Here’s a list of articles that I have been reading lately:
Travis Kalanick: The Transportation Trustbuster
online.wsj.com
Travis Kalanick is the John Galt of his generation! Quoting from this article, “Andy Kessler interviews Travis Kalanick, co-founder of Uber, on how he’s bringing limo service to the urban masses—and how he learned to beat the taxi cartel and city hall.”
World War II Spending Did Not End the Great Depression
reason.com
“The aggregate statistics fail to capture essential details of life.”
Powers of prophesy: Davos looks to the future
www.stltoday.com
Interesting multidisciplinary assortment of predictions; I am especially looking forward to owning a driverless car and my own 3D printer! 
www.nytimes.com
“As the winners of our meritocracy hold the reins of progressive power, they may struggle to mitigate the inequality their own ascendance has helped produce.”
College Degree, No Class Time Required
online.wsj.com
“University of Wisconsin will grant bachelor’s degrees based on a person’s knowledge as demonstrated in online tests, not on class time or credits, the first such offering from a public university system.”
Revolution Hits the Universities
www.nytimes.com
“Nothing has more potential to let us reimagine higher education than massive open online course, or MOOC, platforms.”
Yes, Mr. President, We Are a Nation of Takers
online.wsj.com
“AEI scholar Nicholas Eberstadt writes that since 1960, entitlement transfers have grown twice as fast as personal income—to $2.3 trillion annually.”
professional.wsj.com
“Environmentalist Bjorn Lomborg writes that fear-mongering exaggeration about global warming distracts us from the real job of finding affordable and effective energy alternatives.”
www.nytimes.com
“President Obama’s second Inaugural Address makes a compelling case for a pragmatic and patriotic progressivism.”
In his inaugural address, Obama suggested burgeoning entitlements aren’t a problem…
www.aei-ideas.org
Excellent critique of President Obama’s second inaugural address by the AEI’s Nick Eberstadt…
Roe v. Wade at 40: Attitudes about abortion
www.aei.org
AEI just put out a very interesting and informative summary of polling data from myriad sources (on (U.S.) public attitudes toward abortion, circa 2013. Quoting fromthis article, “Although opinion about abortion is stable (over time), it is also deeply ambivalent. Americans are simultaneously pro-life and pro-choice.”
Attorney general’s Web campaign invites N.Y. gun-lovers to ‘move to Texas’
www.dallasnews.com
“The Texas attorney general has launched an Internet ad campaign inviting New Yorkers who feel their state’s new gun laws are too restrictive to move to Texas.”
Gold, Greenbacks and Inflation—A History and a Warning
professional.wsj.com
“In The Wall Street Journal, Paul Moreno writes that the Federal Reserve’s 100th birthday is no cause to break out the champagne.”
Moody’s now has negative outlook for all U.S. universities
news.yahoo.com
“Moody’s Investors Service now has a negative outlook for the entire U.S. higher education sector, the rating agency said on Wednesday, citing “mounting fiscal pressure on all key university revenue sources.”
Find the Perfect Sleep Position
online.wsj.com
“Stomach, back or side? There is no one right way to sleep. But for people with certain types of pain and medical conditions, there are positions that can help keep problems from getting worse and may even alleviate them.
aei.org
I make similar points in my April 2011 blog posting entitled “Make the rich pay their “fair” share!” (cf. http://wp.me/pBo4U-B9) which, among other things, documents that the U.S. has by far and away the most progressive personal income tax system amongst 24 OECD countries. Quoting from this article, “For many years, left-wing intellectuals have exalted Western Europe as the paragon of redistributive equity, contrasting it with the trickle-down nightmare that is America. But on tax policy, at least, that characterization is flat-out wrong, especially after the latest round of tax increases.”
online.wsj.com
“Richard Vedder writes that labor-force participation has declined since 2000, and among the reasons are soaring government benefits. Here are some highlights:
1. There are over 30 million more Americans receiving food stamps today than in 2000 (increase from 17.1 million in 2000 to 47.5 million in October 2012).
2. Three million Americans received work-related disability checks from Social Security in 1990; this number increases to 5 million in 2000 and stands at 8.6 million today.
3. The traditional 26-week unemployment-insurance benefit has been continuously extended over the past four years—many persons out of work a year or more are still receiving benefits.”
New budget fix: Pawn Mount Rushmore?
money.msn.com
“Hey, the country has been talking about minting a massive platinum coin. Could selling a giant granite tourist trap be any more ludicrous?”
Here’s a list of articles that I have been reading lately:
blogs.wsj.com
“Earning more money tends to make people happier, at least up to a point. But new research suggests the reverse may also be true: happier people actually make more money.”
online.wsj.com
“Doris Donnelly writes that novelist and poet Victor Hugo was anticlerical, yet the hero in his famous novel is set on his course by a Catholic bishop.” The following quote from this Wall Street Journal article succinctly explains the story behind Les Misérables : “During the night he spent at the bishop’s home, mere days after his release from serving 19 years as galley prisoner 24601, Jean Valjean stole six silver place settings, was apprehended, and returned the next morning under police guard to face the consequences of his crime. Unruffled, the bishop brushed off the police, added valuable silver candlesticks to the bundle, “bought” Jean Valjean’s soul from evil and claimed it for God. He redirected the life of a man chained to hatred, mistrust and anger, and he enabled Jean Valjean to emerge as one of the noblest characters in literature.”
online.wsj.com
“Asteroid 2012 DA14 will pass very close to Earth—much, much closer than the moon—on Feb. 15. Its path won’t lead to a collision with Earth, but it will pass close to a ring of orbiting satellites.”
www.washingtonpost.com
“After the fiscal cliff, the president is free to be himself — a committed big-government social democrat.”
2 months until next budget crisis?
money.msn.com
“A prominent economist known as ‘Dr. Doom’ says the country’s budget dispute will come roaring back soon.” This (another budget crisis in 2 months’ time) seems like an eventuality, in view of the facts that 1) the fiscal cliff legislation passed 2 days ago delays $110 billion in spending cuts for two months, and 2) this is around the same time that Congress will need to debate whether or not to raise the debt ceiling… So definitely expect more 11th hour brinksmanship around the beginning of March…
The Morning Ledger: Cliff Dive Averted
online.wsj.com
For those of you who are wondering what was in the so-called fiscal cliff legislation that was literally passed last evening in the 11th (pm) hour, I recommend reading the first four paragraphs of the article “The Morning Ledger: Cliff Dive Averted” (@ http://on.wsj.com/VAkXwB). Basically we get a two month reprieve from political theater and last-minute brinksmanship. As former Obama chief of staff (and now Chicago mayor) Rahm Emanuel once famously remarked, “A crisis is a terrible thing to waste”…
professional.wsj.com
“Holman Jenkins writes that bitter politics over taxing and spending will be our lot for years to come.” Quoting from this article, “The fiscal cliff turned into just another trial of strength by advocates of the welfare state to prove the welfare state is not rationally reformable in advance of a funding crisis. But we already knew that.”
Nothing Is Certain Except More Debt and Taxes
online.wsj.com
“In The Wall Street Journal, David Malpass writes that the Senate fiscal-cliff bill still means higher taxes on every working American—so much for just going after ‘the rich.’”
reason.com
“If Government spending wasn’t out of control, no one would have wanted to kill Bush tax cuts.”
www.nytimes.com
“The voters get what they want.”
Hummel on Moss on Limited Liability
econlog.econlib.org
Economist JR Hummel’s informative review of David A. Moss’s book, When All Else Fails: Government as the Ultimate Risk Manager – on the history and nature of liability rules, including limited liability…
Some clear thinking on the national debt and the real fiscal problem
www.aei-ideas.org
Some clear thinking on the national debt and the real fiscal problem: Government’s spending on entitlement programs…
The Fiscal Cliff and Congress’s Dysfunction
www.cato.org
“Spending every year is now twice what it was when Bill Clinton left office, and the national debt is three times as high. Republicans and Democrats alike should be able to find wasteful, extravagant, and unnecessary programs to cut back or eliminate.”
americanradioworks.publicradio.org
Here’s the story line for this podcast: “Ever heard of the self-employed college professor? Thanks to the efforts of the for-profit education company Straighter Line, some professors will now be able to go into business for themselves and set the price on how much their teaching is worth.”
Over the Cliff at Steven Landsburg
www.thebigquestions.com
Here’s a positive spin about going over the fiscal cliff from University of Rochester economist Steven Landsburg (AKA the Armchair Economist)…
online.wsj.com
France’s Constitutional Court struck down the new 75% top French income tax rate, not because it is confiscatory; rather on grounds of—get this—unfairness. While it is apparently “fair” to take 75% of what someone earns, it isn’t fair unless the law confiscates 75% from all rich households equally…
Top 10 Economic Charts of 2012
blogs.wsj.com
The charts include 1) a look at what the largest and smallest parts of the economy have been, going back to 1949, 2) where Americans have been spending their money from 1901 to the present, 3) a snapshot of people moving in and out of the U.S. labor force, 4) a look back at the economic performance of the U.S. during presidents’ first terms, 5) a listing of how many weeks of unemployment benefits are offered by each state, 6) which states have the worst unemployment rates (going back to 1976), 7) the numbers behind the U.S.’s deficits, 8) how student loan debt outpaces all other forms of nonhousing consumer debt, 9) how overall food prices don’t move as much as corn prices do, and 10) how Germany’s economic performance compared to the rest of the euro zone.
online.wsj.com
“You don’t have to be Warren Buffett to be considered wealthy. It all depends on who is setting the bar. Here’s why it matters for your taxes, investment options and college aid—and what you can do about it.”
www.nytimes.com
“This is the moment to get out of your rut and visit the rest of the political spectrum.” One of my New Year’s resolutions is to follow Ross Douthat’s advice to: 1) take out a subscription to a magazine whose politics I don’t share, 2) expand my reading geographically as well as ideologically, and 3) make a special effort to read entirely outside existing partisan categories.
The Most Important Speech So Far in the 21st Century?
blogs.wsj.com
George Will at Washington University in St. Louis. The transcript of Mr. Will’s speech entitled ” titled “Religion and Politics in the First Modern Nation” is available for downloading from http://rap.wustl.edu/wp-content/uploads/2012/02/George-Will-lecture-text.pdf; the video is @ http://www.c-span.org/Events/Conversation-with-George-Will-on-Religion-in-Politics/10737436348/.
Here’s a list of articles that I have been reading lately:
Families Await, Lament Moscow’s Move
professional.wsj.com
“Adoptive parents in the U.S. who have been assigned to children, and in many cases have met them in Russian orphanages and have dates to bring them home, warily await the country’s proposed ban on U.S. adoptions.” This is genuinely cruel – as this article points out, Russia “… has about 120,000 registered orphans but fewer than 20,000 Russians listed as prospective adoptive families.”
Dear Mr. President, Zero-Sum Doesn’t Add Up
online.wsj.com
“In The Wall Street Journal, P.J. O’Rourke asks: Is life like a pizza, where if some people have too many slices, other people have to eat the pizza box?” As far as I am concerned, P.J. O’Rourke’s op-ed in today’s Wall Street Journal wins the award for the best op-ed ever…
Six Reasons To Keep Capital Gains Tax Rates Low
news.investors.com
“The advantages of low capital gains taxes have led many economists to call for ending these taxes altogether. Eleven OECD countries today don’t tax long-term capital gains.” This is an Excellent tutorial on the economics of capital gains taxation. This article explains how going over the fiscal cliff will prospectively raise the cost of capital for US firms while reducing the rate of private investment and future growth prospects for the US economy…
College graduates earn 85% more than those with high school-only
www.bizjournals.com
“Adults with bachelor’s degrees in the late 1970s earned 55 percent more than adults who had not advanced beyond high school. That gap grew to 75 percent by 1990 — and is now at 85 percent. The margin is smaller, though still sizable, when adults with bachelor’s degrees are compared to counterparts …”
Port Closures Approach, As America Nears The Container Cliff
blogs.wsj.com
“It might not be as economically deadly as the tax hikes and spending cuts due on Jan. 1, but a looming crisis at America’s ports has retailers worried.” First there was a fiscal cliff, then there was a milk cliff, now we have a dock cliff. Here a cliff, there a cliff, everywhere a cliff cliff!
Hobby Lobby faces millions in fines for bucking Obamacare
religion.blogs.cnn.com
“Craft store giant Hobby Lobby is bracing for a $1.3 million a day fine beginning January 1 for noncompliance with the Patient Protection and Affordable Care Act, dubbed Obamacare.”
Why Celebrate Christmas When We Do?
www.firstthings.com
“It is generally believed that the birth of Christ is celebrated on December 25 because our savvy Christian forebears with a flare for marketing took over a winter solstice holiday from the surrounding pagans. Not so, apparently.”
A Christmas Prayer for North Korea’s Christians
online.wsj.com
In North Korea, public worship is dangerous, and a ‘congregation’ might mean two people on a park bench, silently sharing their faith.
online.wsj.com
The Wall Street Journal publishes its traditional Christmas editorial on freedom and faith. This editorial was written in 1949 by the late Vermont Royster and has been published annually in the Wall Street Journal ever since.
Bloomberg, LaPierre and the Void
nytimes.com
This quote captures the moment perfectly: "Our society is divided between an ascendant center-left that’s far too confident in its own rigor and righteousness and a conservatism that’s marched into an ideological cul-de-sac and is currently battering its head against the wall."
Cooper, Huffman and Adlerstein: The Most Persecuted Religion
Rabbi Abraham Cooper, Rev. John Huffman and Rabbi Yitzchok Adlerstein write that Christians are targeted-by independent groups or governments – in 131 of the 193 countries in the world.
There’s a new NBC game show called Take it All which recreates a well-studied problem in game theory called the Prisoner’s dilemma. According to the Prisoner’s dilemma Wikipedia article, a “classic” example of this game is as follows:
“Two men are arrested, but the police do not have enough information for a conviction. The police separate the two men, and offer both the same deal: if one testifies against his partner (defects/betrays), and the other remains silent (cooperates with/assists his partner), the betrayer goes free and the one that remains silent gets a one-year sentence. If both remain silent, both are sentenced to only one month in jail on a minor charge. If each ‘rats out’ the other, each receives a three-month sentence. Each prisoner must choose either to betray or remain silent; the decision of each is kept secret from his partner until the sentence is announced. What should they do?”
This game is called the Prisoner’s dilemma because the solution to the game involves joint betrayal rather than joint cooperation, even though joint cooperation is the better outcome for both. To see this, consider the following “payoffs” (in terms of prison time) that Prisoner 1 and Prisoner 2 associate with the strategies “Betray” and “Keep Silent”.
|
|
Prisoner 2 |
||
|
Prisoner 1 |
Betray |
Keep Silent |
|
|
Betray |
A) 3 months in jail, 3 months in jail |
C) Go free, 1 year in jail |
|
|
Keep Silent |
B) 1 year in jail, Go free |
D) 1 month in jail, 1 month in jail |
|
Suppose Prisoner 2 decides to betray Prisoner 1. Under the “Prisoner 2 Betrays Prisoner 1” scenario, Prisoner 1 will only have to spend 3 months in jail if he betrays Prisoner 2 (corresponding to cell A above), and a full year in jail if he keeps silent (corresponding to cell B above). Now suppose Prisoner 2 decides to keep silent. Under the “Prisoner 2 keeps silent” scenario, Prisoner 1 goes free if he betrays Prisoner 2 (corresponding to cell C above), and spends 1 month in jail if he keeps silent (corresponding to cell D above). So no matter what Prisoner 2 does, Prisoner 1 always spends less time in jail if he betrays Prisoner 2. By symmetry, no matter what Prisoner 1 does, Prisoner 2 always spends less time in jail if he betrays Prisoner 1. Thus the dilemma…
Now, let’s consider how Take it All recreates the Prisoner’s dilemma. The show begins with five contestants playing a first round, four contestants playing a second round, and three contestants playing a third round. The final two contestants after round three advance to the “Prize Fight” which mimics the Prisoner’s dilemma game shown above. In the Prize Fight, the strategy pair for each contestant is “Keep Mine” (i.e., keep my winnings from Rounds 1–3) and “Take it All” (i.e., keep my winnings from Rounds 1–3 and also take my opponent’s winnings from Rounds 1–3). If both contestants choose to “Keep Mine,” they will each keep the prizes they have won in the prior rounds (this is analogous to ending up in cell D in the Prisoner’s dilemma payoff matrix shown above). If one contestant chooses “Keep Mine” and the other chooses to “Take it All,” the contestant that chose “Take it All” will go home with all the prizes — theirs and their opponents (this is analogous to ending up in either cell B or cell C D in the Prisoner’s dilemma payoff matrix). But if both choose “Take it All,” they both go home with nothing (this is analogous to ending up in cell A in the Prisoner’s dilemma payoff matrix). If one were to play this game purely on the basis of self-interested action, then the obvious strategy would be to always “Take it All”, in which case NBC doesn’t have to pay out at all. However, the interesting (and somewhat creepy and provocative twist) here is that the show’s host (Howie Mandel) gives both contestants time to try to convince each other that they won’t betray each other. Thus, the “suspense” is whether one’s opponent follows through on his or her verbal “promise” to “Keep Mine”.
Now consider what happened earlier this week on a “Take it All” episode:
From a business perspective, I think that it is quite clever to produce a game show based upon a prisoner’s dilemma game. The production costs for a show like this are nominal, and most of the time the production company won’t have to pay out a jackpot. It doesn’t take a game theory expert to figure out that the incentive structure of the game is incompatible with a (Keep Mine, Keep Mine) outcome. The likely outcome is (Take It All, Take It All), in which case no prize is paid. Occasionally one can expect a (Keep Mine, Take It All) outcome, as was the case earlier this week. This also works to the NBC’s benefit; the “drama” of the game creates a buzz and possibly more viewership (thus bringing in more revenue from commercials). In all likelihood, NBC also manages the risk of a (Keep Mine, Take It All) outcome by purchasing an insurance policy covering the cost of the jackpot from Lloyds of London…
Let me make one final point about Prisoners Dilemmas and television shows. The next time you watch a Law and Order re-run, keep in mind that virtually every Law and Order episode is organized around some variation of a Prisoners Dilemma game. The downside of realizing this is that this makes Law and Order much less interesting to watch, since you can often deduce what will likely happen just a few minutes into each episode!
Matt Ridley writes the Mind and Matter column in The Wall Street Journal and has written on climate issues for various publications for 25 years. He is somewhat of a science polymath, having written on a wide variety of science topics – so many that he even has his own Amazon page @ http://amzn.to/V6Qn0E. His latest book, the Rational Optimist (cf. http://amzn.to/VPXE15), is on my reading list for the holidays. His latest WSJ article provides an interesting and informative assessment of empirical climate research:
Matt Ridley: Cooling Down the Fears of Climate Change
online.wsj.com
In The Wall Street Journal, Matt Ridley reports that the latest scientific evidence points to a further rise of just 1°C by 2100-and the net effect on the planet may actually be beneficial.
Apparently there is a diaspora of rich French citizens surrendering their French passports so as to avoid having to pay a recently passed top marginal income tax rate in France of 75 percent. Quoting from the article accompanying this video, “French Premier Jean-Marc Ayrault said it was pathetic that people move to another country to avoid taxes after a Belgian mayor said that actor Grard Depardieu was moving to Belgium possibly to pay lower taxes.”
