You've heard of prediction markets like InTrade, right? Basically, like gambling, but on real-world non-sporting events, so as to aggregate the market's knowledge about the future, and reward those who know and "share" their knowledge. GMU professor Robin Hanson did a lot of the work in formulating them and encouraging their development.
Now, if only he could recognize the insights of others.
Back in January, his blog posted Peter McCluskey's idea to use prediction markets to unveil another kind of information: how a presidential candidate impacts prices in financial markets, such as oil futures, government bond yields, etc. And how does he propose to do it? The prediction market would host a bet on a measure of their correlation. Which measure? The (modified) ratio of how much the candidate's contract price (i.e. market's estimate of chances of winning) changes to how much the financial security's price changes ... on election day. ( a so-called "shock response future")
Great idea, I thought -- but wrong measure. Election day by itself is unreliable. After all, more than just the election will influence the financial security's price that day. Plus, the market has already largely incorporated the influence of whoever's expected to win except in very close races. Worse, it's way too easy to manipulate: want to "prove" Democrats make interest rates low? Eat a loss by buying treasuries at an absurd price at a critical time, just like that gentleman who ate a loss on oil just to be the first to buy oil at $100/barrel.
So, I told them exactly that and suggested a better measure: don't just look at election day: measure the correlation all the way up through election season. Find how often e.g. oil's price goes up as a Democrat's chances of winning go up, and look at how closely they track each other, each day or week. That's far more robust against manipulation, and extracts much more relevant information. Yet arguing the point with McCluskey and Hanson was like talking to a wall: they were responding to distortions of my idea that seemed to have only a partial understanding of it. For example, Hanson argued that no, no, no, silly: we need a metric available before the election ... which mine is. No no no, Hanson really meant something completely different from what he actually said.
Well, McCluskey went ahead and launched his inferior futures market on the InTrade site. And, just two days ago, Hal Finney launched a celebration of those futures markets' "success" with a blog post that developed the implications of the prices those contracts traded at. Major posters gave McCluskey a good pat on the back.
(Re-)Enter Silas.
I remarked that I had suggested a better metric on the earlier thread, and asked if the people there would be more interested in a futures market for my idea. A few were, and one major poster reluctantly admitted that I had a better metric and deserved acknowledgement.
A major implication of my criticism, let's not forget, was that too many other forces impact a financial security's price on any given day (including election day) and the market has already incorporated most of the impact of whose expected to win (or, of course, Senate/House elections could impact as well...). This means we should expect the market McCluskey made to be rather useless -- traders will view the correlation on just election day, as effectively random -- a 50/50 chance either way. And what do we see? Yep: "49.9-50.1" -- or an implied 50/50 chance.
As Finney sheepishly avers: "These values are so close to the 50% mark that it appears that the markets do not expect any significant movement in oil prices or interest rates on election day, that can be attributed to developing information about which party will win. As critics have noted, this could be because they don't see much effect of political parties on these values, or else because they expect that the election day results will be a foregone conclusion and there will be no surprises in that regard."
Or, reading between the lines, despite all the kudos we're giving McCluskey, he created a market that provides completely useless information, even though I told him long before how to make it useful.
Hanson tried to save face by replying again, so I had to gently correct his misguided attempt to trivialize my insights. Okay, not so gentle -- but when you're so wrong, and for such wrong reasons, why do you expect a huge amount of respect right back? Especially when you're the one always complaining about how stupid it is that you have to gain social status just to get people to listent to your good ideas!
What's especially interesting is when Hanson alleges that, duh, of course he had considered my idea. It's just an obvious variation! And yeah, in a way it kind of is. But judge his attempts at response for yourself -- are those the remarks of someone who has considered the idea and rejected it? Would he constantly respond to misunderstandings of the idea? Make so many misstatements about it? Not notice his true complaints applying to his own idea?
Furthermore, even if he does think the election day correlation is so much more important, why didn't he suggest the further "obvious" variation of simply increasing election day's weighting in the correlation, which would still retain the measure's robustness against noise and manipulation?
His latest response to my damaging criticisms? Silence. A wise, wise choice.
Will they go ahead and belatedly implement my idea before I go ahead myself with it? It will be very, very funny when they do.
A blog by Silas Barta
Thursday, July 31, 2008
Wednesday, July 30, 2008
And to *double* the stakes on oil ...
Well, a little googling got me a blog post from Pacific Park Financial that lists leveraged oil ETFs, which they warn as being "not meant for buying-n-holding; rather, they are meant for making a calculated bet and exiting when you've reached your profit target or stop-loss." (emphasis mine)
A calculated bet? Oh, we can do that.
The one I'd be interested in here is DXO, which makes a leveraged long bet on oil, attempting to replicate 2x the gain/loss of oil. Unfortunately, it hasn't been around long (just over a month), but this chart, which I hope you can see okay, shows it neatly getting double the return on the security OIL.
If oil (no caps) merely returns to what it was three weeks ago, that's a nice 30% return for me. But of course, the whole point of the bet was that fate doesn't work like that, and my bad luck will thus drop oil's price even more forcefully.
Perhaps with a li'l work, I can find a different oil ETF that amplifies the return, but has a longer history. Or, switch gears entirely and try to use my luck to bring down an entire commodity index, rather than just oil.
Stay tuned. (archaic expression from they days of radio when they wanted you not to tune to a different station)
A calculated bet? Oh, we can do that.
The one I'd be interested in here is DXO, which makes a leveraged long bet on oil, attempting to replicate 2x the gain/loss of oil. Unfortunately, it hasn't been around long (just over a month), but this chart, which I hope you can see okay, shows it neatly getting double the return on the security OIL.
If oil (no caps) merely returns to what it was three weeks ago, that's a nice 30% return for me. But of course, the whole point of the bet was that fate doesn't work like that, and my bad luck will thus drop oil's price even more forcefully.
Perhaps with a li'l work, I can find a different oil ETF that amplifies the return, but has a longer history. Or, switch gears entirely and try to use my luck to bring down an entire commodity index, rather than just oil.
Stay tuned. (archaic expression from they days of radio when they wanted you not to tune to a different station)
Tuesday, July 29, 2008
The shortest, safest libertarian case for IP
Am I going too far with that claim? Nope. I've argued it many times and haven't seen any response that's even remotely plausible. Here goes:
***
Most libertarians have no problem seeing why property rights in radio waves (i.e. the exclusive right to emit at a certain frequency) are justified.
Next, notice that IP (intellectual property) rights have the exact same form. Just as spectrum rights allow exactly one entity to form his property into a specific pattern (such that it emits at a specific frequency), IP lets exactly one entity form his property into a specific pattern. They are rights to configurations of objects rather than objects as such.
It is true (as many, many will remind me) that to broadcast at the same frequency as someone else "interferes" (!) with their "signal" (!). However, your judgment that there is "interference" is itself an arbitrary value judgment about the merit of someone's intended use. In exactly the same way, copying someone's ideas can interfere with their intended use.
Remember, the ether does not somehow "want" to carry information. It is simply one positive attribute humans have been able to wring out of it; if people merely loved to blast radio waves for the heck of it, the conflict wouldn't arise. So the characterization as "interference" is solely a function of the uses people want to make of it.
Unless and until you can make a libertarian case why one desired use justifies exclusion rights for specific patterns and the other does not, the cases are perfectly parallel.
***
There, that's all there is to it. Don't let the length of this post confuse you; the entire case is self-contained between the asterisk lines. I want to now briefly review my history of making it.
If you look at this comment and the preceding, you see Stephan Kinsella make a seemingly innocuous but actually damning admission: that attempts to differentiate the cases of IP and radio waves reduce to (the very arbitrary decision of) what counts a "relevant use" for purposes of discerning property rights boundaries, a distinction mentioned nowhere in Kinsella's widely quoted case against IP.
The argument persuaded some participants to reluctantly bite the bullet and admit that they couldn't therefore support radio wave rights either. (Yikes!)
You're rightly skeptical to wonder why I'm not quoting a peer-reviewed, published exposition of this argument, and indeed many have suggested I flesh it out and submit it to a (very ungrateful) libertarian journal. While probably a worthwhile pursuit, if I have spare time, it kind of misses the point of journals: to get results, whether they be new, useful scientific laws, or evidence in favor of propositions, or establishment that something is or is not possible. If the above remark by Stephan Kinsella is the best response he, the eminent opponent of IP, can marshal, we already have a result. Wanting it in a journal article is putting the cart before the horse.
I've probed other intellectuals on this and found similar inability to refute -- I'm just posting the best response I've gotten.
Comments are greatly, greatly welcome. Unlike some other people who shall remain nameless[1], I want to see where I'm wrong.
[1] A name is a label intended to refer to a proper noun. An example of a name might be Stephan Kinsella or Bob Murphy.
***
Most libertarians have no problem seeing why property rights in radio waves (i.e. the exclusive right to emit at a certain frequency) are justified.
Next, notice that IP (intellectual property) rights have the exact same form. Just as spectrum rights allow exactly one entity to form his property into a specific pattern (such that it emits at a specific frequency), IP lets exactly one entity form his property into a specific pattern. They are rights to configurations of objects rather than objects as such.
It is true (as many, many will remind me) that to broadcast at the same frequency as someone else "interferes" (!) with their "signal" (!). However, your judgment that there is "interference" is itself an arbitrary value judgment about the merit of someone's intended use. In exactly the same way, copying someone's ideas can interfere with their intended use.
Remember, the ether does not somehow "want" to carry information. It is simply one positive attribute humans have been able to wring out of it; if people merely loved to blast radio waves for the heck of it, the conflict wouldn't arise. So the characterization as "interference" is solely a function of the uses people want to make of it.
Unless and until you can make a libertarian case why one desired use justifies exclusion rights for specific patterns and the other does not, the cases are perfectly parallel.
***
There, that's all there is to it. Don't let the length of this post confuse you; the entire case is self-contained between the asterisk lines. I want to now briefly review my history of making it.
If you look at this comment and the preceding, you see Stephan Kinsella make a seemingly innocuous but actually damning admission: that attempts to differentiate the cases of IP and radio waves reduce to (the very arbitrary decision of) what counts a "relevant use" for purposes of discerning property rights boundaries, a distinction mentioned nowhere in Kinsella's widely quoted case against IP.
The argument persuaded some participants to reluctantly bite the bullet and admit that they couldn't therefore support radio wave rights either. (Yikes!)
You're rightly skeptical to wonder why I'm not quoting a peer-reviewed, published exposition of this argument, and indeed many have suggested I flesh it out and submit it to a (very ungrateful) libertarian journal. While probably a worthwhile pursuit, if I have spare time, it kind of misses the point of journals: to get results, whether they be new, useful scientific laws, or evidence in favor of propositions, or establishment that something is or is not possible. If the above remark by Stephan Kinsella is the best response he, the eminent opponent of IP, can marshal, we already have a result. Wanting it in a journal article is putting the cart before the horse.
I've probed other intellectuals on this and found similar inability to refute -- I'm just posting the best response I've gotten.
Comments are greatly, greatly welcome. Unlike some other people who shall remain nameless[1], I want to see where I'm wrong.
[1] A name is a label intended to refer to a proper noun. An example of a name might be Stephan Kinsella or Bob Murphy.
Monday, July 28, 2008
Question: why can't "Addictive"(tm) stuff addict me?
This has been a real confounder for me. You all know about how society regards certain products as dangerous, and gets them banned, in large part because they are addictive. You use them, you get hooked, you can't stop, they're destructive to your body, and then you have to go on public assistance. Woe is thee.
Yet I have never been able to get addicted (or near addicted -- I'm not going by the rigorous psychological definition here) to such products. For example, I have never once actually enjoyed the process of drinking an alcoholic beverage. That is, there has never been an instance where I drank beer/wine/liquor/whatever and actually got a positive response signal from my brain telling me to do it again because it's cool.
So I don't like any alcoholic beverage (the feeling of intoxication is another story) and can't even distinguish them much. They all taste like like sour/bitter stuff that stings/hurts as they go down. Yuck! I mean, I get that it's an "acquired" (i.e., imagined) taste, but I've been socially drinking for a while (i.e. in the presence of legal guardians and after turning 21), and ... nada. To drink anything alcoholic feels like a chore, not something I'd do for enjoyment. (In fairness, soda stings too as it goes down but is otherwise tasty.) When I pick a beer, I go for "least painful", not "tastes good".
I'm even at the point where I believe it's all faked. You're all familiar with the phenomenon of how double-blind tasting destroys the standard quality ranking for wines (link forthcoming). And then, for example, when I asked my female friend "K" what she likes about beer, I got answers like, "well, um, it tastes good when you're really thirsty and tired ..." (in contrast, of course, to all those drinks that taste BAD when you're desperate for one...).
My female (and Italian) friend "A", an avid wine lover, claims that my brain or genome must be so fundamentally different that I should submit myself for medical study so as to gain insight into curing alcoholics (a condition that completely perplexes me). Yet my female friend (wine lover but not Italian) "C" insists that not liking wine is common among her friends. Like with wanting to tank oil's price, I'd be very interested in contributing to the well-being of society by helping out with curing alcoholism ... if in fact I can. (I'm glad their names all begin with different letters!)
(Yes, I know there are some good points about how "alcoholism" is just a case of "I really like alcohol and will ditch my family to enjoy it" [link forthcoming] but the existence of a desire to drink so much is believable and worth understanding better.)
The same phenomenon repeats itself for smoking. While I have tried cigarettes before, and did smoke socially a couple times, and certainly beyond the threshold that makes people yearn for a cigarette, I feel no desire whatsoever to smoke. (Hi health insurer! I haven't ever smoked nearly enough to count as a "smoker".) Sure, the buzz is great, but I have never thought to myself "Hey, I want to do something enjoyable ... oh! Right! Lighting up!"
I can hear you guys yawning. Now, here's the kicker: I do get powerful, near-addiction urges to e.g. post on internet forums, eat ice cream/milkshakes (YUM!), play certain video games, and other things I can remember. But EVERY one of those things for which I *do* get urges ... is completely legal! (Go me!) That is, there has never been any kind of succesful mass movement to ban those things! Those closest we've see is "fat taxes" which are very unsuccessful.
For discussion: am I different enough to be useful to medicine? Is this condition a special case of my bad luck, as society will protect me from access to non-addictive stuff, and let me use addictive stuff to my own detriment? Is it just a matter of time before I start "getting a taste" for these things? Do people merely pretend to like certain beers and wines e.g. as a form of social signaling?
Yet I have never been able to get addicted (or near addicted -- I'm not going by the rigorous psychological definition here) to such products. For example, I have never once actually enjoyed the process of drinking an alcoholic beverage. That is, there has never been an instance where I drank beer/wine/liquor/whatever and actually got a positive response signal from my brain telling me to do it again because it's cool.
So I don't like any alcoholic beverage (the feeling of intoxication is another story) and can't even distinguish them much. They all taste like like sour/bitter stuff that stings/hurts as they go down. Yuck! I mean, I get that it's an "acquired" (i.e., imagined) taste, but I've been socially drinking for a while (i.e. in the presence of legal guardians and after turning 21), and ... nada. To drink anything alcoholic feels like a chore, not something I'd do for enjoyment. (In fairness, soda stings too as it goes down but is otherwise tasty.) When I pick a beer, I go for "least painful", not "tastes good".
I'm even at the point where I believe it's all faked. You're all familiar with the phenomenon of how double-blind tasting destroys the standard quality ranking for wines (link forthcoming). And then, for example, when I asked my female friend "K" what she likes about beer, I got answers like, "well, um, it tastes good when you're really thirsty and tired ..." (in contrast, of course, to all those drinks that taste BAD when you're desperate for one...).
My female (and Italian) friend "A", an avid wine lover, claims that my brain or genome must be so fundamentally different that I should submit myself for medical study so as to gain insight into curing alcoholics (a condition that completely perplexes me). Yet my female friend (wine lover but not Italian) "C" insists that not liking wine is common among her friends. Like with wanting to tank oil's price, I'd be very interested in contributing to the well-being of society by helping out with curing alcoholism ... if in fact I can. (I'm glad their names all begin with different letters!)
(Yes, I know there are some good points about how "alcoholism" is just a case of "I really like alcohol and will ditch my family to enjoy it" [link forthcoming] but the existence of a desire to drink so much is believable and worth understanding better.)
The same phenomenon repeats itself for smoking. While I have tried cigarettes before, and did smoke socially a couple times, and certainly beyond the threshold that makes people yearn for a cigarette, I feel no desire whatsoever to smoke. (Hi health insurer! I haven't ever smoked nearly enough to count as a "smoker".) Sure, the buzz is great, but I have never thought to myself "Hey, I want to do something enjoyable ... oh! Right! Lighting up!"
I can hear you guys yawning. Now, here's the kicker: I do get powerful, near-addiction urges to e.g. post on internet forums, eat ice cream/milkshakes (YUM!), play certain video games, and other things I can remember. But EVERY one of those things for which I *do* get urges ... is completely legal! (Go me!) That is, there has never been any kind of succesful mass movement to ban those things! Those closest we've see is "fat taxes" which are very unsuccessful.
For discussion: am I different enough to be useful to medicine? Is this condition a special case of my bad luck, as society will protect me from access to non-addictive stuff, and let me use addictive stuff to my own detriment? Is it just a matter of time before I start "getting a taste" for these things? Do people merely pretend to like certain beers and wines e.g. as a form of social signaling?
Sunday, July 27, 2008
To invest in oil, invest in OIL
A reader who wished to remain anonymous suggested to me that if I want to go long on oil (so as to make its price collapse and end the suffering), I should take the route in plain sight: buy the ETF with ticker symbol OIL. Apparently, its value stays very close to 1.68 times the current spot price of oil. In fact, since neither Yahoo nor any of the finance sites I go to actually let you chart the history of the price of oil, you should use that chart when you want to compare something to oil's price history.
(The reason is that the quoted price of a barrel of oil is actually the price for a delivery in the near future, so expanding the time history of that just gets you the price of a briefly-traded security. But when you want the *history* of oil's price, you don't want a plot of the price of an "August 08 delivery"; you want a plot of "August 07 delivery as valued in July 07, September 07 delivery as valued in August 07 ...".)
Why you'd want to remain anonymous about that, I have no idea. :-/
(The reason is that the quoted price of a barrel of oil is actually the price for a delivery in the near future, so expanding the time history of that just gets you the price of a briefly-traded security. But when you want the *history* of oil's price, you don't want a plot of the price of an "August 08 delivery"; you want a plot of "August 07 delivery as valued in July 07, September 07 delivery as valued in August 07 ...".)
Why you'd want to remain anonymous about that, I have no idea. :-/
Thursday, July 24, 2008
Setting SYNC Straight (Or, SYNC SUCX)
So I thought I'd try out "SYNC" by Microsoft and Ford. It's the system that lets you control your cell phone and iPod by voice. Hey, great stuff, right? What a convenient way to bounce around between your playlists, your artists, your podcasts. And even better: after having driven around in a car with merely a one-way input jack, I certainly realized the value of having an mp3 interface that a) is hidden from view so it doesn't have to be reconnected each time, b) charges as you drive, and c) will pick up right where you left off when you come back to your car.
Sync fails about as badly as possible while still having the general description given to it.
Let's go over how:
1) Sync's marketers make no attempt to ensure that your first experience with Sync is with a qualified professional, trained in the system. While there may be some dealers that provide for such (NOTE edited to clarify), Ford and Microsoft don't seem to be interested in making that a requirement to sell their hypercool, "let's make up for previous failures" product. In the two dealerships I went to to check it out, neither one knew how to operate it. On the first one, the salesman made it even worse by trying to figure it out for the first time when he tried to show it to me, even while knowing 24 hours in advance that I'd be there!
2) The Sync site is syncularly useless. No "set an appointment to try it out". No "list of dealers that offer". (Just a list of cars on which it's offered, and dealers that sell those cars ... who may or may not have Sync cars.) The list of supported phones? You get to download a pdf for this basic list. It has no forums, no feedback. Each part of the site takes a long time to load. It has no instruction manual that can tell you exactly how to do what you want to do with it (and therefore IF) you can.
3) The claimed podcast support is a LIE. While being allowed to *play* your podcast is supported, anything beyond that is little more than an afterthought. You can't tell it to play a specific podcast, and one post I found says that, as best he could discern, you have to figure out the artist, and tell it to play that. Oh, and good luck maneuvering to the specific track within that podcast that you want to hear. Hope you figured out the number!
And telling it to "start from earliest unlistened podcast and go forward in time"? HAHAHAHAHA! You're kidding, right?
4) The Ford Focuses that I looked at don't conceal your iPod from view at its point of input (as would make sense to protect it from thieves that look into your car to find stuff to steal). Okay, okay, maybe a design oversight. But no, they actually advertise how they have a special compartment to easily hold your iPod [link forthcoming], and even though the designers though to have such a nice iPod holder, it somehow never occured to them to put some kind of cover on it to keep it out of view!
5) Despite what I wanted in c) above, it doesn't just pick up where you left off each time you turn the car back on, and doesn't even bother to stop playing when you turn off the ignition. Okay guys, I can understand how neato it is to keep stuff running when you turn off the engine so you can keep up the mood when seducing your date. But what about the other 30% of my life when I'm going on various errands while I want to hear my podcasts? I want to turn off the ignition, leave, come back, start it again, and continue where I left off, all without having to fiddle with my iPod. Ease of use WAS the whole point, REMEMBER?
What's worse, as others have pointed out, the voice will nag you about your lacking metadata every time you turn your engine on! That's on TOP of you having to tell it to go to your USB input every time you start the car.
6) They want you to use Sync for a whole bunch of functions -- it's a cornerstone of their marketing (see the top ten the bottom left) -- which would imply you're going to be hitting the "voice input" button quite a bit. Yet I look at the steering wheel and find that ultra-frequently-used button on the harder-to-reach inner row of the steering wheel controls.
(picture from Yahoo Autos; annotations are mine; click to enlarge)
HUH? Did your designers miss the day where they taught you make the most frequently used stuff, the easiest to access?
7) It doesn't automatically shuffle your music playlists, and even after I told it to, it STILL started on the same track each time I called up the playlist. No, I'm not going to use your ultra-cool "play more often/less often" function to get this kind of thing not to happen.
8) When I hit the phone button while driving -- an error, since I had no phone set up with it nor had I turned on my own phone's bluetooth functionality -- it adamantly REFUSED to stop searching for a phone and go back to playing other media (radio or mp3s) on the car's sound system. No matter what button I hit -- the change media button, the phone button, the radio button, etc etc etc, I could not start playing the radio or other mustic. Do you understand that? Because I hit one button that I didn't really want, that caused the entire audio system to become useless until I turned off the engine. WHAT? Did your designers miss the day when they talked about containing failures? Hitting one button in error should not turn off the car's sound permanently.
Well, at least they got the voice recognition by and large correct, as well as the charging of the iPod. (Wait, I didn't check the last one there ... and frankly, I can't give them the benefit of the doubt at this point.)
What is wrong with you designers at Ford and Microsoft??? I could design a better system in an afternoon. Heck, I just did. Implement these suggestions and you have a product worth buying.
Oh, and in case you guys get your act together and are wondering: my salary requirements are $150k/year plus relocation expenses and benefits, plus, in the case of Ford, wage payment priority over pensioners. Y'all have my email.
Sync fails about as badly as possible while still having the general description given to it.
Let's go over how:
1) Sync's marketers make no attempt to ensure that your first experience with Sync is with a qualified professional, trained in the system. While there may be some dealers that provide for such (NOTE edited to clarify), Ford and Microsoft don't seem to be interested in making that a requirement to sell their hypercool, "let's make up for previous failures" product. In the two dealerships I went to to check it out, neither one knew how to operate it. On the first one, the salesman made it even worse by trying to figure it out for the first time when he tried to show it to me, even while knowing 24 hours in advance that I'd be there!
2) The Sync site is syncularly useless. No "set an appointment to try it out". No "list of dealers that offer". (Just a list of cars on which it's offered, and dealers that sell those cars ... who may or may not have Sync cars.) The list of supported phones? You get to download a pdf for this basic list. It has no forums, no feedback. Each part of the site takes a long time to load. It has no instruction manual that can tell you exactly how to do what you want to do with it (and therefore IF) you can.
3) The claimed podcast support is a LIE. While being allowed to *play* your podcast is supported, anything beyond that is little more than an afterthought. You can't tell it to play a specific podcast, and one post I found says that, as best he could discern, you have to figure out the artist, and tell it to play that. Oh, and good luck maneuvering to the specific track within that podcast that you want to hear. Hope you figured out the number!
And telling it to "start from earliest unlistened podcast and go forward in time"? HAHAHAHAHA! You're kidding, right?
4) The Ford Focuses that I looked at don't conceal your iPod from view at its point of input (as would make sense to protect it from thieves that look into your car to find stuff to steal). Okay, okay, maybe a design oversight. But no, they actually advertise how they have a special compartment to easily hold your iPod [link forthcoming], and even though the designers though to have such a nice iPod holder, it somehow never occured to them to put some kind of cover on it to keep it out of view!
5) Despite what I wanted in c) above, it doesn't just pick up where you left off each time you turn the car back on, and doesn't even bother to stop playing when you turn off the ignition. Okay guys, I can understand how neato it is to keep stuff running when you turn off the engine so you can keep up the mood when seducing your date. But what about the other 30% of my life when I'm going on various errands while I want to hear my podcasts? I want to turn off the ignition, leave, come back, start it again, and continue where I left off, all without having to fiddle with my iPod. Ease of use WAS the whole point, REMEMBER?
What's worse, as others have pointed out, the voice will nag you about your lacking metadata every time you turn your engine on! That's on TOP of you having to tell it to go to your USB input every time you start the car.
6) They want you to use Sync for a whole bunch of functions -- it's a cornerstone of their marketing (see the top ten the bottom left) -- which would imply you're going to be hitting the "voice input" button quite a bit. Yet I look at the steering wheel and find that ultra-frequently-used button on the harder-to-reach inner row of the steering wheel controls.
(picture from Yahoo Autos; annotations are mine; click to enlarge)
HUH? Did your designers miss the day where they taught you make the most frequently used stuff, the easiest to access?
7) It doesn't automatically shuffle your music playlists, and even after I told it to, it STILL started on the same track each time I called up the playlist. No, I'm not going to use your ultra-cool "play more often/less often" function to get this kind of thing not to happen.
8) When I hit the phone button while driving -- an error, since I had no phone set up with it nor had I turned on my own phone's bluetooth functionality -- it adamantly REFUSED to stop searching for a phone and go back to playing other media (radio or mp3s) on the car's sound system. No matter what button I hit -- the change media button, the phone button, the radio button, etc etc etc, I could not start playing the radio or other mustic. Do you understand that? Because I hit one button that I didn't really want, that caused the entire audio system to become useless until I turned off the engine. WHAT? Did your designers miss the day when they talked about containing failures? Hitting one button in error should not turn off the car's sound permanently.
Well, at least they got the voice recognition by and large correct, as well as the charging of the iPod. (Wait, I didn't check the last one there ... and frankly, I can't give them the benefit of the doubt at this point.)
What is wrong with you designers at Ford and Microsoft??? I could design a better system in an afternoon. Heck, I just did. Implement these suggestions and you have a product worth buying.
Oh, and in case you guys get your act together and are wondering: my salary requirements are $150k/year plus relocation expenses and benefits, plus, in the case of Ford, wage payment priority over pensioners. Y'all have my email.
Wednesday, July 23, 2008
A few more giant steps toward giving up my mouse
Many of you may not know I've been in a quest to abandon use of the computer mouse entirely and do everything from the keyboard, as part of my broader goal of improving ease of computer use, which itself is ... nevermind, I'll cut it off right there.
The point is, I've found an absolutely marvelous tool that lets me use the keyboard for a notoriously mouse-intensive task -- web browsing! With this tool, Vimperator (a Firefox plugin and apparently modeled after the Vim text editor, which may or may not have something to do with the "vi" environment), you can "click" on any link just by hitting "f", which brings up a key command for each link on the screen, and then typing that command! While it has many other features (that I'm still slowly learning), that by itself justifies installing it.
In fact, I even created this entire post without using the mouse, and yes, that includes logging in and copying the link from another tab.
With such an amazing tool, how can I criticize it? Like this:
The time for the link key commands to pop up is too long for my taste and makes it not time-competitive with the mouse. (This is probably not easily improvable -- the programmer is no fool!) Also, it doesn't have enough alternate commands to make one-handed use very feasible. (Yes, you just thought of a naughty comment and no, we don't care.) ADDENDUM: oh, and how the link key commands ("hints") don't seem to exploit the letters that already exist in the links (as native alt commands do), plus they overlap the links without any transparency features that let you continue to see the text of the link while the hint is on top.
Still, compared to all that vimperator makes possible, these are tiny nitpicks. Hats off to Herrn Martin Stubenschrott!
The point is, I've found an absolutely marvelous tool that lets me use the keyboard for a notoriously mouse-intensive task -- web browsing! With this tool, Vimperator (a Firefox plugin and apparently modeled after the Vim text editor, which may or may not have something to do with the "vi" environment), you can "click" on any link just by hitting "f", which brings up a key command for each link on the screen, and then typing that command! While it has many other features (that I'm still slowly learning), that by itself justifies installing it.
In fact, I even created this entire post without using the mouse, and yes, that includes logging in and copying the link from another tab.
With such an amazing tool, how can I criticize it? Like this:
The time for the link key commands to pop up is too long for my taste and makes it not time-competitive with the mouse. (This is probably not easily improvable -- the programmer is no fool!) Also, it doesn't have enough alternate commands to make one-handed use very feasible. (Yes, you just thought of a naughty comment and no, we don't care.) ADDENDUM: oh, and how the link key commands ("hints") don't seem to exploit the letters that already exist in the links (as native alt commands do), plus they overlap the links without any transparency features that let you continue to see the text of the link while the hint is on top.
Still, compared to all that vimperator makes possible, these are tiny nitpicks. Hats off to Herrn Martin Stubenschrott!
Setting the CPI straight
This is an expanded version of a semi-relevant post I made on Menzie Chinn's Econbrowser post, where I list what is wrong with the CPI, the commonly-cited measure of inflation, and what should be done about it.
1) Why include rarely-purchased things in the CPI at all? If home prices double, that doesn't change my mortgage payments. (Rents, which do regularly shift for those paying them, are a different story.) If iPods can now store twices as much for the same price, that doesn't do anything for me until I replace mine in two years. It does even less if price increases keep me from making that purchase altogether.
2) About hedonic adjustments: Here, I'll have to admit not having done my research here, and the wikipedia article wasn't much help. In order to do such an adjustment, you'd have to look at the product and measure various characteristics about it, which doesn't sound like something the relevant commissinos have labs for.
Example: I've noticed cereal boxes have gotten flimsier and thus hard to hold. I know this wasn't done because the flimsiness is a hugely sought-after thang. It was because that's cheaper. In doing so, they gored my consumer surplus. Though still worth buying -- because I like cereal -- the box is worth a lot less to me. Was this factored into cereal prices?
Without lifting a finger to do research, I'm guessing the answer is somewhere between "no" and "HAHAHAHAHA! Good one!"
So then, do hedonic adjustments ever result in inflation being stated as being *higher* because quality went *down*? If no, that means they should be discarded altogether. Don't subtract quality improvements unless you're going to add quality degradations.
3) Why don't they compile an "insulin index" as a way to measure the impact of the money supply on general price levels? Insulin is a necessary product for diabetics, who use it to sustain their existence, consciousness, and general health. It is the only product I know of to meet all of the following conditions:
-Has a very fixed, inelastic demand.
-Has many inputs, making it unaffected by local supply shocks.
-Can't be degraded in response to more expensive overall inputs, since it needs to meet a medical standard, thus preventing inflation from being hidden.
I haven't been able to find such an index.
4) Not so much a CPI issue, but why have your "core" inflation measure be one that outright excludes the very vital food and energy from it?
Yes, food and energy are deceptively volatile.
No, that's not a good enough excuse when we have such mathematical tools as a "RUNNING AVERAGE" that allows you to eliminate short-term volatility, while also accounting for when those prices go up and stay there.
1) Why include rarely-purchased things in the CPI at all? If home prices double, that doesn't change my mortgage payments. (Rents, which do regularly shift for those paying them, are a different story.) If iPods can now store twices as much for the same price, that doesn't do anything for me until I replace mine in two years. It does even less if price increases keep me from making that purchase altogether.
2) About hedonic adjustments: Here, I'll have to admit not having done my research here, and the wikipedia article wasn't much help. In order to do such an adjustment, you'd have to look at the product and measure various characteristics about it, which doesn't sound like something the relevant commissinos have labs for.
Example: I've noticed cereal boxes have gotten flimsier and thus hard to hold. I know this wasn't done because the flimsiness is a hugely sought-after thang. It was because that's cheaper. In doing so, they gored my consumer surplus. Though still worth buying -- because I like cereal -- the box is worth a lot less to me. Was this factored into cereal prices?
Without lifting a finger to do research, I'm guessing the answer is somewhere between "no" and "HAHAHAHAHA! Good one!"
So then, do hedonic adjustments ever result in inflation being stated as being *higher* because quality went *down*? If no, that means they should be discarded altogether. Don't subtract quality improvements unless you're going to add quality degradations.
3) Why don't they compile an "insulin index" as a way to measure the impact of the money supply on general price levels? Insulin is a necessary product for diabetics, who use it to sustain their existence, consciousness, and general health. It is the only product I know of to meet all of the following conditions:
-Has a very fixed, inelastic demand.
-Has many inputs, making it unaffected by local supply shocks.
-Can't be degraded in response to more expensive overall inputs, since it needs to meet a medical standard, thus preventing inflation from being hidden.
I haven't been able to find such an index.
4) Not so much a CPI issue, but why have your "core" inflation measure be one that outright excludes the very vital food and energy from it?
Yes, food and energy are deceptively volatile.
No, that's not a good enough excuse when we have such mathematical tools as a "RUNNING AVERAGE" that allows you to eliminate short-term volatility, while also accounting for when those prices go up and stay there.
How to invest in expensive oil?
While most of you still don't think it's a good idea, or will work as intended, for me to go long on oil in the hopes that my luck will bring prices down ... I still want to know the best way to do it in the case that I later decide that I want to.
First, the constraints:
I have a Scottrade (brokerage) account, which lets me buy stocks (including ETFs) and bonds. It is not, however, authorized to trade in options (or futures or forwards or shortselling), which would take a few weeks to authorize (I have to send in signed paperwork). So the first, question is, should I go ahead and authorize that, just to be ready?
As for money, the account has about $3200 in an ETF (ticker PRFZ) and under $100 in cash currently. I can add to it from cash reserves or liquidating other investments (including the PRFZ). You can safely assume I can buy $10,000 worth of securities.
Next, I would like to keep this simple, so I only want to invest in only one security -- so nothing like "buy this one and short this other ...". (It is of course acceptable to suggest a single security that *itself* employs such a strategy.) I want the best one stock whose returns track the standard quoted price of a barrel of oil, and yes, that means include any dividends, which makes it that harder to look up with the free investment tools available.
So, the question: which security to buy? An energy sector equity ETF? A natural resources sector equity ETF? A commodities index ETF? An ETF that employs some leveraged strategy that amplifies size of oil price movements? The bonds of an oil-rich developing country? Or, take the plunge and authorize buying calls on oil?
Suggestions are welcome!
First, the constraints:
I have a Scottrade (brokerage) account, which lets me buy stocks (including ETFs) and bonds. It is not, however, authorized to trade in options (or futures or forwards or shortselling), which would take a few weeks to authorize (I have to send in signed paperwork). So the first, question is, should I go ahead and authorize that, just to be ready?
As for money, the account has about $3200 in an ETF (ticker PRFZ) and under $100 in cash currently. I can add to it from cash reserves or liquidating other investments (including the PRFZ). You can safely assume I can buy $10,000 worth of securities.
Next, I would like to keep this simple, so I only want to invest in only one security -- so nothing like "buy this one and short this other ...". (It is of course acceptable to suggest a single security that *itself* employs such a strategy.) I want the best one stock whose returns track the standard quoted price of a barrel of oil, and yes, that means include any dividends, which makes it that harder to look up with the free investment tools available.
So, the question: which security to buy? An energy sector equity ETF? A natural resources sector equity ETF? A commodities index ETF? An ETF that employs some leveraged strategy that amplifies size of oil price movements? The bonds of an oil-rich developing country? Or, take the plunge and authorize buying calls on oil?
Suggestions are welcome!
Monday, July 21, 2008
Poll results: Don't go long on oil
Looks like the poll results are in. Wow, 9 votes, without me having to vote or arm-twisting people into vote, or voting myself!
One third of you (3) want me to go ahead with this, while two thirds (6) believe that the world doesn't work like I believe it does, in which fate conspires to work against me, such that I can exploit it to help others. (Surprisingly, none of you took the "High oil prices ROCK!" option, which is strange, since I mentioned the poll to the eminent David Zetland, and there's a contingent of people who see good in expensive oil.)
Well, the bigger theempire giant, the harder the fall. This will just make me that much more famous if I publicly declare intent to manipulate oil prices this way and I turn out to be right.
Pledges for gifts if I can make oil fall, can be made by email. Thanks in advance.
ADDENDUM: Some people are having trouble reading the poll options. They were:
-Yes! Full steam ahead! (3)
-No, high oil prices ROCK! (0)
-No ... the world doesn't work like that, kid. (6)
- ... Not even gonna dignify this one. No, wait! (0)
One third of you (3) want me to go ahead with this, while two thirds (6) believe that the world doesn't work like I believe it does, in which fate conspires to work against me, such that I can exploit it to help others. (Surprisingly, none of you took the "High oil prices ROCK!" option, which is strange, since I mentioned the poll to the eminent David Zetland, and there's a contingent of people who see good in expensive oil.)
Well, the bigger the
Pledges for gifts if I can make oil fall, can be made by email. Thanks in advance.
ADDENDUM: Some people are having trouble reading the poll options. They were:
-Yes! Full steam ahead! (3)
-No, high oil prices ROCK! (0)
-No ... the world doesn't work like that, kid. (6)
- ... Not even gonna dignify this one. No, wait! (0)
GM Watch: Ve haf vays of making you sell us tires!
Very strange story on CNN's Money today. It looks like GM Daewoo got a court order requiring two tire makers to keep selling tires to Daewoo, a GM owned subsidiary.
Huh? Now, why would GM need a court order to get someone to sell them car parts? Here's the key part of the story:
Only having read this article, it's hard to know the full story. Did Hankook and Kumho agree to sell the tires at a certain price and then reneg? Or did the agree that the tires *could* be hiked by at least 5.5%, and upon later reflection realized they couldn't justify selling the tires except at 12% more?
The former seems unlikely, since it would have made more sense for GM to just pay the extortion and sue to get the money back later, rather than take the hit to production described later int the article (without percentages). But then, the latter seems unlikely too, because what is the point of such an agreement?
I guess it all comes down to the intricacies of Korean law, and the tight relationship between businesses, unions, and government.
But having to sue to get your tires? Sorry, it just makes GM look that much worse.
Huh? Now, why would GM need a court order to get someone to sell them car parts? Here's the key part of the story:
Hankook Tire Manufacturing (000240.SE) and Kumho Tire (073240.SE) stopped supplying tires to GM Daewoo's main Bupyeong plant at 0400GMT Friday, calling for an additional 12% price hike on top of a 5.5% rise agreed with GM Daewoo in March.
Only having read this article, it's hard to know the full story. Did Hankook and Kumho agree to sell the tires at a certain price and then reneg? Or did the agree that the tires *could* be hiked by at least 5.5%, and upon later reflection realized they couldn't justify selling the tires except at 12% more?
The former seems unlikely, since it would have made more sense for GM to just pay the extortion and sue to get the money back later, rather than take the hit to production described later int the article (without percentages). But then, the latter seems unlikely too, because what is the point of such an agreement?
I guess it all comes down to the intricacies of Korean law, and the tight relationship between businesses, unions, and government.
But having to sue to get your tires? Sorry, it just makes GM look that much worse.
Wednesday, July 16, 2008
Setting myself straight: The FDIC can't get you the principal either
Yesterday I casually dismissed concern that the FDIC wouldn't get you bank account money insured by law. Worry about inflation, not the principal, I said. But it looks like there's bad news in the IndyMac run, and some people might not even get that. Long lines formed, the kind we haven't seen in a long time (sue me if I don't know if this happened in the 80s. It sure happened in the 30s!)
Some choice quotes to get you quaking:
Yikes!
Well, I certainly know the horrors of having to navigate a bureaucracy, and throwing all your trust into something that's been pretty reliable, only to have it blow up in your face. Luckily, it's never been about money in these amounts!
This really needs to be getting more attention: for the FDIC not to honor these insured values, means everyone's FDIC-insured account is at risk. To steal from MLK: insurer nonpayment anywhere, is a threat to its insureds everywhere. My Google-fu isn't that great, but have a look for yourself. Where are the bloggers on this one?
These folks may still actually get their money, since these incidents may just be delays, as happened in the S&L crisis. We can only hope at this point.
Some choice quotes to get you quaking:
Noelle Gabay of Northridge, a budget analyst for the state of California, said FDIC officials acknowledged that she was owed $213,500 but provided her access only to $99,000.
"My trust in the FDIC is gone," said Gabay, 49. "The question is now, where do we put our money? Do we buy a bigger mattress?"
Yikes!
Todd Bash, ...had two certificates of deposit, a savings account and a checking account, totaling more than $180,000 ... when he finally talked to a teller, she showed him that more than $80,000 was missing from one account. Why? The teller didn't know. She referred him to an FDIC official in the branch, who also couldn't tell him what happened, he said.
"One person finally suggested that maybe there was a hold on my account, but when I asked if it was a hold, why wouldn't they just say there was a hold? . . . Nobody could give me any answers," he said.
Well, I certainly know the horrors of having to navigate a bureaucracy, and throwing all your trust into something that's been pretty reliable, only to have it blow up in your face. Luckily, it's never been about money in these amounts!
This really needs to be getting more attention: for the FDIC not to honor these insured values, means everyone's FDIC-insured account is at risk. To steal from MLK: insurer nonpayment anywhere, is a threat to its insureds everywhere. My Google-fu isn't that great, but have a look for yourself. Where are the bloggers on this one?
These folks may still actually get their money, since these incidents may just be delays, as happened in the S&L crisis. We can only hope at this point.
Tuesday, July 15, 2008
Paranoid comment-left-elsewhere of the day
There's been a lot of talk about whether you're money's safe in banks, and Jeffrey Tucker's recent post at the Mises blog ponders this. I've heard rumors from people at work suggesting that you need to at least make sure your money qualifies for the FDIC guarantees.
My comment:
Couldn't have said it better myself.
My comment:
If your friends are asking if they should worry about getting back their money that's in the bank, I'd say that's pretty ridiculous -- the FDIC will get it to them. The real concern you should be having is about the value of that money, and on that question, it really doesn't matter if your money's in an FDIC-insured account or not.
They'll get you, not by reneging on the FDIC's guarantee, but by making the money worthless when they finally get it back to you.
As always, it's not inflation that bothers me, but interests rates not reflecting it.
Couldn't have said it better myself.
Setting DC's gun laws straight
So Megan McArdle posts about DC's new gun laws intended to pretend to comply with the recent Supreme Court ruling. The howlers:
My comment on McArdle's blog:
As for the ballistic fingerprinting -- I don't think it's too unfriendly to the rights specified in the Second Amendment, but it does seem rather useless and thus counts as a "we're just throwing this in to make it harder for you" which THEN would sound unconstitutional.
ADDENDUM:Okay, now I feel stupid. Turns out there's this provision:
Nevertheless, I don't think it takes away from my main point, since:
1) This provision seems very unlikely for anyone to get completely right on the first trip home from the gun shop.
2) They can still tail people from shops outside the District.
* Allowing an exception for handgun ownership for self-defense use inside the home.
...
* Firearms in the home must be stored unloaded and disassembled, and secured with either a trigger lock, gun safe, or similar device. The new law will allow an exception for a firearm while it is being used against an intruder in the home.
My comment on McArdle's blog:
Wow, talk about levels of stupid. Keeping a gun like that makes it useless in home defense. Plus, DC doesn't have "stand your ground" laws, so you'll almost certainly be in a position where the time it takes to get the gun ready will be less than the time it takes for you to run away, and so anything other than running away will get your sorry self prosecuted.
Moreover, while I see a home-use exception, I don't see a transport-to-home-when-you-bought exception. No, it's not an oversight, no it's not implicit, and yes it will be abused. DC police will monitor gunstores, even if out of the district, wait for the driver to enter DC, pull them over on probable cause, catch them with a gun outside the home, and then they're in deep trouble.
Don't think they won't try this.
As for the ballistic fingerprinting -- I don't think it's too unfriendly to the rights specified in the Second Amendment, but it does seem rather useless and thus counts as a "we're just throwing this in to make it harder for you" which THEN would sound unconstitutional.
ADDENDUM:Okay, now I feel stupid. Turns out there's this provision:
Rules for transporting firearms legally within the District:
1. When the law allows transporting a firearm legally, the owner must transport it unloaded and securely wrapped in a package, with the package visible in plain view.
Nevertheless, I don't think it takes away from my main point, since:
1) This provision seems very unlikely for anyone to get completely right on the first trip home from the gun shop.
2) They can still tail people from shops outside the District.
GM cutting dividend, jobs, irresponsibility
Well, it looks like GM is going to finally suspend its dividend.
Gee, you mean we have to pay the wages for labor performed fifty years ago before the enterprise's residual income claimants? Who'da thunk?
This is something I've been demanding for a long time.
They will also be trying to cut jobs. They had some "success" with their buyout program in which they tried to pay all their US workers to go away and shut up about their guaranteed jobby. As the eminent Winterspeak was clever enough to point out, the people most likely to take the buyouts are the competent workers. They get the buyout money, plus the income from their next eager employer. Anyone who refuses to take the buyout -- and you know, is putting together your next car -- knows damn well he can't rook anyone else to pay him for what he does.
And for those of you with GM warrantees needing work? Well, I hope you'll like getting in line behand granny's life support money. I'm sure you'll look real noble.
Gee, you mean we have to pay the wages for labor performed fifty years ago before the enterprise's residual income claimants? Who'da thunk?
This is something I've been demanding for a long time.
They will also be trying to cut jobs. They had some "success" with their buyout program in which they tried to pay all their US workers to go away and shut up about their guaranteed jobby. As the eminent Winterspeak was clever enough to point out, the people most likely to take the buyouts are the competent workers. They get the buyout money, plus the income from their next eager employer. Anyone who refuses to take the buyout -- and you know, is putting together your next car -- knows damn well he can't rook anyone else to pay him for what he does.
And for those of you with GM warrantees needing work? Well, I hope you'll like getting in line behand granny's life support money. I'm sure you'll look real noble.
Sunday, July 13, 2008
Should Silas hammer down oil prices?
If you haven't been living in a cave for the last six months, you've heard the big debate about whether we're in a speculative oil bubble. Whether the claims linked (which should guide you to a good discussion of the issue if you follow the links contained therein) are true, I will not comment on.
However, I do have good reason to believe that I have natural "bad luck". I won't get into any specifics, but I have been in the following scenario too many times to have kept count:
Helpful person: Oh, you want to accomplish X? Oh, just do Y, no problem.
Me: I did Y, and Z happened.
Helpful person: WTF????? That's supposed to be like a one in a million event!! That's just not supposed to happen, no no no, I refuse to believe that. That sure must have sucked if it did, but you must be making that up.
So, I was thinking ... should I channel this bad luck for the good of humanity? For example, all I'd have to do is take a good chunk of my portfolio, and use it to go long on oil (i.e. invest in such a way so that it increases in value if oil's price goes up and vice versa). Then, my bad luck attractor would cause oil's price to collapse.
Pros: End pain on the billions of people who buy oil-related products, including the people in countries suffering food riots.
Cons: Would cost me a few thou.
So far, not doing it looks like the more attractive option.
Now, there's a clear potential for pareto improvement here (I take paypal, thanks), but then, maybe creating an explicit contract with me to make up my investment losses would "tip off fate" and make the trick not work. So perhaps I need only vague, unofficial promises to treat me like a king for killing the oil monster? Share your thoughts.
However, I do have good reason to believe that I have natural "bad luck". I won't get into any specifics, but I have been in the following scenario too many times to have kept count:
Helpful person: Oh, you want to accomplish X? Oh, just do Y, no problem.
Me: I did Y, and Z happened.
Helpful person: WTF????? That's supposed to be like a one in a million event!! That's just not supposed to happen, no no no, I refuse to believe that. That sure must have sucked if it did, but you must be making that up.
So, I was thinking ... should I channel this bad luck for the good of humanity? For example, all I'd have to do is take a good chunk of my portfolio, and use it to go long on oil (i.e. invest in such a way so that it increases in value if oil's price goes up and vice versa). Then, my bad luck attractor would cause oil's price to collapse.
Pros: End pain on the billions of people who buy oil-related products, including the people in countries suffering food riots.
Cons: Would cost me a few thou.
So far, not doing it looks like the more attractive option.
Now, there's a clear potential for pareto improvement here (I take paypal, thanks), but then, maybe creating an explicit contract with me to make up my investment losses would "tip off fate" and make the trick not work. So perhaps I need only vague, unofficial promises to treat me like a king for killing the oil monster? Share your thoughts.
Setting the anti-science smear straight
(Yikes! Last post was on Thursday!)
For discussion: Why is it skeptics of climate change (either of the science or the need to do anything) who are always accused of being anti-science, when 90+% of environmentalists, are just as willing to dismiss the economic science that says, "Hey, here's the most efficient way to handle the problem", so that they can go on advocating ridiculously inefficient policies?
For discussion: Why is it skeptics of climate change (either of the science or the need to do anything) who are always accused of being anti-science, when 90+% of environmentalists, are just as willing to dismiss the economic science that says, "Hey, here's the most efficient way to handle the problem", so that they can go on advocating ridiculously inefficient policies?
Thursday, July 10, 2008
Setting GM and corporate pensions straight
So apparently GM is back in the news. Mark Thoma does his usual thing of posting a lengthy quote without his own analysis, of a New York Times piece in which Roger Lowenstein discusses the history of GM and the legacy costs that are currently bringing it down.
Many, many people think it is legacy costs or bad management or fuel costs that is causing GM to falter. While I've said this in many posts across the internet, it's time to set things straight on this blog: only the legacy obligations can account for GM's poor health.
Why? It's simple. Even if you were to go in and replace whoever you think is a fool at GM, with whoever you think is capable of doing a superior job, that still wouldn't save them. Because those very same supergeniuses would just get bid away buy someone that doesn't have to dock off the legacy costs from the supergeniuses' pay!
Failure to recognize this insight has led to some monumentally stupid analyses of the issue. For example, the perpetually hate-able Malcom Gladwell blames GM's problems on the magical dependency ratio, ultimately claiming that when a company can do the same tasks with fewer workers, that makes it harder to pay retirees!
What happened in GM's history was this: management convinced the unions to accept lower wages in the present, in return for guaranteed pensions later -- that is, deferred compensation. And where would the money for those pensions come from? "Durr, well GM's always going to be superprofitable, no matter how many people they have to support, right?" Well, that's what the unions had to be thinking in order to accept such a deal, in which they didn't have oversight in the (non-existent) pension fund. (It would have made much more sense just to take the higher wages and divert them to a union-controlled pension fund, but I guess if you think GM can't fail ...)
Today, such practice of having an unfunded pension -- or, in effect, stuffing the pension fund with low-grade GM bonds -- would get management thrown in jail, and only recently are they making them actually, heaven forbid, fund the pension.
The upshot is, GM should have taken the wage savings and invested them in a diversified portfolio. But instead, they saw the cheaper labor as free money and threw it off as dividends. And that, my friends, is what enrages me about the whole thing. As deferred compensation, the pension is effectively a wage and thus should have priority over debt. Yet even up to today with an underfunded pension, GM is (and has long been) throwing off dividends. No dividend should be paid until GM has bought a third-party annuity and health insurance plan for everyone they've promised those things to.
The surest sign GM's going to face bankruptcy? Check out this AP article:
Many, many people think it is legacy costs or bad management or fuel costs that is causing GM to falter. While I've said this in many posts across the internet, it's time to set things straight on this blog: only the legacy obligations can account for GM's poor health.
Why? It's simple. Even if you were to go in and replace whoever you think is a fool at GM, with whoever you think is capable of doing a superior job, that still wouldn't save them. Because those very same supergeniuses would just get bid away buy someone that doesn't have to dock off the legacy costs from the supergeniuses' pay!
Failure to recognize this insight has led to some monumentally stupid analyses of the issue. For example, the perpetually hate-able Malcom Gladwell blames GM's problems on the magical dependency ratio, ultimately claiming that when a company can do the same tasks with fewer workers, that makes it harder to pay retirees!
What happened in GM's history was this: management convinced the unions to accept lower wages in the present, in return for guaranteed pensions later -- that is, deferred compensation. And where would the money for those pensions come from? "Durr, well GM's always going to be superprofitable, no matter how many people they have to support, right?" Well, that's what the unions had to be thinking in order to accept such a deal, in which they didn't have oversight in the (non-existent) pension fund. (It would have made much more sense just to take the higher wages and divert them to a union-controlled pension fund, but I guess if you think GM can't fail ...)
Today, such practice of having an unfunded pension -- or, in effect, stuffing the pension fund with low-grade GM bonds -- would get management thrown in jail, and only recently are they making them actually, heaven forbid, fund the pension.
The upshot is, GM should have taken the wage savings and invested them in a diversified portfolio. But instead, they saw the cheaper labor as free money and threw it off as dividends. And that, my friends, is what enrages me about the whole thing. As deferred compensation, the pension is effectively a wage and thus should have priority over debt. Yet even up to today with an underfunded pension, GM is (and has long been) throwing off dividends. No dividend should be paid until GM has bought a third-party annuity and health insurance plan for everyone they've promised those things to.
The surest sign GM's going to face bankruptcy? Check out this AP article:
The chief executive of General Motors Corp. dismissed speculation that the largest U.S. automaker might soon seek bankruptcy protection ... Comments in the past week about a potential bankruptcy are "not at all constructive or accurate," Rick Wagoner said Thursday.That certainly sounds like a weasel! "Not constructive"? Right, because it's our job to help you rook people into trusting that you'll be around for a while. And people thought I was crazy for avoiding GM in fears that the warranty promises are a joke...
Tuesday, July 8, 2008
The true problem with Amazon's one-click patent
Arnold Kling discusses the relative merit of software versus drug patents and brings up everyone's favorite, Amazon's one-click patent. He says that the difference between it and drug patents that makes one-click so objectionable, is that one click is obvious (you could come up with it in an afternoon, and so could anyone else).
I've said before that I think this misses the more fundamental objection: that it seems to patent the end, rather than the means. Buying something using just one click is the thing that is good, rather than the means of a achieving it. So by patenting it, you exclude any possible way of making a website such that one click causes something to be purchased. It is analagous to patenting "quick travel between two destinations" rather than "this specific machine that can get you between two destinations.
Of course, my greatest worry is that such basic interface enhancement is actually non-obvious to the typical software programmer or software interface designer. Heck, if I had a nickel for every time I banged my head on my keyboard due to interface problems, I could buy Amazon out!
I would have posted this comment on the blog I just linked except the they kinda won't let me. But expect to see a lot of ignorant comments about intellectual property there. It's just the nature of the beast.
I've said before that I think this misses the more fundamental objection: that it seems to patent the end, rather than the means. Buying something using just one click is the thing that is good, rather than the means of a achieving it. So by patenting it, you exclude any possible way of making a website such that one click causes something to be purchased. It is analagous to patenting "quick travel between two destinations" rather than "this specific machine that can get you between two destinations.
Of course, my greatest worry is that such basic interface enhancement is actually non-obvious to the typical software programmer or software interface designer. Heck, if I had a nickel for every time I banged my head on my keyboard due to interface problems, I could buy Amazon out!
I would have posted this comment on the blog I just linked except the they kinda won't let me. But expect to see a lot of ignorant comments about intellectual property there. It's just the nature of the beast.
Two peculiarities about Obama
First of all, why hasn't anyone made fun of Obama by missspelling his first name? Now, I'm not advocating anyone do this, because I think it's petty and wrong. But why don't they spell it as Biraq, which under some pronunciations can sound the same as Barack? Wow, now you've linked him to a Middle Eastern country! Go you! Again, the problem isn't that I think he *deserves* such tactics, but it seems so obvious, yet no one does it. Then, string them together and you have "Biraq Hussein Osama". Again, I think this tactic would be wrong, but given the intensity of Obama hatred, why hasn't it happened yet?
Second, I've heard, by my count, three pro-Obama songs enter the rotation on XM station 101, the reggae (Jamaican-style) music station. Since the song has to be *good* in addition to pro-Obama to enter rotation, that suggests a lot of effort going into promoting him.
Second, I've heard, by my count, three pro-Obama songs enter the rotation on XM station 101, the reggae (Jamaican-style) music station. Since the song has to be *good* in addition to pro-Obama to enter rotation, that suggests a lot of effort going into promoting him.
Sunday, July 6, 2008
Bob Murphy gets scarcity wrong and won't issue a correction
A month or so ago, my perpetual foil, Bob Murphy, wrote an op-ed that I had quite few criticisms about (Mises blog a little flaky right now), but it looks like, despite what I had thought previously, Bob doesn't feel he erred. Here is the part of Bob's op-ed that I found objectionable:
There's no getting around this. Bob very clearly claimed that paying higher prices due to government assigning emissions rights in a case where excessive emissions hurt others, does not reflect economic scarcity. This is wrong, as I have claimed before, because -- under the assumption that all of the climate science is in order -- CO2 emissions do, in the aggregate, cause others to forgo consumption. So there's a choice: either these people get to emit CO2, or these other people get to not be flooded, not have thermohaline circulation shut down, etc. Inability for both parties to engage the consumption patterns they both want, is exactly what is meant by scarcity (though some are confused by the fact that it's a different good for each party).
Lest we think his remarks were specific to a particular poorly-run assignment of atmospheric rights (and of course Bob has totally outlined his ideas elsewhere for what would be a valid division of the atmosphere, right?), he does us the favor of comparing it to sneeze permits.
In regard to that remark, Bob responded, after I criticized him:
He then goes on to defend, irrelevantly, his claim that cap and trade "is not a market solution", a term for which he seems to use a non-standard definition and didn't define. (Bob seems to have adopted Stephan Kinsella's tactic of switching which claim he's defending so as to make his opponents' points irrelevant. If that's not what he was doing, I apologize.) But of course, such arguments don't help defend the claim under dispute, on whether higher oil prices due to permits reflect scarcity. Even if Bob can successfully support the claim that cap-and-trade "is not a market solution", that still wouldn't mean the scarcity analysis is valid.
I welcome others to read the above links, and please tell me in the comments if you think Bob's original op-ed is correct about scarcity as written, or if you don't. I think that Bob did admit it should be corrected, and even if not, he should believe so. Because even if he really was just referring to the "too few" permits case, that still wouldn't save him: issuing too few permits would just mean that the higher prices now reflect "the fact that your CO2 emissions are causing flooding in the Netherlands, not just Bangladesh" (or whatever) -- that's still a reflection of scarcity, just in favor of a different adjudication of the conflict. (Interestingly, Bob has also often worried that governments would botch such programs by -- wait for it -- issuing too many permits, which makes his unintuitive clarification of his original remark all the more unexpected.)
Yet despite the superficial resemblance, cap and trade isn’t really a free market. The number of permits is an arbitrary scarcity imposed by government fiat. In the real market, resource prices indicate genuine scarcity. ... But if the prices of oil, coal, and other fossil fuels explode because of a cap and trade program, this won’t reflect genuine economic scarcity.... This is no more a “market price” than if the government decided to sell people permits giving them permission to sneeze.
There's no getting around this. Bob very clearly claimed that paying higher prices due to government assigning emissions rights in a case where excessive emissions hurt others, does not reflect economic scarcity. This is wrong, as I have claimed before, because -- under the assumption that all of the climate science is in order -- CO2 emissions do, in the aggregate, cause others to forgo consumption. So there's a choice: either these people get to emit CO2, or these other people get to not be flooded, not have thermohaline circulation shut down, etc. Inability for both parties to engage the consumption patterns they both want, is exactly what is meant by scarcity (though some are confused by the fact that it's a different good for each party).
Lest we think his remarks were specific to a particular poorly-run assignment of atmospheric rights (and of course Bob has totally outlined his ideas elsewhere for what would be a valid division of the atmosphere, right?), he does us the favor of comparing it to sneeze permits.
In regard to that remark, Bob responded, after I criticized him:
This may have led some readers to conclude that I was saying the very nature of the situation rendered carbon permits as illegitimate property titles, the price of which could not possibly correspond to genuine economic scarcity. However, as Silas correctly notes, if James Hansen and the guys at [RealClimate] are right, then CO2 emissions affect others just as conventional pollution does. If one agrees that one can have property rights to a clean stream etc., then in principle one could have a property right to the atmosphere and this could spawn a market in which the right to inject CO2 into this property is sold.
He then goes on to defend, irrelevantly, his claim that cap and trade "is not a market solution", a term for which he seems to use a non-standard definition and didn't define. (Bob seems to have adopted Stephan Kinsella's tactic of switching which claim he's defending so as to make his opponents' points irrelevant. If that's not what he was doing, I apologize.) But of course, such arguments don't help defend the claim under dispute, on whether higher oil prices due to permits reflect scarcity. Even if Bob can successfully support the claim that cap-and-trade "is not a market solution", that still wouldn't mean the scarcity analysis is valid.
I welcome others to read the above links, and please tell me in the comments if you think Bob's original op-ed is correct about scarcity as written, or if you don't. I think that Bob did admit it should be corrected, and even if not, he should believe so. Because even if he really was just referring to the "too few" permits case, that still wouldn't save him: issuing too few permits would just mean that the higher prices now reflect "the fact that your CO2 emissions are causing flooding in the Netherlands, not just Bangladesh" (or whatever) -- that's still a reflection of scarcity, just in favor of a different adjudication of the conflict. (Interestingly, Bob has also often worried that governments would botch such programs by -- wait for it -- issuing too many permits, which makes his unintuitive clarification of his original remark all the more unexpected.)
Saturday, July 5, 2008
A pickup truck driver tried to ram me
Okay, first personal post. As I was driving back to Austin from Waco for the 4th of July weekend, was stopped at a light behind a pickup truck driver. I saw him smoking and figured he was just going to be like the standard, don't-care-about-everyone-else jerk that tends to drive a pickup.
And of course, I turned out to be right. He tossed his cigarette out his window in contravention of the laws against this and general standards of decency. So, I gently reminded him of his transgression by laying on my horn the moment it hit the ground. This seem to anger him, as he started to yell things at me I couldn't quite make out, via his rear-view mirror. I motioned to him something like "smoking cigarette, toss aside, what the hell?" As is usual from this type of animal, he only got angrier.
In an attempt to retaliate, he drove very slowly through the light when it turned green. No problem, he's trying to piss me off and it's not going to work. I just casually followed behind him without attempting to go around him. Finally, he pulled to the left to a turn lane and put on his signal like he was going to turn. After I passed he came charging behind me. He got in the lane to the left of me and I suddenly notice he was changing lanes right into me. I quickly braked in order to avoid him, and wasn't sure if he would have actually gone through with it.
Apparently, he thought this would scare me. But still not wanting to break any law, I continued to drive along casually, no matter how slow he went. Finally, he just turned off to a side road. A driver behind me looked like he was getting out his cell phone so I pulled in to a driveway for a business, thinking the witness would pull over too. But he didn't, so I continued to my destination, never seeing the truck again.
Too bad I didn't take the time to catch his plate numbers.
So, did I unnecessarily risk my life by antagonizing a jerk? Discuss.
Overcoming bias can make you cynical
If you haven't already, start reading Eliezer Yudkowsky's series on intelligence, evolution, quantum physics, biases, morality, and whatever-else, now would be a good time to start. The latest entries in this series on morality, though, may make you cynical, as he probes, among other weighty issues, the question of whether there's a difference between "I want this" and "It is right that I should get this."
Bryan Caplan stirs up a worthwhile Pigou discussion
Bryan Caplan respectfully declines entry into the Pigou club and explains the problems he has with its reasoning: doesn't it imply that there needs to be a Pigou tax (i.e. tax on a negative externality intended to make its cause accounted for in decision-making) on, say, women showing their faces, if indeed this makes people unhappy (perhaps because the society strongly favors Sharia)?
Throughout the discussion, commenters come close to making the point I've made before, that negative externality complaints are fundamentally about justice, not efficiency (see two paragraphs above ==-break). In other words, given the archetypal example of the factory throwing off air pollution, the thing that makes people object to such scenarios is that they believe the polluter is victimizing those that must breathe the air. To respond, as economists do (often invoking Coase's Theorem), that well-defined property rights will lead people to negotiate to Pareto-improvements, misses the point. People generally don't find it right that someone should have pay others not to pollute, and finding a cheaper way to broker the deal doesn't help matters.
(Actually, the best argument I could make to get this point across can't be made in words. Rather, it would be a rev a motorcycle very loudly at you while you're trying to sleep, but in just such a way that there wasn't any law against it. Your reaction would be the sentiment I'm trying to express.)
So, in order for externalitities to make people want laws, they must not only bother others, but do it in a way that offends others' sense of justice. To people in modern liberal democracies, seeing a woman's face exposed just isn't going to do the trick. But elsewhere, it just might. To those societies, the advice an economist would give is: hey, don't ban exposed faces outright! You're missing out on tremendous gains! Instead, levy a high tax on it, and distribute the proceeds to everyone. Women adamant about showing their faces win (they'd prefer at least having the option to buy face-showing permission, even if they intend to fight such laws), and people getting the money win!
To the more objectively demonstrable global harms, there's no reason Caplan shouldn't want the same thing: don't take the extreme measure of banning pollution, but let anyone pollute, so long as they're willing to pay a proportional share of the harm done to others.
EDIT: Cleaned up first parenthetical to make it coherent. Yikes!
EDIT: Cleaned up first parenthetical to make it coherent. Yikes!
Friday, July 4, 2008
My latest attempt at starting a blog
I've tried starting blogs before -- there was the movementarian one with Tim Swanson, and then the Intellectual Propriety one on TypePad -- and this is the latest. Let's hope it works out.
I've titled it "Setting Things Straight" because a lot of my posts on other blogs have been criticizing others' arguments, and I've gotten a big case of "GYOB" (get your own blog). So these thoughtful criticisms will find their place here more often.
It will also be a general-use blog, so you'll see my comments on a variety of issues that interest me, including artificial intelligence, global warming, social psychology, evolution, and anything else that tends to piss people off.
EDIT: Oh, and intellectual property. Don't forget that.
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