Bang for the buck

In the course of this post about a recent change in how state universities in Texas admit students, Matthew Yglesias states:

... The marginal dollar of either the taxpayer or the charitable donor will do a lot more for society when spent on people who aren't already the best students.

It is hard to understand how anyone could actually believe this. Since good students learn new material faster and easier (and retain it longer) it is cheaper (and therefore more cost effective) to raise them to any given level of proficiency. Society would not be better off if the dumb students went to college and the dumbest went on to graduate school.

Liberals are free to argue for equality over efficiency but they should not make silly claims in the process.

Performance parking

Matthew Yglesias here argues for pricing public parking to match demand. There is certainly something to be said for this but Yglesias weakens his case with this:

... When you price street parking properly—which is to say a price that’s high enough so that there’s almost always a space or two free on every block, but low enough so that there’s not more than a space or two free on any given block ...

This sounds good but is just not practical, there is no way the pricing would be that attuned to demand.

Disparate impact

With Sonia Sotomayor's nomination to the US Supreme Court liberals have been defending her Circuit Court of Appeals vote in the Ricci case . For example this Slate article by a Stanford law professor, Richard Thompson Ford. Bearing in mind that I am not a lawyer I nonetheless believe this article is disingenuous at best. Ford states:

... the city rejected the firefighter exam because the test violated Title VII, ...

Actually whether the test violated Title 7 is at issue with the city claiming it feared that it did. Ford later states:

... An employer can also discriminate by using a selection process that has a disparate impact—in other words, that screens out a particular group for no good reason. ...

This is just wrong. A test has a disparate impact if it screens out a particular group more than other groups. It is nonetheless legal if it does so for a good (job related) reason. This might seem a subtle distinction but it appears to me that Ford (like some other liberals) is trying to obscure that for the test to be illegal it must have a disparate impact and it must also be unrelated to job performance. The second point has not been established and flat statements that the test was illegal are misleading.

See here for a summary of disparate impact law.

Dishwashers

Among the many things I would rather not spend a lot of time thinking about are dishwashers. Unfortunately I was just forced to do some when my dishwasher stopped working. Since it was quite old replacement seemed more sensible than trying to get it repaired. I will sometimes drive other people nuts by vacillating for weeks about purchases but in this case I made a reasonably quick decision to go with a model similar to a Consumer Reports best buy. It will be delivered next week and hopefully will demonstrate that dishwasher technology has advanced over the last 25 years.

Tax refunds

I got my state and federal tax refunds yesterday. It appears that in additional to failing to sign my state income tax return, I copied one of the numbers wrong when preparing the final version from a draft. As a result New York State thought I had made an arithmetic mistake and reduced my refund accordingly. Fortunately this was not too difficult to correct. I had to spend 20+ minutes on hold with the New York tax department but they were then able to fix the problem without requiring me to submit an amended return. So part of my refund will be delayed a bit. Hopefully this just means I was bit tired when I finished the state return and is not further evidence of impending senility.

Yale 2009

I am back from attending the Yale 2009 commencement. This involved four separate events spread over two days.

Christopher Buckley gave the class day address on Sunday. He had some good lines such as pointing out that while the first black President, Obama, is a Harvard man his election probably would not have been possible without the efforts of George W. Bush, a Yalie. The rest of the class day exercises were less interesting, particularly the awards to Yale professors which seemed a bit too self promotional.

The picture shows Hilary Clinton receiving a honorary degree on Monday morning as part of the Commencement ceremony. Although the picture is of a TV screen set up for those of us in the back I did in fact see her albeit at a distance (she was actually off the picture to the right). She is perhaps the most famous person I have ever seen in person. The rest of the morning event was less noteworthy and the actual diplomas were not handed out until later in separate ceremonies for the individual colleges like Calhoun.

While I am glad I attended, other colleges manage things in a more expeditious way which is easier on the friends and family. And Yale came across as rather smug, I heard a few too many references to the great value of a Yale education.

Things could have been worse. When parking my car on Monday morning I was not warned that the parking garage would close at 9 pm. I had dinner and didn't make it back to the car until about 9:20 and just barely averted finding it locked in.

Yale Commencement

I will be attending the Yale Commencement this weekend so blogging will be suspended until I return.

Bad reporter

I recently saw this AP story in my local paper. It starts out:

The 40-story skyscraper sits on a prime corner in the country's wealthiest commercial market, steps from the Museum of Modern Art and a few blocks from Rockefeller Center and Central Park.

It recently sold for $100,000.

The commercial real estate market is currently not in the best of health but it surely isn't this bad is it? Is the building full of asbestos or something? Not until much deeper in the story do we learn:

... Otera took over the loan and the tower's $240 million mortgage. ...

So the real sales price was $240.1 million. This is a big drop from the $498 million 2006 sales price but not the total wipe out a $.1 million sales price would imply.

This is just terrible reporting.

High speed rail

As I am afraid of flying I have taken long distance Amtrak passenger trains on several occasions. You might think then I would be sympathetic to the administration's plans for high speed passenger rail . However I am not. Amtrak is already highly subsidized without being particularly competitive for people who aren't afraid of flying. I doubt additional spending will increase volume much which means it would fail any reasonable cost benefit analysis. It is a bit distressing how disconnected these sorts of spending decisions are from any rational evaluation of technical merit.

Livermore windmills

Although I was born in Boston I think of Livermore California as my home town as my parents moved there when I was 3 and I lived there until I left for college.

One of the things Livermore is known for is the Altamont Pass Wind Farm which is in the hills just to the east. The windmills are quite visible from I580 as it traverses Altamont pass. They were constructed around 1980 which is after I had left but I would see them when returning home to visit.

This windfarm was a pioneer and encountered a number of problems. The tax credits that subsidized construction were based on capacity rather than actual power generated. Perhaps as a result many of the early wind turbines soon broke down and were not repaired. The resulting derelict windmills were quite noticeable and did not help wind power's image. It was also found that the windfarm was responsible for a large number of bird kills. In part this was because of the location but also because of the older turbine designs with small fast blades passing near the ground. It is believed more recent designs featuring larger slower blades higher off the ground are less dangerous to birds. The newer designs are also more efficient and are gradually replacing the original turbines. Wind power in general has been growing rapidly in recent years.

The picture was taken in July 2002 looking northeast from Patterson pass (which is on a back road a bit south of I580).

Credit cards

It appears a law imposing new regulations on credit card issuers will be passed soon. I generally approve of restraining businesses (and others) from taking advantage of idiots as long as this can be done without imposing excessive costs on sensible people. Being sensible I pay my credit card balance in full every month. The new law doesn't appear likely to raise my costs significantly so is unobjectionable in that sense. On the other hand I don't think it actually does all that much to protect idiots from themselves. That would require more significant and controversial measures like interest rate limits, higher minimum payments and the like.

About to expire

I was glad to see that the government is finally cracking down on the obnoxious "your car warranty is about to expire" robocalls. I seemed to get at least one a week. These sorts of calls didn't bother me too much when I was working as I was rarely around to receive them but now that I am at home more they have become more irritating. Perhaps I should sign up for the "do not call" registry although that apparently did no good with the car warranty calls.

Curiously my senior Senator, Schumer, was just complaining about these very calls. One suspects he knew the FTC action was imminent.

Counting calories

My local paper reports that a law took effect in Westchester last week requiring chain restaurants to include calorie counts on menus. The idea apparently is the law will induce fat people to eat less and lose weight. I don't think this is very likely.

On the other hand the law will help people like me who see food as fuel get the best deal for our dollars. Although the law doesn't appear to apply to the restaurants I patronize most as they aren't chains.

Out of sync

As noted here I signed up for basic cable this year but have not been watching it much. One reason is most of the Met's and Yankee's games are on premium cable. However today's Met's game was on Fox so I watched part of it. I had started listening to the game on the radio before I thought to check whether it was on TV. When I turned on the TV I noticed the radio was about 6 seconds ahead of the TV broadcast so the radio would describe every play before it happened on TV. This is kind of annoying if you would rather listen to the radio announcers. Apparently this is common enough that there is a product which will delay the radio broadcast to match.

There seem to be two theories for why the delay exists. One theory is that the TV signal is delayed so "indecency" can be bleeped lest the network be fined by the FCC. The other theory is the reason is technical, the digital TV signal gets compressed and decompressed, routed through satellites etc. delaying it relative to the radio broadcast. The game was on two cable channels one analog, one digital but I didn't think to check if the delay was the same.

Croton Landing Park

The local paper had an article Thursday about a ribbon cutting ceremony Wednesday for an enlarged Croton Landing Park (pdf file) . This was a little strange as there had already been an opening ceremony last October.

Croton Landing Park extends for about 1/2 mile between the Hudson and the Hudson line railroad tracks. It is part of a planned Hudson walkway from Peekskill to Yonkers. The parking lot is at the south end of the park. It takes me about 10 minutes to walk along the Hudson to the north end which is a bit shorter than I prefer for a walk. I took the picture today looking south across Half Moon Bay. The buildings in the center are condos. Senasqua Park is to the left and Croton Point Park sticks out into the Hudson to the right.

Cash flow

As noted here I had my heating system repaired Monday. I got the bill today considerably faster than my previous experience with this business. So I am tempted to speculate about the reason. Is business slow leading to no backlog of invoices to prepare and mail? Or is business slow requiring more attention to be paid to cash flow? And if business is slow is this because of the economy or because of seasonal factors? Or maybe they just have a more organized person doing the billing. I guess one data point doesn't really prove much.

State inspection

I bought a car last May. New York requires a safety and emissions inspection every year which means I was due. I had it done today. It passed but the mechanic recommended replacing the transmission and brake fluid. I suppose I will have this done but it bothers me a bit that I have no idea whether it is really needed.

The car is a 2004 Toyota Solara. Like every car I have ever owned it has more than 100000 miles on it. This is because I am a cheapskate. This has some advantages but I overdo it. My previous car, a 1986 Toyota Celica, was in pretty bad shape when I belatedly replaced it.

The picture was taken last October. The car is parked on Quaker Bridge road with the Old Croton Aqueduct trail in the background.

Oregon Inlet Life Saving Station

On my most recent vacation trip to the Outer Banks I was intrigued by an old abandoned building which turned out to be the Oregon Inlet Life Saving Station . The station was abandoned in 1988 and as of 2008 there are plans to restore it. The photo was taken in March 2000. The Oregon Inlet bridge is visible in the background.

Cold water flat

So I am about to take a shower and the water starts heating up so I get in. The water stops heating up. Eventually I figure out something is wrong. Checking in my garage reveals the heat off for no obvious reason. Fortunately this is apparently slow season for heating repairmen. So the system is fixed already. The repair looked simple so hopefully it won't cost too much. If only all my problems were as easily solved.

Wealth and bubbles

Benjamin M. Friedman (who really should know better) said in the New York Review of Books (via Matthew Yglesias ):

Another fundamental issue that the current discussion has overlooked almost entirely is the distinction between the losses to banks and other lenders that reflect genuine losses of wealth to the economy, and other losses that don't. When the value of your house falls, that's a loss of wealth to the economy as a whole. If you keep paying your mortgage, you bear the loss yourself: your net worth is diminished by the amount of the decline in the home's price. ...

This is dangerously wrong. The increase of house prices in a bubble does not represent a genuine gain of wealth to the economy as a whole and the decrease in prices when the bubble pops does not reflect a genuine loss of wealth to the economy as a whole. If you sell your house at an inflated price then you gain wealth and the person who buys the house loses wealth. The gain and loss offset but bubbles are in fact bad overall because the mispricing causes misallocation of resources such as building too many houses. This misallocation does represent a real loss of potential wealth. So artificially propping up housing prices won't prevent a loss of wealth to the economy as a whole instead it will encourage further misallocation of resources thereby decreasing future wealth.

Allergy season

Various trees, bushes and flowers have been blooming for several weeks without bothering me. However over the last couple of days there seems to have been something in the air that I am allergic too. It would be interesting to know what it is. And it would be nice if whatever it is would go away.

Performance enhancing drugs

Performance enhancing drugs are in the news again. My view is professional athletes should be allowed to take anything the team doctor is willing to prescribe with all usage publicly reported. Professional athletes are well paid and the reporting requirement should act to limit abuse. It is my understanding that experimental operations for sports injuries have ended up improving care for everybody, I don't see why this wouldn't also be true for experimental use of drugs.

Filing cabinets

My condo has been messier than usual since I got laid off since lots of files from my office are now piled in my living room. So last Saturday I ordered some file cabinets which were on sale at Office Max. They arrived today. This should eventually improve things but at the moment they are just adding to the clutter.

Niagara Falls

I visited Niagara Falls in May of 1992 spending a night in a motel in Canada, one of the few times I have been outside the US. They are worth seeing. On the American side there are pedestrian bridges out to islands in the river from which you can see the Falls from the top. The Canadian side provides more front on views. The picture was taken from the Canadian side and shows American and Bridal Veil Falls. Bridal Veil is the small fall to the right. The picture was taken with a Kodak 110 camera. It seems to have faded a bit but I always had trouble getting good pictures with that camera. I got a 35mm camera a bit later which was better and recently a digital camera which is better still.

Using ie and eg

I was surprised to discover today that I have been incorrectly using ie where eg is correct. It seems ie is the Latin initials of "that is" and should be used to clarify a reference to a specific thing while eg is the Latin initials of "for example" and should be used when giving an example of something. I think I knew eg meant for example but I mostly used ie which I thought could be used in either way. A little disconcerting to find out you have been making a mistake for practically your entire life.

I blame my parents.

Cobra subsidy

The recent economic stimulus package provides some subsidies for Cobra coverage . I recently received a letter from my former employer about this. However I don't appear to benefit. As previously noted my former employer was already picking up the cost for medical insurance under Cobra for a year so the 65% subsidy for nine months doesn't help there. My former employer was not subsidizing dental insurance under Cobra so I would get a small benefit except for the fact that I will probably be over the income limit (for singles the subsidy phases out between 125k and 145k) and have to repay the subsidy on my 2009 taxes. Nor do I benefit from the second opportunity provided to elect Cobra coverage. I would have benefited more by the proposals to extend the 18 month Cobra limit but these were removed from the final bill. I can't complain too much as I have less need than most of the recently unemployed.

Rainy day blues

Another common problem with the weather here is a lack of sunshine. Today for instance was dreary, gray and rainy. Not weather I find congenial. Perhaps I should consider moving somewhere with a nicer climate. But inertia is powerful in my case, I am not big on new things.

Chrysler

The administration's support for a reorganization plan for Chrysler that only pays senior creditors 30 cents on the dollar has provoked a certain amount of ranting from the right:

Which brings us to the real question, which is, when did it become the government's job to intervene in the bankruptcy process to move junior creditors who belong to favored political constituencies to the front of the line? Leave aside the moral point that these people lent money under a given set of rules, and now the government wants to intervene in our extremely well-functioning (and generous) bankruptcy regime solely in order to save a favored Democratic interest group.

I find it unconvincing. Without government assistance Chrysler would be liquidated. The government can favor junior creditors with its assistance as long as the senior creditors are left no worse off than they would be with liquidation. If there is a plausible case that the senior creditors could expect to get substantially more than 30 cents on the dollar from liquidation I would like to see it. Otherwise it appears to me they are just trying to use their power to obstruct things to extract a higher price from a government which is reluctant to let Chrysler be liquidated.

On the other hand the administration's claims that the junior creditors have made sacrifices that the senior creditors should share are also unconvincing. The junior creditors aren't sacrificing anything relative to what they would get in liquidation if the government walked away which is nothing. So this is not a reason for the senior creditors to accept less than liquidation value.

Risk

Brad DeLong thinks:

... The problem is that among financiers everywhere, the tolerance for holding risk has collapsed. ...

Felix Salmon thinks:

Common sense says that you can’t start lending money to very risky borrowers without taking on lots of credit risk – but somehow, by the time the loans made their way through the system, almost nobody thought that they were taking on credit risk ...

I agree with Salmon, there never was any great tolerance for risk instead people were fooled into buying risk they didn't expect or want. So any plan for recovery which depends on credit markets returning to normal where normal means being able to represent risky loans as safe is wrongheaded. This may mean some businesses are no longer viable which is too bad but you can't build a sound economy based on lies.