interesting point is that Senator Kerry screws up a lot of the data for having been absent for over 60% of the votes that session. As a result, he skews to the center - because, as Jakulin analyzes it, not voting is like letting the majority vote for you.

The most useful graphic by far from my point of view is this one, which shows which issues Republicans and Democrats differed most on. If you scroll to the bottom, you can also see which issues they voted the same on. 100% agreement from all sides came on a bill to provide additional pay and benefits for military personel. More interesting to some will be the differences between the various Republican voting blocks, of which he identifies three (though only two seem to be really antagonistic). Block B seem to be the fiscal conservatives, Block A the Bush loyalists, and Block C the McCain crowd (though McCain himself straddles groups B and C).

Another interesting ranking had to do with how influential each state or individual Senator was. One should use the work “influential” with caution here, of course. What Jakulin means is that these are the states and Senators that voted with the majority on the most occasions, and so account for the lion’s share of the variation in the data. That doesn’t necessarily mean that they’re causing the pattern, just that they’re more likely than not to reflect the overall sense of the Congress. By this measure, the top ten most influential states in 2003 in order of influence were: Ohio, Tennessee, Arkansas, Kansas, Missouri, Montana (???), Georgia, Mississippi, Kentucky and Alabama. All of these states were represented by two Republicans except Montana and Georgia, which had Senators from both parties. If you’ll recall, of course, this was the year of Zell Miller from Georgia, so for all practical purposes Georgia had two Republican Senators. The top twenty most influential Senators were all Republicans - unsurprising for a year in which there was a Republican majority.

A breakdown of the observed “voting blocks” is here.

On the whole, very interesting stuff. Unless I am mistaken, Jakulin is marginally involved in the writing of this book, which will be out in September and which I have criticized a bit before. I look forward to going through it with a fine-toothed comb in the fall.

500 posts and counting!

Today’s unintentional self-parody comes from Bill Gates who, when asked if Vista is up to his expectations, reponds:

There is no product that we have ever shipped that was 100% of what I wanted. We have a culture that is about ‘we need to do better.’ Vista has given us an opportunity to exercise our culture.

So get on it, then.

It’s been almost two years since I first posted on The Only Winning Move. Hard to believe. What started as an experiment in jealousy (Noah had a blog and I didn’t!) has become a daily fixture. The 481 posts I put on the Blogger-hosted version don’t quite make for a one-a-day average, but it’s close. The time came when Blogger was just too confining, and so I’ve taken out webspace of my own and relaunched the blog here. The WordPress content management system may or may not be temporary (I’d like to roll my own, but experience shows I probably won’t have time), but for now I’m quite satisfied. What follows is the text of the original “purpose” post (actually the second post) I put up on 29 August 2006.:

So - this is my (temporary?) blog. Since it’s tradition to start out with an explanation of the title and purpose…

Anyone who grew up in the 80s will recognize the title as a line from Wargames - a fun but not very profound (or realistic) movie about a lone high school hacker who nearly starts WWIII when he hacks into the government’s missile mainframe by accident trying to play some computer games. Disaster is averted when the kid tricks the machine into running simulations against itself. The computer “learns” that there are no winners in a nuclear war and stands down its attack saying “A strange game. The only winning move is not to play.”

Well, that’s more or less how I feel about politics in general. My views are profoundly Minarchist: some basic frame of government is necessary to keep civilization civilized, but over and above that the best policy is to leave people alone. Most (possibly all) attempts to micro-manage the economy, and with it people’s lives and personal choices, end up hurting more than they help. It is no historical accident or coincidence that free societies are prosperous societies. If politics is the game, the only winning move is not to play.

But this isn’t meant to be a blog about politics - at least not primarily. Really, I chose the Wargames quote because I grew up in the 80s - and is there a movie more “of the 80s” than Wargames? The year it came out was the year I got my first computer (an Atari 800XL). More than anything, the technology revolution , the computer revolution in particular, is something I identify with my generation. I love technology, and I love progress. I like nature hikes and animals (especially cats) as much as anyone, but I have no patience for the “back to nature” types. Man was meant to solve problems; life is a constant struggle to improve. To an impressionable 4th-grader, Wargames was something like the 80s version of the New Seekers’ Coke ad: an announcement that the world was now digital…and younger and faster. (In the case of the New Seekers I guess the point was that everything was going to be lame for a decade…and behold the 70s.) Never mind that it’s really just a fun teen flick - that’s what it meant to me at the time.

It’s true that I’m a computer geek now. I wasn’t back then. I spent over half of the 90s living abroad (Japan, Korea, Germany) and learning new languages (another passion of mine). I came home to be a Linguistics professor and rediscovered computers in graduate school. Now, my field is Machine Translation, and I’m working on a PhD at Indiana University.

This blog will be about many things. Cognitive Science, Computer Science, Formal Languages and Logics, Algorithms, Linguistics (esp. Syntax), Machine Translation. And yes, also Politics (especially of the Classical Liberal/Austrian School variety), Philosophy, movies, pop culture, novels, cats, friends, and THOUGHTS ON LIFE.

Enjoy.

Wired has a cool 8-minute video summary of everything that’s happened on Battlestar Galactica. Did I watch it…? Hmmm….

The following line comes from one of Richard Posner’s posts on the excellent Becker-Posner Blog:

I would like to see the price of oil rise to $200, despite the worldwide recession that would probably result, provided that it rises as a result of heavy taxes on oil or (better) carbon emissions.

This strikes me as something that I should respond to, since I have also often celebrated rising gas prices on this blog. One could easily get the impression that I’m in favor of higher taxes on oil for all the reasons Posner gives in his post: reducing economic dependence on hostile and unstable foreign powers, stimulating investment in environmentally-friendly energy alternatives - you know, all the usual perks. But in point of fact my opinion is the opposite of Posner’s here: I would also like to see the price of oil rise to above $200, despite the worldwide recession that would probably result, provided that it rises NOT as a result of heavy taxes on oil or carbon emissions, but rather as the result of natural market processes.

In fact, I have trouble understanding what the reasoning would be behind Posner’s assertion that $200/barrel oil is somehow only a good thing if it’s an artificial price brought on by taxes. Thinking independently, the only thing I came up with is that it gives us a “safety word” in case the recession becomes too painful. If $200/barrel prices result from taxation rather than supply problems, then the government can always “turn off the problem” (by lowering the taxes) if consumers cry “uncle!” But this reasoning is nowhere to be found in Posner’s post. What he gives instead seems specious:

The taxes would jump start the development of clean fuels, and the financial impact on consumers could be buffered by returning a portion of the tax revenues in the form of income tax credits.

This seems downright irrational. If we “buffer” the financial impact on consumers, then we blunt their drive to search for alternatives. Granted, oil companies themselves might want to invest in alternative fuels to avoid the price barrier imposed by the hefty taxes Posner is proposing, but with what capital, one wonders? If their profits are suddenly slashed by an added tax burden, where is this investment money going to come from? Presumably Posner is proposing that the tax revenues be spent by the government to stimulate research into alternative energy sources, but believing that this would be done efficiently or in good faith requires me to imagine a fantasy government quite different from the one we actually have. The government we actually have, if you’ll recall, sends the president to Saudi Arabia twice in the last four months to beg for cuts in the price of oil that they well know the Saudis either cannot or will not supply. Meanwhile no one mentions that we have plenty of oil right here at home that we’re not allowed to touch for silly environmental reasons. Instead of talk about that, Congress votes to allow lawsuits against OPEC for price gouging, something that can only ever increase prices further. And let’s not even talk about ethanol subsidies, where Congress gives handouts to the least energy-efficient form of ethanol while simultaneously slapping import tarrifs on the kinds of foreign-produced ethanol (sugar cane ethanol) that actually work. This is NOT a government we can trust to micromanage our energy spending choices!

And this:

Heavy taxes on oil would reduce not only the amount of oil we import but also the revenue per barrel of the oil exporting nations, so there would be a double negative effect on those countries’ oil revenues: they would sell less oil and earn less per unit sold. The reason for the latter effect is the upward-sloping supply curve for oil. Suppose the first million barrels of oil can be produced at a cost of $1 per barrel and the second million at $2 per barrel. If total demand is one million barrels, the suppliers break even: they have revenues of $1 million and costs of $1 million. If total demand is two million barrels, the suppliers have revenues of $4 million (because the price of all barrels is determined by the price that the marginal purchaser is willing to pay) but costs of only $3 million ($1 million for the first million barrels, $2 million of the second). The lower the price of oil received by the oil producers (that is, the price net of tax), the lower their net income.

Neat trick, but is there any reason to believe that it actually works this way? Oil is well known to be an inelastic-demand product, meaning that there’s really only a certain point to which we can reduce our use of it in the shortterm without completely killing our economy. I have no doubt that on the free market things work as Posner says (it costs more to produce extra oil to meet demand, and since it’s a demand-driven production, prices can rise to keep pace with production cost, true), but what of a situation where demand is artificially depressed? Surely in this case the oil company can afford to sell at a higher profit margin to compensate for the tax cuts, and also save itself the trouble of extracting as much oil as it had in the past. The dampening effect on the company’s profits would seem to be less than Posner anticipates. We know from the previous scenario that there is $4million worth of demand for the oil. If this demand is inelastic, there will be somewhat - but not much - less than that after the taxes, so let’s call it $3million. Oil companies charge $2million on top of $1million production costs, and the other $1million goes to pay the taxes. They still make $1million ($2million in profit on $1million in production), and for doing less work. Over the long term, of course, I suppose I can’t really argue against Posner’s scenario. Demand would drop with time as people found alternatives. The point is simply that the punishing effect on oil-producing countries is not going to materialize for a time, and relative to what they suffer, we suffer a lot more in terms of economic slowdown. It really is cutting off the nose to spite the face.

If, however, it’s a real drop in demand, then the scenario is obviously quite different. As there are real alternatives in this case, oil-producing countries then don’t have the luxury of pumping up their prices safe in the knowledge that someone will buy. Once demand is more elastic, then oil profits for these countries will fall on their own. But this is pointedly not the situation caused by the taxation scenario.

Of course, I’m not a trained economist (though neither is Posner), so perhaps there are things I’m overlooking. The REAL argument against “going the tax route,” in any case, is that it’s an ill-advised transfer of wealth to the government.

I hear lots of arguments to the effect that the government should artificially raise prices on oil to “wean us off our addicition,” and these arguments almost always focus on the supposed benefits that higher prices would have on consumption. What most people fail to consider is that all that money that gets collected in the taxes that account for the price increase is money that gets collected in taxes. It’s money that people used to spend on themselves that the government is now spending for them, money lifted from the economy and given over to government programs. And like every tax, it’s economically inefficient. What people would have spent on food, on entertainment, on education, etc. is now given to the government to spend on … what, exactly? Posner suggests it could be spent on energy programs, but the government doesn’t have a very encouraging history there. As noted, it’s currently spending a lot of its “energy money” subsidizing hugely inefficent “alternatives” like ethanol. So let’s imagine that the gas tax goes to fund some such subsidy. And let’s further imagine that it works and people start buying other things instead of oil. So what happens to the subsidy? Politicians go to the subsidy receivers and say “fair is fair, people stopped buying oil, so we have less income in taxes from oil, we’re going to reduce your subsidies accordingly?” In some distant utopia, maybe - but here in the real world what happens is that the subsidy-receivers threaten to vote for the opponent, and so they get their subsidies anyway. And the government pays for that by … raising taxes somewhere else and doing more price damage to the economy if it’s the Democrats, or more deficit spending doing capital damage to the economy if it’s the Republicans. Either way, once you let politicians have a tax, they don’t easily let it go. They’ll either compensate for it by finding money (real or imaginary) somewhere else, or, more likely, now that the government has a (much larger) stake in oil tax intakes, they will be more reluctant than ever to kill off oil consumption. Making the government hostile to energy alternatives to oil by giving it a stake in oil profits seems like a really bad idea.

No - better that we just let it go. The “transfer” of wealth that currently goes to oil-producing countries happens because they provide us with something useful: an efficient energy source. This is, in itself, hugely profitable for us - comparative advantage and all that. The best way to get ourselves off of oil dependence is simply to evolve out of it, which we are currently doing without help from the government. Call it a “soft landing.” Rather than Posner’s government-induced shock to the economy which not only causes a recession we might not need (if the goal is energy-independence, I mean) but also gives the government an ever-greater license to meddle, almost certainly making investment in energy alternatives less efficient in the process (because the government invests on the basis of politics rather than economic and scientific reality) - what we could have instead is a slow, comfortable transition where the private market sends investment money toward profitable fuel alternatives (rather than the ones that tend to get people elected in the shortterm), leading to a more sustainable base for the future, and without needlessly throwing money to the wind in the meantime.

So yes, I’m all for $200/barrel oil, but only if it’s a result of real economic signals and not just a product of the government’s imagination.

I’m getting a little tired of defending Hillary Clinton on this site, but I would just like to say that the recent spat of accusations in the blogosphere and pundit media that she’s dropping hints that someone shouls assasinate Obama are off the charts. A typical bit of commentary comes from zFacts (no persistent link available at the time of writing).

She claims her statement meant that races often last till June. But why bring up a 40-year-old assassination to make this point? She claims it’s because “We all remember” when Bobby was assassinated.
Did you remember it was in June? I sure didn’t. She knows that almost no one remembers.

Actually, the point isn’t that it was in June, but that Bobby Kennedy was the popular choice “nominee presumptive” at the analogous point in the cycle in 1968. It’s true that the dates of the contest were all different then (and for that reason I doubt she expects anyone to remember the June date specifically) and that primaries mattered less than they do now - but the aggregate facts actually make it a good analogy. Whether or not you remember that Kennedy was killed in June specifically, some things that anyone familiar with the history will remember are that Kennedy was an initial long-shot who turned out to be a lot more popular than anyone expected. The DNC was deadset on nominating Humphrey (which they did without running him in a single primary, actually) after LBJ imploded in New Hampshire, and was sort of suprised when the challenge came from McCarthy. McCarthy’s grassroots popularity inspired Kennedy to run, and he quickly became the more popular anti-war alternative, the voice of the left wing of the party. Gee, see any similarities that might be relevant? A candidate who is surprisingly popular, giving the presumptive winner at the outset a run for her money, and this largely on the basis that he is the more credible anti-war candidate, having actually voted against the Iraq War Resolution? I’m gonna go out on a limb and say that it’s OK if anyone sees a parallel between Obama and Kennedy here.

To top that, there were two true examples from more recent years. Gary Hart and Ted Kennedy fought until the convention. The only reason to reach back 40 years to the assassination for a false example is to bring up Obama’s vulnerability.

Let’s start with Ted Kennedy. This would be the 1980 election, and Kennedy, unlike Clinton, campaigned well beyond the point where he could feasibly win. Remember that neither candidate this cycle has yet reached the threshold for nomination. That was not true in 1980. Though initially favored to beat Carter 2-to-1, the bottom had alreday mostly fallen out of Kennedy’s campaign by November 1979. He flubbed a bunch of questions on a nationally televised interview, and the Iran Hostage Crisis did wonders for Carter’s approval rating. Carter went into the convention with a 30% lead in pledged delegates (no superdelegates in 1980) over Kennedy, more than enough to force a victory. Kennedy had lost by March, in fact, and took the fight to the convention mostly out of spite, refusing to endorse Carter or even shake his hand on stage. Let’s see a show of hands of anyone who can think of a reason why Clinton might not want to compare herself to Kennedy in 1980? Yup, that’s everyone in the class.

What of Gary Hart? Well, this is admittedly a pretty good analogy in real terms, since Hart, like Clinton to Obama now, had mostly lost to Walter Mondale by June of 1984. He stayed on through June arguing that “Super Tuesday III” (there were a lot of contests in June that year) would vindicate him. His position was such that he couldn’t really win the pledged delegate count, but the argument was that the superdelegates (yes, they were back in 1984) would see a strong showing for him on Tuesday III as a change in the wind and support him anyway at the convention. But the catch here, of course, is that Obama is Mondale and Clinton is Hart. She hardly makes her case by comparing herself to the eventual loser!

Now, the Clintons are not exactly paragons of straight-shooter politics, so on personality alone there’s good reason to think she’s dropping indecent hints. But let’s stop all this talk about the Bobby Kennedy analogy being inappropriate. It’s perfectly appropriate for what she was trying to say. In fact, I can’t really think of a better one in living memory.