Friday, December 31, 2010

Best Ideas of 2010

For the last 10 years the New York Times has created it's annual year in ideas. Here are my favorites from this year:

The 2000s Were a Great Decade:
Two recessions. 9/11. Iraq. Afghanistan. You might think the last decade was among the worst in modern history. But according to the economist Charles Kenny, author of “Getting Better,” a forthcoming book on global development, you’d be wrong. Average worldwide income, at $10,600, is 25 percent higher than it was a decade ago. Thanks to increases in agriculture efficiency, cereal production grew at double the rate of population in the developing world. Vaccine initiatives have helped cut the death rate from common diseases like measles by 60 percent. Child mortality is down 17 percent.
Aftercrimes:
After an earthquake, changes to the earth increase the likelihood of aftershocks occurring in a particular place and time — something that seismologists have become good at forecasting. This year, the mathematician George Mohler showed that what holds for earthquakes also holds true for crime: not only does an initial crime beget future offenses, but these “aftercrimes” also tend to occur according to a predictable distribution in time and space. The idea of follow-on crimes is nothing new — once a house is burglarized, police know that criminals are likely to return to the same house or others nearby — but Mohler showed that the timing and location of the crimes can be statistically predicted with a high degree of accuracy. Using L.A.P.D. burglary data to identify a series of random, initial offenses in a sector of the city and adapting algorithms used to forecast aftershocks, he predicted that 17 percent of the city’s burglaries would occur in a 5-percent area of the city over the next year.
Turbine-Free Wind Power:
Conservationists argue that wind turbines pose a risk to birds, bats and sensitive habitats like shorelines. People living close to wind farms, meanwhile, complain of constant noise and vibration. This year, engineers responded with a new way to draw electricity from the wind: oscillating wind panels.

The Real-time Inflation Calculator:
Measuring inflation is a time-consuming business: at the beginning of each month, government researchers across the country amass troves of data on prices for everything from shoes to milk to phones. Two weeks after the end of the month, the government releases gauges of inflation like the Consumer Price Index. But inflation hunters may now get an advance glimpse of the data, thanks to a real-time inflation calculator devised by two economists at M.I.T., Alberto Cavallo and Roberto Rigobon.

Cavallo and Rigobon devised software that scans Web sites for prices, using a method similar to the one that Google uses to index Web pages.
Human Milk for Sale:
Wet nurses have been profiting from the sale of human milk since the dawn of civilization. Why not the nutrition and biotech industries? This year, Abbott (makers of Similac) began selling a new line of "immunonutrition" made entirely from purified, concentrated and pasteurized human milk. The product, called Prolact + H²MF and manufactured by Prolacta Bioscience, is considered a human-milk fortifier, designed to be added to breast milk for premature babies weighing less than 2.75 pounds.
The Train That Never Stops:


D.I.Y. Macroeconomics:
The democratization of economics owes much to the financial crisis that first hit in 2007. That ongoing catastrophe, which few economists predicted, tarnished the profession’s reputation, prompting some to look elsewhere for answers. They turned to — where else? — the Internet, where vast amounts of economic data that had once been hidden from public view were now online. Sites like FRED, maintained by the Federal Reserve Bank of St. Louis, enabled anyone with a connection to the Web to download data on everything from local home-price indexes to credit-card balances to weekly fluctuations in diesel prices.

At the same time, a growing army of knowledgeable “econo-bloggers” began analyzing the data available online.
Social Media as Social Index:
Even as several social networks have surpassed the populations of most nations — more than 500 million people are now signed up for Facebook and 175 million for Twitter — we still tend to regard these sites in terms of their value to us as individual users. In the past year, however, social scientists have begun looking more broadly at the aggregate value of social media. According to a number of recent studies, it now seems possible that the networks’ millions of posts and status updates are adding up to something culturally and financially priceless.

This past April, for instance, Sitaram Asur and Bernardo Huberman at HP Labs demonstrated that by analyzing the positive or negative sentiments expressed in 2.8 million Twitter messages about 24 movies, they could predict how the films would perform at the box office. Their methodology — an algorithm, actually, that their company is now in the process of patenting — worked significantly better than the Hollywood Stock Exchange, another popular tool for predicting box-office success.

In October, a team led by Johan Bollen at Indiana University reported that by classifying 9.7 million Twitter posts as falling into one of six mood categories (happiness, kindness, alertness, sureness, vitality and calmness) they could predict changes in the Dow Jones Industrial Average. As Bollen explains, when he began his study, he expected that the mood on Twitter would be a reflection of up and down movements in the stock market. He never imagined it would be a precursor.
Here are the ones that didn't make my cut: Relaxation Drinks, The Youth Condom,Cybercom, Literary Near Futurism, The Bra Mask, The Megalobster, Doping Bicycles, The Armored T-Shirt, The Long-Life-Span Smartphone, The Guitar That Stays in Tune, Biocouture, Emotional Spell-Check, Perfect Parallel Parking, More Club Teammates, More World Cup Success, Performance Enhancing Basketball Shoes, The Meat Dress, End-of-Men Fashion, The Ginger-Ale Celebration, The Comeback Album as Testimonial, LeBron James's 'Decision', Taking Your Pulse by Webcam.

To get an idea on the accuracy of these, here are the best of the best ideas of the last 10 years:
2001: “Populist Editing.” Wikipedia has since eclipsed the Encyclopaedia Britannica and Microsoft’s Encarta project, and many of us use it almost every day.

2002: “Early-Detection Revisionism.” We often find extra medical treatment hard toturn down, yet frequently it does us little good or even harm, so sometimes it’s better not to know your condition at all. Prostatecancer is one area in which this idea is having an impact.

2003: “Social Networks.” The New York Times has a Facebook page, a Facebook application and a New York Times News Quiz on Facebook; then there are Facebook’s 500 million users.

2004: “Dumb Robots Are Better.” The days of the Jetsons, and housecleaning robots, are not upon us, so settle for less. Be happy if your robot does anything useful at all.

2005: “Touch Screens That Touch Back.” This pick was ahead of its time, as few people realized that this technology, as seen in the2002 Steven Spielberg movie “Minority Report,” would show up so quickly in the iPhone and the iPad.

2006: “Walk-In Health Care.” We’ll need more of this, as general practitioners are harder to see and emergency-room waits get longer.

2007: “The Best Way to Deflect an Asteroid.” Send satellites with mirrors to reflect the sun, vaporizing one spot on the asteroid, releasing gases and changing its course. If this ever comes in handy, it will be the biggest idea of them all.

2008: “Carbon Penance.” “ . . . a translucent leg band . . . keeps track of your electricity consumption. When it detects, via aspecial power monitor, that electric current levels have exceeded a certain threshold, the wireless device slowly drives six stainless-steel thorns intothe flesh of your leg.” Satire is an idea, too. The slightly more practical anti-global-warming idea from 2008 was to eat kangaroos,since they, unlike cows, do not produce methane gas.

2009: “Music for Monkeys.” We still don’t know which of the ideas from last year will pay off, but the idea of generating music that monkeys enjoy (and humans don’t) was the most fun of the bunch.

Thursday, December 30, 2010

Avoiding Xmas Deadweight Loss, Part III

In the first and second parts of this series I discussed different ways to avoid the huge loss to society in bad or overpriced gifts (but maybe not wrapping). The suggestions were simple ways to be sure what the receiver gets is close to what the receiver wants. I've suggested giving guilty pleasures, giving in your expertise, and also fun gift exchanges. But apparently Amazon may solve this problem for us:
Every year, millions of packages get shipped across the country from Amazon from all over their various warehouses to gift receivers who open them and invariably look at them and go, hmm, I didn't want that. And then the gifts go back across the country.

Amazon has come up with a way to make sure that the gifts that you get are the gifts that you want. They have patented a method of creating rules in your Amazon account so that if you get a gift, for instance, from Aunt Mildred who is a awful gift-giver, those gifts would automatically either be converted to a gift card or something from your wish list.

You can specify, for instance, don't give me wool sweaters. And if a wool sweater is ordered for you, it would be converted into something else. The rules could go sort of on and on and on. You could say anything over $50, let me know first and convert the gift.
All this without ruining those good feelings the giver gets:
In many cases, they would not know. In fact, in their patent has made it pretty clear that you could send a return thank-you note that thanks the person for the actual gift that you converted, without telling them that the gift had been converted.
Until then, we'll have to just have to be uncomfortably forward with what we do and do not want.

Wednesday, December 29, 2010

Ronald Coase Explains the Market

Nobel Prize winning economist Ronald Coase turns 100 years old today. I first came across his work when learning about the seemingly magic ability of the Coase theorem to work out disputes when property rights are well defined. He's more famous for his article The Nature of the Firm. In it he discusses a question so important so few bother to ask it: Why do people form companies in the first place? Why not simply trade individually through the market?

The question and the answer gets at the main economic debate over just how much organization and central planning is required for the maximum production. It seems obvious to organize in businesses, but businesses like governments are forms of bureaucracy. The bigger the business, the bigger the bureaucracy. Just imagine how much inefficiency there much be in major corporations like GE and AT&T. Yet so many industries have almost all large companies (banking, gasoline, cars, etc). Try right now to think of examples of small businesses you frequent.

The benefits of big business can also apply to government. Think of the government as a business that provides products (property rights, defense, health and retirement insurance). On the question of size of government, like most issues, the answer is on the margin. Rarely do we want all or none of something. Instead we want some portion of it. Government works the same way. We don't want a small government, we want a good government. That good government isn't small or large, it's just right. Here's how I think about it:
Imagine anarchy to the left, communism to the right, and the United States somewhere in the middle. That may actually be what the legacy of the US will be. Maybe our greatest export isn't computers, medicine, or weapons, but good government. The question is, are we currently to the right or the left of the peak of the curve?

Bottlenecked Blog Readability

I've posted before on the personality type of this blog. But recently Justin Landwehr posted on one of Google's new advanced search features. It allows you to see and filter your search results based on reading difficulty. Which also means you can check to see the reading difficulty of your own writing. Here's the results for the Bottlenecked Blog:








I'm not exactly sure what to make of this. Compared to other blogs I read I am above average. A part of me is happy. Everyone likes to be told they have a high reading level. Even though the topics discussed here may be a factor, the sites that are blockquoted probably are too. And reading level doesn't necessarily imply intelligence. It's also possible that Google just couldn't get a good read on the site and just gave it an intermediate score. So what really matters, readability, probably isn't measured very well with this tool. Good thing there's another tool that let's me measure that, the comments section. Please let me know how this blog can be made more readable, even if the answer is better grammar.

To use this tool yourself click on advanced search on the Google homepage, and select "annotate results with reading levels" under reading level.

Tuesday, December 28, 2010

Difference Between Humans and Animals, Part XVI

Yesterday I mentioned that giving cash to panhandlers is more harmful than helpful. Here's a biological explanation of the drug addiction that often leads to real homelessness. From Physician Dr. Gabor Maté:
Well, the human brain, unlike any other mammal, for the most part develops under the influence of the environment. And that’s because, from the evolutionary point of view, we developed these large heads, large fore-brains, and to walk on two legs we have a narrow pelvis. That means—large head, narrow pelvis—we have to be born prematurely. Otherwise, we would never get born. The head already is the biggest part of the body. Now, the horse can run on the first day of life. Human beings aren’t that developed for two years. That means much of our brain development, that in other animals occurs safely in the uterus, for us has to occur out there in the environment. And which circuits develop and which don’t depend very much on environmental input. When people are mistreated, stressed or abused, their brains don’t develop the way they ought to.
That's a small portion of a fantastic interview with Democracy Now! about drug addiction and decriminalization. It seems to balance out my earlier post on letting parents relax about their responsibility and my earlier posts on the legalization of drugs. I recommended the whole video.

Monday, December 27, 2010

Don't Give Money to Panhandlers

Finally, a newspaper confirming what so many already know. From The Guardian:
But Thames Reach is citing "overwhelming evidence that people who beg on the street do so to buy hard drugs, particularly crack cocaine and heroin". Outreach team members estimate 80% of people begging do so to support a drug habit. The research is corroborated by the results of drug tests by the police on a group of people arrested for begging in Westminster; 70% tested positive for crack cocaine or heroin.

"Giving to people who beg is not a benign act without consequences," said Mike Nicholas, a spokesman for Thames Reach. "As an organisation that has worked with people on the street for over 30 years, we have seen many lives damaged by hard drugs and alcohol misuse. We have even lost people through overdoses in situations where a significant portion of the money they spent on drugs came from members of the public giving loose change."
Thames Reach is a London-based charity that works with the homeless. Here's how they help:
She escaped her addiction when Mark Smith, an outreach worker, persuaded her to stop living rough and get medical help. It was a huge breakthrough for someone whose life was a cycle of begging, prostitution and addiction and who had spent almost two decades living in office cupboards, a tent on marshland and in a cardboard box under a railway bridge.

"Mark won my trust, he didn't talk down to me," she said. "He was very patient and I used to look forward to seeing him, sharing his fags and having a burger."

After Mark had asked her "14 or 15 times" to think about coming off the streets, Tracy relented and is now off heroin and on methadone.
I'm certainly not trying to encourage you to not be generous with your time or your money. I simply want good intentions to be met with good results. We all desire to do good, but don't let the guilt of not giving lead you to donate to the detriment of the receiver. Here are some suggestions I've gathered:
  1. The goal in helping is to move the needy towards less need.
  2. Don't give cash, gifts, or even groceries (anything can be traded).
  3. Relationships are the best and hardest way to change.
  4. I'm afraid often we pay beggars not out of mercy, but so they will leave us alone.
  5. Work is inherently good for society and the worker. Finding them a job can be a great place begin for them and your relationship.
  6. Know your neighborhood so well that you know what it needs and can decipher between hustlers and the needy.
  7. Donate these organizations that help the homeless. Won't make you as warm and fuzzy, but they have a better track record at making others feel warm and fuzzy (or at least warm).
  8. Find the local resources in your area (churches, charities, government services). Keep their card and contact information on you.
  9. If your area doesn't have a satisfactory resource, make one. 
  10. Live in a neighborhood that allows you to help your neighbors. Remember we need to live with those we help.
These suggestions scare me because they require more of me than I am currently giving. Most people agree that we are at least partially responsible for those around us. Starting with family, then community, and so on. We are not only responsible for how and how much we give. Like in the personal example above described, change is hard, change is exhausting, but positive change is worthwhile.

Sunday, December 26, 2010

Young Siblings, Old Siblings

The Brookies in '01
The Brookies in '10


Inspired by Young Me, Now Me.

Saturday, December 25, 2010

Merry Christmas from Google Ngram

This graph represents the usage of Merry Christmas in library books over the last 500 years:

 Try your own searches at Ngrams.GoogleLabs.com.

Friday, December 24, 2010

Avoiding Xmas Deadweight Loss, Part II

Christmas two years ago I pointed that the inefficiency of gift giving is significant, but could be avoided. However, what I didn't mention is just how significant it was. The Economist suggests the number may be close to 10% of all money spent on Christmas gifts. That's $4 billion in wealth gone. Although giving can be valuable on its own, like a good short cut on a long road trip, increases in efficiency increases happiness. Sadly, because of the social norms market, giving cash, and to a lesser extent gift cards, aren't the short cut. That's why I was so amused by a recent story from Planet Money was so convincing. I won't do the story justice by describing it, so you should take the time to listen and come to the same conclusion that I did; that trading presents increases well-being. That's why my siblings have decided to do something a little different this year:
  1. Instead of exerting the huge effort needed to find all of my siblings (I have six not counting their spouses), we've drawn names. Each person is responsible for one other person.
  2. We each also bring a smaller gift and play the Dirty Dice Christmas Gift Grab Game.
We actually did this early because of schedules and I must admit, it was fun and affordable.

Thursday, December 23, 2010

Efficiency of Political Corruption

Something I've blogged about a lot is how surprisingly efficient even undesirable things are.  Our emotions,  bad customer service, political apathy, oil speculators, high frequency trading, and engagement rings just to name a few. Here's another for the list, political corruption:
That's the theory put forward by evolutionary biologists Francisco Ubeda and Edgar Duenez. The pair used game theory to figure out why people cooperate to form a society even though the ones in charge are corrupt. The model they developed assumes that government officials and law enforcers - in other words, the individuals responsible for punishing noncooperators - can get away with a certain amount of noncooperation themselves in the form of corruption, and that they can sidestep most punishments when caught being corrupt.
Here's more:
What's interesting is that society works because of corruption, not in spite of it. That's because law enforcers often need a little extra incentive to devote their time to holding society together, and that takes the form of mild noncooperation. Ubeda explains this phenomenon:
"Law enforcers often enjoy privileges that allow them to avoid the full force of the law when they breach it. Law enforcing results in the general public abiding by the law. Thus law enforcers enjoy the benefits of a lawful society and are compensated for their law enforcing by being able to dodge the law."
Even more interesting, I can't add this to my difference between humans and animals series:
And it's not just humans that are described by these findings. Social insects also show evidence of corruption and abuses of power among those charged with keeping the rest of the insects in line.
That's not to say we shouldn't try to minimize political corruption. I've already mentioned how WikiLeaks is trying to do that. But here's a less controversial and simpler way to do it:
When a government contracts out work, the distance between the people delivering the services and the ultimate customer -- the taxpayer -- grows. Contractors have little incentive to save the rest of us money, and our ability to make sure they're doing it is too limited. If a contract is failing, it may well remain a secret between one or two bureaucrats and the company concerned. Government audit agencies might uncover a problem if they are alerted or perform a random investigation. But the rest of us can't hold contractors (or the officials who hired them) to account if we don't even know what's meant to be delivered.

There's an answer to these problems: Publish the contract.

Tuesday, December 21, 2010

Resolving Conflict with Customers (and Spouses)

Here's are the highlights of an article from Slate Magazine about dealing with rude customers. It applies to relational conflict as well:
Aikido. This concept is borrowed from Japanese martial arts. "Masters of aikido do not resist the physical force of their opponents,"
Here's an example:
Don't interrupt the volcano while it's spewing lava! Take notes instead. Once the eruption is over, acknowledge your customer's anger by saying something like, "I know you're angry. I would be, too." If that doesn't calm your volcano down, remove him from the crowd so he can subside without losing face in front of the other customers.
Here it gets real good:
"All of us have a strong tendency to like people who are most similar to us," Barlow and Moller write. You must therefore find something in yourself that resembles the customer and display it. Obviously this is going to be tricky when the customer is in a really bad mood. If he's shouting, you don't want to start shouting, too. But neither do you want to be smiling. Instead, put on a sober face and make eye contact to acknowledge that this is a serious problem (even if it isn't).
Here's the marriage application:
The aikido method reminds me of some advice a mentor gave me when I got married 20 years ago. When fighting with your wife, he said, never apologize too early. Angry people need time to vent, he explained; apologize too quickly and your wife won't get what's made her mad off her chest.

Monday, December 20, 2010

Emptying the Bottle: Late-December '10 Links

Here is a list of the worthwhile sites I've Bookmarked recently:
As always, feel free to email me anything interesting you come across.

Sunday, December 19, 2010

Difference Between Humans and Animals, Part XV

In the second installment of this series, I embedded a lecture from Robert Sapolsky, a Professor of Biology, Neurology and Neurosurgery at Stanford University. In it he gives a wonderful explanation of the similarities and differences between humans and the rest of the animal kingdom. Recently, he wrote an article for the New York Times about how understanding metaphors are one of the unique things to humans:
We understand that a captain wants more than just hands when he orders all of them on deck. We understand that Kafka’s “Metamorphosis” isn’t really about a cockroach. If we are of a certain theological ilk, we see bread and wine intertwined with body and blood. We grasp that the right piece of cloth can represent a nation and its values, and that setting fire to such a flag is a highly charged act. We can learn that a certain combination of sounds put together by Tchaikovsky represents Napoleon getting his butt kicked just outside Moscow. And that the name “Napoleon,” in this case, represents thousands and thousands of soldiers dying cold and hungry, far from home.
Another thing he mentions is why we can. It's our bigger and denser frontal cortex. It allows us to not only understand complex metaphors, but also gives us:
Emotional regulation, gratification postponement, executive decision-making, long-term planning. We study hard in high school to get admitted to a top college to get into grad school to get a good job to get into the nursing home of our choice. Gophers don’t do that.

Saturday, December 18, 2010

Afghans Should Peace Out

A while back I mentioned the unusual idea of letting Iraq decide on whether American soldiers stay in Iraq. If you thought that was out of the box, here's a more unusual idea about Afghanistan:
Should we leave Afghanistan? Absolutely not. The Afghans should leave Afghanistan! They have already shown that in other countries, they can assimilate and succeed. Do Afghans in America or Australia live in mudbrick hovels and prevent their daughters from going to school? Do they harbor terrorists, plant mines in the roads, and stone adulterous women to death? Of course not!

Take the Afghans out of Afghanistan and you help them out too. This would be a far more humane and beneficial version of an old counterinsurgency technique, moving the population to safe areas. The ultimate safe haven is a secure and prosperous country. In this way, we will fulfill our goal of protecting the Afghan population.

It wouldn’t be so difficult to resettle the Afghans — and it would be far cheaper than the $12 billion a year we are spending on training their Army and police alone.
The entire article is actually not worth reading and goes too an extreme. The idea however is solid. If coalition forces really support the Afghan people, they should welcome them into their backyard.

Friday, December 17, 2010

The Good, the Bad, and the Ugly of WikiLeaks

In the last month Julian Assange, has gone from journalist to lightning rod. Recently his organization, WikiLeaks, released 250,000 US diplomatic cables (essentially emails from diplomats that are called cables because they were once sent via telegraph). Although most of the documents weren't classified, they were written with the understanding they would be private. They have given the world a never before seen look inside American diplomat discussions.  The impact of this can be seen in Assange's victory in the online poll for Time Magazine's Person of the Year (though Time actually gave Mark Zuckerburg the award).

That certainly doesn't mean he's well loved. After all, Hitler won person of the year in 1938. In fact, several groups have separated themselves from Wikileaks since the cable leaks. The site lost it's domain name just days after Amazon dropped the site from its web servers. PayPal froze the account of the foundation accepting donations or the site. Visa and MasterCard have reportedly stopped transactions for those trying to donate money to the organization. The Swiss bank PostFinance has put a hold on the legal defense funds of the founder who was recently arrested on separate, but very controversial, rape charges. He was released on bail yesterday thanks to support from none other than Michael Moore. Assange's home nation of Australia has even threatened to cancel his passport. In response, many of these organizations have themselves been attacked online by "hacktivists" from the pseudo-organization Anonymous.

Although I don't agree with the illegal hacks against these companies, I don't feel much sympathy for them. World governments are understandably upset about their secrets being exposed, but for these companies to jump the gun before any rulings have been made is, in my opinion, cowardice. To understand the strong reactions to these cables it's important to understand what exactly is in them. Clarifying the information is difficult, because it's history's largest classified information release. One of the main things revealed is how American diplomats see and describe foreign leaders. One of the five newspapers given the documents, Der Spiegel, even put summaries of each on the cover. Let me warn you, they're not flattering.

here are the translations

Another uncomfortable revelation was that American diplomats have been asked to spy on other members of the United Nations. Also, it was revealed that the Chinese government hacked into Google, the computers of US officials, and the Dalai Lama. China is also apparently more ready to abandon their ally, and all around troublemaker, North Korea than previously thought. Saudi Arabia, United Arab Emirates, and Egypt have all asked the US to attack Iran. It revealed that American officials do not have much respect for Russian Prime Minister Vladimir Putin's new kind of authoritarianism. Even going as far as to say the current president “plays Robin to Putin’s Batman”. There was even evidence of Afghanistan's top down corruption, a secret military action in Pakistan, and missile strikes in Yemen.

As shocking as these cables are, they aren't the first controversial releases from WikiLeaks. Earlier this year they released a video of an event in Baghdad nicknamed Collateral Murder. Later this year, but before the most recent release, Afghan War documents and Iraq War documents were both leaked. Assange has also hinted at his next target to expose, the banking industry. These major releases have made this organization globally infamous. There have been calls for Julian Assange's arrest and assassination from several world leaders. That's why I'd like to take a chance on this tiny part of the internet to discuss this overwhelming issue. So here are what I see as the good, the bad, and the ugly of WikiLeaks:

The Good: Exposing truth, like sunlight, is often the best disinfectant. Most of what I have learned from the leaks have been information that either should not have happened or when it happened the world should have been informed about it. I don't want my government doing things they don't want me to know. It's also important to know that WikiLeaks is just a conduit for the released information. They were not the ones who actually removed it and have a journalistic obligation to publish what is brought to them. Best of all, even the existence of this organization and the threat it brings improves transparency and diplomatic professionalism. Currently there is too much secrecy, so any movement away is positive. These complex relationships show just our complicated our interventionist foreign policy is. If our government could no longer keep such damaging secrets about what it’s doing abroad, then it would have to change what it's doing abroad.

The Bad: These releases have the potential to create great instability in the world. It's been been a political and diplomatic disaster for the United States. It's made at least a dozen world leaders look deceitful, inept, or worse. It will make it that much more difficult to deal with controversial nations like Russia, China, Yemen, etc. There has also been fake documents released. The Pakistani media published fabricated cables claiming the Indian generals are genocidal. For two nations with so much tension, and nuclear weapons, these could have been disastrous. The recent controversy has put a damper on the general support for government openness. For example, the Whistleblower Protection Enhancement Act of 2010, which is ten years in the making, was expected to pass through Congress this month. Instead it has been halted by politicians worried by the new WikiLeaks controversy.

The Ugly: The released documents will probably result in more information being labeled classified. One of the least mentioned things about the cable leaks is that the information was already available to millions of military and government employees. It's alleged that a simple army private gave the information to WikiLeaks. That's actually pretty open. The recent controversy will only make that less so. It might also decrease the connectivity between the offices of government made ten years ago in response to 9/11. Perhaps the biggest impact these leaks will have is that honest international discussion will be harder. When you observe anything, it changes, simply because of your presence. Like CSPAN did for the American Congress, these leaks may hinder conversation because no one wants to talk directly anymore. If every conversation becomes public, then every conservation becomes political. Less diplomatic and more pandering. Professionalism has a cost, real valuable conversation. These complicated negotiations can't work if there is no privacy at the negotiation table.

WikiLeaks' actual negotiation table in Stockholm, Sweden

It's certainly embarrassing. There are clear short term problems created. But that doesn't tell us if it's good in the long run. The most important thing to remember is that what is being exposed to the American people is what is being done in the name of the American people. We have a right to know what is being done in our name. I can understand privacy at the negotiation table, but we should know they are at the table. Many claim that this information puts lives at risk, yet I haven't heard any concrete examples. A better question is whether more Americans are at risk if these types of secrets are never revealed? Perhaps our foreign policy would be less complicated and less intrusive. There will certainly be a backlash of privacy, but Julian Assange predicts American secret expansion will only be temporary.

The conversation isn't about Julian Assange or even WikiLeaks. It's about the entire idea of releasing this kind of information to the public. With or without WikiLeaks, the technology now exists to allow copycats to leak documents while maintaining anonymity. Like the Xerox for the Pentagon Papers, the hero or villain isn't a person, but a thumb drive and the internet. I would certainly like to see more information revealed about truly dangerous and corrupt governments. But even when the focus is on the US I think on net it is good (and so does the original whistleblower from the Pentagon Papers). It's possible that WikiLeak-type organizations should be restrained. There are certain things that deserve at least temporary secrecy. That's what American court cases about media leaks are for, deciding on the details. Though according to polls, it doesn't look good for Julian Assange from the perspective of the average American opinion. But I'm often more comfortable not agreeing with average Americans.

If you'd like to read more here is the WikiLeaks' new url. Here's their Wikipedia page. Here's how they've mostly been making public comments, their Twitter page.

Thursday, December 16, 2010

Uncompensated Holiday Unemployment

Here's a quote NPR's Marketplace last week in a story about academic sabbatical:
From the outside, the professor-ly life might seem pretty cushy. Summers off, the job security of tenure, a paid leave every six years or so to do research.
And here's a letter written in response:
Michael Harris wrote from Fairbanks, Ala., and his post at the University of Alaska, Fairbanks, to challenge the notion of professors getting summers off. Academics are on nine-month contracts, Professor Harris writes. "This is not actually time off, but rather annual uncompensated unemployment with the obligation to return to their faculty positions in the following term."
With today and tomorrow canceled for snow, I guess my forced leave begins early. Oh the challenges of educating the youth of America.

Venn Diagram of Efficiency

"Efficiency is intelligent laziness"
From the newly subscribed to Every Day Venn blog.

Tuesday, December 14, 2010

Don't Let You Get in the Way

Although I've been mostly positive about my own blogging, one of my big worries is that once my ideas go public, they will become static. That in an effort to not contradict myself, I will be less likely to adopt different ideas. Even worse, if this is true for me, then maybe it's also true of the billions of other people putting there thoughts and ideas on social networking sites everyday. Though there may be benefits to this (who's to say the new you is better?), I think most personal growth is just that, growth.

Economist Robin Hanson once published a list of "signs that your opinions function more to signal loyalty and ability than to estimate truth" on his blog Overcoming Bias. Here they are:
  1. You find it hard to be enthusiastic for something until you know that others oppose it.
  2. You have little interest in getting clear on what exactly is the position being argued.
  3. Realizing that a topic is important and neglected doesn't make you much interested.
  4. You have little interest in digging to bigger topics behind commonly argued topics.
  5. You are less interested in a topic when you don’t foresee being able to talk about it.
  6. You are uncomfortable taking a position near the middle of the opinion distribution.
  7. You are uncomfortable taking a position of high uncertainty about who is right.
  8. You care far more about current nearby events than similar distant or past/future events.
  9. You find it easy to conclude that those who disagree with you are insincere or stupid.
  10. You are reluctant to change your publicly stated positions in response to new info.
  11. You are reluctant to agree a rival’s claim, even if you had no prior opinion on the topic.
  12. You are reluctant to take a position that raises the status of rivals.
  13. You care more about consistency between your beliefs than about belief accuracy.
  14. You go easy on sloppy arguments by folks on “your side.”
  15. You have little interest in practical concrete implications of commonly argued topics.
  16. Your opinion doesn't much change after talking with smart folks who know more.
  17. You are especially eager to drop names when explaining positions and arguments.
  18. You find it hard to list weak points and counter-arguments on your positions.
  19. You feel passionately about a topic, but haven’t sought out much evidence.
  20. You are reluctant to not have an opinion on commonly discussed topics.
Similarly, entrepreneur Paul Graham has written an essay on the topic of "keeping your identity small". He speaks specifically about problem conversations with religion and politics:
More generally, you can have a fruitful discussion about a topic only if it doesn't engage the identities of any of the participants. What makes politics and religion such minefields is that they engage so many people's identities. But you could in principle have a useful conversation about them with some people. And there are other topics that might seem harmless, like the relative merits of Ford and Chevy pickup trucks, that you couldn't safely talk about with others.

The most intriguing thing about this theory, if it's right, is that it explains not merely which kinds of discussions to avoid, but how to have better ideas. If people can't think clearly about anything that has become part of their identity, then all other things being equal, the best plan is to let as few things into your identity as possible.

Most people reading this will already be fairly tolerant. But there is a step beyond thinking of yourself as x but tolerating y: not even to consider yourself an x. The more labels you have for yourself, the dumber they make you.
What does this mean for my desire for perspective and the descriptive terms I have on the top right of this blog?

Sunday, December 12, 2010

Spousonomics' Suggestion for Date Night

I recently came across a blog called Spousonomics all about "using economics to master love, marriage and dirty dishes". It's based on a book of the same name. In one of their posts the authors suggest not only regular date nights, but unique ones. These new experiences flood the brain with same chemicals that bring us back to the same feelings we had when we first fell in love. Encouraging these kinds of "active choices", ensure that our routine isn't irrationally impacting our actions. This is idea is what convinced my lovely wife and I to go to downtown Raleigh to the only outdoor skating rink in North Carolina last week. Just look how romantic this advertisement makes it look!
























It was cold. It was inelegant. It was memorable. So get out and there and follow your heart (and your utility curve). My wife and I are heading out again tonight for a improv company Christmas party!

Saturday, December 11, 2010

Emptying the Bottle: Mid-December '10 Links

Here is a list of the worthwhile sites I've Bookmarked recently:
As always, feel free to email me anything interesting you come across.

Friday, December 10, 2010

Comedy Makes You Smarter and Happier

I've posted before on the benefits of improv in thinking faster, idea support, and building friendship. Here's a benefit of simply watching comedy, it makes you smarter, instantly:
In a just completed study, researchers at Northwestern University found that people were more likely to solve word puzzles with sudden insight when they were amused, having just seen a short comedy routine.

“What we think is happening,” said Mark Beeman, a neuroscientist who conducted the study with Karuna Subramaniam, a graduate student, “is that the humor, this positive mood, is lowering the brain’s threshold for detecting weaker or more remote connections” to solve puzzles.
Humor can also help improve your mood:
This study aimed to demonstrate that the cognitive demands involved in humor processing can attenuate negative emotionsA primary aspect of humor is that it poses cognitive demands needed for incongruency resolution. On the basis of findings that cognitive distraction prevents mood-congruent processing, the authors hypothesized that humorous stimuli attenuate negative emotions to a greater extent than do equally positive nonhumorous stimuli.
Here's the Wikipedia article on the positive psychology of humor.

Thursday, December 09, 2010

Economics of Hanukkah

I've done the economics of Christmas, and since I'm an equal opportunity blogger, here's one for you Old Testament only readers:
In case you're lost, here's some economics help and here's some Jewish history help.

Wednesday, December 08, 2010

Difference Between Humans and Animals, Part XIV

Perhaps the difference between humans and animals is human interaction with animals:
Traditionally, the big three traits of humans have been sophisticated communication, tool use, and domestication of animals. Shipman argues that the fact that people take domestication one step further and adopt pets as family members is a fourth distinguishing trait of human beings.

Shipman calls this close bond with animals the “animal connection,” and says it unites all the other human traits. Unlike other animals, who can only communicate via a limited set of signals, humans have languages capable of expressing complex concepts—and we share our language with our pets, treating them as if they understand our words (even though in many, if not most cases, they do not!). While some animals such as chimpanzees do make and use tools, no other animal utilizes so many tools in such complex and varied ways as humans do. We even use animals themselves as tools—from rodent bomb-sniffers to carrier pigeons to police dogs. In nearly every case where humans work with animals, they form close bonds.
The article even lists the practical socializing effects of owning pets.

Tuesday, December 07, 2010

The Curse of Volunteering Abroad

Two years ago I posted on the problems of direct country to country aid. Apparently well-intentioned Westerners are also doing harm in another way, volunteering:
The study reveals that short-term volunteer projects can do more harm than good. Wealthy tourists prevent local workers from getting much-needed jobs, especially when they pay to volunteer; hard-pressed institutions waste time looking after them and money upgrading facilities; and abused or abandoned children form emotional attachments to the visitors, who increase their trauma by disappearing back home.
There are also problems of Americans giving money to orphanages which are kept purposely squalid to elicit more pity. These:
"orphans" might have been bought from impoverished parents, coerced from loving families or simply rented for the night. An official study found just a quarter of children in these so-called orphanages have actually lost both parents. And these private ventures are proliferating fast: the numbers increased by 65% in just three years.
And don't just send donations either:
We have seen it with the dumping of cheap food and clothes, devastating industries and encouraging a dependency culture. And now we see it with "voluntourism", the fastest-growing sector of one of the fastest-growing industries on the planet.
And finally, here's why we do it:
Inevitably, the needs of impoverished communities are subverted by the demands of wealthy visitors. Alexia Nestora ran the North American arm of a major "voluntourism" group and admitted such firms loved orphanage stops. "They sell the best and are the most tearjerking projects to pitch to the media. Volunteers come away with the classic picture with an orphan and tell all their friends about their experience
I wouldn't totally negate the value of the experience of short-term mission work. I spend enough time here trying to convince you you're rich, when one trip abroad can do it much more effectively. But my fear is that this becomes a way to pay to remove global guilt instead of actually solving the problem. If you want to go on a trip, go on a trip. If you want to help specific people in need, I'm convinced the only ways are to live with them or have them live with you.

Monday, December 06, 2010

Takeaways from Q & A with Tyler Cowen

If you are a regular reader of this blog, then you're aware of my affinity for economics professor Tyler Cowen. He covers everything from blogging, to the market, to reading suggestions. He was even nice enough to answer my question about the timing of the Industrial Revolution on his blog. At a teaching economics conference I even heard his co-blogger at Marginal Revolution, Alex Tabarrok, say that "before there was Google, there was Tyler". The weekly podcast Surprisingly Free recently did a Q & A with Tyler. Here are my takeaways:


Water transport is significantly cheaper than trade over land. Though slower, the natural resistance of water travel is simply less than land and air. This may helps explain why buying local may not be that great. I wonder what percentage of the buy local movement is about personal image.

One of the main reasons why there has been relative peace instead of war is that the technologies of peace have been cheaper than the technologies of war. This has not been true through most of human history. Nuclear terrorism may change this.

Trying to incentivize marital fidelity may actually ruin the cultural norm. Shame may be one of the best motivators. Especially the guilt children might put of divorcing parents.

People are more likely to think they are above average when they don't have to pay to prove it. This may be why many teachers don't support merit pay. That said, if the administration, board, or superintendent positions aren't based on merit, then maybe they can't reward merit.

Most economic principles are correct. There may be changes on the margins, but the textbooks probably won't change much.

If the average person doesn't fly much, then they may actually want too much airport security. They are hurt (indirectly) by terrorist attacks, but are barely affected by increased invasive pat downs. Tyler predicts, and I agree, that there may be small cosmetic changes to the current TSA policy, but that most of it will stay intact. Then once we have another attack, anyone still protesting will seem crazy.

One of the best ways to learn economics, like anything, is to do it. That means reading it and writing it. That means blogging.

The best non-fiction books are about the past. The worst non-fiction books are about the future. Worst case scenario: have a very incorrect understanding the world with a high degree of certainty.

In the past I've specifically voted for divided government. Historically this has been the best way to limit the growth of bad government. However, now that our country is on an unsustainable growth in spending, gridlock will bankrupt us.

When asked where Tyler would most like to live in the world he said where he is now. Shouldn't we all say that?

Knowledge is contextual. My job as a teacher is to give my students the context to learn long after final exams.

Tyler thinks marijuana legalization will never happen because of the concerned parent vote. I hope he's wrong.

Apparently my old friend and Clemson economics study partner Tate Watkins is helping to produce the Surprisingly Free podcasts. I must say I'm at least a little jealous.

Here's Surprisingly Free's first Cowen interview from earlier this year on the internet, the iPad, and Lost.

Sunday, December 05, 2010

Al Gore Abandons Ethanol

Kudos to Mr. Gore for giving an honest confession about corn subsidies:
Last week, Al Gore finally admitted the obvious. The former vice president (and winner of the Nobel Peace Prize) who promoted ethanol in his Oscar-winning film, "An Inconvenient Truth," said that corn ethanol was a "mistake." He went further, saying that he supported ethanol production because the first presidential primary is in Iowa, which produces more ethanol than any other state: "I had a certain fondness for the farmers in the state of Iowa because I was about to run for president," he said. Gore also said that the "massive subsidies" given to ethanol are not "good policy."
Yet the billions in subsidies on domestic ethanol and high tariffs on foreign ethanol continue. The whole article linked is worth reading.

Saturday, December 04, 2010

Encourage Saving with the Lottery

Two years ago I listed the top five things I've learned from financial guru and radio talk show host Dave Ramsey. One of the lessons for future planning that really stuck with me was having 3-6 months of expenses as an emergency if (when) things go wrong. The most recent episode of the already recommended Freakonomics Radio recently brought to my attention just how many Americans don't have anything close to that. They cited an international survey which asked people if they could come up with $2,000 in 30 days from either savings, borrowing, friends or family. Here are the pitiful results:


I place most of the blame on our overemphasis on the present and poor planning for the future. So it's not just an American problem, it's a human problem. So what can we do about it? We could mandate savings, but I'm always uncomfortable forcing financial decisions on others. So instead, I suggest we nudge people towards a more stable budget. Entrepreneur turned philanthropist Bill Gates suggests subsidizing micro-banking to the poorest, but that can have mixed results. Instead, the folks at Freakonomics suggest harnessing one of our seemingly least rational obsessions, the lottery.

Last year America "spent more than $58 billion on lottery tickets, or roughly $200 per person" on lottery tickets. The likelihood of the lottery having a positive financial impact is practically zero, even if you win. That is, unless, you don't lose the money you spend on the lottery. What the folks at Freakonomics are suggesting in this podcast is a Prize-Linked Savings Plan. Like a normal bank, it takes deposits and pays back interest. The only difference is that it takes some of that interest from each account, combines it, and regularly pays out huge cash prizes. It's a savings account and a lottery. The best part is those who are most likely to pay a larger part of their income in the lottery, the poor, need a savings account the most.

So if this idea is so great, why haven't we heard it before? The competition won't allow it. That's because the competition is government run lotteries. And the government not only makes the lottery, it makes the rules. But don't fret, via some loophole, a league of Michigan credit unions have created one. So if you have a hard time saving, bet it all.

Friday, December 03, 2010

Economics of the Last 200 Years

Although wealth isn't everything, it is very important. Here's a flashier, shorter, still awesome version of Hans Rosling's famous TED Talk:



I was right when I said if you're reading this, you're rich, but I guess I forgot that historically you're also rich if you're not reading this (and you'll get richer).

Thursday, December 02, 2010

Impact of Slavery on Slave Exporting Nations

It's well established that most poor nations are located in Africa. Here's one possible explanation:
Can part of Africa’s current underdevelopment be explained by its slave trades? To explore this question, I use data from shipping records and historical documents reporting slave ethnicities to construct estimates of the number of slaves exported from each country during Africa’s slave trades. I find a robust negative relationship between the number of slaves exported from a country and current economic performance. To better understand if the relationship is causal, I examine the historical evidence on selection into the slave trades, and use instrumental variables. Together the evidence suggests that the slave trades have had an adverse effect on economic development.

Wednesday, December 01, 2010

Emptying the Bottle: Early-December '10 Links

Here is a list of the worthwhile sites I've Bookmarked recently:
As always, feel free to email me anything interesting you come across.

Tuesday, November 30, 2010

Dan Ariely for the Holidays

No this isn't another plug for Dan's book or about his most recent post on gift giving. It is a plug to see Mr. Ariely in person. Except instead of a lecture hall, it will be at a comedy theater. That's right, behavioral economist,  author, and blogger Dan Ariely will be the special guest monologist December 17th for DSI's flagship show, Mister Diplomat. Improv. Economics. Me. What more could you ask for?

Sunday, November 28, 2010

Economics of Social Safety Nets

Food stamps, unemployment, Emergency Rooms, Medicaid, disability checks are just a few of the social safety nets that most industrial countries have. They exist to ensure the "least of these" have some basic living standard provided by the government. Many economists, myself included, complain about the inefficiencies these incentives can create. But what if instead of government distortion of the free market, this is just a correction of it. What if the welfare state is genetic insurance?:
Back before you were born--in fact, before you were even conceived--nobody knew you were going to develop into the sort of sophisticated individual who reads Slate. For all anyone knew, you might have been born without enough skills to boot up a computer--or to earn a decent living.

If your unborn soul could have bought an insurance contract, then you'd probably have snapped up some kind of "skill insurance" in which everybody pays premiums, and those who land in the shallow end of the gene pool split the pot.
If this did exist, just how much insurance (or how much safety net) would there be? You'd have to know the risk of being poor and the difference between the rich and the poor. Once you know that, then you know what percentage of the population should be getting assistance:
If you take the insurance metaphor seriously, then 23 percent of the population--the 23 percent with the fewest skills--should be permanently unemployed and on welfare.
Based on those numbers the welfare state should be bigger. That is, unless, you take into account the inefficiencies created:
Factor that into the equation, redo the calculations, and you end up concluding that the fraction of the population on welfare should be just 0.6 percent--in other words, practically zero.

Thursday, November 25, 2010

Economics of Native American Stereotypes

In honor of my full stomach from two Thanksgiving dinners (two more to go tomorrow) I ask this question: What factor determines how historically authentic Native American tribes portray themselves? You might think it's how much time they spend with other tribes. It's actually the opposite, it's the tourists:
The framing analysis found that nearly 4 out of 10 tribes with casinos represent their own identities using the historic relic frame—primarily relying on the exotic Other, such as tepees and stoic chiefs in headdresses, locked in the past. In contrast, only 1 in 10 of the tribes without casinos communicates the same identity, instead being more likely to display a voiced participant frame of modern images and assertions of sovereignty and resistance.
Happy (Economics of) Thanksgiving

Wednesday, November 24, 2010

Worthwhile Sentences on Political Commentary

From moderate David Brooks: "Democratic victories are always ascribed to hope; Republican ones to rage."

From the Economic Logician: "Many see the Great Recession, as it is now called, as a dual crisis: an economic crisis and a crisis of economics, and more specifically macroeconomics."

From Professor of Shakespeare Peter Saccio: "Shakespeare and Sarah Palin have two things in common. One, they both tend to make up words. Two, half the country can't understand what the other half of the country thinks is so great about them."

From the Seattle Times: "There are no small-government disciples in massive oil spills."

From New York Magazine: "If you can't beat it, the thinking goes, yell at it."

Tuesday, November 23, 2010

Collusion in the Classroom

Recently due to a field trip, my AP Microeconomics class was cut down to just a handful. So instead of treading forward without most of the class, I decided to introduce the perfect board game, Settlers of Catan. It shows first hand some important economic principles: changes in price due to scarcity, gains from trade, and as I found out, how to collude. The first time I played with the students I won. Not necessarily a huge feat since none of them had played before and I've certainly spent enough time playing online. However they called for a rematch and I was happy to oblige them one day after school. Again I took an early lead and was close to wrapping up my second victory.

Near the end of the game I got distracted by a phone call from a friend of a friend asking about the Clemson economics program. Suddenly, one of my students came from behind to win the game. So suddenly in fact that I suspected a little foul play. After packing up the game the students let me in on their plan. I'll paraphrase their excited words. "Mr. Brookie we worked together! I traded what she wanted, we put the robber on you, AND we gave her our bonus points! We did that thing you talked about in class. We colluded!" As the regulator, it was important for me to not to get distracted. Then again, at least I know they're learning.

Monday, November 22, 2010

Difference Between Humans and Animals, Part XIII

Last time I highlighted something humans can't do. Well here's awesome stuff from us humans:



Here's earlier parts one, two, three, four, five, six, seven, eight, nine, ten, eleven, and twelve.

Saturday, November 20, 2010

Science of the Gold Standard

President Harry Truman once asked why you would ever want "a system in which you pay people to dig things out of the ground and then bury them in the ground again?" NPR's Planet Money asked a similar question in a recent podcast in which they give an element by element breakdown of why gold has been used for thousands for years as the medium exchange all over the world. For obvious reasons the unit of exchange shouldn't be a gas, corrode, explode, too rare, or kill you. Those simple requirements eliminate 116 of the 118 elements, leaving just platinum and gold. And unless you have a furnace that can heat up to 3,000 degrees, you can't melt platinum. So out of all the elements, gold is the clearly the best to use as a standard. Well, that is, except for trust.

Emptying the Bottle: Late-November '10 Links

Here is a list of the worthwhile sites I've Bookmarked recently:
As always, feel free to email me anything interesting you come across.