Big Money

The latest news in the banking world:

Fraud and mismanagement at Afghanistan’s largest bank have resulted in potential losses of as much as $900 million — three times previous estimates — heightening concerns that the bank could collapse and trigger a broad financial panic in Afghanistan, according to American, European and Afghan officials.

I don't have any insights to offer about this, but I'll offer up some simple math instead. The GDP of Afghanistan is about $15 billion. That means that this single bank is reporting losses equal to about 6% of GDP. That would be the equivalent of, say, Chase or Bank of America reporting a loss of around $1 trillion or so. That's a big loss.

Wikipedia's Gender Problem

The New York Times reports today that Wikipedia contributors are overwhelmingly men:

About a year ago, the Wikimedia Foundation, the organization that runs Wikipedia, collaborated on a study of Wikipedia’s contributor base and discovered that it was barely 13 percent women....With so many subjects represented — most everything has an article on Wikipedia — the gender disparity often shows up in terms of emphasis. A topic generally restricted to teenage girls, like friendship bracelets, can seem short at four paragraphs when compared with lengthy articles on something boys might favor, like, toy soldiers or baseball cards, whose voluminous entry includes a detailed chronological history of the subject.

....Is a category with five Mexican feminist writers impressive, or embarrassing when compared with the 45 articles on characters in “The Simpsons”?

....Jane Margolis, co-author of a book on sexism in computer science, “Unlocking the Clubhouse,” argues that Wikipedia is experiencing the same problems of the offline world, where women are less willing to assert their opinions in public. “In almost every space, who are the authorities, the politicians, writers for op-ed pages?” said Ms. Margolis, a senior researcher at the Institute for Democracy, Education and Access at the University of California, Los Angeles.

This is just guesswork on my part, but I think this is a different phenomenon than gender disparity in op-ed writing. For starters, you need to compare apples to apples, and wondering why Mexican feminist writers are underrepresented on Wikipedia compared to The Simpsons is silly. It's because The Simpsons has an audience in the millions while Mexican feminist literature has an audience in the thousands. You don't really need to dig much deeper. There are several comparisons like that in the Times piece, and they mask the problem more than they illuminate it.

Still, even accounting for that, the gender disparity is real. But I suspect the reason has less to do with women having trouble asserting their opinions and more to do with the prevalence of obsessive, Aspergers-ish behavior among men. After all, why would anyone spend endless hours researching, writing and editing a Wikipedia post for free about either The Simpsons or Mexican feminist writers? I think that "having an opinion on the subject" is far too pale a description of why people do or don't do this. You need to be obsessed. You need to really care about the minutia of the subject and whether it's presented in exactly the right way. And you need to care about this in a forum with no professional prestige. You're really, truly doing it just for the sake of the thing itself.

I've long been convinced that this tendency toward obsession is one of the key differences between men and women. I don't know what causes it. I don't know if it helped primitive men kill more mastodons during the late Pleistocene. But it does seem to be real, and it doesn't seem to be something that's either culturally encouraged or discouraged in children of either gender. I just don't know. But I'll bet that an obsessive outlook on life is something that produces a lot of Wikipedia articles.

Covering Egypt

James Joyner — joining a cast of millions — complains that cable news coverage of Egypt has been terrible. If you want to know what's going on, you have to watch al-Jazeera. Then this:

It’s not exactly that private news channels can’t do a fantastic job. ABC, NBC, and CBS did so within my memory. And CNN did so even more recently. But they did so under quasi-monopoly conditions....But, with the proliferation of cable, Americans were increasingly choosing to watch something other than news: game shows, re-runs, SportsCenter, or whathaveyou.

With the incentive gone, news programming began to be viewed as an expense, and the networks largely did away with foreign coverage. Not only is it expensive to produce, but Americans generally don’t care about it unless there’s a crisis. But, since by definition we don’t know where crises will break out ahead of time, it’s cheaper to simply parachute in to cover them. And hard news began to soften, including more human interest stories and politics-as-sports coverage.

I've watched no news coverage of any kind for the past four days and therefore have no idea what network coverage has been like. But I think this deserves a bit of perspective that's independent of what these guys are doing. So here it is: what we're seeing is not the superiority of al-Jazeera in its approach to covering the news. What we're seeing is the fact that we're in the middle of an uprising in the Middle East and that happens to be something that al-Jazeera is very, very well situated to cover. Conversely, if I wanted news about the Super Bowl, I'd turn to ESPN. For news about the repeal of healthcare reform, CNN would probably be pretty good. For news about Jerry Brown's upcoming State of the State address in California, one of my local news stations would be best.

There's no question that American cable nets — along with virtually all of the rest of the American media — suck very badly at covering international news. I'd love to blame them for this state of affairs, but I think that's kind of unfair. The problem is that Americans have voted with their pocketbooks and announced in a loud and sustained voice that they don't really care about international news unless it happens to be either (a) a U.S. war or (b) some kind of disaster story like Haiti or the Chilean miners. Given that, it's hardly reasonable to expect CNN or Fox to run a money-hemorrhaging charity operation for those few of us who care about this stuff.

And I'll add one more thing: maybe, just maybe, up-to-the-nanosecond coverage isn't really all that important? If you're transfixed by this stuff, that's fine. No one begrudges it. But really, is there any compelling reason why a TV network should be broadcasting continuous coverage of something like this? If you don't find out for three or four hours that Hosni Mubarak replaced his cabinet, does it matter? And does following events on Twitter, where the signal-to-noise ratio is about 1%, really improve your understanding of what's happening?

I doubt it. But that still doesn't excuse the atrocious quality of analysis on the cable nets. Since I haven't watched it — except for a few minutes of Fox one morning in which they were obsessed with the Muslim Brotherhood — I can't say anything about it from personal experience. But I trust James when he says it's awful, and there's not much excuse for that. Giving Egypt a couple of hours a day instead of 24/7 treatment seems fine to me, but at the least, those couple of hours ought to be good stuff.

Egypt in Real Time

I've been away all weekend or else I would have mentioned this earlier, but Nick Baumann has been following the events in Egypt for the past several days and posting a continuous stream of updates and links to some of the best posts on the subject. You can see it here. Just start at the top and scroll down, or else go straight to the bottom to get the latest updates.

Friday Cat Blogging - 28 January 2011

On the left, Inkblot is giving himself a good chin smooch after spending a few minutes gazing in rapt concentration at a nearby hummingbird. He had obviously been hoping to sprout wings and fly over for a lunchtime snack, but when that didn't happen he decided to pretend nothing had happened and curl back up in the sunshine. (Current temp here: 71 degrees.) On the right, Domino has performed her post-dinner leap into the bookshelf. I have no idea why, but both cats go crazy for a few minutes after they get fed, and this is where Domino frequently ends up. A few minutes later, though, she was snoozing away.

Downgrading America

Karl Smith on the possibility that ratings agencies will downgrade U.S. debt from its current AAA rating:

I am [] willing to take 50 to 1 odds that President Obama doesn’t understand what a downgrading of US Treasuries would mean. He could probably trot out some line about investor confidence but what this actually meant and the significance or more to the point, lack thereof, he would not be able to explain cogently.

I can't speak for Obama, but I have a feeling that the significance would be: zero. Granted, there's symbolic importance to something like this, and on a substantive level there are certain funds that are legally prohibited from holding non-AAA debt. So fine: maybe not quite zero.

But U.S. debt is simply too big, too public, and too widely followed for ratings agencies to have much influence over it. Everyone knows what the problems with the American economy are, and no one thinks that the folks at Moody's or S&P know any more about it than anyone else. They just don't have any special expertise to offer here. A downgrade might provide an opportunity for some short-term arbitrage, but beyond that it's not clear if it would have any effect at all. It's the market that determines the price of U.S. debt, not the ratings agencies.

(The president couldn't actually say anything this cavalier, of course. He'd have to trot out some line about investor confidence and the long-term strength of the U.S. economy blah blah blah. Still, I think zero is more or less the actual correct answer.)

Is Corporate Tax Reform Still Possible?

The New York Times has a pretty good primer on corporate tax reform today, and it includes the chart on the right showing the different rates that various industries pay thanks to the tax breaks, subsidies, and loopholes that they've lobbied for over the years. Jon Chait comments:

Guess what? The interest of the companies benefiting from loopholes outweighs the interest of the companies that would like lower rates. If nothing else, loss aversion will drive the loophole beneficiaries to lobby harder than non-beneficiaries. My prediction: nothing happens.

He's probably right, and this is a profound demonstration of just how far right the Republican Party has moved over the past couple of decades and how much more power the business community has amassed. After all, as Bruce Bartlett reminds us today, the idea of lowering rates but eliminating loopholes in the corporate tax code managed to get bipartisan support as recently as 25 years ago during the administration of conservative hero Ronald Reagan. Today, though, it's a nonstarter:

Republicans claim they are for it, but they steadfastly refuse to name a single existing tax provision that is worth getting rid of; they are only for tax rate cuts and that is the sum total of their contribution to the tax reform debate....The other factor in Republicans’ thinking is just cynical politics....Grover Norquist, president of Americans for Tax Reform and the man who, more than anyone else, lays down the Republican line on all tax issues, told me this when I asked him about coming up with offsets to pay for tax reform: “I recommend taking the corporate rate to 25 percent. The Dems can suggest tax hikes if they believe they need to ‘make up’ revenue. That is a bipartisan division of labor.”

The political trap is obvious. Any actual reform that would increase revenue will be relentlessly attacked by Republicans as a tax increase and they will quickly send out fundraising letters to whatever group or industry is affected, requesting campaign donations to prevent the Democrats from raising their taxes. No mention will be made by Republicans of the idea that the reforms would be coupled with tax rate reductions in a revenue-neutral manner that neither raises nor lowers net tax revenue in the aggregate. Unfortunately, this strategy will doom any hope of tax reform. No Democrat is going to put forward any revenue-raisers under these circumstances.

I've always been cautious about taking any lessons from the passage of corporate tax reform in 1986. It was, in some ways, sui generis, a sort of miraculous bipartisan stand against corporate interests that's just very, very rare. And yet: it happened. Twenty-five years ago conservative Republicans were willing to team up with Democrats to do something that was good for the country, and neither side backed down because of either corporate pressure or an unwillingness to allow the other side a victory. It was, in a way, an existence proof that this kind of thing was once possible.

In theory, there's no reason it couldn't happen again. Democrats are probably willing to go along, and base broadening is, officially anyway, something that conservatives favor. But in real life, Republicans are less willing to work across the aisle these days and Democrats are far more responsive to corporate pressure than they were in the 80s — which is, I suppose, just a longwinded way of saying that American politics is broken and big business reigns supreme. But it's a very concrete way of saying it, and it lends itself to an almost quantitative assessment. The fate of corporate tax reform is sort of a bellwether for the state of our political system, and I suspect our system is so broken that it will die without even getting a serious hearing.

The GOP and the Tea Party

Kathleen Hennessey of the LA Times reports that with the election safely out of the way, Republican senators are none too eager to associate themselves with the tea party movement:

The first meeting of the Senate Tea Party Caucus on Thursday attracted just four senators — out of 47 GOP members — willing to describe themselves as members. The event was as notable for who wasn't there as who was. Sen. Marco Rubio (R-Fla.), once a tea party favorite, has for now declined to join the caucus, whose first meeting was organized by Sen. Rand Paul (R-Ky.). Sen. Ron Johnson, a Wisconsin Republican whose campaign sprung from the small-government movement, has said he's unsure if he'll join. Sen. Pat Toomey (R-Pa.) showed up to address the group of activists, but then hustled out of the room, ignoring reporters' questions about whether he was in or out.

Hennessey notes that there are institutional reasons that might explain some of this, but I suspect the real reason is simpler: it's one thing to be a tea partier in a congressional district, which might be small and ideologically extreme. But it's a lot harder to be one in a statewide office, where you have to appeal to a broader range of the electorate. As lots of analysts have noted, congressional districts have become more polarized over the past couple of decades — partly due to gerrymandering, partly due to geography, and partly due to people actively segregating themselves — and this provides fertile ground for hardcore activists on both sides. But it just doesn't scale up. Sarah Palin will never be president. Hell, Joe Miller couldn't even win a Senate seat with her backing. The tea party is having an impact, but it's mostly at the fringes and the leadership of the GOP will, eventually, swallow it up and spit it out. As I put it earlier this year:

As with the earlier incarnations [of right-wing extremism], its core identity will slowly fade away and become grist for CNN retrospectives, while its broader identity becomes subsumed by a Republican Party that's been headed down the path of ever less-tolerant conservatism for decades. In that sense, the tea party movement is merely an unusually flamboyant symptom of an illness that's been breeding for a long time.

That's already happening, I think.


This is probably obvious to everyone already, but just for the record: I don't have anything personally to add about events in Egypt, and I assume that you can follow the basic news from mainstream sources just fine without links from me. So I won't be posting much about this, even though it's plainly important stuff. If I run across some especially interesting commentary somewhere, I'll post about it, but that's about it.

My Problem With the Kindle

Last night I finally caved in and downloaded Tyler Cowen's e-booklet, "The Great Stagnation." I'll have a substantive review on Monday, but for now I'd like to whine a bit about the business model behind the thing.

Here it is: if you want to read TGS, you pay Amazon $4 and download it to your Kindle. The problem with this is that the Kindle sucks at rendering tables and charts. The screen cap on the right, for example, shows a chart from Tyler's book. As Kindle charts go, it's actually not too bad. But what's on the X-axis? It appears to start with 1455, and obviously the numbers go up. I get the idea. But the actual details are completely lost. Later in the book there's another table so badly rendered that I can't make it out at all.

In the case of "The Great Stagnation," this isn't too big a deal. I know what the chart above is getting at, and the table at the end is one I've seen before. But other nonfiction books don't fare so well. Gregory Clark's Farewell to Alms, for example, relies heavily on lots and lots of fairly complex charts and tables, and they're rendered so badly (unreadable graphs, table columns that don't line up, etc.) and placed so haphazardly that they made the book almost impossible to absorb properly. To this day, I'm not sure if my disagreements with his thesis are real, or mere artifacts of the fact that the e-version of the book was really hard to follow. In any case, that was the book that made me give up on the Kindle entirely for nonfiction. Until now.

I'd happily buy an iPad, or maybe even a bigger Kindle, if I thought that graphical elements would be properly rendered with a little more screen real estate. But I have a feeling they aren't, and I don't feel like examining nonfiction books closely before I buy them to see if they rely on graphical elements and should be purchased in paper form or are primarily text and can be safely read on the Kindle.

Besides, a pretty good business model already exists for pieces like Tyler's: sell it to a magazine. It's a little long, maybe, but I'll bet it could have been sweated down into a long magazine piece, especially since chapters 3 and 4 could profitably have been reduced to a few hundred words each. The advantages for Tyler would have been (a) great graphics designed by a pro and (b) a guaranteed wide audience. The advantages for me would have been (a) excellent readability and (b) I probably could have read it for free, increasing my consumer surplus by $4. This would have been a pareto-optimal state for all of us.

Anybody else have the same problem with the Kindle? Is the bigger version better? How about the iPad? I don't care about fiction. That already works fine. I just care about whether complex nonfiction renders nicely. What say ye, commentariat?

UPDATE: In case you're wondering how I got a screen cap of a Kindle book, I didn't. I just put the Kindle on my flatbed scanner and scanned the whole thing. Photoshop did the rest. I'm not really sure if there's a better way of doing it.