Milestone

Today I put on a tie for the first time in more than a year. It took me a bit to remember how to tie the damned thing.

We attended the baptism of the child of some dear friends of ours.

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Unforeseen Secondary Effects

2035 is a long time away. Who knows what will have happened by then? But bear with me on this. Imagine that California’s executive order banning the sale of new vehicles with internal combustion engines were to become effective immediately and were to withstand the inevitable challenges in the courts. Which of the following would happen and to what degree?

  1. Californians would buy a lot more electric vehicles.
  2. The price of used cars would rise sharply due to increased consumer demand.
  3. The price of used cars would rise sharply due to increased speculation.
  4. It might actually become more worthwhile to leave stolen cars intact rather than breaking them up for parts.
  5. A lot of car dealers would set up shop in adjoining states just across the California state line.
  6. I think the likelihood from most likely to least likely would be B, C, E, A, D. What do you think?

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Cognitive Dissonance

Speaking of coherence, I urge you to read Tyler Cowen’s brief post at Marginal Revolution on “the inflation trilemma”. It’s terse and I suspect it explains a lot of the economic thinking of the Biden Administration.

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Why I Don’t Comment on the News of the Day

Judging by this morning’s “talking heads” programs the biggest news stories of the day have been Liz Cheney’s loss of leadership status in the Republican Party and the missile exchanges between the Israelis and the Palestinians. I haven’t commented on either and I thought I’d explain why. Let’s start with the exchange between the Israelis and the Palestinians.

I don’t think that the IDF should have gone into the Al Aqsa mosque and taken down its PA system, I don’t think the Palestinians should be firing missiles at the Israelis, and I don’t think that the Israelis should be bombing the Palestinians. What I think doesn’t change anything and will convince no one. It astonishes me what claptrap the narrative of the Israelis as western colonizing oppressors is. The grandparents of the majority of present Jewish Israelis were Jews driven from Egypt, Iraq, Iran, and other North African and Middle Eastern countries in the 1940s. Most of their grandparents were not European Jews. Ashkenazic Jews comprise about a third of present Israelis. Said another way today’s israelis are as Middle Eastern as the Palestinians.

I am also wary of the U. S.’s cultivating a cozy relationship with any nationalistic theocracy whether it’s Israel, Saudi Arabia, or, increasingly, India. I just don’t think that’s compatible with American notions of human rights. All of those views taken together are enough to make just about anybody dislike me. Why dwell on it?

Onwards to the Republicans. I live in Chicago in Cook County in the state of Illinois. All of those are run by Democrats. The president of the U. S. is a Democrat and both houses of Congress are presently run, tenuously, by Democrats. What Republicans do or do not do has next to no effect on my daily life but what Democrats do touches my life every single day. I wish the news media were a lot more concerned about honesty, decency, and coherence among Democrats than they seem to be.

And that’s why I haven’t commented on the two biggest news stories of the day.

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The Measure of Man

If you don’t know the names of Bertillon or Lombroso, you will by the time you’ve finished reading this article at the MIT Press Reader by Jessica Helfand about anthropometrics. Here’s a snippet:

The pursuit of human metrics has a rich and fascinating history, dating back to the ancient Greeks, who viewed proportion itself as a physical projection of the harmony of the universe. Idealized proportion was synonymous with beauty, a physical expression of divine benevolence. (“The good, of course, is always beautiful,” wrote Plato, “and the beautiful never lacks proportion.”) From Dürer to da Vinci, the notion that humans might aspire to a pure and balanced ideal would find expression in everything from the writings of Vitruvius to the gardens of Le Nôtre to the evolution of the humanist alphabet. To the degree that proportion itself was deemed closer to the divine when realized as an expression of balance and geometry, proportion had everything to do with mathematics in general (and the golden section in particular) and found its most profound expression in the realization of the human form.

The author glosses over some of the darkest chapters in anthropometry which have largely resulted in the field becoming just shy of taboo. All I can add is a question. How can you really know whether something is real or not unless you measure it? A priori? Article of faith?

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How Is It Transmitted?

I want to commend this article at Wired about an early and widespread misconception about COVID-19 to your attention. Here’s a snippet that contains the meat of the piece:

According to the medical canon, nearly all respiratory infections transmit through coughs or sneezes: Whenever a sick person hacks, bacteria and viruses spray out like bullets from a gun, quickly falling and sticking to any surface within a blast radius of 3 to 6 feet. If these droplets alight on a nose or mouth (or on a hand that then touches the face), they can cause an infection. Only a few diseases were thought to break this droplet rule. Measles and tuberculosis transmit a different way; they’re described as “airborne.” Those pathogens travel inside aerosols, microscopic particles that can stay suspended for hours and travel longer distances. They can spread when contagious people simply breathe.

The distinction between droplet and airborne transmission has enormous consequences. To combat droplets, a leading precaution is to wash hands frequently with soap and water. To fight infectious aerosols, the air itself is the enemy. In hospitals, that means expensive isolation wards and N95 masks for all medical staff.

The books Marr flipped through drew the line between droplets and aerosols at 5 microns. A micron is a unit of measurement equal to one-millionth of a meter. By this definition, any infectious particle smaller than 5 microns in diameter is an aerosol; anything bigger is a droplet. The more she looked, the more she found that number. The WHO and the US Centers for Disease Control and Prevention also listed 5 microns as the fulcrum on which the droplet-aerosol dichotomy toggled.

There was just one literally tiny problem: “The physics of it is all wrong,” Marr says. That much seemed obvious to her from everything she knew about how things move through air. Reality is far messier, with particles much larger than 5 microns staying afloat and behaving like aerosols, depending on heat, humidity, and airspeed. “I’d see the wrong number over and over again, and I just found that disturbing,” she says. The error meant that the medical community had a distorted picture of how people might get sick.

I recommend reading the whole thing. The balance of the article is a detective story. Where did the 5 micron theory originate? It has just about every aspect of a good detective story short of assembling all the suspects in a living room to explain the crime.

It’s also a story about how medical guidance is arrived at. Spoiler: it isn’t necessarily all about the science. And how you go about changing the hive mind of a health care bureaucracy.

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Downgrade

This post is for those of you who think that technology always advances. It ain’t necessarily so. I’m in a bit of a quandary. Back in 2014 I purchased an 8.9″ Kindle Fire HDX. I selected it after looking at all of the competitors at the time—it was obviously the best. It has served me well over thousands of miles of travel in a dozen countries.

Recently, it has developed a problem which I have learned is called “ghost touch”. The screen is not responding properly to touch inputs and the device is essentially unusable. I have three alternatives:

  • Replace the screen myself.
  • Find someone to replace it for me.
  • Buy a new device.

The problem I face is that there doesn’t appear to be any tablet on the market today that has as good a resolution as my old Kindle. They all look pixellated (blocky) by comparison. What I have is slow, it doesn’t have a lot of memory, it can’t run present-day Android apps, and it’s not upgradeable but it’s still a better device that the prospective replacements.

This is not the first time that I’ve had the experience of modern technology actually being worse than old technology. The most recent time was 20 years ago. My old home wireless network was actually faster and more reliable than anything on the market even today. And that wasn’t even the first time I had that experience.

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Contrasting Views

I didn’t want to let these two sharply contrasting views on inflation pass by without comment. In the Wall Street Journal James Freeman remarks:

Inflation is surging as Washington prints and spends money at historic levels. Meanwhile Covid-related policies are still making it hard for businesses to staff up and increase production. A former Trump economic adviser isn’t the only one concerned that too much money chasing too few goods may be more than a temporary problem.

The former Trump adviser, Kevin Hassett, served as chairman of the White House Council of Economic Advisers. Now he’s outside government and watching the feds shovel cash to consumers while making life more difficult for producers. Today Mr. Hassett writes via email that “the Biden Administration is providing the biggest positive stimulus to demand since WWII, and at the same time doing everything it can to suppress supply. Higher [unemployment insurance] benefits, closed schools (which keep one parent at home), and promised corporate tax hikes practically guarantee that supply can not keep up with demand. It is a recipe for an inflation shock we have not seen in the U.S. in a generation.”

It’s not just the Biden administration’s reckless fiscal policy at issue. On the monetary side of the Beltway swamp, the Federal Reserve continues to maintain emergency easy-money policies even though the U.S. economy has been rebounding since last summer. And all of the money the Fed has created is not just showing up in markets for virtual coins and actual beach houses. Some Fed officials have dismissed general inflation as merely “transitory” following the pandemic. The Journal’s Gwynn Guilford reports today:

Consumer prices surged in April by the most in any 12-month period since 2008 as the recovery picked up, reflecting both rising demand as the Covid-19 pandemic eases and supply bottlenecks.
The Labor Department reported its consumer-price index jumped 4.2% in April from a year earlier, up from 2.6% for the year ended in March. Consumer prices increased a seasonally adjusted 0.8% in April from March…
U.S. stocks fell and government bond yields rose after the inflation data was released. Investors are concerned that rising prices could prompt the Federal Reserve to move on interest rates sooner than expected.

while Paul Krugman expresses no concern in his latest New York Times column:

Over the past 12 months core inflation was 3 percent, not too far short of the headline number, and in the month of April alone core inflation was slightly higher than the overall inflation.

But a number of economists, myself included, have been arguing for a while that price changes over the course of the next few months will probably be bloated by temporary factors that conventional measures of core inflation won’t control for. A month ago I warned that “we’re going to have a weird recovery,” with an “unusual set of bottlenecks” causing “a lot of price blips outside food and energy.”

Sure enough, those April price numbers were driven to a large extent by peculiar factors obviously related to the economy’s restart. When people talk about underlying inflation, they rarely have the price of used cars in mind; yet a 10 percent monthly rise in used car prices — partly because people are ready to travel again, partly because a shortage of computer chips is crimping new-car production — accounted for a third of April’s inflation. There was also a 7.6 percent rise in the price of “lodging away from home,” as Americans resumed going places amid a waning pandemic.

And then there were “base effects”: A year ago many prices were depressed because much of the country was in lockdown, so that simply getting back to normal was bound to show up as a temporary rise in inflation. White House estimates that correct for these effects show considerably tamer inflation.

These arguments for discounting short-term inflation numbers aren’t after-the-fact excuses. I wrote about bottlenecks and blips a month ago; White House economists warned about misleading base effects around the same time. What we’re seeing is what we expected to see, just a bit more so.

There’s an old wisecrack that one measurement is a point, two are a line, and three are a trend but that doesn’t reflect modern management best practice. Any substantial deviation from the expected or the norm is worthy of formulating a mitigation plan to address. So, what are we seeing today?

and there’s a substantial difference between now and 2008. Since 2008 we’ve had four consecutive administrations, Republican and Democratic, which have added sharply to the debt:


Contrary to what some people seem to believe there is strong empirical evidence that increased public debt suppresses economic growth. What has been learned over the last decade is that there’s not a “cliff” at 100% of GDP but the basic claim of a relationship between debt and growth has not been refuted. Translation: the very size of the debt that the Bush, Obama, Trump, and Biden Administrations have imposed on us will make it very, very difficult to grow our way out of whatever problems present policy is creating.

Which brings me to my basic point. Foreign investors as I have previously documented are already nervous. I want to know what the Biden Adminsitration’s mitigation strategy is for the dollar’s losing its reserve status or a catastrophic loss of confidence in the dollar. Don’t tell me the odds. Tell me the strategy.

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The Decennial Question

Every ten years the same question comes up. Is an estimation the same thing as an enumeration? The latest incarnation of the question is in Adam Korzeniewski’s post at The American Mind:

Contrary to its image in the mainstream media, the Census does not behave like a studiously nonpartisan agency. Many of those in leadership made their negative opinions of former president Trump clear. Historically, Census Apportionment numbers appear to favor liberal, blue states over conservative, red states in the final rounds of representative allocations. This likely stems from the use of “hot-deck imputation,” a controversial method where the Census will use a nearest, most similar neighbor to impute the characteristic, population, etc., of a household who does not fill out the Census or respond to enumeration attempts. A more radical method called “count imputation” creates a whole person at an unresponsive household. These are persons without available Federal or state records. In Utah v. Evans, 536 U.S. 452 (2002), the Supreme Court left imputation to the Secretary of Commerce’s discretion because, in the majority view, it does not constitute statistical sampling, prohibited in 13 U.S.C. §195. It can be argued that hot-deck imputation favors more liberal states over more conservative ones, more urban states over more rural states. Specifically, it favors states that have areas of low response rates to the Census.

The Census justifies count imputation methodology through comparison to existing, known datasets. But this is an information asymmetry. Epistemologically speaking, you cannot compare an unknown unknown to a known unknown variable by simply randomizing a sample of known quantities. The quality of these households overwhelmingly self-responding to the Census, or responding to Census Enumerators (workers), makes these households sufficiently distinct from nonresponsive households with zero records. While imputing missing demographic characteristics makes sense, adding entire people does not. In 2000, the Census Bureau imputed 1,172,144 people and in 2010, 1,163,462.

After field data collection, the Census begins data processing. This phase showed a discrepancy of tens of thousands of persons in particular Northeastern states, primarily centered around “Group Quarters,” a special kind of residence that the occupants don’t normally rent or own, and where they usually receive a service, such as a nursing home or university. Normally, these are enumerated separately by specialists trained to handle their unique circumstances. But these facilities were difficult to access in 2020 because of the pandemic-related lockdowns.

Given the complications, the Census decided to apply “Group Quarters Imputation,” a process that was never brought to the states to give input on, nor practiced in the 2020 Decennial Testing Phases. This process created hypothetical persons missing in the data, but it is not an imputation method by definition. This “Group Quarters Imputation” used a linear regression analysis based off estimates from the Group Quarters themselves, yielding a ratio by which Census analysts would impute the population of each facility. The use of the term “imputation” in this case is egregious. It constitutes statistical sampling, which is forbidden by law for Census enumeration. This method also heavily favors the Northeast because of the density of college campuses in that region and the fact that the lockdown was the most severe there during the Decennial Census.

Article I, Section 2 of the U. S. constitutions says:

Representatives and direct Taxes shall be apportioned among the several States… according to their respective Numbers… . The actual Enumeration shall be made within three years after the first meeting of the Congress of the United States, and within every subsequent Term of ten Years.

To the best of my knowledge the U. S. was the first country to adopt such a provision—the first of its censuses was in 1790 and took 18 months to accomplish. I haven’t been able to discover when estimation techniques augmented actual enumeration in coming up with the census totals. As long as money and power is involved in the census resuits I don’t anticipate controversy over the census to abate.

However, from a methodological standpoint simultaneously interpolating and extrapolating is problematic. In the trade it’s known as “making stuff up”.

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Article I, Section 7

I was amused that the editors of the Washington Post’s have apparently just discovered Article, Section 7 of the U. S. Cosntitution:

All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

Not in the Senate and especially not in the White House:

As The Post’s Jeff Stein and Tyler Pager reported, objections from lawmakers in Mr. Biden’s own party range from the categorical — Sen. Joe Manchin III’s (D-W.Va.) objection to lifting the tax rate on any corporation beyond 25 percent — to the parochial — blue-state Democrats’ demand for expanded deductibility of the high state and local taxes their upper-income constituents pay. The most recent development in this vein was an appeal from farm-state Democrats led by Rep. Cindy Axne (D-Iowa) seeking protection against Mr. Biden’s plan to eliminate a huge loophole in the capital gains tax. Closing the loophole would increase what people owe the government when they inherit appreciated assets such as stocks, bonds — or agricultural land.

Mr. Biden has appropriately declared himself willing to negotiate, but he and congressional leaders must stand firmly against special pleading from within their own party, lest his plans become bogged down or fail altogether. This will be difficult, given the Democrats’ razor-thin majorities in both houses, which means tiny handfuls of lawmakers, or individual ones, can exercise decisive leverage.

Mr. Biden’s best bet is to articulate broad principles, such as pay-as-you-go and tax-code equity, and reject any and all ideas inconsistent with them. Undoing the limitation on state and local tax payment deductibility, and thereby undoing one of the few progressive features of the 2017 Republican tax law, would fail this test. Depending on the details, Mr. Manchin’s 25 percent corporate tax rate could pass, since it represents a 4 percentage point increase over the 21 percent established in 2017. As for pay-as-you-go, Mr. Biden has already said he is “not willing to not pay for” his plans, useful pushback against the temptation among some Democrats to skip the tough politics of taxes altogether and put the entire spending boost on the national credit card.

Most of the Congress’s power resides in its control over the tax code and its ability to carve out exceptions for causes or groups it favors. Asking it to abstain from that would be a bitter pill.

I also have a question. If the gauge of whether something is good policy is how it polls:

The White House has reminded Democratic lawmakers of poll numbers showing wide support for raising taxes on corporations and the tiny sliver of upper-income households targeted in Mr. Biden’s plans.

why do we need a Congress at all?

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