Sunday, October 26, 2008

Traditionally, statistical significance in conclusion A means 95% confidence in conclusion A. The frequentist interpretation of "95% confidence" is that if twenty studies respectively yield conclusions A, B, C, D,..., Q, R, S, T each with 95% confidence, then we expect exactly one of these conclusions to be wrong. (It doesn't matter whether these studies repeat the same experiment or are about completely different subjects.) With that in mind, Nate Silver at FiveThirtyEight currently projects Obama will win the electoral college with 95.7% confidence. Silver kindly offers McCain advice on optimizing his slim chance of winning. (1. Abandon Pennsylvania, Wisconsin, Minnesota, Iowa. 2. Attack New Hampshire and New Mexico. 3. Defend Colorado, Virginia, Nevada, Ohio and North Carolina. 4. Gamble on Florida, Missouri and Indiana.) However, Silver is confident McCain will lose, and so am I.

I'm not happy about this situation. I agree with Krauthammer's endorsement of McCain for foreign policy reasons, except I'm less sanguine about the economy than Krauthammer is. It is true that, "Today's economic crisis, like every other in our history, will in time pass." It's also true that in 1933, a rhetorically gifted President and copartisan supermajorities in congress were elected after an economic crisis. They then greatly expanded the size of government and inadvertently made the economy worse. I don't think things will be nearly that bad this time around, but I still would greatly prefer a divided government in 2009.

Thursday, October 23, 2008

Chinese free enterprise: the future or the past? (HT: Tyler Cowen.)
Mr Huang has gone far beyond the superficial data on gross domestic product (GDP) and foreign direct investment that satisfy most researchers. Instead, he has unearthed thousands of long-forgotten pages of memoranda and policy documents issued by bank chairmen, businessmen and state officials. In the process he has discovered two Chinas: one, from not so long ago, vibrant, entrepreneurial and rural; the other, today’s China, urban and controlled by the state.

Wednesday, October 22, 2008

Today I found a new source of amusement, Dr. Boli's Celebrated Magazine.
Word of the day: triboluminescence.

Monday, October 20, 2008

Razib's review of Red State, Blue State, Rich State, Poor State is interesting. For example:
In rich states, blue states, the rich are more secular than the poor. I doubt this will surprise many readers. But this might: in red states the rich are often more religious than the poor! In blue states the wealthy are more socially liberal than the poor, but somewhat more economically conservative. In other words, the wealthy in blue states tend to exhibit a libertarian lean. In red states the wealthy are at least, or more, socially conservative, and much more economically conservative. This is of course a natural explanation for why income matters much more in red states for partisan voting, but less so in blue states. Blue state elites have to balance their social values which are strongly Left with their economic interests. In red states elites have no such conundrum, their social and economic interests are naturally served by the Republican party, while the poor who may be socially conservative have powerful economic interests in the Democratic party.
In May 2008, Lomborg convened the second Copenhagen Consensus Center conference. This time eight leading economists, including five Nobelists, considered how to allocate a theoretical $75 billion during the next four years to solve 10 of the world's largest problems... The panel's top four solutions: providing vitamin A and zinc supplements to poor children, liberalizing trade, fortifying salt and staple foods with the micronutrients iodine and iron, and expanding childhood immunization. Cutting greenhouse gases came in at the bottom, although another approach to global warming—R&D spending on low-carbon energy technologies—was a mid-list priority.
Jeffrey Goldberg has a great story in The Atlantic about how he, with the help of Bruce Schnei­er, was not prevented by the TSA from using fake boarding passes or bringing sundry contraband onto planes. I'm always happy to see Schneier's critiques of "Security Theatre" get wider publicity.
Schnei­er and I walked to the security checkpoint. “Counter­terrorism in the airport is a show designed to make people feel better,” he said. “Only two things have made flying safer: the reinforcement of cockpit doors, and the fact that passengers know now to resist hijackers.” This assumes, of course, that al-Qaeda will target airplanes for hijacking, or target aviation at all. “We defend against what the terrorists did last week,” Schnei­er said. He believes that the country would be just as safe as it is today if airport security were rolled back to pre-9/11 levels. “Spend the rest of your money on intelligence, investigations, and emergency response.”

Thursday, October 16, 2008

Paul Krugman summarizes his Nobel Prize-winning work in a very understandable way.

Friday, October 10, 2008

Friday, October 03, 2008

Oh, if only our banks were nationalized, or at least more regulated, like in Europe. Then we'd never have gotten into this mess, right?

Via Arnold Kling I learn that:

We now know that it was French finance minister Christine Lagarde who begged Mr Paulson to save the US insurer AIG last week. AIG had written $300 billion in credit protection for European banks, admitting that it was for "regulatory capital relief rather than risk mitigation". In other words, it was underpinning a disguised extension of credit leverage. Its collapse would have set off a lending crunch across Europe as banking capital sank below water level.
Now look at this list of European banks with assets bigger than their nation's GDP. Tyler Cowen has more commentary, and a link to this story:
Europe moved to shore up more teetering banks Wednesday, as officials struggled to answer a basic question: How did their highly regulated banks, many of them state-owned, get suckered by the same speculative investments that have flattened Wall Street?

Thursday, October 02, 2008

Honor among thieves

The title of this post is the tentative title of the card game I developed last weekend. I tested it by playing it twice with my wife; we both thoroughly enjoyed it.

Wednesday, October 01, 2008

Tyler Cowen helpfully summarizes his views on the financial crisis.