Thursday, December 15, 2011

Rain Man in SLC? Lock, stock, and barrel

If you were alive in the 1980s then you’ve probably seen (or at least heard of) the movie Rain Man (1988; poster from here). It stars Dustin Hoffman as Rain Man (an autistic savant) and Tom Cruise as his brother, who is something of a bon vivant that is down on his luck. The whole movie hinges around en epic road tip to California, in the midst of which the two take a casino in Vegas (in a classic scene) for all its worth. And that, right there, is the last thing my mind remembers Rain Man doing…. card counting in Vegas.

Fast forward to 2011, and I find myself in the middle of a super interesting and entertaining book on the art of memory and the culture that surrounds a small but proud group of people who take part in memory competitions. The book is called Moonwalking With Einstein and it’s by Josh Foer. So, Foer is a young journalist getting wrapped up in these memory competitions and one day he decides to go visit, wait for it, none other than the real Rain Man himself. It turns out the man behind the movie is named Kim Peek, but likes to be called “Kimputer.” Okay, but get this: he lives in Salt Lake City (Murray to be exact) and is apparently hilarious (and very much a savant). Moonwalking with Einstein (pp. 222-3):
Kim and I spent the better part of our afternoon together sitting at a table in the back corner of the Salt Lake City public library’s fourth floor, where he has spent almost every weekday of the last ten years reading and memorizing phone books. 
[…] 
And no matter how many books of etiquette he may have memorized, his sense of what’s socially appropriate is, to put it generously, esoteric. Standing in a crowd of people in the lobby of the Salt Lake City public library, Kim wrapped his thick arms around my shoulders and gripped me against his paunch and then forcibly gyrated against me. “Joshua Foer, you are a great, great man,” he told me loudly enough to startle a passerby. “You are a handsome man. You are a man of your generation.” And then he let out a deep roar.

Addendum: At the end of Foer's book, he sadly mentions that Kim Peek had died. Rest in peace, Kimputer. 

Wednesday, December 14, 2011

SOPA?

I really don’t mean for this to be an activism blog, but I just wanted to highlight one more piece of legislation that has been receiving quite a bit of attention lately. It’s called the Stop Online Piracy Act (SOPA, or H.R. 3261), and was introduced in the house in October by Representative Lamar Smith (R-TX). I don’t know much about this sort of thing, so I’ll outsource some of this to Wikipedia:
The bill expands the ability of U.S. law enforcement and copyright holders to fight online trafficking in copyrighted intellectual property and counterfeit goods. Now before the House Judiciary Committee, it builds on the similar PRO-IP Actof 2008 and the corresponding Senate bill, the Protect IP Act
The bill would allow the U.S. Department of Justice (DOJ), as well as copyright holders, to seek court orders against websites accused of enabling or facilitating copyright infringement. Depending on who requests the court orders, the actions could include barring online advertising networks and payment facilitators such as PayPal from doing business with the infringing website; barring search engines from linking to such sites and requiring Internet service providers to block access to such sites. The bill would make unauthorized streaming of copyrighted content a felony. The bill also gives immunity to Internet services that voluntarily take action against websites dedicated to infringement, while making liable for damages any copyright holder who knowingly misrepresents that a website is dedicated to infringement.
So, the bill would give the government more power to shut down websites containing (or linking to websites that contain) copyrighted material. Currently, under the Digital Millenium Copyright Act, websites such as YouTube are protected from legal liability if they “act in good faith to remove user-uploaded infringing content from their sites.” It appears that websites would lose this legal protection if the SOPA legislation were to pass. This is one of the reasons Google opposes the bill, along with a litany of venture capitalists, who provide critical funding for Silicon Valley’s startup companies.

Supporters include the RIAA, MPAA, Nike, the US Chamber of Commerce, NBCUniersal, Ford, Revlon, the NBA, and Pfizer. Opponents consist of Google, Yahoo!, Facebook, Twitter, eBay, Mozilla, Reporters Without Borders, and ACLU, and Human Rights Watch. The main concern with such a bill is the power it would give the government to shut down websites, rather than just have them remove offending content. Apparently even if a website simply links to another site with such content the former would be in danger of being shut down. While respecting copyright is an important part of a developed economy, giving more power to the government to close websites and regulate the internet is dangerous path to go down.

The House Judiciary Committee will review the bill and its recent changes tomorrow, so now looks to be a good time to act if you’re inclined to do so. Read more on this piece of legislation from cnet.com.

Monday, December 12, 2011

Homeownership—what you'll need to know

In this post I want to link to most of what one might need to think about in terms of purchasing a house. This certainly won't give you everything, but hopefully will provide you a place to start in terms of researching whether you should get your own place.

First, in terms of the financial aspects of homeownership, and how it compares to (say) investing in stocks, this post provides the relevant details. It contains the characteristics of a good investment, the long-term returns of house prices in general, describes how leverage works, and provides a contrarian view compared to what you'll generally hear about homeownership.

Here you'll find some of the benefits of homeownership, a discussion of whether it's better to rent or own, and a few thoughts on the potential downsides of ownerships which could quickly leave you on a sinking ship that you have no control over.

If you want to determine whether your particular case better lends itself to owning or renting, check out this post. It'll give you objective methods to determine whether a house is a bargain. Relatedly, this talks about whether buying or renting has been the better deal over various decades for different parts of the country. It also explains why renting may be better for you if you're a good saver and why homeownership may be the better bet if you need a little push at socking it away.

In terms of the financing, this post describes the benefits of putting 20% down and this post describes why a 15 year mortgage could save you ~ $100k compared to the 30 year loan. And finally, here I describe why the mortgage interest tax deduction isn't all that great of a deal.

Good luck out there, and, if in doubt, defer consumption.

Indefinite detention without trial? Coming to a town near you.

So, the Senate recently passed legislation (S.1867) reauthorizing military spending for 2012 in what’s called the National Defense Authorization Act (NDAA). Curiously, this year John McCain and Carl Levin (photo to the right) introduced specific sections (1031 and 1032) of the bill which would allow for the indefinite detention of US citizens by the military. It passed 93-7 in a closed door meeting without any type of hearing.

Last week, the US House of Representatives voted to “close portions of conference” related to their version of the bill (H.R. 1540), which would mean discussions on the house floor would not be made available to the public. Hmm. Closed-door discussions on giving the government the ability to detain US citizens indefinitely and without trial? It doesn’t take a conspiracy theorist to worry about this turn of events. As this NYU piece notes, it’s sad that the only display of bi-partisanship (the bill passed 93-7) politicians can muster comes when restricting the (6th amendment) rights of US citizens. See Jon Stewart's sharp take here.

Senator Robert Udall from Colorado introduced an amendment to the bill which would have stripped it of its indefinite detention sections, but this legislation failed by a vote of 38-60. For now, the bill is under review by the House, but, as mentioned above, we won’t be able to follow their discussion. President Obama can veto the legislation (and has promised to), but his veto can be over-ruled by a two-thirds majority in the House and the Senate.

You can learn how your Senators voted on this here (for those in Utah, Sen Hatch voted yes and Lee voted no; good for Senator Lee). Please write your officials a quick note voicing your disapproval of the current version of NDAA and express your support for the Udall amendment. While the thought of attacks against the U.S. is scary, it's much scarier to know that you could be falsely accused and imprisoned without trial.

The Utah delegation:

1st district:
Congressman Rob Bishop (call if you are not in his district as he will not accept your email)
(202) 225-0453
http://robbishop.house.gov/ZipAuth.aspx

2nd district:
Congressman Jim Matheson  (call if you are not in his district as he will not accept your email)
(202) 225-3011
@RepJimMatheson

3rd district:
Congressman Jason Chaffetz (call if you are not in his district as he will not accept your email)
(202) 225-7751
@jasoninthehouse

Senator Orrin Hatch
(202) 224-5251
@OrrinHatch

Senator Mike Lee
(202) 224-5444
@SenMikeLee

Thursday, December 8, 2011

The paradox of thrift (and how not to fix our debt situation)

If one follows the news much at all these days, they’ll have noticed that many developed countries around the world are suffering from budget deficits. That is, partly due to the financial crisis, government revenues are often vastly insufficient for the amount of money governments are paying out. Many of these countries have been trying to solve these budget problems by cutting spending across the board (this is generally referred to as imposing austerity). Oddly, cutting spending may not be the best way to go about balancing government budgets, largely because of something called the paradox of thrift.

This idea was first elucidated in the Fable of the Bees by Mandeville in 1714, and later popularized by John Maynard Keynes in the twentieth century. I remember catching on to this in a intro to business thought class at the University of Utah. We were reading Thoreau (yes, the class was awesome) and it dawned on me that if everyone lived like he did the economy would grind to a halt. Despite it being a paradox, this makes sense, right? If everyone stopped spending money at the same time, whether to save the money or to pay down debt (as is currently happening), then much of the demand for goods and services (economic growth relies on), just wouldn’t be there.

Wikipedia defines the paradox of thrift thusly:
[I]f everyone tries to save more money during times of recession, then aggregate demand will fall and will in turn lower total savings in the population because of the decrease in consumption and economic growth. [emphasis theirs]
So, as governments around the world cut their spending their economies will grow more slowly. This is because the paradox not only applies to spending by individuals, but also that done by companies and governments as well (because it doesn’t really matter who is doing the spending).  Two other points seem appropriate here. First, a country’s debt is considered in terms of the size of the country’s economy (i.e., debt/GDP). If you slow down the growth of GDP by slashing spending, your debt to GDP ratio won’t fall even if you’re slowing the growth of your debt. Lower tax receipts from the slowing economy are another big part of the problem. Rather than slashing spending to the bone, for governments a better way to fix the problem is to grow their way out of debt, as the US did after WWII. In this situation not only are tax receipts up, but the GDP (i.e., the denominator in the ratio) is increasing. This is the problem with Italy right now; it’s not growing, and the austerity measures only make things worse.

The second point I wanted to make is that currently the US government can borrow money at negative real interest rates for up to seven years. This means that the government can borrow money now, and, after inflation, pay less back in the future. No one really mentions this when discussing the country’s budget problems. With the crumbling infrastructure in this country, and the ~24 million people currently un or under-employed, it would make a lot of sense to borrow the money now, build stuff we need by paying currently-idle people to do work, and then pay the smaller amount of money back in the future. With negative real interest rates, this literally has no downside. It's unfortunate Europe's not so lucky.

Wednesday, December 7, 2011

Is technology progressing more slowly (and is that why our economy stinks)?


Tyler Cowen, a noted blogger and economist at George Mason University, wrote a short e-book last year called The Great Stagnation. It sparked a huge debate in the economic community and blogosphere because 1) it was very interesting and 2) his thesis seems to explain why our economy (and median income growth) has been doing so poorly over the last decade (with charts, I’ve written a little about this stagnation here). Tyler cites a technological slowdown as being to blame for our troubles. He explains how it happened thusly:
In a figurative sense, the American economy has enjoyed lots of low-hanging fruit since at least the seventeenth century, whether it be free land, lots of immigrant labor, or powerful new technologies. Yet during the last forty years, that low-hanging fruit started disappearing, and we started pretending it was still there. We have failed to recognize that we are at a technological plateau and the trees are more bare than we would like to think. That’s it. That is what has gone wrong.
Cowen goes on to cite various facts demonstrating the nature of the slowdown since the 1970s. For example, he notes the fact that in 1947 median family income was $21,771 and by 1973 it had already doubled to $44,381; when comparing 1973 to 2004 (a longer period), median income had just gone from $44,381 to $54,061, which was just a 22 percent increase. In other words, our grandparents’ generation saw a much larger increase in living standards than our parents have.

As mentioned, he attributes this slowdown to the fact that our country has picked most of our low-hanging fruit. The first that he cites is the fact that our country once had plentiful land next to important rivers and ports, and that ambitious immigrants could easily come to the country, “work hard on good U.S. topsoil, and enjoy a higher standard of living.” While we still have tons of land, most of it is in disadvantageous locales.

Second, the country was able to make vast gains by simply educating the population (and indeed, in the early twentieth century we led the world in this regard). Cowen here cites the fact that in 1900, only 6.4 percent of Americans graduated from college, whereas by 1960 60 percent of Americans did so. A lot of potential was brought off the farm during this period (to the country’s great benefit), and we’ve already accomplished the same feat for college enrollment. While there are incremental gains still to be made, progress going forward will be much harder to achieve.

The last thing he attributes the income stagnation to is the lack of technological innovation in the last 30 years. It’s counterintuitive, but the data bears it out. For example, he cites a figure from physicist Jonathan Huebner (to the right, and from the book) which shows that innovation actually peaked in 1873 (which is in line with what this book says), and that it was easier for the average person to “produce an important innovation in the nineteenth century than in the twentieth century.” This is not because people were so educated then, but because innovation was then easier and could be done by amateurs. Further, he states that the absolute number of patents produced in the US has declined from 1966 (54,600) to 1993 (53,200), and that the number of patents per researcher has “been falling for most of the twentieth century.”

Indeed, if you think of the advances made by our grandparents generation compared to ours, this will start to make sense. Societal gains from 1880 to 1940 brought a whole host of technological advances, including “electricity, electric lights, powerful motors, automobiles, airplanes, household appliances, the telephone, indoor plumbing, pharmaceuticals, mass production, the typewriter, the tape recorder, the phonograph, and radio, to name just a few, with television coming at the end of that period.” Even the  microwave was first on sale in 1947. If you think of innovation over the last 60 years (from 1951), the internet comes to mind as the only one that’s really revolutionary. We certainly have much more stuff, and the innovations from the early twentieth century have been spread to most of the population (think cars, air travel, refrigerator, dishwashers, microwaves), but life in the kitchen and home is much the same now as it was then. For a great example, Paul Krugman similarly looks at the progress (or lack of it) in his own kitchen and makes a comparison between eras here.

So, Cowen's whole point is that technological progress has slowed and that’s why the economy isn’t growing the way is used to. His proposed fix for the current situation is to raise the social status of scientists, and he thinks it would be a big help "if people love science, care deeply about science", and "view scientific achievement as a pinnacle of our best qualities as leaders of Western civilization." Sign me up, Tyler. We scientists have been been needing someone to stroke our ego for way too long.

Considering the way it turns typical thinking on its head (and for only $4), The Great Stagnation is well worth your time and money.

Monday, December 5, 2011

Mitt, the lover of all things nuclear (or at least some things nuclear)

We’re way past it being just a Mitt fortnight on the blog, but I still want to talk about the guy. Since I haven’t swung by the library just yet, you’ll be treated to another Mitt-based post. This time it’s about nuclear energy. Incidentally, he and his lovely wife are currently on the cover of Parade magazine (yes, the one that comes with the newspaper). Does anyone else think Tag’s collar hearkens back to the 1970s? Stick with the button-down collar, Tagg, like your father.
So, while nuclear energy isn’t exactly a hot topic at the moment, perhaps that’s due to the fact that we have a large part of the population out of work and a media that’s more concerned with the merry-go-round circus that is the Republican primary. While it’s hard to measure exactly how much these things will hurt us, the unmitigated effects of air pollution, climate change, and the unsavory aspects of enriching despots with our oil purchases make nuclear power a suitable topic, indeed. First, I’ll quote Mitt’s No Apology (page 239) and then I’ll talk about the disaster that occurred in Japan this year and why it shouldn’t deter us from nucleating our energy policy (or something). Mitt:
Nuclear power is a win-win; it’s a domestic energy source with zero greenhouse gas emissions. The McKinsey analysis determined that nuclear power poses the single largest opportunity to reduce global greenhouse gas emissions. Without increased nuclear generation, the same study predicts global temperatures cannot achieve the two-degree Celsius goal. So, if you’re serious about global warming, you have to say yes to nuclear, and if like me you’re serious about energy security, you get to the same place.
I confess that I don’t understand why some environmental activists still consider nuclear power such a boogeyman. They should consider the contemporary evidence—the United States now has 104 trouble-free nuclear reactors at sixty-five power plants. France gets 80 percent of its electrical power from nuclear generations. Nations all over the world are currently building new plants, and scores of naval vessels have been safely and efficiently running on nuclear power for decades. Vermont, the state which many consider to be the “greenest” in the country, gets 73 percent of its power from nuclear power. Nuclear generations has a safe and economic track record, and it is here to stay.
Some argue that “nuclear power has no prospects in market-driven energy systems for a simple reason: nuclear plants cost too much to build… electricicty from new light-water reactors will cost twice as much as from new wind-farms.” This argument would be more persuasive if Argentina, Canada, China, Finland, France, India, Japan, Pakistan, Russia, South Korea, the United Kingdom, and other nations didn’t have a total of forty-eight new nuclear reactors under construction as of the summer of 2009. Can all of those countries be pursuing energy solutions that make no economic sense?
Mitt goes on to say our dependence on foreign oil is more dangerous than the risks posed by nuclear power and that the red tape inhibiting new plants should be slashed. Indeed, he’s right that it makes no sense that environmentalists are up-in-arms about nuclear power considering the currently limited capacity of wind and solar energy. As an undergraduate I once had a choice chat with one of my Atmospheric Science professors, who expressed such sentiments by saying that without nuclear, “society is fu**ed”. He said it twice for emphasis. Mitt seems to get that fact, and smartly uses energy security as a cover to win the argument with his own party (again, I’m still not convinced he’s as conservative as he pretends to be).

Sure, nuclear waste and radiation are undesirable, but, as this same professor noted, oddly the best thing to promote nuclear power could be some sort of well-publicized accident. Hear me out on this. Those who have spent any amount of time in Japan have likely traveled to Hiroshima or Nagasaki. I visited the former of the two last year and was impressed by its beautiful parks, impressive museums, and efficient transit system. You know what I didn’t notice? The effects of radiation. The city was bustling with 1.2m people (and has amazing okonomiyaki). The street cars were purportedly running days after the bomb was dropped, so perhaps you can file this in the only-in-Japan file, but generally people wrongly assume that contaminated areas remain so for millennia.

Oh, and I can’t forget to mention the events in Japan this year. To keep it simple, the Fukushima Daiichi nuclear plants were rated as safe for a 8.6 magnitude earthquake, while the quake that actually occurred was 8.9-9.0. Similarly, the tsunami that hit the plants was 14 or 17m high (45 feet!), whereas the plants had been prepared for a 5.7m wave. In terms of the earthquake alone, the power was at least twice as strong (10^8.9 / 10^8.6) as what the Fukushima nuclear plants had been rated for (this same paper argues that since we don’t feel the waves the seismograph does, but rather the actual energy, the quake was fifteen times that which had been planned for). Twice to fifteen times stronger than what was planned for. This is why there was a problem. And it wasn’t a problem with nuclear energy, but a rather a lack of imagination on the part of the engineers and geologists that planned the reactors' defenses. If you still have doubts, drive through West Virginia one of these days and examine what the coal mining there has done to the landscape and the miners’ health. Some of those regions are a lot worse off than Hiroshima.

What does it mean to defer consumption and why are we doing this?

Instead of posting an efficiency tip this Monday morning, I’d like to elucidate this blog's life philosophy a little bit. People often ask the meaning behind the blog’s name and how it relates to the topics I post about, so I thought it might be worthwhile to tie everything together.

From time to time I’ll read parts of The Richest Man in Babylon. The book was published in 1926 but is composed of ancient-sounding parables about handling money. While I could use various texts to describe the principles behind this blog, of course, this one in particular has been on my mind lately. One of the most striking passages of the book is this: “The purpose of a budget is to help thy purse to fatten. It is to assist thee to have thy necessities, and, in do far as attainable, thy other desires. It is to enable thee to realize thy most cherished desires by defending them from thy casual wishes.”

It’s basic, but when one is able to defer consumption and lay money at interest, you’re ensuring yourself a more prosperous future. When one forgoes the distractions of the day to pursue their education or when one exercises or eats right, they’re doing the same thing. In this blog's first post, I wrote about the many benefits that accrue to those who are simply able to delay gratification. Look at everything you did today. How much of it consisted of making yourself temporarily happy now, rather than contributing to a foundation for lasting happiness in the future? I like this because it's simple and applies to so many aspects of life: Defend thy most cherished desires from thy casual wishes.

Friday, December 2, 2011

We are to blame for shitty laws and officials

Just as something of a follow up post to yesterday. It’s one thing for us to follow current events and study the issues that face our local or national community, but it’s certainly another to actually be doing something about it. I fear many of us (and I’m at the top of this list) don’t actually do anything when we’re agitated about some aspect of society. The implications of public policy, whether we like it or not, infuse a great many aspects of our lives. This isn’t necessarily a bad thing; it’s that way simply because of all the people we have to integrate with on a daily basis.

Matt Yglesias is a popular, clear-headed policy blogger. If you haven’t heard of him, he’s currently writing here. Check em out. He got a letter a while back from a lady who wanted to not only be well informed, but also working to make a difference. His response is framed in terms of making gains for the progressives, but it makes sense for any issue:
She wants to know what she should actually be doing to try to create change, since “[w]atching Jon Stewart tell me things I already know in funny voices is starting to seem hollow.”
This has become one of my refrains when talking to people in person. If you’re a progressive and you feel that the political system isn’t doing what you want, it’s misguided to look at this as a personal failure of elected officials. It’s, if anything, a personal failure of you and people like you. Justice and equality doesn’t just happen because it’s nice, people need to make it happen. If it’s not happening, then its advocates are failing. And I do think there’s a lot of wisdom to the old Le Tigre song “Get Off The Internet.” Reading and talking to like-minded people about how powerful people are failing can seem like action, but it really isn’t. As for what you should do, probably the most obvious step is to make sure to remember to volunteer doing something at peak election season, but I would also suggest the following two steps that I think people underrate:
— Make sure to call/write to your member of Congress and senators. Even if their vote is entirely predictable, they still pay attention to what they’re hearing from constituents, and the overall volume of feedback still matters. If reliable liberal members get praise from their constituents from doing liberal stuff, then they become emboldened in their liberalism. You should be doing this regularly. If a major legislative proposal is dropped, let your elected officials know how you feel about it. Both positive and negative reinforcement matter.
— Be personally annoying about your political views when they’re relevant to your interactions in everyday life. I, being a jerk, will absolutely not allow someone to make a remark about the high prices, crowding, and mediocrity of DC bars without subjecting them to a discourse about the DC liquor licensing regime. Lots of people who think they’re not interesting in the DC liquor licensing regime are interested in its consequences. If you are in a car with me and we’re in a rush hour traffic jam, you are damn well going to listen to me talk about congestion pricing. This generally doesn’t work in Washington for national politics, but whatever it is you do, I’m sure you interact with lots of “apolitical” or moderately conservative people who remark now and again about things in their life to which politics is relevant. Point this out to them. Tell them who the bad guys are. Recommend some good blogs. Your friend Bob probably thinks he doesn’t care about monetary policy, but does care about the state of the labor market. Explain it to him. Be bold. Be annoying.
Of course, these tactics work for any issue, not just for achieving a liberal agenda. Again, whether we're upset about laws regarding the economy, transportation, the environment, or liquor licensing, if "you feel that the political system isn’t doing what you want, it’s misguided to look at this as a personal failure of elected officials. It’s, if anything, a personal failure of you and people like you. Justice and equality doesn’t just happen because it’s nice, people need to make it happen."

Congressman Rob Bishop (call if you are not in his district as he will not accept your email)
(202) 225-0453
http://robbishop.house.gov/ZipAuth.aspx

2nd district:
Congressman Jim Matheson  (call if you are not in his district as he will not accept your email)
(202) 225-3011
@RepJimMatheson on twitter

3rd district:
Congressman Jason Chaffetz (call if you are not in his district as he will not accept your email)
(202) 225-7751
@jasoninthehouse

Senator Orrin Hatch
(202) 224-5251
@OrrinHatch

Senator Mike Lee
(202) 224-5444
@SenMikeLee

Thursday, December 1, 2011

SkiLink is looking to take away YOUR land.

Turning to something more serious, a bill was recently introduced by Rob Bishop and Jason Chaffetz in the US House (HR 3452) and Orrin Hatch and Mike Lee in the US Senate (S 1883) which would enable the sale of 30 acres of Forest Service Land to Talisker, a Canadian company that owns the Canyons Resort. The House version is found here and is quite short. Called the Wasatch Range Recreation Access Enhancement Act, the bill would allow the Canyons to build a gondola, called SkiLink, which would connect with Solitude Mountain Resort in Big Cottonwood Canyon via the Wasatch Crest. Talisker and the bill’s sponsors in Washington are promoting the bill as a way to increase tourism and economic growth while also reducing car traffic from one resort to the other.

While these might seem like reasonable goals at first blush, ski industry leaders and local enthusiasts have largely come out against the project. For example, Peter Metcalf, president of the respected ski and outdoor company Black Diamond, sent a letter (found here) to Governor Herbert opposing SkiLink on the grounds that
A. It will set an unfavorable precedent to sell off actively used and appreciated public lands for the benefit of a private business entity.
B. It will circumvent the public process and, in this instance, a public that has already expressed sentiments against the wanton expansion of ski areas in the Wasatch. It will become the impetus for a range war of construction of additional lifts which span the Wasatch crest and put at risk the integrity of our watershed and diminish the backcountry skier/hiker/biker /tourist experience.
C. It will truly jeopardize the likelihood of there ever being one well thought out, comprehensive, and inclusive solution to the transportation and ski interconnect that facilitates our ski and transportation demands while protecting the integrity of the Wasatch of all and for all of its uses.
The Save Our Canyons group has also come out against the project here. Indeed, it seems that profits are the main driver behind the proposed legislation because 1) estimates have said the project will only reduce traffic through the canyons by only ~50 cars/day (based on the 18k/yr estimate), which hardly seems like something these politicians would normally care about; 2) it would involve the sale of public lands (i.e., YOUR land) to a private company in Canada; 3) it would put infrastructure in the pristine Wasatch backcountry, not only ruining the remote area for backcountry skiers and snowshoers in the winter, but also diminishing the area for hikers and bikers in the summer.

As Peter Metcalf mentioned, if the Canyons Resort and local politicians think this is something that Utahns would support, they wouldn’t be circumventing the public process. This is not just another idle threat to the Wasatch, either, as the House subcommittee on National Parks, Forests and Public Lands is holding a hearing tomorrow morning regarding the proposal.

Please contact our local representatives before tomorrow’s meeting and let them know how you feel about the project.

Congressman Rob Bishop (call if you are not in his district as he will not accept your email)
(202) 225-0453
http://robbishop.house.gov/ZipAuth.aspx

Congressman Jason Chaffetz (call if you are not in his district as he will not accept your email)
(202) 225-7751
@jasoninthehouse on twitter

Senator Orrin Hatch
(202) 224-5251
@OrrinHatch

Senator Mike Lee
(202) 224-5444
@SenMikeLee

Congressman Jim Matheson (Encourage him to actively fight this proposal that sells off lands in his district)
(202) 225-3011
@RepJimMatheson

The above have been compiled by Maura Hahnenberger and she has more ways to make your voice heard here.

Wednesday, November 30, 2011

Jason Chaffetz, no longer just a cot dweller

Instead of the usual ridicule we hurl here on politicians both local and national, we’ll break with tradition and render kudos. Jason Chaffetz, the Republican US Representative from Utah’s 3rd district, is in the currently in the news because of an immigration bill he recently sponsored. The bill, once it passes the senate, would eliminate the 7 percent cap which kept the citizens of particular foreign countries from gobbling up all the visas issued to enter the US. The 7 percent cap is arbitrary, as China and India alone hold 40% of the world’s population. Why should small countries like Chile arbitrarily have as wide a door into the US as China, right? They shouldn’t, so thanks Rep Chaffetz.

Chaffetz, you might remember, in 2008 went wide right of Chris Cannon (hard to believe, I know), a long-time Representative from Utah, and beat him in the 3rd district Republican primary. He’s come off as a little more gimmicky than substantive, however, as he’s best known for sleeping on a cot in his Washington office and introducing legislation to restrict the use of full-body imaging scanners at airports. You may not have known that he was a kicker for BYU and received a BA in communications (okay, so he doesn’t have the intellect or credentials of, say, a Mitt Romney). He later went on to work for Nu Skin, from where it seems Jon Huntsman plucked him to be his campaign manager in 2004 and subsequent chief of staff (did he know him or something? the Wikipedia profile is silent on why Huntsman thought Chaffetz fit for the job). I’m probably just in a sour mood, but shouldn’t the populace just naturally require some sort of educational requirement—perhaps something rigorous, or past the bachelors—for those who would make this country’s laws and determine the federal budget?

But, anyway. In terms of immigration once again, the Chaffetz bill, while a step in the right direction, does nothing to increase the number of educated immigrants allowed into our country, which is a travesty. The world’s best and brightest come to our universities, receive invaluable training and connections, and then we force most of them back to their home countries. It’s no wonder that Michael Bloomberg (mayor of NYC, billionaire) called this a policy of “national suicide.” And, no, foreigners don’t take jobs from Americans, as the number of jobs at any one time is not fixed. Immigrants are highly entrepreneurial. In fact, a recent survey found that 52% of Silicon Valley startups were founded by an immigrant. We’d make a decent amount of headway in helping our country’s housing crisis, entitlements problem, and largely stagnant incomes if we stapled a greencard to the diploma of all those who come to our universities from abroad.

Salt Lake City, on the grid


I love to travel not only for relaxation but also to casually observe how various societies have made a go at civilization in the modern city. I’ve also lately been reading more into the way city design plays into economic growth, so in future posts I’ll look at a few examples of what cities to promote and impede higher living standards. In the first of a series of Salt Lake City-specific posts, I wanted to say a few words about the layout of the city, the grid system of addresses, and other sundries.

First off, of course, Salt Lake City was founded in 1847 as Brigham Young and his persevering crew arrived here from points east. One of the first things they did was establish the temple block, which to this day is the heart of the city and probably the main attraction in terms of SLC-specific cultural and spiritual sites. Like other western cities of the time, such as Dodge City (1872) and Oklahoma City (1890), Salt Lake is on the grid system (apparently, originally designed by Joseph Smith; see figure). SLC is perhaps most known for it because of the Mormon-style exactitude with which is was carried out. This means that downtown and other parts of the valley are neatly blocked out, and the streets’ names are usually their address (100So, 3300So, 700E, etc.). At 600So (often just called 6th South) and need 1000So? Just head south, wary traveler. All of Salt Lake County is on the same grid. The temple site, being the heart, is the zero-point in terms of addresses go in SLC. The corner of Main Street and South Temple specifically is where you’re at 0 East, West, North, and South, whereas in other cities it would be at the capitol building or courthouse.

The blocks in Salt Lake are large, being roughly 8 to a mile (making each block a square furlong). Brigham Young was apparently one who loved to drive unfettered, as the city streets were made wide enough so a wagon team could turn around without resorting to profanity. It would have been nice if Young would have acted as a prophet when doing urban design (as he did in other matters), as the wide streets tend to make the city less walkable, less aesthetically appealing (thought it’s still gorgeous), hinder economic growth (cause the city’s less dense), and promote driving.

In terms of finding places in SLC, whichever number in the address is round (a la 700E, 4500So) will be the street and the precise number will be the house/business number (a la 5107So or 2146E). A further pleasant oddity is the fact that odd numbered addresses on streets going North/South are on the east side of the street (and evens are on the west); for addresses on streets going East/West, the odd numbers are on the north side with evens across to the south. Go explore and feel the exactitude.

Tuesday, November 29, 2011

The siren song of the student's t-test

Switching gears a bit, I want to touch on a common logical and statistical fallacy that pervades the sciences and clouds research results. While the may seem wonkish, even those who’ve just had entry level math have probably dealt with the t-statistic or student-t test. I was motivated to discuss this by an article I received while TAing for a stats class last Spring. It was by Tom Siegfried at sciencenews.org and discusses several of the logical fallacies commonly used when presenting scientific results. Now, don’t roll your eyes just yet, as the student-t test is used in countless studies across a wide variety of fields. Knowing how to correctly interpret the results of such a test will come in handy when you’re confronted with the myriad—often conflicted, and possibly important—studies reported in the news.

For those unfamiliar, the t-test was developed by William Sealy Gosset, who worked at the Guniness brewery in Dublin in 1908. He was forced to use a pen name, which is where the term “student” was born. What his test does is tell you the odds of a sample of data (which has a Gaussian distribution) randomly occurring against the backdrop of a population with a similar standard deviation. In addition, the test is used to compare to two samples of data (where one is the control and the other has been altered in a deliberate way) and determine the odds of the altered data set randomly occurring within the control data set. This is done by comparing whether the means of the two (Gaussian distributed) samples are equal. Whether using a lookup table in a textbook or a program such as Matlab, the result is encapsulated in what’s called the p-value. And this is where the confusion arises.

Depending how strict your study is, one may conclude that their results are significant if the p-value is less than .05 or .01. This is saying that, only if the result occurs by chance only 5 or 1% of the time, would they consider the change from the control to have a significant statistical effect. As this article mentions, however, few studies actually correctly interpret the results of the t-test. You’ll often hear that if the p-value is .05, then the author can be 95% certain that the change made to the control caused a significant difference. In the sciencenews article, Tom Siegfried diagnoses the problem with this:
That interpretation commits an egregious logical error (technical term: “transposed conditional”): confusing the odds of getting result (if a hypothesis is true) with the odds favoring the hypothesis if you observe that result. A well-fed dog may seldom bark, but observing the rare bark does not imply that the dog is hungry. A dog may bark 5 percent of the time even if it is well-fed all of the time.
I think that in life we make these type of transposed conditional type errors more often than we realize. To summarize, the correct way to interpret the results of the of value is the following: for a p-value of .05, there is a 5% chance of the altered sample occurring randomly if the change from the control has no effect on the result (i.e., if the null hypothesis is true).

If these t-statistic complications weren’t enough, Siegfried also explains some issues with the test even when it’s properly interpreted. First, if your p-value is less than your (.05 or .01) threshold, then either there is a real effect present, or the result was an unlikely fluke (i.e., sometimes it’s the latter and we won’t know). On the other hand, if your p-value is greater than your threshold, then either the studied effect doesn’t exist, or perhaps your test wasn’t powerful enough to detect a small but real effect. Lastly, statistical significance may not mean practical importance, as the studied effect may be so small such that it effects few situations or people.

While these points may seem recherch√©, they're important to keep in mind when interpreting the barrage of studies we come across (in the media and elsewhere) as we try to take “small steps toward a much better world.”

Monday, November 28, 2011

Is spending out of control?

Hope everyone had an enjoyable weekend. Despite the troubles we face, individually and as a country, it’s amazing how much we have to be grateful for. It’s also surprising how focusing on being thankful rather than gratifying our desires makes us so much more happy. While Mitt week may turn into a Mitt fortnight (yes, the book was that interesting), I thought I’d make a quick post about the other side of the aisle for a moment.

Whenever you hear someone denigrating President Obama the most common line of attack revolves around the fact that government spending has risen sharply during the last several years. While spending has risen, the vast majority of this spending is due to the continued economic malaise and not the fact that a liberal is in charge. Paul Krugman makes this point very well here (with a nice pie chart even), and, no, Krugman isn’t just a hyper-partisan. A couple of points to keep in mind. First, government spending is usually expressed as a percentage of GDP. When GDP shrinks (as happened during the recession) the spending/GDP ratio goes up even if the number of dollars spent stays the same. The second point is that during recessions, the government has to spend more money on things like Medicare, food stamps, and unemployment benefits because of all the people out of work. No matter what the president does, the social safety net is going to cost more when more people need it. This is good to keep in mind when people are ranting and raving. Do click through to Krugman and see specifically where the spending has gone.

I plan to read Obama’s books before the election, so this will be the first of many posts examining his past policies, general worldview, and plans for fixing the economy. In the near future I’d like to diversify here a bit as well and blog about common scientific/logical fallacies and the culture (restaurants, skiing, hikes, shops, events, urban planning) that is Salt Lake City.

Wednesday, November 23, 2011

Mitt—the hater of boomer entitlements... and apparently young people

Continuing our series on Mitt Romney, today we’ll briefly address his opinion of the sustainability of our current entitlement system and the generation that put it in place. I’ve written about this in the past, and think it’s important to make a bigger fuss about who’s getting the short end of the stick

After talking about the people who fought in WWII (Tom Brokaw’s so-called Greatest Generation) and the sacrifices they made to win the war and build the country, on page 150 of No Apology Romney goes on to criticize the current generation in charge and the system they’ve established:
Today we find in ourselves at a very different moment in history, and I fear that if we remain on our current track, history will come to know us as this nation’s worst generation—because we will force our children and their children to bear the brunt of our recklessness and the willful neglect of the problems we created. The problem is so deep-seated that relatively few of us in the postwar “boomer” generation even understand at a basic level how we are compromising future generations. If we did, I’m convinced that we would do whatever it takes to set things right. […] Never before has there been a generation of Americans that has imperiled the following generations’ opportunity for achievement and advance as we have done. [emphasis his]
Mitt gets it. The boomers have set up vast entitlement programs (Medicare and Social Security among them) and have essentially left the next generation to find the requisite funding. And yet, for some reason, young people aren’t mad as hell. I suppose it has something to do with indifference and simply not knowing much about how the federal government works.

Mitt continues on about how this entitlement problem might be fixed (by cutting benefits and raising payroll taxes) and then finally discusses who will do the fixing:
It is important to conduct the entitlement discussion without scaring our senior citizens, which is why the reforms that are necessary must be made concurrent with guarantees to our elderly that their benefits will not be slashed and the promises that relied upon will not be broken.
Sounds good Mitt, but let me get this straight. Those that have created the broken system (i.e., the boomers) won’t have to share in any sacrifice to fix it? Unbelievable pandering on Mitt’s part here; he knows that seniors vote en masse. If something’s going to be done with our country’s entitlement problem it has to be done by shared sacrifice. Why should those who have broken the system get off scot free?  DO NOT let that happen. The boomer generation has practically thrown our country into the financial sewer and they damn well better help the rest of us pull it back out.

Tuesday, November 22, 2011

Romney is regulating his party

Continuing Mitt week, we'll now address his views on the (oh so sexy) role of regulation in the economy. Those who have been watching the debates have surely noticed that most of the candidates either want to destroy or neuter most government agencies (if they can remember them), claiming that the regulation they impose is the cause of the economic malaise. As the burden of regulations imposed on businesses during the Clinton and Bush administrations wasn't any less than it is now, it appears that the theory falls flat in the face of a bit of analysis. The economist Jared Bernstein, for example, weighs in here. So, does Romney toe the party line on this or provide a nuanced perspective on a complicated issue? I'll quote directly from page 136 of Mitt's No Apology:
The Republican Party has ong been an opponent of overregulation, and rightly so. But I believe some people in my part are overly fond of bashing regulation as the constant enemy of growth and competition. They are certainly right about some regulations, but there are wrong when it comes to others. The rule of law and the establishment of regulations that are clear, fair, and relevant to contemporary circumstances provide the predictability and stability that is needed for investment and risk-taking.
Back when I was at Bain Capital, one of our first venture capital investments was in a technology that allowed machining companies to reuse their cutting oil--the cooling lubricants that are used in drilling, routing, and cutting metals. New government regulations had just been established  to prevent companies from simply throwing used oils down the drain. The regulations ultimately led to better machining industry practices, but because they weren't enforced for almost a decade, we lost our investment. Michael Porter is convinced that, far from being a drag on the economy, "National advantage is enhanced by stringent standards that are rapidly, efficiently, and consistently applied." I wish more Republicans and Democrats alike understood that important fact. [emphasis his]
It looks like Mitt is two for two thus far on the economy this week. While some regulations needlessly distort markets, others rightfully force our companies to innovate, which results not only in a cleaner and safer planet, but also one in which American firms can compete with those abroad. One of these days I'll post something he gets wrong regarding the economy, but for now I'm not seeing it.

Monday, November 21, 2011

Mitt Romney—smooth tax operator

It’s Mitt Romney week here on Deferred Consumption and it comes none too soon, considering his prominence (photo is from here). A friend was recently telling me how Romney’s book, No Apology, had given him a more favorable opinion of the former Massachusetts governor, so I decided to pick it up. As I go through the book I’ll be highlighting certain passages and the relevant policy details in an effort to more properly vet the man, and hopefully make some (admittedly nuanced) comparisons to Jon Huntsman. I’ve also singled out the former Utah governor because of his sane policy proposals and level head, which is in stark contrast to what we’ve seen in the other candidates.

Today we’ll be discussing the flat (or fair) tax, which has become popular in Republican policy circles the last couple years. The basic idea is to have people at all income levels pay the same tax rate. In 2004 Mike Huckabee promoted such a tax, as have Rick Perry and Herman Cain in the current election cycle. These plans often simply rely on a consumption, or sales, tax, but are occasionally combined with a low income-tax rate. Using solely a sales tax under such a system (and replacing local taxes), Romney estimates the total tax rate would end up just under 35% for everyone. On page 130 of No Apology, he weighs in:
One challenge of the fair tax is that the very rich would see their taxes go down—a lot. If Bill Gates makes about a billion dollars a year on his investments, for example, his current taxes would be at least $200 million. Let’s say he spends $50 million on himself and his family every year—which is a huge sum and I doubt he spends that much, but let’s use it for an illustration: Under the fair tax, Bill Gates would pay “only” about $17 million in taxes—his tax bill would thus drop from $200 million to $17 million. The Wall Street Journal found that the enormous amount saved by the wealthiest under the fair tax would be made up by a higher tax burden on the middle class. This is not an outcome that will or should gain traction with the American public.
While such a consumption tax would encourage Americans to save, on this issue Romney gets it exactly right. A fair tax would cause the tax burden to be shifted towards the middle (and lower) classes, rather than resting mostly on the rich. It’s refreshing to hear such a sensible and contrarian take on this often popular Republican policy proposal. Stay tuned for more Mitt.

Friday, November 18, 2011

Early childhood development is under-appreciated

Turning from money to something a little more important, Jon Cohn at The New Republic and Kevin Drum at Mother Jones have a couple startling posts up about early childhood education. The story starts in Romania, where the former Communist dictator apparently banned abortion in order to increase the country’s population. Not only did this help their population but it also left the country with warehouses full of orphans, who received little attention or human-interaction. A neuroscientist, Charles Nelson, was later able to convince the Romanian government to allow some of the kids to go live in foster homes. Subsequently, a group of researchers studied the developmental differences between those left in the orphanage versus those who left. John Cohn:
Prior to the project, investigators had observed that the orphans had a high frequency of serious developmental problems, from diminished IQs to extreme difficulty forming emotional attachments. Meanwhile, imaging and other tests revealed that some of the orphans had reduced activity in their brains. The Bucharest project confirmed that these findings were more than random observations. It also uncovered a striking pattern: Orphans who went to foster homes before their second birthdays often recovered some of their abilities. Those who went to foster homes after that point rarely did.
 This past May, a team led by Stacy Drury of Tulane reported a similar finding—with an intriguing twist. The researchers found that telomeres, which are protective caps that sit on the ends of chromosomes, were shorter in children who had spent more time in the Romanian orphanages....It was the clearest signal yet that neglect of very young children does not merely stunt their emotional development. It changes the architecture of their brains. [emphasis is Kevin Drum’s] 

Did you catch all that? The children receiving less human interaction, and thus less intellectual stimulation, not only had psychological developmental issues, but also experienced physical changes to their anatomy! Apparently the amount of stimulus a child receives before they’re two can cause developmental losses that can’t be undone, no matter how much one spends on primary education. Kevin Drum rightly comments on the need to spend more money on early childhood development and posts the figure to the right, which shows the impact of the mother’s education on the subsequent achievement of their child.

Couple things I take away from this chart. 1) No matter how fair your economic system, we’ll always have a fair amount of economic immobility. 2) By age 3 (!) children already show substantial differences in their cognitive ability. Sadly, it appears that a lot of the K-12 money is being misspent. For the full story, do take a look at the original New Republic piece here and the subsequent The Mother Jones piece here.

Thursday, November 17, 2011

For Immediate Consumption

Today we’ll start a new feature here where I highlight various interesting articles around the web. I find that people who really want to know what’s going on in the world are disappointed by the local tv news (for certain), but also by local and even national papers. We’ll see if we can’t point you to some new, interesting sources.

Ezra Klein discusses the congressional super-committee (which is supposed to fix the budget) and provides a wrap-up of the day’s best articles.

The Economist’s Democracy in America blog on Newt Gingrich’s rise.

Business Insider on how Europe may be “days from a catastrophe.”

Paul Krugman explains why inflation is still not a problem.

The New York Review of Books talks about America’s new robber barons.

From the NY Times, this article is by a financial planner (apparently from Utah) explaining how he lost his house. Has great info on the housing mania that gripped the country 5 years back.

Japan’s national soccer team recently traveled to North Korea to play their national team: “When the Japanese national football team, Samurai Blue, arrived in Pyongyang on November 14th for their first match there in 22 years, its players' snacks were confiscated. Mobile phones and laptops were banned. And the team was delayed from entering the country for four hours, depriving it of valuable prematch training time. Guards chastised them from laughing and scolded one player for daring to lean against a wall, according to the Japanese media.”

In a future post we’ll highlight a few different blogs and alternative news sources that might have been under your radar. Thanks for reading.

Wednesday, November 16, 2011

Neeeeeeeewt

Newt Gingrich has been churned to the top of the heap this week in terms of the not-Romney set of candidates (photo by Gage Skidmore). As he was largely ignored previously in the race (and his staff once quit en masse, leaving his campaign on life support), this’ll give us an opportunity to find out whether we should continue ignoring him. By way of background, Newt was a congressman from Georgia from 1979-1999, and the Speaker of the House from for the last four of those years. In the 1994 elections he was “at the forefront” of the Republican take-over of the house, which had been controlled by Democrats for 40 years. Publicly and politically, he was to Bill Clinton what Nancy Pelosi was to George Bush. Impressively, he and President Clinton were able to pass a landmark welfare reform (1996) and actually balance the budget (1999; first time since 1969).

Newt has a PhD in modern European history from Tulane (1971), and, since resigning his congressional seat in 1998 when Republicans lost the house, has been a popular conservative analyst, consultant, and commentator. He’s currently married to his third wife, having cheated on his previous two wives and subsequently marrying the one he was cheating with. The affair that started his current marriage ironically took place during his time as leader of the Republican investigation of Bill Clinton’s dalliances. Interestingly, he blames his infidelity on his ebullient patriotism: “There's no question at times in my life, partially driven by how passionately I felt about this country, that I worked too hard and things happened in my life that were not appropriate.”

Seeing as how I don’t require the President to be a Pope or a Prophet, however, the moral lapses, sad as they are, shouldn’t automatically disqualify him for office. In terms of policy, in the past he’s shown signs of moderation, as he supported an individual mandate (saying his health care views were closely aligned with those of Hillary Clinton), agreed with John Kerry on global warming, and criticized Paul Ryan’s trumped-up health care plan as a piece of right-wing social engineering. Lately, however, it appears he’s moved sharply to the right, switching positions on both the mandate and global warming. It's hard to tell exactly where he stands, however, as he has a knack for refusing to answer any questions with any degree of detail. It appears that by taking an erudite-sounding macro view of everything he thinks he’ll impress voters.

Newt has expressed contempt for the debt reduction super committee, and instead wants to implement the lean "Six Sigma” management program in the federal government, expand energy exploration, have states set welfare eligibility, and expand research for cures to diseases such as Alzheimer’s. Indeed, a weird grab bag of ideas that probably wouldn’t make a dent in the budget. If one wants to reduce the trajectory of the deficit, you have to start with Medicare, period. Newt’s currently taking flak for a $300k $1.6m payday from Freddie Mac before the financial crisis. As I find more specific positions I’ll post them, but, as Kevin Drum points out, apparently Newt's website asks voters for their ideas instead of explaining his own, so I'm not sure there's much to find. Hopefully Gingrich’s time as the anti-Romney is short so we can move on to a more level-headed candidate (such as Huntsman and… er, Huntsman).