2012 - %3, January

Can Economists Pick Winners in the Stock Market?

| Sun Jan. 29, 2012 12:03 PM PST

Suzy Khimm points us to the latest survey of economists and the general public sponsored by Northwestern University. She highlights their finding that while economists all agree that raising tax rates by one percentage point on the rich would bring in more revenue, only 66% of the public believes this. That's a big victory for Rush Limbaugh and Fox News. But I actually find this result more disturbing:

Survey respondents appear more confident than economic experts about one’s ability to predict the stock market. In response to the statement, “Very few investors, if any, can consistently make accurate predictions about whether the price of an individual stock will rise or fall on a given day,” 64 percent of economists strongly agreed whereas only 54 percent of the Index sample agreed. [Emphasis mine.]

More accurately, I might find this result disturbing, because it suggests that 36% of professional economists think that lots of investors can consistently and accurately predict the price of a specific stock on a specific day. Oddly, though, the 64% figure for economists is for those who "strongly agree," while the 54% figure for the general public is for all those who merely "agree." So perhaps 64% of economists strongly agree with this statement and 36% merely agree. That would be OK. But then again, maybe 36% of economists don't agree at all. That would be a travesty.

I'm curious to know which it is. But I'm even more curious to know why this survey project reports its results in such an ambiguous fashion and doesn't make the raw results available. What's up with that?

UPDATE: Thanks to Twitter, I have my answer. If I had only realized that the raw data was available at an entirely different website, based on a poll done three months ago, I would have gone straight here and discovered that, in fact, 100% of economists agreed with this statement. The only distinction is that 64% strongly agreed and the other 36% agreed.

So the relevant comparison, I think, is that 100% of economists agree with this statement but only 54% of the general public agree with it. It's not clear to me why the Northwestern folks seem to have rather egregiously fudged that.

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The Decline and Fall of Public Support for Public Education

| Sun Jan. 29, 2012 11:42 AM PST

Atrios writes about the growing cost of a university education:

The basic thinking seems to have been that it was wonderful for university to be free back when most people who attended were quite wealthy, but once the masses started getting ideas about going it was time to force them to pay. And there again is your generational divide.

Actually, I think the dynamic is a bit different from that. It was back in the early 20th century that most people who attended college were wealthy — or at least upper middle class — and at that time, universities were expensive, not free. Private universities cost a lot of money (and handed out only a few scholarships here and there to salve their consciences), and state land grant universities, while not as expensive as Harvard or Yale, still cost too much for most ordinary working class schlubs. Neither of my grandfathers could afford to attend college, for example, even though they wanted to. (One of them joined the Navy instead, and the other drove out to California to make his fortune.)

That changed after World War II, when the economy was booming and everyone suddenly woke up to the fact that there were lots of working class kids who were plenty smart enough to attend college. This happened at exactly the time that America needed lots of college-educated workers, so we made sure they could all go. The GI Bill helped lots of them while all-but-free public universities helped lots of others. This was the golden age of low-cost higher education, and it was an era with more class mixing than ever before or after.

This started to erode in the post-Reagan era, but I don't think it's because of a generational divide. That's just the symptom, not the disease. It's largely a class divide. For a few decades following World War II, when state universities were a legitimate ticket into the white collar world for everyone, they were supported by everyone. But after the first generation or two got their tickets punched and moved out of the old neighborhoods and into middle-class suburbia, all the low-hanging fruit was gone. Poor and working class neighborhoods were no longer producing lots of kids who had the smarts for college but couldn't afford to go. More and more, universities were populated by the grandchildren of the GI Bill generation, all of whom were already middle class or better.

And as that happened, public universities began to lose public support. Why should working class and lower middle class taxpayers subsidize the education of children who had already benefited from a privileged upbringing and whose college degrees would provide them with a lifetime of higher earnings? After all, if some well-off kid wants a sheepskin that will make him rich, why shouldn't he pay for it himself?

And with that, universal support for cheap higher education dwindled, but not really for generational reasons. If poor and working class families still felt like their kids had a good shot at going to college, I'll bet they'd still support low-cost public universities just as much as they used to.

Journalists—Myself Included—Swept Up in Mass Arrest at Occupy Oakland

| Sun Jan. 29, 2012 11:03 AM PST
Occupy Oakland protesters flee as police attempt to kettle them ahead of Saturday's mass arrest.

On Saturday, Occupy Oakland re-entered the national spotlight during a day-long effort to take over an empty building and transform it into a social center. Oakland police thwarted the efforts, arresting more than 400 people in the process, primarily during a mass nighttime arrest outside a downtown YMCA. That number included at least six journalists, myself included, in direct violation of OPD media relations policy that states, "Even after a dispersal order has been given, clearly identified media shall be permitted to carry out their professional duties in any area where arrests are being made unless their presence would unduly interfere with the enforcement action."*

After an unsuccessful afternoon effort to occupy a former convention center, the more than 1,000 protesters elected to return to the site of their former encampment outside City Hall. On the way, they clashed with officers, advancing down a street with makeshift shields of corrugated metal and throwing objects at a police line. Officers responded with smoke grenades, tear gas, and bean bag projectiles. After protesters regrouped, they marched through downtown as police pursued and eventually contained a few hundred of them in an enclosed space outside a YMCA. Some entered the gym and were arrested inside.

As soon as it became clear that I would be kettled with the protesters, I displayed my press credentials to a line of officers and asked where to stand to avoid arrest. In past protests, the technique always proved successful. But this time, no officer said a word. One pointed back in the direction of the protesters, refusing to let me leave. Another issued a notice that everyone in the area was under arrest.

I wound up in a back corner of the space between the YMCA and a neighboring building, where I met Vivian Ho of the San Francisco Chronicle and Kristin Hanes of KGO Radio. After it became clear that we would probably have to wait for hours there as police arrested hundreds of people packed tightly in front of us, we maneuvered our way to the front of the kettle to display our press credentials once more.

Fighting Bullshit, Part 2

| Sun Jan. 29, 2012 10:13 AM PST

Yesterday I suggested that fighting bullshit is every bit as important as fighting genuine misunderstanding. Karl Smith takes issue with this:

This is an important point but we should define a line between where the contributions of professional intellectuals end and where the contributions of professional advocates take over.

If there is genuine misunderstanding then there is a role for intellectuals to say — well actually I think it's like this.

However, once an issue simply [becomes] a proxy for which team you want to win, this is not our fight. There are good men and women who are paid to do that and they should.

However, our role is the spread of knowledge. Once people are no longer concerned with knowledge but simply scoring points, we should move on.

I don't get this at all. The case at hand was a Mark Zandi op-ed debunking the BS that Fannie Mae and Freddie Mac caused the 2008 financial crisis. This wasn't a case of fighting BS with BS. Zandi was fighting BS with facts. Nor was it a case of harmless BS that only a small lunatic fringe believes. The Fannie/Freddie myth is believed by millions of people, some of them very influential, because they think the BS sounds plausible and they don't have the tools to evaluate it.

Generally speaking, the contagion vector for misinformation goes something like this:

Liars/hacks ---> Bullshitters ---> General public

Now, I do think public intellectuals have a responsibility to fight this stuff in a sober, factual, evenhanded way. They should leave the histrionics and cherry picking to partisan shills like me. Still, fight it they should. Their duty is to inform, and that duty stands regardless of where the misinformation comes from, what the motivation behind the misinformation is, or who the misinformers are targeting.

This task can't be left solely to popularizers and party wheel horses while academics limit themselves to conferences and professional journals. Public education is too important for that, and hearing the facts frequently and forcefully from those with the deepest knowledge of a subject is important since they bring with them with a level of credibility that no other source can match. Academics and other intellectuals don't have to take partisan sides, but they should take sides, and they should take them as publicly as possible.

POSTSCRIPT: By the way, just in case anyone is offended by the repeated use of the word bullshit in this exchange, it's worth noting that Karl and I are both using it in its technical, analytical sense as explicated by Princeton philosophy professor Harry Frankfurt in his famous essay, On Bullshit. There's a short summary here if you don't want to read the whole thing.

Chart of the Day: What's Your Major?

| Sat Jan. 28, 2012 1:27 PM PST

Via Tyler Cowen, Benjamin Campbell and Samuel Wang report that your college major depends a lot on which particular psychopathologies are common in your family:

We surveyed an entire class of high-functioning young adults at an elite university for prospective major, familial incidence of neuropsychiatric disorders, and demographic and attitudinal questions. Students aspiring to technical majors (science/mathematics/engineering) were more likely than other students to report a sibling with an autism spectrum disorder. Conversely, students interested in the humanities were more likely to report a family member with major depressive disorder, bipolar disorder, or substance abuse problems.

Is it science or is it bullshit? You make the call! But there's a chart to go with it, along with the usual throat clearing that this could all be due to nature, nurture, or a combination of both, so please don't send them any death threats. In any case, it all seems pretty plausible, doesn't it?

Fighting Bullshit

| Sat Jan. 28, 2012 11:23 AM PST

Karl Smith says lefty intellectuals have a problem dealing with bullshit. Case in point: Mark Zandi spending several hundred words this week demonstrating, yet again, that Fannie Mae and Freddie Mac weren't responsible for the 2008 financial meltdown:

Mark, Mark. Clonazepam. It’s a beautiful thing. Let go.

I am betting that maybe five people in the US actually believe Fannie and Freddie caused the housing bubble. Maybe half a dozen more are actively lying about it.

The rest are just Bullshitting. That is, they don’t really care what the truth is one way or the other. This is just a way to gesture in the general direction of the federal government and say Urrhh!!!

Ah, but what's the proper response to bullshit? Karl is almost certainly right that among actual conservative economists, only a few actually believe that Fannie and Freddie played a big role in the financial collapse. But those few true believers have a significant effect on:

  • Other conservative thought leaders, who don't know anything themselves but are happy to parrot congenial talking points.
  • Conservative legislators, who need intellectual justification for their speeches on the House floor.
  • The media, which is willing to continue suggesting that this is a genuine controversy as long as conservative thought leaders and conservative legislators keep pushing it.
  • Millions of rank-and-file conservatives, who listen to Fox News and read the Wall Street Journal editorial page and honestly believe this stuff because they're getting it from people they trust.

Does Mark Zandi know this? Of course he does. He's not an idiot. But what's the proper response? If you ignore the bullshitters, then the anti-GSE narrative gets set in stone whether or not it's bullshit. If you fight it, at least it remains fluid for a while — possibly long enough for things to settle down.

So sure, it's kabuki. All of us who write about politics for a living understand that 90% (at least) of what we do is just shadow boxing. Controversies are invented, then debunked, then invented all over again, and debunked. Sometimes the inventors know perfectly well what they're doing, while other times they've talked themselves into actually believing their own nonsense. In either case, these things are mostly just proxies for the issues that really matter.

But so what? The Reichstag fire was wholly invented too, and look what happened after that. As demeaning as it is, fighting back against bullshit is every bit as important as fighting back against the real stuff.

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Breaking: Still No Voter Fraud in South Carolina

| Sat Jan. 28, 2012 9:52 AM PST

Are dead people voting in South Carolina? That's what their DMV director claimed in a sensational hearing a couple of weeks ago. To stop this, South Carolina desperately needs its photo ID law — currently on hold thanks to the Chicago thugs in the Obama Justice Department — to go into effect. "We must have certainty in South Carolina that zombies aren't voting," said state Rep. Alan Clemmons.

Except, um, maybe not. The South Carolina attorney general's office gave the State Election Commission six names off the list of 950 allegedly dead voters, and guess what they found?

In a news release that election agency spokesman Chris Whitmire handed out prior to the hearing, the agency disputed the claim that dead people had voted. One allegedly dead voter on the DMV's list cast an absentee ballot before dying; another was the result of a poll worker mistakenly marking the voter as his deceased father; two were clerical errors resulting from stray marks on voter registration lists detected by a scanner; two others resulted from poll managers incorrectly marking the name of the voter in question instead of the voter above or below on the list.

So that's oh-for-six. Five of the six were actually alive and the sixth had voted absentee before dying. There's no evidence of any fraud at all, just the usual bunch of administrative slip-ups.

This is the story of voter fraud in a microcosm. Claims of fraudulent voting become urban legends practically before the first YouTube video goes up on someone's website, but upon investigation the actual incidence of voter fraud turns out to be virtually nonexistent. Despite Newt Gingrich's infatuation with having MasterCard run our country's immigration program, anyone who's ever worked in the private sector knows that keeping customer and prospect mailing lists clean is a huge pain in the ass. If you manage to stay even 95% accurate, you're a genius. That's doubly true for voter registration rolls, which are a nightmare of people moving, dying, getting married, registering twice by mistake, providing incorrect addresses, and so forth. After any election, you can always find thousands of discrepancies if you look hard enough.

But almost none of them ever turn out to be actual voter fraud. The registration rolls might be sloppy, and poll workers might make mistakes, but practically no one who's ineligible to vote ever shows up at the polls and tries to vote. Study after study after study has made this crystal clear.

But it doesn't matter. The 950 graveyard voters in South Carolina have now entered the pantheon of voter fraud paranoia. That'll be good for passing photo ID laws, which tend to suppress the turnout of Democratic-leaning voting groups, and it'll be good for Republican Party fundraising, but not for much of anything else.

Greens Go After Obama Admin on Arctic Drilling

| Fri Jan. 27, 2012 3:45 PM PST

Pew Environment is running some aggressive new ads targeting the Obama administration's decision to allow drilling in the Arctic to proceed. Last year, the Department of Interior approved Shell's drilling plan for the Beaufort Sea. Here's the television ad, which is ran on CNN and MSNBC after the State of the Union address on Tuesday, and which is running this weekend during the Sunday shows:

The group also took out full-page ads in Politico and the New York Times, cosponsored by the Ocean Conservancy. The group said they are expecting some key decisions on Arctic drilling from the administration in the coming weeks.

Image-of-the-Week: Chile's Antarctic Superbug

| Fri Jan. 27, 2012 3:07 PM PST

Escherichia coli: Mattosaurus via Wikimedia Commons.

Escherichia coli: Mattosaurus via Wikimedia Commons. 

Escherichia coli bacteria are ubiquitous in the lower gut of warm-blooded critters, and because we're warm-blooded and more or less ubiquitous on planet Earth, so are E. coli. While many strains are harmless, others are deadly. A new paper in Applied and Environmental Microbiology reports that one-fourth of seawater samples collected off Antarctica now contain E. coli that  carry genes to make the enzyme ESBL. This enzyme is known to destroy antibiotics and is potentially more dangerous than the superbug MRSA. The contaminated seawater samples were found off three Chilean research stations, none of which deploy any form of sewage treatment. So far none of these superbug E. coli have been found in penguins. The researchers are beginning to investigate the local gulls. WTF, Chile? Clean your mierda.

About That "Clean Energy" Future

| Fri Jan. 27, 2012 2:45 PM PST

President Obama devoted a significant portion of his energy remarks in the State of the Union to natural gas development on Tuesday. He called for greater production of the 100-year supply here in the US, and pledged to take "every possible action" ensure that it is done safely.

"America will develop this resource without putting the health and safety of our citizens at risk," he told the joint session of Congress. He has repeated his support for natural gas in multiple stops along his "America Built to Last" tour this week, which included a visit to a UPS facility in Nevada to tout a liquefied natural gas refueling station the company received stimulus money to build.

Leaving aside the concerns about safety related to fracking (and there are quite a few), the natural gas push raises a number of other questions about the longer-term safety and well-being of our citizens. For one, natural gas is still a fossil fuel. That means there's a finite supply of it, and 100 years isn't all that long, in the grand scheme of things. My (currently nonexistent) kids might still be alive then!

And then there's the greenhouse gas issue. Yes, in some ways it's cleaner than coal. Burning it releases less CO2, but it's not emission-free. The process of extracting gas from shale also causes a good deal of methane leakage. Cornell University's Robert Howarth, a professor in the department of ecology and evolutionary biology, released a paper last year that found it shale gas extraction is responsible for 20 percent more greenhouse gases than coal overall. Now he's got a new paper coming out in the journal Climatic Change that reasserts his finding natural gas is actually be worse than coal, which the Inter Press Service covered this week:

However, those climate gains are more than negated by methane leaks both at the well during the fracking process (called flow-back), and through the gas delivery and distribution system. Howarth and colleagues estimate that between 3.6 and 7.9 percent of all shale gas produced leaks—called "fugitive emissions"—into the atmosphere, making it worse than burning coal or oil.
Methane has 105 times the warming potential of CO2 over a 20-year time frame, after which it rapidly loses its warming potential. If large amounts of methane are released through fracking—as seems likely with hundreds of thousands of new wells forecast in the next two decades—Howarth says global temperatures could rocket upward from 0.8C currently to 1.8C in 15 to 35 years, running the risk of triggering a tipping point that could lead to catastrophic climate change.

Anyway, this is all to say that the safety and environmental concerns related to shale gas extraction aren't limited to fracking, and that the "cleanness" of this clean-energy solution isn't entirely clear.