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What the Myanmar Junta and Washington State Teachers Union Have In Common May 30, 2008

Posted by federalist in Diplomacy, Education, Government, Unions.
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Neither will allow benefits to reach their supposed constituents unless they exercise complete control over the resources.  Both realize that their power is secured only through a stranglehold on the livelihood of their subjects.

Even though many foreign nations and agencies stand ready to bring disaster aid to Myanmar following a devastating cyclone, the military junta that controls the country has refused all aid that is not explicitly channeled through its agents.

Some Asean diplomats say Myanmar’s demand is designed to prevent the country’s citizens from associating increased inflows of aid with help from the U.S. and other Western countries critical of Myanmar’s government.

The Washington Education Assocation, the state teachers union, refused to allow Washington schools to accept a $13.2MM grant from the non-profit National Math and Science Initiative (NMSI).  Turn down free money for teachers and students?  Yes: Part of the NMSI’s grant involves direct merit bonuses to exceptional teachers.  The union demands that it have exclusive control over compensation of teachers.  If higher-performing teachers were rewarded for performance why would they support a union based on seniority and patronage?  More importantly, why do the citizens of Washington allow a union junta to control the public education system?

How to Make It In Our Two-Party System May 22, 2008

Posted by federalist in Government, Special Interests.
1 comment so far

Bruce Bartlett suggests that vitalizing a third political party in the United States is a hopeless cause.

Because of the Electoral College, restrictions on ballot access and onerous campaign finance laws, third parties simply aren’t viable for actually electing candidates. Nor do they pull the major parties toward their position: Ron Paul’s success did not encourage other Republican presidential candidates to even pay lip service to his ideas.

I believe that libertarian ideas would be better promoted by an interest group such as the National Rifle Association than through the Libertarian Party. Such a group could use the limited resources available for libertarian ideas far more effectively by establishing a political action committee, lobbying and advertising than by a political party running futile campaigns for public office.

We have previously noted how special interests dominate two-party politics. Hence, the solution to making a difference in this system: Become a special interest!

The NRA, with roughly 4 million members, has had tremendous success defending the right to keep and bear arms.  It doesn’t seem far-fetched to imagine a few million Americans willing to pay dues in support of the Libertarian agenda.  National Libertarian Association, anyone?

Better Sex? (Optimal Gender Ratios) May 21, 2008

Posted by federalist in Open Questions.
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A WSJ Op-Ed today offers a summary of the modern sociology of polygamy.  Indeed, monogamy may be the single greatest institution of human equal rights.

But this begs the question: Why are gender ratios evenly matched?

In large sexual animals, where gestation is a long and arduous process, it seems that there would be a tremendous benefit for a species to turn out females in much higher numbers than males. Consider elephants, for example: Females gestate babies for 15 months. Elephants don’t face significant predators, and males don’t appreciably contribute to the ability of a herd to forage or raise calves. If anything, they compete for scarce food. A single bull could conceivably keep a herd of 1000 females pregnant. A species of elephant that gave birth to many females for every male would seem to have a tremendous advantage in numbers and population resiliency over one that produced genders in equal numbers.

It doesn’t seem hard to imagine a diploid genetic process in which the sex trait is carried on a separate, extraneous chromosome, and whose propagation to gametes is highly skewed to exclusion.  In humans, for example, there would be additional advantages to carrying the male sex determiner on a 47th chromosome (whose absence results in a female): Males would not be as susceptible to recessive disorders on the X chromosome as they are now.

Are there any higher lifeforms in which sex is determined entirely by genetics and in which the proportion of male to female births is significantly less than one?  Why not?

Hauser’s Law of Taxation May 20, 2008

Posted by federalist in Economic Policy, Government, Taxation.
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David Ranson dusts off some econometric results that should be the basis of all discussions of tax policy. In 1993, Kurt Hauser found, “No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP.” This invariance still holds true, and Ranson dubs it “Hauser’s Law.”

The data show that the tax yield has been independent of marginal tax rates over this period, but tax revenue is directly proportional to GDP. So if we want to increase tax revenue, we need to increase GDP.

What happens if we instead raise tax rates? Economists of all persuasions accept that a tax rate hike will reduce GDP, in which case Hauser’s Law says it will also lower tax revenue. That’s a highly inconvenient truth for redistributive tax policy, and it flies in the face of deeply felt beliefs about social justice.

Presidential candidates, instead of disputing how much more tax to impose on whom, would be better advised to come up with plans for increasing GDP while ridding the tax system of its wearying complexity.

But perhaps we are too charitable with the tax-the-rich crowd’s intentions? It may be that they are not concerned with maximizing tax revenue but rather with using tax policy to minimize income inequality. And it may be that politicians are more concerned with acquiring the patronage of special interests through a byzantine tax code than simply maximizing the tax revenue at their disposal.

Using the Science of Memorization (The Spacing Effect) May 19, 2008

Posted by federalist in Education, Human Markets, Uncategorized.
3 comments

Wired magazine has a feature on the science of memorization.

In the late 1800s, a German scientist named Hermann Ebbinghaus … discovered many lawlike regularities of mental life. He was the first to draw a learning curve. Among his original observations was an account of a strange phenomenon that would drive his successors half batty for the next century: the spacing effect.

Ebbinghaus showed that it’s possible to dramatically improve learning by correctly spacing practice sessions. On one level, this finding is trivial; all students have been warned not to cram. But the efficiencies created by precise spacing are so large, and the improvement in performance so predictable, that from nearly the moment Ebbinghaus described the spacing effect, psychologists have been urging educators to use it to accelerate human progress. After all, there is a tremendous amount of material we might want to know. Time is short.

However, this technique never caught on. The spacing effect is “one of the most remarkable phenomena to emerge from laboratory research on learning,” the psychologist Frank Dempster wrote in 1988, at the beginning of a typically sad encomium published in American Psychologist under the title “The Spacing Effect: A Case Study in the Failure to Apply the Results of Psychological Research.” The sorrowful tone is not hard to understand. How would computer scientists feel if people continued to use slide rules for engineering calculations? What if, centuries after the invention of spectacles, people still dealt with nearsightedness by holding things closer to their eyes? Psychologists who studied the spacing effect thought they possessed a solution to a problem that had frustrated humankind since before written language: how to remember what’s been learned. But instead, the spacing effect became a reminder of the impotence of laboratory psychology.

Ebbinghaus published a monograph in 1885 called Memory: A Contribution to Experimental Psychology.

Piotr Wozniak has been testing and developing a computer program called SuperMemo for twenty years to optimize the use of the spacing effect to learn. (This review recommends Mnemosyne as a more simple, user-friendly, and free program based on the same theory.) Based on Wozniak’s research it is evident that even the best efforts will permit a person to learn and retain only a few million things over the course of a lifetime.

  • Given your memory capacity, what will you commit to long-term memory?
  • Why hasn’t an open-source memorization store like Mnemosyne caught on in the education establishment?

The Weakening Case for Ethanol Fuel in the U.S. May 18, 2008

Posted by federalist in Energy, Government Regulation.
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I’ve been following this issue in the notes on a previous post, but an article in this month’s Road & Track debunked one of the last arguments I thought was out there for ethanol: Namely, that modern cars require oxygenates to control emissions, and that following the MTBE ban ethanol is the only practical oxygenate available. Not so:

These days, “oxygenates” as in [the 10% ethanol blend now sold at gas stations] are solely extenders. With today’s oxygen-sensed engines, there’s no emissions benefit, and in fact there’s degradation in fuel economy and an increase in evaporative emissions.

Tyranny of Special Interests: 110th Congress Edition May 15, 2008

Posted by federalist in Economic Policy, Government, Special Interests.
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How can a minority extract rents from a majority in a democracy? Congress has illustrated this for years with abusive “earmarks.” Past posts (here, and here) have addressed the structural defects of our democracy. But this week Congress gave us an exceptional lesson in political logrolling: A small coterie of wealthy farmers secured record subsidies by … well, the Wall Street Journal summarizes it nicely:

If you wonder why urban Democrats would vote for this rural giveaway, the answer is they have been bought off with roughly $10 billion in extra funding for food stamps and nutrition welfare programs. Someone should tell them that their constituents might not need this cash if the farm bill didn’t help keep food prices high.

Conspiracy Theories and the Federal Reserve May 13, 2008

Posted by federalist in Economic Policy, Finance, Taxation.
9 comments

If you spend much time in anti-income-tax libertarian circles you will discover that fear and loathing of the IRS is followed closely by deep suspicion of the Federal Reserve (“Fed”) and abiding nostalgia for the days of the gold standard.  Libertarians spin vast conspiracy theories about who controls the Fed and who profits from it.  They appear to be confused.  The only legitimate argument against the Fed seems to circle back to the tax code, which presently levies taxes on inflation.  But this is an argument against the tax system, not the monetary system.

Yes, in principle the Federal Reserve could choose to inflate the money supply.  In an inflation scenario non-debtor citizens holding dollars are harmed as dollars lose value.  Meanwhile our debtor government benefits since inflation not only reduces the national debt but also increases tax receipts from capital gains, thanks to the Tax on Inflation.  (If you earn 5% interest during a period in which inflation runs at 5%, you have made no real gain on your savings.  However, the IRS currently looks at your gains in nominal, non-deflated terms, and so they will tax you as if you had gained 5%.)

Gold-standard advocates see a commodity-backed currency as a solution to the moral hazard of government-instigated currency inflation.  But gold-backed currency is not immune to inflation or manipulation either:  It simply replaces the intentional control of the money supply by the Fed with the circumstances of world-wide gold production and storage.  Inflation and deflation still occur when the production of new gold does not match the growth of the economy.  Nations and corporations could still manipulate the money supply by hoarding gold or flooding the market with their stores.  How is this any better than what we have right now?

Though in theory the Fed could take actions to inflate our currency its mission is the exact opposite: to limit inflation to a nominal level.  The Fed is also accountable to the banking system, and since banks are predominantly creditors they are not happy with inflation since it reduces the value of their credits.

In any case, there are numerous ways an individual can protect himself from dollar inflation:  Instead of storing dollars he can hold hard assets, other currencies, inflation-protected securities.  He can even buy “inflation insurance” using swaps on the open derivatives market.

One thing an American can’t do at present is protect himself from the Tax on Inflation: As long as the IRS demands that gains be calculated against an inflating currency, it can assess capital gains even when real gains are zero (or negative!).  So let’s return our focus to the IRS, not the monetary system.

Win at Gambling Using Quantum Physics May 11, 2008

Posted by federalist in Finance.
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Let’s consider games where:

  1. A very small bet can have an enormous “jackpot” payout, and
  2. Every iteration of the game has a jackpot scenario.

In the case of a typical government lottery there is a winning number every draw, and a player who has chosen that number in advance will win the jackpot.  For example in “PowerBall” a player chooses 5 unique numbers between 1 and 55, and then a sixth number in the range 1-42.  The odds of winning the jackpot (which has present value of at least $8MM at all times) are 1 in 146MM (55-choose-5 times 42).

The problem with a truly random game like this is that you can play any number of times and still not win.

However quantum physics gives us a strategy that, in a sense, guarantees we will win every single time. I alluded to this in an earlier post: If we act based on the outcome of a random quantum event then there is an alternate reality in which we make each possible choice. The difference between a classical random number generator (e.g., coin-flipping) and a quantum random number generator is that the former is fundamentally deterministic. I.e., there is no reason to believe that when a coin comes up tails there is an alternate universe in which at the same moment it came up heads. In contrast, an unbiased quantum flip truly does come up both heads and tails in “alternate realities.”

I think the world would be a better place if I had a lot more money under my control. So I will select 28 random qubits and spend $1 to play PowerBall. I know that at the end of the game there exists exactly one reality in which I am an instant multimillionaire. Granted, that is one of only 146MM alternate realities. But if I don’t undertake this exercise I would expect exactly zero realities in which I am much richer next week.

If we incorporated random qubits into our large-scale activity, instead of waiting for the effects of quantum probabilities to ooze up from the atomic level, the “multiverse” would be a much more diverse place!

Traffic Signals: Yellow before Green May 8, 2008

Posted by federalist in Open Questions.
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Many countries use a “4-state” traffic light pattern which shows a red-and-yellow signal before the light turns green again. As an efficient driver I think this is a great idea. For one thing, it gives distracted drivers in front of you extra time to notice that they will have to begin driving again soon, so that they do not waste precious seconds standing still with a green light. For another, it allows skilled drivers approaching a red light the ability to pace their deceleration so that they coast through as it turns green, instead of coming to a complete stop.

Regrettably, the United States Federal Highway Administration (FHWA) regulates traffic signals; their Manual on Uniform Traffic Control Devices (MUTCD) specifically prohibits the use of a “pre-green” signal. I contacted the FHWA to find out why and got the following explanation:

(more…)

Bolton’s Prescription for Fixing the United Nations May 6, 2008

Posted by federalist in Diplomacy.
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John Bolton in this month’s Imprimis:

Under the current system, the U.S. pays 22 percent of the cost of most U.N. agencies, and 27 percent of peacekeeping costs. We are far and away the largest contributor, and every year Congress pays the bill as apportioned by the General Assembly. My revolutionary reform principle would be this: The United States should pay for what it wants and insist that it get what it pays for. This would break up the entitlement mentality at the U.N. and foster an organization that is both more transparent and more effective.