Roquefort, ewe!

As my family will attest,
Stinky, blue-veined cheeses I detest.
Still, I can hardly cheer
over tariffs to make Roquefort so dear.

From the Washington Post,

In its final days, the Bush administration imposed a 300 percent duty on Roquefort, in effect closing off the U.S. market. Americans, it declared, will no longer get to taste the creamy concoction that, in its authentic, most glorious form, comes with an odor of wet sheep and veins of blue mold that go perfectly with rye bread and coarse red wine.

It sounds like someone in the Bush administration couldn't stand the stuff either.

"Wretched excess," quite possibly

This morning's Washington Post contains two thoughtful conservative criticisms of the economic stimulus legislation that was passed by the House of Representatives and that is now before the Senate.

George Will counsels congressional Republicans that President Obama deserves some deference on the stimulus package but also observes that,

Congressional Democrats have turned the 647-page stimulus legislation into an excuse for something that never needs an excuse -- an exercise in wretched excess. They have forfeited some of the president's claim to deference.

Will is right that the legislation has been larded up with spending that has little to do with the current economic crisis and a lot to do with Democrats advancing parts of their agenda.

At the risk of goring my own ox, one of these provisions is the $17.6 billion that would be spent on Pell Grants, infrastructure at colleges and universities, and other student financial aid, including student loans. There is considerable merit in some of this spending. There is also some need to address problems in the student loan programs that stem from the financial crisis. However, much of this spending could be addressed in other legislation and falls outside the "stimulus" category.

In another column, Martin Felstein writes

On this page in October, I declared my support for a stimulus. But the fiscal package now before Congress needs to be thoroughly revised. In its current form, it does too little to raise national spending and employment. It would be better for the Senate to delay legislation for a month, or even two, if that's what it takes to produce a much better bill. We cannot afford an $800 billion mistake.

He goes on to criticize specific tax cut and spending increase provisions of the legislation. He points out that some of the personal tax cuts are likely to go towards savings and debt payments rather than spending, weakening their stimulative effects. Similarly, some of the "infrastructure investments," such as computerizing medical records, may have little effect on jobs growth.

While the legislation is portrayed as an immediate stimulus, it is in fact a multiyear bill. The Congressional Budget Office estimates that the net fiscal impact (spending increases plus tax cuts) from the legislation will be $817 trillion billion,* but this is the total over 10 years. Of this amount, $170 billion will be "spent" in what remains of FY 2009 (i.e., between now and September); $356 billion will be spent in FY 2010; $174 billion goes to FY 2011, and $114 billion doesn't appear until the out years of FY 2012 - FY 2019.

Some delays in spending are necessary. The government can't turn around and spend an extra $817 billion in a day. Many of the infrastructure projects will take time to complete. Federal agencies, state governments, and local governments need to be able to plan their spending. For many reasons, it's prudent to spread out some of the funding and to plan on continuing that funding into next year.

Some spending in out years is also reasonable. Unlike the last administration, which never included out year spending for war emergency spending in its budgets, the current administration is acknowledging what we already know--that many of the spending projects will continue to incur costs for several years. The government is unlikely to cut off funding for multi-year capital projects partway through their funding; it should budget and has budgeted accordingly.

Nevertheless, $288 billion (a third of the package) is slated for FY 2011 and beyond. Some of the $288 billion continues earlier projects, but a portion involves projects that won't be initiated until after September 2010. There's just no good reason to rush into those commitments.

As the legislation moves into the Senate, leaders there should look to trim some of the extras from the immediate portions of the bill and should strip out altogether new commitments beyond FY 2010. These other portions of the bill deserve more scrutiny and can be addressed later when we have more information about the effectiveness of the initial spending, the state of the economy, and other possible problems that we may confront.

* Corrected 1/30/2009, 8:10 a.m.

Blog by a colleague

I just found out that my next door colleague in the Economics Dept. at UNCG, Dennis Leyden, has been blogging for the last few months. Dennis is accumulating a nice set of economic observations to use in his classes, using local, national, and personal events.

I Love It When You Call Me Names, um Not

Why do some people, especially bloggers and commenters, write the things that they do?

Are they trying to advance a dialog where people might come to a genuine consensus of some issues or at least a better understanding of their fundamental differences? Or are they writing in a way that effectively tries to shut off debate?

You can tell that writers have settled for the latter course when they can't offer anything but insults for people who hold different opinions.

Thoughtful people read, listen to, and evaluate different views. If they disagree, they try to come up with facts and arguments that address the disputed points. If they disagree and are motivated enough, they might actually write something along these lines.

You seldom, however, see thoughtful people do the following in discussions and in their writing.

Name-calling. People who regularly address or categorize their opponents as idiots, morons, brats, liars, zealots, bigots, cowards, or even more colorfully as baby-killers, Nazis, fascists, flat-earthers, etc. have already lost the argument. More to the point, it says something about people's value of time if they spend time engaging people who actually fit these descriptions.

As George Carlin observed years ago,

There are a lot of little phrases and expressions too, language items that occur in your childhood that you don't get to use when you grow up. Things you leave behind. Stuff you don't say anymore. Like NYAHH NAH NAH NYAHH NAH! I have an awful time working that in.

George might have had problems working that in, but many bloggers don't.

Arguing with the insane. Along the same lines, you really have to wonder about people who see everyone who holds a different opinion as being crazy. If someone other than a psychological professional regularly uses the words like Bush Derangement Syndrome, Obama Syndrome, wingnuts, moonbats, whackos, delusional, fanatic, lunatic, pathalogical, etc., he or she has many more issues to deal with than his or her opponents. Yes, there are kooks, nuts, and fringe elements on both sides, but these people are the exception, rather than the rule.

Questioning other people's motives. Thoughtful people can not only disagree but can also have valid reasons for those disagreements. It's easy to assign bad motives to a disagreement; it's harder to figure out how someone with reasonable or even similar values found a way to a different conclusion. You don't have to be a war-mongerer or traitor to differ on military policy, a bigot, racist (of either the regular or reverse varieties), or an advocate of victimhood to differ on race relations, or greedy or a bleeding-heart to differ on social policy.

Mars farts, Earth on edge

"Pull my finger."

In the science department, the Washington Post and other papers are reporting that scientists detected an eruption of methane on Mars and have interpreted it as a "sign of life."

Funny, my wife used the same words when she detected an eruption of methane from me after I had fallen asleep in front of the TV.

In an informal poll, all the Earth men I spoke to thought the news from Mars was terribly funny. The Earth women? Not so much.

Implications of torture

Two follow-ups on Judge Crawford's statement that she had dropped charges against Mohammed al-Qahtani because she had concluded that he had been tortured.

The New York Times hosts an on-line symposium on the topic, with responses ranging from a call for further investigations and prosecution of the torturers

It is not enough to drop criminal charges against the torture victims, as Ms. Crawford did. Indeed, if wrongdoers can be prosecuted without reliance on coerced evidence, they should be. Rather, we must hold the torturers accountable. To date, not a single high-level military or administration official has been deemed responsible for the torture policy – even though it was specifically authorized by Donald Rumsfeld, Dick Cheney, and many others in the highest levels of the Bush Cabinet and executive branch.

to claims that the conduct has been blown out of proportion

Ms. Crawford’s conclusion is another instance of the military getting it wrong. Isolation and temperature variations of the type we are talking about here are not torture. To contend otherwise is to trivialize something that is truly heinous. It may be politically correct, but it is wrong. American law has always maintained a bright line between the egregious pain and suffering caused by actual torture and other forms of abusive conduct. Ms. Crawford’s suggestion that abusive conduct that has a "medical impact" meets the “legal definition of torture” is preposterous.

Over at slate.com, Dahlia Lithwick and Phillipe Sands argue that the U.S. has now passed a critical turning point

Under the 1984 Torture Convention, its 146 state parties (including the United States) are under an obligation to "ensure that all acts of torture are offences under its criminal law." These states must take any person alleged to have committed torture (or been complicit or participated in an act of torture) who is present in their territories into custody. The convention allows no exceptions, as Gen. Pinochet discovered in 1998. The state party to the Torture Convention must then submit the case to its competent authorities for prosecution or extradition for prosecution in another country.

The former chief judge of the United States Court of Appeals for the Armed Forces and general counsel for the Department of the Army has spoken. Her clear words have been picked up around the world. And that takes the prospects of accountability and criminal investigation onto another level. For the Obama administration, the door to the do-nothing option is now closed. That is why today may come to be seen as the turning point.

Regrettably for our country, Lithwick and Sands have it right. An allegation of heinous and illegal behavior by a credible and knowledgeable official requires investigation.

Prices rising in the service sector

A well-known exchange, sometimes attributed to Winston Churchill and Lady Astor, goes as follows:

Churchill: "My Dear, would you go to bed with me for a million pounds?"

Astor: "Well, yes, I guess I would."

"How about 100 pounds?"

"What kind of person do you think I am?"

"My Dear, we have already established that. We are merely haggling over the price!"

It turns out we need to update the exchange. A student in San Diego is auctioning her virginity to pay for graduate school. The going price right now is $3.7 million.

What me torture?

Last week, Vice President Dick Cheney, told the Weekly Standard,

I think on the left wing of the Democratic party, there are some people who believe that we really tortured...

Make that the left wing of the Democratic party and the Bush administration official in charge of trying the remaining Guantanamo detainees.

From this morning's Washington Post

The top Bush administration official in charge of deciding whether to bring Guantanamo Bay detainees to trial has concluded that the U.S. military tortured a Saudi national who allegedly planned to participate in the Sept. 11, 2001, attacks, interrogating him with techniques that included sustained isolation, sleep deprivation, nudity and prolonged exposure to cold, leaving him in a "life-threatening condition."

"We tortured [Mohammed al-]Qahtani," said Susan J. Crawford, in her first interview since being named convening authority of military commissions by Defense Secretary Robert M. Gates in February 2007. "His treatment met the legal definition of torture. And that's why I did not refer the case" for prosecution.

Judge Crawford, who previously served in defense department posts in the Reagan and earlier Bush administrations, would now appear to be a fellow traveler in Dick Cheney's book.

In another blow to actually trying the terrorists, there may be insurmountable problems with the evidence in these cases. From another article in this morning's Post

A former military prosecutor said in a declaration filed in federal court yesterday that the system of handling evidence against detainees at Guantanamo Bay is so chaotic that it is impossible to prepare a fair and successful prosecution.

To that, you can add some outright bungling

Military defense lawyers also said yesterday that the Office of Military Commissions may have accidentally withdrawn the charges against all defendants at Guantanamo Bay facing trial, including Jawad and even Khalid Sheik Mohammed, the operational mastermind of the Sept. 11, 2001, attacks.

The Bush administration has held detainees for seven years and only successfully prosecuted a handful. At least that's what some on the left wing of the Democratic party say.

Disappointments, Bush has had a few

One of the nice things about living in Greensboro is that you seldom face any serious traffic. But back when I lived in Northern Virginia, hoo boy, were there ever some colossal jams. Living there, it's one just of the things you become accustomed to and try not to get too upset about.

Occasionally, though, when the jam was unexpected or the car had been idle and boxed in for a while, the frustration would boil over, and an angry and misanthropic thought would pop into my head--"This had better be worth it!" As if a particularly grisly accident or mangled car would provide some cosmic compensation for the time spent idling.

Angry thoughts often lead to others. Sometimes this took the form of being disappointed if the traffic cleared with no visible initial cause for the jam.

Those kind of thoughts, of course, are completely misguided. There is certainly nothing admirable or really even defensible about them. Once the frustration passes, they are actually kind of shameful. It's horrible to wish misfortune on some other random motorist and not to take some solace from no one being hurt. The thoughts also conveniently overlook my and others' contributions of herding behavior, unwillingness to pay road taxes, poor driving, etc.

It turns out, though, that I'm not the only misanthrope walking the planet. The same kinds of sentiments colored President Bush's last press conference yesterday.

When asked for the umpteenth time by a reporter whether he had "made any mistakes," the President started with some defensive and grudging admissions of errors with the "Mission Accomplished" banner, his rhetoric, the Katrina response, and Social Security reform.

However, he then paused and began listing "disappointments."

There have been disappointments. Abu Ghraib obviously was a huge disappointment during the presidency. Not having weapons of mass destruction was a significant disappointment. I don't know if you want to call those mistakes or not, but they were -- things didn't go according to plan, let's put it that way.

So let's get this straight. Saddam Hussein not having weapons of mass destruction was a significant disappointment. Disappointed with the underlying intelligence, okay. Disappointed with his own decisions, sure. But disappointed with the absence of WMDs? Wow.

If we take the President at his word--and the word he emphasized was "disappointment"--he would have been comforted, relieved, or possibly even happy for Hussein to have actually had WMDs. Never mind the danger to our troops, the Iraqi population, the region, and the world if this had been the case.

Like the ignorant bravado the President showed when he said of the Iraqi insurgents, "bring 'em on," his latest comments reveal that he is unconcerned about others' well-being, at least for a while, so long as his ego is massaged.

To the extent that the quieter life of Crawford or wherever the President retires to affords him time to reflect, maybe he will see how misguided and misanthropic his policies and outlook have been. However, if he runs into traffic down there, I've got a fair idea of where his thoughts will go.

Can't ask, can't tell

The Washington Post reports on how the widespread use of cell phones is complicating the jobs of health and social science surveyers.

Cellular telephones are perhaps the biggest threat to survey data that epidemiologists have confronted in years.

...Federal law requires that calls to cellphones be hand-dialed; it is illegal to use automatic dialers, which are standard tools for survey and polling firms. Furthermore, a huge fraction of "owners" of cellphone numbers are children ineligible for the health surveys. Once reached, some cellphone users are reluctant to talk at length because they have to pay for incoming calls.

The article also describes "mode effects:"

For example, when a group of people with the same age, race and education are called on a conventional phone, 25 percent say they smoke, but on a cellphone 31 percent say they do. On a land line, 38 percent say they have been tested for HIV, while on a cellphone 54 percent say they have.

These are all serious problems with few good or inexpensive alternatives.

Largest annual loss of jobs since 1946

This morning's report by the U.S. Department of Labor on the December jobless rate is as bad as was expected. More than half a million jobs were lost on net in December according to the payroll figures, and national unemployment rose to 7.2 percent, the highest since January 1993.

The payroll figures indicate that 2.6 million jobs were lost on net for all of 2008, with 1.9 million of these losses occurring in the last four months. In absolute terms, the December to December loss in payroll employment is the largest 12-month loss since February 1946 during the demobilization from World War II. In percentage terms, the loss is the largest since December 1982.

Household data indicate that the percent of the U.S. population that is employed has fallen from 62.7 percent to 61.0 percent over the last year.

The median duration of unemployment spells is up to just past 10 weeks, meaning that half of all spells are lasting more than two and a half months. The mean duration is nearly five months.

In a separate study issued last month, the Department of Labor also reported that involuntary part-time employment has nearly doubled in the last year and a half. We typically conceptualize employment as either being with or without a job but overlook that there is a continuous dimension. People sometimes aren't able to work the number of hours that they would like, and this problem, along with unemployment, gets worse in recessions.

Joblessness in Greensboro and the rest of North Carolina

The economic situation in Greensboro and the rest of North Carolina is deteriorating quickly. The U.S. Department of Labor reports that the unemployment rate in Greensboro reached 8.1 percent in November, up more than a full percent from the month before and up more than three percent from a year earlier.

The figures are only slightly worse than for all of North Carolina, which had an unemployment rate of 7.8 percent in November. All major metropolitan areas in the state are seeing substantial unemployment increases. Especially hard hit are the cities of Hickory and Rocky Mount, where unemployment rates have now reached the double digits.

Unemployment rates in North Carolina and selected cities

Area	Nov. 2007	Oct. 2008	Nov. 2008
North Carolina	4.6	6.8	7.8
Burlington	4.8	7.3	8.5
Charlotte-Gastonia-Concord	4.8	7.2	8.1
Durham	3.7	5.1	5.8
Hickory-Lenoir-Morgantown	5.7	8.5	10.2
Greensboro-High Point	4.8	7.0	8.1
Raleigh-Cary	3.5	5.3	6.1
Rocky Mount	6.0	9.7	10.9
Winston-Salem	4.4	6.5	7.2

Private surveys and jobless claims indicate that the situation will look even worse when the December figures are available.

The economy and shoplifting: an update

Slate's Jack Shafer deconstructs the New York Times' shoplifting story that I linked to last week. Shafer shows that there is a lot less to the Times' numbers than it first appears.

Several of the Times' examples are anecdotal. Shafer goes on to describe supporting anecdotes from other newspaper stories as well as some contradictory anecdotes.

Abstinence pledges worse than ineffective

The Washington Post reports this morning

Teenagers who pledge to remain virgins until marriage are just as likely to have premarital sex as those who do not promise abstinence and are significantly less likely to use condoms and other forms of birth control when they do, according to a study released today.

The findings indicate that pledges are not only ineffective at stopping premarital sex but counter-productive in discouraging teens from taking reasonable precautions.

One explanation for the findings may be that pledges convince teens that they don't need to take precautions. After all, you don't need condoms or other forms of birth control if you're not going to have sex in the first place. However, in the instances when sex does happen, the teens are unprepared. As the study indicates, the "instances" seem to be as frequent for the pledged teens as for the unpledged teens.

Another explanation is that pledges put up barriers between teens and responsible adults who might help arrange for contraception. It is difficult enough for a teen to start the "I need protection" conversation with a parent; imagine how much harder it is when the teen has pledged chastity.

Yet another explanation may be that parents become less vigilant regarding their children's behavior once a pledge has been made.

Pledges and abstinence programs generally are based on the unrealistic notion that we shouldn't send "mixed messages" to teens. However, the mixed message seems unavoidable. We should discourage teenagers from engaging in sex, but if they do, we want them to take precautions against pregnancy and disease.

The good news seems to be that teens as a group are getting the mixed message despite the actions of some adults. Teen birth rates and pregnancy rates are at relatively low levels. More comprehensive programs that recognize the inherent mixed message may help to reduce these rates more.

In-kind bonuses to investment bankers

Investment bankers at Credit Suisse may be feeling a lot like Clark Griswold after finding out that most of their year-end bonuses are being paid out in the form of "junk bonds, mortgage-back securities and corporate loans" instead of cash.

Clark, whose Crunch enhancer non-nutritive cereal varnish actually added value to his company, deserved better and eventually got it.

The bankers, who created these crummy securities and pawned them off on their customers, are getting far better than they deserve.

"Rational" crime

In its simplest form, the rational model of decision-making assumes that people compare the net benefits and costs of alternative choices and choose the alternative with the highest net benefit. The model can be extended to consider long-term consequences, different ways of discounting the future, and other considerations. However, the model, especially when applied to this-or-that types of choices, essentially comes down to a cost-benefit calculation.

Economists use the rational framework, without much controversey, to examine consumer (demand) and producer (supply) behavior in markets. Economists, most famously Gary Becker, have also used this model to examine other aspects of people's behavior including criminal activity.

Conservatives implicitly rely on the rational model when they argue that more police and tougher sentences deter criminal behavior. The argument is simple. These actions increase the likelihood of getting caught and the penalties associated with crime and thereby raise the cost of crime. For someone who is on the margin between committing and not committing a crime, the increase in costs will be enough to tip the scales against engaging in crime. Enforcement and penalities are examples of direct costs of crime. In the rational model, when these costs go up, criminal behavior goes down.

Conservatives, however, seem to have more trouble grasping another implication of the model, involving indirect or opportunity costs. When deciding between two alternatives, a person is less likely to choose one alternative if the value of the other alternative increases. Applied to criminal decisions, this means that people are less likely to engage in crime if the value of legitimate actions increases.

In his 1968 Journal of Political Economy article on "Crime and Punishment: An Economic Approach," Becker wrote (p. 177),

There is a function relating the number of offenses by any person to his probability of conviction, to his punishment if convicted, and to other variables, such as the income available to him in legal and other illegal activities, the frequency of nuisance arrests, and his willingness to commit an illegal act...

...a rise in the income available in legal activities or an increase in law-abidingness due, say, to "education" would reduce the incentive to enter illegal activities and thus would reduce the number of offenses.

The rational model predicts a link between economic and criminal activity. When the economy sours and legitimate money-making opportunities dry up, criminal activity is likely to increase.

A New York Times article this morning on shoplifting supports this analysis. It reports that,

As the economy has weakened, shoplifting has increased, and retail security experts say the problem has grown worse this holiday season. Shoplifters are taking everything from compact discs and baby formula to gift cards and designer clothing.

Police departments across the country say that shoplifting arrests are 10 percent to 20 percent higher this year than last.

The article identifies several other contributing factors, all of which fit within the rational framework.

Much of the increase has come from first-time offenders... But the ease with which stolen goods can be sold on the Internet has meant a bigger role for organized crime rings, which also engage in receipt fraud, fake price tagging and gift card schemes, the police and security experts say. And as temptation has grown for potential thieves, so too has stores’ vulnerability.

'More people are desperate economically, retailers are operating with leaner staffs and police forces are cutting back or being told to deprioritize shoplifting calls,' said Paul Jones, the vice president of asset protection for the Retail Industry Leaders Association.

Acknowledging that bad economic conditions contribute to crime is neither a capitulation to lawlessness nor an argument against pursuing other policies. Instead, it provides us with a better understanding of one of the factors--there are many others--behind people's behavior.

A rational analysis suggests that people, business owners, and law enforcement will need to be more vigilant during the tough economic months ahead.

An unfortunate sign of the times

The New York Times reports that the U.S. Postal Service is suspending its Operation Santa programs in New York and other cities. The programs, which have operated in different cities for more than 100 years, allowed post office customers to provide gifts to children who had written letters to Santa Claus.

According to the Times, "A Postal Service official in Washington, after an initial, limited acknowledgment of a 'privacy breach,' said that at one of the programs, not New York’s, a man whom a letter carrier recognized as a registered sex offender had 'adopted' a letter."

The problem with the program was that the Santas had the children's addresses and could provide gifts to children directly, sometimes in person.

The USPS is hoping to resume the program once it implements procedures to anonymize the children's letters. Under these arrangements, the post offices would act as clearing houses. They would replace the names and addresses in the letters with codes, and Santas would then only have the codes. Gifts would be brought to the post office, where workers would take care of subsequently unscrambling the codes and getting the gifts to the right children.

Sadly, even this wouldn't stop all possible abuses unless the USPS inspected the packages being sent to the children, as predators could still include their own contact information, or worse things, in the packages.

The USPS is absolutely right to take steps to protect the privacy and safety of children. It's terrible, though, that the bad actions of a few people could put such a worthwhile project at risk.

Nike Missile

The U.S. decommissioned its Nike Missiles in the 1960s, but it seems that two slipped into Iraqi hands.

I want it now duddy...

If Veruca Salt were touring Roddie Blagojevich's corruption factory, she might have asked for more than a golden goose.

Loans for infrastructure stimulus

In his Sunday New York Times column, Thomas Friedman called for the government to direct its stimulus "investments" towards projects with significant social, economic, and technological pay-offs, that is to make genuine investments. Some of the areas he would target include batteries for cars and "green" energy infrastructure. He also recommends adding a carbon tax to redirect consumer demand towards these greener alternatives.

One thing that isn't discussed is how the investments should be structured. The government should consider using loans rather than outright grants to make many of these.

Loans would take advantage of the government's good credit and ability to borrow at low rates. They explicitly address the "credit crunch" aspects of the current downturn. And the low rates end up effectively subsidizing the investment projects.

Loans also acknowedge that one way or the other, the funds that are going toward the stimulus will need to be paid back. If the money is really going toward economically worthwhile investments, the direct returns on those investments should be the source of repayment.

As William Nordhaus has long argued, fiscal deficits, including deficits directed toward "induced innovation," should be viewed in terms of their investment components. Why not go one step further and structure the spending the way that businesses and private parties would structure their investments?