Archive for the ‘Uncategorized’ Category

The Goldman SEC Case

April 23rd, 2010 No comments

The government’s complaint is here. Paulson thought certain securities were overvalued, and wanted to short them. It asked Goldman to construct a new security, Abacus, out of them. Goldman hired ACA to choose the securities that would make up Abacus and to go long on it. Goldman told ACA what the idea of Abacus was (without giving an opinion on whether that kind of security was overvalued) and gave ACA Paulson’s list of securities as potential ingredients. ACA chose some of the Paulson securities, and some other securities to make up Abacus. Abacus was a synthetic product, so for every party going long, somebody had to go short. Goldman advertised Abacus as having been designed by ACA. Goldman and ACA went long, and Paulson went short. Various other parties went long or short too.

This sounds fair to me. Paulson thought the securities were overvalued, but he knew that most people didn’t. He wanted one of the overvaluers to put its genuine stamp of approval on Abacus to give it credibility. ACA did that. ACA was under no pressure and no financial interest to approve securities it thought were overvalued. Its stamp of approval was genuine.

Conglomerate Blog: Business, Law, Economics & Society

As I understand it from the complaint, ACA picked every single asset referenced in the portfolio, and the only dispute is over the fact that Paulson, which had no authority whatsoever, suggested some of them to ACA, and ACA didn’t know that Paulson was hoping ACA would make bad picks.

ACA was supposed to be the expert here, which is why it was given full authority. Paulson thought ACA was a stupid expert, which was in fact true, and was helping give ACA rope to hang itself with. But to the extent that ACA was relying on Paulson rather than using its own judgment, isn’t it ACA that is failing in its duty? (Not a legal duty, but its business” duty” to maintain its reputation for doing good work and not just relying on claims by non-experts)
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Eric Rasmusen

Another point. Whenever Goldman puts together a deal, it has multiple parties involved, who pretty much always have adverse interests (each company has to hire its own lawyer, doesn’t it, rather than having one law firm for everybody?). The parties are supposed to know that some of their interests are joint— they all want to get the deal done— and some adverse–they each want a bigger share of the benefits. A party is smart to listen to the apparently helpful suggestions of another party, but stupid to blindly trust them. Isn’t that what happened here?

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Iceland Jokes

April 22nd, 2010 No comments

The Volokh Conspiracy

Reported by Michael Rubin (The Corner):

[1. I]t was the Icelandic economy’s last wish that its ashes be scattered over the EU.

[2.] Iceland goes bankrupt, then it manages to set itself on fire. This has insurance scam written all over it.

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Cloning Oneself

April 21st, 2010 No comments

Marginal Revolution: Cloning thoughts

I think it’s undisputable that the rest of us, at least, would be better off if there were 100 extra Bryan Caplans around. If nothing else, I’m sure he contributes more in tax revenue than he uses up in services.

The Darwinian question is interesting, and goes to Dawkins’s good Selfish Gene idea. Most of us don’t want a clone of ourselves– we want an almost-clone, but improved in certain ways. We would like our child to have higher IQ, no asthma, and no tendency to be pot-bellied. That would be bad, however, for our genes for stupidity, asthma, and pot-belliedness. There’s an inter-genetic conflict.

There’s also a good philosophic question. If my almost-clone is smart and non-asthmatic, is he really like me? Have I really perpetuated myself? What, especially, if I am centrally defined by my bad qualities—arrogance, cowardice, and stupidity?

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Self Defense Threats in Kansas

April 21st, 2010 No comments

The Volokh Conspiracy » Kansas Now Allows Threat of Deadly Force in Self-Defense, and Not Just Use of Such Force

You wouldn’t think that it would take a statute to do this. After all, if it’s OK to kill someone to defend against a threat of death or serious injury, the lesser harm of threatening to kill someone should be fine, too. 

But last year the Kansas Supreme Court held that existing Kansas law only allowed a defense for actual use of force, which didn’t include threats; earlier this year, the Kansas Court of Appeals faithfully applied this principle. Fortunately, the Kansas Legislature (apparently prompted by the urging of gun rights advocates) passed a law that — among other things — makes clear that threats of force should qualify as justifiable self-defense, to the same extent that the actual use of force qualifies; and just yesterday, the governor signed the bill. Good work.

On blackmail: the illegality is not in the threat, but in the promise not to carry out the threat if money is paid. It’s perfectly legal for me to say to you that I’m going to tell your wife about your adulterous behavior. What’s illegal is to ask for money to be silent.

In self-defense, the threat is a statement that if you come closer to me with your knife, I will shoot you. It is not trying ot make a deal; it is simply informing you of what will happen— what I would do even if I hadn’t made the threat. A bystander could have made the statement with the same effect: “If you go any closer to Rasmusen holding that knife, he’s going to shoot you.”

The mere announcement that you are going to exercise your legal rights should not be illegal.

If a mother tells her child, “I’m going to spank you,” is that assault even tho the spanking itself is legal? If a boxer tells his opponent, “I’m going to land one right on your nose,” is that assault even tho the blow itself would not be? I hope not. Maybe Kansas will need a couple of other new statutes to cover those cases too, tho.

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A Quaker Joke

April 21st, 2010 No comments

The Volokh Conspiracy » Kansas Now Allows Threat of Deadly Force in Self-Defense, and Not Just Use of Such Force

the old joke where the Quaker farmer finds a burglar in his house: ‘Friend, I would not harm thee for all the world, but thou are standing where I am about to shoot’.

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Nuclear Proliferation

April 17th, 2010 No comments

Nonproliferation? How Quaint! – Mark Steyn – National Review Online

If you read in the paper that New Zealand had decided to go nuclear, would you lose a moment’s sleep over it? Personally, I’d be rather heartened. It would be a sign that a pampered and somnolent developed world had woken up and concluded that betting your future on the kindness of strangers is a helluva gamble. What Obama and his empty showboaters failed even to acknowledge in their “security” summit is the reality of the post–Big Five nuclear age: We’re on the brink of a world in which the wealthiest nations from Canada to Norway to Japan can barely project meaningful force to their own borders while the nickel-’n’-dime basket cases go nuclear.

How long do you think that arrangement will last? Iran has already offered to share its nuclear technology with Sudan. Sudan? Ring a vague bell? Remember that “Save Darfur” interpretative-dance fundraiser you went to where someone read out a press release from George Clooney and you all had a simply marvelous time? Hundreds of thousands of people have been killed — with machetes. That’s pretty labor-intensive.

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Share of Defense Spending

April 16th, 2010 No comments

Story comments –

Some commentors have been claiming that national defense was half the government budget. Far from it. In 2009, according to the Administration itself 749.7 billion was spent on defense, out of a total of 3,833 billion— 20% of the federal budget, and less than social security by itself. See

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The Secret Leader of the Tea Party Movement

April 16th, 2010 No comments

Hundreds turn out for Tax Day tea party in Bloomington:

Organizer Parker spoke briefly to the crowd through a megaphone, pointing out the movement’s successes, such as the election of fiscally conservative governors in New Jersey and Virginia, as well as that of Republican Scott Brown to the Massachusetts Senate.

Leiter also spoke to local protesters, saying the mainstream media had tried to give the movement a leader in Glenn Beck, Sarah Palin or Sean Hannity.

“Who is our leader?” he asked. “We are,” the crowd chorused back.

“Exactly,” Leiter said, garnering applause and hoots of appreciation.

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A Sign of Reagan’s Talent

April 16th, 2010 No comments

General Election 2010: How to win the great TV debate – Telegraph

Asked about the age issue in 1984, Reagan generously promised not to bring up his opponent’s “youth and inexperience”. The 56-year-old and much-experienced Walter Mondale couldn’t help joining in the laughter.

So far as I have been able to learn, none of Reagan’s handlers suggested the lines and Reagan didn’t tip them off in advance.

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Obama Isn’t Pardoning Anyone

April 16th, 2010 No comments

Obama should exercise the pardon power

Kenneth Lee

April 12, 2010

During a recent oral argument in a case involving the U.S. Sentencing Guidelines for crack cocaine, Justice Anthony Kennedy asked a curious question: “Does the Justice Department ever make recommendations that prisoners like this have their sentence commuted?”

When the Justice Department attorney could not answer the question, Kennedy remarked that the president had not granted a single act of clemency during the past year and wondered aloud whether “something is not working in the system.”

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Congressional Races in the Odd Years?

April 15th, 2010 No comments

RealClearPolitics – How Bad Could 2010 Really Get For Democrats?

Chart I below lists the “wave” midterm elections since the country began having regular midterm elections after the Civil War (before then, many states held their Congressional elections the year after and the year before the Presidential election, i.e. odd-numbered years, while other states followed the Presidential/midterm model).

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The Political Views of Fans of Different Sports

April 15th, 2010 No comments

Taki’s Magazine, edited by Taki Theodoracopulos

A new survey of the athletic and political tastes of 218,313 American adults confirms old stereotypes and identifies fun new ones. The Politics of Sports Fans from the marketing research firm National Media Research, Planning and Placement includes a sophisticated graph that rewards careful scrutiny: Your browser may not support display of this image.

A few random notes:

Fans of PGA golf are represented by the red disk in the upper right corner. They both vote the most Republican (which is why they are farthest to the right on the horizontal Party axis) and just plain vote the most (they are nearest the top on the vertical Turnout axis).

(By the way, the red and blue hues merely reiterate visually which quadrant a sport falls in.)

The larger a sport’s dot, the higher the percentage of grown-ups who say they are “very interested” in it. Not surprisingly, pro football (the big red “NFL” disk near the center) has the most, and most-average, fans.

The least likely to vote are pro wrestling fans (the pale blue dot in the lower left). The most Democratic are the small number of fans of the Women’s NBA, while the NBA’s fans are the second most liberal.

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Franck on Geoff Stone on Jurisprudence

April 15th, 2010 No comments

Bench Memos – National Review Online

Everybody Must Get Stone [Matthew J. Franck]

Today the New York Times gives 1,100 words’ worth of prime newspaper real estate to University of Chicago law professor Geoffrey Stone to set us all straight on how to think about the Constitution. It was actually more words than he needed, so let me provide you with the condensed version in case you are pressed for time:

“Those conservatives who rail about liberal judges ‘making’ law rather than ‘applying’ it get my goat. Originalism is disingenuous. We know this because the Constitution contains open-ended language, whose meaning is simply unknown to us, whereas the aspirations of the framers are perfectly well-known to us.

“Conservative judges routinely make bad rulings, actually driven by ideology rather than original meaning, which will be obvious to you as soon as I recite some of the outcomes they have produced.

“Liberal judges, equally obviously, make good rulings, driven by the framers’ aspirations rather than ideology, which I will again prove to you by reciting some notable outcomes for which they were responsible.

“Oh, did I mention that the perfectly knowable aspirations of the framers, hidden just behind the impenetrable words they wrote whose meaning is unknowable, are best fulfilled by an empathetic, that is, liberal approach to modern realities? Well, they are, because I say so.”

I begin to understand why some of the law faculty at Chicago were willing to offer a permanent position to part-time lecturer Barack Obama, despite his evident lack of scholarly accomplishments.

Very nice. It’s no exaggeration– read Stone’ article. It’s amazing. Here’s a sample:

Rulings by conservative justices in the past decade make it perfectly clear that they do not “apply the law” in a neutral and detached manner. Consider, for example, their decisions holding that corporations have the same right of free speech as individuals, that commercial advertising receives robust protection under the First Amendment, that the Second Amendment prohibits the regulation of guns, that affirmative action is unconstitutional, that the equal protection clause mandated the election of George W. Bush and that the Boy Scouts have a First Amendment right to exclude gay scoutmasters.

Whatever one thinks of these decisions, it should be apparent that conservative judges do not disinterestedly call balls and strikes. …

Liberal judges, on the other hand, have tended to exercise the power of judicial review to invalidate laws that disadvantage racial and religious minorities, political dissenters, people accused of crimes and others who are unlikely to have their interests fully and fairly considered by the majority. Liberal judges have ended racial segregation, recognized the principle of “one person, one vote,” prohibited censorship of the Pentagon Papers and upheld the right to due process, even at Guantánamo Bay. This approach to judicial review fits much more naturally with the concerns and intentions of people like Madison who forged the American constitutional system.

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Our Local Republican Congressional Primary

April 14th, 2010 No comments

The Hoosierpundit: 9th District Debate Roundup

watching the debate last night changed my mind. Of the four candidates Mike Sodrel, I felt, was the most polished, gave the better responses, had a better command of the issues and presented himself as the best candidate to beat Baron Hill in the fall. Todd Young spent the night taking potshots at Sodrel’s record and trying to draw Sodrel into a fracas. The first couple times it seemed legitimate but, over time, it grew tiresome. And the crowd sensed that it was tiresome, it seemed like he was trying to conduct a prosecution. Every time Travis responded to a question he would speak as if he was in front of a large crowd without the benefit of a PA system. He was literally shouting in a clipped campaign style that did not seem appropriate for this type of setting. Sodrel seemed relaxed and was able to provide examples of his previous term in Congress to issues like immigration, national defense and tax policy. Philosophically, there is not much separating the four. They all support term limits, are pro-life, favor strong national defense and want to secure our borders. But of the four I felt Mike Sodrel has the benefit of having been there before and knowing what to expect and how to get things done in Congress.

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University Racial Quotas

April 10th, 2010 No comments

The Volokh Conspiracy » Blog Archive » A Department That Doesn’t Look Like America

Eric Rasmusen says:

I think most universities would say they would be very unhappy if 95% of their faculty or students in a given subject were Jewish, and would take active steps to reduce the percentage. That’s essentially what the Ivy League colleges did in the early 20th century, except the Ivies had a much lower cutoff level than 95%. Thus, I think we can say we have Jewish quotas now, and are hypocritical in saying we oppose the idea, as opposed to the exact level— the present quotas just aren’t a binding constraint, except insofar as they are lumped in with the White-Asian-Foreigner constraint, which is tightly binding.

Jewish student quotas in the 1920s were:

Yale 10%
Princeton 3%
Harvard: 10–12%
Columbia 20%
Dartmouth 5%

Antisemitism: a historical encyclopedia of prejudice and …, Volume 1
edited by Richard Levy. p. 514.

A helpful distinction in looking at racial discrimination is whether the discriminator places value on the discriminated-against group, and hence has a minimum quota (even tho it is nonbinding) as well as a maximum quota. That is true of present affirmative action discrimination and of the anti-Jewish discrimination of the 1920s, but not of the racial segregation of the American South. Present affirmative action proponents don’t want too many whites, Asians, or foreigners, because given the limit on the total number of people that would displace others, but they certainly want some of them, given valued things they bring to the university. The same was true of the 1920’s Ivy Leagues— even Princeton— which valued smart Jews, but didn’t want too much of the class to be made up of smart Jews, Midwesterners, and so forth. They could have reduced the quotas to 0, legally, but they did want some of the Jews. On the other hand, the Southern colleges of the same era wanted zero black students, not just a very small number of very good black students.

Perhaps that is what is captured in the notion of discrimination motivated by positive desires versus discrimination motived by negative desires.

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The Tax Burden across Countries

April 8th, 2010 No comments

Greg Mankiw’s Blog

Taxes/GDP x GDP/Person = Taxes/Person

Here are the results for some of the largest developed nations:

.461 x 33,744 = 15,556

.406 x 34,219 = 13,893

.390 x 35,165 = 13,714

.282 x 46,443 = 13,097

.334 x 38,290 = 12,789

.426 x 29,290 = 12,478

.373 x 29,527 = 11,014

.274 x 32,817 = 8,992

The bottom line: The United States is indeed a low-tax country as judged by taxes as a percentage of GDP, but as judged by taxes per person, the United States is in the middle of the pack.

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Collingwood’s Idea: Look at the Question to Understand the Answer

April 7th, 2010 No comments

Being And Time | The New Republic

This also gave him one of his central targets: philosophers who find it easy to yank a sentence from Plato, Leibniz, Hume, or whomever, and triumphantly demonstrate that it is false or meaningless or both, without paying any attention to the problem to whose solution it was intended as a contribution.

You understand someone, according to Collingwood, not in the way you might come to understand a piece of machinery or any other mechanical or causal process, but by “re-enacting” in your own mind the problem they were addressing and the solution they were proposing.

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Why Make Ugly Art?

April 7th, 2010 No comments

Being And Time | The New Republic

In London during World War I, Collingwood walked every day past Sir George Gilbert Scott’s Albert Memorial, and by his own account it was this eyesore that first turned his mind toward serious questions of history and art:

Everything about it was visibly misshapen, corrupt, crawling, verminous; for a time I could not bear to look at it, and passed by with averted eyes; recovering from this weakness I forced myself to look, and face day by day the question: a thing so obviously, so incontrovertibly, so indefensibly bad, why had Scott done it? To say that Scott was a bad architect was to burke the problem with a tautology; to say that there was no accounting for tastes was to evade it by a suggestio falsi. What relation was there, I began to ask myself, between what he had done and what he had tried to do? Had he tried to produce a beautiful thing; a thing I meant, which we should have thought beautiful? If so he had of course failed. But had he perhaps been trying to produce something different? If so he might possibly have succeeded. If I found the monument merely loathsome, was that perhaps my fault? Was I looking in it for qualities it did not possess, and either ignoring or despising those it did?

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Being Gracious to Opponents Is Easier if You’re Not Their Victim

April 6th, 2010 No comments

The Corner – National Review Online

Sen. Tom Coburn (R., Okla.) defended House Speaker Nancy Pelosi from personal attacks at a town hall in Oklahoma:

While discussing his policy disagreements with Pelosi, Coburn said “she’s a nice lady,” which brought hisses and hoots from the crowd.

Said Coburn: “Come on now. She is nice — how many of you all have met her? She’s a nice person. Just because somebody disagrees with you doesn’t mean they’re not a good person… So don’t catch yourself being biased by Fox News that somebody is no good. The people in Washington are good. They just don’t know what they don’t know.”

Coburn also has an unlikely friendship with President Obama.

Full story here.

UPDATE: From a reader:

I understand what Sen. Coburn is saying, but I don’t think he really appreciates the view point of his audience. I believe it is relatively easy for a person in/with power to be gracious to an adversary. Think of how many buddies Ted Kennedy had among Republican senators. When they lose a fight with a Kennedy or Pelosi they may have bruised pride, but they are not significantly hurt in any material way by that loss. Us ‘commoners’ can and are hurt in significant ways when a Coburn loses a political fight. It’s not just a disagreement to us. So maybe he can be a little more sympathetic to those of us that personalize being @#$@%#@% over by the Dems and their policies.

It’s also significant that Pelosi and Coburn can trade favors, and need a good working relationship.

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The CBO Obamacare Cost Estimate

March 30th, 2010 No comments

The Bus Econ Brown Bag was interesting today. I attach a couple of documents explaining OBamacare. The Kaiser summary looks good. It misses the key sentence in the CBO budget projections, tho, which says the CBO is relying on cost reductions by a Board which is forbidden to suggest any savings method that rations care, increases private spending via taxes or copayments, or affects hospitals.

From the CBO:

“The projected longer-term savings for the legislation also reflect
an assumption that the Independent Payment Advisory Board
established by H.R. 3590 would be fairly effective in reducing
costs beyond the reductions that would be achieved by other
aspects of the legislation.” ( p. 14, March 20, 2010 CBO letter to
Speaker Pelosi)

From a summary of the plan:

“Establish an Independent Payment Advisory Board comprised of
15 members to submit legislative
proposals containing recommendations to reduce the per capita
rate of growth in Medicare spending
if spending exceeds a target growth rate….

The Board is prohibited from submitting proposals that would
ration care, increase revenues or change benefits, eligibility or
Medicare beneficiary cost sharing (including Parts A and B
premiums), or would result in a change in the beneficiary premium
percentage or low-income subsidies under Part D. Hospitals and
hospices (through 2019) and clinical labs (for one year) will not be
subject to cost reductions proposed by the Board.”

( “Summary of New Health Reform Law,” Kaiser Family Foundation,
p. 8 source they list:

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Judicial Activism: What Conservative Activism Would Look Like

March 29th, 2010 No comments

Suppose we adopt the following reasoning:

P1. The Constitution protects all important human rights.
P2. The right to have an abortion is an important human right.
C1: The Constitution forbids state laws against abortion.

Prof. Marshall believes P1, and Justice Scalia does not, so Justice Scalia thinks Prof. Marshall’s conclusion C1 is wrong, regardless of whether P2 is true or not.

If P1 is good jurisprudence, then it also applies here:

P1. The Constitution protects all important human rights.
P3. The right to not be aborted is an important human right.
C2: The Constitution forbids state laws allowing abortion.

Prof. Marshall believes P3 is false, but Justice Scalia believes it is true. Since Justice Scalia thinks P1 s false, he thinks C2 is false too. Suppose, however, that Prof. Marshall talked with Justice Scalia and convinced him that P1 is good jurisprudence. Justice Scalia would then adopt C2.

At the moment, Prof. Marshall’s position should be: Given that Justice Scalia believes P3, it is wrong for Justice Scalia to hold back from Conclusion C2 and allow abortion. Scalia’s abortion decisions are unduly deferential to state legislatures. If Scalia had had a majority on the Court in 1973, then the morally right thing for them to do would have been for the Court to strike down California’s legalization of abortion. To be sure, Prof. Marshall thinks their view of human rights is wrong, but a judge has to go with what his own views on that when the text gives no guidance.

I would like to make it clear that I don’t believe P1. Thus, I do think it would be constitutional to ban having more than one child— just as all kinds of stupid and unjust policies are constitutional. If the electorate has voted for a one-child policy, however, we’ve got a lot worse problem than just that one policy— we have an electorate that will do crazy things, and 5 sane judges aren’t going to stop that. I worry more about the possibility of getting 5 crazy judges than 151 million crazy citizens.

I also don’t think it would be unconstitutional to have a state law saying that if the parents agree, they can murder their child if it is less than one year of age. That’s an unlikely law. It’s less likely, though, than a Supreme Court that would say that the right to kills one’s children is a natural human right. After all, that was what the Romans believed, and I don’t doubt but that it’s common in other cultures. ( Brent Shaw tries to refute the idea that Roman law said this, but I find his article quite fails at its attempt. Raising and Killing Children: Two Roman Myths. Brent D. Shaw Mnemosyne, Fourth Series, Vol. 54, Fasc. 1 (Feb., 2001), pp. 31-77 .)

Two more examples of possible conservative activism:

1. One might argue that the Constitution requires that any state government fund religious private schools (in fact, *all* private schools) at the same level as non-religious government schools.

2. One might argue that high marginal tax rates (federal plus social security plus state taxes) are Takings, or unjust on grounds of natural law. A reasonable and workable rule would be that any combined marginal tax rate less than 1/3 is always ok, a rate between 1/3 and 2/3 is justified if the government has a special need such as war finance, and a rate over 2/3 is never justified.

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Cover on Blood and Judges

March 29th, 2010 No comments

A quote I heard today at the law school:

Some interpretations are writ in blood and run with a warranty of blood as part of their validating force. Other interpretations carry more conventional limits to what will be hazarded on their behalf….

For the courts, too, may or may not speak in blood. To be sure, judges characteristically do not have to use their own blood to create meaning; like most power wielders, they usually write their bloodier texts in the bodies of the inmates of the penal colony. But the fact that all judges are in some way people of violence does not mean they rejoice in that quality or write their texts lightly…. The community that disobeys the criminal law upon the authority of its own constitutional interpretation, however, forces the judge to choose between affirming his interpretation of the official law through violence against the protesters and permitting the polynomia of legal meaning to extend to the domain of social practice and control. The judge’s commitment is tested as he is asked what he intends to be the meaning of his law and whether his hand will be part of the bridge that links the official vision of the Constitution with the reality of people in jail.

Harvard Law Review NOVEMBER, 1983 97 Harv. L. Rev. 4 THE SUPREME COURT, 1982 TERM: FOREWORD: NOMOS AND NARRATIVE Robert M. Cover

He should have cited De Maistre who, I think, said something related.

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The Pope and Pedophilia

March 29th, 2010 1 comment

It will be interesting to see if Pope Benedict can defend himself against charges that he protected pedophilia. I did have the sense that as an administrator he wanted to take a harder line than Pope John Paul II, who was part of the problem. But it now seems that even if he did oppose the old Pope’s policies, he was a loyal subordinate and kept quiet about evil thigns he knew were happening, rather like a Nazi who argued against death camps but helped build them when he lost the argument. I hope that isn’t true, and that we’ll find out otherwise. The Pope isn’t defending himself very well, though– he’s just brushing off the issuee–which is a very bad sign.

I’m a Calvinist, and the point that people are evil and you need people to have institutions is a good one. Every organization is going to contain people who do evil. What’s more important is how the organization responds to that. But Roman Catholics do talk a lot about the One True Church, and maybe the protection of pedophilia by its bishops is a sign that the Roman Catholic denomination is not it.

If a political party had that much corruption in the leadership, I wouldn’t want to be associated with it even if its doctrine was sound.

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Politicians Totally Surprised by Honest Accounting

March 29th, 2010 No comments

The American Spectator : Obama in Rude Denial

The White House political and legislative operations were said to be livid with the announcement by several large U.S. companies that they were taking multi-million or as much as a billion dollar charges because of the new health-care law, the issue was front-and-center with key lawmakers. By last Friday, AT&T, Caterpillar, Deere & Co., and AK Steel Holding Corp. had all announced that they were taking the one-time charges on their first-quarter balance sheets. …

On Friday White House chief of staff Rahm Emanuel and Obama senior advisor Valerie Jarrett were calling the CEOs and Washington office heads of the companies that took the financial hits and attacked them for doing so. One Washington office head said that the White House calls were accusatory and “downright rude.”

The companies are taking the charges because in 2013 they will lose a tax deduction on tax-free government subsidies they have had when they give retirees a Medicare Part D prescription-drug reimbursement.  …

“Most of these people [in the Administration] have never had a real job in their lives. They don’t understand a thing about business, and that includes the President,” says a senior lobbyist for one of the companies that announced the charge. “My CEO sat with the President over lunch with two other CEOs, and each of them tried to explain to the President what this bill would do to our companies and the economy in general. First the President didn’t understand what they were talking about. Then he basically told my boss he was lying. Frankly my boss was embarrassed for him; he clearly had not been briefed and didn’t know what was in the bill.”

It isn’t just the President who didn’t understand his own proposal. Late Friday, House Energy and Commerce Committee Chairman Henry Waxman and Rep. Bart Stupak, chairman of the Oversight and Investigations panel, announced that they would hold hearings in late April to investigate “claims by Caterpillar, Verizon, and Deere that provisions in the new health care reform law could adversely affect their company’s ability to provide health insurance to their employees.”

Neither Waxman or Stupak — who betrayed the pro-life community by negotiating for more than a week with the White House to ensure his vote on the health care bill — had anything more than a cursory understanding of how the many sections of the bill would impact business or even individual citizens before they voted on the bill, says House Energy Democrat staff. “We had memos on these issues, but none of our people, we think, looked at them,” says a staffer. “When they saw the stories last week about the charges some of the companies were taking, they were genuinely surprised and assumed that the companies were just doing this to embarrass them. They really believed this bill would immediately lower costs. They just didn’t understand what they were voting on.”

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Japanese Armor, Heirlooms, and Boys’ Day

March 29th, 2010 1 comment

One Perfect Suit of Samurai Armor –

Lightweight and flexible, the armor was considerably more ingenious and practical than its clanking European counterparts. The suit could be donned with relative ease; its flaring shapes allowed the warrior on horseback to move freely and to easily engage in hand-to-hand combat. Mr. Welch believes it may have belonged to the daimyo, or warlord, in charge of the Kii province in the southern part of the island.Samurai armor is often part of a family’s heritage and is typically stored away, usually in a kura, or Japanese treasure house. “If you go around Tokyo or other historic cities,” Mr. Welch explains, “you’ll see a walled family estate and then, rising above it, a white plaster building with very thick walls, which is where the family keeps all the precious things that aren’t in use.” On May 5, Boys’ Day, it is traditional to bring out the suit of armor (or a replica) and other symbols of male strength.

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Democratic Lying Campaign about Threats

March 26th, 2010 No comments

Michelle Malkin has a long list of past Democratic false charges that opponents made threats against them– a remarkably long list. She also talks about the current purported threats, a number of which have been completely discredited almost immediately and none of which have been confirmed as the work of non-Democrats.


AN IMPLAUSIBLE REPORT IN THE SEATTLE TIMES: “A rock was thrown through the window of Driehaus’ Cincinnati office Sunday.”

Justin Binik-Thomas emails from Cincinnati that Rep. Driehaus’ office “is on the 30th floor of a skyscraper downtown.” He also says that he spoke to Driehaus’ office today and they said this never happened. Which is too bad, in a way, as the Reds could use a guy with an arm like that . . . .

The Seattle Times should run a correction.

From Wikipedia:

The Gleiwitz incident was a staged attack by Nazi forces posing as Poles on 31 August 1939, against the German radio station Sender Gleiwitz in Gleiwitz, Upper Silesia, Germany (since 1945: Gliwice, Poland) on the eve of World War II in Europe.

This provocation was the best-known of several actions in Operation Himmler, a Nazi Germany SS project to create the appearance of Polish aggression against Germany, which would be used to justify the subsequent invasion of Poland….

For months prior to the 1939 invasion, German newspapers and politicians like Adolf Hitler accused Polish authorities of organizing or tolerating violent ethnic cleansing of German nationals living in Poland.[6][7]

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Some numbers useful for thinking about health care:

March 25th, 2010 No comments

Some numbers useful for thinking about health care:

IU PPO $900 Deductible. The middle expense plan.  (2010)
Single person:  396.  $4800/year.
Married  or cohabiting couple:  966.  $11,600/year
Family with children: 1097. $13,164/year


Employee average age: 34. Half male.
Average family size: 2.11.
15% claimed less than $250.  (remember: there is the deductible
to overcome)
 43% claimed 250-2500.
20% claimed  2500-10000
 7% claimed 10,000-50,000
1% claimed over 50,000


Marginal tax rates.
    It looks as if including state taxes, payroll taxes, everything this
is what the CBO got for 2005, roughly (Figure 5):
0-8000/year income:  8-20% marginal rate.
8-40,000:  33% marginal rate
40-90,000: 40% marginal rate
90,000+: 33% marginal rate

So we pretty much have a flat tax.

 The biggest difference in the married couple (one earner) picture
is that the 25,000-40,000 marginal rate is 50%.

CBO, Effective Marginal Tax Rates on Labor Income


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The December Senate Rule Breaking by the Parliamentarian

March 25th, 2010 No comments

For RedState’s very thorough post on this, with a Senate transcript, excerpts from the Senate rules, and so forth, go to OpenCongress makes the same argument that rule changes have sneaked past before, not mentioning that objections were made to any of them.

The later RedState post says,

Making the Death Panels Permanent | RedState, expands as below. AceofSpades argues the other side by saying that the Senate has used less than a 2/3 majority before to include a rules change, but RedState points out that they did it with no senator objecting, to which AceofSpades has no reply. Dailykos talks about the issue too, but only with insults, no attempt at real argument.

There are always, when some of us on the right blow up an issue like Harry Reid’s rules changes, some people who say we’re overreacting.

I have to say I think they miss the point.

First, I do agree with Gabriel Malor that “a quick glance at the Library of Congress website and Google shows that language similar to that used here to except these provisions from the Standing Rules has been used dozens of times in the past thirty years in both the Senate and the House, including in the 109th Congress when Republicans controlled both chambers.”

Second, I do agree the GOP has done thing, including with Medicare Part D.

But, in most all of the cases, though not all including Medicare Part D, the Senate first went through a procedural vote requiring a two-thirds vote in recognition that there would be a change of Senate Rules.

In several of the cases, including Medicare Part D, when that two-thirds vote did not first happen, the 51 person vote went forward without an objection being raised by the Democrats on that point.

Here is where I think the people saying we’re overreacting are totally missing the point.

In the case at hand, an objection was raised and very clearly the rules were being changed. The Senate President, however, ruled that the rules were not being changed, just procedure, despite the clear wording of the change being a rules change.

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Justice Dept. Corruption: The Stevens Case

March 24th, 2010 No comments

Months After Ted Stevens Debacle, Justice Department Corruption Unit in Disarray –

prosecutorial misconduct. With that backdrop, lawyers in the department’s Criminal Division, led by Associate Attorney General Lanny A. Breuer, earlier this month transferred prosecutors Nicholas Marsh and Edward Sullivan out of the public integrity unit. The decision was controversial at the department because the internal probe was at an early stage and because supervisors remained on the job.

William Welch, the chief of the Public Integrity Section, and Morris, his principal deputy, have continued to work on cases since the transfer of two of their subordinates, but as an administrative review continues, they no longer have management responsibility, the sources said. Other lawyers in the section have taken on supervisory roles in specific cases.

Sources said that among the questions investigators are pursuing is how closely the work of the Stevens trial team was supervised by officials in the Criminal Division. Senior political and career lawyers there may have offered input and monitored decisions about the kinds of material to turn over to Stevens’s defense team at Williams & Connolly, the sources added. Senior officials at the department also made decisions about the composition of the trial team, adding Morris, who had more courtroom experience, only weeks before the trial.

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Belief as an Act of Will

March 24th, 2010 No comments

There was an interesting discussion at Prof. O’Connor’s house last night. Here is what I got out of it. A hard question is whether it is morally correct to fight giving in to the false beliefs of a group you are in, do nothing, or actively seek to succumb to them. This isn’t as easy a question as it sounds.

The situation is that someone may join a group because he believes most of what they believe, but he thinks they are wrong on at least one item. Doing nothing, he knows that by hearing only one of the argument, he will tend to modify his belief in that direction. Active resistance would counter that. But there is something to be said for joining with one’s group on non-essential points, even to the extent of changing one’s beliefs.

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Lying Evangelicals, and Two Jokes

March 24th, 2010 No comments

There is probably more hypocrisy and lying about their beliefs by evangelicals than by the average American, simply because evangelicals have at least a loose standard of what they’re supposed to believe, and it isn’t the same as what the average person believes. Thus, the evangelical has more temptation to say one thing in church and another thing with secular friends. And he has more to hide, because more of what he says is wrong is legal and hence tempting— abortion, porn, and divorce being prime examples.

It’s worse with evangelical pastors and professors at evangelical colleges. They’d actually lose their jobs if they admitted their actual beliefs. Since their actual beliefs are usually liberal, they don’t have the spine to do that (unlike those who convert to RC or Orthodox). So they lie.

Here’s a joke that Wheaton’s combination of requiring Education professors to believe in inerrancy and Bill-Ayres-style political correctness makes me think of. The joke needs footnotes. Lubavitchers are a sect of Orthodox Jews who try to get other ethnic Jews to act Jewish. A Mezuzah is a tiny box for a door with certain Bible verses in it. Tefillin are boxes with Bible verses and straps that you wear while praying. And Kosher requires a person to strictly separate meat and dairy dishes, even to the extent of not mixing them inside your mouth. So on to the joke:

A Lubavitcher seeking to reclaim secularized Jews went up to a college boy with a yarmulke and said, “Are you Jewish?”

Trapped, the boy had to admit that he was.

“Do you have a mezuzah on your dorm door?” asked the

“Yes, from the hour I moved in.”

“Do you put on tefillin properly before you say your morning prayers?”

“Yes, every day.”

“After you eat meat, do you wait at least six hours before putting any dairy product in your mouth?”

“Yes, I wait at least eight hours, in fact.”

Then why are you eating a ham sandwich?

“Well, I don’t believe in overdoing things.”

There was also
a Pearls Before Swine cartoon strip something like the following.

zebras were trying to improve relations with crocodiles, so they
sent a delegation to have bilateral talks on how to reduce tensions and build bridges between them.

The response came back in the
form of a letter, asking for more zebras to be sent.

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Alcee Hastings and the Democratic Party

March 22nd, 2010 No comments

Power Line

Hastings was once a federal judge, but he was impeached–it is hard to articulate what a difficult, cumbersome process that is–because he solicited bribes from criminal defendants. That is, he approached the criminals and told them that he would let them off if they paid him. That’s a little extreme, even for a Democrat. Hastings’ efforts to make himself rich in this criminal fashion came to light and he was investigated. He responded to the investigation by committing perjury.

As a result of his multiple crimes, Hastings was removed as a federal judge by the United States Senate, one of the few times in history that has happened. Here is the really astonishing thing: instead of going to jail, Alcee Hastings went to Congress! Democratic voters were not in the least concerned that he is a criminal of the most verminous sort. On the contrary, they elected him to represent them in Florida’s 23rd Congressional District! That, really, tells you all you need to know about the depravity to which the Democratic Party has sunk.

Now, Alcee Hastings, exposed as a criminal and a betrayer of his oath as a federal judge, is playing a key role in the Democrats’ effort to jam Obamacare down the throats of unwilling voters. Here is Hastings explaining that the Democrats have no intention of following House rules; rather, they are just making it up as they go along:…

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Using Ideas

March 22nd, 2010 No comments

   At Prof. O’Connor’s house last time somebody (Notess?) made the good pont that scholarly debate attacks opponents at their strongest point, whereas sophistical debate attacks them at their weakest.  We also talked about the Christian virtue of looking for the good in bad books, not just sneering at the bad. I thought of this just now on reading in
Statistical Modeling, Causal Inference, and Social Science

What’s relevant to me is not what Popper “understood” but what he contributed. I think his ideas, including his emphasis on falsification, have contributed a huge amount to our understanding of the scientific process and have also served as a foundation for more sophisticated ideas such as those of Lakatos.

When considering contributors to human knowledge, I think it’s best to take an Earl Weaver-esque approach, focus on their strengths rather than their weaknesses, and put them in the lineup when appropriate. (As the publisher of two theorems, one of which is true, I have a natural sympathy for this attitude.)

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Public Defenders

March 22nd, 2010 No comments

The BLT: The Blog of Legal Times

Defining Indigent: The wife of Rep. John Conyers Jr. (D-Mich.) was declared indigent this week by a federal judge and assigned a tax-funded public defender to appeal a three-year prison sentence for bribery conspiracy, The National Law Journal reports. Rep. Conyers makes $174,000 a year.

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Obamacare’s Future

March 22nd, 2010 No comments

Chances for repeal of Obamacare in a few years, once it gets going, are good. If I’m reading it right, the bill is going to make health insurance much more expensive, but (a) you can just pay 2% or so of income (say, $2000) instead, and (b) you can wait to buy insurance till you get cancer. If so, hardly anybody will buy insurance till they get severely sick. Annual premiums will, as a result, have to rise to perhaps $50,000/year (no exaggeration— remember, anybody with brains won’t buy it till they have prospective bills that year of at least the amount of the premium). So insurance will disappear, and we’ll be back to 1940.

Update, March 24.

Obamacare is so screwed up it might actually turn out to be good policy. Here’s what might happen:

1. Employers all stop covering health insurance, because it costs too much and the employer penalty is cheaper (2 or 3 thousand dollars, I think— and remember, top-coverage plans are going to be taxed if they’re offered)

2. Individuals won’t buy insurance till they get cancer. At that point, they will.

3. Since (a) only sick people will buy insurance, and (b) extra mandates also make health insurance more expensive, the price of health insurance will at least triple.

Thus, in the end we’ll be left with nobody having health insurance, and all the moral hazard that’s driving up health costs will disappear. Well– not quite. We’ll still have Medicaid, so anybody who spends all his assets and loses his job will get free medical care after that.

But maybe government subsidies would kick in at some point in time. In that case, maybe insurance would only go up to $20,000/year for an individual, and we would in effect have a ban on our existing style of insurance combined with compulsory catastrophic insurance, financed by taxes.

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The Peculiar New York Times

March 22nd, 2010 No comments

Steve Sailer’s iSteve Blog

Big, Big News!
The New York Times website devotes a top-half-of-the-frontpage spot to headline this overwhelmingly important news story:

Arrest in Racial Case at N.J. Wal-Mart
WASHINGTON TOWNSHIP, N.J. — The authorities in southern New Jersey said Saturday that they had arrested a 16-year-old boy for activating a public-address system at a Wal-Mart store last week and ordering “all black people” to leave.

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Keeping Voting Open

March 22nd, 2010 No comments

A good research question is whether it is good or bad to have a voting rule for public votes that allows a voter to change his mind and change his vote midway through it. Also interesting is the question of whether to vote in random order, predictable sequence, or simultaneously.

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Latex, Word, and Zombies

March 22nd, 2010 No comments

Marginal Revolution

“We originally wrote this article in Word, but then we converted it to Latex to make it look more like science.”

The link is here. It is the best analysis of zombification I have seen to date. For the pointer I thank John Chilton.

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Statistical Significance

March 22nd, 2010 No comments

<p>Here is something good to keep in mind:

Marginal Revolution: Why Most Published Research Findings are False

Suppose there are 1000 possible hypotheses to be tested. There are an infinite number of false hypotheses about the world and only a finite number of true hypotheses so we should expect that most hypotheses are false. Let us assume that of every 1000 hypotheses 200 are true and 800 false….

  In fact, standard statistical practice guarantees that at least 5% of false hypotheses are accepted as true. Thus, out of the 800 false hypotheses 40 will be accepted as “true,” i.e. statistically significant.

It is also inevitable in a statistical study that we will fail to accept some true hypotheses (Yes, I do know that a proper statistician would say “fail to reject the null when the null is in fact false,” but that is ugly). It’s hard to say what the probability is of not finding evidence for a true hypothesis because it depends on a variety of factors such as the sample size but let’s say that of every 200 true hypotheses we will correctly identify 120 or 60%. Putting this together we find that of every 160 (120+40) hypotheses for which there is statistically significant evidence only 120 will in fact be true or a rate of 75% true….

Ioannidis says most published research findings are false.  This is plausible in his field of medicine where it is easy to imagine that there are more than 800 false hypotheses out of 1000.  In medicine, there is hardly any theory to exclude a hypothesis from being tested.  Want to avoid colon cancer?   Let’s see if an apple a day keeps the doctor away.

Brad DeLong and Kevin Lang wrote a classic paper suggesting that one of the few times that journals will accept a paper that fails to reject the null is when the evidence against the null is strong (and thus failing to reject the null is considered surprising and important).

The 5% significance level is just a convention. Even on its own terms, it doesn’t pretend to be more— 5% isn’t an intrinsically meaningful number (50% has a lot more oomph, really).

But it is important to have a convention. It makes it a lot easier to read a table if we can scan for asterisks instead of having to read p-values, or, worse yet, have to figure out what prior the author is using in his calculations.

The problem comes when scholars fail to understand that it’s a a convention. A good referee won’t accept a paper in economics just because the results reach 5%. If the result is surprising, he’ll demand some robustness checks and some theory, and a big sample size (which helps avoid acceptance-selection bias because there it’s harder to draw a million big samples than small samples).

On the other side, a good referee *ought* to accept a paper with suggestive results even if the sample size is too small to get to 5%. This is less likely, because we economists are obsessed with regression analysis and despise the case study. Sometimes, though, there are only 20 data points, and we shouldn’t just throw away that information. Instead, we should do a regression, which will generate insignificant results probably, but then draw graphs, make a table with every data point, and discuss each point’s residual and real world specialness.

  The Ioannides result  reminds me of one of my own papers, on conservative bias in business (or politics, or marriage).  The average potential  business idea has a below-market return. Otherwise it wouldn’t be potential, it would be actual, since a business could accept random new ideas (the nuclear toothbrush, the cardboard credit card, the Nome Dairy Queen…) and make money. In estimating the profitability of new projects, however, there is random error. Suppose 5% is the cost of capital. If a business accepts any idea which has a 6% estimated return, most of the ideas it accepts will be ones with returns of less than 5% which just happened to have positive measurement error, since there are few genuine 6% ideas.  Thus, the business should be conservative, and use a hurdle rate of perhaps 9%.

“Managerial Conservatism and Rational Information Acquisition, ” Journal of Economics and Management Strategy (Spring 1992), 1(1): 175-202. Conservative managerial behavior can be rational and profit- maximizing. If the valuation of innovations contains white noise and the status quo would be preferred to random innovation, then any innovation that does not appear to be substantially better than the status quo should be rejected. The more successful the firm, the higher the threshold for accepting innovation should be, and the greater the conservative bias. Other things equal, more successful firms will spend less on research, adopt fewer innovations, and be less likely to advance the industry ‘s best practice.  (

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