And the Cupboard was Bare
I can't find or think of anything to post today. I'll keep trying.
While I do, here's a bunch of posts that, for one reason or another, were all ready to go but never got posted here:
EPI: Quantifying the Threat of Offshoring
Which jobs are vulnerable to offshoring?:
Quantifying the Threat of Offshoring, by Jared Bernstein, Lawrence Mishel, James Lin, EPI: ...Offshoring is a term used to describe the practice of sending work that used to be done here to be done by workers abroad. ...
In seminal work, economist Alan Blinder examined the tasks performed by employees in hundreds of occupations, and identified those jobs that are potentially offshorable.[1] While many “blue-collar” or production jobs have long been recognized as offshorable, Blinder’s contribution was to account for the role of communication technologies that allow many more workplace tasks to be offshored. For example, telemarketing and accounting tasks typically do not require on site presence and the tasks involved can be accomplished by phone and especially over the internet.
Blinder stresses two caveats. First, he is trying to “estimate the number of jobs that are potentially offshorable,” [his italics and underline], and second, that “only a fraction of these offshorable jobs will actually be offshored.” Nevertheless, those employed in offshorable jobs can expect to see their wages adversely affected solely because their work can be offshored even if it is not actually offshored. The availability of offshore labor, even if it is never tapped, increases the supply of workers available to the employer, and this creates downward pressure on wage growth.[2] ...
Findings ...[We] find ... that between 18 and 22 percent of today’s jobs—25 to 30 million—could potentially be offshored.[4]
Data ... reveal that the educational group most vulnerable to offshoring are those with at least a four-year college degree. While 29.5% of all jobs are staffed by those with at least a four-year college degree, 34% of offshorable jobs fall into this category. Over eight million highly educated workers are at risk from offshore competition.
Jobs vulnerable to offshoring also pay better, even when comparing jobs with comparable education requirements... For instance, among college-educated workers, offshorable jobs pay about $8,000, or 14%, more per year than non-offshorable jobs. Among jobs for workers with at most a high school education, offshorable jobs pay about 9% more than other available jobs. This is a measure of what is at risk for workers in occupations exposed to this type of global competition.
The OES data ... provide details on the skill demands of various jobs, and these data also reveal the higher skill levels of offshorable jobs. Offshorable jobs, for example, are much more likely to require moderate rather than short-term on the job training, and are more likely to require an associate or bachelor’s degree than non-offshorable jobs.
Most other characteristics are found to be similar among both offshorable and nonoffshorable jobs... For example, there are few regional or city/suburb differences between all jobs and those with offshore potential.
Eating More or Working Less?
Is increasing obesity in recent years due to more caloric input, or less energy output?
Why is the Developed World Obese?, by Linda Gorman, NBER Digest: ...[T]he causes of the dramatic increase in obesity over the last few decades are not well understood. Although some experts point to the decline in work-related physical activity, it has both been comparatively gradual and has largely predated the recent rise in obesity. Furthermore, obesity among children and the elderly, two groups that we would not expect to be affected by changes in work-related physical activity, has risen along with adult obesity. Finally, the obesity increase has been remarkably similar across countries, which suggests a worldwide phenomenon.
In Why is the Developed World Obese? (NBER Working Paper No. 12954 [open link]), authors Sara Bleich, David Cutler, Christopher Murray, and Alyce Adams show that rising obesity in the developed world is primarily the result of consuming more calories. Specifically, they find that increased caloric intake accounted for 93 percent of the change in adult obesity from1990 to 2001 (the remainder is attributable to reduced energy expenditure). The increase in caloric intake appears to be driven by technological innovations, such as lower food prices and the ease with which businesses can enter the marketplace, as well as changing sociodemographic characteristics such as increased labor force participation and increased urbanization.
Across the developed world, average food prices fell by 12 percent from 1980 to 2002, which the authors associate with a corresponding higher caloric intake of approximately 38 calories. A 10 percent increase in female labor force participation was associated with an increase of approximately 70 calories. A 10 percent increase in urbanization was associated with an increase of approximately 113 calories.
The authors point out that a very small net increase in calories may lead to a large increase in obesity, and they predict expected changes in weight based on the associations they observe between caloric supply and the drivers of increased consumption. For example, they show that increasing food prices by 12 percent would be associated with a decrease of 1.5 kilograms (3.4 pounds) for the average 65-kilogram (143-pound) person. Similarly, they show that decreasing urbanization by 5 percent would be associated with a decrease of 2.2 kilograms (5 pounds) for the average 65-kilogram person. ...
The authors note that available data are likely subject to important measurement errors and that caution should be used in interpreting their results. They conclude that, while over consumption appears to be relatively more important to rising obesity than physical activity, energy expenditure is still important to weight management and overall health.
Are You Safer Today?
A report on the war on terror:
Are we safer? A report card on the war on terror, by David Cole and Jules Lobel, LA Times: We have more than six years of experience with the Bush administration's war on terror, and there has not been another terrorist attack on U.S. soil. But can the administration take credit for that? Here's a report card on what the administration's counter-terrorism strategy has achieved, and what it has cost. The figures are drawn from official government sources, reliable news accounts, institutional reports and our own continuing review of data.
Worldwide
Number of terrorist attacks
2001 1,732 2005 4,995 2006 6,659
In Iraq
Average daily number of insurgent attacks
July 2003 16 May-July 2007 161.6 At Home
Number of "terrorism or terrorism-related" convictions and guilty pleas (with an international connection) claimed by the Justice Department as of June 2006 3... 261
Number of those cases actually involving attempted terrorist activity ... 2
Minimum number of foreign nationals preventively detained in anti-terrorism initiatives in the U.S. in the first two years after 9/11 ... 5,191
Number of those convicted of terrorist crimes today... 0
Number of U.S. foreign residents who complied with domestic registration program targeting immigrants from Arab and Muslim countries ... 83,519
Number of those convicted of terrorist crimes today ... 0
Number of foreign nationals the Justice Department claims to have deported in connection with 9/11 investigations ... > 515
Number of those deemed to be connected to terrorism ... 0
Number of Al Qaeda cells discovered in the U.S. since 9/11 ... 0
Guantanamo and 'Black Sites'
Number of people detained at Guantanamo since Jan. 2002 ... 775
Number of detainees released ... 470
Number of detainees tried for any crimes ... 0
Number of people estimated to have been detained in CIA "black sites" -- secret prisons outside the U.S. ...> 100
Number of those detained who have been charged or convicted of any crime ... 0
Cost of Iraq War and Homeland Security
Estimate of Iraq war cost in 2003 (dismissed by President Bush as unrealistically high) $100 billion to $200 billion
Actual funding of Iraq war, 2003 through 2007 $413 billion
Estimate of federal funding for homeland security, 2003 through 2007 $236.7 billion
Human Cost of Iraq War
Number of U.S. soldiers killed in the Iraq war as of Nov. 16 ... 3,867
Number of civilians killed in the Iraq war as of Nov. 16 ... 77,213 to 84,128
Pocket Professor
I downloaded my video lectures onto my iPhone. Not sure why, but I'm having a hard time internalizing the fact that I'm carrying around my entire class in my pocket.
Well, I Guess You're the Expert, So Go Ahead
Asymmetric information and the "expert service problem":
When Trust in an Expert Is Unwise, by David Leonhardt, Commentary, NY Times: A few years ago, an economics graduate student named Henry Schneider ... took [his] Subaru to 40 garages, loosening the battery cable and draining some coolant before each visit. He even wrote himself a script and memorized it, to make sure he was telling every garage the same thing. ...
Mr. Schneider was trying to answer a question that has occurred to ... drivers who have ... been given the unsettling news that a car needs more repairs than they had expected: Does it really? Or is the garage just looking to make some extra money off me?
Economists sometimes refer to this situation as an “expert service problem,” because the same expert who is diagnosing the flaw is the one who will be paid to fix it. In most of these cases, consumers aren’t sophisticated enough to make an independent judgment. That’s why they went to the expert.
The problem, of course, extends well beyond the car business. Anytime you call a plumber or roofer to your home or anytime you visit a doctor or dentist, you’re at risk of having an expert service problem.
There is one school of thought ... that says we shouldn’t worry so much about these problems. Even if most consumers can’t distinguish between good and bad expert service, some can. These informed consumers will tell their friends and relatives which experts to use, and an expert’s reputation will eventually become well known. The market, according to this view, solves the problem. But there haven’t been too many real-world tests of the theory...
At only 27 of the 40 garages did mechanics tell Mr. Schneider that he had a disconnected battery cable, ...[a] problem to which he had pointed them by saying his car didn’t always start. Only 11 mentioned the low coolant, a problem that can ruin a car’s engine. Ten of the garages, meanwhile, recommended costly repairs that were plainly unnecessary ... In all, only about 20 percent of the garages deserved a passing grade. ...
Mr. Schneider didn’t set out to study cars. His original goal was to examine the health care system. But he couldn’t very well give himself a heart murmur and then visit 40 cardiologists. ...
[B]y studying a fairly narrow question, Mr. Schneider discovered a larger truth: the expert service problem really does appear to be a serious one. It isn’t that reputation is irrelevant. ... But when a situation is too complex for an amateur to grasp — and when it involves shades of gray — you probably shouldn’t expect to get a purely objective diagnosis from someone who has a financial incentive to give you something else.
That, in fact, may be the biggest flaw with today’s health care system. ... Professor Hubbard argues that the expert service problem is more serious in medicine than in auto repair, because most people are less willing to question a doctor than to question a mechanic. Any effort to reform American medicine has to grapple with these conflicts of interest.
And what about your car? How can you be sure you’re not getting swindled? ... Mr. Schneider says. “...If you’re an uninformed consumer, it’s going to be very hard to know if you’re getting good service...” ...[T]he best solution may be the oldest one: asking for a recommendation from someone who is knowledgeable enough to distinguish between good service and bad. ...
Big Fix in a Little Pond?
Here's more on Social Security:
Responsible Fools: How the Democratic Candidates Got into a Social Security Fix, by Paul Starr, American Prospect: It seems so reasonable, particularly to many Democrats. To solve the long-term shortfall in Social Security, why not tax all earnings instead of just the first $97,500? Wouldn't taxing pay above that level be the economically progressive and fiscally responsible way to solve Social Security's problems?
Prodded by Tim Russert at the Democratic presidential debate in New Hampshire ... and again in Philadelphia ... several of the candidates agreed that it was the thing to do. ...
None of those candidates challenged the premise ... that Social Security faces so dire a prognosis that only a big tax increase or cut in benefits can solve the problem. ...
Let's think carefully about this. Do Social Security's problems need to be addressed now by a tax increase? How many tax increases can the next president expect to get through Congress? And what would be the impact of taxing all earnings on the long-term political viability of Social Security?
Social Security does not face an urgent crisis. It will be solvent through 2041 even under the dismal 1.8 percent economic growth rate assumed by the Social Security actuaries... According to that scenario, Social Security will have a deficit equal to ... .7 percent of gross national product ... over the full 75-year period that the actuaries attempt to forecast.
These forecasts ... depend on guesses not just about economic growth, but about inflation, birth and death rates, immigration, and many other unknowns -- all the way out to the year 2082. We're not certain what most of these variables will be next year. But a lot of people have become persuaded that the very height of responsibility is to promise to raise taxes next year on the basis of speculative projections of what will happen decades from now. ...
Given the political resistance to any proposals for increasing taxes, a new president will have to consider carefully whether the first priority for new revenue in 2009 ought to be solving the speculative budgetary problems of the 2040s. A new administration might want, for example, to do something about the 47 million Americans who now don't have any health insurance. Or it might want to make productive investments in education, research, and infrastructure that could help keep the economy growing at more than 1.8 percent a year.
And consider this: Eliminating the cap on taxable earnings in Social Security will change the relationship to the program of people in the income brackets over $97,500... Social Security remains a good deal for most of them...
But take off the cap on taxable earnings, and many upper-middle-income people will decide the program is no longer in their interest. If you want to revive the movement toward privatization, eliminating the cap on taxable earnings would be just about the best thing you could do.
From the beginning, Social Security has been built on an ingenious political compromise that's been the secret of its durability. Overall ... the program has a strongly progressive effect on the distribution of income. No other social policy has been so successful in reducing poverty. But because taxable earnings are capped, the program has avoided generating a tax revolt. Since Franklin Delano Roosevelt got the program enacted, most Democratic leaders have understood that the cap was crucial for Social Security's political support and survival. ...
I'm not suggesting there couldn't be some tinkering with the cap, but we already have a method for annually adjusting it... One of the reasons for the long-term projected shortfall in Social Security revenue is that this formula no longer works as intended. When it was adopted, the aim was to set the cap on taxable earnings so that the tax would apply to 90 percent of total earnings... But because earnings have become increasingly concentrated at the top, the share subject to Social Security taxes has fallen to 83 percent.
In other words, one way to solve Social Security's long-term problems is not only to grow the economy faster than 1.8 percent, but to adopt policies that ensure more of the growth goes to people in the middle class.
But suppose the distribution of income continues to be sharply unequal. Former Social Security Commissioner Robert Ball proposes to change the formula -- slowly, over a period of years -- so that the cap would rise and again apply to 90 percent of total earnings. That would close about one-third of the long-term shortfall...
The difficulty..., however, is that getting the cap up to ... 90 percent of earnings is going to hit a lot of upper-middle-income earners pretty hard. ... My own view is that ...[a] new administration ought to save any proposed tax increases for more urgent problems. ...
Wage Gaps
David Wessel looks at wage gaps between men and women and between the middle and upper end of the wage distribution. Women are catching men, but both men and women in the middle and lower end of the wage distribution are losing ground to those at the top:
One Pay Gap Shrinks, Another Grows, by David Wessel, Capital, WSJ: There's a new myth percolating about the U.S. economy: Female workers are doing great. So are educated men. The only ones hurting are male high-school dropouts. So, the argument goes, cut the whining about globalization and technological change hurting the American middle class, fix the education and training system, and get on with it.
It's a nice story. Unfortunately, it isn't true. Women are closing the pay gap with men and are outpacing men in the race to get college diplomas. But the fact is that the remarkable burst of productivity of the past decade has not been widely shared with the women or men living at the middle of the American middle class.
"Women are doing better than men, but still not good ... given the strength of productivity growth," says Lawrence Katz, a Harvard University economist... "If men had done as well as women, things would look much brighter, but people would still be questioning why the median worker hasn't earned more."
Justifiably uneasy about Democratic politicians' demonization of globalization, labor economist Stephen J. Rose of the centrist Democrats' Progressive Policy Institute is the latest to raise his voice to argue against what he calls the "dark vision" that "the American middle class is disappearing." ... He does, however, offer a rather significant admission: "The last six years have seen very little wage growth for the bottom 80% of the work force."
A few caveats: (1) The choice of years to compare, the particular wage measure used and the way one adjusts for inflation can tilt the data toward a brighter or gloomier picture. (2) Men and women tend to live together, so when wages for one go up and wages for the other go down, they share the pain or gain. (3) In many ways -- cleaner air, healthier children, amazing technology -- the middle-class American family is far better off than it was 35 years ago.
A few facts:
Women are gaining on men. ... But, as the accompanying chart demonstrates, the men and women at the statistical middle of the middle haven't done all that well. ...
Women are getting more education. In 1960, there were 1.6 men graduating from four-year colleges for every woman... By 1980, there were as many women as men graduating. Today, there are about 1.35 women graduates for every man.
But the noteworthy gap is between workers with education and workers without, regardless of gender. The payoff for getting a diploma traditionally has been greater for women..., and that's still true. The bigger story is how much more valuable a college diploma is than it was 30 years ago...
The ... gap between economic winners and losers of either gender is widening. And the patterns of inequality among women are ... similar to ... the patterns among men: Earnings at the very top are growing much faster those at than at the middle or the bottom. ...
Former Treasury Secretary Lawrence Summers puts it sharply. If the distribution of income in the U.S. today were the same as it was in 1979, and the U.S. had enjoyed the same growth, the bottom 80% would have about $670 billion more, or about $8,000 per family a year. The top 1% would have about $670 billion less, or about $500,000 a family.
The bottom line: The economy treats female workers more like male workers than it did a generation or two ago. That's a welcome fact. But it doesn't obscure the unwelcome reality that the fruits of America's prosperity aren't being widely shared.
Laffering at an Unfunny Boehner
This whole issue has been frustrating, so pardon me while I deal with it yet again.
Is Boehner a liar, an idiot, or both? Is the press biased, incompetent, or does it think misleading people about hundreds of billions of dollars in revenues lost to tax cuts is not important enough to report on? Are most Republicans politicians like Boehner, either intentionally lying or incapable of understanding the complex relationship between tax rates and tax revenues (degree of complexity: taxes down, revenues down at any reasonable tax rate)?
This is not a he said - she said issue, there are not two sides to this (unless you count dreamland as a real place), so why don't reporters tell it like it is - that these people (including those on a few editorial pages) are either intentionally lying or have such a poor understanding of economics that their competence for the job ought to be questioned?:
Republican economics, by Brian Beutler: Charlie Rangel unveiled his tax proposal yesterday and... I did notice something about the instantaneous reaction from the GOP.
"Imposing higher taxes at this time will doom our economy, put people out of work and cost the federal government revenue that is badly needed, if in fact we're going to balance the budget," said House Minority Leader John A. Boehner, R-Ohio.
I think the plan hadn't been on the table for an hour before the most powerful Republicans in the country were lambasting it for violating Laffer principles. Consider this another entry in the "Megan McArdle was badly wrong" blogger series. Meanwhile the plan is supposedly revenue neutral, which means Boehner is a liar and has no idea what he's talking about.
And, Mathew Yglesias on the same topic:
Laffering All the Way to the Bank, by Mathew Yglesias: Charlie Rangel floats tax reform proposal and ... House GOP Leader John Boehner explains it will reduce revenues through increasing tax rates: "Imposing higher taxes at this time will doom our economy, put people out of work and cost the federal government revenue that is badly needed, if in fact we're going to balance the budget." I would really like someone to explain to me why the press doesn't treat this kind of thing as a gaffe. I remember when Howard Dean couldn't correctly state the total number of people in the Army and it was like the end of the world.
But the top House Republican (like the president and vice president of the united states and most other Republican Party elected officials) can't correctly state the relationship between tax rates and federal revenues, which seems like a big deal.
Numerology
There's no reason you should care, but from the control panel for the blog lists these totals, all in a row:
6 pages • 77,777 comments • 888 TrackBacks
And if you are looking for nines, add up the digits on most any time stamp at the bottom of posts.
The Republican War on Inconvenient Science
The White House is at it again:
White House edits CDC climate testimony, by H. Josef Hebert, Associated Press: The White House severely edited congressional testimony given Tuesday by the director of the Centers for Disease Control and Prevention on the impact of climate change on health, removing specific scientific references to potential health risks, according to two sources familiar with the documents.
Dr. Julie Gerberding, director of the Atlanta-based CDC, ... told a Senate hearing that climate change "is anticipated to have a broad range of impacts on the health of Americans." ...
Her testimony before the Senate Environment and Public Works Committee had much less information on health risks than a much longer draft version Gerberding submitted to the White House Office of Management and Budget for review in advance of her appearance.
"It was eviscerated," said a CDC official, familiar with both versions, who spoke on condition of anonymity because of the sensitive nature of the review process.
The official said that while it is customary for testimony to be changed in a White House review, these changes were particularly "heavy-handed," with the document cut from its original 14 pages to four. It was six pages as presented to the Senate committee. ...
Sen. Barbara Boxer, D-Calif., the committee chairman, in a statement Tuesday night said the Bush administration "should immediately release Dr. Gerberding's full, uncut statement, because the public has a right to know all the facts about the serious threats posed by global warming."
The Bush administration has been trying to defend itself for months from accusations that it has put political pressure on scientists... The White House in the past has said it has only sought to provide a balanced view of the climate issue. ...
The deletions directed by the White House included details on how many people might be adversely affected because of increased warming and the scientific basis for some of the CDC's analysis on what kinds of diseases might be spread in a warmer climate and rising sea levels, according to one official who has seen the original version. ...
The Unhappiness Caused by Unemployment and Inflation
How does well-being change when unemployment and inflation change? This paper finds that "Unemployment is more costly than inflation in terms of its impact on wellbeing," and that "the least educated and, somewhat surprisingly, the old put the highest weight on unemployment. Conversely, the young and the most educated put the greatest weight on inflation":
Is Unemployment More Costly Than Inflation?, by David G. Blanchflower, NBER WP 13505, October 2007 [open link]: Abstract Previous literature has found that both unemployment and inflation lower happiness. This paper extends the literature by looking at more countries over a longer time period. It also considers the impacts on happiness of GDP per capita and interest rates. I find, conventionally, that both higher unemployment and higher inflation lower happiness. Interest rates are also found to enter happiness equations negatively. Changes in GDP per capita have little impact on more economically developed countries, but do have a positive impact in the poorest countries -- consistent with the Easterlin hypothesis. I find that unemployment depresses well-being more than inflation. The least educated and the old are more concerned about unemployment than inflation. Conversely, the young and the most educated are more concerned about inflation. An individual's experience of high inflation over their adult lifetime lowers their current happiness over and above the effects from inflation and unemployment. Unemployment appears to be more costly than inflation in terms of its impact on wellbeing.
Conclusions ...The main results of the paper can then be summarised as follows:
1. The northern European countries, especially the Danes, have generally higher happiness and life satisfaction scores than residents of Southern Europe, especially Portugal, Italy, Greece and Spain. Residents of former Eastern bloc countries have particularly low happiness scores.
2. The happiness ranking of countries remains broadly the same when macro controls are included.
3. Consistent with the Easterlin hypothesis, rising GDP per capita does not raise happiness for developed countries. There is evidence, however, that higher GDP per capita has a positive effect for poorer countries. This impact was especially marked for the former Communist countries of the Czech Republic, Hungary, Poland and Slovakia.
4. I estimate the unemployment/inflation trade-off as closer to one and a half than one as implied by the ‘misery index’. I find that the least educated and, somewhat surprisingly, the old put the highest weight on unemployment. Conversely, the young and the most educated put the greatest weight on inflation.
5. Past experience of high inflation during an individual’s adult lifetime lowers their happiness, over and above the impacts from higher contemporaneous inflation and/or unemployment rates.
6. Unemployment is more costly than inflation in terms of its impact on wellbeing. Our estimates imply that, across EU countries, a one percentage point increase in the unemployment rate lowers well being by approximately 1.6 times as much as a one percentage point increase in the inflation rate.
QJE Special Offer and the Ariel Rubinstein Seminar Comment Generator
This comes by email from someone with a proven track record publishing in journals such as this, someone who recently experienced this journal's special 24 hour turn-around service and thought this reminder to others might be helpful:
And while I was poking around at the sites related to the ad, I came across this on Ran Spiegler's Quasi-Economics web page:
The Ariel Rubinstein Seminar Comment Generator, by Ran Spiegler: In the late 1970's, an AI computer program named ELIZA (http://wwwai.ijs.si/eliza/eliza.html) became hugely famous. The program simulated the behavior of a psychotherapist. One could have a dialogue with ELIZA, as if it were a real psychotherapist. Although very primitive and mechanical in its sentence generating process, it passed the "Turing test" rather well: many people were fooled into believing that ELIZA was a real psychologist.
In this short article I proudly present ARSECOG: The Ariel Rubinstein Seminar Comment Generator. This is an AI program in the style of ELIZA. However, instead of simulating a psychotherapist, it simulates the eminent economist Ariel Rubinstein. Prof. Rubinstein is renowned for his insightful and penetrating comments during research seminars. I am sure many of us, who envy his capabilities in this department, would find a program such as ARSECOG quite useful.
To demonstrate the program's performance, I have applied it to the following situation. Prof. Rubinstein's car has been stolen. He contacts his insurance agent. Here is the dialogue between Prof. Rubinstein, simulated by ARSECOG, and the insurance agent:
Agent: Good afternoon, Prof. Rubinstein. Your wife has called us earlier this morning and reported that your car was stolen. Could I have your policy number, please?
ARSECOG: Why policy? No policy. This is just a theoretical exercise.
Agent: It says here that the model of your car was Mazda 626.
ARSECOG: What's wrong with just 0 and 1?
Agent: But it says here 626. That's the model.
ARSECOG: You say model, but it's just a fancy way of saying that it's a fable.
Agent: Prof. Rubinstein, if you want to get your money, you will have to give me your policy number and car model.
ARSECOG: Let me see if I understood your model. There are two states, two actions, two outcomes and two players. That is indeed very nice.
Agent: May I speak with your wife, please?
ARSECOG: The question we should ask ourselves is not whether you can speak with my wife, but why my wife called you in the first place.
Agent: Good day, Prof. Rubinstein.
ARSECOG: Please, call me Ariel.
You might also like, along with the accompanying pictures:
Dror Reshef and Rani Spiegler present: Using Economic Theory to Save the World: Economic theory has made great strides in the last fifty years, producing a body of thought that shines like a beacon of modern dismal science. Yet, this is no time for complacency. It is time to storm out of the ivory tower and put the immense power of economic theory to good use. And what better use is there than saving the world? Non-Harvard economist Rani Spiegler is a pioneer of this latest application of economic theory. Let us join him and visit several landmarks in this great human adventure.
Posted by Mark Thoma on Sunday, November 18, 2007 at 01:44 PM in Economics Permalink TrackBack (0) Comments (21)
Quasi econ page was best laugh of the week.
Thanks
Posted by: Farrar Richardson | Link to comment | Nov 18, 2007 at 02:38 PM
In re offshoring: Another 20 million or so on top those, that many and more, who have already sailed and pretty soon you talking about a real lot of jobs.
Posted by: ken melvin | Link to comment | Nov 18, 2007 at 03:26 PM
"Number of civilians killed in the Iraq war as of Nov. 16 ... 77,213 to 84,128"
Did the David Cole and Jules Lobel drop a digit or something?
Posted by: | Link to comment | Nov 18, 2007 at 04:16 PM
I just double-checked and those are the numbers in the article - but they do seem pretty low.
Posted by: Mark Thoma | Link to comment | Nov 18, 2007 at 04:20 PM
The comment on the civilians killed in the Iraq war was by me. The anonymous bug hit in typepad hit me again.
And I should probably mention that I meant to say, "Did David Cole and..."
And last I checked, the FBI still doesn't link "Usama" bin Laden with 9/11.
Posted by: John M 307 | Link to comment | Nov 18, 2007 at 04:21 PM
http://www.latimes.com/news/opinion/la-op-cole18nov18,0,5332552.story?coll=la-opinion-rightrail
November 18, 2007
Are we safer? A report card on the war on terror
By David Cole and Jules Lobel - Los Angeles Times
Number of civilians killed in the Iraq war as of Nov. 16 ... 77,213 to 84,128
[This is of course a shameful immoral undercounting of Iraqis killed in the course of the war and occupation. The estimate of Iraqi "violent deaths" ranged around 600,000 as of June 2006. "Excess deaths" of Iraqis, including deaths due to the effects of infrastructure destruction as of June 2000 ranged around 655,000.]
Posted by: anne | Link to comment | Nov 18, 2007 at 04:23 PM
June 2006....
Posted by: anne | Link to comment | Nov 18, 2007 at 04:26 PM
http://www.washingtonpost.com/wp-dyn/content/article/2006/10/10/AR2006101001442_pf.html
October 11, 2006
Study Claims Iraq's 'Excess' Death Toll Has Reached 655,000
By David Brown - Washington Post
A team of American and Iraqi epidemiologists estimates that 655,000 more people have died in Iraq since coalition forces arrived in March 2003 than would have died if the invasion had not occurred....
Of the total 655,000 estimated "excess deaths," 601,000 resulted from violence and the rest from disease and other causes, according to the study. This is about 500 unexpected violent deaths per day throughout the country.
The survey was done by Iraqi physicians and overseen by epidemiologists at Johns Hopkins University's Bloomberg School of Public Health. The findings are being published online today by the British medical journal the Lancet....
Posted by: anne | Link to comment | Nov 18, 2007 at 04:30 PM
At least we can understand a little of what war and occupation have meant in Afghanistan, Iraq and Somalia. The United Nations is today reporting that life-span in Afghanistan declined from 44.5 to 43.1 between 2003 and 2005. Afghanistan has fallen since 2003 to 5th from the bottom of the human development index. Somalia is today reported to have 450,000 displaced person since the completion of the American supported Ethiopian invasion in January 2007. The external and internal displacement sum for Iraq is above 4.5 million.
Posted by: anne | Link to comment | Nov 18, 2007 at 04:38 PM
"And the cupboard was bare"
At first I thought this blog entry was going to be about the options available to the Fed....
Posted by: ndd | Link to comment | Nov 18, 2007 at 04:41 PM
http://commentisfree.guardian.co.uk/daniel_davies/2006/10/how_to_not_lie_with_statistics.html.printer.friendly
October 12, 2006
The Numbers Do Add Up: The attempts to rubbish the Lancet study on the massive Iraqi death toll are devious hack-work.
By Daniel Davies - Guardian
As Richard Horton's * post says, the latest Johns Hopkins University study of mortality in Iraq, published in the Lancet is horrible news. When the previous study ** was published, a horrendous chorus of hacks sprung up and suddenly discovered a new-found expertise in epidemiological statistics.
Tim Lambert, the Australian science-blogger, and I ended up spending a lot of time and energy fighting on the online front of this Campaign For Real Statistics, and so it is with heavy heart that I see that President Bush - who is probably a better statistician that many of his online supporters as he has at least been to business school - has already expressed an uninformed opinion on the matter.
There will be a concerted attempt to persuade people that the statistical issues involved in this study are difficult. They aren't. The correct way to think about this is as follows:
First, don't concentrate on the number 600,000 (or 655,000, depending on where you read). This is a point estimate of the number of excess Iraqi deaths - it's basically equal to the change in the death rate since the invasion, multiplied by the population of Iraq, multiplied by three-and-a-quarter years. Point estimates are almost never the important results of statistical studies and I wish the statistics profession would stop printing them as headlines.
The question that this study was set up to answer was: as a result of the invasion, have things got better or worse in Iraq? And if they have got worse, have they got a little bit worse or a lot worse. Point estimates are only interesting in so far as they demonstrate or dramatise the answer to this question.
The results speak for themselves. There was a sample of 12,801 individuals in 1,849 households, in 47 geographical locations. That is a big sample, not a small one. The opinion polls from Mori and such which measure political support use a sample size of about 2,000 individuals, and they have a margin of error of +/- 3%. If Margaret Beckett looks at the Labour party's rating in the polls, she presumably considers this to be reasonably reliable, so she should not contribute to public ignorance by allowing her department to disparage "small samples extrapolated to the whole country". The Iraq Body Count website and the Iraqi government statistics are not better measures than the survey results, because one of the things we know about war zones is that casualties are under-reported, usually by a factor of more than five.
And the results were shocking. In the 18 months before the invasion, the sample reported 82 deaths, two of them from violence. In the 39 months since the invasion, the sample households had seen 547 deaths, 300 of them from violence. The death rate expressed as deaths per 1,000 per year had gone up from 5.5 to 13.3.
Talk of confidence intervals becomes frankly irrelevant at this point. If you want to pick a figure for the precise number of excess deaths, then (1.33% - 0.55%) x 26,000,000 x 3.25 = 659,000 is as good as any, multiplying out the difference between the death rates by the population of Iraq and the time since the invasion. But we're interested in the qualitative conclusion here.
That qualitative conclusion is this: things have got worse, and they have got a lot worse, not a little bit worse. Whatever detailed criticisms one might make of the methodology of the study (and I have searched assiduously for the last two years, with the assistance of a lot of partisans of the Iraq war who have tried to pick holes in the study, and not found any), the numbers are too big. If you go out and ask 12,000 people whether a family member has died and get reports of 300 deaths from violence, then that is not consistent with there being only 60,000 deaths from violence in a country of 26 million. It is not even nearly consistent.
This is the question to always keep at the front of your mind when arguments are being slung around (and it is the general question one should always be thinking of when people talk statistics). How Would One Get This Sample, If The Facts Were Not This Way? There is really only one answer - that the study was fraudulent.[1] It really could not have happened by chance....
[1] In the context of the 2004 study, I was prepared to countenance another explanation: that the Iraqis were lying and systematically exaggerating the number of deaths. But in the 2006 study, death certificates were checked and found in 92% of cases.
* http://commentisfree.guardian.co.uk/richard_horton/2006/10/post_499.html
** http://www.guardian.co.uk/Iraq/Story/0,2763,1338749,00.html
Posted by: anne | Link to comment | Nov 18, 2007 at 04:55 PM
Anne dear - instead of regurgitating tripe form the NYTimes, why don't you just look at Tyler Cowens statistic that the US fires 250,000 bullets per day in Iraq. They can't all be bad shots......
Posted by: zero | Link to comment | Nov 18, 2007 at 06:45 PM
MT wrote:"Are most Republicans politicians like Boehner, either intentionally lying or incapable of understanding the complex relationship between tax rates and tax revenues (degree of complexity: taxes down, revenues down at any reasonable tax rate)? "
Mark you forget the discontinuity that results from a government surplus. Even reasonable levels of taxes will be uncollectable if a surplus runs long enough.
Though a balanced budget may not be a problem as long as savings rates are steady, if saving desires are increasing faster than deficit spending there is a problem (as would currently be indicated by long-term treasury yields at historic lows).
ME wrote: "House GOP Leader John Boehner explains it will reduce revenues through increasing tax rates: "Imposing higher taxes at this time will doom our economy [most economists would agree], put people out of work [most economists would agree] and cost the federal government revenue that is badly needed if in fact we're going to balance the budget[the government can only collect what savers are willing to spend]., " I would really like someone to explain to me why the press doesn't treat this kind of thing as a gaffe."
The lack of resonance comes from misinterpretation.
John B. is simply going on the premise that the government can only collect in taxes what it has already spent.
3 situations to understand
1) Gov surplus - the ability to tax is jeopardized. Surpluses cannot go on indefinitely as at some point all government created fiat money has been taxed out of existence and any additional taxes cannot be paid. The interbank payment system would eventually collapse along with all bank/nonbank created money. Very few economists will admit this as very few understand banking.
2) Gov balanced budget - the ability to tax is limited to government spending unless the government starts accepting MBS, corporates etc. as payments for taxes.
3) Gov deficit - the ability to deficit spend without inflation is unlimited as long as there are savers willing to save the future tax liabilities created by deficit spending. The danger is inflation and any economic fallout that may be caused by inflation.
The Republicans seem to have monetary creation/destruction the spending/taxation more 'right' than many Democrats, sorry to say.
Posted by: Winslow R. | Link to comment | Nov 18, 2007 at 07:04 PM
"---- dear - instead of regurgitating tripe form the NYTimes...."
Notice the crazed language of intimidation; always intimidation and always meant to belittle women becauae that is a mark of intimidators. Always women must be intimidated, as the mother of a marine serving in Iraq must be viciously intimidated. Notice though how intimidated I am.
Posted by: anne | Link to comment | Nov 18, 2007 at 07:08 PM
"Hey ---- - why is Ms. Donna Anton's son joining the marines if he doesn't want to go to Iraq? Duh!!"
There is a peculiar kind of person who would mock a mother's terrible fear for a child become a soldier, a mother desperately wanting peace where there was no reason war. Worried ever so desperately about a child turned soldier. Imagine, the crazed mockery of a marine's mother.
Posted by: anne | Link to comment | Nov 18, 2007 at 07:14 PM
http://www.nytimes.com/2006/08/18/opinion/l18iraq.html
The Relentless Tragedy Called Iraq
To the Editor:
"Insurgent Bombs Directed at G.I.'s Increase in Iraq":
I can't help but compare your headline with President Bush's bizarre remarks on Wednesday: "There's some good people in our country who believe we should cut and run. They're not bad people when they say that, they're decent people":
"President Joins in G.O.P. Attacks on Democrats About Terrorism."
You better believe I'm a decent person — and a decent mother whose 19-year-old United States Marine son is being deployed to Iraq next month to face a deadly, targeted anti-American insurgency that has nothing to do with the "war on terror."
Why should my son, or any other mother's son, be sacrificed in a mounting civil war because it's not politically advantageous for the Bush administration to admit that its Iraq policy has failed?
My decency is suffused with bitterness.
Donna J. Anton
Hayle, England, Aug. 17, 2006
Posted by: anne | Link to comment | Nov 18, 2007 at 07:15 PM
http://www.nytimes.com/2007/03/12/opinion/l12herbert.html
Is This 'Supporting the Troops'?
To the Editor:
My 20-year-old son is nearing the end of his first deployment to Iraq with the United States Marines. Only a few days ago, we learned that he received a commendation for initiative and bravery for pulling wounded and dead Iraqi soldiers out of a bus hit by a roadside bomb during a recent midnight convoy.
Specifically, he was recognized for "tirelessly moving multiple wounded Iraqis to the casualty collection point and loading them on the medivac helicopters ... and also volunteering to help collect the dead and ensuring that they were evaluated."
It's bad enough that my son is risking his life fighting a war that was waged on lies and deception. How infinitely more galling it is to realize that his value to the Bush administration wouldn't even merit decent care at Walter Reed if he were wounded or disabled.
Bob Herbert is right about the troops being shortchanged: it's something I never thought that America would do either.
My son has been commended for extending a degree of professionalism, respect and devotion to duty in aiding wounded Iraqi soldiers that the United States government doesn't extend to its own troops.
The horror, the horror.
Donna J. Anton
Hayle, England, March 8, 2007
Posted by: anne | Link to comment | Nov 18, 2007 at 07:16 PM
http://www.nytimes.com/2007/07/10/opinion/l10iraq.html
Leaving Iraq: Voices in Response to a Clarion Call
To the Editor:
As the mother of an active-duty United States marine, I am conflicted by your editorial. While I applaud your bold stance — "It is time for the United States to leave Iraq" — it is clearly too little, too late.
You admit to putting off this conclusion, hoping against hope that the feckless George W. Bush would have the vision or means to pull off a miracle in Iraq, while much of your reality-based readership foresaw the disaster, having already discounted the war-mongering propaganda well before the ill-fated invasion four years ago.
My son is scheduled to return to the lost cause of Iraq next February. It will take much more than a lengthy editorial in The Times to bring the troops home by then, or any time in the foreseeable future. Lives, limbs and treasure will continue to be lost and spent in this endless quagmire, this nightmare of Kafkaesque proportions.
Donna J. Anton
Hayle, England, July 8, 2007
Posted by: anne | Link to comment | Nov 18, 2007 at 07:23 PM
http://www.juancole.com/2006/10/655000-dead-in-iraq-since-bush.html
October 11, 2006
655,000 Dead in Iraq Since Bush Invasion
By Juan Cole - University of Michigan
A careful Johns Hopkins study has estimated that between 420,000 and 790,000 Iraqis have died as a result of war and political violence since the beginning of the US invasion in March, 2003.
Interesting conclusions are that we are wrong to focus so much on suicide car bombings. The real action is just shooting enemies down with bullets. Only 30 percent of the deaths have been caused by the US military, and that percentage has declined this year because of the sectarian war.
And, folks, this is a major civil war, with something close to 200,000 dying every year.
I once warned that a precipitate US withdrawal could result in a million dead a la Cambodia or Afghanistan. Little did I know that the conditions created by the US invasion and occupation have all along been driving toward that number anyway!
This study is going to have a hard ride. In part it is because many of us in the information business are not statistically literate enough to judge the sampling techniques. Many will tend to dismiss the findings as implausible without a full appreciation of how low the margin of error is this time. Second, it is a projection, and all projections are subject to possible error, and journalists, being hardnosed people, are wary of them.
The New York Times report has already made a serious error, saying that deaths in the Saddam period were covered up. The families interviewed knew whether their loved ones were disappearing in 2001 and 2002 and had no reason to cover it up if they were. The survey established the baseline with a contemporary questionnaire. It wasn't depending on Iraqi government statistics.
Another reason for the hard ride is that the Republican Party and a significant fraction of the business elite in this country is very invested in the Iraq War, and they will try to discredit the study. Can you imagine the profits being made by the military-industrial complex on all this? Do they really want the US public to know the truth about what the weapons they produce have done to Iraqis? When you see someone waxing cynical about the study, ask yourself: Does this person know what a chi square is? And, who does this person work for, really?
Then Anthony Cordesmann told AP that the timing and content of the study were political. But is he saying that 1800 households from all over Iraq conspired to lie to Johns Hopkins University researchers for the purpose of defeating Republicans in US elections this November? Does that make any sense? And, if Cordesmann has evidence that the authors and editor set their timetable for completion and publication according to the US political calendar, he should provide it. If he cannot, he should retract.
Ironically enough, the same journalists who will question this study will accept without query the estimates for deaths in Darfur, e.g., which are generated by exactly the same techniques, and which are almost certainly not as solid.
The study concludes that an average of 470 Iraqis per day have likely died as a result of political violence since March 19, 2003, though the number could be as low as 350 per day if the margin of error skewed to the low side. United Nations estimates based on figures from Iraqi morgues are more like 100 per day.
I follow the violence in Iraq carefully and daily, and I find the results plausible.
First of all, Iraqi Muslims don't believe in embalming or open casket funerals days later. They believe that the body should be buried by sunset the day of death, in a plain wooden box. So there is no reason to expect them to take the body to the morgue. Although there are benefits to registering with the government for a death certificate, there are also disadvantages. Many families who have had someone killed believe that the government or the Americans were involved, and will have wanted to avoid drawing further attention to themselves by filling out state forms and giving their address.
Personally, I believe very large numbers of Iraqi families quietly bury their dead without telling the government of all people anything about it. Another large number of those killed is dumped in the Tigris river by their killers. A fisherman on the Tigris looking for lunch recently caught the corpse of a woman. The only remarkable thing about it is that he let it be known to the newspapers. I'm sure the Tigris fishermen throw back unwanted corpses every day.
Not to mention that for substantial periods of time since 2003 it has been dangerous in about half the country just to move around, much less to move around with dead bodies.
There is heavy fighting almost every day at Ramadi in al-Anbar province, among guerrillas, townspeople, tribes, Marines and Iraqi police and army. We almost never get a report of these skirmishes and we almost never are told about Iraqi casualties in Ramadi. Does 1 person a day die there of political violence? Is it more like 4? 10? What about Samarra? Tikrit? No one is saying. Since they aren't, on what basis do we say that the Lancet study is impossible?
There are about 90 major towns and cities in Iraq. If we subtract Baghdad, where about 100 a day die, that still leaves 89. If an average of 4 or so are killed in each of those 89, then the study's results are correct. Of course, 4 is an average. Cities in areas dominated by the guerrilla movement will have more than 4 killed daily, sleepy Kurdish towns will have no one killed.
If 470 were dying every day, what would that look like?
West Baghdad is roughly 10% of the Iraqi population. It is certainly generating 47 dead a day. Same for Sadr City, same proportions. So to argue against the study you have to assume that Baquba, Hilla, Kirkuk, Kut, Amara, Samarra, etc., are not producing deaths at the same rate as the two halves of Baghdad. But it is perfectly plausible that rough places like Kut and Amara, with their displaced Marsh Arab populations, are keeping up their end. Four dead a day in Kut or Amara at the hands of militiamen or politicized tribesmen? Is that really hard to believe? Have you been reading this column the last three years?
Or let's take the city of Basra, which is also roughly 10% of the Iraqi population. Proportionally speaking, you'd expect on the order of 40 persons to be dying of political violence there every day. We don't see 40 persons from Basra reported dead in the wire services on a daily basis.
But last May, the government authorities in Basra came out and admitted that security had collapsed in the city and that for the previous month, one person had been assassinated every hour. Now, that is 24 dead a day, just from political assassination. Apparently these persons were being killed in faction fighting among Shiite militias and Marsh Arab tribes. We never saw any of those 24 deaths a day reported in the Western press. And we never see any deaths from Basra reported in the wire services on a daily basis even now. Has security improved since May? No one seems even to be reporting on it, yes or no.
So if 24 Iraqis can be shot down every day in Basra for a month (or for many months?) and no one notices, the Lancet results are perfectly plausible.
The abstract for the study says:
' Methods: Between May and July 2006 a national cluster survey was conducted in Iraq to assess deaths occurring during the period from January 1, 2002, through the time of survey in 2006. Information on deaths from 1,849 households containing 12,801 persons was collected. This survey followed a similar but smaller survey conducted in Iraq in 2004. Both surveys used standard methods for estimating deaths in conflict situations, using population-based methods.
Key Findings: Death rates were 5.5/1000/year pre-invasion, and overall, 13.2/1000/year for the 40 months post-invasion. We estimate that through July 2006, there have been 654,965 "excess deaths"—fatalities above the pre-invasion death rate—in Iraq as a consequence of the war. Of post-invasion deaths, 601,027 were due to violent causes. Non-violent deaths rose above the pre-invasion level only in 2006. Since March 2003, an additional 2.5% of Iraq's population have died above what would have occurred without conflict.
The proportion of deaths ascribed to coalition forces has diminished in 2006, though the actual numbers have increased each year. Gunfire remains the most common reason for death, though deaths from car bombing have increased from 2005. Those killed are predominantly males aged 15-44 years. '
More on the techniques from the text:
' The surveyors from the School of Medicine of Al Mustansiria University in Baghdad conducted a national survey between May and July 2006. In this survey, sites were collected according to the population size and the geographic distribution in Iraq. The survey included 16 of the 18 governates in Iraq, with larger population areas having more sample sites. The sites were selected entirely at random, so all households had an equal chance of being included. The survey used a standard cluster survey method, which is a recommended method for measuring deaths in conflict situations. The survey team visited 50 randomly selected sites in Iraq, and at each site interviewed 40 households about deaths which had occurred from January 1, 2002, until the date of the interview in July 2006. We selected this time frame to compare results with our previous Human Cost of Iraq War survey, which covered the period between January 2002 and September 2004. In all, information was collected from 1,849 households completing the survey, containing 12,801 persons.
This sample size was selected to be able to statistically detect death rates with 95% probability of obtaining the correct result. When the preliminary results were reviewed, it was apparent three clusters were misattributed. These were dropped from the data for analysis, giving a final total of 47 clusters, which are the basis of this study. '
Posted by: anne | Link to comment | Nov 18, 2007 at 07:26 PM
What was among the markedly important aspects of the Johns Hopkins study was that for more than 90% of the tragic excess deaths since the invasion of March 2003 there were confirming death certificates.
War is terrible beyond my understanding, and thoroughly needless war is worse. There have been over 60,000 American casualties in Iraq; with injuries continually unfolding. Over 100,000 American veterans of Iraq and Afghanistan had been granted disability status by October 2006.
Posted by: anne | Link to comment | Nov 18, 2007 at 07:40 PM
http://www.nytimes.com/2006/10/11/washington/11veterans.html?ex=1318219200&en=57988c04bbbbd7d4&ei=5090&partner=rssuserland&emc=rss
October 11, 2006
Data Suggests Vast Costs Loom in Disability Claims
By SCOTT SHANE
Nearly one in five soldiers leaving the military after serving in Iraq and Afghanistan has been at least partly disabled as a result of service, according to documents of the Department of Veterans Affairs obtained by a Washington research group.
The number of veterans granted disability compensation, more than 100,000 to date, suggests that taxpayers have only begun to pay the long-term financial cost of the two conflicts. About 567,000 of the 1.5 million American troops who have served so far have been discharged....
Posted by: anne | Link to comment | Nov 18, 2007 at 07:43 PM