voluntaryXchange

Katrina and Government Inadequacy

On the second anniversary of the hurricane that everyone knew was coming eventually, The New York Times featured a cute graphical piece updating us on the status of New Orleans.

It's time for a what's wrong with this picture moment.

A lot is obvious: population is down by 1/3, the labor force is down by 1/4, home prices are down by 15%, rents are up by 40%, and airline traffic is off by 1/4. The unemployment rate is about the same.

Clearly the private sector took a big hit, and has declined in a balanced way.

This is not the case with government services. Buses are down over 80%. Hospitals are down a tad less than 50%. Child care centers are off by 2/3, and about 40% of the schools are not open yet.

If you asked anyone in New Orleans prior to Katrina which would be more resilient - the local people or the local government - you would've been hard pressed to find someone who said the local government. And the proof is there - the private sector is off by roughly 1/3, while the public sector is off by 2/3.

I don't think it's unreasonable to start with a null hypothesis that with an honest, effective and credible local government that those declines should be close to one-to-one. They're not.

It's tempting to blame the Federal government for this, but really, what other disaster locations do you know of where people could get back on their feet but the government couldn't?

Did this happen in NYC after 9/11?

Did this happen in LA after the '91 riots or '94 earthquake?

Did this happen in the Mississippi or Red river valleys after their historic floods in the 90s?

Did this happen to the bay area after their quake in '89?

I can tell you one place where it did happen: New Orleans after Hurricane Betsy in 1965. I am not making this up: there were abandoned and condemned houses from Betsy still waiting to be torn down when Katrina hit.

This is very sad, but for everyone who knew the big one was coming eventually, there was also someone who knew that the civil structures in Orleans Parish would be the biggest impediment to recovery.

I m Glowing

p a href "http www.currencytrading.net " CurrencyTrading.net a has come out with a list of the a href "http: www.currencytrading.net 2007 the-top-100-economics-blogs " top 100 economics blogs a and voluntaryXchange is on the list. p p Oddly there are numbers - but the list is in a categorical format - so the numbers aren t really rankings at all. Good thing since I m 99. Anyway vX is in the miscellaneous category with some other solid blogs from academic economists I m guessing because I don t post exclusively on economics . p p FWIW: I ve been ranked a lot higher but now that it seems like just about everyone at the top schools has a blog it s extra nice to be noticed. p

What's the Safest Browser?

Ryan Naraine's Zero Day discusses a new study that suggests that isn't an easy question to answer.

Surprisingly, Firefox has more vulnerabilities than Internet Explorer.

But, honeypots set up with Internet Explorer get hacked more often than those with Firefox.

These are contradictory, but nonetheless both true.

Speculation is that Firefox is less vulnerable because the default setting for it is to update automatically, which is not the case for Internet Explorer. The upshot is that hackers go after Internet Explorer because lazy and/or ignorant users permit themselves to be taken advantage of.

Hmmm. Sounds like a browser version of the the singles bar culture.

N.B. A "honeypot" is a computer that is set up to be intentionally vulnerable and worthwhile for hackers to attack, to help understand their methods.

Taking Global Warming Seriously

I don't take global warming seriously.

But, I'm not closed minded either.

William Nordhaus at Yale is the economic expert on global warming. He estimates that the Stern plan to curb global warming (under discussion by the UN) would cost $27T to save $13T, and that Al Gore's plan would cost $34T to save $12T (yes, the T stands for trillion).

Both of these are startlingly bad ideas. Losing $15-20T isn't something to be proud of.

Bad enough for me to label them as the worst ideas in human history since ... oh say ... the cultural revolution and perhaps even the final solution. (FWIW: a forensic economist would eyeball these numbers and say that this cost is in the range of a minimum of 20 times that of the holocaust).

So ... remember here ... I am aping the recommendations of a true believer in global warming who has crunched the numbers the way only an economist can.

What does Nordhaus recommend? A carbon tax starting at $34 per carbon ton.

How much is that, exactly? The math is below the fold - but I get a bit less than 9 cents per gallon.

So, the most cost effective way to combat global warming is with a carbon tax that would add far less to the price of gas than the already extent state and federal taxes.

So ... um ... why on earth are the powers-that-be so focused on much bigger impositions in our daily life?

Could it be that they're just controllers and moralists ... the latest incarnation of hair-shirted monks from the Dark Ages?

Hat tip to Newmark's Door, which got me started on this.

Is Larry Craig Mormon?

The web is abuzz because Senator Larry Craig pled guilty to committing lewd acts in a public men's room.

A lot of the buzz is because Craig is a Republican from Idaho, so a lot of the buzz (see The Democratic Daily, Marc Ambinder at The Atlantic, Pam's House Blend, Magic Valley Mormon, and New West) revolves around whether Craig is a Mormon who has been involuntarily outed. This is mostly in the comments, where this is almost a foregone conclusion.

The answer is no. Craig is listed at Adherents.com as a Methodist.

N.B. The comments at The Democratic Daily do correct the claim that Craig is Mormon, but it is spotty elsewhere.

13 Reasons Why Iraq Is Not Vietnam

"In Iraq, the genocide, repression, aggression and cultural obliteration preceded the coalition's intervention and had been condemned by a small but impressive library of UN resolutions." More from Christopher Hitchens:

1) The Vietminh, later the Vietnamese NLF, were allies of the United States and Britain against the Axis during the Second World War. The Iraqi Baath party was on the other side.

2) Ho Chi Minh quoted Thomas Jefferson in proclaiming Vietnam's own declaration of independence, a note that has hardly been struck in Baathist or jihadist propaganda.

3) Vietnam was resisting French colonialism and had defeated it by 1954 at Dien Bien Phu; the real 'war' was therefore over before the US even landed troops in the country.

4) The subsequent conflict was fought to preserve an imposed partition of a country striving to reunify itself; if anything, the Iraqi case is the reverse.

5) The Vietnamese leadership appealed to the UN: the Saddamists and their jihadist allies murdered the first UN envoy to arrive in Iraq, saying that he was fit only for death because he had assisted in securing the independence of East Timor from Indonesia.

6) Vietnam never threatened any other country; Iraq under Saddam invaded two of its neighbours and declared one of them (Kuwait) to be part of Iraq itself.

7) Vietnam was a victim of chemical and ecological warfare; Iraq was the perpetrator of such illegal methods and sought to develop even worse nuclear and biological ones.

8) Vietnam neither sponsored nor encouraged terrorist tactics beyond its borders; Iraq under Saddam was a haven for Abu Nidal and other random killers and its 'insurgents' now proclaim war on Hindus, Jews, unbelievers and the wrong sort of Muslim.

9) There has for years been a 'people's war' fought by genuine guerrillas in Iraq; it is the war of liberation conducted by Kurdish fighters against genocide and dictatorship. Inconveniently for all analogies, these fighters are ranged on the side of the US and Britain.

10) The Iraqi Communist party and the Iraqi labour movement advocated the overthrow of Saddam (if not necessarily by Bush), a rather conspicuous difference from the situation in Indochina. These forces still form a part of the tenuous civil society that is fighting to defend itself against the parties of God.

11) The American-sponsored regimes in Vietnam tended, among other things, to be strongly identified with one confessional minority (Catholic) to the exclusion of secular, nationalist and Buddhist forces. The elected government in Iraq may have a sectarian hue, but at least it draws upon hitherto repressed majority populations - Kurds and Shias - and at least the American embassy works as a solvent upon religious and ethnic divisions rather than an inciter of them.

12) President Eisenhower admitted that if there had ever been a fair election in Vietnam, it would have been won by Ho Chi Minh; the Baath party's successors refused to participate in the Iraqi elections and their jihadist allies declared that democracy was an alien concept and threatened all voters with murder.

13) The Americans in Vietnam employed methods ('search and destroy'; 'body count') and weapons (napalm, Agent Orange) that targeted civilians. Today, those who make indiscriminate war on the innocent show their hand on the streets of Baghdad and are often the proxies of neighbouring dictatorships or of international gangster organisations.

It's Craven, but It Isn't Censorship

Many major newspapers have refused to print today's Opus comic strip.

You can read it at Salon (the link looks like it goes to an article, at the top just off center).

Many people are labeling this as censorship (for example, Little Green Footballs). It isn't. These newspapers are private entities that have the choice to buy (and print) or not buy (and not print) any syndicated item they choose. Censorship is more specific: it implies that the government is forbidding the running of something that those in the private sector would like to see in print.

But, it is craven to cave in an implied threat of violence; especially for newspapers.

Data Massage by Governments

It's an interesting but not entirely unexpected result: macroeconomic data from banana republics appears to have been massaged prior to release.

What's interesting is the method used: Benford's Law. This is the idea that in data, the leading digits should not occur in equal numbers. Broadly, this is because we start counting things with one, so ones should be more common than twos, and so on. This is a clever method, reminiscent of Freakonomics.

Read the whole thing (John Nye and Charles Moul        (2007) "The Political Economy of Numbers: On the Application of Benford's Law to International Macroeconomic Statistics," The B.E. Journal of Macroeconomics: Vol. 7 : Iss. 1       (Topics), Article 17. Available at: http://www.bepress.com/bejm/vol7/iss1/art17).

FWIW: I once caught a graduate student cheating using Benford's Law: I was initially suspicious because so many of his econometric results had the same number of digits (this was in the days before statistics packages did much formatting), and then I recognized that his first digits didn't look right. In some sense, noticing that the results all showed the same number of digits was evidence that the leading zeros probably weren't there in the proportions they should have been.

Refereeing Horror Story

One more career milestone: I've now had a co-author retire before getting a response from a journal about the acceptance/rejection of our article.

I'm tempted to name the journal, but I don't dare jeopardize that possible acceptance. ;)

Office 2007 Tip # 2

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