Subway density

Now this is pretty cool (and a little depressing for some of us). Neil Freeman has a nifty set of subway maps, all at the same scale, of a bunch of major cities. The contrast is striking.

Here’s Paris:

Paris

Tokyo:

Tokyo

and BART, (San Francisco) Bay Area Rapid Transit:

BART

The Bay Area does have a smattering of other rail systems—SF Muni, VTA Light Rail, Caltrain—but they don’t dramatically change the picture. (And they aren’t subways, of course, though neither is BART for most of its trackage.)

US Defense Spending In Context

Matthew Yglesias.

US Defense Spending In Context

I’ve shown charts before showing how absurd the American defense budget looks in context. Now a new chart making the same point, but with slightly more up-to-date 2007 spending data:

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As you can see, not only is the United States spending well over double the combined defense budgets of Russia and China, but America’s close allies constitute the bulk of the other big spenders. Indeed, if you add all the European countries together, they spend about 50 percent more than Russia and China combined.

Public Deeply Ignorant About Cap and Trade

OK, this can hardly be surprising. But still…

Matthew Yglesias: Public Deeply Ignorant About Cap and Trade

Via Dave Weigel, an unusually useful poll from Rasmussen Reports:<

Given a choice of three options, just 24 percent of voters can correctly identify the cap-and-trade proposal as something that deals with environmental issues. A slightly higher number (29 percent) believe the proposal has something to do with regulating Wall Street while 17 percent think the term applies to health care reform. A plurality (30 percent) have no idea.

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The political press has a very strong structural bias toward overestimating the extent to which the public has real opinions about hot political issues. I wish more pollsters would put these kinds of polls in the field that do something to probe the extent of public ignorance. Polls that attempt to directly probe the public’s views about cap and trade wind up measuring a lot of pseudo-opinion. As you can see right in this result, people are incredibly unwilling to admit that they “don’t know” something or other. Thus 46 percent of the public says they know what cap and trade is about even though they don’t, in fact, know what it’s about.

Rats Outperform Humans in Interpreting Data

Via Mark Thoma. Lots more, mainly on spurious data mining.

Rats Outperform Humans in Interpreting Data

Laboratory experiments show that rats outperform humans in interpreting data… The amazing finding on rats is described in an equally amazing book by Leonard Mlodinow. The experiment consists of drawing green and red balls at random, with the probabilities rigged so that greens occur 75 percent of the time. The subject is asked to watch for a while and then predict whether the next ball will be green or red. The rats followed the optimal strategy of always predicting green (I am a little unclear how the rats communicated, but never mind). But the human subjects did not always predict green, they usually want to do better and predict when red will come up too, engaging in reasoning like “after three straight greens, we are due for a red.” As Mlodinow says, “humans usually try to guess the pattern, and in the process we allow ourselves to be outperformed by a rat.” …

Ventura on torture

I’ve had a soft spot for Jesse Ventura since, while visiting family in Minnesota, I listened to his pre-election gubernatorial debates. This via Glenn Greenwald.

[JESSE] VENTURA: I don’t watch much TV. This year’s reading, I covered Bush’s life. I covered Guantanamo and a few other subjects. And I’m very disturbed about it. I’m bothered over Guantanamo because it seems we’ve created our own Hanoi Hilton. We can live with that? I have a problem. I will criticize President Obama on this level; it’s a good thing I’m not president because I would prosecute every person that was involved in that torture. I would prosecute the people that did it. I would prosecute the people that ordered it. Because torture is against the law.

[LARRY] KING: You were a Navy SEAL.

VENTURA: That’s right. I was water boarded, so I know — at SERE School, Survival Escape Resistance Evasion. It was a required school you had to go to prior to going into the combat zone, which in my era was Vietnam. All of us had to go there. We were all, in essence – every one of us was waterboarded. It is torture.

KING: What was it like?

VENTURA: It’s drowning. It gives you the complete sensation that you are drowning. It is no good, because you — I’ll put it to you this way, you give me a waterboard, Dick Cheney and one hour, and I’ll have him confess to the Sharon Tate murders.

Greenwald comments:

Let’s just repeat that: “I would prosecute the people that ordered it. Because torture is against the law.” That is the crux of the case for investigations and prosecutions. That’s it.

Is the Conservative Movement Losing Steam?

Here’s a fragment from a post by Richard Posner at his blog.

Is the Conservative Movement Losing Steam?

… By the end of the Clinton administration, I was content to celebrate the triumph of conservatism as I understood it, and had no desire for other than incremental changes in the economic and social structure of the United States. I saw no need for the estate tax to be abolished, marginal personal-income tax rates further reduced, the government shrunk, pragmatism in constitutional law jettisoned in favor of “originalism,” the rights of gun owners enlarged, our military posture strengthened, the rise of homosexual rights resisted, or the role of religion in the public sphere expanded. All these became causes embraced by the new conservatism that crested with the reelection of Bush in 2004.

My theme is the intellectual decline of conservatism, and it is notable that the policies of the new conservatism are powered largely by emotion and religion and have for the most part weak intellectual groundings. That the policies are weak in conception, have largely failed in execution, and are political flops is therefore unsurprising. The major blows to conservatism, culminating in the election and programs of Obama, have been fourfold: the failure of military force to achieve U.S. foreign policy objectives; the inanity of trying to substitute will for intellect, as in the denial of global warming, the use of religious criteria in the selection of public officials, the neglect of management and expertise in government; a continued preoccupation with abortion; and fiscal incontinence in the form of massive budget deficits, the Medicare drug plan, excessive foreign borrowing, and asset-price inflation. …

Health Care and Student Loans: The Bad Guys Are on the Run

Good news from Dean Baker? Twice in one post? Indeed.

Health Care and Student Loans: The Bad Guys Are on the Run

Progressives should be feeling good right now. There is clear evidence that we are winning on two really big issues.

Starting with the smaller of the two, Sallie Mae, the largest private issuer of student loans, is now proposing to accept a plan in which the government is the sole issuer of government guaranteed loans. Sallie Mae’s plan is that it continue to be given the opportunity to originate these loans, picking up fees in the process.

This proposal is in response to the Obama administration’s plan to get the private sector out of the government guaranteed loan business. There is ample evidence that the involvement of private firms just adds costs — approximately $90 billion over ten years according to the Congressional Budget Office. Sallie Mae’s compromise proposal is a recognition of the fact that it cannot stop the Obama plan.

If this story is good, the news on health care is even better. The industry is now proposing a scheme whereby it will curtail cost growth by 1.5 percentage points a year. At these point none of the details of the proposal are public and it is unlikely that any of the commitments in the proposal will be binding in any serious way on the industry.

However, the fact that they would suggest that such cost savings are possible is an enormous concession. After 10 years, the cumulative savings from this proposal would amount to more than $400 billion a year, more than $3,000 for every family in the country.

The industry is talking this way because they are scared to death at the prospect of having a Medicare type public plan, which will both provide competition for private insurers and create an effective mechanism to constrain the fees charged by health care providers. As many have argued, the public plan is a real game changer.

These new developments in both the health care debate and the debate over student loan policy are great news. In both cases the industry groups are now prepared to make important concessions that they never would have envisioned even a year ago.

Of course, there is no reason to accept their compromises. Why should we waste any of the money that could be going to help college students so that Sallie Mae executives can draw high salaries and its shareholders can enjoy large dividends. Let them make money in the market, not by adding costs to a government program.

Similarly, the threat of a public plan has forced promises of concessions from the health care industry. If we don’t actually get the public plan, there is no enforcement mechanism for these promises. If we go ahead and put the public plan in place, then we know that the industry will deliver on its promises.

Now is not the time for compromises. We must keep the pressure on. It is showing results.

—Dean Baker

This is the Internet; Ergo, Star Trek

IOZ on the new Star Trek.

This is the Internet; Ergo, Star Trek

… I would go further. The original crew of the Enterprise were types, and god help us, it was up the actors to invest them with character. Now the filmmakers have attempted to craft arcs of character that will catapult each character firmly into his typewithout throwaway scenes of child-hood bullying, less yet thirty-seven other characters foreboding, “You are a child of two worlds.” Yeah, really? Please remind us before we get to the next reel. …

The law’s majestic equality

The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.

—Anatole France

I added this to my quote collection today, and in looking it up had a look at its context, from The Red Lily, 1894.

Nowadays it is a duty for a poor peasant to be a soldier. He is exiled from his house, the roof of which smokes in the silence of night; from the fat prairies where the oxen graze; from the fields and the paternal woods. He is taught how to kill men; he is threatened, insulted, put in prison and told that it is an honor; and, if he does not care for that sort of honor, he is fusilladed. He obeys because he is terrorized, and is of all domestic animals the gentlest and most docile. We are warlike in France, and we are citizens. Another reason to be proud, this being a citizen! For the poor it consists in sustaining and preserving the wealthy in their power and their laziness. The poor must work for this, in presence of the majestic quality of the law which prohibits the wealthy as well as the poor from sleeping under the bridges, from begging in the streets, and from stealing bread.

This comes from the Project Gutenberg version of the text; I don’t know who the translator is.

Washington Post Victim Blaming

Washington Post Victim Blaming

The Washington Post has an incredibly insightful oped column noting that the spendthrift baby boomers will have almost nothing saved for retirement. This is true as serious economists have tried to point out.

The problem with the column is that the reason the baby boomers didn’t save is because they believed the claims about the bubble economy from the experts cited in the Washington Post and elsewhere. The Post used to have James “Dow 36,000” Glassman as a regular columnist. Its most cited expert on real estate prices was David “Why the Real Estate Boom Will not Bust” Lereah, who worked as the chief economist for the National Association of Realtors for his day jobs. Of course similar views were put forward by people like Alan Greenspan and Ben Bernanke.

The views of those of us who tried to warn of both the stock and housing bubbles were (and are) almost completely excluded from the Post’s pages. They were far more likely to hear the Post’s endless tirades, in both the news and editorial pages, about how Social Security was going to bankrupt the country.

There is a well-documented wealth effect whereby people consume based on their stock and housing wealth. The excessive consumption of the baby boom cohort was a predictable result of the stock and housing bubbles. This spending would have been entirely rational if this bubble wealth was real as the Post and the rest of the media told the boomers. If the boomers can be blamed in this story it is for listening to the media and the experts that whose views they convey.

—Dean Baker

Term Limits for SCOTUS Justices

Makes sense to me.

Term Limits for SCOTUS Justices

Here’s a good four year-old article from Stephen Calabresi and James Lindgren making the case for abolishing life tenure for Supreme Court justices. Their mathematically sensible advice is that justices should serve for a fixed term of 18 years. This is longer than the historical average for the Supreme Court but considerably shorter than the post-1970 average of 25 years.

A new justice would be picked, on schedule, ever two years. This would eliminate the risk of what happened during the Carter administration when nobody died or retired and consequently by 1992 all the justices had been selected by Republicans. It would also formalize the rhetoric around the idea that “elections have consequences” by specifying in advance what those consequences are.

Invasion of the Neutered Sprites

Say amen, someone.

Invasion of the Neutered Sprites

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… The traditional habitat of the Sprites today, of course, is Nonprofitland. Finding them isn’t hard. Look for logos for organizations dedicated to community-building, or health-supporting, or any kind of relentlessly positive thinking. There you will find these little figures by the dozens, prancing around, holding hands, embracing their families, and generally celebrating the universal themes of wellness, happiness, and goodness.

Unfortunately, they have come to have the opposite effect on me. They make me sour and depressed, not least because of my dim memories of having personally contributed to their proliferation. So, I hereby take a sacred pledge: with Da Vinci, Corbu, and Otto Neurath as my witnesses, I swear I will never create another Neutered Sprite. I invite you to join me. Together, we can defeat this epidemic!

Church and torture

This is from a CNN pointer to a Pew Research Center poll.

Survey: Support for terror suspect torture differs among the faithful

The more often Americans go to church, the more likely they are to support the torture of suspected terrorists, according to a new survey.

More than half of people who attend services at least once a week — 54 percent — said the use of torture against suspected terrorists is “often” or “sometimes” justified. Only 42 percent of people who “seldom or never” go to services agreed, according to the analysis released Wednesday by the Pew Forum on Religion & Public Life.

White evangelical Protestants were the religious group most likely to say torture is often or sometimes justified — more than six in 10 supported it. People unaffiliated with any religious organization were least likely to back it. Only four in 10 of them did.

The differences aren’t exactly huge, though. And notice the largest and smallest groups believing that torture “can never be justified”. I’d be curious to see the same poll for murder, rape, infanticide.…

33400CB3-9FA3-452F-9B07-180DB0DC5508.jpg

Naked rants

In case you missed them (shame on you if you did), here are a couple of fine rants from Yves Smith at Naked Capitalism. Well, fragments of them; click for the unexpurgated versions.

First rant:

Yet Another Program to Enrich Banks at Taxpayer and Borrower Expense

The chicanery never ends.

The latest bit of looting fobbed off as a win for homeowners is a program to shovel money to second mortgage lenders:

The Obama administration unveiled a new program to help borrowers with second mortgages stay out of foreclosure, offering cash to servicers, investors and borrowers who modify loan terms.

Guess what? Plenty of seconds are under water and have NO economic value. But they play like pigs in foreclosure and renegotiations. So this program will validate values above market value for these homes and unnecessarily enrich second mortgage holders, who otherwise would have to eat their losses.

Second rant:

On Pelosi’s Duplicity and Apparent Sandbagging of Elizabeth Warren

Despite her longevity as a California pol, house speaker Nancy Pelosi is looking like every bit as much of a dyed-in-the-wool financial services industry backer as the Congressmen on the New York-Boston corridor.

But if we are lucky (and we’d need to be very lucky) history might repeat itself. The original Depression investigation was also a sham exercise, but Pecora, brought in to write the final report after three previous investigators were fired or quit, asked to reopen the hearings, and some initial successes, plus the arrival of the Roosevelt administration, gave the probe a new leash on life.

But with the both the Democrats and the Republicans firmly in the hold of the banking classes, it will take something more on the order of a miracle to get a serious inquiry underway.

Normal Flu

Matthew Yglesias. Worth keeping in mind.

Normal Flu

If I were to say that this year 30,000 Americans would die from the flu, you’d probably think I was offering an alarmist take on the current swine flu outbreak. In fact, I would be offering an extremely optimistic take on influenza in 2009. According to the Centers for Disease Control, the country sees about 36,000 flu-related deaths in a normal year and around 200,000 hospitalizations. It’s standard for between five and twenty percent of the population to contract the flu in any given year.

Given all that, not only do we face the risk of an unusually bad pandemic of “swine flu” we also face a risk of panic. Apparently, very high levels of flu-related hospitalizations and deaths are actually pretty normal. But the media doesn’t normally cover them as national news stories. The heightened awareness of swine flu risks, however, means that anything flu-related is going to get dramatically inflated attention.

Repairing bank balance sheets

Calculate Risk has a post with some very instructive charts comparing the effects of various attempts to bail out banks as they affect the bank’s balance sheets.

Calculated Risk: Bank Balance Sheet: Liquidity and Solvency, Part II

In the previous post, I tried to present a conceptual overview of a liquidity crisis using a bank’s balance sheet: Bank Balance Sheet: Liquidity and Solvency, Part I. Note: I combined various types of financial institutions to illustrate a few points.

As we continue the story, the bank has suffered some losses, but the bank run has been halted by the efforts of the FDIC (increasing insurance limit), or the Fed (by providing liquidity).

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This time we look at the bank’s assets. What I’ve labeled as “normal assets” are various categories of assets, perhaps commercial & industrial (C&I) loans, consumer loans, and others. Although the charge-offs are increasing for all of these loans during the recession, these assets have a market value or otherwise are in OK shape.

The larger problem is the toxic assets (now known as legacy assets). These are mostly related to residential real estate, but there are many other toxic loans (Construction & Development, foreign loans, LBO PE loans, etc.)

The banks are facing huge additional losses for these legacy assets, and these losses will make some banks “balance sheet” insolvent (liabilities will be great than assets). However, the bank is not insolvent in the business sense, because the bank can still pay their debts as they come due — at least for now.

Irish reject e-voting, go back to paper

A little more than two years ago, I published a review in Voting matters of the Second Report of the Irish Commission on Electronic Voting.

The government of Ireland chose an electronic voting system for use beginning with the local and European Parliamentary elections of 11 June 2004. Responding to public criticism, the government established the Independent Commission on Electronic Voting and Counting at Elections in March 2004. In April 2004, the Commission issued an interim report recommending against using the chosen system for the 2004 elections, citing concerns over secrecy, accuracy and testing. The Commission issued its First Report in December 2004, and its Second (and final) Report in July 2006; the Commission was dissolved in September 2006. Except for a limited pilot test in 2002, the system has not been deployed.

The experience was not entirely satisfactory (read the report, or my review). I concluded,

The Irish government is left with several options for moving forward.

1. Adopt the Commission’s recommendations. Improve the voting machine and its software, improve procedures during and between elections, and replace the IES with alternative software that can meet the Commission’s standards.

2. Adopt the Commission’s recommendations as above, but require the vendor to provide a voter-verifiable audit trail (VVAT), and adopt appropriate procedures for taking advantage of the VVAT.

3. Abandon the chosen system, begin a process to define new criteria for a voting system, and then identify and acquire such a system.

4. Abandon the chosen system and continue to use the existing paper-based system, perhaps with procedural improvements, leaving open the option of considering an electronic voting system at some future time.

The Sunday Business Post (Dublin) reports that the government is leaning toward option 1, estimating the cost of complying with the Commission’s recommendations to be approximately 500K, compared with a sunk cost of some 60M.

The 500K figure is disputed, however, and regardless of the cost of option 1, the cost of option 2 would be substantially higher.

My advice? Choose option 4, and establish a new commission that would, with public participation, recommend improvements to the present paper-ballot system, monitor the experience and (dis)satisfaction of other users of electronic voting systems, and develop criteria for the eventual selection of a system for Ireland. The world of electronic voting is evolving rapidly, and Ireland is in a fine position to take advantage of the experience (including the bad experience) of others before taking such an important step.

In the event, the Irish Government has accepted acted consistently with my advice, reverting to paper ballots and establishing an Independent Electoral Commission to make further reforms (though apparently not explicitly including another go at electronics).

Minister Gormley announces Government decision to end electronic voting and counting project
23/04/09

The Minister for the Environment, Heritage and Local Government, Mr. John Gormley T.D., today (23 April 2009) announced that the Government has decided not to proceed with the implementation of electronic voting in Ireland. A process will now be put in place, including discussions with the supplier, to address the disposal of the electronic voting and counting equipment and termination of storage arrangements.

“It is clear from consideration of the Report of the Commission on Electronic Voting that significant additional costs would arise to advance electronic voting in Ireland. This decision has been taken to avoid such costs, especially at a time of more challenging economic conditions. The financial and other resources that would be involved in modifying the machines in advance of implementation could not be justified in present circumstances”, Minister Gormley said.

The Minister noted that “the public in broad terms appear to be satisfied with the present paper-based system and we must recognise this in deciding on the future steps to be taken with the electronic voting system.” The Minister also acknowledged that “the assurance of public confidence in the democratic system is of paramount importance and it is vital to bring clarity to the present situation”.

Quite. Good. Carry on.

Watch what they do

Barry Ritholtz. Corporate insiders don’t seem to believe that a bull market is coming any time soon. On the contrary.

Beware Insider Selling

“Nobody ever sold a stock because they thought it would go up. And as a group, corporate insiders obviously are scarcely enthusiastic about the prospects for a genuine bull market.”

Or so said Alan Abelson in this week’s Barron’s.

Is he right? How fallible are the CEOs, CFOs, and other execs regarding their own firm’s prospects? Consider:

“If those now infamous shoots of recovery are popping up all over, why would insiders be so aggressively dumping stocks?

Yet, they indisputably are. …