johaneriksson.se

Most discussions on the need to balance the U.S. budget settles for staying in the comfort of abstractness, avoiding the messy details of how deficits are to be eliminated. Not so with the Senate Tea Party Caucus, who have put an actual budget proposal on the table.

The trio would curb Social Security spending by increasing the retirement age over time and indexing benefits to individual incomes. High-income earners would see slower growth in their benefits while low-income workers would see increased benefits.

The proposal would fund Medicaid, the State Children’s Health Insurance Program, food stamps and child nutrition programs through block grants.

It would cut most discretionary spending to fiscal year 2008 levels but spare national defense spending from the deep cuts mandated by the 2011 Budget Control Act.

It would freeze foreign aid spending at $5 billion a year and eliminate the departments of Commerce, Education, Housing and Urban Development and Energy and privatize the Transportation Security Administration.

It is politically unviable, of course, but they should be commended for showing how it could be done. My spontaneous reaction is that there are good ideas in there, although the marginal effects of making social security benefits more progressive need to be properly analyzed. While the proposal will never turn into policy, hopefully it will help move the debate in a useful direction.

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Andra intressanta bloggar om: politik, usa, underskott, finanskrisen

Stephen Wolfram has collected data on his daily life for a long time, and having analyzed some of it, written a fascinating blogpost.

Every day—in an effort at “self awareness”—I have automated systems send me a few emails about the day before. But even though I’ve been accumulating data for years—and always meant to analyze it—I’ve never actually gotten around to doing it. But with Mathematica and the automated data analysis capabilities we just released in Wolfram|Alpha Pro, I thought now would be a good time to finally try taking a look—and to use myself as an experimental subject for studying what one might call “personal analytics”.

It’s certainly not for everyone, but it’s an interesting read. Google, and companies like them, have started to show how powerful massive amounts of data can be when combined with intelligent tools. I suspect we’ve only just scraped at the surface.

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Andra intressanta bloggar om: teknik, information, framtiden

Via Tim Harford, this roller coaster ride depicts U.S. real estate prices from 1890 to 2006. We all know which way it went after that …

It’s quite a ride.

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Andra intressanta bloggar om: politik, usa, fastighetspriser, ekonomi, finanskrisen

One of Alex Tabarrok’s recipies for the innovation renaissance is patent reform. Felix Salmon has an excellent example of how harmful current legislation is.

RIM had discovered prior art for all of the patents that NTP was suing over — but that didn’t really help them at all. The problem was that the patents had already been awarded to NTP, which meant that NTP was within its rights to sue RIM for as long as it held those patents. Once RIM found out what NTP was up to, it could and did challenge the patents at the U.S. Patent Office, which has a procedure for such things. But the U.S. Patent Office is an entirely separate entity from the U.S. District Court, where judge James Spencer made it very clear that his job was to rule only on whether RIM was violating NTP’s patents, and not on whether NTP’s patents were properly granted. Had RIM not settled the case, the court could and probably would have shut down the entire BlackBerry service.

Even if law suits are based on bogus patents, it may still be better for the victim to settle. Surely, it’s difficult to argue that this protects innovation.

While reform is needed, there is a lot to improve on regarding the implementation of current law. To be efficient, patent offices need to both work quickly and have sufficient knowledge to avoid awarding patents to what is really prior art. Those two goals conflict, and it’s not clear how the trade-off should be made. And reform itself is difficult, both because of the global nature of the problem, and because of regulatory capture. But until it can be achieved we will suffer from reduced growth and innovation.

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Andra intressanta bloggar om: politik, patent, tillväxt, ekonomi

Johan Norberg pulls out some key facts from the latest World Bank Global Poverty Update(pdf). Quoted in full:

-The proportion in extreme poverty ($1.25 a day) has been reduced from 52% in 1981 to 22% today.

- It´s not just China. The proportion excluding China declined from 41% to 25%.

- World population increased by more than 2 billion 1981-2008, but the number of poor was reduced by 650 million people.

- For the first time, data indicate a decline in poverty rate and number of poor in all six regions of the developing world.

- East Asia cut the proportion in extreme poverty from 77% in 1981 to 14% in 2008.

- For the first time ever extreme poverty in Sub-Saharan Africa dipped below 50%.

- 1999-2008, 454 million people escaped extreme poverty. That is 138,200 every day, 5,758 every hour, 96 every minute around the clock.

- But at the current rate of progress there will still be around 1 billion people living below $1.25 per day in 2015.

These numbers call for celebration. We rightly tend to focus on problems — rightly, because by focusing on them we find solutions — but we should not forget the bigger picture. Things are getting better.

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Andra intressanta bloggar om: politik, ekonomi, fattigdom

Steven Landsburg explains one of the basic building blocks of economics well:

What economists do believe (or act as if they believe) is that people maximize expected utility, which is a different thing altogether. To assess the value of a 50% chance of $100, we multiply 50% times a number called the utility of $100, and we predict that when confronted with multiple choices, they choose the one that maximizes their expected utility. This is a far better theory than Nagel’s bastardized version, for several reasons. First of all, it’s not an assumption; it’s a conclusion. We start with some very simple axioms about human preferences and deduce that people behave so as to maximize expected utility. Second, there’s a vast body of empirical work that’s largely compatible with this theory’s predictions.

One of the most widespread misconceptions among non-economists is that these “utility” numbers represent some subjective measure of well-being. (Because it fosters this misconception, the word “utility” was probably a poor choice from the get-go, but we’re stuck with it.) All the relevant theorem says is that people act as if they assigned a number to each possible outcome (e.g. $100 is assigned a 2, $1000 is assigned a 3, etc) and then act as if their choices were based on these numbers, multiplied by probabilities a la Nagel (so that a 50% chance of $1000 is assigned a 1.5, making it inferior to a sure $100). The numbers, according to the theory, are different for different people, which is why, confronted with identical circumstances, different people make different choices.

One of the reasons economics does not do well in predicting outcomes is that it is difficult to observe what utility numbers people “assign” to different outcomes. I put the word assign in quotes, because people do not actually assign them explicitly — they just act as if they do. And it gets more complex on the macro level where several billion people, all with different preferences, interact with each other.

I enjoy Landsburg’s writing, blog and books. He has a knack for expressing his thinking in a clear way, challenging you to figure out exactly why you disagree with him, when indeed you do.

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Andra intressanta bloggar om: ekonomi

Don’t miss this TED Talk by Michael Huemer, Bryan Caplan’s favourite philosopher. Tasty food for thought.

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Andra intressanta bloggar om: politik, filosofi

From the Rolling Stone:

Back when he was running for president in 2008, Barack Obama insisted that medical marijuana was an issue best left to state and local governments. “I’m not going to be using Justice Department resources to try to circumvent state laws on this issue,” he vowed, promising an end to the Bush administration’s high-profile raids on providers of medical pot, which is legal in 16 states and the District of Columbia.

But over the past year, the Obama administration has quietly unleashed a multi­agency crackdown on medical cannabis that goes far beyond anything undertaken by George W. Bush. The feds are busting growers who operate in full compliance with state laws, vowing to seize the property of anyone who dares to even rent to legal pot dispensaries, and threatening to imprison state employees responsible for regulating medical marijuana. With more than 100 raids on pot dispensaries during his first three years, Obama is now on pace to exceed Bush’s record for medical-marijuana busts.

The article chronicles the twists and turns of the Obama administration’s drug policy, and is worth reading in its entirety.

At least two lessons can be learned from this. One is to not take proclamations of enforcement priorities too seriously. They can change quickly, and what was opportune at some point, may not be at another. The other, related point, is that the only realistic way to get the federal government out of the medical marijuana issue is to actually change to legislation. This latter point is important, and relates to the rule of law. There is something discomforting about the execute branch stating that it will simply not enforce a policy that it finds unjust, without working towards changing the legislation.

Concerning drug policy in general, medical marijuana is just a small piece in a much larger puzzle. There is growing support (and evidence) that the war on drugs is a failure, and that change is needed. From a purely pragmatic standpoint, legalization must be considered. The current prohibition policy leads to tragedy, not just for drug addicts in America (and the West in general) who are prosecuted and imprisoned when they need care and support; the even larger disaster is the damage done to Mexico and a slew of other countries in Latin America, where drug lords take out the civil institutions the allow society to function.

Apparently, the Obama administration is not willing to provide change we can believe in when it comes to drug policy.

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Andra intressanta bloggar om: politik, usa, obama, droger, kriminalitet

Some quick thoughts on books I’ve read lately.

- The Invisible Gorilla, by Christopher Chabris and Daniel Simons. Books on popularized psychology can easily end up sensationalist and superficial. This one, who has taken its name from a famous experiment, mostly avoids that and has a lot of interesting content. Still, I wished it delved a little deeper.

- The Age of the Infovore / Create Your Own Economy, by Tyler Cowen. Double title because it was first published under one name, and then another. I had big expectations on this, and the theme — how the modern economy rewards a new set of personality characteristics — is potentially deep. While I enjoyed the discussion on autism, which is what takes up most of the book, I felt the author was too busy (rightly) defending autism as having upsides as well as downsides, sometimes losing sight of the main theme.

- Leaving the Atocha Station, by Ben Lerner. Excellent novel about artistic posing, in a place where foreigners would want to do just such a thing. I enjoyed it a lot.

- Cooking for Geeks, by Jeff Potter. About what happens to food when you subject it to heat, chemicals and other things, and takes on its topic from the perspective of a curious software developer. A mix that fit me well. Recommended!

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Andra intressanta bloggar om: psykologi, ekonomi, böcker

Bryan Caplan:

When people complain about politics, they rarely focus on bad ideas, bad policies, or even bad situations.  Instead, the typical complainer focuses on bad people.  Every now and then, these bad people have proper names, like “Bush” or “Obama.”  But complainers usually focus on broader groups, like “the Jews,” “the fundamentalists,” “the Democrats,” or “the Chinese.”  Once a complainer picks a group, he’ll often link them to a bad idea, a bad policy, or a bad situation.  But complaints about ideas, policies, and situations come and go.  The groups a person complains about are far more stable than the details of his complaints.

Of course, every complainer thinks that his complaints are justified.  No doubt they occasionally are.  Still, when a person habitually complains about a group, it’s hard not to wonder, “Suppose there were nothing to complain about.  Wouldn’t this complainer still pick a group and complain about them?”  Many people love to have someone to hate.  They crave a scapegoat.

I think that there is a lot to this. Caplan continues by listing four characteristics of the optimal scapegoat.

1. An optimal scapegoat must be someone you would dislike no matter what they do.
2. An optimal scapegoat must be someone widely disliked in your society.
3. An optimal scapegoat must be nontrivial.
4. An optimal scapegoat must be multifaceted.

Looking at the political debate through the scapegoat lens is probably rather useful. But even more interesting is trying to observe yourself from this perspective. Who are you likely to use as a scapegoat?

In my case, the answer is likely to be eurocrats (note the choice of word!), or top level politicians in general. Hopefully, I will be able to keep that in mind, and avoid putting emphasis on their personalities and what I perceive to be their wants and wishes, and instead focus on their ideas and actions.

Wish me luck!

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Andra intressanta bloggar om: politik, debatt, psykologi