Sunday, February 28, 2010

"Evangelical Aid"

Nick Kristof is spot-on in the NY Times today.

"A root problem is a liberal snobbishness toward faith-based organizations. Those doing the sneering typically give away far less money than evangelicals. They’re also less likely to spend vacations volunteering at, say, a school or a clinic in Rwanda.

If secular liberals can give up some of their snootiness, and if evangelicals can retire some of their sanctimony, then we all might succeed together in making greater progress against common enemies of humanity, like illiteracy, human trafficking and maternal mortality."

Saturday, February 27, 2010

Russ Roberts is right, you know.

Austrian economist Russ Roberts as George Mason writes in the WSJ:

"[T]he arsenal of the modern econometrician is vastly overrated as a diviner of truth. Nearly all economists accept the fundamental principles of microeconomics—that incentives matter, that trade creates prosperity—even if we disagree on the implications for public policy. But the business cycle and the ability to steer the economy out of recession may be beyond us.

The bottom line is that we should expect less of economists. Economics is a powerful tool, a lens for organizing one's thinking about the complexity of the world around us. That should be enough. We should be honest about what we know, what we don't know and what we may never know. Admitting that publicly is the first step toward respectability."

Tuesday, February 23, 2010

New credit card rules

Yesterday the new legislation affecting credit cards went into effect. While one can argue the merits of some government intervention, there are a couple parts of the legislation that I think are good ideas. "Nudges" as Thaler and Sunstein would call them.

The best example of a nudge in the current legislation is that your credit card statement will now be required to display this:

4. Minimum payment warning
Estimate of how long it could take to pay off your balance if you make only the minimum payment each month, and how much you’ll have to pay to eliminate your balance in three years.

Consumers should know how to figure out how much more they're paying for their loan if they're only making the minimum payments, but most probably don't take the time to figure it out. The credit card company counts on consumers not doing the math because that's how they make more money. Now, the company is required to do the math for you and put it front and center.

Students are always disturbed to see how much more they're paying for things if they're making the minimum payment. They sometimes think they're just being good citizens by making that minimum payment, but don't figure out how it all adds up.

An in-class example:
Suppose you put $500 of textbooks on your credit card. The card advertises a 19% rate and the monthly payments it requires on the balance is $20. How long will it take to pay off your books? How much will you have paid for them?

The answer is 32 months, almost 3 years! The total amount paid then comes out to $20 x 32 months = $640. You paid $140 more for the already expensive books.

The credit card companies are now required to do the above math for you.

Suppose you developed a plan to pay off your books in 12 months. How much does your payment need to be? The answer here is $46.08. In the end, you will still have paid $46.08 x 12 = $552.96 for your textbooks. $53 is better than $140, but it's still money that would be better spent elsewhere.

The alternative? Start saving $46 every month (or as much as you can) a year in advance so that you can buy your textbooks with cash. That way you don't pay more than the price tag.

Monday, February 22, 2010

"What I read"

The Atlantic online is posting a series looking at what their columnists and bloggers read. They start with this opening:

“Every time I hear about Twitter I want to yell Stop,” writes George Packer in his New Yorker blog. Packer feels he’s drowning in information and opinion. Perhaps he feels, like many of us, that other people can read faster, or have some secret formula that allows them to converse knowledgeably at 8 a.m. about an item this morning on To reassure you or alarm you further, and perhaps to give you a few ideas, we are asking various friends and colleagues how they deal with the information tsunami.

I also feel like everyone else is reading faster than I am, like I never really learned how to read. This series has somewhat depressed me. Maybe everyone reads more because they commute via train to work and have that time to read magazines or read major newspapers "cover to cover." @mattmckee might find this editor's use of Twitter handy. He has 4 different personal Twitter feeds that he checks. I'm always reading a non-fiction book, but don't count on me to have it finished tomorrow like other folks. I love reading long-form journalism like The New Yorker, but don't count on me to even read my BusinessWeek cover-to-cover in a week's time.

Tyler Cowen, an economist blogger, posts 12 times a day, publishes a book or two a year, publishes a textbook, travels all over the world, voraciously reads books on topics ranging from South African art to Haitian music to the Industrial Revolution, and reposts thoughts from academic journals and other blogs. He also has a family and teaches at a university while doing research. How does he sleep?

I've been trying to use technology to maximize reading time. And I've deactivated my Facebook.

I make it a point to read the following 5 bloggers every day. Everything they post, in order of priority:
1. Reihan Salam's The Agenda blog at The National Review's website. He's smart, and very clear in his writing. When he's on NewsHour he talks faster than other guests and is thinking harder than they are. He's the sharpest conservative out there, and is a genuinely nice guy in my communications with him.

2. Brad Delong's "Grasping Reality..." He's a liberal economist at UCLA who also has a lifestyle like Tyler Cowen above. He's one of those liberals who calls anyone who disagrees with him "stupid" or "nihlist", etc. He makes me think a lot, and I find him to be quite reasonable on some issues.

3. Econbrowser- 2 economists co-author this blog and they give me all the macro things I need to think about. With plenty of good graphs (which slow down my smart phone, but at least are readable on it).

4. Greg Mankiw- Dr. Mankiw doesn't write as much these days, I guess he's gotten busy with other things. His more reasonable voice has been sorely missed; he's sort of come across as a party hack in recent months. When he does think on his blog, it's generally thought-provoking and useful.

5. Marginal Revolution - Tyler Cowen and another economist run this blog and it's usually a lot to keep up with. But it's the "everything else" that economists and others are thinking about.

I'm not blogging much anymore because I'm reading and thinking more. But not fast enough to keep up with everyone else.

Saturday, February 20, 2010

Instapaper and Delicious make my life more efficient

We had some windfall cash lately (in part from me teaching in Jan term) and I used some of that money to purchase a Kindle. Instapaper is a wonderful service that lets you save websites that have articles you want to return to read and then download them all as text documents onto your Kindle. I click one button on my browser and it automatically saves the article at Instapaper. At the end of the day or when I have time, I simply download all the articles and read them at my leisure on a device that is much easier on my eyes than my back-lit computer screen (or smartphone).
Instapaper also integrates with Google Reader so that any blog post that I mark to "share" shows up as a downloadable article on my Instapaper list. That way I can read blogs on my phone while waiting somewhere and easily mark the longer ones that I want to read later.

The other service I've used for a long time, and recently gave an instruction seminar for fellow faculty on, is Delicious. Delicious lets you bookmark websites you visit (mostly articles, in my case) and tag them for sorting. You can publish each tag as its own RSS feed. I use this for students in each of my subjects. When I run across a good article for Personal Financial Planning, it goes onto their RSS feed in one click and shows up on their Google Reader, which I make them start using on Day 1 of class.

Between these 2 sites I'm able to store things for future personal use. Delicious lets me store things I know will be important for me to reference, Instapaper lets me store things I want to read at a more convenient time.

Hope you find both of these services useful.

Friday, February 12, 2010

Niebuhr on regulation

The New Republic magazine has reprinted several articles by Reinhold Niebuhr written decades ago. This great quote comes from "Liberals and the Marxist Heresy:"

The fact is that an economy can neither be totally regulated nor totally unregulated; just as men can be neither masters of their historical fate nor mere prisoners of destiny. Neither dogma is totally true. Modern communities do not live in the harmony assumed by the one dogma, nor do they move inevitably to a climax of social tension as the other dogma assumes. So the healthiest modern nations have distilled truth from the tension between both equally untenable dogmas and have preserved their health by practices which followed neither too consistently.

Thursday, February 11, 2010

On Twitter and journalism

I have what could be called a preoccupation with TV journalists and news writers. I like trying to figure out what they're thinking, how they come up with the questions they do, where they get their slant from.

Journalists are some of the heaviest users of Twitter, posting links to stories they're following and offering comments, often while their story is airing. And if you catch them just right they'll respond to tweets. I use Twitter to respond to their stories, criticize their stories, or compliment them. It's what I do. I count some local journalists among my "friends."

One example on the national scale is ABC News' chief White House correspondent Jake Tapper. He has responded to a couple of my tweets at him lately.

One story that has been carried heavily in the blogosphere but not in the network news is Republican Congressman Paul Ryan's (WI) budget proposal that would eliminate the deficit and turn Medicare and Social Security into a voucher program. The program has gotten respectful looks from liberals and cheers from conservatives for being the first real idea produced by a Republican in ages. I've been frustrated because it has not been on the network news, even NewsHour has not covered it. Tapper tweeted a link to an ABC News podcast interview with Ryan.

While I was happy to see the podcast, I was again frustrated that it would not be covered on the actual TV news.

I responded: @jaketapper Why just a podcast and not a segment on the news? The "how the Betty White commercial was made" ranks higher than this?

I was referring to the 5-minute piece the night before on how that Super Bowl commercial was made (*spoiler alert* - just like every other production since the creation of film-- with a body double. *GASP*, you're shocked, right?).

Tapper responded: @KD0IMH
quitcher belly aching and just enjoy it.

How is this blog worthy? I'm just chronicling my interaction with people who bring me the news and the great utility I derive from each additional exchange with them. The major journalists seem to spend a lot of time defending their coverage and responding to critics. I think this is a good thing, they work harder to get the facts right. Their interviewees have a forum to express their thoughts on the interview.

I find I use Twitter mostly to keep up with the news.

Friday, February 05, 2010

And these guys make $millions$

HT: David Beckworth for this clip from CNBC quizzing Super Bowl players on basic knowledge. I will show this in class next week.

My opinion on the state of things

Last year I wrote about trying to choose my economics "religion" or "denomination." One person who has been influential on my thinking in the last year is Scott Sumner at The Money Illusion. His post this week rebutting other economists I read and respect was a fantastic summary of his own points of view which have basically become my own as well.

Basically: The Fed allowed Nominal GDP to fall in half in 2008 and has been too contractionary in its policies since 2007 despite the illusion of a 0% federal funds rate. We've become Japan and Ben Bernanke has not done anything he said he would do (in papers and speeches years ago) should America become Japan.

Republicans and supply-siders are foolish to worry about inflation right now and to argue that the Fed should raise rates and pursue even more contractionary policy. As Sumner said earlier this week, it's 1931 all over again.

Dr. Sumner has been influential in slowly tilting the debate and blame for our current economic ills toward the Fed's poor monetary policy (not the Fed's bailouts which is all Congress complains about and maybe all the public thinks about). While he's a (neoliberal) conservative monetarist, both liberals and conservatives agree with his main points and ironically the more liberal Keynesian-leaning folks have been voicing his arguments more loudly. Lefty Matt Yglesias also cites the Sumner post here.

He claims to spend 6-7 hours a day working on his blog and it shows.