Well, at least that’s settled

John Quiggin56 Comments

Looking back over the blog can be a bit dispiriting. Many of the arguments we are having now were being conducted, in much the same terms, back in 2002. There is, however, at least one exception, even if it’s a relatively minor one. When I started, I included a category “Mac and other computers”, planned to express my position as a member of the beleaguered but enthusiastic minority of Macintosh users.

I’m posting this in a Starbucks in Washington DC[1] and every customer in the store, including me obviously, is working on either a MacBook or an iPhone. That’s fairly typical of my recent experience, so I think I can safely say that this issue has been settled. Of course, now that Apple is no longer the underdog, there are plenty of reasons for concern about its corporate policies, but those are more related to issues like Intellectual “property”

So, this is the last post in the “Mac and other computers” category. If only I could say the same for “Boneheaded stupidity”.

fn1. Not the kind of place I’d ever go in Australia, but decent independent coffee shops are just about non-existent here.

Zombie Economics – the movie

John Quiggin35 Comments

When I signed the contract with Princeton UP for Zombie Economics, I read the section covering movie rights, and had fun chatting about which of my friends would be best suited to play Dynamic Stochastic General Equilibrium, Trickle Down (yes, yes, I know!) and so on. Then I found out that Freakonomics actually has been made into a movie, and of course, I wanted the same. But, even in the century of the mashup, it doesn’t seem likely that a polemical economics text could be made watchable just by adding zombies (though I thought the mash worked pretty well in print).

Instead, how about starting with a comic-horror zombie movie, then making the apocalyptic zombie-generating event a financial-economic crisis? That seemed much more promising, and I starting working out the treatment in my head. All was going well until I realized that I was stealing all my best ideas from Charlie Stross. I emailed Charlie, and he said to go right ahead, so I thought at least it would be fun for a blog post.

Over the fold some of the scenes I’ve sketched so far – feel free to make suggestions which I will then feel free to steal in the unlikely event that this goes any further.

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Water policy after the flood

John Quiggin202 Comments

There’s already some finger-pointing about the management of Brisbane’s dams in the weeks leading up to the flood. I don’t want to deal with that while the emergency continues, but I will make a couple of suggestions regarding future policy in Brisbane and elsewhere

* The historical statistics on the frequency of severe rainfall events (both droughts and floods) have proved to be of little value. Everywhere in Australia, we need to work on the assumption that extreme events will be more common in the future than they were in the (pre-2000) past.[1]

* As regards Wivenhoe Dam, we need a much more cautious approach to flood mitigation, going into wet seasons with a substantially larger reserve capacity. This in turn will reduce Wivenhoe’s usefulness as a water supply source, and buffer against drought.

* One response that is immediately available to us is to turn on the water recycling plant, built at great expense during the drought and never used. Current policy is to turn it on when average dam levels are at 40 per cent. This trigger should be raised significantly. As a very rough guide, it appears that when our dams are at 100 per cent of normal we currently have enough storage for four years supply. If instead we cut the maximum to three years supply (75 per cent0, we could (roughly) cancel the impact on supply by turning on the recycling plant at 65 per cent (40+25)

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Flooded

John Quiggin47 Comments

I’m still on the other side of the planet, but the news from Brisbane is bad and seems to be getting worse. Fortunately, my family and I are all out of harm’s way. Unfortunately, that’s meant we’ve suffered a fair bit of property damage, and won’t be able to do anything about it for some time. I’ll probably be off-air for a while. We’ve had some very successul appeals for help in relation to past disasters here, but I’m not in a position to run one this time. Feel free to use this thread for offers of help to those affected, and any useful insights. Please, no pointscoring or social/political debates – there will be time for that later on.

Economical arithmetic* — Crooked Timber

John Quiggin38 Comments

I’m at the American Economic Association meeting in Denver, and just attended a panel of the great and serious discussing the US budget deficit. The numbers are pretty impressive – on current projections, US government expenditure (properly measured) is likely to be around 25 per cent of national income (around 3 trillion/year) and the default budget deficit is around 10 per cent of national income. While current and former CBO directors went over the usual options, it struck me that I had seen those numbers before.

Roughly speaking, the share of US national income going to the top 1 per cent of the income distribution has risen from 15 to 25 per cent over the past decade, mostly because of the growth in size and profitability of the financial sector. As I’ve argued before, this payment to the top percentile can be seen as a kind of tax paid by the population as a whole for the benefits of living in the kind of economy that has developed over the past few decades of financialisation. (Please check irony alerts before responding!)

Clearly, any attempt to claw back some of this money to fill the budget hole would have what economists call “incentive effects”. More precisely, it would necessitate a big contraction of the financial sector. Judging by the reaction of the assembled experts when I raised this point (all declined to respond), this is literally unthinkable.

  • I’m alluding to Richard Feynmann’s joke that, in view of the size of budgets, we should talk about “economical” rather than “astronomical” numbers.
via crookedtimber.org

Posted via email from John’s posterous

The significance of agnotology

John Quiggin119 Comments

A year or so ago, there was a lot of fuss around the talking point, originating with Richard Lindzen of MIT that “There has been no statistically significant warming since 1995?”At the time, I observed that this meant nothing more than “given the variability in the data, we need at least 15 observations to reject the null hypothesis at 95 per cent confidence”. Thus, it was totally unwarranted to slide, as Lindzen and others did, from “no statistically significant warming” to “no significant warming” or even, in Lindzen’s case “warming has ceased for the past fourteen years”. Sad to say, most of the “sceptics” who profess to “make up their own mind” on the issues, are either too lazy or lack the mental equipment to learn the basic statistics needed to understand this point, and therefore unthinkingly repeated Lindzen’s claim. But, to anyone who understood the issues, it was obvious that a couple more observations in line with the observed warming of recent decades would be enough to bring the trend to statistical significance.

With 2010 over, we now have 16 observations starting in 1995, and (unsurprisingly to anyone who followed the argument thus far) the upward trend is now statistically significant at the 5 per cent level[1] That is, if climate change since 1995 (the time of the first IPCC report, and well after Lindzen announced himself as a sceptic) had been purely random, the odds against such an upward trend would be better than 20 to 1 against.

The obvious question is whether Lindzen will now concede that his claim, and the inference he drew from it, has been falsified, and that warming has not in fact ceased as he suggested. I’m willing to bet that what we see is evasion, obfuscation of or outright silence, not only from Lindzen, but from all of those who parroted his claim.

fn1. My estimates based on the Hadley data used by Lindzen gives an estimated trend of 0.012 degrees a year, with a t-value of 2.45.

300

John Quiggin153 Comments

Victoria suffered just under 300 deaths in road crashes in 2010. That’s a tragedy nearly every day, but it’s still a small fraction of the toll exacted by motor vehicles 40 years ago, when the road toll peaked at 1061 in 1970 (at at time when there were fewer people and many fewer cars). I couldn’t find a graph for Victoria but here is one for Australia as a whole, showing the same pattern with a slight lag as other states followed Victoria.

Anyone my age or older will remember that, after decades of accepting steadily increasing death rates as the price of mobility, Victorian governments of both political persuasions finally took the politically courageous step of enforcing higher safety standards – first seat belts and automative design rules, then effective techniques to catch and convict speeders and drink drivers, then helmet laws and more stringent license testing, among many others. Victoria’s interventions were eventually followed by other governments in Australia and elsewhere, but the lags are such that Victoria has gone from having some of the most dangerous roads in the world to having some of the safest. Nevertheless, and not surprisingly, these steps aroused plenty of opposition at the time, and the opponents were able to produce supposed experts to back their arguments.

What might seem more surprising is that even after four decades in which their claims have been refuted beyond any reasonable doubt, the same experts are still pushing the same discredited lines, and still finding a ready audience. With a closer look at the experts and their audience, this fact is perhaps less surprising, but still requires some explanation.

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Sandpit 300

John Quiggin31 Comments

This is a sandpit for people who want to
(a) argue about the efficacy of specific road safety interventions
(b) record their status as believers (with or without qualification) in the libertarian/conservative orthodoxy that climate change is a hoax/fraud/unsupported hypothesis.

I’d request no responses to those in category (b). They are, in my view, beyond help, and there are plenty of sites pointing out their errors if they want to look.