Monday, August 31, 2009

Great Soundtracks of our time...

So the Commission has been debating the best Soundtrack recently...

The current contenders are:

Purple Rain -- the seminal Prince and the Revolution companion to the movie of the same name. Some of the classic tracks include: Let's Go Crazy, Purple Rain, When Doves Cry.

There is no arguing that this is a great album, and that the movie was a game changer in the early 1980s. That said, the commission sat down to watch the movie the other night, as was staggered by the absolutely terrible acting and the telegraphed plot. Really, was there any real competition between Prince and Morris Day and the Time - Really?

Among the Commission's issues with Purple Rain is the inclusion of only Prince's music from the film -- the Time's Jungle Love and The Bird would have been great additions...

Once -- the soundtrack album to the film, with Glen Hansard and Marketa Irglova as struggling musicians who work together for a brief while. Key Tracks include: Falling Slowly, If You Want Me, Lies, Gold.

This album and movie work together beautifully, telling what is fundamentally a story of unrequited love. Neither lead is an actor by training or profession, but the chemistry and the storyline of the movie make thee most of this fact.

The Commission has two basic issues with Once as a contender for Best Soundtrack. The first is that neither the movie nor the album are as widely known, despite the Academy Award for best song. The second is that that it is not Purple Rain...

Garden State -- the soundtrack to the Zach Braff film of the same name. Key Songs include: Don't Panic, Caring is Creepy, I Just Don't Think I'll Ever Get Over You.

This album is a wonderful counterpoint to the film, and each song brings out a piece of the movie. The combination of artists as diverse as Coldplay, Collin Hay (formerly of Men at Work), the Shins, and Simon & Garfunkel manages to convey moods and feelings that add to the film.

While at least one Commission member feels that this is perhaps the perfect album, the basic flaw is one that Mr. Braff himself describes when he discusses the album. "Essentially, I made a mix CD with all of the music that I felt was scoring my life at the time I was writing the screenplay." While the songs are evocative of the moods in the movie, they do not advance the plot the way the songs in Purple Rain and Once do.

The Economics of Marriage...

There is a great post over at today. Betsy Stevenson (and Economist at Wharton and also the wife of Freakonomics blog contributor Justin Wolfers) gave her take on the economics of choosing a mate.

Here is the link:

While it is not romantic, there is certainly some truth in Ms. Stevenson's approach to the topic, although she may be skipping over the emotional needs a bit...

The comments below the article are worth a read as well...

Thursday, August 27, 2009

Guilt and Shame in Child Rearing...

Joshua Gans (author of Parentonomics) over at his Game Theorist blog points out a good article in the New York Times on the value of Guilt in child rearing.

Here is the link:

Unlike Shame -- something that should definitely be avoided in raising kids -- recent studies (including the somewhat cruel one detailed in the article) seem to indicate that a good sense of guilt is positively correlated with good behavior.

So apparently the Commission's mother(s) were on the right track after all...

Tuesday, August 25, 2009

This is why I read the Freakonomics blog...

Daniel Hamermesh has a great post over at Freakonomics that uses the new SciFi movie District 9 to explain monopolies...

Definitely worth reading:

Thursday, August 20, 2009

In the Market for Water...

In a recent article over at Freakonomics, Daniel Hamermesh points out that market pricing might help citizens of Central Texas get through the worst drought in 50 years... It is very short but a good read...

Market pricing is tough to enforce for goods that are required for daily life though. People that don't want to pay honest market rates have an easy job framing the discussion in terms of limiting access of necessities to the poor.

Tuesday, August 18, 2009

Licensing and Regulation...

The 108Warren Commission had to go out and get a dog license today for their fine pet dog. Normally that wouldn't really be a cause for a blog post, but today it got the commission thinking.

During this remarkably challenging economy, there has been a great deal of talk about state and local budgets. Since the members of the commission have the distinct pleasure of living in southern NJ, close to Philadelphia, we have had the opportunity to hear even more about state and local budget problems. While NJ has passed a state budget, our neighbor Pennsylvania has yet to do so...and the local municipalities are all having serious financial difficulties.

So, what does this have to do with the dog license you ask?

As local and state governments are looking at unbalanced budgets, much of the conversation has been about how to increase revenue. The consensus is that services have already been cut to the bone. The commission thinks that perhaps the consensus is a bit off base.

After getting back from spending 15 minutes and $8 to license the dog, the commission came across this article over at Market Design. It is a brief discussion on licensing, from doctors and lawyers, to an assortment of other professions. Going through some of the links from Texas' Department of Licensing and Regulation, and in particular their Cosmetology section, the Commission began to wonder at the need to regulate cosmetology and related professions. The Commission wondered what it cost the citizens of Texas for this department to rule that Fish Pedicures are not legal?

Perhaps, in this era of declining tax revenue and unbalanced budgets, it is time for citizens to reconsider the level of regulation needed in their daily lives, and what it costs. Texas is not alone -- although I have not seen a ruling on fish pedicures so easy to find in other states' websites. Do citizens really need their state to license their hair stylist? Wouldn't the market pretty quickly put bad or unsanitary salons out of business? Aren't their legal tools available to someone who feels that their salon experience has been less satisfying?

Does the Commission's town really need to know if my dog has been neutered? That seems a bit personal. Again, aren't there civil penalties in place for dog owners whose pet get "too friendly" with other dogs? Do we need the municipality to spend tax dollars to track this? While these rules may have begun to limit disease (rabies vaccination was also required for licensing), one wonders what a comparative cost analysis of licensing vs rabies treatments would show.

Perhaps it is time for citizens to take a long look at the services they ask government to provide. Everyone knows that certain entitlements are the third rail of politics, and the commission is not suggesting that we start there. The Commission suggests that if we start looking at the smaller issues where government services are really not required, perhaps someday, we will look at the larger ones too.

Wednesday, August 12, 2009

How much does Government cost?

The Commonwealth Foundation -- an unabashedly conservative group -- has a study out that finds the cost of government is now 61% of our national income.

Read the article (and find the link to the actual report) at the Commonwealth Foundation's blog.

As with a study from any partisan group, take the study with a grain of salt, but it is worth reviewing. Even if the numbers are inflated, there is no doubt that the cost of government has been rising for some time, and is continuing to rise.

It is tough to call for smaller government during a recession when more people find themselves in need of government services, but it is important to remember that we the people are paying for the government out of our pockets.

Every dollar spent by the government is coming from the people, so at some point it is worth asking how much we can really afford.

Tuesday, August 11, 2009

More Bad Loans on the Horizon?

US Economics News blog has a great post on the danger of Ginnie Mae and Federal Housing Authority becoming the next Fannie and Freddie -- putting huge taxpayer dollars at risk.

Here is the link:

It is hard to imagine that the government would repeat the same bad practices that caused a large part of the housing bubble, and resulted in multi-billion-dollar bailouts of Fannie and Freddie...but it appears that history may be repeating.

Monday, August 10, 2009

Cap and Trade vs a Carbon Tax...

Gregory Mankiw had a great article in the New York Times this weekend on Climate Change and the proposed Cap and Trade program that is making its way through congress -- you can read it yourself, here.

Whether you are a believer in global warming or not (and the commission knows that some of you are not convinced), this article does a good job of highlighting the differences in the Cap and Trade program that President Obama campaigned on, and the one proposed by Congress.

Basic economics teaches us that if we want to actively reduce the carbon emitted as part of economic activity a Carbon Tax would be the most effective way to do so. Even those who do not believe in global warming would agree. The higher cost of releasing carbon as a byproduct of production would drive increasing efficiency and the search for new methods of production that did not reduce carbon. At the same time, prices for those products would increase. The revenue from the Carbon tax would be used to offset these higher prices through tax reductions.

Despite the fact that it would be the most efficient, a Carbon Tax is not politically viable. That leaves Cap and Trade. What Mr. Mankiw points out so effectively in his piece is that the Cap and Trade legislation is substantially less efficient than that proposed by President Obama when he was running.
The numbers involved are not trivial. From Congressional Budget Office estimates, one can calculate that if all the allowances were auctioned, the government could raise $989 billion in proceeds over 10 years. But in the bill as written, the auction proceeds are only $276 billion.
The issue is by lowering the proceeds to $276 billion -- that reduces the possible taxes to be offset -- which will mean higher prices in the rest of the economy.

As Mr. Mankiw explains:
The hard question is whether, on net, such a policy is good or bad. Here you can find policy wonks on both sides. To those who view climate change as an impending catastrophe and the distorting effects of the tax system as a mere annoyance, an imperfect bill is better than none at all. To those not fully convinced of the enormity of global warming but deeply worried about the adverse effects of high current and prospective tax rates, the bill is a step in the wrong direction.
The Commission feels that if we are going to try and do something about global warming, we should do it in the most efficient way possible. Unfortunately, Congress is hardly the place to go for efficiency...

Counting Brothels in Japan...

Apparently the Bank of Japan is now counting brothels in an attempt to measure the service sector more accurately. This is important as Japan shifts from a manufacturing and export economy to one that is more service based.

Don't just take the Commission's word on it -- read the Bloomberg article yourself, here.

In a related note, the bank is apparently not having much trouble hiring service-sector auditors...

Managing Risk

There is a great guest post on the Freakonomics blog today about the need to manage risk.

Here is the link:

The Authors of the post (Jeremiah H. Chafkin and Andrew W. Lo) base their post on the Laurence Gonzales book Deep Survival -- the story of 4 mountain climbers who died while climbing back down Mt. Hood in Oregon after reaching the summit.

The climbers' error was in focusing on reaching the summit of the mountain -- supposedly an "easy" mountain to climb -- and not remembering the need to pay as strict attention to the way down. Lo and Chafkin take the Gonzales premise (that the climbers' mental model of this "beginners" mountain did not match the reality of that day) and point out the similarity in thinking about the economy prior to the current downturn.

In their words:
The remarkably consistent performance of the U.S. residential real-estate market over the decade from 1996 to 2006 may have had the same effect, leading many experienced businessmen to conclude that such growth was likely to continue indefinitely. And despite all the protections that were available to these captains of industry — analytics that showed large potential losses in the event of a downturn in housing prices, leverage constraints imposed by regulatory capital requirements, and warning signs from the hedge-fund industry in 2005 and 2006 — they charged ahead anyway, with the single-mindedness of a well-funded expedition hell-bent on conquering a mountain. Their mental models apparently did not match reality either.
The authors point to modern science that shows that decision-making is not always fully rational and fully informed and question the need to build professional skepticism into senior management -- a Chief Risk Officer.

It is definitely worth reading...

Sunday, August 9, 2009

Comic Con...

From the beginning, the 108Warren Commission was intended to cover pop culture just as thoroughly as it does economics and politics. Until now though, the commission members have been woefully uninspired.

To remedy that, the Commission is welcoming a new member this week. He brings a broad appreciation for pop culture and a fairly biting wit. Below is his first post -- a very tame discussion of his visit to Comic-con in San Diego...

Comic-Con can be an exercise in sensory overload and sleep deprivation that takes a week or so afterwards to let sink in. While you are in the middle of it, Comic-Con is a whirlwind of A-list celebrities promoting their new projects, booths selling everything from video games to Thor's hammer, and tons of people dressed as their favorite super hero or Star Wars character. Basically it's 4 days of geek nirvana in sunny San Diego.

I got to San Diego early Wednesday afternoon and met up with my friend Nicole. We had enough time to check into our hotel and get something to eat before heading to the convention center for preview night.

It doesn't take long to for the sensory overload part to kick in. First thing you are hit with is the overwhelming crowds, with 150,000 people a day Comic-Con can feel very claustrophobic. The crowds can make it difficult to navigate the massive exhibit hall that takes at least 2 or 3 tries to get all the way through.

On Thursday, the first real day of Comic-Con begins. We get there by about 9:00am even though the first panel that we want to see isn't until 3:00. It gives me a chance to people-watch --one of the things that I love to do at Comic-Con.

I'm constantly amazed at the huge variety of people who turn up here, especially my favorite group --the cos-players (costume-players). I admit that Halloween is my favorite holiday, and a big part of the reason is that I love costume parties, but I've never felt the urge to dress up and go out in public any other time of the year. The folks who are into cos-play, seem to come to Comic-Con to express their love of a particular character, but more importantly, with the goal of getting into as many pictures as possible. The costumes that I've seen over the years have been truly amazing, and I admire the work and detail that goes into them I just couldn't imagine walking around all day like that.

We found out that Sony Pictures would be promoting Zombieland on Thursday night with a zombie walk through the Gas lamp District a few blocks from the convention center. We went and got our zombie “makeover” and shambled the streets for about an hour with about 200 other zombies while getting many smiles and some very strange looks from the people who were eating at the many outdoor restaurants that we passed. After the walk it was dinner and drinks then back to the hotel knowing that there will be another long day tomorrow.

On Friday there were a few panels we wanted to see that were all in the same room. Now here is one of the downsides of Comic-Con, in order to see the panels, we have to get in the room early in the morning and sort of camp out there because of the huge lines that form the later it gets. Many times if you don't plan ahead and get into a room early you will never get to see the things you want to see. This also means that you are stuck sitting through things that you have no interest in so that you will have a seat for the things that you're there for. This is why the scheduling of where you are going and when is vitally important. Someone said to me that it's not about what you see at Comic-Con, but what you miss. Very true.

On Friday night Nicole decides that since we are hanging out late to meet up with friends, that she is just going to sleep out in line to get into the Lost panel on Saturday morning. I went back to the hotel, not planning on going to see Lost because it was running against a few other things that I wanted to see. That was a mistake on my part.

I get to the convention center early Saturday morning, figuring I would bring Nicole the drinks she wanted and get in line for my own panel. When I finally find a place to park, which is a daily adventure all its own, and get to the con I realize, when I see the line (probably on the order of about 15,000 people), that there is NO way that I will ever get into the panels that I want, so I stay with Nicole and see the Lost panel. Saturday was another day spent entirely in one room in order to see the things that I want to see. On the bright side, unlike Friday I actually want to see almost everything that's being shown.

After the panels, I take a walk through the exhibit hall to get some pictures and collect some of the freebies that they hand out at the booths. Once the exhibit hall closes for the day, I meet up with Nicole we get something to eat and then head to the hotel. It was a very long day and we are planning on getting back early again on Sunday to get back in line.

We get up about 5:30 Sunday morning, grab some breakfast on the way and are in line by about 7am. It's the last day of the con, and although they say it doesn't get as crowded on Sundays, it seems that somebody forgot to tell that to the crowds.

After seeing one early panel I take a last walk of the exhibit hall floor picking up a few things that I've been eyeing all week and taking some final pictures. I catch up with Nicole and a couple other friends, for one last check to see if we missed anything before calling it a con.

All in all it was another good year at Comic-Con. Although there is no way to see everything that you want to see, and you will no doubt miss the cool thing that everyone will be talking about for the rest of the week because you left 5 minutes earlier to catch something else, it's really cool for 4 days to be at the center of the pop culture universe.

Monday, August 3, 2009

Even Worse Than Taxes...

Everyone knows the old saw about Death and Taxes, but the Commission ran across a fascinating (and a bit disheartening, if you had illusions about living forever) post today at Gravity and Levity with a lot more detail on mortality.

Apparently the odds of your dying in a given year actually double every 8 years.

The author notes that:
For me, a 25-year-old American, the probability of dying during the next year is a fairly miniscule 0.03% — about 1 in 3,000. When I’m 33 it will be about 1 in 1,500, when I’m 42 it will be about 1 in 750, and so on. By the time I reach age 100 (and I do plan on it) the probability of living to 101 will only be about 50%.

Apparently this was discovered by a British actuary (Benjamin Gompertz) back in 1825, and is now called the Gompertz Law of human mortality...

What the 108Warren Commission finds fascinating is that this "Law" still holds true, even with the tremendous advances in medicine over the past 184 years -- the odds have certainly improved over that time, but they still double every 8 years.

Just something to consider as the US looks at changes to health care policy...