Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

"A strong conviction that something must be done is the parent of many bad measures."
  -- Daniel Webster

Thursday, October 02, 2014 :::

This is essentially trivia, but I'd like to note three candidates who perhaps should be in the conversation for the Economics Nobel Prize but, at least so far as I've seen, haven't been, along with speculations as to why:
Avinash Dixit
Part of what is impressive about Dixit is that he has contributed to a lot of fields; I wonder whether he hasn't received it yet in part because they can't decide what to give it for. A strong case has been made that he should have shared the 2008 prize with Krugman, much of whose work rested on some of Dixit's early work; it may be that politics played a role in his not being included.
Jean Tirole
I will admit to having thought he was a woman until a few hours after I learned that he is French — it occurred to me that he was likely male at the moment I realized I had been mispronouncing his first name. It's possible his work is too closely related to that of (really) the last three years' worth of prizes [edit: for some reason I forgot about the 2010–2011 prizes, and had in mind the winners from 2009, 2012, and 2013 when I wrote this], whose only real common thread is "fields on which Tirole's work impinges"; it's not so much the case, as with Dixit, that his contributions are so diffuse as that they sit in the middle of IO, markets, governance, and finance. In years past I've seen people suggest him for the prize, and cheer for it on the grounds that it would be fun to watch the media try to explain his work to laymen; that prospective source of entertainment for those of us in the know might hurt him a little bit with the committee.
Ben Bernanke
This is another case, as with Tirole, of the timing being wrong, not so much for the last few years' prizes as for his recent retirement from a high-profile non-academic job that might make politics a factor, to some extent forever but especially this year. He would never have been a shoo-in, but certainly would have been a credible candidate ten years ago based on his previous work on the effects of the finance and banking sector on what economists and populists alike sometimes call "the real economy". His theoretical work preceded his historical work on the Great Depression, and one can see evidence of his work at times in his performance of his more recent job, but one can also see his management style and the effects of the institutional setting in which he was working. No doubt were he to receive it much of the popular media coverage would imply, almost certainly incorrectly, that it was an endorsement by the committee of his actions in the last eight years, and the committee may want to avoid that for a while.

::: posted by dWj at 1:04 PM

(1) comments

Friday, September 19, 2014 :::
It's my understanding that one of the reasons the Bush administration wanted to eliminate the inheritance tax was because there are so many other strange rules and taxes (gift taxes, "generation-skipping" taxes) that really only exist to catch people who are trying to get around the inheritance tax. Similarly, it's worth noting that a certain amount of labor regulation moonbattery seems to exist in support of minimum wage laws; if you could garner a consensus to replace the minimum wage with an enhanced EITC, you might be able to get some follow-on regulatory benefits as well.

::: posted by dWj at 12:02 PM

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Wednesday, August 27, 2014 :::
I'm scheduled to meet with my advisor, and appear to have given up on any hope of being prepared for that, so I'm reading Matt Levine instead. If you don't know about the difference between the way the US taxes income and the way every other country does — i.e. that basically every country taxes economic activity within its borders, but the US taxes a lot of economic activity outside its borders as well — then Welcome to our blog! and maybe go read his synopsis of the international corporate tax system. The upshot as it concerns the Tim Hortons deal is that, if BK and TH join to become a Canadian company, BK will pay somewhat less in taxes (viz. on its non-US operations), while if they join to become a US company, TH will pay a lot more in taxes (viz. on its non-US operations), and this is a legitimate merger for non-tax reasons, but TH kind of doesn't want to volunteer for all those new taxes.  What I want to address is more
  • Your U.S. subsidiary makes a pill for $1.
  • Your U.S. subsidiary licenses the patent on that pill from your Bermuda subsidiary for $9,995.
  • Your U.S. subsidiary sells the pill for $10,000.
  • Your U.S. subsidiary has $4 of net income, which is taxable.
  • Your Bermuda subsidiary has $9,995 of net income, which is not.
This seems fair to me if the R&D work behind the patent is done in Bermuda. Since (If?) it's not, at least in theory you might tax the value of the patent minus its R&D "cost-basis" as it leaves the country; in practice, it probably wouldn't be easy to value the patent. I'm not sure whether making expatriation of capital a taxable event is workable or not.

I will add that "eliminate corporate taxes" is another idea I like in theory more than in practice; my practical objection is that it's hard to say what is an expense incurred in the production of revenue.  If I'm a traveling salesman, maybe I need a car for work as a legitimate business expense, so I go find myself a Maybach and write off its depreciation on my taxes.  Well, I am not a tax lawyer, so this isn't tax advice, but the IRS is going to see through that.  In actual practice, a lot of expenses are going to necessarily be a combination of employee perk and unavoidable expense, and there are going to be rules of varying levels of arbitrariness and well-foundedness to try to keep evasion to a minimum without screwing people too hard, or at least let's suppose that's an IRS goal.  A lot of that complexity can be kept out of individual income taxes only to the extent that it can be shoved into corporate taxes, where I think complexity is likely to be easier to bear (and easier for those who can't bear it to legitimately avoid it at lower cost).  So ultimately perhaps you can (should?) have a corporate tax rate of 0, but you still might want corporations filing forms that clarify whether some of the employees or clients are receiving in-kind income that can be taxed at some other level.

::: posted by dWj at 11:31 AM

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Monday, August 25, 2014 :::
Vox has an article about an attempt by graduate schools to have the Taft administration rank undergraduate colleges. It elicited blowback:
Public universities argued that looking only at grad school preparation was myopic, since their mission was to serve the needs of the state.
This seems like one of the least valid complaints about the whole enterprise.
One of the most important things to do when using metrics is to attend to their limitations; accordingly, if you are creating a list ranking the best X, especially when X is very diverse along many dimensions, you have to say what you mean by saying that one X is better than another; usually, at least at a first pass, this involves stating the reason for constructing this ranking in the first place. If you are constructing a ranking of colleges so that graduate schools have a guide as to which colleges best prepare their students for graduate school, you should construct the ranking that serves that purpose and be perfectly clear that that's what you are doing.
Perhaps, at the time, Virginia Tech was doing an excellent job of preparing students to be engineers and a terrible job of preparing them for graduate school — perhaps in part because it had no intention of preparing students for graduate school. On a ranking of "What school should you attend if you want to be an engineer?", perhaps it should have rated quite highly. On a ranking of "What school leaves you best prepared for graduate school?", perhaps it should not. On a ranking of "Colleges and Universities" that purports to measure graduate school preparation, "the needs of the state", the caliber of the football team and the preparation of students to be good citizens and/or employees, perhaps it would rank somewhere else — and perhaps the group of people who should care where it ranks would be reduced from few to none.
Indeed, these days there are already numerous private rankings, some less laughable than others, with the least laughable ones ranking schools in different subjects — a school that leaves its engineering students well-prepared for graduate school may or may not leave its history students as well-prepared for graduate school. Indeed, the very wrong-headed counterargument
The only reason to oppose transparency, some proponents argue, is that reveals facts colleges would rather conceal.
falls to the rebuttal that what the Education department should do is make the data available, without pretending to find a Platonic ideal ordering on that data that applies a proper weight and consideration to each element to recognize a single abstract notion of "College".
The justification for a new set of rankings from the federal government seems to be
... Obama wants federal financial aid to depend on how colleges do in the new federal quality rating system.
To the extent that there will be federal money going to these colleges and it is appropriate for the federal government to monitor colleges that should be subsidized in this way, it makes sense for the government to produce a metric of how creditable one school is over another, and this aim should be an important input into the design of such a metric. Once it is produced, it would be irresponsible for the department of Education to ever be unclear about what it has measured or why; indeed, if
College presidents argue that the ratings effort itself is misguided, or that measuring graduates' incomes is the wrong way to measure the value of higher education, or that there is no way a rating system will capture the different missions of community colleges and elite private universities.
those college presidents may be correct, but especially as regards the last two points, graduates' incomes may well be a good measure of which students' loans should be guaranteed, but nobody should pretend that that is the only valid measure of the value of higher education, or that doing well on any single rating system should be the primary goal both of community colleges and of AAU universities.

::: posted by dWj at 11:59 AM

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Thursday, August 14, 2014 :::
This post is at least superficially about baseball, but it's kind of about logic and rules.
Unless the catcher is in possession of the ball, the catcher cannot block the pathway of the runner. The “unless” means that the opposite is also true, that if the catcher is in possession of the ball, he can block the plate, at which point it is the runner’s job to avoid or minimize their contact.
I was going to elaborate this more, but I don't think anyone who reads this blog confuses converses and contrapositives, or will have any trouble figuring out that this is fantastically wrong.

As it happens, just from the screencaps I seem to be running 100% on guessing which half of the plays that he thinks are indistinguishable (he thinks all 6 runners should be out) from each other were called each way, even though I would need video to really know that the rule as he quotes it is being applied correctly.  In half of them, the catchers look as though they have a leg sticking out toward the runner; unless they're falling away from the runner to catch the ball or something, this gives a strong impression that they were unnecessarily in the way before they had the ball.  The player was constructively safe before the catcher had the ball.

::: posted by dWj at 7:20 PM

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Thursday, June 12, 2014 :::
The second of these two notes is valuable, but I want to play with it a bit.

The system of governance established for the federal government and, by and large, for the state governments as well, delegates to the federal government certain tasks, places certain constraints on state and federal governments, and largely leaves the political branches of those governments free to use their best judgment (or whatever else they feel like using) to make decisions within their respective purviews.  For at least two hundred years it has also been fairly standard practice for the judicial branch to step in where those governments seem to have overstepped their bounds.  In the last century this has been used in highly dubious contexts and, in less dubious contexts, in highly dubious ways; it seems to me that the system in some kind of principle is supposed to leave the legislature and executive as much freedom as practical to decide how to correct these oversteps, except to the extent they can't or won't.

While much political "discourse" make the simplifying assumption that education and health care are each homogenous, atomic things, such that one either has one or doesn't or, at best, can have more or less of it, in fact actual details of what education to provide and how (best?) to provide it are, even conditional on an agreement that the state should provide them, admissible of a wide range of reasonable beliefs.  If the outcomes in some manner consistently, for example, provide better education to white students than to black students, particularly if they do so in a way that is because of decisions or actions that seem to be motivated by race, then a strong case can be made that the courts should insist on a correction, perhaps putting in place its own (approximately minimal) correction until the other branches of government can act, and certainly doing so if the other branches demonstrate repeated failure to act.  If the legislature and executive branches are trying as hard to comply with the constitution as the judicial branch is, however, then republican principles insist that they make the decisions.

A court in California has decided that California's laws regarding public education are insufficiently attentive to their role in providing some students with a worse education than others, and (I'm not quite clear how important this is) there is a tendency for students in the former group to be racially categorized differently from students in the latter group.  The (currently stayed) injunction seems, at least to me, not to be the minimal adjustment to those rules necessary to change this, though it is at least worth noting that the "minimal adjustment" would be to spread unnecessary misery equally among students rather than to eliminate it.  New Jersey, in its feature-length constitution, guarantees students an education, and if California has such a provision, that would seem more obvious grounds for the injunction that was actually produced.  (Never mind the actual rulings to which it has led in New Jersey.)

Taranto seems to indicate that the decision in California is an extension of its Supreme Court's previous moonbattery (not his word) in its most consistent manner, and while there's something to be said in jurisprudence for consistency, there's also something lamentable about the apparent succession of rounding errors that seems to sometimes lead the court rather strikingly to 0=1.  It should also be noted that there is some consensus in the legal world that the role of a lower court is in fact to apply the higher court's previous moonbattery in its most consistent manner; especially with the stay in place, it seems like the preponderance of evidence is that the judge did his job, even if it has produced a result that everyone hates for a different reason.

::: posted by dWj at 4:43 PM

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Wednesday, June 04, 2014 :::

::: posted by dWj at 1:17 PM

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Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

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