Thursday, December 31, 2009

Some things that enhanced my life this year

Everyone makes list this time of year, right? Here are a few pieces of technology that changed how I operate:

1. Nokia e63 Smartphone. I bought it unlocked straight from Europe via Amazon.com after calling and talking to a nice sales rep for under $200. It's not an iPhone, but those are much more expensive. It literally never leaves my side. Whether reading my Bible online at church or reading blogs while I watch NewsHour, or using it to calm my son by playing Elmo's Song on YouTube...the Smartphone is a powerful ally.
I'm the dork who walks around with a phone that isn't a phone because I don't have a sim card in it because we only use one pre-paid cell phone. Most people can't understand that. I don't understand paying for a data plan from AT&T or Verizon because wi-fi is pretty much everywhere and free. Whether I'm sitting in class or at home I can always keep up with what's happening.

Favorite uses this year:
1. Being able to see my sister-in-law tweet pictures of my son while I was walking around downtown Istanbul.

2. Being able to keep the doppler radar in my hand while waiting on a tornado bearing down on Bolivar.

Wish list: A touch-screen phone with larger keypad option and more apps (in other words iPhone or Android). Nokia still has 38% of the world market, but that will diminish quickly.

2. As a result of Google's meddling with my former beloved NewsGator FeedDemon, I needed a way to quickly share articles with students via RSS. Enter Delicious.com. Install the Delicious plug-in for your browser and you can instantly bookmark websites through them, tag them for sorting, and then publish them on your own RSS feed. Every article you want to bookmark all in one place, with the ability to add comments. You can also see how many others bookmarked the same article and easily search what others are bookmarking by tag. I put over 100 articles out for my Money & Banking class in the course of the semester, mostly from just reading the newspapers and studying blogs throughout my day.

I love Delicious so much and found it so useful for teaching that I'm conducting a faculty seminar on it in January--teaching other faculty how to use it. That will be no small task, so prayers are in order.

3. Twitter.com and Tweetdeck. Yes, I had several "why I hate twitter" posts, and I did think it was stupid. As more people got on Twitter, the less stupid it became. It's now the best way to receive breaking news--that's my primary use for it. It's also a good way to communicate with people that you might not have access to otherwise... maybe they would never be your Facebook friend. I won a hat on Twitter. It allows people to communicate short bits that would be too cumbersome with a blog platform (and too difficult to read with standard RSS reader).

A few people whose thoughts I read on Twitter:
John Piper and Rick Warren. And daily quotes from C.S. Lewis.
UK WR/RB/QB Randall Cobb, John Calipari, and a few other athletes/coaches.
Several conservative politicians, including those who represent my district.
A whole slew of journalists, particularly ones on TV since that's my odd obsession. When they tweet on the scene or between takes you feel like you're right there with them.

I've only encountered 4 students at SBU who use Twitter, and only a few faculty. College students spend 99% of their time on Facebook.

My biggest problem right now is that it's tough to do Twitter with a Smartphone. Cumbersome to click someone's link to an article and not be able to note that article for later viewing on a real computer (Delicious doesn't work with Smartphones).

This post was way longer than I anticipated. Happy New Year!

Book Review (#20 of 2009)

New Ideas from Dead Economists: An Introduction to Modern Economic Thought by Todd G. Buchholz (1990 edition, not the revised 2007 edition).


I learned an amazing amount from this book which will translate immediately into me teaching an amazing amount in a Jan term course on economic and financial thought in a few weeks.

Buchholz's history of economic thought is very readable with his witty humor. It definitely helps to have at least had some principles classes to completely understand the thoughts he explains, but he uses some simple explanations that are easy to follow. The history is great.

I now understand the syntheses of the economic schools more completely. My favorite line in the book is that "it is no longer possible to separate (modern, mainstream) economists into Keynesian and Monetarist camps." Both sides have learned from the other.

Buchholz pretty obviously has Keynesian readings (at least it was obvious to me) as he knocks a little too hard on the Monetarists and the Rational Expectations schools. But he's mostly fair (if not too simplistic) in his arguments.

This edition doesn't cover Behaviorialists or Austrians (although he mentions Hayek a few times). I assume the 2007 edition would include them and fix the typos I found.

In all, I give it 4 stars out of 5.

I bought this book for $1 several years ago and should have read it several years ago. That's been a recurring theme this year. :-(

Results of this Year

I thought I'd note some significant changes and progress from this year, what I learned and how I changed. I would say my blog title lived up to be the theme of this year. My goal has been to make all of my activities ones that I perceive as adding value, particularly the value of knowledge (I esteem knowledge as extremely valuable). It has been about exposing my deficiencies and confronting them head-on.

Some examples:

1. Confronting my math deficiencies.
I have my current job because several others turned me down for lack of strong math background. There is a fairly low glass ceiling for people with business econ degrees without a demonstration of high math competency. You can't avoid it.

I have always struggled with math while developing a greater admiration for it in recent years. So, I enrolled in Calculus 2 in the fall and earned an A. This is the first time since junior year of high school that I haven't had to repeat a math course. It required a lot of late nights, early mornings, and long hours in the library working problems. A tough 5 hour class added to my on-campus workload. I plan on enrolling in Calc 3 in the spring and continuing onward as long as I get to take 1 class for free every semester (employee perk).

2. Confronting my physical deficiencies.
My wife and I made a conscious effort to confront them together. I've shed some pounds and am closer to my college weight than I have been since '02, but am in much better physical shape overall. And I'm still pushing forward.

3. Confronting intellectual deficiencies.
That's sort of the theme of my life-- learning is about the only thing I really enjoy doing and a day where I don't learn new things is a wasted day for me. As a college instructor, I'm always under pressure to know and understand things that I don't currently and I'm always humbled by how much I don't know. 2008-2009 were busy years in the economy, so it was difficult making sense of all the policies being implemented, the theories behind the policies, and figuring out where I stand on them. And then teaching deciphering it all for undergrads. My Money & Banking course was the best example of it, I pushed the students hard to learn (a lot on their own) and most did far beyond their own expectations and I was quite pleased and proud.

Some changes:
Being busy with 1, 2, and 3 and a fun family means other things had to be cut out. In evaluating what to cut out, I simply asked "What value does this add?" Sometimes it boiled down to "Will this activity help me get a job later, or not?" Sometimes it was "Am I going to be a committed contributor--adding value to this activity for others--or not? If not, then I'd be better off not engaging in the activity." Lately, it's been reduced to "Does this activity make me stronger, faster, or smarter?"

It meant cutting back on a lot of watching and developing emotional attachment to sports. I'm still struggling with the morality of most college sports programs and the lack of what I perceive to be value added by professional sports (and I find most Christian friends and pastors unwilling to engage in that conversation with me). NASCAR offends me the least and the winners are basically good scientists and engineers, so I like seeing smart people get rewarded. I consider college football to be my vice-- I have trouble justifying my love for it. I don't love basketball nearly as much as I used to.

My thoughts on church are constantly evolving under the value added framework. If God calls us Christians to "be perfect as He is perfect" then why don't we push our institutions and programs to also be perfect from a NT standpoint? Why don't our churches look like the NT and why do so many of our resources go to once-a-week "smorgasboard-style" flagship services? I find myself rejecting the models of most of the SBC's flagship churches and mission programs as either incorrect biblically or unsustainable economically. Again, shouldn't we strive for absolutely optimal churches and agencies? Shouldn't we strive for optimum efficiency?

This has also meant a re-evaluation of my own budget and habits. I feel we're pretty good at budgeting, and I enjoy teaching it to students every spring. My wife gets 99% of the credit for this. However, could there be improvements? For example, if helping widows and orphans is "pure and undefiled religion" as James says, then shouldn't I be doing more of that? Do I need to rearrange my schedule to intentionally engage in more of that? Apparently I do, or else my conscience wouldn't bother me about it.

That's a long enough summary of thoughts over the last year. I wonder how many years will go by before I look back and cringe at them.

Sunday, December 27, 2009

Commercial of the Year

Our ISP here (Windstream, with a local monopoly) subscribes to ESPN 360 which means we can watch pretty much any ESPN selection free online. Every single online commercial break features the same Dos Equis commercial with The Most Interesting Man in the World. Even after 100 times that same commercial is great. It's a mix of Ron Burgundy with those snazzy Old Spice commercials. I'd never seen any others until writing this post.

Here is a YouTube montage of all of the Dos Equis commercials with The Most Interesting Man in the World. The commercial I've seen 100 times is the last of the bunch. Enjoy!

Friday, December 25, 2009

Book Review (#19 of 2009)

Your investment manager or stock broker probably believes he can beat the market-- ie: do a better job investing your money than simply putting your money in an index fund. And he is wrong. Anyone who says "I can beat the market" is a liar. "Buy and hold" is a better strategy for the investor than actively trading. As Nobel laureate Eugene Fama recently pointed out (again) using data from 1984-2006:
Even before expenses, the overall portfolio of active mutual funds shows no evidence that active managers can enhance returns. After costs, fund investors in aggregate simply lose the fees and expenses imposed on them.

As more players enter the capital markets, the markets become more strongly efficient. This is why I have a problem teaching finance-- I see too many students graduate who think they are somehow smarter than the market. Granted, one aspect of Efficient Markets Hypothesis may not hold to be true -- the underlying price may not always be right (and see my review of Taleb's Fooled by Randomness or Mandelbrot's The (Mis)Behavior of Markets) and risk may be grossly misassessed due to false assumptions of normality.
But people who are able to see mispriced assets or missassessed risk either don't exist or are too far and between. Bill Miller became a legend for managing a fund that beat the S&P 500 for 15 consecutive years (the only one to do so). Now his fund is the worst performing of its class and he's lost tens of billions of dollars.
This is also why I don't want to be an investment manager or try to sell someone the idea that I could pick the best mutual funds for them, because the data say that active management is ludicrous. All I could do is match their risk tolerance to the stated risk of the fund, like selling them the color car they want to drive.



Capital Ideas: The Improbable Origins of Modern Wall Street by Peter L. Bernstein is a classic history of modern finance. How academic economists and mathematicians revolutionized finance, and how the investment services industry fiercely resists their ideas. From determining the fair price of an option to designing the optimally diversified portfolio, Bernstein tells the story of how it all took place from Bachelier to Rubinstein.

Last summer, I read Bernstein's Against the Gods (my review here), which told the history of risk and is a good prelude to this book. What Taleb and Mandelbrot argue is that the tools used in Bernstein's book are folly for risk management because of the models' underlying assumptions--the world is not normally distributed. 1987 is an "aberration" Bernstein glosses over, and 2008 made Taleb and Mandelbrot rock stars (Taleb calls for every Nobel economics winner in Capital Ideas to be stripped of their awards).

As far as comprehensive history, this book is tough to beat. It has been required for our Jan term class for the last several years, which is why I needed to read it (although I'm not requiring it). After the dot-com crash of the 1990s, Bernstein wrote a sequel "defense" of his "heroes" which I would like to read.

4 stars out of 5.

Thursday, December 24, 2009

On this Christmas Eve

Dr. Rodney Reeves, Dean of the College of Theology and Ministry at SBU, has a great blog post entitled "The Dark Side of Christmas." It's Christmas from Joseph, Mary, and Jesus' perspective. Fantastic reminder, it really hits home. An excerpt:

"Listening to his family relive the circumstances of his birth, Jesus knew what he was born for. Redeemed by poor parents with a turtledove instead of a lamb, Jesus was destined to be good news for those who have nothing. He knew he was heaven’s gift of the poor to the poor. The lowly are exalted, the humble honored because the Messiah was born in David’s hometown to poor pilgrims from Nazareth."

Book Review (#18 of 2009)

In 2007, David Brooks interviewed candidate Obama and almost randomly asked him if he'd ever heard of Reinhold Niebuhr. Obama replied "I love him," and proceeded to give him a detailed summation of Niebuhrian thought. This was rehashed again in January when NPR's Speaking of Faith hosted a forum on the subject. You can download the discussion and other Niebuhr-related info.

I was apparently oblivious to all of this at the time. When Obama gave his Nobel acceptance speech, the media pundits all noted its Niebuhrian themes and that piqued my curiousity. The Irony of American History by Reinhold Niebuhr seems to be the book most often referred to when speaking on the philosopher/theologian.

To quote Obama via Brooks:

“I take away,” Obama answered in a rush of words, “the compelling idea that there’s serious evil in the world, and hardship and pain. And we should be humble and modest in our belief we can eliminate those things. But we shouldn’t use that as an excuse for cynicism and inaction. I take away ... the sense we have to make these efforts knowing they are hard, and not swinging from naïve idealism to bitter realism.”
This is a good summary. In short, Irony is about the ways America grew from post-colonial free-market isolationism to a reluctant superpower. Published in 1952 at the beginning of the Cold War, I find Niebuhr to be quite prescient. He is also very informed about microeconomic principles, which I found impressive. Either everyone was back then (as opposed to now), or Niebuhr is just special.

Here are points that stick out to me:

1. Americans tout their higher standard of living as a sign of their superiority over Communism, while Marxists tout that high standard as evidence of their guilt. Marxists/Communists assume that property rights are the cause of all economic ills and that if a nation has rich people they only became rich on the backs of the poor.

2. Americans have always been pragmatic about government. While personal liberty has always been the predominant goal of our society, we're pragmatic about the limits of it. Hence, we are always balancing growth with regulation.

3. Calvinists (Puritans) and Jeffersonians both (at least eventually) saw prosperity as evidence of God's favor. The prosperity of America makes it somewhat prideful in the eyes of the world, something useful to be mindful of.

4. America as the "Arsenal of Democracy" is one of the ultimate Niebuhrian ironies. We have to maintain a military force but beware of the dangers of the "military-industrial complex" as Eisenhower would soon note.

5. Newly independent, developing nations are poor simply because their economies aren't developed and their land not yet productive. These countries need Western support but mostly time. But Marxists point to these countries as evidence of Western exploitation. The gap between poor and rich is always seen as a result of the rich exploiting the poor.

6. Communist countries uphold justice for the poor as the ultimate ideal, and yet their oligarchy oppresses the poor and always make them always worse off--another irony.

7. We can't export democracy or eradicate all evil in the world through it. Many countries just don't have the culture or mindset for it to flourish.

8. From #7, Niebuhr would have opposed the 2003 Iraq war while probably supporting the Persian Gulf war of 1991.

9. Niebuhr feared that America would engage in a fatal "preemptive war" against Communism that would destroy the world rather than simply wait for history to take its toll on Communism. Glad he was not proved right here.

10. Niebuhr looks down on "American Exceptionalism," the idea that America has a unique, world-enlightening role to play in history. He points out that most countries & civilizations have a history of that same belief. Obama has also stated that he does not believe in American Exceptionalism any differently then the French believe in French Exceptionalism, etc.

David Brooks argues that Niebuhr (and Obama) are wrong on this point, as would most conservatives I know.

In all, I give the book 3.5 stars out of 5. Having read it, I feel a little more caught up with other "bourgeois" people.

Wednesday, December 23, 2009

Book Review (#17 of 2009)

Velvet Elvis: Repainting the Christian Faith by Rob Bell. (This book has nothing on its cover, so no picture posted).

I should note that here are two critical reviews of the book written by pastors that I have also read this week (PDFs):
http://www.sohmer.net/Velvet_Elvis.pdf
and
http://www.relationalconcepts.org/long%20topics/Velvet%20Elvis%20Review.pdf

I don't always see Bell saying what the critics accuse him of saying in this book. Which is important because most conservatives I know accuse him of being a "heretic," a "false teacher," "dangerous," and a "deceiver."

Bell is heavily influenced by Ray Vanderlaan, whose video series I once reviewed here. I have since found a more recent and very good critique of Vanderlaan that makes Bell's use of Vanderlaan very problematic.

But Bell has raised a question that I am working on answering in my own mind, something I've wrestled with in my mind for a few years:

Orthodox doctrine ("sola scriptura" or "scripture alone") says that the Bible is:
1. Perspicuous (or clear) such that anyone can read it and understand the one true meaning of the text; the meaning intended by the author upon writing.
2. Sufficient such that Scripture alone is all that is needed to understand scripture.

Also, 3. the mind of man is the same everywhere, so that anyone in any culture/context can read the text and find the same meaning.

Bell takes issue with this, saying "Scripture alone just isn't true." He contends that:
1. It's impossible to understand what the author meant in all passages without understanding the context they were written in and the context of the audience they were written to. Scripture alone isn't sufficient because it doesn't always give that context (for example, see my post about VanderLaan's look at John's letter to the 7 churches).

2. It is impossible for anyone to get the author's intended meaning, the one true interpretation, of the text because we all approach things from our own biases, culture, mores, etc. Moreover, our Bible has been translated into English such that some things get lost in translation.

The entire scholarship of post-modernism begins with linguistics. Certain European philosophers contended that the ideas behind language are different in different cultures, so things don't translate well--ie: we think differently. The doctrine that all men are of the same mind conflicts with this more modern view.

I go back and forth on whether or not I believe #3. I've intensely studied four different languages from four different language families. There are ideas in some cultures that are very difficult to convey in others.

I struggle with #1, and #2. For example, in 1 Corinthians 11 Paul commands the women not to pray without head coverings. The reason given from the pulpit of churches I've been a member of for this not applying today is that it had to do with the culture of Corinth. However, that cultural context is not given explicitly in Scripture and so that knowledge is an extra-biblical source used to apply the text today. How does that not violate the doctrine of "Scripture alone?"

Anyway, while I work on that with help from others (feel free to chime in!) I take issue with a couple other things in Bell's book, but not nearly as much as others.

Bell gives the caveat on the back cover:
"Test it. Probe it. Do that to this book. Don't swallow it uncritically. Think about it. Wrestle with it. Just because I'm a Christian...doesn't mean I've got it nailed."

I cannot really rate this book that I'm not sure about. It definitely made me think and go back to try and illuminate what was good and what was possibly heresy.

Sunday, December 20, 2009

On the marginal costs of health care reform

A few weeks ago a federal advisory panel created an uproar when it recommended women put off regular mammograms until age 50. The network news led with the story for a few days. Congressional representatives took to the floor to decry the "rationing of health care." One congresswoman (I don't recall who) stated something like "We will not ration health care on the basis scientific of research!" which I think is the dumbest statement ever spoken in Washington.

Richard Thaler, whose unrelated book I just bought, wrote on this touchy subject for the Economic View column of the NY Times yesterday. He's simply trying to explain to people about what happens when the costs outweigh the benefits.

What the advisory panel was saying was that the marginal cost of a mammogram for a woman under 50 outweighed the marginal benefit, partly due to the number of false positives. It costs a lot of money to screen people and the number of lives saved didn't make it worth it. Thaler does a great job of showing a math example, click the graphic on the left. In his example using the real fact that 10% of mammograms for women in their 40s produce false positive results, only 9 out of 1008 women who tested positive would have cancer. So, while 1008 would test positive and receive expensive treatments, you're only potentially helping 9 women (and creating other stress and problems for the rest). We could eliminate all 1008 of the mammograms and save millions of dollars. The 9 with cancer would likely detect it some other way or later. Maybe some would die, but is saving those few lives worth all the millions of dollars spent testing everyone? How about when it's taxpayer money? Thaler also looks at some different aspects, so read him first.

My sister-in-law posted in a comment a while back "How can anyone measure the value of a human life?" Insurance companies and the government do this every day. What's the optimal amount to spend on prevention? You spend until the marginal cost is equal to the marginal benefit. We cover this in the Insurance and Risk Management class I taught for the first time this semester. Observe the following exam question:

XYZ Railroad transports toxic chemicals long distances. If a derailment and spill occurs, the estimated damages to the environment and cleanup cost is $10 million. The chart below shows the possible safety expenditures for XYZ and the probability of a derailment and spill for each level of safety expenditure.


Calculate the optimal level of safety spending for XYZ railroad.

Note that the railroad company can NEVER eliminate the chance of a loss. Similarly, we could spend trillions and there would still be a few uninsured people out there. We can never eliminate the uninsured completely. Rational people think at the margin, so you have to think "How much does it cost to get that next uninsured person insured and what would be the dollar amound of benefit generated?" The CBO does that with every bill written.

Unfortunately, politicians aren't always rational. We also see this in church where a congregation has spent a lot of money on a program and will say "If just one person gets saved, it's all been worth it!" The problem is that ignores opportunity costs-- that money could have been used much more effectively some other way.

The correct answer to the problem above is $100,000. If the company spends nothing on prevention then its expected loss is $300,000 ($10 million x .03). By spending $100,000 on prevention (the marginal cost) the expected loss falls to $200,000--ie: the marginal benefit is $100,000. The optimal amount of spending is where marginal cost = marginal benefit.

What if the company spent an additional $50,000? Its expected loss would be reduced by only $40,000. The cost outweighs the benefit, so this is not a wise decision for a firm.

The problem is that if XYZ has a train wreck causing $10 million in damages people in Congress will subpoena the CEO and ask "Why didn't you spend more on safety??" If he answers that he was behaving rationally he'll be excoriated by Congress and the national media.

Saturday, December 19, 2009

Good intentions and health care reform

The Senate just reached their compromise, it's been scored by the CBO, and now it will move forward against an entrenched Republican opposition.

One provision of the bill rather frightens me:
Under the proposal from Senate Democratic leader Harry Reid, health insurance plans for large groups would have to spend at least 85 cents out of every dollar on medical costs. That means just 15 cents could go toward overhead and executive salaries, among other things. Small groups or individual plans would have to spend at least 80 cents on the dollar for care. That proportion of spending, known as a "medical loss ratio," has a major impact on how much profit companies can make and is closely eyed by Wall Street. Consumer groups and other critics have long argued that insurers aim to trim medical spending and raise customer costs to boost profits and please shareholders, a charge the industry has denied, saying premium increases mirror rising healthcare costs overall.

What frightens me about this (other than the obvious government price control)? Textbook analysis: An insurance company calculates a "fair premium" by calculating the probable loss on the policy. If it expects to pay out $1,000 in losses on your policy, then the least it can charge is $1,000 (this is the "fair premium").
Besides charging you extra (called "loading") to cover administration, marketing, and make a profit, insurance companies charge extra in order to have a larger capital cushion in the event of large losses. When assets > liabilities, a company becomes insolvent.
By limiting the amount of loading that insurance companies can charge, Congress is increasing the chances of them going bankrupt.

In most cases if your insurer goes bankrupt your state will pick up the tab in the event of a loss (with a limit). But that's putting even more taxpayer money at risk.

Sunday, December 13, 2009

David Brooks has been to Sunday school?

David Brooks' Friday column tells the Hannukah story, with perhaps a modern-day allusion in the last sentence (read it yourself). The only part I found odd was this one:

"Generations of Sunday school teachers have turned Hanukkah into the story of unified Jewish bravery against an anti-Semitic Hellenic empire. Settlers in the West Bank tell it as a story of how the Jewish hard-core defeated the corrupt, assimilated Jewish masses. Rabbis later added the lamp miracle to give God at least a bit part in the proceedings."
What Sunday school has David Brooks been to that the teacher even mentions Hannukah? Is that what goes on in mainstream denominations (Lutheran, Episcopalian, etc.)? Brooks' summary of the Hannukah story taught me more than I knew, and I'd bet $10 it's more than any Sunday school teacher I've ever had ever knew about Hannukah. Which is probably a shame.

Something I learned today

This time of year means Lottie Moon Christmas Offering for the IMB in all Southern Baptist churches. It's a push to raise funds that go solely to IMB work rather than through the general fund filtering process.

We watched a video in church from Jerry Rankin, congratulating FBC Bolivar for being the #4 largest giver to the Lottie Moon fund last year. I was stunned. The church averages less than 800 in attendance, yet they're the #4 giver in America? (This was going to look like a different blog post at that point).

The pastor later recounted the cool story: Edna Wright was a long-time church member and cook at the SBU cafeteria. She saved money in a retirement account, didn't touch any of it, and lived to be 99. By the time she died, her account had accumulated a hefty sum which she left in her will for the furthering of God's kingdom.

That meant a sum of over $500,000 from her estate to the IMB last year as part of the church's offering. Wow! Just thought I'd share it as a reminder that you can't take it with you but it can still do great things after you're gone.

Friday, December 04, 2009

Must-see TV

Made a pledge to our local PBS station tonight. Mostly because of my love for PBS NewHour (note their new format and website). Jim Lehrer closed with a stirring reading of what he calls the "Principles of MacNeil-Lehrer Journalism." He ended it with an emphatic "And I am not in the entertainment business!" That made all the difference, I literally almost ran to the computer to pledge money to my local station.

If you're not watching NewsHour then you don't know what the news really is (unless you have BBC on your satellite ...but even then it's not as fantastic).

We've also taken a liking to Curious George, maybe moreso than our 18 month old has (although he's interested). William H. Macey narrates it, it's executive produced by Ron Howard, it's great.

Tuesday, December 01, 2009

Book Review (#16 of 2009)

In Fed We Trust: Ben Bernanke's War on the Great Panic (How the Federal Reserve Became the Fourth Branch of Government) by David Wessel.

This is probably the first complete look at the Fed and Treasury's handling of the financial crisis. I've enjoyed getting greater detail on those events which I followed with much interest (and my students are writing a wiki about). I enjoy Wessel's columns and tweets.

Economists like Scott Sumner have been critical of the Fed's lack of aggressiveness in the crisis. While Bernanke thought "outside the box" it hasn't been enough for Dr. Sumner, who I respect a great deal. Wessel's book showed that many of the Fed presidents and FOMC members feared anything unorthodox. They would never relent to an inflation target, would never think of CREATING higher inflation as a way to combat the liquidity trap. I found that really sad, but I am glad to know what the political realities of Fed life are.

My criticism of Wessel's book is that he glosses over Lehman Brothers' collapse, focusing only on how its collapse affected other things. I suppose he left it to other books and the documentaries PBS Frontline did to tell the Lehman story, but glossing over that event and focusing on all the others seems a little bit of an odd choice.

Bernanke lashed out at Fed critics over the weekend. Rightly so, politicians are critical of him and others of doing too much when previously they were concerned that too little was done (ignoring that so much meddling by politicians helped fuel the housing boom in the first place). "You get no kudos for what might have been," Hank Paulson is quoted. Bernanke comes across as a good guy and national hero to Wessel, someone who did whatever it took when given few legal options.

I give the book 3.5 stars out of 5. It's good, but I look forward to more in-depth books on the crisis in the years (decades) to come.

Book Review (#15 of 2009)

The Victory of Reason: How Christianity Led to Freedom, Capitalism, and Western Success by Rodney Stark.
Stark sets out to challenge anthropologists like Jared Diamond who contend that Europeans rose to prominence mainly out of geographic factors in their favor. Stark's hypothesis is that Christian thinking-- forward looking thought towards progress and in favor of basic equality and property rights-- led to European development. That while the decline of the Roman Empire is something historians have lamented in centuries past, it was precisely the catalyst that freed up individuals to become entrepreneurs. Stark makes the point that Max Weber's protestant work ethic hypothesis is a myth--capitalism existed long before protestantism.

In short, Stark thinks like an economic historian and shows that it's the incentives that matter. I thought Ferguson's Ascent of Money (my review) did a good job of showing the development of basic finance and economic thought. But Stark goes further back then Ferguson did, and does a much better job. Ferguson's book was a bestseller and got a PBS special. Stark's book won't.

The problem I have with Stark's book is that the links he makes to Christianity being a catalyst for economic development come across rather weakly. Early church fathers frowned on lending and commercial activity. There was a long period where the Catholic church looked more favorably on these activities, and then after the Protestant Reformation the Catholic church reverted back to opposing those activities and preserving its sovereignty. So, the church has played it both ways.

But if you can link Christian thinking to equality-- no king has any more right to your property than you because God shows no favoritism-- then you have the basis for property rights, which is the basis for capitalism.

This book was recommended to me by my dean, and then someone referred me to Horizon Community Church in Cincinnati, where the pastor was preaching a sermon series supposedly inspired by the book. So, it was a must-read. I'm requiring it for the Winterfest course I'm teaching on the history of economic and financial thought.

In all, I give this book 3.5 stars out of 5. Namely because I'd bet that someone has some good arguments to oppose Stark. But the book is an easy read and is quite entertaining and informative. I am humbled by how much I learned from it.

Monday, November 23, 2009

Douthat to the Rescue?

For those holding their breath, Ross Douthat, co-author of Grand New Party (my review) and the most conservative Republican writing for the NY Times spells out the Republican party's problems in his op-ed today. Namely, none of the leadership are grasping any of the good ideas being thrown out there by conservative thinkers. There's no excuse for it.

Are you a Republican? Here's the litmus test.

According to ABC News' David Chalain via George Stephanopoulos, the Republican National Committee's January meeting will feature some representatives proposing an "80%" litmus test for candidates desiring RNC funding. A candidate must support 8 out of the following 10:

1) We support smaller government, smaller national debt, lower deficits and lower taxes by opposing bills like Obama’s “stimulus” bill.

(2) We support market-based health care reform and oppose Obama-style government run healthcare.

(3) We support market-based energy reforms by opposing cap and trade legislation.

(4) We support workers’ right to secret ballot by opposing card check.

(5) We support legal immigration and assimilation into American society by opposing amnesty for illegal immigrants.

(6) We support victory in Iraq and Afghanistan by supporting military-recommended troop surges.

(7) We support containment of Iran and North Korea, particularly effective action to eliminate their nuclear weapons threat.

(8) We support retention of the Defense of Marriage Act.

(9) We support protecting the lives of vulnerable persons by opposing health care rationing, denial of health care and government funding of abortion.

(10) We support the right to keep and bear arms by opposing government restrictions on gun ownership.

I disagree with #3 & #6 and I only agree with the abortion part of #9. Anyone who saw 60 Minutes last night saw what happens when we don't effectively ration Medicare. Why should my tax dollars pay for a 93 year old given 3 months to live to have a new $50,000 pacemaker? Insurance companies ration every day, that's why we have 30+ million uninsured. Republicans have become outright dishonest about health care. If we don't ration Medicare/Medicaid, then #1 won't even make any sense!

Most Republicans apparently don't realize that sending McChrystal's requested 40,000 more troops in Afghanistan will end up costing us $40 billion extra a year. This is why I wish Sarah Palin and others would stop complaining about Obama's "dithering" in the same sentence they complain about his massive government spending. They want to cut taxes (#1 on the list) and yet further expensive wars, which is just stupid and partly how we got this massive deficit to begin with. Why do you have to be a war hawk to be a Republican? Didn't Eisenhower teach us anything?

Why, oh why, can't we have smarter Republicans with better lists? The smart ones are probably the "moderates" that don't pass the litmus test.

By the way, the January RNC meeting is in Honolulu. Nice to know my RNC donation would go to pay for their plane flights from D.C. Isn't it ironic that they criticized Obama from being from Hawaii and yet hold their plush convention there? What a nice display of fiscal conservancy it will be.

Sunday, November 22, 2009

4 in a row

Image by Carlos Barria/Reuters in the NY Times.

If you had told me at the beginning of the season that Jimmie Johnson would win his 4th consecutive Sprint Cup title, the first time in 61 years of NASCAR that anyone has done that, and that Hendrick Motorsports would finish 1-2-3 for the first time in NASCAR history, I honestly wouldn't have been surprised.

The only thing that would have surprised me was if you'd have told me that Mark Martin was the #2.

From the NY Times' article:
“I will say that what he has done is incredible and as much as he wins, Jimmie’s one of those guys that you want to hate,” Jamie McMurray said. “But he’s one of the best guys out here. I think he’s very deserving of what he has.”

Congrats Jimmie Johnson and Chad Knaus on another superb season! You're the best that's ever existed in the sport.

Thursday, November 19, 2009

The Real Heroes

In our church small group there is a couple who don't have any children of their own. He's in his late 30s, she's almost 30. They've spent the year going through the state licensing program for foster care so they can be a foster home.

They got a call a few weeks ago asking them if they would take a set of 3 brothers who had been split up before. A 3-year old, a 21 month old, and a 5 month old. Immediately!

They accepted and had to transform their house into a suitable home overnight. Pretty unbelievable sacrifice, she used the Family Leave Act to stay home from work for a few days to help the adjustment, and friends & family have donated equipment to them. They haven't yet received any funding from the state, and one birth mother has refused to give her WIC vouchers, so their expenses have risen significantly.

If you don't have kids you may not be able to imagine the sacrifice they've made and how their marriage is completely altered. We saw them on Tuesday and I was completely in awe. This situation might be indefinite, meaning they could end up with permanent adoption (and imagine the pain/sacrifice if the kids are eventually taken away again after they all become attached).

They are heroes. They are role models.

A hero is not someone who gets paid to hit a last-second shot, or coach a team to an upset, or take lobbyists' influence to pass a pork-laden bill. Real heroes have no arenas to get applause in, their applause comes only from heaven.

Saturday, November 14, 2009

Book Review (#14 of 2009)

Bounce Back by John Calipari.

This book is supposed to motivate you to overcome setbacks. Coach Cal has even set up a website for you to share your story and motivate others, as well as download his "practice plans," activities designed to help you bounce back.

If you can relate to a guy who's major setback in life was being fired from a multimillion dollar NBA coaching job only to go on to other multimillion dollar coaching jobs after being unemployed (or doing an ESPN gig) for a few months, then this book is for you.

If you can handle cliches like "PractiCAL point," and dialogue like "Put your faith in me, and I'll put my faith in you" then this book is for you.

If you can handle other...clever...phrases like "Let's bounce back, bounce forward, and bounce forever" (last sentence in the book) then this book is for you.

I'm glad Calipari overcame his setbacks and landed on his feet. He makes good practical step-by-step points about how to overcome being fired, or demoted, or divorced, or whatever. Much of it lines up with good scriptural teaching (accept God's will, don't be bitter, find good counselors, etc.). However, there's no mention of him bouncing back from having 2 trips to the Final Four being vacated by the NCAA or how he handles being called a "cheater" by every non-UK fan. The useful basketball knowledge I gained was how he recently decided to adopt the dribble-drive offense.

In all, I give this book 2.5 stars out of 5.

Friday, November 13, 2009

Book Review (#13 of 2009)

Desperately Seeking Paradise: Journeys of a Sceptical Muslim by Ziauddin Sardar
This book was recommended to me about 5 years ago, I bought it but never got around to reading it. That was a mistake. I reviewed a book on chaos theory earlier in the year and discovered that its author was the same.

Sardar is a scientist and deep intellectual. Moreover, he is a learner and a seeker, and so I felt an instant connection to him. Sardar has traveled the world and seen all sides of the umma, and desperately wishes to save it from itself. The book chronicles years in England spent learning from Muslim scholars, years spent in Saudi Arabia bemoaning the Kingdom's destruction of history and ruining the hajj by clogging it with modern pollution, and years spent watching the Muslim world turn more and more insular and backward.

Sardar's circle of intellectual scholars write articles and advise governments to seemingly no avail. He was at a meeting in Pakistan when Osama bin Laden and others in the mujahideen could not find a way to reconcile their differences, and the future was clear. They reached a ghastly depression when their fears were realized on 9/11 and afterward.

I enjoyed Sardar's observations in his travels to places like Turkey, Syria, and Iran. I learned about how much hope the umma placed in the Iranian revolution, and how bad it was when those hopes were dashed by the violent tyranny that emerged.

All along the way, Sardar explains ancient Muslim history and philosophy, illustrating the different schools of thought and what they mean for today. I learned a great deal about Islam that I never knew before. Sardar's problems with Muslim clerics today are very similar to the ones I have with evangelical pastors.

If you're an American who thinks he knows a decent amount about Islam, or has read several books on the subject, think again and afresh and read this book. Sardar believes in a pluralist Islam. It's not clear to me why he rejects Christianity. It seems to me that what he's looking for is clearly found in Jesus and the teachings of the Bible. I'd love to have a conversation with him.

This book was better than I could have imagined, and much different. Wish I had read it 5 years ago.

5 stars out of 5.

Friday, November 06, 2009

The Road to Independence

My 1001st post (today) is too long after my 1000th post. Sad, I've been busy. I've got 2 book reviews coming up though.

David Brooks' column today on "What Independents Want," reads the tea leaves of the weekend's elections. Polls show that the popular pendulum has swung toward demands for smaller government.
"Government should do what it’s supposed to do: schools, roads, basic research."

But as Mark Shields told Brooks tonight:
"But when told that there's a trace of botulism in a can of tuna fish in Pocatello, Idaho, they want to know, where the hell was the federal government? People want results. And they really feel do that the federal government is not on their side."

And that's the sad fact. The more government we have, the more we expect it to do.

The Republican party moved closer to inching me out of their tent this week. No, it wasn't the Sarah Palin-led Tea Party movement to oust the liberal (moderate?) Republican candidate in some New York district I've never heard of. It was more the (broken) Republican spin machine touting their health care bill. Here's Ezra Klein's take:
"CBO (estimates) that 17 percent of legal, non-elderly residents won't have health-care insurance in 2010. In 2019, after 10 years of the Republican plan, CBO estimates that ...17 percent of legal, non-elderly residents won't have health-care insurance. The Republican alternative will have helped 3 million people secure coverage, which is barely keeping up with population growth. Compare that to the Democratic bill, which covers 36 million more people and cuts the uninsured population to 4 percent.

According to CBO, the GOP's alternative will shave $68 billion off the deficit in the next 10 years. The Democrats, CBO says, will slice $104 billion off the deficit."

So, they're touting a plan that doesn't increase the number of insured and would reduce the deficit by 34% less ?? Yes, Republicans have become a laughing stock. While Brooks rightly points out that Independents are voting Republican, remember that ABC poll last week that showed only 20% of the population identify themselves as Republican? There's a reason for that.

So, I'm really close to abandoning ship and just being Independent. Republicans need a few changes:

1. Someone other than chain-smoking John Boehner out front all the time. Remember when he was on the news a few weeks ago for skirting ethics laws with his fancy golf outings with lobbyists? I do. He's embarrassing.

2. The ability to explain basic economics and why incentives matter. "Drill baby drill" and "tax cuts!" are mantras with little intellectual understanding behind them.

3. Actual health care legislation that would work. Like the Brad Delong plan I've harped on. If you're going to put out a plan that's going to fail, why not put out something BOLD?

4. Smarter people. There are a few in the party, but they've been marginalized by the loud and rowdy right.

That is all.

Sunday, October 25, 2009

More On Health Care

Since I saw this PBS report on health care in the Netherlands I've been pretty high on their system. A price ceiling that allows the market full leeway in shifting the supply curve to the right. If you watch the video in the link above, note the automated prescription dispenser... no need to spend $100k+ a year on pharmacists (reading this, Ashlie?).

Since the U.S. reform falls well short of what the Dutch have done, and well short of what was outlined in "How American Health Care Killed My Father," I've been pretty depressed about what the outcome will be-- disaster!

This Tyler Cowen column in yesterday's NY Times makes me feel worse. Arguing that what little state-level evidence we have so far indicates that individual mandates won't bring premiums down, and the subsidy-laden reform working through congress will make matters of entitlement-dependency worse.

Americans don't realize how much their standard of living is slowly falling behind that of other countries. We're not experiencing the growth in that measure that we've known in years past, and this will only worsen over the next decade (my opinion here).

Monday, October 12, 2009

Back on Top

Thought I'd take a spare 2 minutes to post this picture from yesterday's race.
Jimmie Johnson and Chad Knaus are in first place 4 races into the Chase, so the world is as it should be. If you watched "Together: The Hendrick Motorsports Story" on ABC this weekend then you know that it's just WRONG for any teams other than Hendrick to win.

Thursday, October 01, 2009

Suicide Tax

France Telecom has seen 24 of its employees commit suicide in the last 18 months, most of whom mentioned the poor working environment of France Telecom in their suicide notes. Many of these also killed themselves while working on the job, hanging themselves in their cubicles or jumping out the window.

In microeconomics we teach that one sure way to reduce the quantity of something is to tax it at the margin. So, one trade union proposes doing exactly that:

"As the debate rages whether the suicides were provoked by vicious globalization, the company's cynical management, or mollycoddled state workers being made to face up to reality, France Telecom seems to be doing its utmost to avoid another one. One trade union has suggested the government levy a suicide tax on companies to make sure they maintain a decent work environment."

Friday, September 25, 2009

Afghanistan Update

A while back I wrote that Obama needed to be honest with the American people:
2. We need billions of dollars in spending on infrastructure, education, and agricultural development (just to name a few) and a commitment of thousands of troops for decades if we want to get serious about an Afghanistan that looks like it belongs in the 20th century (much less the 21st).

General McChrystal's report basically calls for an "all-in" or "all-out" commitment--no middle ground.

David Brooks writes today:

"These are the realistic choices for America’s Afghanistan policy — all out or all in, surrender the place to the Taliban or do armed nation-building. And we might as well acknowledge that it’s not an easy call. The costs and rewards are tightly balanced. But in the end, President Obama was right: “You don’t muddle through the central front on terror. ... You don’t muddle through stamping out the Taliban.”


All-in or all-out. What will it be?

Wednesday, September 16, 2009

An example of why we have a health care cost problem

Related to yesterday's post and the article contained there.

I'm on the benefits committee for my university (I was appointed, I didn't ask). We're going to have a presentation by an insurance company on Monday. The company is going to buy us dinner afterwards. This is an example of an administrative, overhead cost that all of us pay for. Your higher premiums are going to buy a lot of people like myself dinner, in order to convince us that that we sign up for some insurance package that we'll pay too much for in order to provide dinner presentations for other potential customers.

I already feel dirty.

Tuesday, September 15, 2009

Must read article about health care

I just finished reading "How American Health Care Killed My Father." It's been picking up steam all over the blogosphere. David Brooks also quotes it a lot.

Read it NOW. Then email your congressman and tell him/her to read it.

Part of his solutions remind me of the Brad Delong plan... mandate all Americans save something (say, 15%) of their income into an HSA, with government providing catastrophic insurance as a backstop. Eliminate the insurance system as we know it and make individuals the customer rather than Medicare, Medicaid, and insurance companies. That will create competition that doesn't exist currently and the entire health care system will become like everything else in a well-functioning market economy. Buying health care will be like buying groceries.

Friday, September 11, 2009

Awesome Business as Missions quote

Someone older and wiser told me this today:
"Deuteronomy 8:18 says 'But you shall remember the LORD your God, for it is He who is giving you power to make wealth, that He may confirm His covenant which He swore to your fathers, as it is this day.'

"If God is giving us the power to make wealth, and we're seeing poor people everywhere around us, then what are we doing with what God has given us?"

Sunday, September 06, 2009

On Afghanistan

A couple years ago I asked on this blog what the strategy was, exactly, for the war on terror in Afghanistan. I'm still asking. One question I've asked for years is "How, exactly, is this not just like Vietnam?"

Joshua Foust has been pretty critical of the recent Afghanistan strategy, he's been trying to make sense of strategies for years.

Nick Kristof reveals some Afghanistan experts' analysis in his column today. "Nonsense" is one adjective used to describe U.S. policy.

George Will has come out in favor of withdrawal and has drawn criticism from the right-wing.

The arguments for staying in Afghanistan from people like Thomas Friedman look, to me, like this:
"There are some good things that have been done. Peace in cities, schools for girls, much more freedom...so we can't leave yet or these 'triumphs' will become tragic stories rather than fragile glimmers of hope."

I think President Obama needs to be honest with the American people:
1. We will never eliminate the Taliban.
2. We need billions of dollars in spending on infrastructure, education, and agricultural development (just to name a few) and a commitment of thousands of troops for decades if we want to get serious about an Afghanistan that looks like it belongs in the 20th century (much less the 21st).

We need to do some serious marginal analysis. Does the marginal benefit outweigh the marginal cost of an additional soldier, an additional aid dollar, an additional day in Afghanistan? Because the sunk costs don't matter.

FWIW-- I'm for pulling out. Doing nothing is sometimes better than not doing everything that needs to be done and the NATO alliance clearly has shown no willingness to do that.

For any Christians interested, the underground Church in Afghanistan and Pakistan was very active (maybe even flourishing?) there before 9/11 and our large commitment. I'd talked to people who had seen it. Very very quietly, with no Western hands on it. So, if you're sad about the Western missionaries who will have to pack up and leave if we pull out, please remember that God works in His own ways, not ours.

Saturday, September 05, 2009

Twitter got me a hat

This Hendrick Motorsports cap autographed by Rick Hendrick himself came FedEx to me today.
I won it this week via Twitter. Hendrick's twitter account gave away 10 hats to everyone who retweeted a Hendrick thread. I happened to be one of the first retweeters and got my name into a small pool and thus won on the first drawing.

Twitter has its positives and negatives--I don't hate it anymore but I have to be careful how I use it. It brought me a Hendrick hat so I was quite happy with it as this made my week fantastic. I have wanted a Hendrick clothing item of any kind for years. I would rather have Chad Knaus' signature but I'll take the boss man's any day.

Friday, August 28, 2009

The lack of blogging will continue...

I now know why most people aren't as well-read as I think they should be... those people are busy. And now I am busy too. I can occasionally tweet but can't find time to write anything worthwhile (except emails to students).

School started this week which means I divide my scarce time mainly among the following:
1. Calculus 2
2. Teaching 4 sections of 3 classes, plus 2 different independent studies.
3. Faculty sponsor of a student club.
4. Chair of a faculty committee (someone's cruel joke).
5. Student advising & registration (students aren't allowed to drop their own classes...)
6. Trying to force technology to make my life easier--which actually makes it harder and more time-consuming.

So, I have to carve out time to read newspapers and blogs to stay current. My mobile device helped me with this until NewsGator decided to discontinue support of its NewsGator Go! app in favor of synching with Google Reader. So, now my RSS feeds are MUCH harder to read and much less organized due to Google Reader being horrible over mobile devices. I feel betrayed by this decision, it's the angriest I've been at a tech company since Windows 95 came out, but in that case it was a step forward while this one is a step backward. And I am going to send an angry email to NewsGator if I find more time...

Tuesday, August 25, 2009

Death to a Conspiracy Theory?

The only good Obama "conspiracy theory" I could come up with was one that was rumored in the mainstream: Obama would appoint his adviser Larry Summers to be the next Fed chairman.

The thinking is that Bernanke is an inflation hawk and would raise interest rates if inflation expectations ran high. While debt-per-GDP is expected to grow exponentially due to the health care & entitlements costs, Bernanke won't help the gov't out by monetizing it. Hence, some thought Obama would appoint his friend Summers to be more aggressive in holding rates down and allowing inflation to rise to levels not seen since the early 80s-- in order to bail out the government's balance sheet.

Now that Obama is reappointing Bernanke, perhaps that conspiracy theory finally goes out the window. Or we can wait until Obama's second term... :-)

Saturday, August 22, 2009

Great quote

HT: @DavidWessel of Wall Street Journal. Barney Frank on economists:

Not for the first time, as an elected official, I envy economists. Economists have available to them, in an analytical approach, the counterfactual. Economists can explain that a given decision was the best one that could be made, because they can show what would have happened in the counterfactual situation. They can contrast what happened to what would have happened. No one has ever gotten reelected where the bumper sticker said, "It would have been worse without me." You probably can get tenure with that. But you can't win office.

Thursday, August 20, 2009

Change is coming...

I've sat through 2 long days of "faculty development," staff reports, and instructional seminars. The theme of today's meetings came from this commercial for Kaplan University which scared many of our administrators:


"Change is coming..." "Things are changing fast..." "We must change..." "We must be aware of what's changing..." were all repeated cliches of the day.

It's funny because I've been repeating similar cliches for the last week. My department has a new boss who is an outsider (like myself) and an instrument of change. It's like a tidal wave approaching shore, you can either find a way to roll with it or be destroyed by it.

Higher education is changing. We live in an increasingly global extremely competitive world where students would rather get a cheaper online degree from home than drive somewhere for expensive face-to-face interaction. As higher education becomes more necessary more people are supplying it and doing it in new ways that are eliminating the old players.

Students are changing. College students today have never known of a world without the internet. They're growing more comfortable with doing everything online, including reading textbooks. Our admissions director/chief recruiter said "I'm working in such a way that we are all still here in 5 years."

Technology changes faster than you can change. We watched an IT demonstration of a new but very soon-to-be obsolete software package (hello, Google Wave) that even the IT people hadn't mastered yet (and was disappointingly unflexible).

This time around the change benefits me and makes me feel young. I'm the guy who is always online with his mobile device and gets work done during lectures with an attention-getting tiny Asus EEE netbook. Both devices are models from well over a year ago and are considered out-of-date. Yet they're revolutionary and cool to my peers who are older. I'm the guy live tweeting the meeting (I counted a couple other new faculty twitterers today too). So, I am fairly hip to the idea of more technological change. IE: I may be older and less cool than my students, but I'm still OK.

I've lived in different cultures, gone through different universities, and am always voraciously devouring the latest ideas and debates. So, I relish the idea of our university doing new things and not stuck doing the same old same old.

Change for change's sake is often unnecessary. But change for survival, and change that is deeply striving for the glory of God is necessary and pretty exciting. Except for those who don't want to change...

4th Anniversary

Four years ago today I married my beautiful wife. She has added value to my life and radically changed my values. This is the first time we've spent consecutive anniversaries in the same place. She gets to put up with my desire to live lots of places as well as my mad blog rants about sports, my frustrations with lying Republicans (and other forms of politician), and my odd obsessions with journalists and economist bloggers. We do have a wonderful son who is even more fun than he was a year ago in part because of his mommy. And we still have NASCAR.

Congrats, babe! Happy anniversary!

Wednesday, August 19, 2009

I found this funny...

Niall Ferguson is author of The Ascent of Money which I reviewed here and is airing on PBS in four 1-hour segments (and is a required text for my Money & Banking class). He also writes a periodic column for the Financial Times. What he wrote a few weeks ago was so bizarre that everyone said "huh?" and some quickly accused him of being a racist. He has responded to his critics by talking to his colleague Henry Louis Gates Jr. --the same Gates who shared a beer at the White House with the cop that arrested him--to find out if his weird remark was indeed offensive.

I reprint Paul Krugman's blog post today because it made me spew my coffee. I am thankful for lively open discussion among such PhDs:

I really had no intention of writing more about Niall Ferguson. Regular readers may recall that he wrote an article in the Financial Times that began,

President Barack Obama reminds me of Felix the Cat. One of the best-loved cartoon characters of the 1920s, Felix was not only black. He was also very, very lucky. And that pretty much sums up the 44th president of the US …

I asked, are there no editors?

But Professor Ferguson demands that I (and James Fallows) print his response:

As you both took exception to my comparison of the President with Felix the Cat, my favorite cartoon character, implying it was racist and recommending I consult Professor Henry Louis Gates Jr., I have now done so. He has taken the trouble to consult others in the field of African-American Studies, including our colleague Lawrence D. Bobo, the W. E. B. Du Bois Professor of the Social Sciences, and has written to me as follows:

“None of us thought of Felix as black, unlike some of the racially-questionable caricatures Disney used. Felix’s blackness, like Mickey’s and Minnie’s, was like a suit of clothes, not a skin color. … You are safe on this one.”

What can I say? While the Ferguson line was deeply offensive — everyone I know asked, “Did he really write that? Did the FT actually publish it?” — it never occurred to me that it had anything to do with the question of whether Felix the Cat was supposed to be African-American. The mind reels.

For the record, I don’t think that Professor Ferguson is a racist.

I think he’s a poseur.

I’m told that some of his straight historical work is very good. When it comes to economics, however, he hasn’t bothered to understand the basics, relying on snide comments and surface cleverness to convey the impression of wisdom. It’s all style, no comprehension of substance.

And this time he ended up choking on his own snark.

Saturday, August 15, 2009

Clarification on Sports & Christians (continued)

To clarify where I'm coming from:
Many of the great civilizations in the world saw a huge rise in the prominence of their athletes and entertainers just before those societies collapsed.

Things have gotten pretty imbalanced. The culture that Louisville supported for Rick Pitino's misdeeds, for example. The huge salaries for the Caliparis of the world who add questionable value to the good of society (no matter how you measure it--GDP, innovation, productivity, education, etc.) while the budget is cut in other areas of the university Calipari works for.

The market value (demand) for an additional great basketball player or coach is higher than that for an additional teacher, police officer, or physicist-- even though you can easily argue that the others bring more benefit to society. It's this market that I have issues with--and it represents our collective preferences. So, I am concerned about my own preferences contributing to the imbalance.

What separates MLB from other sports entirely is that the entire system is corrupt. The commissioner turning a blind eye to the steroids, the players all lying about it to the media, players even lying to congress, and when the truth finally, slowly trickles out that almost every player was doping no one cares. There are no recriminations against David Ortiz and other Red Sox who we know were illegally doping during their first World Series run. The commissioner is making a lot of money to perpetuate the status quo to keep revenues high.

When a Pitino or someone else is caught doing something immoral, no one cares anymore. "It's not as bad as what _______ did, and he didn't get punished, so why should Pitino?" The NCAA as a whole isn't as bad as MLB-- there are no systemic lies being perpetuated. But, the imbalances are getting worse in college athletics. I'm not sure I want my dollars to support the imbalance any more. And I think much of my feeling comes from spiritual conviction.

I think, like personal finances, we need to have a greater discussion as believers in what we do with our resources.

Thursday, August 13, 2009

Thoughts on Christians and Sports (continued)

Since there's a lot of debate over the Pitino situation, I thought I'd put some more of my own thoughts out there. Not trying to be judgmental about Christians and modern sports, I'm simply working through the issue myself.

I think back to Rome and imagine early Christians there, wrestling with whether or not to attend games in the Coliseum. What do you think they'd have done?

I can imagine a line of debate like this:
Pro: "We should attend the games because that's where the people are. That's where we can reach the most people. We can't engage the culture without a door like sports to open conversation."

Con: "We shouldn't attend the games because we'd be adding our support for something that kills slaves. It's something that degrades the value of human life and as Christians we know that all life is precious. We should tell the world that God has other intentions for life and not be a part of that culture."

My guess is that an elder or Paul or someone would say "Let's go down to the holding cells and preach to the slaves that they can be set free via Christ" and they'd find better things to do with their time then enter the arena to watch those slaves die and the emperor hailed.

Does the scenario above have any bearing on modern sports and entertainment culture? I think so. What are your thoughts?

Can Christians still be sports fans?

Ted Kluck writes an "open letter" sports column for Christianity Today. He recently wrote a
letter to Donte Stallworth that I liked. Why do fans get so indignant about Michael Vick returning to the field after serving jailtime for killing dogs while Donte Stallworth killed a PERSON and served almost no jail time yet had the green light to play?
Thankfully, the NFL suspended Stallworth for the season today.

But it makes you think-- do you want these people getting your money and attention? Is it moral? I've made the case here before that it's immoral to support MLB, and I stand by that contention. I also recently lamented the million dollar hirings of Lane Kiffin and John Calipari at a time when universities were slashing departments and teachers due to budget crises.

The Rick Pitino soap opera is something that has me questioning allegiance to NCAA basketball. Facts:
1. Pitino has a morality clause in his contract.
"There is a morals clause in section six, page eight of Pitino's lucrative contract that allows the school to fire him with just cause for acts of 'moral depravity' or being dishonest with the university. It also allows him to be terminated with cause for generating disparaging publicity, if it is caused by his 'willful conduct that could objectively be determined to bring the employee in public dispute or scandal, or which tends to greatly offend the public.'"

2. Pitino had drunken sex with an aide present, impregnated a stranger, then payed $3,000 for her abortion.

3. Pitino is an outspoken Catholic who started a large foundation on behalf of his son Daniel who died in infancy.

4. UL's AD says he stands by Pitino "One million percent," while UL's president says he accepts Pitino's apology and wants to move on.

So, there are no repercussions. What Pitino did certainly wasn't illegal, therefore it isn't immoral either? 20 years ago coaches at major universities got fired for having affairs. Not so anymore.

Are you contributing to this behavior? Are you buying the tickets and boosting ad revenue by watching the games on TV? Are you donating money to the program and buying the memorabilia? Are you demanding the people in charge to change? Are you holding anyone accountable? Can Christians be "salt" and "light" and the church be "the pillar and support of truth" without Christians crying "foul!"?

Many of my Christian friends still defend MLB despite the weekly revealing of players who cheated and lied, and a commissioner (Bud Selig) who has tried to cover it up for several years while making millions in salary. They just fork over their cash. Yet many are incensed about Democratic politicians who are pro-choice (ie: immoral in a different way) and claim a moral high ground. How is this not hypocrisy?

If I don't agree with the huge salaries and benefits paid to coaches and programs which create debatable value in terms of academics and live lives that don't value life and demonstrate character then how can I keep watching? How can I wear the t-shirt? How can I root for them? Would Jesus?

*Update* This Adrian Wojnarowski article on Yahoo! sheds more light on the Pitino culture.

Tuesday, August 11, 2009

Back from Turkey

Last week was absolutely fantastic, one of the best weeks overseas I've ever experienced. Some college students I talked to described Turkey as a "magical world," and I like that description. There's just too much that I loved to mention here; Istanbul is easily one of my favorite cities in the world. Thanks to all those who prayed for our journey, it was 90% very smooth. A few highlights:

First, Turkish Air was awesome. Easily the best trans-atlantic flight I've ever had. We had about a hundred movies to choose from and about as many music stations and full albums of every genre. Welcome to the 21st century, right? Wish we had that service here in the States. Of course the food was great, too.

Imagine taking a trans-continental cruise every time you went to work. Well, that's what thousands of Turks do every day. Istanbul sits on two continents and most people ferry across.Here's a view from the boat at sunset.

Ephesus was neat. Seeing where John ministered and was buried, seeing where Acts 19 took place. Here's a picture of me next to some ruins.

I really knew God had his hand on the trip when we were sitting in an important meeting and I saw this car pull up outside. I immediately rushed out to meet the driver. He and his wife are Turks that used to live in Lexington, he's an EKU alum. They came back to Turkey because they were homesick. Seriously, in a city of 18 million this is the only guy that has this on his car. How awesome is that?

This is the Hagia Sofia museum/mosque/church in Istanbul, used to be the largest building of the world when it was Constantinople and the center of the Western world. We toured it, it's possibly more impressive outside I think.

This is just a tiny sample. Hopefully we have built some bridges for SBU students to go over and do business internships as well as for faculty to go to assist. Endless opportunities.

The only other thing I will say is that my Nokia e63 is one of the best investments I've ever made. Plugged a Turkish sim card in and it worked great as a phone, the wi-fi capability worked well in downtown Istanbul (where the city offers free wi-fi) as well as the hotel, and the camera worked well as a backup when I forgot my real camera.

Friday, July 31, 2009

Görüşürüz!

In about an hour I will depart Bolivar for Central Asia. So, there will be no blogging until I return on 8/8. I look forward to being away from the U.S., hopefully it's what I need to be more appreciative of my country and less grumpy about it.

See you later!

Book Review (#12 of 2009)

According to BusinessWeek, The Tipping Point by Malcolm Gladwell has been the #1 long-run business bestseller for a long time. I didn't find a cheap copy until Christmas, and didn't start it until about a week ago.

I greatly enjoyed this book, especially the first 3/4 of it. Gladwell has recently taken flack for some of his work from economist Bill Easterly, been criticized by Seth Godin, and ridiculed by basketball fans for some things Bill Simmons quoted him saying. So, I'm sure one can find all kinds of details that are questionable in his book... like talking only about William Dawes and Paul Revere while never mentioning Samuel Prescott...

Anyway, the Tipping Point is actually about church planting. When I get some time I'd like to search the interwebs and see who this book helped in thinking about their churches. Gladwell only uses examples of churches in one place (explaining how John Wesley's model was so successful, experiencing exponential reproduction) and probably isn't a Christian. But his observations of natural phenomenon from sociology to various human organizations give us some things to think about.

Church planters should use his book to ask:
1. How can I make the message more sticky?
2. Who are my Connectors...those people who just seem to know everyone?
3. Who are my Mavens, people who others go to for advice or for expert opinions on what book to read or what car to buy?
4. Who are my Salesmen, those natural evangelists?
5. How can I think about myself and my congregation in context? People behave one way in one context, and another way in another context. This is just a fact. How can I better understand how this behavior affects the dynamic of my church?
6. Why is my church more than 150 people? No church should ever be bigger than 150. Through the centuries everyone from generals to the Fortune 500 have figured this out... but churches don't seem to.

I didn't like the last couple chapters, found them a little bit tough to stretch the rest of the book around. But the book is great for encouraging thinking and discussion. And if you want to know how children shows like Sesame Street and Blue's Clues developed, this is your book.

4 stars out of 5.

Monday, July 27, 2009

Economics as Religion

Whenever I feel I have a spare hour I try to read up on economic blogs, namely macroeconomic blogs. And I usually have an intense look and furrowed brow.
Explanations of the financial crisis-- the before, during, and now after-- are usually contradictory while each having kernels of truth.

This is because macroeconomics really developed different schools in the 20th century akin to the branching of denominations in Christianity/religion.

You have to decide, are you:
simple Neoclassical, old-school Keynesian, New Keynesian, Post-Keynesian, Monetarist, Austrian, etc.? (Some of these are considered "heterodox" and there are other heterodox schools).

You can be a New Keynesian with a monetarist bent just like one can be a Reformed Southern Baptist (Reformed= Calvinist). But most schools/denominations fall back on the same catechisms, the same principles.

So, it's tough to decide. You shop around to see which one you like, examine the assumptions behind the doctrines, etc.
Which one is the clearest to understand? While this may be a factor in deciding, it perhaps shouldn't be. Perhaps the best schools of thought are the most complicated.

Which school of thought explains current events most accurately, or predicted them? Pretty much all do in retrospect due to hindsight bias.

Which school you associate with is usually a function of your upbringing and education (like seminary). If you went to a "salt water" economics school on the coasts then you probably don't believe in efficient market hypothesis and are some brand of Keynesian. (If you went to a religious seminary in one of those schools you also probably don't believe in the total inerrancy of Scripture and are probably Episcopalian or Lutheran).

Asking "what do the data say" rarely works here, because you have to ask "which data?" and so much of that data depends on the presenter.

My brow remains furrowed (though to the best of my understanding I'm a New Keynesian who is flirting with converting to full Monetarism).

What led you to choose your current religious affiliation? When you chose you probably understood some basics, had heard a couple arguments you liked, but were by no means an expert. And you may have been an adherent all your life and still not understand everything. Or was it that you just liked the people associated with those arguments and felt comfortable and welcome there?