Kevin Drum

Economists Are Almost Inhumanly Impartial

| Mon Dec. 8, 2014 12:29 PM EST

Over at 538, a team of researchers takes on the question of whether economists are biased. Given that economists are human beings, it would be pretty shocking if the answer turned out to be no, and sure enough, it's not. In fact, say the researchers, liberal economists tend to produce liberal results and conservative economists tend to produce conservative results. This is unsurprising, but oddly enough, I'm also not sure it's the real takeaway here.

The methodology they used to calculate bias involves a series of bank shots. Here's how it's done. First, take a group of economists with known ideologies. Second, examine the word choices in their papers. Third, create an algorithm that links ideology and word choice. Fourth, apply the algorithm to a large group of economists. Fifth, examine the numerical results in their papers. Sixth, normalize the results within fields to see how left- or right-leaning their conclusions are. Seventh, plot numerical results vs. predicted ideology.

Whew! There are, needless to say, error bars at every step along the way. Still, you will end up with a regression line eventually, and you can see it in the chart on the right. Sure enough, it shows that liberal economists tend to produce more liberal results, and vice versa for conservative economists.

That, however, is not the conclusion I draw from all this. What I see is a nearly flat regression line with a ton of variance. Those blue dots are all over the place. If the authors say their results are statistically significant, I believe them, but it sure looks to me as if (a) the real-world error bars are pretty big here, and (b) economists as a whole are remarkably unbiased. I mean, look at that chart again. I would have expected a much steeper line. Instead, what we see is just the barest possibility that ideology has a very slight effect on economists' findings.

If these results are actually true, then congratulations economists! You guys are pretty damn evenhanded. The most committed Austrians and the most extreme socialists are apparently producing numerical results that are only slightly different. If there's another field this side of nuclear physics that does better, I'd be surprised.

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One Simple Truth About Facebook That Snobby Elitists Can't Seem to Wrap Their Heads Around

| Mon Dec. 8, 2014 11:10 AM EST

Alex Tabarrok mulls the question of whether advertising-supported products are fundamentally less attuned to customer needs than, say, Apple products:

Apple’s market power isn’t a given, it’s a function of the quality of Apple’s products relative to its competitors. Thus, Apple has a significant incentive to increase quality and because it can’t charge each of its customers a different price a large fraction of the quality surplus ends up going to customers and Apple customers love Apple products.

Facebook doesn’t charge its customers so relative to Apple it has a greater interest in increasing the number of customers even if that means degrading the quality. As a result, Facebook has more users than Apple but no one loves Facebook. Facebook is broadcast television and Apple is HBO.

No one loves Facebook? This is a seriously elitist misconception. It's like saying that Tiffany's customers all love Tiffany's but no one loves Walmart.

But that's flatly not true. Among people with relatively high incomes, no one loves Walmart. Among the working and middle classes, there are tens of millions of people who not only love Walmart, but literally credit them with being able to live what they consider a middle-class lifestyle. They adore Walmart.

Ditto for Facebook. I don't love Facebook. Maybe Alex doesn't love Facebook. And certainly Facebook's fortunes rise and fall over time as other social networking products gain or lose mindshare. But there are loads of people who not only love Facebook, but are practically addicted to it. And why not? Facebook's advertiser-centric model forces them to give their customers what they want, since happy customers are the only way to increase the number of eyeballs that their advertisers want. Apple, by contrast, was run for years on the whim of Steve Jobs, who famously refused to give his customers what they wanted if it happened to conflict with his own idiosyncratic notion of how a phone/tablet/computer ought to work. In the end, this worked out well because Jobs was an oddball genius—though it was a close-run thing. But how many companies can find success that way? A few, to be sure. But not a lot.

"Quality" is not a one-dimensional attribute—and this is an insight that's seriously underappreciated. It means different things to different people. As a result, good mass-market companies are every bit as loved as companies that cater to elites. They're just loved by different people. But the love of the working class is every bit as real as the love of the upper middle class. You forget that at your peril.

The Obama Recovery Has Been Miles Better Than the Bush Recovery

| Sat Dec. 6, 2014 3:19 PM EST

Paul Krugman writes today about the dogged conservative claim that the current recovery has been weak thanks to the job-killing effects of Obamacare and Obama regulation and the generally dire effects of Obama's hostility to the business sector. But I think Krugman undersells his case. He shows that the current recovery has created more private sector jobs than the 2001-2007 recovery, and that's true. But in fairness to the Bush years, the labor force was smaller back then and Bush was working from a smaller base. So of course fewer jobs were created. What you really want to look at is jobs as a percent of the total labor force. And here's what you get:

The Obama recovery isn't just a little bit better than the Bush recovery. It's miles better. But here's the interesting thing. This chart looks only at private sector employment. If you want to make Bush look better, you can look at total employment instead. It's still not a great picture, but it's a little better:

Do you see what happened? The Bush recovery looks a bit healthier and the Obama recovery looks a bit weaker. Why? Because we added government jobs. Bush got a nice tailwind from increased hiring at the state and federal level. Obama, conversely, was sailing into heavy headwinds because he inherited a worse recession. States cut employment sharply—partly because they had to and partly because Republican governors saw the recession as an opportunity to slash the size of government—and Congress was unwilling to help them out in any kind of serious way.

This is obviously not a story that conservatives are especially likely to highlight. But there's not much question about it. Bush benefited not just from a historic housing bubble, but from big increases in government spending and government employment. But even at that his recovery was anemic. Obama had no such help. He had to fight not just a historic housing bust, but big drops in both government spending and government employment. Despite that, his recovery outperformed Bush's by a wide margin.

There are, of course, plenty of caveats to all this. First of all, the labor force participation rate has been shrinking ever since 2000, and that's obviously not the fault of either Bush or Obama. It's a secular trend. Second, the absolute size of the labor force started out smaller in 2001 than in 2010, but it grew during the Bush recovery, which makes his trend line look worse. Its growth has been pretty sluggish during the Obama recovery as people have dropped out of the labor force, which makes his trend line look better. These are the kinds of things that make simple comparisons between administrations so hard. And as Krugman points out, it's unclear just how much economic policy from either administration really affected their respective recoveries anyway:

I would argue that in some ways the depth of the preceding slump set the stage for a faster recovery. But the point is that the usual suspects have been using the alleged uniquely poor performance under Obama to claim uniquely bad policies, or bad attitude, or something. And if that’s the game they want to play, they have just scored an impressive own goal.

Roger that. If you want to credit Bush for his tax cuts and malign Obama for his stimulus program and his regulatory posture, then you have to accept the results as well. And by virtually any measure, including the fact that the current recovery hasn't ended in an epic global crash, Obama has done considerably better than Bush.

Friday Cat Blogging - 5 December 2014

| Fri Dec. 5, 2014 2:45 PM EST

In today's episode of Friday catblogging, Hilbert is trying to prove that he's a size 12. He was unconvincing, despite plenty of squirming to try to fit his entire body into the shoe box. The result was an interestingly blurred face, but not an entire cat in the box.

In other news, we've had to clear off the mantle over the fireplace because it turns out that Hopper can shinny up the bricks and start whacking away at whatever is up there. But there's more to the story. We figured that Hilbert was a bit too gravity-bound to pose any similar danger, so we were blaming Hopper whenever something got knocked over. But on Wednesday night, during the 9 pm play hour, we watched in awe as Hilbert careened across the living room floor, flung himself straight up the brick facing, and grabbed onto the mantle. He barely made it, and had to chin himself up the last few inches, but make it he did. Nothing is safe around here anymore.

Lefties Earn 10% Less Than Righties

| Fri Dec. 5, 2014 1:02 PM EST

Well, this is weird. Danielle Kurtzleben summarizes a new study called "The Wages of Sinistrality":

In the data, around 11 to 13 percent of the population was left-handed. And when broken down by gender — that is, comparing women to women and men to men — those lefties have annual earnings around 10 to 12 percent lower than those of righties, Goodman writes, which is equal to around a year of schooling. (That gap varied by survey and by gender, however.) Most of this gap can be attributed to "observed differences in cognitive skills and emotional or behavioral problems," he writes, adding that since lefties tend to do more manual work than right-handers, the gap appears to be due to differences in cognitive abilities, not physical.

Apparently the cognitive differences were already well known (though I didn't know about them), but this paper is the first to document the earnings gap. It's surprisingly large. So if you're a lefty and you're doing well, congratulations! You've beaten the odds.

Chart of the Day: Net New Jobs in November

| Fri Dec. 5, 2014 9:56 AM EST

Merry Christmas! The American economy added 321,000 new jobs last month, 90,000 of which were needed to keep up with population growth. This means that net job growth clocked in at 231,000 jobs, which is....pretty good, actually. And virtually all of it came from private sector job growth. We're still not in full-tilt recovery mode, but this is a genuinely positive number. The unemployment rate stayed steady at 5.8 percent.

And there are no hidden gotchas in these results. The unemployment rate didn't stay steady just because folks were dropping out of the labor force. All the employment-related numbers changed by similar amounts last month, and the labor force participation rate remained unchanged at 62.8 percent. If you insist on finding a downside to this month's jobs report, perhaps it's the fact that the unemployment rate spiked up a bit for workers with no high school diploma. But that's as likely to be a statistical blip as anything else.

Hourly earnings for all workers rose at an annualized rate of about 4.3 percent, which isn't bad, but earnings for nonsupervisory workers were up only 2.3 percent, which is roughly flat when you adjust for inflation. I generally pay more attention to the latter number, which means that wages still aren't showing much energy. This is, as usual, unsettling. It suggests that even with the economy adding jobs, there's still a fair amount of slack in the labor market.

Still, that's a lagging indicator. If we can manage to keep up this level of job growth over the next year, wages will probably start to show some life. Needless to say, though, that's a big if. The world economy is sailing into headwinds at the moment, and there's no telling if the United States can buck the trend. Perhaps falling oil prices will give us the added push we need. Perhaps.

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Unlike Diamonds, E-Books Are Not Forever

| Thu Dec. 4, 2014 9:21 PM EST

Microsoft is getting a divorce from Barnes & Noble:

On Thursday, the two companies parted ways, with Barnes & Noble buying out Microsoft for about $125 million. In other words, in just over two years, the value of the Nook business has lost more than half its value.

....And yet despite these grim numbers, Barnes & Noble has reason to look favorably on its relationship with Microsoft. The initial $300 million investment gave the bookseller an infusion of cash when it needed it most....Microsoft, meanwhile, was hoping that the Nook software would bolster its own tablet business, making it a more viable competitor to Apple’s iPad. That didn’t pan out, and Microsoft was left committed to a declining Nook business that was adding little to its own ambitions in the tablet market.

This highlights one of the big problems with e-books: what happens when there's no software left to read them? I'm a big user of the Nook app on my Windows tablet, but its demise was announced months ago. Microsoft doesn't care about Nook because it's not a killer app for Windows 8, and B&N doesn't care about Windows 8 because Windows tablets have a minuscule market share. So the app died. For now everything is still fine, but it's inevitable that when upgrades stop, eventually an app stops working for one reason or another. Will I then be able to read my Nook books in some new Microsoft reader? Or will I just be up a creek and forced to switch to an iPad or Android tablet? There's no telling.

It's weird. I think I now know how Mac partisans used to feel when Microsoft was eating their lunch. They all believed that Macs were obviously, wildly superior to anything from Redmond, and were only on the edge of extinction thanks to massive infusions of marketing by an industry behemoth. Now I'm in that position. After considerable time spent on both iPad and Android tablets, I find my Windows tablet obviously, wildly superior to either one. It's not even a close call. But the market disagrees with me. The few drawbacks of Windows 8, which I find entirely trivial, are deal breakers for most users, and as a result app makers have stayed away. This causes yet more users to avoid the Windows platform and more app makers to stay away, rinse and repeat.

What a shame. I guess I can only hope that by the time Windows tablets are consigned to the dustbin of history there will finally be an Android tablet that's actually usable by adults who want to do more than update their Facebook pages. We'll see.

POSTSCRIPT: Of course, this wouldn't be a problem—or not such a big problem, anyway—if Amazon and other e-book vendors allowed third-party apps to display their books. But they don't, which means Amazon's monopoly position in e-books also gives them a monopoly position in e-book readers. This is really not a situation that any of us should find acceptable.

No, the Garner Case Doesn't Show That Body Cameras Are Useless

| Thu Dec. 4, 2014 12:51 PM EST

Very quick note: ever since last night, a lot of people have been making the point that Eric Garner's killing produced no grand jury indictment even though the whole incident was captured on video. So maybe the whole idea of body cameras on police officers is pointless.

This is ridiculous. There are pros and cons to body cameras, but only in the rarest cases will they capture a cop killing someone. Even if, arguendo, they make no difference in these cases, they can very much make a difference in the other 99.9 percent of the cases where they're used. The grand jury's decision in the Garner case means a lot of things, but one thing it doesn't mean is that body cameras are useless.

Can We Please Kill Off the Kabuki in the Press Room?

| Thu Dec. 4, 2014 12:14 PM EST

Things are a bit slow this morning, so I want to replay for you a Twitter conversation with CNN's Jake Tapper. The subject is Jonathan Karl of ABC News, who harassed press secretary Josh Earnest earlier this week over President Obama's picks as ambassadors to Argentina and Hungary. Neither one has any special diplomatic experience, and one of them is a former producer for a soap opera:

Jake Tapper: meant to give props to @jonkarl for his Bold and Beautiful ambassador questions to @PressSec the other day

Kevin Drum: Why? Is anything really gained by this daily kabuki in the press room?

JT: why what? why is it worth challenging people in power about questionable decisions?

KD: It's kabuki. Everyone knows the answer. It's happened forever. Earnest wasn't going to answer. Why waste the time?

JT: i guess i dont think trying to hold those in power accountable is a "waste of time." have a great day

Tapper's point is pretty easy to understand, and my colleague Nick Baumann agrees with him. There's a long tradition of rewarding big campaign contributors with cushy ambassadorial posts in spite their fairly visible lack of qualification. There's not much excuse for this, so why not demand to know why Obama is doing it?

But here's my point. This is yet another example of a bad habit that the White House press corps engages in constantly: faux confrontation over trivia that gets them camera time and kudos from late-night comedians, but is, in reality, completely pointless. Jonathan Karl knows perfectly well why these two folks were appointed. They raised lots of money for Obama. Josh Earnest knows it too. This stuff has been going on forever. But Karl knows something else: Earnest is a spokesman. He's flatly not allowed to fess up to political stuff like this, and he's just going to dance around it.

This is why I called it kabuki. If this were actually an important topic where there was some uncertainty about the answer, then confrontation would be great. I'd like to see more of it for truly important stuff. But is Karl's investigative reputation really enhanced by an inane kindergarten round of "let's pretend" with whatever poor schmoe happens to be at the press room podium? Is this truly an example of "holding those in power accountable"?

I really don't see it. Then again, maybe Karl is working on a whole segment about the ridiculous practice of rewarding supporters with cushy diplomatic posts in fashionable countries. Or maybe even a segment asking why countries even bother having ambassadors in high-profile capitals where they serve precious little purpose anymore. If that's the case, then maybe the questions made sense.

But purely as confrontation? Please. Dignifying this silliness as "challenging people in power" is like calling a mud fort an infrastructure project. It really doesn't deserve any props.

UPDATE: Hmmm. Apparently Tapper and some others interpreted my initial tweet as referring to the entire concept of the press briefing. So to some extent, this is a misunderstanding. Obviously I don't object to the general practice of holding briefings (though I wish reporters would boycott all the "background" briefings). I just object to the habit of peppering White House flacks with questions about trivial topics that everyone knows the answer to. It seems more designed to get YouTube kudos than to truly challenge anyone in power.

Some Fair and Balanced Race Baiting at Fox News

| Thu Dec. 4, 2014 10:58 AM EST

Andrew Sullivan is heartened that even most conservatives seem to be shocked by yesterday's grand jury decision not to return an indictment in the killing of Eric Garner. But "most" is not quite all:

The exception to all this was Fox News last night. Megyn Kelly’s coverage proved that there is almost no incident in which a black man is killed by cops that Fox cannot excuse or even defend. She bent over backwards to impugn protesters, to change the subject to Ferguson, to elide the crucial fact that the choke-hold was against police procedure, and to imply that Garner was strongly resisting arrest. Readers know I had very mixed feelings about Ferguson. I’m not usually inclined to slam something as overtly racist. But there was no way to interpret Kelly’s coverage as anything but the baldest racism I’ve seen in a while on cable news. Her idea of balance was to interview two, white, bald, bull-necked men to defend the cops, explain away any concerns about police treatment and to minimize the entire thing. Truly, deeply disgusting.

Jeez. A thinly veiled appeal to racist sentiment at Fox News? I am shocked, I tell you, shocked.