Tuesday, May 31, 2011

Society benefits from L.A. Noire

Rockstar Games has put a lot of work into storytelling in recent games like Grand Theft Auto IV and Red Dead Redemption. The writing is always good, the characters are memorable, the look and feel is very carefully developed and in an industry rarity, the acting is superb.

But the biggest new technology Rockstar is trumpeting is the facial motion captures being used in the newest game, L.A. Noire.

The game focuses a lot on interviewing and interrogating witnesses and suspects, and players need to be able to read the faces of the characters to determine when someone is lying.

And that's where the economics come in.

Rockstar has put a lot of money into advancing this technology for entertainment purposes, but an Asperger's Syndrome expert says socially-blind patients can benefit from the game and learn more about reading facial expressions.

Add this to my running tally of positive externalities from video games.

For any readers who want to practice their facial reading skills, check out this great video of Milton Friedman talking to a student about public and private housing. Watch the changes in the student's facial expressions and body language from 5:55 to 6:03.

It communicates a very clear message: "This guy just beat me."


Sunday, May 29, 2011

What speculators do to prices

It's amazing how the general public will allow a journalist or activist to teach them about a complicated subject like economics and walk away with the completely wrong idea.

Mark-to-market accounting is a perfect example, where firms list the current value of their assets instead of what they originally paid for it. The public thinks it should be stopped because Enron used it to list phony values, but the alternative forces companies to list completely fictional values of assets because the prices have fallen or risen since purchasing.

In other words, that 8-track maker isn't the cash cow it once was.

Another example is the public's uninformed hatred of speculators - investors who bet on the future value of a resource. The general public has heard that speculators drive up oil prices, and make no contribution to society.

But economists insist that speculators keep prices from being volatile and serve a very useful purpose by evening the value of commodities over time.

Luckily, we have a natural experiment in place - onion speculations have been banned in America since 1958, so how steady is the price of onions over time?

The difference is absolutely striking. No speculation in the onion market correlates with a volatile price. While this doesn't prove the explanation once and for all, it is a dramatic piece of evidence.


Friday, May 27, 2011

Don't kid yourself, they're snobs

Looks like I have to wade into the garden again to call a spade a spade.

Rallying under the idiotic moniker "foodie," activist Eric Schlosser wrote a piece recently defending his camp from being called "food elitists" by claiming that his ranking of some foods over others is based on the harm those foods do to society. The defense falls flat when you let a few rays of reality shine on his positions.

I've been calling his side "food snobs" for awhile now, and it's never occurred to me I had to justify that label. Talk about conspicuous consumption, these people claim any food that isn't produced through primitive, labor-intensive and inefficient means is unhealthy, foul, inferior and outright poisonous. It's not enough to celebrate their expensive meals, they feel the need to dismiss "commoner food" as cheap and unfit for human consumption.

They talk about their own meals like flowery long-winded menu-writers, slipping unimportant cooking techniques and obscure ingredients into the titles of their food. It's not enough to say they had salmon last night, they have to call it "pan-seared Atlantic salmon encrusted with sea salt." It doesn't matter that the presence of sea salt is indistinguishable from table salt, sea salt costs $2 an ounce and expensive ingredients build up expectations of better taste.

When you spend all your time proclaiming your food undeniably tastes better, turning your nose up at "toxic" poor-people food, and proclaiming yourself as a savior for low-status people, then yes, you are a food elitist.

There's an old saying that madness and genius are separated by a few degrees of success. I have to take Schlosser's side and say if his assumptions were true, and that realistic food production was somehow a threat to public health, then he'd be correct in saying some foodies are not snobs but concerned.

The reality is, of course, that the food system he envisions is completely unrealistic, harmful to the environment, hamstrings the economy, and in some cases, a threat to public health. They want to return to a fictional golden age of food the same way social conservatives view the 1950's.

So if their world view wasn't completely wrong, some foodies could escape the "snob" label. But Schlosser isn't one of them. He's guilty as a fox covered in chicken feathers.

Schlosser is the co-producer of the Food Inc. documentary, which I Netflixed purely as a service to my readers. It's exactly the same sort of fear mongering and self-congratulating you'd expect and instead of drafting a whole post of complaints, let me focus on the one that stood out for me.

The camera follows a poor family that eats a lot of fast food. They claim they can't afford regular food, and the film makers appear to sympathize with them. They say for the price of two pears you could get a McMeal.

So what good-natured, progressive solution do they recommend for this family. Expanding the food stamp program? Subsidizing fruits and vegetables? More meals at public schools?

Nope, none of these. They want a Pigovian tax on the foods the poor are eating now. Their solution isn't to make the choices they see as good cheaper, but to make the "bad" choices more expensive.

Maybe Schlosser didn't hear the family when they said this is the only food they can afford. He's willing to make this family poorer in exchange for some small marginal changes in consumption. Less new socks for junior, but at least he's eating mashed potatoes instead of French fries.

They're just assuming of course, that the poor are going to be making fresh salads instead of stocking up on Ramen noodles and boxes of spaghetti. Look at college students as a model for expected behavior.

Nice try food snobs, really now. If it bothers you so much to be called elitists why don't you try exercising a little humility and see if the label fades?


Thursday, May 26, 2011

DeLong takes no prisoners

It's good to be on the right side of DeLong's wrath now and then. Look at the way he dismantles some lefty professors for trumpeting Fidel Castro. The title of the post says it all: Washed-Up, Marginal, Authoritarian, and Unappealing Leftist Watch: "Castro Did Lots of Good and Humane Things, Despite Being a Dictator; but the Bottom Line Is U.S. Hatred of Castro Had Nothing to Do with His Being a Dictator..."

My favorite part of reading Marxists try to defend real-world regimes is the way they try to cling to literacy rates as success. Talk about a moving goalpost. I don't recall anyone taking to the trenches because they thought too few of their neighbors could appreciate Horton Hears a Who!

I imagine the real reason communist regimes pushed literacy is they wanted the masses to be able to read their propaganda.

My question is, if the health care system in Cuba is such a shining star for Castro, why don't the same people celebrate America's system? After all, the World Health Organization ranks the US two slots above Cuba.


Wednesday, May 25, 2011

You don't have to defend everything they do

A few months into Maine governor Paul LePage's term I realized something: just because I agree with his economic policies doesn't mean I have to pretend he's not a jerk.

LePage has had the deck stacked against him since he ran for governor. The leftist social circles I live in are ready to pounce on him whenever he takes a stand, such as when he declined an NAACP invitation. However, knowing he's a target, LePage has never put any real effort into curbing his personality and couldn't resist making an off-color remark.

He knows there's a witch-hunt out to get him for being a Republican leader in a left-wing state, but he's never made it hard to find dirt on him. Since taking office this year, he's provided the bitter left with a regular supply of ammunition by losing his cool or saying silly things, like the chemical BPA is safe but might give women "little beards."

Even though he was right about BPA being safe, even though the NAACP is a twisted parody of a once-glorious organization, even though I'd probably vote for LePage again, I am not obligated to defend his self-sabotaging personality that comes out when the cameras are on. He needs to knock it off and stop making it so easy for the other side to mount an opposition.

People seem to have a natural tendency to defend their peers and comrades in the face of all reason. Look at some of the awful things being said to defend Dominique Strauss-Kahn this month.

This brings me to the unfortunate case that inspired this post. Scientist Lawrence Krauss, who is supposed to speak at the TAM 9 skeptics conference this July, has expressed doubt of the accusations that his friend and financier Jeffrey Epstein is guilty of knowingly participating in human tracking and sexual abuse.

My post is not about Krauss being unwilling to consider his friend is guilty. He has expressed doubt, not cynicism, Instead, it's on the framing of the issue by Rebecca Watson, one of the hosts of the Skeptic's Guide to the Universe podcast.

This is the ignored paragraph where I say that I generally like Rebecca Watson. It's true. While she's a far-leftist and a third-wave feminist, I don't fault her for these things and she genuinely makes me laugh with her wit and humor. I think she's put a lot of work into organizing various skeptic groups and events and I'm glad she's on the panel of one of my favorite podcasts.

But sometimes she shows poor judgment. She flipped out when co-host Jay Novella said a transgender person who lives as a man but became pregnant is really a woman. She got banned from the Randi.org for sockpuppeting - not a viscous thing to hold against someone, but for someone so high up in the community it was a major lapse in judgment. She accused the skeptical community of sexism for not having more female speakers at TAM 7, learning on the podcast that organizers tried desperately to find them but they just aren't there. In the past year on the show I've noticed her bringing her wild anti-corporate politics more and more into discussions. Some of this blame belongs on host Steve Novella for not reeling her in on a non-political show, however. She even went as far to bring up "Monsanto," the left's secular devil.

There is an amazing post on Skepticism & Ethics about how Watson is leading an online lynch mob against Krauss, armed with more self-righteousness than facts. Watson has given into that human weakness to assume guilt with sex-crime accusations and has the facts all wrong. False allegations ruin lives and their are a lot of innocent people dealing with this.

This is not a generic anti-Rebecca post. I really like some of the things she's done and I generally agree with her on important issues. But I'm not going to defend her actions here or tolerate them. She has gone off the deep end here and needs a serious reality check.


Sunday, May 22, 2011

Get Equipped with Gridlock

Capcom ran into the tragedy of the anticommons recently, when it cited the loss of permission to use voice acting clips and intellectual property as the main reason it won't be releasing Mega Man Legends as a retro download on the Playstation 3.

The tragedy of the anticommons is the idea that fragmented property rights prevent products and services from being sold, making everyone worse off. This is a textbook example.

But there's more at fault here then the burden of gathering permission slips from a whole population of tiny properties. There is the large transaction cost of all legal work and the chilling effect of bad lawsuits. Capcom's Vice President Christian Svensson said the fear of litigation is a major factor in the decision.

So who's really to blame here? Is it copyright laws and the property rights that are restricting Capcom from releasing their own game again on a new platform, or is the cumbersome, expensive legal system?

I'm willing to blame the slow wheels of justice here. If the transaction costs were lower, that is, if getting the rights to those little patches of intellectual property was a smooth and simple procedure, then Capcom would have no trouble navigating those waters. The solution to bad side effects from copyright laws is not to throw out copyright. It is to revise the way we deal with copyright.


Thursday, May 19, 2011

Can't say this enough times

My political opponents are usually good people who I think are wrong. They are not evil.

I'm repeating myself, of course. I've written a few posts about this topic before, so many times I've exhausted my supply of pithy quotes to drag up, but I feel like going back to it one more time after a friend shared a Thomas Sowell clip about the different plans conservatives and liberals have for society.

I think Sowell did a good job of keeping things classy. He starts off by reminding us that government workers put in charge of helping the public will always have their own interests at stake as well. He then went on to say that hubris caused members of the left to ignore evidence when it contradicted their vision for society.

He did not say, as we often hear, that the left has bad intentions for society and just wants to control people. Sowell said his opponents are wrong, but never questioned their intentions.

This is what political discourse should look like, and while it's so much easier to write a negative blog post than a positive one, my focus here is the way Sowell presented his case instead of the nuts and bolts of his argument.

Beyond all other reasons, I do not write angry posts damning the American left because so many good people in my life are progressives - people I know to have nothing but noble intentions. These are the people I love, and I can't imagine myself making such awful sweeping statements about them.

It strikes me as so childish and short-sighted for people with anger-based politics to resort to character assassination against their opponents instead of engaging them. Surely they must have someone in their lives who disagrees with some of their cherished views.

There is something very sacred about ones world view. I know I'm very attached to mine, but may I never become infuriated by the idea of someone holding a different view.


Monday, May 16, 2011

Medical journals publishing poor economics

AidWatch has a great post that suggests why the public is so ignorant about the failure rate of well-intentioned foreign aid projects and schemes to eliminate poverty abroad: Medical journals whose reviewers are not competent to detect bogus economic arguments give a pass to sloppy research as long as the medical aspect is competent.

These flawed studies get picked up by the media, who sees they passed the peer-review process, and the public thinks some failed plan makes the world a better place.

The public embraces things like fair trade coffee, play pumps, Tom's Shoes, microloans, the Millennium Villages Project and United Nations Peacekeepers - despite the major failures of these schemes.

The icing on the cake is the things that successfully reduce third-world poverty, like globalization, free trade and sweatshops, have a poor reputation with the public.

You see what I'm up against here?


Saturday, May 14, 2011

Crony capitalism hate post #257

Crony capitalism is like a reality TV show where contestants who are voted off are invited back on the show immediately.

Thursday, May 12, 2011

Day-to-day progressivism

Wish I'd thought of this - video maker asks college students to redistribute their grades to academically-poor students.

Not that this is a new idea, the concept isn't nearly as amusing when merely presented as a hypothetical compared to directly asking students.

During my unemploymeny days I would sometimes borrow a similar idea of progressive splitting of restaurant checks and pitch to my working lefty friends that we divide the check up by income, instead of by what we ate.

Some were amused, some changed the subject but none of them volunteered to give it a try.


Monday, May 9, 2011

The trouble with balancing budgets through tax increases

I remember reading a personal finance book when I was fresh out of college that said people who think a bigger paycheck will solve their are sadly mistaken. If you don't see controlling your spending as the issue, you will always respond to increases in income with increased spending and never get out of debt.

That lesson came rushing back to me while watching this short video from the Center for Freedom and Prosperity:

Item number two in the video came with the claim that each new tax dollar brings with it a $1.17 increase in spending. If that is true, than raising taxes without controlling spending will never balance the budget because politicians will just spend it on new projects.

I'm reminded of the time Milton Friedman recalled a claim from John Kenneth Galbraith that every problem with New York City could be fixed if taxes doubled. Friedman said the tax revenue has tripled since then and all the problems are worse.


Friday, May 6, 2011

Victory gardens and demand-side economics

While rewatching the Keynes vs. Hayek rap video I started to think about the food rationing in World War II and victory gardens, where the public was encouraged to grow vegetables in their own backyards. This would increase the food supply and allow workers to focus on munitions instead of feeding the country.

What finally struck me is, isn't this a bad thing to do for the economy from a Keynesian perspective?

World War II is often heralded as the great Keynesian fix for the Great Depression: The war effort increased government spending, thus putting people to work and money in their hands, allowing them to buy more. Critics like me say wars destroy more than they build, including the things people actually need, and that consumer spending didn't increase until after the war.

But stepping into the Keynesian mindset, home production of food lowers aggregate demand. I've said over and over that local food production fails to take advantage of economies of scale and ties people down and prevents them from doing more productive things with their time. Self-sufficiency makes people poorer because they fail to take advantage of comparative advantage.

There are unfixable conflicts between Keynesian economics and the crude economic model thrown together by localists. Victory gardens help solve food shortages, but there is no reason to think they improve total prosperity under normal circumstances, despite some recent claims about the one at the White House.

Whatever science-based economic perspective one comes from, it's clear to see that home gardens make a nice hobby, but are not an integral part of an advanced economy.


Tuesday, May 3, 2011

Celebrating justice or vengence

Now that the US Military finally cornered and killed Osama bin Laden a national debate has emerged about the appropriateness of celebrating the death of an evil man.

It was surreal to hear newscasters and politicians proudly beam about the death of anyone, even someone who deserved worse. It's clear that there's an element of vengeance here, but as Bryan Caplan has written, what's wrong with revenge?

I can't speak for anyone else, but I was happy because we finally found him and stopped him. I think if we had captured him unscathed it would still be a cause for celebration and you'd still hear joyous cries of "we got him." After nearly 10 years, I'd given up hope we'd ever catch up to him, and I wasn't even sure he was alive anymore.

And just because he's dead doesn't mean we should hold back our joy of ending a long, long manhunt for a mass murderer. Following the death of Jerry Falwell, Christopher Hitchens wasn't shy about reminding the public of the awful things the reverend did in life.

I respect peoples who are opposed to celebrating the death of an enemy, but I hope they don't lose sight of the tremendous good that just happened - and remember there is a victory behind the bloodshed. I hope they can find some comfort in knowing a very guilty man will no longer be enjoying a life on the run and a terrorist network is missing a spiritual leader.