Asymmetrical Information

From the desk of Jane Galt:

Now that's chutzpah

Roberto Lavagna, Argentina's finance minister, certainly has guts. Right now, the government line is that they can't pay their bondholders, because the country's too poor. Now, faced with the prospect that growth might be faster than previously forecast, he's arguing that the primary surplus agreement that he has with the IMF is for a fixed nominal sum--ca. 2.6% of 2003 GDP--not for a percentage of GDP.

That's a pretty neat trick. "We can't pay you if we're poor, because we need the money, and we can't pay you if we're rich, because of our IMF agreement". Think it would work with my student loan officer?

From the desk of Jane Galt:

Forgotten, but not gone

Andrew Gilligan resigns.

From the desk of Jane Galt:

A Day in the Life

Today, I have tasted sorrow.

I don't usually blog personal things, but the anguish of this is too great.

I found a couch, a floor sample marked down at a considerable discount. It was lovely. It was the right size. It was . . . too expensive. But not so expensive that I couldn't, by dint of skipping a few meals, afford it. Such a sacrifice is a mere bagatelle to the committed journalist.

Nonetheless, I hesitated. It was pricey. For two weeks, I pondered. Then yesterday I made a decision. I should have my lovely couch!

You know how this ends. I got to the store to find out that they'd sold the damn thing this morning.

There will be other couches, of course. But not this couch. Due to the slobbery nature of my dog, I was looking for leather. Leather couches, in my price range (excuse me, sir . . . do you accept food stamps? cigar bands? Franklin Mint collectibles?) generally come in one color: black. I hate black furniture. It is modern. It is masculine. It thoroughly resists personalization. Stick a pillow on it though you may, the couch resolutely rejects it. It fights the pillow. And given how much bigger the couch is, the couch usually wins. Eventually you get tired of looking at your lonely pillows, valiantly fighting the tide and yet still, after months and months of careful thought and arranging, looking as if they do not belong on the sofa . . . and you remove them to a safer location. The couch, triumphantly unadorned, dominates your living room with a glowering sulk.

I am bereft. I am beyond comfort. I hate to bother you with it, dear readers, but right now I can think of nothing else. Let this be a lesson to you: when you find something you love, don't ponder, buy. Carpe couch.

From the desk of Mindles H. Dreck:

Call me Al

BROKAW: Reverend Sharpton, should wealthy Americans or people who are well off, for that matter, pay more for their Medicare benefits? Should we begin now a real test of means and apply it to the Medicare costs that are beginning to run exponentially out of control?

SHARPTON: I think they should pay their share, which is more. I think that when you have the present set-up that you have and you go above $80,000 and they pay nothing, I think that is absolutely ridiculous. I think that they must pay their share.

Spoken like a man who hasn't received a paycheck recently. Medicare withholding has no ceiling. The Medicare cap was removed in 1993. This was, ironically, the year in which Sharpton copped to failing to file a return (for prior years).

Frankly, it's unclear whether Rev. Al has made much of a contribution to these funds himself.

btw, Is it me (and the distractions I had while watching), or did Dean get precious little air time last night?

UPDATE: Commenter Kate asks why I bother with Sharpton, referencing (her presumption) a blase attitude re. Alan Keyes and Pat Buchanan. Taken in order:

1."Then there's the Rev. Sharpton factor. He had the best performance last night, the best lines and the best appeal to an important South Carolina voting bloc: blacks, who were told a vote for Sharpton guaranteed them a voice at the convention. A poll last weekend had Sharpton running third at 15%, two points behind Kerry and six points behind Edwards. The more divided the field, the harder for Mr. Kerry to put up numbers to blow his rivals out of the race." - OpinionJournal's Political Diary, Friday January 30

2. Keyes never had numbers like Sharpton. Buchanan did in a few states and the only reason I didn't blog furiously about him is because I wasn't blogging at all during the elections. I started in October of 2001. Nut job that he is, it is worth pointing out that Buchanan appears less prone to fraud, tax evasion and willful ignorance of the facts than Sharpton.

From the desk of Jane Galt:

The Call of the Mall

So the other day I was walking through Target with a gentleman friend, who is also shopping for his new apartment. We had been shopping for several hours, and all I needed to complete my list was a shower curtain. On the way to the shower curtain area, I stopped to look at just a few more things . . .

"Jane," said he, "can we get the shower curtain and go, please?"

Insensitive to the urgency in his voice, I replied "I just want to look in a few more places."

"Jane," he said, in a level, even tone which was a credit to his sex, "I will look for shower curtains for you. But for the health of our relationship, I have to tell you that I am not doing this every time we go into a store. I just can't do it. I will kill myself."

I tried to explain my emotional inability to leave any aisle unlooked at, without success. We got the shower curtain and left, with my promise to find a woman to do this the next time I feel the need to spend three hours at Target.

I am recalling this to you because I have just read an excellent blog post on malls by Tyler Cowen at Marginal Revolution, which reads, in part:

1. At last count there were 1,175 large regional enclosed malls in the United States. Such malls account for about 14 percent of all U.S. retailing, or about $308 billion in sales.

2. The average mall customer spends 22 seconds looking at a mall map, and often leaves the map baffled.

3. The spaces near mall entrances typically yield lower rents and lower valued items. The shopper, upon entering the mall, is still disoriented and is not yet ready to buy something. That is why hair cutteries are so commonly found near mall entrances.

4. Men are more interested in people watching at malls, whereas women are more interested in shopping. Men also like the non-retail parts of malls, such as food courts, which do not require them to price shop or try on anything.

I suspect, although I have absolutely no evidence, that this is based in evolutionary biology: that men shop as hunters, and women as gatherers. Any of my readers have any theories they want to suggest?

From the desk of Jane Galt:

A little light music for your enjoyment

Happy birthday to me
Happy birthday to me
Happy birthday, dear meeeeeeeeeeeeeeeeeeeeee
Happy birthday to me!

From the desk of Mindles H. Dreck:

Safety first!

From the desk of Mindles H. Dreck:

Let the Games Begin

I'm surprised there isn't more comment from the legal bloggers about Judge Norgle's dismissal of the slavery reparations lawsuit. It is quite a thorough opinion (scroll down for legal filings)rejecting the plaintiffs' standing, injury and ruling that the statute of limitations is long passed.

[LEGAL BLOGGER UPDATE: Bainbridge, Curmudgeonly Clerk and Overlawyered are on it, with interesting observations about the status of corporations and their successor shareholders, as well as an interesting observation (in CC's comments) about whether the current shareholders don't have the slave-owning shareholders' profits embedded in their own costs -hence experiencing no gain whatsoever from slavery-related activities]

Of course, noting any of the above draws a predictable reaction:

Outside the courtroom after Norgle's ruling, more than 60 people gathered around activist Conrad Worrill, who said he expected such a decision from Norgle, whom he called an "arrogant, racist, white judge."

In addition, there is certainly no question that those who would pay reparations (shareholders and employees of the defendants) have little connection with those who benefited from slavery. Many are unions, foreign investors recent immigrants and some beneficial owners inevitably descended from slaves themselves. Furthermore, the involvement with slave trafficking of the various companies named in this and one other suit varies dramatically from one company to the next. Three criteria emerge from the defendant selection in this lawsuit:

1. A continuous history - who ever thought avoiding the M&A craze would be a liability?
   
2. Availability of records - one Historical Soceity officer noted to me that corporations have reconsidered or requested the return of donated archives since the suit
   
3. Pedigree and perceived deep pockets - A tackle shop or distillery that might have actually owned a slave doesn't cut it, apparently.
   

But this is just the beginning, as one activist notes:

But Deadria Farmer-Paellmann, a legal researcher who was lead plaintiff, said reparations advocates will start using other tactics to pressure companies accused of profiting from slavery. "The next stages will include boycotts and ads in university (newspapers) and major press."

Other lawsuits have been filed, naming even the Pope and Jaques Chirac. More seriously, other institutions will be roped in, in a strategy designed either to coerce a mass settlement or force the government to intervene:

The number of corporations that benefited from slavery and that could be sued may reach more than a hundred, according to Deadria Farmer-Paellmann, a lawyer who is a plaintiff and who almost single-handedly has uncovered the information linking corporations to slavery. "These companies have become multibillion-dollar interests in large part due to the practice of stealing people and stealing their labor," she said. "Justice requires that they atone for these wrongs by paying restitution." (Prior to her recent research, the reparations movement was focused almost solely on restitution by the government.) Additional corporations could include utility companies that used slaves to lay gas lines beneath Southern cities like New Orleans and mining companies that forced slaves to dig for coal, according to USA Today reporter James Cox, who has researched the subject extensively. Media companies like Gannett, Knight Ridder and the Tribune Company have been linked to slavery because their predecessors published ads for runaway slaves. Nor are universities exempt. Advocates are discussing whether schools including Harvard, Brown, Yale and the University of Virginia should be sued because many of their original benefactors were allegedly wealthy slaveowners.

Hence the third criteria above. Defendants have to be vulnerable to PR damage. Even if the end is judged noble, the means is clearly a shakedown. As one critic remarks:

This, and similar litigation, is not filed with the expectation of winning in court. It is a tactic to encourage settlements from large corporations. In this sense, it is legal extortion. The sensitivity of this issue — and indeed the issue of race relations in our society — can be seen in the judge’s decision. Even though the suit was wholly without merit, and he dismissed it, Norgle acknowledged the “historic injustices and immorality of the institution” of slavery, as if he were the first to notice.

Corporate America should resist the reparations shakedown. If one company settles, it will increase pressure on others to do the same. Any attempt to pay off the racial hustlers in hopes they will go away is shortsighted. It will only increase the size of their demands. It will also produce a highly negative reaction from shareholders, customers and employees. NLPC is ready, willing and able to help organize such a reaction.

This is an extremely blunt instrument for dealing with a long past horror. One doubts that any large reparation fund will benefit anyone but the organizers and the net effect to the country could be anything but negative, considering the number of other reparations that might plausibly be sought with such a precedent and the disincentive to maintain a consistent corporate presence here. Furthermore, if the objective is as stated here by Richard Barber, a NJ activist:

``We are here on behalf of all of those enslaved Africans who worked for 240 years without a payday,'' Barber said. He said there are people in America ``who have trust funds built on the backs of slaves. Time to pay up.''

then this lawsuit is way off the mark. Where are the descendants of those who had trust funds created from owning the shipping companies that moved slaves? All over the world. Some significant portion have succumbed to generational dilution and are sitting in public sector jobs hoping the private sector pays the tab*. Others of these trust funds are, no doubt, safely invested in companies formed sometime after the Civil War.

Barber also remarks:

"If the healing of this nation is to begin, it must start with reparations."

I doubt it. I'm afraid it may be just the opposite.

However, I'm interested in other opinions. Iis extracting a settlement that penalizes unrelated third parties an attitude-altering slippery slope, or am I blind to the valuable 'closure' that exceeds this defect?

UPDATE: My bad, Venomous Kate blogged the ruling and has more, including this interesting observation:

claims which are settled are considered discharged. Period. Free and clear. So the payment of reparations associated with slavery would mean that from that moment forward, each and every person of African-American heritage had been compensated for "disadvantages."

Think about it. Like caucasians, African-Americans would no longer have the protection of "race-based quotas" in hiring or college admissions. There would be no further societal impetus for protection against racial discrimination as to African-Americans (while all other races would be entitled to ongoing protection.) No more "minority status" because, although statistically African-Americans might remain a minority there would no longer be a justification for additional legal protections since the legal effect of reparations is to have removed any "disadvantage" associated with being African-American.

I was hoping to get Eugene Volokh's opinion on the ruling, but he is busy being astonished at someone who thinks slaves were freer than today's taxpayers!. I suppose the slave-descendants owe taxpayers' reparations then...

* Actually, I'm passingly familiar with some descendants of East India merchants, and such a description wouldn't be too far off the mark. The primogenitor changed his mind about slavery, but selling Opium in East Asia and doing business at gun point doesn't make one a saint, does it? For most of the descendants, the fortune is long gone, but for the visiting privileges to an incredible group of islands off of Cape Cod held in trust for generations.

From the desk of Jane Galt:

Tee hee

Funniest thing I've seen yet about New Hampshire.

From the desk of Jane Galt:

Beautiful bubbles . . .

Are we in a housing bubble? Aren't we? I tend to think we are, but most people disagree with me. (Though anyone with any sense at all will tell you that shortly after 2010, housing prices in most currently hot markets are going to fall off a cliff, as boomers downsize. That means those who are buying anything larger than a condo should think hard about a fifteen year mortgage instead of a thirty. It would be a terrible shame to pay extra interest on equity you can't realize).

This terrific article with from the WSJ (subscription only) offers a little sobering evidence for my position:

Coe Lewis, an agent at Century 21 Award who represents the Bachmans of San Diego, says some people worry too much about prices. "They get paralyzed," Ms. Lewis says. "They almost overthink the process. They think there's got to be a dip. There's not going to be a dip. I'm not afraid at all of a bubble in Southern California."

Messrs. Case and Shiller, however, see signs that a bubble mentality has developed in some of the hotter markets. Last year they surveyed 700 people who had recently bought homes. The survey found that many of these people had very high -- and probably unrealistic -- expectations of how much home prices would keep rising. On average, respondents in the San Francisco area thought prices would rise nearly 16% a year over the coming decade.

Another sign of self-delusion: Some people surveyed thought prices in places like San Francisco and Boston should continue to rise faster than those elsewhere because they are such attractive places to live and there is little space for new housing. Those factors do explain why home prices in those cities are relatively high, the authors note, but they don't mean that prices should keep on rising at a faster rate.

.
Definition of a speculative bubble: when a significant plurality in the market is buying on the assumption that even without any improvement in the underlying characteristics of the asset, some other idiot will buy it from them at a significantly higher price. It's known as the "Greater Fool Theory", and it's what made stock markets in the late 1990's so much fun . . . if you weren't invested in them.

From the desk of Jane Galt:

The Christian virtues

I am carefully withholding judgement on Mel Gibson's movie about Christ's crucifixion, The Passion, until I see it. (It opens on Ash Wednesday). But this little interview with an episcopalian minister, from Salon, doesn't predispose me to listen too carefully to its critics. The Reverend Mark Stanger oozes distinctly un-Christian contempt for those who do not hail from the affluent coastal class, and a rather un-liberal intolerance for those who hold beliefs different from his . . . at least if they happen to be evangelical Christians. It makes one distinctly embarassed for the reverend, the magazine, and the congregation, the more so because they seem distinctly unaware of what bigoted jerks they sound like.

The Rev. Mark Stanger, canon precentor and associate pastor of San Francisco's premier mainstream Episcopalian church, Grace Cathedral, was one of the lucky Christian leaders invited to one of Outreach's pre-screenings of "The Passion." Stanger took his mother to Barrington, Ill., to see the tightly guarded film, hosted by Gibson himself, who gave a Q&A afterward. I am lucky to call Stanger a friend, so we dished the dirt about the event. Apparently, not only do the Jews have a legitimate gripe against "The Passion," but so do the Arabs -- yet, according to Father Stanger, the Christians come off worst of all.

Where were the screenings?

There were two showings, and they were at the two premier modern suburban Evangelical churches in the country. One was at Saddleback Community Church in Orange County; the other, where I went, was at Willow Creek in Barrington, Ill.

Somebody told you it was a real red-neck, weirdo community, right?

This guy I know said he wouldn't set foot in there -- not without shots, at least. These places are highly successful. [Willow Creek] is like a modern hotel conference center, with a food court ... the worship space is a huge auditorium, with multi-screens, that seats 4,500 people. As someone from a fairly sensible church, I really felt uneasy in the crowd. I could really see how church freaks some people out. I couldn't put my finger to it, but there was this atmosphere of giddiness and anticipation...

Star-struck craziness...?

Yeah, and also everyone there was white. Any identifiable clergy that I saw were male. There may have been female clergy, but it seemed to be male clergy with their wives in tow, or male clergy with their clergy buddies, or a lot of young male youth-leaders.

Do you think they were mostly Evangelical-style Christians?

I would think so.

This film is being touted as the most factual representation of the crucifixion possible; Mel Gibson has called it the most authentic and biblically accurate film about Jesus' death.

It's absolutely not.

[Snip blather about how you can't make a factual account of the crucifixion if you pay too much attention to the bible -- possibly true, but not an argument you're going to win with a literalist.]

One of the ways [Gibson] tries to produce an air of authenticity in the film is to have the principals speaking Aramaic, the dialect of Hebrew that Jesus would have spoken, and the Roman soldiers and Pilate speaking Latin.

But very chillingly, in the interview after the showing, Mel Gibson said the reason that he had [his cast] speaking those original languages -- and I didn't misinterpret him, because he told a long story to illustrate it -- he said, "If I was doing a film about very fierce, horrible, nasty Vikings coming to invade a town, and had them on their ship with their awful weapons, and they came pouring off the ship ready to slaughter -- to have them speak English wouldn't be menacing enough."

How did that hit you?

I almost puked. It was so xenophobic: The good guys speak English; the bad guys speak these other languages. It wasn't a consistent view, because in the film Jesus was speaking the same language as his tormentors, but even so, I think it was meant to cause confusion and awe in the audience, to have these horrible people speaking either a Semitic or an ancient language like this.

In other words, "I recognize that my interpretation of his quote is in fact refuted by the quote itself, but what sort of a Christian minister would I be if I gave Mel Gibson the benefit of the doubt?

Then he just segues off into la-la land:

Did you feel like that the use of these ancient languages was a veiled anti-Semitic comment?

Anti-Semitic and anti-Muslim. Some of those words in Aramaic sound a little bit like Arabic -- Arabic is a Semitic language too. [In the film, it came off like] nasty foreigners were doing this thing to our beautiful Jesus. So when Mel Gibson said in the interview that the reason for the other languages was to highlight the brutality, that kind of freaked me out. I could see how it would work on an unsophisticated audience.

Showing Jesus speaking Aramaic: anti-semitic. And anti-muslim, because semitic languages resemble each other. That's why when we want to show a bad guy, we have him speaking English, because English sounds a lot like German, which is the language of Nazis . . . I'm confused.

[Snip the Very Reverend Mark Stanger complaining that the movie focuses too much on Jesus's crucifixion, as if it were unique, and that the crucifixion is too violent. Snip also my asking my co-workers if the Reverend Mark Stanger would have preferred we omit the crucifixion altogether and show Jesus having a picnic at Disneyworld with the apostles]

[On second thought, I can't let this go unhighlighted:]

I thought "The Passion" was really perverse and really depraved. There's a lot of criticism against the film that it gives a bad picture of Jews -- I think it gives a worse picture of Christians. Holding this up as somehow emblematic of something central to our belief -- this preoccupation with both sin and blood sacrifice -- is just absolutely primitive.

[Snip more such complaints, and also allegations of anti-semitism, because I'm not going to judge those until I see -- shudder -- the movie]

How was the preoccupation with sin illustrated in the film?

The "devil" was a kind of androgynous creature, but most people read it as a woman, and called her "The Temptress" -- she was whispering to Jesus on the night before his Passion, saying "Nobody. Nobody can take on the sin of the whole human race. It's too great. Nobody can. You can't do it." And Jesus does!

He paints his face blue, puts on his kilt, and he goes for it!

A more sophisticated version would have Jesus deciding that no man can do it alone, and what he really needs is a community board meeting so the entire block can really get together and collectively decide to forget about sin so they can get on with the important discussions, like where to put the new bike path.

[snip the Most Extremely Reverend Stanger complaining that those monotheists keep insisting that there's only one God, and once again excoriating Gibson for making the crucifixion violent.]
I think the last section really sums the whole thing up:

What would be your advice for would-be moviegoers?

I'd say don't bother. I think it's a big bore.

Yeah, that crucifixion -- snoresville. Why would a Christian want to put themselves through three hours of that?

Update: In response to an early question, no I'm not religious, definitely not a believer in the literal truth of the bible, and most certainly not Catholic. However, my sister attended an Episcopalian school at which the clergy manifested the same uber-liberal style. "Why of course we tolerate other faiths but you can't expect us to respect the beliefs of those dreadful evangelicals!". "I love going to church but will you please stop talking so much about Jesus?" It sets my teeth on edge. I fully admit its intolerant. But of course, I don't think God's commanding me to be otherwise. ;-)

And I'm certainly carrying no brief for Mel Gibson; for all I know, the movie is the worst piece of anti-semitic garbage since Leni Riefenstahl died. But his critics, thus far, haven't exactly covered themselves in glory.

From the desk of Jane Galt:

Whither macroeconomics

Very interesting essay (warning: some jargon) on the future of macroeconomics.

(Via Marginal Revolution)

From the desk of Jane Galt:

The Clash of Nations

We've heard a lot, over the years, about how this or that nation is going to surpass the West in some technology, and shortly thereafter will own the world. Up until now, these things have not come to pass; we have not sold our birthright to the Saudis for their oil, nor the Japanese for their walkmen, nor the Germans for their BMWs, nor the Indians for their bottomless reserves of skilled programmers willing to be paid in cigar bands.

But simply because these sorts of proclamations have never come true in the past does not mean that they never will. And in fact, we face a growing threat from the Muslim world that is not merely likely, but inevitable. That threat is the Muslim calendar.

As you may or may not know, the Muslim calendar is a lunar calendar; as such, it only has about 354 days. This means that the Muslim calendar gains on the Western (Gregorian) calendar at the rate of 11 days every year.

Up until now, we have been protected by the foresight of our ancestors, who arranged to have their major religious figure born more than 600 years before the major religious figure of the Muslims. Thus, we are fortunate enough to find ourselves in 2004 when the Muslim world is only in 1425.

But Western hegemony cannot last forever as long as we are locked into the solar model. Every year, the Muslims creep forward by another eleven days while we wait, helplessly, for them to overtake us. On May 1st, 20874, the Muslim Calendar will pull even with the Gregorian, and thereafter, the Muslims will be ahead of us. By 20909, the Muslim world will be a full year ahead of us. How can we hope to compete, economically, if the Muslim world is able to tap the technological riches of the future while we remain mired in a less advanced present?

The only solution is to act now to preserve our competitive advantage. We must switch to a lunar calendar now, to ensure that Western society will forever be The Society of the Future.

There will be naysayers, of course, those who do not believe that the threat is real or imminent. But try though they may to stick their heads in the sand, they cannot alter the merciless trend that will, if we do not act now, doom our great - great - great - great - great - great - great - great - great - great - great - great . . . - great - grandchildren to the pitiful stature of second class citizens. If we love our great^(x) grandchildren, we will act immediately to ensure their futures, rather than selfishly insisting on maintaining a Gregorian calendar which can ultimately only benefit us at their expense.

From the desk of Mindles H. Dreck:

Loss of insurance privileges

Many copies of the scam email Steve Antler discusses here were received at my firm. The message is below, but note the location of the form to which it directs you -

To whom it may concern;
In cooperation with the Department Of Homeland Security, Federal, State and Local Governments your account has been denied insurance from the Federal Deposit Insurance Corporation due to suspected violations of the Patriot Act. While we have only a limited amount of evidence gathered on your account at this time it is enough to suspect that currency violations may have occurred in your account and due to this activity we have withdrawn Federal Deposit Insurance on your account until we verify that your account has not been used in a violation of the Patriot Act.

As a result Department Of Homeland Security Director Tom Ridge has advised the Federal Deposit Insurance Corporation to suspend all deposit insurance on your account until such time as we can verify your identity and your account information.

Please verify through our IDVerify below. This information will be checked against a federal government database for identity verification. This only takes up to a minute and when we have verified your identity you will be notified of aid verification and all suspensions of insurance on your account will be
lifted.

http://www.fdic.gov/idverify/cgi-bin/index.htm [need I say it? don't go here - Ed.]

Failure to use IDVerify below will cause all insurance for your account to be terminated and all records of your account history will be sent to the Federal Bureau of Investigation in Washington D.C. for analysis and verification. Failure to provide proper identity may also result in a visit from Local, State or Federal Government or Homeland Security Officials.

Thank you for your time and consideration in this matter.

Donald E. Powell
Chairman Emeritus FDIC

John D. Hawke, Jr.
Comptroller of the Currency

Michael E. Bartell
Chief Information Officer

Either this is a pre-existing form on the FDIC's website or it directs data elsewhere by html POST. In the latter case the FDIC has been hacked [not. see update].

The FDIC's announcement is here and doesn't deal with the url at all.

I'm sure all the money laundering suspects are trembling at the idea that their $100,000 FDIC coverage might be revoked! Isn't that sort of like saying 'you're a suspected terrorist so we're confiscating your frequent flyer miles'?

UPDATE: D'oh! the text of the hyperlink was the real FDIC site. The underlying link was redirected to http://202.63.206.88/index.htm, and is no longer up.

From the desk of Jane Galt:

Hello, ICC

When Bush failed to sign the treaty for the International Criminal Court, many cited fears that US soldiers might be hauled before it on dubious war crimes charges.

Don't be ridiculous, said critics; it could never happen.

Of course not.

London - Britain's use of cluster bombs in the Iraq invasion could count as a war crime and justifies further investigation by the International Criminal Court (ICC) prosecutor in the Hague, a group of international lawyers said on Tuesday.

Seven academics from Britain, Ireland, France and Canada interviewed eyewitnesses and examined evidence to see if there was a case for referring British conduct to the court, said the pressure group Peacerights, which organised the review.

"There is a considerable amount of evidence of disproportionate use of force causing civilian casualties," one of the lawyers, Professor Bill Bowring of London Metropolitan University, told a news conference.

'The US cannot be tried before the court because it refuses to sign up to it'
"The United States cannot be tried before the court because it refuses to sign up to it. The United Kingdom did."

.

From the desk of Mindles H. Dreck:

Novus Advert Seclorum

The USA Network is advertising its new show with stickers on 50,000 circulating dollar bills. Marketplace had the story today.

"What if the Treasury sold advertising space on dollar bills?" asks Marketplace. I would say this technique probably has a short half-life.

From the desk of Jane Galt:

Where is the Republican Ralph Nader?

Timothy Noah wants Democrats to find a Republican Ralph Nader who will siphon enough votes away from George Bush to make room for a Democrat in the Oval Office. But I think Noah is confusing cause with effect.

Third party candidates break away from their parties when the party is moving away from them, which is usually because the electorate is moving towards the other party. Henry Wallace and Strom Thurmond, George Wallace and Ralph Nader were all members of a formerly fairly powerful group that was falling out of favour with the American public. Like most of us who are losing power, they decided that the fault lay not with themselves, but with the party that was ignoring their righteous claims. They tried to tug the party back their way by costing them the election. (Possibly, some of them even believed that their platform was actually popular enough to win, only in some special, secret way that didn't show up in polls or anything).

The American electorate is currently moving rightward. Maybe we're at the apex of a realignment, which fits with the theory that America alternates between sixty year periods of domination by each party; perhaps its nothing so organized, but merely the fallout from 9-11. Whatever it is, Focus on the Family (James Dobson is Timothy Noah's preferred candidate for the role of metaphorical Brutus) doesn't need to run a candidate, because George Bush hasn't yet abandoned their policy agenda to appeal to swing voters, the way that Bill Clinton did with NAFTA or welfare reform. The Democrats, on the other hand, have valid fears that if they nominate Kerry or even Edwards, Ralph Nader will once again rear his ugly head.

Where does Perot fit into this theory? Not sure, though I get the sense, from the polls of prior voting habits, that he was the creature of the Reagan Democrats, populist pragmatists with no easily categorized ideological leanings who felt ignored by both the patrician in the White House, and the Rhodes Scholar running against him. But that's just my opinion.

If you ask me (and no one did), the Democrats need to stop searching for gimmicks such as a third party savior, or hoping for demographic salvation (a la Teixera and Judis), and start looking for some new ideas with which to pull the American electorate back towards them. So far, the big ideas on which the Democrats have staked their future this election cycle have been:

1) Maybe the economy will continue to suck!
2) Maybe the American public will decide that the war in Iraq is as rotten as we said it would be, except when we voted for it.
3) George Bush is running a huge budget deficit, which is awful, and that's why I'm going to increase it.

If you ask me, this is 10% inspiration, 90% desperation. Of course, suggestions like that are probably why no one asks me.

From the desk of Jane Galt:

Overheard in my office

Quotes from the discussion of the various speeches in Iowa, of which I know nothing because I was busy clearing a path through the box-rubble in my new apartment:

On Howard Dean's Speeach:

"Those clips just made him sound like a muppet."

(referencing the acres-long list of places enumerated by Mr Dean where his campaign was going to gloriously triumph)"What does this say? He's angry and he's got an atlas."

On John Edwards:

"Having to listen to him and George Bush compete in a Southern Jes'-folks-a-thon for nine months is my own personal vision of hell."

On John Kerry:

"I believe that his war record can cancel out the fact that John Kerry is from Massachussetts for voters in the south. But I don't believe it can cancel out his personality, which is pure Massachussetts. Outside of large urban areas, Massachussetts=Death."

On Dick Gephardt

"What can you say about Dick Gephardt? Poor bastard got whipped like a rented mule."

On Lieberman (who didn't compete):

"He's gonna get caned in New Hampshire."

Saddest moment from all the speeches:

Tom Harkin telling Dean supporters (I'm paraphrasing): "Iowa has a history of putting out a three candidate ticket. We're on that ticket."

Yeah, and I'm the best 6'2 female shortstop with asthma named "Jane" within twenty feet of my desk.

Posted by Jane Galt at 11:18 AM | Comments (7) | TrackBack

From the desk of Jane Galt:

Slow news week

I"m sorry that posting has been so light . . . I've been moving since Friday. Bed's in, blinds are up (oh, the saga of the blinds . . . you have no idea), kitchenwares are washed and stored, and all I need is about eighty bookshelves and a dresser. (If you're in the New York area, and you know anyone who's selling a nice, big, preferably well made, dresser for cheap, please do let me know. I'm flexible on appearance, as long as it's not lacquer or formica.)

Still moving today, but hopefully by tomorrow I'll be back with updates from the front.

From the desk of Jane Galt:

Why can't I make a comment, Mommy?

Because of the evil comment spammers, dear.

The comment spammers have been hitting my comments section pretty hard, locking up my host's server. The wonderful Michal Wallace, of my fantastic hosting service Cornerhost, is helping me take steps to deal with this (like upgrading my MT installation to MySQL), but until that's done sometime tonight, I'm afraid comments are off limits.

The stupid thing is that since (I believe) I'm pretty vigilant about watching the comments for spam (I'm sure they do slip by when I'm busy), all most of these #$@! succeed in doing is wasting my time and theirs, merrily sending porn-watching invitations for me to delete.

I've heard there's some way to get around this by renaming the comments script. If you know how to do this, could you email me?

From the desk of Jane Galt:

Robbing from the rich . . .

Argentinian president Nestor Kirchner won adoration from his populace for wresting a sweet deal from the IMF by allowing his country to default on its IMF obligations, causing the IMF to come running, double-quick, with an offer more to his liking.

Now he's trying to pull the same deal with private bondholders. He -- and many of his supporters in the west -- like to talk a good game about how Argentina shouldn't have to make its people suffer to pay obligations to rich investors. And a lot of us are sympathetic: why should some poor Argentinian who makes his living scavenging garbage piles go hungry to fatten the pockets of rich Western investment bankers?

But as the WSJ points out (subscription required), the investors aren't all rich investment-firm types:

About 44% of Argentina's private debt is held by small investors, including 450,000 Italians, 35,000 Japanese and 150,000 Germans and Central Europeans. Europeans such as Mr. Lucifora have long had a preference for fixed-income investments over stock.

In the late 1990s, local banks began promoting Argentine bonds as an alternative to Italian T-bills, whose yields declined as Italy adopted the euro. Since the IMF and major Western governments held up Argentina as a model of free-market reform during the 1990s, Mr. Lucifora said he thought the bonds were safe, and put $150,000 in Argentina.

With his Argentine bonds now worth only a fraction of what he paid for them, Mr. Lucifora has cut every nonessential expense -- including vacations, eating out and newspaper subscriptions -- and keeps the thermostat low. He spends hours logged onto a bondholders' chat room, attends seminars on suing Argentina and studies Spanish so that he can fire off e-mails to the Argentine media.

Mr. Lucifora and other bondholders don't know where to turn. Banks in Italy, Central Europe and Japan have formed negotiating groups to represent holders of Argentine bonds. But in Italy, where retail investors poured $14 billion into Argentine bonds, many of the retail investors are infuriated at the banks for having sold them the shaky bonds in the first place. "The doctor who gave me the poison now says he's going to give me the cure," says Raimondo Iallonardo, a graphic designer from Milan, who lost his son's college-tuition money in Argentine bonds.

Some individual bondholders have formed negotiating groups of their own. Other European bondholders have challenged Argentina in court, with little success. German creditors tried unsuccessfully to obtain a court order seizing an Argentine naval training vessel, La Libertad, that was due to dock in Bremerhaven in 2002. When Argentina's Mr. Kirchner was preparing to visit Italy last year, a provincial lawyer, Mauro Sandri, threatened to have the presidential plane, Tango 01, impounded. Bondholders claimed credit when Mr. Kirchner cancelled his visit, though Argentine officials attributed it to scheduling conflicts.

Mr. Kirchner's tight-fisted stance has made Argentina a bad word in Japan, as well. Japanese investors were attracted to Argentine bonds during the late 1990s, after Japan's real-estate and stock bubbles popped and local interest rates dropped to virtually zero. When an Argentine official visited Japan last year to discuss the debt restructuring, an investor demanded that part of Patagonia be ceded in lieu of debt payments.

Argentina's efforts to justify its position have often made matters worse. On a trip to Germany last year, Argentine debt negotiator Guillermo Nielsen said that, given the magnitude of the economic catastrophe that rocked Argentina, it should get the same treatment as post-World War II Germany, which received a 77% debt write-down. Investor Stefan Engelsberger presented Mr. Nielsen with a photograph of the bombed-out city of Frankfurt to show how much more dire Germany's situation had been.

In America, most bond investors are indeed wealthy. But in Europe, bonds are more normal than stocks, and a lot of these guys are the equivalent of the local middle manager who got raped when his broker put him into dotcoms. Argentina wants them to accept a deal worth only about 25% of the value of the bonds before the default.

It's not so great for Argentina either. It's good in the short run -- Mr Kirchner gets to spend more. But in the long run, for Argentina to grow, it's going to need capital. And if Mr Kirchner succeeds in his quest to make them eat Argentina's losses, international investors are going to be very leery indeed of providing it.

From the desk of Jane Galt:

Marriage promotion

I'm pretty skeptical about this $1.5 billion for marriage promotion. I mean, if our mothers can't chivvy us into marriage, when they're right there, nagging us constantly, starting every other goddamn sentence with "You know, if I had grandchildren, this would be a great opportunity to . . . ", mentioning ever-so-casually how nice we look in white . . .

Excuse me, are you still here?

As I was saying, if our mothers can't browbeat us into getting married, what hope has a faceless government bureacracy?

On the other hand, my mother doesn't have $1,500,000,000 to spend . . .

From the desk of Jane Galt:

Al Franken is a big, fat . . . radio host?

Looks like Al Franken is going to go head-to-head with Rush Limbaugh on the new liberal radio network some funders are trying to launch. Should be interesting, for a couple of reasons. First, I've never understood why there's no liberal counterpart to Rush, so it's good to see someone finally trying a natural experiment. And second, a friend who is bearish on the new network's chances pointed out that Rush, whatever you think about him, is extremely gifted at radio--and he got that way by slogging his way up through the ranks at station after station, honing his craft on the graveyard shift. Franken, on the other hand, is going to jump into prime time with little experience in audio-only media (he is, we should not forget, an old television hand.) Can a comedian/television-writer compete with an olympic-quality defending champ his first time in the pool? We'll find out.

From the desk of Jane Galt:

Someone's in trouble . . .

Looks like someone at the Howard Dean campaign forgot something.

From the desk of Jane Galt:

What's wrong with this picture?

So MoveOn has chosen the winner of their Bush in 30 seconds contest: Child's Pay, a slick ad that shows children working to pay off the Bush deficit. Seth Stevenson reviews:

In sum, "Child's Pay" is a solid choice by the judges. And unlike the other finalists—many of which come off as shrill lectures—this one might actually change some minds. It's reasonable, moderate, and high-toned. Which is no doubt just what the judges were looking for, especially after a flap over two entries that equated Bush with Adolf Hitler. But what's right with this ad is also precisely what is wrong with it.

Of all the ads, this is the one that most looks like it was dreamed up and executed by the Democratic National Committee. So why bother? Why not just leave that sort of thing to the DNC itself and strive for something new and different? MoveOn clearly conceived of this contest as a bold experiment in opening up the forum, turning the consumer/producer tables, and crashing the media dialogue. (The contest rules even state: "We're NOT looking for the same old slick political ads from Washington media consultants.") But in the end they went with the most polished, staid option. What's more, this ad completely ignores the MoveOn crowd's single biggest issue: the war in Iraq. Is this what all those grass-roots folks wanted to see when they donated money to air a spot that would speak for unheard voices? An ad about the growing deficit?

(I've also got a separate, more practical problem with the ad: message clarity. When this actually airs on television, I'm not sure how effective it will be with the audience. All those shots of children at work, with no voice-over or text, suggest this is an ad about child labor, perhaps making a point about international sweatshops or something. Only at the end do we get the punch line, and even then it leaves us a little puzzled. I mean, these kids won't really be kids anymore when they go to work to pay off the deficit. They'll be adults then. By this point the whole thing's muddled, and the next ad comes on and it's for fabric softener and it's got a cute puppy in it, and now you've lost us completely.)

But that's not really what's wrong with it. What's wrong with it is that it's not going to help the Democrats win, because they are not going to be able to meaningfully run on the deficit--at least not with the policy platforms they're running now. Particularly not if the candidate is the MoveOn crowd's darling, Howard Dean.

There is a well established myth among Democratic intellectual types that runs something like this: Clinton came into office, Bob Rubin convinced him that he should close the deficit, and together they worked to enact a huge tax increase on the rich that closed the budget deficit. Bond traders were so thrilled that the budget deficit was going to close that they lowered interest rates, touching off an economic boom that brought unrivaled prosperity. This myth is particularly beloved of members of the Clinton-era treasury department, and is pushed hard in Bob Rubin's new book.

It isn't true. Oh, I have no doubt that, all else equal, budget deficits cause interest rates to rise and suck up some quantity of savings that would otherwise have been directed to productive investments. But I don't think that the effect is of the magnitude the Clinton folks claim. Indeed, their claims are rather odd, dotted with phrases like "the effect was much more robust than we had anticipated", which to an economist should signal that it's time to take a good, hard look at the data, because when an effect is three or four times what you predicted, it's a good bet that it's caused by something else entirely. Indeed, Bob Rubin claims in his book that the bond markets were so wowed by his stated intention to cut deficits that they brought interest rates down significantly even before the magic tax law had been passed. Uh huh. He also claims elsewhere that if the surplus hadn't evaporated, the long bond would be at 0.2%.

(Actually, he doesn't claim that -- he makes a number of scary sounding claims about the deficit meant to cast George Bush in the worst possible light, which, if you do the math, imply that the long bond would be at 0.2%. For the non bond oriented among you, this means one of two things:

1. If we'd left a Democrat in office (by implication) we would have massive deflation.
2. The real interest rate on US debt has declined approximately 90% from where it was in the non-inflationary fifties.

But I digress.)

Don't get me wrong. I'm a big fan of Bob Rubin, and an even bigger fan of Larry Summers, his successor. But as far as I can tell, the claims about the magic of deficit reduction are, to say the least, extremely overwrought.

Moreover, the tax increase didn't close the budget deficit. The CBO estimated that the Clinton tax increase raised revenues by about 0.8%, after controlling for cyclical effects. In 1992, when Clinton took office, the deficit was 2.9%.

After the drop in the stock market, the CBO took a hard look at the Clinton era surpluses and determined that without windfall revenue from the bubble, there would never have been a surplus--Clinton would have run a deficit all the way through.

Furthermore, Clinton's committment to deficit reduction has been somewhat retroactively enhanced. Had he succeeded in passing his national health care scheme, the deficit would have grown, not shrunk. It was the election of a Republican congress, and the resulting stalemate--Republicans not allowed to raise taxes, and Democrats not allowed to raise spending--that seems to have kept the surplus for debt reduction, rather than new tax cuts or spending increases. As soon as one party controlled all three branches, they proceeded to get rid of the surplus.

Now, the fact that the Clinton surplus came from bubble revenues makes it hard for Democrats to campaign on a balanced budget. To get one, they'd have to not only repeal all of the Bush tax cuts, but also enact stiff new taxes to make up for both cyclical effects (bubble or no, the height of a boom is the best time to collect taxes, and though the recession is over, we won't be in lush tax land for several years to come), and the fact that the Clinton taxes didn't close the budget deficit absent bubble revenues. Or they'd have to cut spending significantly.

But the Democrats don't want to cut spending; they want to raise it. Dean and his brethren (with the possible exception of Wesley Clark) seem to have spending plans for every dollar they bring into the treasury through tax increases.

If they want to publish a remotely truthful campaign document, they will thus have to admit that they aren't going to do a damn thing about the budget deficit. Of course, there's no reason why any of these candidates should be interested in being the first presidential candidate in history to publish remotely truthful tax policy documents. But even if they're willing to make the sort of extravagent untruthful claims about the tax code and human behavior that generally pass for campaign tax plans in this imperfect world (and are, unfortunately, taken at face value by intelligent supporters who ought to know better), they're probably not going to want to push that line too hard.

They long to, I know. They ache to tell the Faithful that if only they are elected, they will raise taxes on the rich, close the budget deficit lickety-split, and thus, through the magic of the bond market, bring back those halcyon last days of the Clinton administration when anyone who could breathe and spell his name could make millions in the stock market. The problem is, if they are then elected, the voters will probably notice that the budget does not, in fact, close, and the stock market bubble does not, in fact, return. This will make them angry. And an angry voter is a voter ready to hand over a sixtieth senate seat to the Republicans.

It is especially off limits to Wesley Clark. Wesley Clark owes his candidacy to the sponsorhip of the Clintons. And if he promises to bring back 1999, when this is, in fact, not possible, it will tarnish the strongest remaining element of Bill Clinton's legacy -- the belief that he, and not millions of Americans trying to build a better future for themselves, was primarily responsible for the boom of the nineties.

So the commercial, while very well done, is not going to help the candidates much. But given their recent track record, I don't think that's going to stop them from flogging it in every available forum.

From the desk of Jane Galt:

Department of Bad Statistics

So I am reading this Fareed Zakaria article on Pakistan, and I come across this passage:

For 15 years now Pakistan has found a cheap and effective way to fight over Kashmir -- by helping Kashmiri militants in their terrorist tactics. Sept. 11 changed that game. It stigmatized terrorism and gave India a crucial ally on this issue: the United States. Suddenly Pakistan found that supporting terror had become costly indeed.

But something equally important has happened in South Asia over the past 15 years. India has been transformed by a market revolution. Globalization has come to every part of the country, whether in the form of a call-center job, a Chinese-made toy or American-inspired television shows. Suddenly Indians want to compete. And they are. Last year India's economy was the second fastest-growing in the world, at 7.4 percent. Its business leaders speak confidently of becoming global players in their fields. In this Indian future, a continuing cold war with Pakistan is a drag.

During the same period, however, Pakistan went down a different path, one of radical Islam and domestic dysfunction. The results? In 1985 its per capita gross domestic product was 6.5 percent higher than India's; today it's 23 percent lower. Its birthrate is soaring at a frightening 2.8 percent, while India's is 1.7 percent and dropping. Thirty percent of Pakistan's economy is consumed by its military.

Immediately, alarm bells went off in my head. Bad statistics alert!

What's wrong with this passage? Well, start with this fact: total government share of GDP in the United States is 30% of GDP. Admittedly, it does go higher in other countries -- up to 60% in Sweden at one point. But no developed country is spending 30% of GDP on its military -- we're the spendthrifts in that department, at under 5%.

Well, perhaps Pakistan, a developing country, spends a larger percentage of its GDP on the military than we do. Perhaps so. But 30% is lunatic. A developing country generally spends less of its GDP on government than an industrial nation, because it can't afford to. We can take 30% of our GDP, shovel it into the treasury, and everyone still has plenty of money for food, clothes, and progressive scan DVD players with digital surround sound capabilities. Do that with a country where per capita GDP is, as Pakistan's is, around $2,000 per year, and you'll end up with a lot of dead people. Especially if that 30% is only military consumption, and all the other stuff that government does (even if it's a third world government that doesn't do very much) has to be budgeted for on top of that.

And indeed, when I go to the Economist's extremely handy Countries Section, and look at their Pakistan page, I find a nifty little document with economic data on Pakistan that says indeed, total government consumption in Pakistan is not over 30%; it's more like 10-12% of GDP. Rendering that military figure totally, wildly incorrect, unless someone's shipping Pakistan military supplies worth 20+% of their GDP every year.

From the desk of Jane Galt:

Opening a shut case

New Mexico is reopening the case of Billy the Kid. They'll use DNA evidence to find out if it was really the Kid that Pat Garrett shot in the 1880's, or an imposter. What was that they used to say about letting the dead past bury its dead?

From the desk of Jane Galt:

Finally, a campaign race I can get interested in

Are you tired yet? We haven't even had the primaries, and already the fatigue is upon us. Not another candidate blathering about how he promises to fix all our problems at absolutely no cost to anyone except people we don't like, please. I can't take it.

But salvation is here. From new favorite blog Mistakes were Made, an election contest that really encourages voter involvment:

. . . from the comments so far, you are a clever and perspicacious lot, to boot. But disappointingly few commenters so far. B and I scratch our heads, sip our beers and mutter, "Who do you have to blow to get comments in this town?" There's the obvious way, of course. "My political opponents are mental cripples--discuss." But such posts, well, did we mention www.andrewsullivan.com?

So, a challenge, to you, talented reader. Primary season is upon us. The Des Moines Register has endorsed. (Edwards.) The New Republic has endorsed. (Lieberman.) But Mistakes Were Made has coyly withheld its endorsement, so far. No longer. The contest:

1) You will write a poem endorsing a candidate

2) The form should be appropriate to the candidate. A sonnet for the posh John Kerry? An army-style call-and-response ("I don't know what I been told...") for Wesley Clark? An Amiri Baraka-style rant for Sharpton? The decision is yours.

3) The bard-shy among you may vote for poems. Contribitors may also vote, but note that it is not only forbidden but just plain bad form to vote for yourself.

4) Entries must be submitted by January 20th, a week before the New Hampshire primary.

5) Mistakes Were Made will choose a winner based on reader opinions, our own judgment and the votes of our distinguished panel of friends. The winner will be announced shortly before the primary, and we will all proceed to get this country on track again.

Start composing.

From the desk of Jane Galt:

The biological basis of behavior

Fascinating piece from Charles Murtaugh:

. . . "When small is beautiful", from this year's Christmas issue of the Economist. I actually read it over the holidays, but it wasn't available online to non-subscribers at the time; thanks to Orrin Judd for linking to it yesterday. The author asks the question, "How big should a nation-state be?" and refers to a very interesting new book on the subject:

Of the ten richest countries in the world in terms of GDP per head, only two have more than 5m people: the United States, with 260m, and Switzerland, with 7m. A further two have populations over 1m: Norway, with 4m and Singapore, with 3m. The remaining half-dozen have fewer than 1m people. What do such variations imply about the link between population size and prosperity? . . .

The book argues that the best size for countries is the result of a trade-off between the benefits of scale and the costs of heterogeneity; and that openness to trade alters this trade-off. The gains from being big are considerable. Large countries can afford proportionately smaller government (although they often don't). Essential running costs can be spread over many taxpayers. . .

But size has costs too. Thus large countries are also likely to have a diverse population whose varying preferences and demands a government may find hard to meet: America, Brazil and India are cases in point. . .

However, the trade-off between the costs and benefits of size is affected by another factor: trade restrictions. The importance of economic size for prosperity depends crucially upon how open a country's economy is. Small countries that may not be viable in a world of trade restrictions can prosper when trade is liberal and markets are open. . .

None of this, however, satisfactorily explains the United States. It has a hugely successful economy and one of the world's highest levels of income per head, yet is also one of the most diverse countries on earth. Surely this winning combination of size and heterogeneity disproves the trade-off theory?

The answer, says Mr Alesina, lies partly in history: as in many countries, borders are partly a legacy from the past. In America, the cost of heterogeneity was a protracted and bloody civil war. More important is America's federal structure. If the United States were as centrally ruled as, say, France, the country would break up.

What struck me was how these findings seemed analogous to the problem of biological scaling, particularly as applied to respiration and circulation. Really little critters, like nematodes, don't have any sort of specialized respiratory system: oxygen just diffuses across their skin, and because their bodies are so narrow it has no problem penetrating to interior cells. Insects, on the other hand, have canals of air-bearing tubules running through their bodies, called trachea, through which air flows in and out to supply oxygen (and remove CO2) from inner tissues, inaccesible to diffusion from without.

Air tubules wouldn't work for vertebrates, though; to supply our large, very metabolically-active bodies, an even more complicated system of indirect respiration has evolved, via circulating red blood cells that literally carry oxygen from the lungs to distant target tissues. Thus, with increasing size comes with an increasing investment in efficient oxygen transport; a nematode that became "super-sized" to the scale of a Great Dane would have only a few moments to thrash around scarily, before quickly asphyxiating.

Does something similar apply to the movement of something -- goods and service? people? ideas? -- within the volume of a nation-state, such that unless that something moves very freely and efficiently, the "metabolism" of the state is impaired? Small states, thus, would be least affected, while large states more so. (Recall from above: "If the United States were as centrally ruled as, say, France, the country would break up.")

It's just a random thought. For warm-blooded animals, increased size actually confers at least one metabolic benefit, i.e. more efficient heat retention. Similarly, the Economist article notes a major benefit for the large nation-state: military might.

Embassies, armies and road networks are all likely to cost less per head in populous countries. Defence in particular is cheaper for giants. ?It is only safe to be small in a peaceful world,? say the authors. . .

Orrin fondly extrapolates that this study portends the doom of China and India, but they might well choose to sacrifice the prosperity of their citizens for sustained military prowess: particularly if they face an otherwise single-superpower world.

I would point out one thing: the fact that rich countries tend to be small might be a statistical artifact of the fact that a little bit of luck goes a long way towards boosting your per-capita income if your number of capitas is small. Nonetheless, the thesis makes intuitive sense, particularly for this libertarian-type, and Charles' thoughts are fascinating to muse upon.

From the desk of Jane Galt:

Media appearance

I'll be on CNNfn tomorrow at 9:00 am. If you are among the three cable subscribers who gets CNNfn, and you happen to be homebound, check it out.

Update: The time zone is EST. Thanks to Frank Martin for pointing out that I missed this.

From the desk of Jane Galt:

Finally, some good news

Attacks have dropped 22% since Saddam's capture.

From the desk of Jane Galt:

Public Service Announcement

As you probably know, this blog has two authors. Myself (Jane Galt) and Mindles H. Dreck, the International Man of Mystery. The deal is, he writes better stuff, but I'm more prolific, thus illustrating the eternal economic verity: Quality. Quantity. Cheap. Choose two.

Mindles has been on a long hiatus. His infrequent postings have led many to forget the jewels which (too infrequently) drop from his keyboard into our path. New readers may not be aware at all that he posts here. But he does. The name of the poster appears at the top of the entry, so you can always tell who's writing -- even if the superior quality of Mindles' contribution hasn't tipped you off. That will avoid the problem we've had with some people commenting on his posts as if he were me. He's not. He's smarter and better looking, for starters.

And Mindles . . . welcome back. We've missed you.

UPDATE FROM MINDLES: She is as untruthful as she is flattering. This blog's recruiting policy is not that of Mr. Lopez-Pierre's Harlem Club. She's not only better looking but also beats me in both quantity and quality. I'm just a guy who turned 40 and has three kids of his own plus Eliot Spitzer run amok all over his industry. We now return you to your regularly scheduled, appropriately Megan-heavy programming.

But thanks for the encouragement.

From the desk of Jane Galt:

Our long national nightmare is over

As many of you know, my apartment search has been difficult. Sisyphean, even. I have found -- and lost -- five or six suitable apartments over the past eight months.

Many of you were deceived by my post indicating that I was moving to Brooklyn. I was moving to Brooklyn, until the fellow I was supposed to move in with asked for a cashier's check for several thousand dollars, with the lease to appear at some time in the indefinite future.

Then I was supposed to move into a rent stabilized apartment. Landlord backed out at the last minute.

Then there was the roommate . . . well, I won't bore you.

The point is, I've finally found an apartment.

Like all New York apartments, I can't afford it, it's small, it's oddly shaped, and it has too little closet space. However, it does have a decent kitchen, hardwood floors, a more than adequate amount of light, and it's on the first floor, so the dog can enjoy barking at passing strangers. Plus, it's three blocks from my parents' house -- and yes, that's a feature, not a bug. My parents aren't the snoopy, overbearing kind that stop by to check on your laundry technique. They're the nice kind that bring you things when you're sick.

I love it.

I signed a lease on Saturday, and I move in this week. I haven't had any pledge drives this year, so this is it -- if you want to hit the tip jar to help cover the staggering broker's fee I just paid, or the myriad costs of moving, I'd greatly appreciate it.

But most importantly, I wanted to share my joy with my readers. After 2 1/2 years of living with my parents, I finally have a home.

From the desk of Mindles H. Dreck:

Steve Verdon has changed his mind...

...about outsourcing.

He fails to take into account that the U.S. market share of turntable manufacturing has actually grown.

From the desk of Mindles H. Dreck:

'My So-Called Blog'

In the news media, the blog explosion has been portrayed as a transformation of the industry, a thousand minipundits blooming. But the vast majority of bloggers are teens and young adults. Ninety percent of those with blogs are between 13 and 29 years old; a full 51 percent are between 13 and 19, according to Perseus. Many teen blogs are short-lived experiments. But for a significant number, they become a way of life, a daily record of a community's private thoughts -- a kind of invisible high school that floats above the daily life of teenagers.

Not so different, really. Especially if we minipundits take Maureen Dowd as a role model.

From the desk of Mindles H. Dreck:

Everybody who cares about Wallace Shawn's politics...

please stand up.

I sincerely believe that if Bush and Cheney recognized the full humanity of other people's mothers around the world, they wouldn't commit the crimes they commit.

...We're in an emergency situation. The United States has become an absolutely terrifying country, and I would hope that I could participate in some way in stopping the horror and the brutality.

Oh, the brutality.

Damn, I stood up for a second. Here's more 'method punditry' (i.e. what's their motivation?):

Bush and his colleagues are exhilarated and thrilled by the thought of war, by the thought of the incredible power they will have over so many other people, by the thought of the immensity of what they will do, by the scale, the massiveness of the bombing they're planning, the violence, the killing, the blood, the deaths, the horror.

...Why do they want this war so much? Maybe we can never fully know the answer to that question. Why do some people want to be whipped by a dominatrix? Why do some people want so desperately to have sex with children that they can't prevent themselves from raping them, even though they know that what they're doing is wrong? Why did Hitler want to kill the Jews? Why do some people collect coins? Why do some people collect stamps?

Why do some actors write hilariously incoherent and over-the-top political commentary?

We can't fully understand it. But it's clear that Bush and his group are in the grip of something. They're very far gone. Their narcissism and sense of omnipotence goes way beyond self-confidence, reaching the point that they're impervious to the disgust they provoke in others, or even oblivious to it.

Answered his own question, he did.

From the desk of Mindles H. Dreck:

You didn't ask

I am, of course, jealous of my co-blogger's highly successful exhibitionism.

As I am neither female nor particularly attractive, such adulation is unavailable. However, here's a picture of Mindles Dreck taken in the early '60s. Readers from way back in 2001 may recognize the mood:

From the desk of Mindles H. Dreck:

The Stupid Week in Review: PC and Nanny-State Cannibalism

There seems to be no time in my week for blogging these days, but I did clip a few articles for comment.

Just Chop off the Noisy Bits
Tomorrow's Arts & Leisure section of the NYT features an article (oddly available in print but not up on the web site; Sunday update: here it is) entitled "Shushing the Symphony":

...a new regulation imposed by the European Union that reduces the allowable sound exposure in the European orchestral workplace from the present 90 decibels to 85. The problem is, a symphony orchestra playing full-out can easily reach 96 to 98 decibels, and certain brass and percussion instruments have registered 130 to 140 at close range.

(Here's a BBC version of the same story, and reason's 'brickbat' take is here, alleging this will make Mozart and Beethoven unplayable)

I've been a woodwind player in an orchestra with brass behind me (typically the low end of the brass section containing the much-feared bass trombone) and a guitarist in a jazz band. I can vouch for the occasional discomfort from blasts of high-volume noise, but my understanding was always that short blasts were not as damaging as constant loud exposure, such as from a pneumatic drill on a construction site.

Certainly the oddest aspect of the story is the reporter recounting how orchestras with earplugs have trouble modulating their volume, and the site of individual players inserting and removing earplugs somehow detracts from the performance. By all means! Let's use aesthetics as a reason to disallow the individuals affected from coping with the problem like this guy...

... but regulate aesthetics for everyone by limiting the dynamic range presented.

To be fair, Reason's take is flawed. The rule goes to average sound levels not instantaneous measurments, so it works like CAFE, affecting the avergae bombast of the programs presented. It will hardly effect 'Mozart and Beethoven' - that's all we'll hear, as it tends to have less dynamic range than the music of their successors. It's Wagner, Mahler, Stravinsky et al. that will appear only in on the same program with Cage's 4'33".

Nonetheless, this amounts to more nanny-state barbarism - leveled against part of the arts that typically enjoys subsidies.

"Eye Candy with a Brain"
In the New York Sun this week, an article appears about Thomas Lopez-Pierre, (scroll down for the full text of the article) who is putting together a private club aimed at "young, affluent black and latino professionals."

An e-mail sent to 5,000 prospective members listed just two entry requirements - they must be professionals and must pay $2,500 to join.

The requirements for women were more demanding: They must be college-educated, single and childless, under 35 years old, and they have to submit a "head to toe" photo.

"Today's successful men want what they call eye candy with a brain," the email's author and the managing partner of the Harlem Club, Thomas Lopez-Pierre, explained of the disparate qualifications. "If we're going to let women in for free, our goal is to attract some of the most beautiful women in the city."

I defend a private club's right to recruit membership as they please. In NY and NJ, however, only certain constituents can get action of this affirmative flavor.

Activist, Not Citizen
Finally, New Yorkers will be shocked to learn that Al Sharpton continues to get a free pass for conflicts of interest, inappropriate use of funds and non-existent accounting and ethics. Offenses that might preclude virtually anyone else from sharing the stage with other presidential candidates. 'Charlatan' is the adjective most have settled on for Sharpton, but it doesn't do him justice. In the world according to Al, being an 'activist' provides ethical exceptions aplenty:

In many ways, the campaign parallels Mr. Sharpton's personal and professional lives when it comes to finances, according to court, New York State and New York City records. Besides disclosing a history of staying in expensive hotels, flying first class and relying on limousine services, though, such records also reveal a series of judgments, lawsuits and tax debts.

....For instance, the National Action Network ran up a debt of $76,704.34 with 1-800-Limo-Center, a business based in Rochelle Park, N.J., which provided Mr. Sharpton with car service at cities around the country, said Howard Levi, a lawyer representing the car service. When the network failed to meet a court schedule to pay off the debt, a judgment was imposed. The remaining unpaid debt is about $30,000, Mr. Levi said.

Asked about the case, Mr. Sharpton objected only to calling the company a limousine service because, he said, he never rides in limousines.

If it's a 'car service' you don't have to pay. I'll have to tell my employer

The National Action Network also owes about $16,000 on a $25,222.83 bill from a conference it held at the Millennium Hotel in New York on Jan. 19, 2000, court records show.

The network also has a tax warrant against it for failure to pay New York State $15,446.31 in unemployment insurance. Christine Burling, a state labor department spokeswoman, said in a statement: "The Department of Labor reached out to the organization via telephone and we provided them with written notices numerous times, but have been unsuccessful in getting the National Action Network Inc. to take corrective action. As a result, the department had no choice but to issue warrants."

What was Sharpton's position on extending unemployment benefits? For thee, not by me?

Mr. Sharpton said this week that he was unaware of the unpaid taxes and had instructed his lawyer to straighten the matter out.

This year, a small travel agency in Manhattan filed a lawsuit against the National Action Network and Mr. Sharpton, saying that the network refused to pay nearly $200,000 for travel, including a trip Mr. Sharpton took to Sudan, plus interest. That dispute is also pending.

He visits terrorist-harboring states and runs out on the bill

Mr. Sharpton said he made about $73,000 a year from the National Action Network, and was vague about any other income, including cash "love offerings" collected at churches where he preaches....

...At least one of Mr. Sharpton's recent debts has been fully paid. After he failed to pay the $65,000 he owed to Mr. Pagones for defamation damages, his friend Percy Sutton, the former Manhattan borough president, came to his aid.

With interest, supporters organized by Mr. Sutton paid Mr. Pagones nearly $80,000.

I'm feeling the love. Just not declaring it...

...Mr. Sharpton's entertainment promotion company, Raw Talent Inc., was dissolved in 2002 for failing to file tax returns for 1991, 1995 and 2002, and not paying taxes in 1991, 1992, and 1995 through 2002, state officials said.

...Mr. Sharpton tried to deflect blame for his financial record by suggesting that he and many of the people around him were not financial experts, but activists who should be given some leeway in such matters.

What's a few missed years, when you're an 'activist'?

In general, the old adage about lying with dogs and getting fleas holds true. Whether you worship at the alter of the state or identity politics, they will eventually turn you boring, barbarous or bankrupt.

From the desk of Jane Galt:

How low can you go?

Okay, so I was shopping on J Crew for clearance items -- I have a pair of cords that I just bought that I liked so much I wanted to buy another pair. I was in the Tall section. Now, if anyone from J Crew is reading this, don't take this the wrong way, because the fact that you have a tall section has earned my undying gratitude. No, really. It's changed my life. I love you guys with all my heart.

Nonetheless. The clearance section is stuffed to the gills with size 16's and size 2's, and little else.

Size TWO? For readers to whom this may be meaningless, a point of reference. I'm about normal weight. I'm 74 inches in my stocking feet (6'2), and have a 35 inch inseam. My waist, at 27 inches, is actually apparently on the small side.

I wear a size 8 or a 10.

There are certainly women who are skinnier than I am. But if there is a woman out there who is my height, and wears a Size 2, what she needs is a crate of ensure, not a pair of cords. How about stocking some more pants in my size, guys?

From the desk of Jane Galt:

New York Notes

Tyler Cowen, a terrific blogger (and GMU economics professor) who blogs at Marginal Revolution and Volokh Conspiracy, will be speaking tomorrow in New York on his new book Civilisation: The Case for a Free Society. Address as follows:

Thursday, January 8 @ 7pm
Soldiers', Sailors', Marines' and Airmen's Club
283 Lexington Avenue, 2nd floor
between 36th and 37th streets, five blocks south of Grand Central Terminal

I'm going, so stop by if you're interested.

From the desk of Jane Galt:

A civilisation in decline

Young people today just don't care about their work the way they used to. The older generation stood for craftsmanship, professionalism, high standards through and through. All the young ones care about is sex, drugs, and making a fast buck.

As in accounting and furniture-making, so in armed robbery:

The pattern of offences involving firearms looks more and more like that in America: random, careless shootings have replaced the carefully-planned bank robberies of old.

“Standards are down,” asserts Terry Smith, who carried out a string of security van robberies in 1980s London. “Most robbers now get caught up in drugs, and they don't plan properly. The professionalism has gone.”

This decline in standards has spillover effects on related industries:

The rise of unskilled robbery—junkies with guns and no previous experience—is bad news for shop workers, who are less well trained in dealing with guns than are bank tellers; it is also bad for the police, who tend to find ill-thought-out crimes harder to solve than planned ones.

From the desk of Jane Galt:

Ooops

Dean's staffers inadvertently invited reporters to listen into a strategy conference call, instead of a PR call scheduled for later in the day:

"Tomorrow, (Tuesday) we're going to start by having Bradley do sort of a subtle thing, if we can, by saying that Dean is a real Democrat, and then follow that up the next day with an in-state person that's probably a little more direct," one unidentified staffer said.

The "in-state" appeared to be a reference to New Hampshire, where Bradley, Al Gore's opponent for the 2000 Democratic presidential nomination, was to appear this morning at a previously unscheduled breakfast.

Another staffer indicated that in a survey of voters Monday by telephone, people expressed concern that "this guy (Dean) is indecisive" and Bradley, a former Hall of Fame player in the National Basketball Association and a three-term senator from New Jersey, could help counter that.

"The Bradley message could be, like, (Dean) knew where he stood on the war, is still a Democrat, takes . . . positions, blah, blah, blah," the staffer said.

The next day, the speaker said, "surrogates" for Dean, both local and national, could "then hit Clark on the flip side of the argument: that he's indecisive, didn't know what party he's with, doesn't know his position on the war," she said.

The strategists ended their conversation when another reporter joined the conference, telling him, "I think you may have the wrong call-in number. This isn't a press call."

It certainly isn't as bad as it could have been . . . remember when the California Democrats inadvertently left the squawkbox open as they discussed ways to worsen the budget crisis to make Schwarzenegger look bad? Still . . . that's got to hurt. No staffer wants to go on record as saying "blah, blah, blah".

From the desk of Jane Galt:

Wesley Clark's tax plan

You knew I was going to weigh in on this, don't you? Wesley Clark has a brilliant new tax plan to make sure that the bottom half of our families pay no income tax. A family of four making 50K, he says, would see their $1,649 average tax burden eliminated by his new tax credit, which would roll up various child tax credits, including the EITC into one deduction. He would pay for this by assessing an extra 5% surcharge on income over $1m.

Problem: the numbers don't seem to add up.

First of all, our average family of four making 50K shouldn't be paying hardly any income taxes. The median household income for a family of four is about $63K. That puts our family of four well into the bottom 50% of taxpayers. And the bottom 50% of taxpayers pay about 4% of all income tax -- mostly by single people with few deductions, not parents. They pay a lot of FICA. But Mr Clark's tax plan isn't going to do a damn thing about FICA -- not and meet its goal of having our lucky citizens file no tax return, it isn't.

And could I mention, while we're on the subject, that there's not a snowball's chance in hell that US citizens, who are much more likely to work multiple jobs, and have a lot more deductions than European citizens, are ever going to achieve the goal of filing no tax return?

That $1600 figure is a tad suspicious, especially since I recall a lot of liberal commentators complaining that Bush's tax cut wouldn't help that mythical family of four making $50K because -- said family generally pays little or no income tax. I couldn't find Clark's figure in a few minutes of cursory googling, but I suspect that it comes from making some heroic assumptions -- like that our family of four doesn't own their own house. In a country with home ownership rates that top 70%, and are even higher for married couples in rural areas (the likely demographic of our family of four -- a secretary married to a janitor would make more than that in NYC), that's not bloody likely.

The assumption on the revenue side is even more heroic -- that he can get all those people making $1 million to cough up 5% more of their income in taxes without any income shifting behavior that will cause revenue losses for the treasury.

But even assuming that's the case, I don't understand how he's getting that figure.

Clark claims that he will, with his new tax plan, eliminate about $1600 worth of tax liability for that family of four. Here's the problem. About 28m married couples filing jointly with children (this hypothetical family of four) owed tax last year. Since the average number of children in the US is slightly over 2, I think we can assume that these couples will, on average, have been a family of four.

Clark's tax cut is not supposed to be phased out -- it's a straight deduction you get no matter how much money you make. So that $1600 he's eliminating for that hypothetical family of four should go, in theory, to every one of those taxpayers.

It won't, of course. Some taxpayers will pay less tax then that, and thus get less benefit. (Unless it's refundable -- meaning the government gives you the benefit whether or not you pay taxes. In which case we have to give it to every one of the 41 million families with at least two children in the US.) Assume, for the sake of argument, that we give it to 25 million householders. That's a cost of about $40 million. ($65 million if we make the extra money refundable). But there are only 192,000 people who have more than $1 million in Adjusted Gross Income. Of these, about 65,000 make less than $1.3 million, meaning they'll pay a trivial amount of tax. The remaining 128,000, more or less, have an average Adjusted Gross Income of a little under $4 million. After we factor out the deduction for their first million dollars, we get revenue of under $20 million.

But wait! There's more! Most people with incomes that high don't pay the federal income tax, because their incomes are carefully structured to maximize their income tax deductions. Instead, they pay the Alternative Minimum Tax of (roughly) 28% of gross income. Wesley Clark's surcharge won't affect them.

But that's not all! Rich people have more ability than anyone else to shift their income into tax preferred forms, such as interest on tax-free municipal bonds, capital gains, and so on. Even if you succeeded in raising their tax rate by 5%, you wouldn't collect nearly as much as you expected, because you would have given rich people added incentive to income shift. This was the experience of the Clinton tax increase -- it collected some extra money, but not nearly as much as they were planning on.

Now, as campaign tax plans go, this is about par for the course. It broadcasts the benefits to largely imaginary (but very sympathetic sounding) taxpayers. It makes heroic assumptions to pretend that it is revenue neutral. And like all Democratic tax plans, it assumes that dramatic increases in the tax rate will have no effect on taxpayers incentives to generate income. (Republican plans err in the other direction, assuming unrealistic levels of increased economic activity generated by lower marginal rates.) Please don't fill the comments with items on the unique perfidy of Democratic presidential candidates -- making silly claims for their tax programs is an occupational hazard of politicians.

And of course, I may have erred somewhere -- my calculations are, at best, hamfisted.

But assuming that I haven't . . . well, Paul Krugman has been claiming for three years that his hatred of George Bush is based entirely on the president's unprecedented, extraordinary dishonesty, particularly in the fuzzy numbers he generates to justify his tax plans. Mr Krugman is also (almost) on record as supporting Wesley Clark. I shall be watching his column with interest to see how he reacts to this stunning betrayal of Mr Krugman's high ideals about scrupulous honesty in tax policy documents.

From the desk of Jane Galt:

Ooooooooooooooooh of the day

Q: What's better than a cute little white Bengal tiger cub?

A: Six of 'em.

From the desk of Jane Galt:

Department of Good News

India and Pakistan are agreeing to hold peace talks. Good for Indian prime minister Vajpayee, who has resisted considerable political pressure from hardliners in his Hindu-nationalist BJP party (a task admittedly made much easier by the political goodwill generated by a booming economy.) And double good for Pakistani President Musharaf, who is resisting even tougher pressure from hardliners in his country, who have recently taken to expressing their disagreement with his policies by trying to kill him. Let's hope this actually goes somewhere. It'd be a nice start to the new year.

From the desk of Jane Galt:

If it tastes too good to be true, it probably is

The Wall Street Journal has a great article today on the quest for a fat-free donut (subscription required). Bottom line -- it doesn't work, unless you use a fat substitute. And donut makers are worried about the potential side effects of fat substitutes, so they won't use them.

The piece prominently features a guy who's going to jail for packaging regular old donuts as fat free (and low cal) and selling them to diet centers. This is surprisingly common -- Pirate's Booty just got smacked for it, as did a number of those low carb "power bar" makers, who basically just put a shinier wrapper on a candy bar and marketed it as Atkins-friendly.

Bottom line -- as one of the obesity experts I interviewed when I was writing a piece on fast food lawsuits said, "If it tastes that good, it isn't good for you." Fat and sugar, as I blogged here, a