And while I was dealing with the comments problem below, I went ahead and updated the site a bit. As you can see, author names and post-dates now appear below the post titles; this is possible now because Blogger is allowing all users access to the Titles feature (previously available only to BloggerPro subscribers). I also expanded the blogroll and changed the site's subtitle. Finally, I added the little proviso at right, letting anyone who sends us email know that their messages are subject to publication unless they request otherwise.
Friday, September 12, 2003
Out with the SquawkBox, in with the BlogSpeak
So my comments provider, SquawkBox, suddenly decided to charge money for my account. My original terms of service specified a 12-month introductory period during which no payment would be required, and I only signed on last April. But it seems they changed the terms of service about a month ago, with no notice except a single message on a support forum – which I’d never bothered to visit because I hadn’t had any problems. Now they require you to pay for the service if you have a high volume of comments; “high volume” appears to be anything more than a few comments a day.
“Ah well,” I said to myself, “the service is (or was) free, so I guess they can run it how they want.” I thought I might even grit my teeth and actually pay for the service, since I hadn’t had any prior problems. But first, I wanted to (a) make sure there wasn’t any mistake, and (b) find out if I could capture all the old comments, in case I wanted to switch comment services now or in future. Well, SquawkBox doesn’t have a single email address listed on its website; the only way you can ask questions or make complaints is by using one of their forums. And you can’t use their forums unless you’re a current customer in good standing – i.e., all paid up.
In short, I can’t get my comments back unless I cough up the money to keep my account active. Well, to hell with that. I don’t want to pay money to an organization that won’t let me get a parachute out. I’ve decided to shoot the hostage – well, abandon him anyway – by not buying access to all the old comments. (My apologies to any readers who had composed and saved their dissertations in my comments box.) I’m now running my comments via BlogSpeak, which turns out to have a simpler and more flexible system anyway.
Thursday, September 11, 2003
Academic Blogs and Infotainment
Tyler Cowen, in an interesting interview, argues that academic blogs are the wave of the future. Top academics will aim for a few prestigious publications and then present the rest of their ideas through blogs and other channels. I’m a bit skeptical since blog topics seem pretty limited to me. Cases, anecdotes and cute stories work well, which is why law and the cute-story part of economics (e.g. why there is such a big markup in movie popcorn) make up most of the blogs I read.
I think it works less well for other issues, such as those that make up most of economics. To give an example, Tyler Cowen presented his “Macroeconomics in Five Easy Lessons”. In his discussion of Fed policy he says (without any explanation)
“Don't worry about the discount rate, when the Fed lends to banks, that is secondary and I will ignore it.In a response to the “first lesson”, Daniel Davies replies to that sentence by saying,
It isn’t secondary at all, particularly if you’re operating on a standard of “what the stock market cares about”. I explained at length a while ago how the control of the overnight money rate can be used to exercise a significant degree of control of the entire yield curveFor that exchange to be meaningful the reader should be able to answer the following questions: Why is anyone worrying about the discount rate in the first place? Why is Cowan right that you can ignore it? And what two things is Davies confusing?
Here is the answer.
The Federal Reserve can affect the amount of reserves in the economy through purchases of bonds (a process called open market operations) or by lending reserves directly to banks. The part of the Fed that makes loans is called the discount window, and the rate it lends at is the discount rate. In the past, the Fed has worked to control the quantity of reserves and short-term interest rates by regulating the amount borrowed at the discount window, which is why the discount rate was important in the past. It no longer does this. There is still some borrowing at the window, but it is mostly for technical reasons, seasonal loans to banks in agricultural areas, and very-short-term (mostly overnight) loans to banks that have temporary difficulties in meeting their reserve requirement. So, the reason you don’t need to know about the discount rate is that changes in Fed policy have made it irrelevant for bigger questions of monetary policy.My point is not that the discount rate is an important subject (although both people brought it up one way or the other) but rather that it is not entertaining, and this distorts the coverage. Because it is not entertaining, Cowen isn’t going to provide an explanation, and no one but economists with formal training will know what is really being talked about. Which is why I doubt that blogs will develop into an alternate location for serious discussions about most parts of economics. What works well on blogs is just too narrow.
What matters for policy are open market operations. These influence the interest rate charged by banks to other banks on overnight loans, which is called the Fed Funds rate (this is the “overnight money rate” referred to by Davies). As he argues, the overnight rate is important; however, it is a separate thing from the discount rate.
Wednesday, September 10, 2003
The Argument Clinic
Micah Ghertner does a nice job of defending Radley Balko against Al Giordano’s scurrilous attack. Essentially, Giordano plays the “silly libertarians must be ignorant, naive, stupid, or evil to believe what they believe” card. Ghertner correctly identifies this as the ad hominem non-argument that it is.
There is one aspect of Giordano’s post that Ghertner doesn’t give the battering it deserves, however, so allow me to take it on. Giordano repeatedly cites Radley’s lack of personal, hands-on experience as a reason to doubt his positions. On the issue of globalization, Giordano notes that Radley has apparently never “learned any of the languages these mythical ‘poor people’ speak” or “done his own heavy lifting in his research [on globalization].” On the issue of prison rape, Giordana urges Radley to “Spend some real time in jail - as an inmate - and then come back and talk to us about prison rape.”
These arguments (if you can call them that) are individual species of a broader genus known as “if you haven’t been there you just can’t understand.” Other members of this genus include “until you can get pregnant, you don’t get to express an opinion about abortion” and “if you haven’t ever worked for the minimum wage, then how can you advocate eliminating it?” The implied claim behind all these positions is that the only valid knowledge is that which is gained through direct personal experience.
I wonder if those who take positions like these would affirm similar statements about non-favored groups, such as “unless you earn over $100 grand per year, you don’t get to support high marginal tax rates,” or “unless you live in a country that is going to get punished by the Kyoto Protocol, you have no business supporting it”?
I encountered a version of this argument a few weeks ago, when I was discussing globalization (yeah, it’s a popular topic) with an intelligent -- and very left-wing -- couple I met at a book reception. After I’d made several economic arguments in defense of globalization (to which I didn’t think they had responded very well, though some observers may have disagreed), they played their “we’ve traveled in the third world, have you?” card. Well, no, I had to admit -- I don’t make enough money to afford vacations in places I’d like to visit, to say nothing of hellholes. What, I wondered, did they think I would see in such places that would change my mind? The clear implication of their statement was that, upon seeing such terrible privation and squalor, I’d reject capitalism. But first, I don’t support globalization because I think life in Pakistan and Indonesia is hunky-dory; on the contrary, I support globalization because I think life there is pretty horrible. And second, their economies are very far from being capitalist, so it would be pretty weird for me to blame their terrible conditions on an economic system other than the one they have.
I suppose they might respond that the poverty of third-world nations is attributable not to their collectivist and totalitarian domestic economic systems, but to the international capitalist system. Okay, fine -- I think that’s wrong, but let’s suppose it’s true. That only strengthens my point, which is that something other than direct personal experience counts as relevant knowledge. If both of us can look at the same squalid conditions, and you can blame them on capitalism while I can blame them on collectivism, then isn’t it apparent that further study, of both a theoretical and empirical character, is required? Yet that is just the kind of evidence the anti-globo crowd is usually disinclined to consider, unless, of course, it’s just raw data (e.g., “The richest fifth of the world’s people consumes 86% of all goods and services while the poorest fifth consumes just 1.3%”) that really proves nothing on its own. Facts do not speak for themselves; they require interpretation.
Ultimately, the “if you haven’t been there” arguments constitute intellectually suspect appeals to emotion. They invite you to make decisions on complex policy issues on the basis of your gut reactions to images of the sad and pathetic, instead of careful analysis. Worse, the argument is deployed in conversation and debate with the clear purpose of dismissing analysis and discrediting the speaker who offers it.
Return of the Firefly
Good news for Joss Whedon fans: "Firefly," Whedon's underrated TV space western that was canceled last year after less than half a season, will be turned into a feature-length film. Plus, all episodes of the show (including three unaired episodes) will be released on DVD this December.
Man Sends Himself by Airmail
Read the whole ridiculous story here. This guy would have been an excellent candidate for the Darwin Awards, if only he had died (which he easily could have). My favorite part: "The freight cost — billed to McKinley’s employer — was $550. At that rate, 'he could have flown first-class,' Phillips said."
Monday, September 08, 2003
Do Not Swap List
Julian takes the RIAA to task for a rather silly argument they’ve mustered in favor of a file-swapping crackdown: that the software used to swap music files is also used for swapping kiddie porn. Radley suggests that Julian is being inconsistent, because he has defended the constitutionality and libertarian-compatibility of the national Do Not Call list: “Why is the DNC list a legitimate use of federal power via the Commerce Clause, but federal laws against fileswapping aren't?”
Radley misunderstands Julian’s argument on the file-swapping issue. He notes, correctly, that many of the same points Julian mustered in defense of the DNC list apply here: (1) there is some form of theft involved [assuming you buy the notion of intellectual property], (2) the theft is being perpetrated by means of public utilities, (3) it’s occurring across state lines, and (4) state laws are insufficient to deal with the problem. And these points would be sufficient to show that a file-swapping crackdown would be constitutional and [again, if you buy the notion of intellectual property] libertarian-consistent if done correctly. But that’s not what Julian was trying to prove. He was simply drawing attention to a thoroughly unbelievable statistic implying that 42% of downloadable porn images were kiddie porn. It turns out this statistic was found by seeing how many of the files had titles or descriptions with certain words like “underage” in them, which in no way indicates that the images actually involve children.
As a constitutional matter, the federal government clearly has the power to deal with file-swapping in some manner, because Article I Section 8 of the Constitution gives Congress the power “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” The Commerce clause need not even be invoked here. The constitutional basis for file-swapping legislation is even better than that for the DNC list.
With respect to libertarian-ness, there are those libertarians who think the IP rights are illegitimate grants of monopoly power, but Julian and I am not among them. I think that IP rights, while differing from traditional property rights in many respects, share with traditional property rights the same consequentialist justification: they deal with a positive externality problem that would exist in their absence. I therefore regard IP as just an unusual species of property. Julian, I happen to know, thinks IP rights should not be regarded as true property, but are justifiable nonetheless. Both of us are skeptical about the rent-seeking efforts of organizations like the RIAA to strengthen the enforcement of IP rights whatever the cost, to extend copyright periods indefinitely, and so on.
Aside from constitutionality and libertarianism, there is the additional issue of effectiveness. It’s entirely possible that anti-file-swapping legislation would be utterly incapable of dealing with distributed networks like Morpheus and KaZaA, in which case the legislation would be constitutional but pointless. The logistical problems associated with the DNC list are not nearly so difficult -- though I could still be convinced by evidence that, on net, the DNC was practically not such a good idea after all. Point being, good policy must be constitutional, just, and practical.
Econobloggers
Tyler Cowen and Alex Tabarrok started an economics-focused blog called Marginalist Revolution last week, and it's already been the site of several really excellent posts. I particularly recommend Tyler's and Alex's mini-debate on the desirability of school vouchers (see here, here, here, and here). This is must-reading for voucher supporters, because Tyler's challenges are not your typical anti-market dreck, yet Alex's responses aptly weigh the disadvantages of a voucher system against the equivalent disadvantages of the status quo.
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