Mr. Burns Campaign Poster

Not exactly a lie,

... this article nevertheless makes an important point.  However, the point is quite complicated and basically unrelated to the headline.  Reminds me of about 98% of what I read.

The headline is:

'Nearly Half of American Children Living Near Poverty Line'

"Millions of children are living in families still struggling to make ends meet in our low-growth, low-wage economy":

That headline stuck me as kinda odd.  I know that while poverty in America is a completely real problem (eg. homelessness here in Seattle is very visible) it's certainly not "nearly half" of Americans who live in poverty.  So how could nearly half of the children be living near poverty when it's only around 15% of the overall population.  Do poor people have that many more kids?  What's going on here?  Tell me more!?

Sucka.  

So I click through.  The real point of the article turns out to be that the US does not have a very equal income distribution.  Shocker, I know.  Reading the actual findings of the study, you see that "near the poverty line" is actually defined as 200% of the poverty line.  Since the household poverty line is drawn at $24k, "near" it becomes any household making less than $48k.  Now, don't get me wrong, this is not a lot of money for a of household of 4 people.  However, since the median household income in the US is only $52k, "near the poverty line" has obviously now been defined in way that robs it of pretty much any meaning other than "below the median income".  

And the bit about children?  Well, I guess the main point becomes that children are people too! Because it turns out that roughly the same percentage of children are below the poverty line (21%) as adults (15%), And of course, since the Newspeak definition of "near the poverty line" is in fact "below median" you won't be surprised to discover that "nearly half" of the children are in below median income households.  Congratulations!  You know the definition of "median".

But that is not news, apparently.  

The Decline and Decline of Argentina

Another one from the massive tome I'm editing entitled: Economists Discover The Obvious 

What lessons do we draw? One may be tempted to portray the Argentine experience as the clearest case of post-1820 stagnation over a century – that is, of secular stagnation stricto sensu. One indeed may be tempted to derive as a main lesson that Argentina 'proves' that secular stagnation is a real possible outcome of any forthcoming 'lost decade(s)' in Europe (Crafts 2014.) Yet I do not believe that this is the main lesson. Instead it is one that economic historians already knew for a while (cf. Haber et al. 2007) but that has been, to a large extent, ignored by the rest of the profession – institutions do matter but among them, political institutions and financial institutions seem fulcral. We should try to do more to understand not only how these two sets of institutions individually affect growth but also how the manner in which they interact may ultimately shape economic development.

 

The post does have a nice graphic comparing the GDP per capita of Argentina to that of Western Europe and its (now former) colonies for the past 120 years.  Which and by the way, anyone with a rudimentary knowledge of economic history and some common sense can see that the "economic break" he's discussing happens in the mid-twenties.  The depression hit Argentina almost as hard as the US (it has always been a commodity exporter) but since they didn't enter WWII till about 5 minutes before the finale, they didn't get that wonderful Keynesian stimulus otherwise known as a war.  This explains the downward bump relative to the US from 36-45.  And then the upward bump relative to Europe that starts in about 1945 and lasts almost a decade is pretty obvious as well -- the Europeans blew themselves up (admittedly, they had some help from abroad).  Remove those data points, and the relative decline is basically a a straight line that starts in the mid-twenties.  QED.

Krugman was out with Don Cherry and Blue the Dog

I like Paul Krugman.  I think he is a force for good in the world.  While I have to admit that he's very predictable with his politics, and covers the same ground again and again, I still read his blog pretty religiously.  His views on macroeconomic issues have influenced me a lot over the past 6 years, mainly because he's tested a simple model that produces specific and non-obvious forecasts against real world data, in real time, over and over again, and been basically right.

However, he screwed the pooch with this anti-Amazon column.  

First, the column has no data, unless you count the one anecdotal conspiracy theory about how Amazon, a company that, mind you, just made an entire television series with a transgender star (try finding that shit on NBC), is secretly favoring Republican books.  

Second, the column makes one of the dumbest analogies of all time -- Standard Oil was a big powerful company, Amazon is a big powerful company, ergo, Amazon must be just like Standard Oil.  We can argue about the breakup of Standard Oil when we know a bit more about the company, but for now, just read the wikipedia description of their business on the eve of the breakup.  Aside from being big, it has essentially no commonality with Amazon and is just there to scare you.  He might as well be saying "big companies are evil".  That's clearly the feeling these days (unless the company named after a fruit), and maybe it's even correct in many ways, but it hardly constitutes an argument.  Trying convincing me that big companies are evil because ... rather than just asserting that big is bad and suggesting that we should ...

Third ... well ... actually, what the fuck should we do about Amazon's evilness?  The absolute worst part of this column is that it doesn't even have the glimmer of a suggestion for a remedy.  Should we just pay publishers more and maybe set a minimum book price?  Should we break Amazon up into 34 companies?  

There are all kinds of interesting questions that come up when you think about the winner-take-al economics of zero-marginal cost products.  Questions about business practices, macroeconomics, politics, etc ... This column doesn't deal with any of them in any substantive way.  At all.  

Bonus:  Don Cherry skit that inspired the title

https://www.youtube.com/watch?v=zl7PwY7RXMU

Down the Line!

http://www.downthelinetennis.com/?m=1

Rory Sutherland Is Making Me Laugh

Some stuff I found in his Twitter feed after listening to his Edge conversation.

Real actors reading Yelp:

https://www.youtube.com/watch?v=7D4WxokJJGc

Romantic pictures from Russian dating sites:

http://www.eatliver.com/russian-dating/

The Pattern on the Stone

Daniel Hillis has done a lot of cool AI stuff, so I picked up his book about how computers work used off Amazon.  Definitely worth $0.01 plus shipping, but not exactly a revelation if you've done any prior reading or thinking about the topic.

The book does a pretty good and pretty substantial job of explaining how a modern computer works from the ground up.  I say "substantial" because Hillis really lingers on some of the very basic building blocks of the physical implementation of Boolean algebra and the construction of a finite state machine, so that by the time you get to him saying that a computer is a finite state machine hooked up to a memory and coupled to some inputs and outputs, these words will all  end up meaning something concrete to you if they did not at the beginning.  

If those words all mean something to you already, you might consider skipping the book.   Though I can't say I learned a ton, I still think I cemented a few concepts like machine language that were a little nebulous before, and the book is well-written and a quick read, hence enjoyable.