Sunday, January 31, 2010

On Matt Chandler

Over the months I've seen several people mention praying for Pastor Matt Chandler, usually via Twitter. I knew he was a young pastor of a big church, but that was about it. The AP published a story today on his battle with brain cancer. The story and his testimony speak for themselves.

Saturday, January 23, 2010

The Age of Uncertainty

I'm amazed at how much the world changes in a week. The uncertainty factor is huge right now, and presumably wreaking havoc on the market.

1. Political uncertainty as Republicans make great strides and become more arrogant and obstructionist. There's definite fiscal uncertainty as reducing health care costs are key to long-term fiscal solvency. Now that reform is basically dead, who knows....?

2. Political and economic uncertainty as populist anger bears its teeth against Ben Bernanke being reconfirmed. There are good criticisms of Bernanke's monetary policy (as Delong points out in the linked post--not moving the FOMC consensus towards things like an inflation target or more effective QE) but no one in congress would understand them. They're just looking for a scapegoat.

3. More uncertainty as the Obama administration announces new policy goals of reining in large banks and changing the rules of the game. I appreciate this note on the "true" story written by an insider posted by Greg Mankiw.

4. Foreign uncertainty as the rhetoric with China ramps up and it appears the U.S. will have to have a very heavy presence in Haiti for the next decade or more.

It's sorta like 2008 all over again--uncertainty is unsettling.

Thursday, January 21, 2010

Book Review (#2 of 2010)

Nudge by Richard H. Thaler and Cass B. Sunstein. This was one of The Economist magazine's Books of the Year in 2008. Thaler and Sunstein are behavioral economists who show several examples of how applying behavioral economics can lead to more optimal outcomes. Given that some of President Obama's advisers are steeped in Chicago school behavioral economics this seems to be an ideal read.

The authors coin the phrase "libertarian paternalism." They believe that government can leave people with the freedom of choice but "nudge" them in making socially optimal decisions. Taxing gasoline is one old-school simple example. You can still buy it, but you're nudged to buy less.

An example more characteristic of their approach is what the city of Chicago did with Lakeshore Drive. The city simply painted lines on the pavement that are evenly spaced and then become closer together over a distance. When you're driving over them at a constant speed it gives the sensation of accelerating. This causes drivers to think they're going too fast and to slow down. Drawing fake speed bumps is also used in some towns. You're still free to drive the speed limit but you're "nudged" to slow down.

Thaler and Sunstein apply their studies to health care reform, social security privatization, the "privatization" of marriage, losing weight, saving energy and more.

The idea of the free market not leading to ideal outcomes is controversial among many on the right as is the idea of paternalistic "nanny state" government correcting those outcomes. Thaler and Sunstein are aiming for liberty while acknowledging that maybe we'd all be better off since people are not always rational agents (a fact that is a cornerstone of behavioral economics).

I find some of their wit gets old after a while. Some of their ideas are very practical, others seem to be a stretch. Almost all of it (except for the simple examples above) is politically impossible. Their examples came in very handy in the class I am teaching, though.

I give it 3.5 stars out of 5.

And now I will fulfill my New Years resolution to read my older books in order of purchase.

Monday, January 18, 2010

Today in class...

I felt like my earlier criticism of Limbaugh and Beck were prescient today.

A student was giving a presentation on Irving Fisher and somehow related monetary policy to something Glenn Beck had on his show. The student showed a YouTube clip of Beck (no, I won't link it) showing some sort of graph and trying to make a point either about the debt or the money supply, it wasn't really clear (I think he said both). In the clip, Beck makes several factual errors and economic ones as well. He ends with "Be sure to send this clip to everyone you know!"

I shared with my class exactly what I said in the last paragraph of this earlier post. I told them it was like when sophomore students put graphs in their economics papers just to fill up space but that have no real point. And this is a guy millions of Americans get their political directives from.

This is why we have GOP candidates like Scott Brown touting the party line of promising to cut taxes and slash deficits at the same time and not getting called out as liars for it. There are indeed good and creative ideas on the right, but no one in the Republican party willing or smart enough to understand and champion them.

Book Review (#1 of 2010)

Mere Christianity by C.S. Lewis. Our small group is going through this classic book. The small group leader is Dr. Zach Manis, one of the sharpest young minds in Christian philosophy in the country and co-author of a new book on the Philosophy of Religion. I look forward to his insights and will try to keep up.

I had never read any C.S. Lewis books in their entirety before (*GASP*, I know I just lost all credibility with that sentence). I found this to be an excellent apologetic for a seeker or a new believer. I posted the quote that meant the most to me. I think Lewis stretches some of his analogies a bit, and it's clear in one of the latter chapters he accepts Darwinian evolution at face value. Other than that, the book is a practical application of the Christian faith to daily life.

However, if C.S. Lewis had published this book today I'm pretty sure he'd be denounced as a "heretic" by many. I bet they wouldn't admit that since this book is still read in seminaries, but I don't see why you couldn't apply some conservative criticisms of Brian McLaren and Rob Bell to C.S. Lewis. Anyone agree with me?

3.5 stars out of 5.

Sunday, January 17, 2010

On Rush & Haiti

I'm sorry to anyone who I offended with my "proverbial middle finger" comment regarding Limbaugh. It would have been better to say "a proverbial rebuke" or something. I was obviously pretty angry. If my comment about pastors offended you, then I apologize for that too.

Our pastor preached a good sermon on Luke 13 today, reminding us all that "unless we repent we will all likewise perish." He had Pat Robertson's comments in mind, and mentioned he felt tempted to feel he was qualified to distribute his own justice to him and others. But that our response to Haiti should be the proper one Jesus gives us in Luke 13.

I know many Christians who feel as Robertson does, and I felt that at least Robertson had eternity in mind and didn't condemn giving aid like Limbaugh did.

In class this week I've been showing some of Milton Friedman's Free to Choose. Friedman was an incredible, clear, smart voice for conservativism. Unfortunately his death left a large void and we're stuck with mean-spirited conspiracy-oriented people like Rush Limbaugh as the public faces of conservativism. That's probably what angers me (and plenty of other conservatives I know) more than anything.

Saturday, January 16, 2010

On Pandora

When I'm at the office mostly by myself on weekends I use to stream music. If you don't use Pandora, you basically start with a song and then it plays other songs that it thinks you may like and you rate them. The more you rate the more it adjusts the song selection to your liking.

According to Pandora, the following are true:
1. I only listen to songs made prior to 1980.
2. I like music with "folk rock qualities, a subtle use of vocal harmony, acoustic sonority, melodic string accompaniment and major key tonality."
3. I like musicians in the following order of frequency:
John Denver
James Taylor
Simon & Garfunkel
Neil Diamond
Jim Croce
Peter, Paul, and Mary

As I was writing this post Pandora whipped out a John Denver cover of John Prine's "Paradise" aka "Muhlenberg County." That's one of my favorite songs to sing when driving through it on the WKY Parkway from my parents' house. I had no idea there was a John Denver cover of it on his Rocky Mountain High album. You rock, Pandora.

Friday, January 15, 2010

Quote from C.S. Lewis

I came across this quote in Mere Christianity that fit very well into the Jan term class I'm teaching:

"I am not an economist and I simply do not know whether the investment system is responsible for the state we are in or not. This is where we want the Christian economist."

The context is whether borrowing/lending at interest is okay even though it appears to be forbidden in Scripture. Lewis' point is that we need laypeople like Christian economists to help us explain and apply the Scripture in our modern day context.

The answer, as we fleshed out in class, is "Yes, it's okay." The students initially seemed mostly uncertain about Scripture's implications. James Halteman, a Christian economist at Wheaton, did a fantastic job in his book of explaining how the interest of the Bible is not the same as interest in today's capitalism. I found other essays written by Christian economics/finance people that dodged the subject.

Thursday, January 14, 2010

Christians don't let Christians listen to Rush Limbaugh

I just went to and followed their link to the Red Cross' website and donated $10. I did it as a way of displaying the proverbial middle finger to Rush Limbaugh for his shameful, idiotic comments yesterday. Among other things, Rush implied President Obama would steal the money donated through the website (btw-- you're not donating to, you link to the Red Cross site first... learn how the internet works, Rush).

I'm glad to see at least a few influential pastors are condemning Rush's comments. But I suspect they'll be back to listening and supporting him next week, just like they were last week.

While some of the media coverage might be overkill, Fox News' prime time programs gave Haiti a grand total of 7 minutes out of 3 hours last night (it was on at the gym and I found the absence rather odd). But I'm glad Glenn Beck has a donation link on his website.

Tuesday, January 12, 2010


In my annual "reorganization" I reached the conclusion that I should read the books I've been carrying around on my shelf for years but have never read. Two of the best books I read last year were those kinds of books. So, I am resolved to begin reading through my books by order of purchase/receipt. I usually sell or trade in my old books, so it's odd that I've been carrying some around for years for "when I get around to it."

I'm starting with Egypt, Greece, and Rome: Civilizations of the Ancient Mediterranean by Charles Freeman. This book is a no-joke comprehensive history of three civilizations that I think I bought in high school. I think I've read just over half of it, haven't touched it in nearly 10 years.

This New Year's resolution is difficult because I just got a bunch of books off my Wish List that I'm eager to read, and there are plenty which will come out this year which I will also want to read immediately.

But, I'm writing it down here for accountability.

By the way, The New Republic now has a book review section on their website. Very cool.

Sunday, January 03, 2010

See, I fit right in!

An oft-cited article in the Wall Street Journal yesterday on how the data say economists are cheapskates.

Some dispute the notion that economists tend to be skinflints. "They aren't cheap," but they are concerned with a loss of economic efficiency, says Betsey Stevenson, an economist at the University of Pennsylvania's Wharton School. "That means that they often fail to do the nice little social gifts that seem wasteful to economists."

Apparently many of them don't think much of Christmas. Considering that most of the people cited in the article are ones I really look up to, I'm glad to know they're striving for efficiency in all areas of their lives.

One of the best parts of the article:

Given their understanding of the odds of gambling, economists seldom frequent casinos, which is one reason the (annual AEA) meeting isn't held in Las Vegas. A decade ago, a hotel sales representative showed Mr. Siegfried a chart showing how little economists gambled compared to other people, he says.

The American Economic Association meetings, however, have been held in New Orleans, which has a few casinos.

One year, Yale University economist Robert Shiller, who'd never gambled in his life, found himself at a casino there. He says that was because Wharton economist Jeremy Siegel realized that by using coupons offered to conventioneers, they could take opposing bets at the craps table with a 35 out of 36 chance of winning $12.50 each. Over two nights, Mr. Shiller netted $87.50.

He hasn't gambled since.

Saturday, January 02, 2010

How I'd begin fixing health care (or America's health) and the drug war at the same time

Step 1: Eliminate all sugar quotas.*
Subsidizing that .0001% of the country that farm sugar by "protecting" them from foreign competition has led to the desired result: A higher domestic price for sugar than would otherwise exist so that those farmers can keep their jobs. This has led, in turn, to manufacturers turning to high-fructose corn syrup as a cheaper input substitute, leading to a less-healthy America.

It also means that foreign producers of sugar, say, South American countries, have had to turn to the production of other crops since we won't let their sugar in. So, many turned to coca...manufacturing it into cocaine. Provide them with a viable legal alternative--sugar--and they'd be happy, but the U.S. rejects their sugar because of the stupid quota system in place to protect the sugar monopolist.

And then we spend $billions$ to treat people with obesity and health problems and $billions$ (and more in terms of human life) to try and stamp out coca production or to keep it out of our country.

It's a simple free market solution that few are advocating.
*- I know this post needs all kinds of footnotes of data to back up my proposition. I'll leave that to commenters.