As reported on Breitbart, Jimmy Carter had this to say about outgoing Prime Minister Blair:
"Former US president Jimmy Carter on Saturday attacked outgoing Prime Minister Tony Blair for his "blind" support of the Iraq war, describing it as a "major tragedy for the world". In an interview with BBC radio, Carter was asked how he would describe Blair's attitude to US President George W. Bush. He replied: "Abominable. Loyal, blind, apparently subservient. "I think that the almost undeviating support by Great Britain for the ill-advised policies of President Bush in Iraq have been a major tragedy for the world."
I gave up on Jimmy Carter a long time ago. A very smart man, but not enough appreciation for what Libertarians believe in -- the amazing power of free individuals to organize a decentralized but efficient society. I started really turning against Carter after he sat next to Michael Moore at the Democratric National Convention in Boston. And now comes this latest broadside. Has the man no decency? Does he really think that Tony Blair is subservient to Bush? I can't believe that liberals are willing to give Bush such a complement -- that he somehow manages to get a person of Blair's intelligence and demeanor to be subservient. Hmmm....is there an alternate theory out there that would explain Blair's behavior? Such as, he is doing what he believes to be right and best for his country?
Saturday, May 19, 2007
Friday, May 18, 2007
The Libertarian View
I was listening to a great radio show on Bloomberg radio on my way out to my camp tonight. They had a CATO Institute fellow on, I think it was Brink Lindsey, and he was talking about what it means to be a Libertarian. He said how Libertarians are not comfortable with either the Republican or Democrat labels, but that they would tend to side with Republicans on economic issues and with Democrats on social and privacy issues. I agree. He also had a line about the Libertarian’s trust in the power of decentralized actions taken by free individuals. I agree there too. I had more trouble agreeing with his position on foreign policy. I suppose that the Libertarian tendency would be non-interventionist, simply on the basis of distrust of centralized government. But a Libertarian will certainly support my right to defend myself. The question comes down to where the line is that separates defense versus activist intervention.
The Berkshire Hathaway Phenomenon
This post will cause me some trouble, I am sure.
Now don’t jump to conclusions, I generally agree with much of what Warren Buffett says, and specifically, I think that much of his investment advice is good. But I am a little worried that over 20,000 people are willing to shell out good money, and burn fuel, to travel to Omaha to watch Warren and his partner chat on stage for several hours. I also worry a bit about the message that many people seem to hear, even if it is not what Buffett would profess: that stock picking is good, and the lessons of modern investment theory, especially those concerning the value of diversification and indexing, are wrong.
The observations I would put to you are the following. On the one hand, my friends and colleagues who are of a liberal mind (small “l,” not liberal in the political sense but in the “liberal arts” sense) have no problem in seeing only the role of chance, random mutations, and natural selection when they observe the glory of some biological wonder like the human eye. No reason to bring in any role for divine intervention here; chance-based evolution takes care of it all. (Please, bear with me, I do like the theory of evolution!) But these same people, when they observe the glory of Warren Buffett’s investment returns, with the Berkshire Hathaway stock portfolio beating the S&P 500 20 out of 24 years, and an abnormal annual return of 8.6%, have no hesitation in pointing out….well, the equivalent of divine intervention!
We have this thing in auction theory called the winnner’s curse, which means that the winner of an auction needs to think carefully about what it means to be the winner: if there is uncertainty over the value of the item to bidders, then there is a very strong tendency for the person who makes the biggest error in value estimation to be the one who bids the most and wins the auction. Ex ante, all bidders’ estimates are unbiased, but ex post, the WINNER’S estimate is known to be a biased high estimate of the true value. And the more bidders, the more biased is the winner’s estimate. With 2 bidders, the highest value estimate is not too bad an estimate of true value; with 2000 bidders, the highest value estimate will be biased by several standard deviations.
A very similar phenomenon occurs with investment results. Start with 10,000 investors, and let them randomly choose stock portfolios over 24 years – no talent, just random stock picks. After 30 years, what do you think the winner of this contest will look like? I promise you, there is a very good chance that the winner of that contest will have beaten the average return in 20 out of 24 years, and have an abnormal return of at least 8.6% per year. Should we crown that investor queen, and travel thousands of miles to worship at her feet? Or should we say, “Hey, your ideas are great; I will take them into consideration. But what I would really like to borrow is some of your luck.”
Now don’t jump to conclusions, I generally agree with much of what Warren Buffett says, and specifically, I think that much of his investment advice is good. But I am a little worried that over 20,000 people are willing to shell out good money, and burn fuel, to travel to Omaha to watch Warren and his partner chat on stage for several hours. I also worry a bit about the message that many people seem to hear, even if it is not what Buffett would profess: that stock picking is good, and the lessons of modern investment theory, especially those concerning the value of diversification and indexing, are wrong.
The observations I would put to you are the following. On the one hand, my friends and colleagues who are of a liberal mind (small “l,” not liberal in the political sense but in the “liberal arts” sense) have no problem in seeing only the role of chance, random mutations, and natural selection when they observe the glory of some biological wonder like the human eye. No reason to bring in any role for divine intervention here; chance-based evolution takes care of it all. (Please, bear with me, I do like the theory of evolution!) But these same people, when they observe the glory of Warren Buffett’s investment returns, with the Berkshire Hathaway stock portfolio beating the S&P 500 20 out of 24 years, and an abnormal annual return of 8.6%, have no hesitation in pointing out….well, the equivalent of divine intervention!
We have this thing in auction theory called the winnner’s curse, which means that the winner of an auction needs to think carefully about what it means to be the winner: if there is uncertainty over the value of the item to bidders, then there is a very strong tendency for the person who makes the biggest error in value estimation to be the one who bids the most and wins the auction. Ex ante, all bidders’ estimates are unbiased, but ex post, the WINNER’S estimate is known to be a biased high estimate of the true value. And the more bidders, the more biased is the winner’s estimate. With 2 bidders, the highest value estimate is not too bad an estimate of true value; with 2000 bidders, the highest value estimate will be biased by several standard deviations.
A very similar phenomenon occurs with investment results. Start with 10,000 investors, and let them randomly choose stock portfolios over 24 years – no talent, just random stock picks. After 30 years, what do you think the winner of this contest will look like? I promise you, there is a very good chance that the winner of that contest will have beaten the average return in 20 out of 24 years, and have an abnormal return of at least 8.6% per year. Should we crown that investor queen, and travel thousands of miles to worship at her feet? Or should we say, “Hey, your ideas are great; I will take them into consideration. But what I would really like to borrow is some of your luck.”
Sunday, April 15, 2007
Updating Beliefs on Climate Change: Extreme Weather Events
With all the cold weather of late, I have been thinking of how we should update our beliefs about changes in climate parameters as extreme weather events occur. This analysis applies, of course, to the warm weather events we had in early winter, and the earlier cold snaps back in September around here. My son is also studying conditional probability in high school right now, so this is good for him as well.
There are at least two “takeaways” from this little excursion. The first is that, as we should have suspected, extreme weather events should indeed lead to some updating of our beliefs about climate change, but not a lot. More important, and my second takeaway, is that this excursion is a great way to see some of the basic ideas of Bayesian statistics.
So I am considering how my beliefs about the probability of climate change taking place change when I observe a (local) extreme cold weather event. Intuitively, a cold event should make us wonder if climate change – which should result in warmer temperatures – is actually occurring. But also intuitively, we should be really surprised if we learn too much from one single weather event.
Our starting point is Baye’s Rule:
Pr(climate change| event) =
{Pr(event | climate change) * Pr(climate change)} / Pr(event)
In words: The “posterior” probability of climate change conditional upon observing a weather event equals: The “prior” probability of climate change, Pr(climate change), times the probability of the event happening conditional upon climate change occurring, all divided by the unconditional probability of the weather event occurring.
If you multiply both sides by Pr(event), you see that both sides of the above equation give the probability of both climate change and the weather event occurring. The equality obviously holds therefore.
We normally use the term “posterior probability” for the left hand side of Baye’s Rule. The Rule tells us how our posterior probability is different from our “prior” probability after observing an event.
It is neat to see how Baye’s rule plays out in our climate context.
Let’s suppose that we have “diffuse” prior beliefs on climate change, that is, that Pr(climate change) from the right hand side of the equation equals ½. The question is how that prior belief changes after we observe an extreme weather event.
To do the analysis, we need to know Pr(event | climate change). Again in words, this is the probability of the weather event conditional upon climate change having happened. This is a key calculation. I take “climate change having happened” to mean that the distribution of daily temperatures in my local location having shifted to the right. Specifically, I assume that climate change has increased the average daily temperature by one degree. Let me also define my extreme weather event as a new record low temperature for the day April 16 in Hanover, NH. What is the probability of this event, conditional upon climate change having occurred? Well, it turns out that the long term average daily temperature for April 16 in Hanover is 33 degrees. And the standard deviation, I will assume, is about 7.5 degrees. The record low for this date is 15 degrees, having occurred in 1940.
If we assume that daily temperatures are normally distributed, then the probability of breaking that 15 degree record given the historical mean of 33 degrees is .008198. With climate change, the average shifts up to 34 degrees and the probability of breaking the record goes down: to .005649.
We now have everything that we need to complete Baye’s rule. The denominator of the equation is a little tricky; it is the unconditional probability of the new low temperature record. To find this, we use this equation:
Pr(event) = Pr(event | climate change) * Pr (climate change)
+ Pr(event |no climate change) * Pr(no climate change)
This is just adding up the different ways that we could observe the extreme weather event: there are two ways, either through climate change or not through climate change.
We have all of these probabilities mentioned in the above discussion. If we calculate it out, we get Pr(event) = (.005649*.5) + (.008198*.5) = .0069235.
Now take the first term of Baye’s Rule and divide by the denominator; this is called the likelihood ratio. In our case, this ratio is .005649/.0069235 = .8159168.
Our posterior belief about climate change after observing the extreme cold event is about 82% of our prior belief before we observed the extreme event.
This is more than I would have expected going into this exercise. What determines how much our prior beliefs are affected?
First, note that the stronger our prior beliefs, the less we would change our priors after observing the cold event: The denominator of Baye’s Rule is a weighted average of the probability of the cold event under two different scenarios, climate change or no climate change. The weight on climate change increases as our prior belief on climate change increases, and this makes the weighted average move closer to the probability of the extreme event conditional on climate change.
As the denominator moves closer to the probability of the extreme event conditional on climate change, the likelihood ratio moves closer to one, and our prior belief is affected very little by the extreme cold event. Intuition: With strong prior beliefs on climate change, a cold event does little to affect them. With weak prior beliefs on climate change, a cold event makes us even more skeptical. Wonder why people are affected differently by events? Bayes would not be surprised!
The other thing that affects our much our prior beliefs change is the term
Pr(event | climate change) relative to Pr(event | no climate change). This gets to the heart of how informative the cold event is. Think about it: If climate change really doesn’t do anything to the probability of cold events happening, then these two probabilities would be equal, and the likelihood ratio in Baye’s Rule would equal one. (Why might climate change not affect the probability of extreme cold events? Well, if climate change did nto affect the distribution of daily temperatures very much, that would work.) And in that case, our posterior probability equals our prior probability. Makes sense, no?
On the other hand, what would make the extreme cold event very informative? This would happen if Pr(event | climate change) relative to Pr(event | no climate change) was large. This would be the case if climate change made extreme cold events very unlikely, so that the ratio of these two terms would be very small. Then the likelihood ratio would be small, and our posterior probability of climate change would be small relative to our prior probability.
Well, in conclusion, this got a little more complicated than I thought, but I learned a bit from it.
One lingering concern I have is over a “data mining” sort of issue. Let me put it this way: Seeing a record cold event in SOME locality in the country is much less informative than seeing a record cold event in one particular locality such as Hanover. Somewhere in the country is going to see a record cold event pretty often; one locality will see one only rarely. The above analysis does not apply to the event of just seeing a record cold event SOMEWHERE (well, it does apply, but the probabilities need serious adjusting -- especially the probabilities of observing extreme weather events).
All of this was stimulated because I wanted to spend the night at my camp. When I got there, this late Nor’Easter had blown out the electricity and the downdraft in my woodstove was so extreme I couldn’t get a fire started. Real pain. I was tempted to stay and cook my dinner on the Coleman stove, but came back home instead. Nasty weather.
There are at least two “takeaways” from this little excursion. The first is that, as we should have suspected, extreme weather events should indeed lead to some updating of our beliefs about climate change, but not a lot. More important, and my second takeaway, is that this excursion is a great way to see some of the basic ideas of Bayesian statistics.
So I am considering how my beliefs about the probability of climate change taking place change when I observe a (local) extreme cold weather event. Intuitively, a cold event should make us wonder if climate change – which should result in warmer temperatures – is actually occurring. But also intuitively, we should be really surprised if we learn too much from one single weather event.
Our starting point is Baye’s Rule:
Pr(climate change| event) =
{Pr(event | climate change) * Pr(climate change)} / Pr(event)
In words: The “posterior” probability of climate change conditional upon observing a weather event equals: The “prior” probability of climate change, Pr(climate change), times the probability of the event happening conditional upon climate change occurring, all divided by the unconditional probability of the weather event occurring.
If you multiply both sides by Pr(event), you see that both sides of the above equation give the probability of both climate change and the weather event occurring. The equality obviously holds therefore.
We normally use the term “posterior probability” for the left hand side of Baye’s Rule. The Rule tells us how our posterior probability is different from our “prior” probability after observing an event.
It is neat to see how Baye’s rule plays out in our climate context.
Let’s suppose that we have “diffuse” prior beliefs on climate change, that is, that Pr(climate change) from the right hand side of the equation equals ½. The question is how that prior belief changes after we observe an extreme weather event.
To do the analysis, we need to know Pr(event | climate change). Again in words, this is the probability of the weather event conditional upon climate change having happened. This is a key calculation. I take “climate change having happened” to mean that the distribution of daily temperatures in my local location having shifted to the right. Specifically, I assume that climate change has increased the average daily temperature by one degree. Let me also define my extreme weather event as a new record low temperature for the day April 16 in Hanover, NH. What is the probability of this event, conditional upon climate change having occurred? Well, it turns out that the long term average daily temperature for April 16 in Hanover is 33 degrees. And the standard deviation, I will assume, is about 7.5 degrees. The record low for this date is 15 degrees, having occurred in 1940.
If we assume that daily temperatures are normally distributed, then the probability of breaking that 15 degree record given the historical mean of 33 degrees is .008198. With climate change, the average shifts up to 34 degrees and the probability of breaking the record goes down: to .005649.
We now have everything that we need to complete Baye’s rule. The denominator of the equation is a little tricky; it is the unconditional probability of the new low temperature record. To find this, we use this equation:
Pr(event) = Pr(event | climate change) * Pr (climate change)
+ Pr(event |no climate change) * Pr(no climate change)
This is just adding up the different ways that we could observe the extreme weather event: there are two ways, either through climate change or not through climate change.
We have all of these probabilities mentioned in the above discussion. If we calculate it out, we get Pr(event) = (.005649*.5) + (.008198*.5) = .0069235.
Now take the first term of Baye’s Rule and divide by the denominator; this is called the likelihood ratio. In our case, this ratio is .005649/.0069235 = .8159168.
Our posterior belief about climate change after observing the extreme cold event is about 82% of our prior belief before we observed the extreme event.
This is more than I would have expected going into this exercise. What determines how much our prior beliefs are affected?
First, note that the stronger our prior beliefs, the less we would change our priors after observing the cold event: The denominator of Baye’s Rule is a weighted average of the probability of the cold event under two different scenarios, climate change or no climate change. The weight on climate change increases as our prior belief on climate change increases, and this makes the weighted average move closer to the probability of the extreme event conditional on climate change.
As the denominator moves closer to the probability of the extreme event conditional on climate change, the likelihood ratio moves closer to one, and our prior belief is affected very little by the extreme cold event. Intuition: With strong prior beliefs on climate change, a cold event does little to affect them. With weak prior beliefs on climate change, a cold event makes us even more skeptical. Wonder why people are affected differently by events? Bayes would not be surprised!
The other thing that affects our much our prior beliefs change is the term
Pr(event | climate change) relative to Pr(event | no climate change). This gets to the heart of how informative the cold event is. Think about it: If climate change really doesn’t do anything to the probability of cold events happening, then these two probabilities would be equal, and the likelihood ratio in Baye’s Rule would equal one. (Why might climate change not affect the probability of extreme cold events? Well, if climate change did nto affect the distribution of daily temperatures very much, that would work.) And in that case, our posterior probability equals our prior probability. Makes sense, no?
On the other hand, what would make the extreme cold event very informative? This would happen if Pr(event | climate change) relative to Pr(event | no climate change) was large. This would be the case if climate change made extreme cold events very unlikely, so that the ratio of these two terms would be very small. Then the likelihood ratio would be small, and our posterior probability of climate change would be small relative to our prior probability.
Well, in conclusion, this got a little more complicated than I thought, but I learned a bit from it.
One lingering concern I have is over a “data mining” sort of issue. Let me put it this way: Seeing a record cold event in SOME locality in the country is much less informative than seeing a record cold event in one particular locality such as Hanover. Somewhere in the country is going to see a record cold event pretty often; one locality will see one only rarely. The above analysis does not apply to the event of just seeing a record cold event SOMEWHERE (well, it does apply, but the probabilities need serious adjusting -- especially the probabilities of observing extreme weather events).
All of this was stimulated because I wanted to spend the night at my camp. When I got there, this late Nor’Easter had blown out the electricity and the downdraft in my woodstove was so extreme I couldn’t get a fire started. Real pain. I was tempted to stay and cook my dinner on the Coleman stove, but came back home instead. Nasty weather.
The Fall of Imus
I have never been a huge fan of Imus, finding him underwhelming with his reasoning.
But boy, did he fall fast. Now once I understood what the word "hos" means (showing my age and ignorance of popular culture there!) I did have to agree that what he said was really bad.
But was an apology not acceptable? Imus did way more than apologize: he grovelled. He grovelled to everyone, even to Al Sharpton. And everyone was after him, especially some of the Presidential candidates. Is the real story here that they all were not looking forward to having to appear on Imus' show several times?
But boy, did he fall fast. Now once I understood what the word "hos" means (showing my age and ignorance of popular culture there!) I did have to agree that what he said was really bad.
But was an apology not acceptable? Imus did way more than apologize: he grovelled. He grovelled to everyone, even to Al Sharpton. And everyone was after him, especially some of the Presidential candidates. Is the real story here that they all were not looking forward to having to appear on Imus' show several times?
One Sad Tax Code
April 15th is upon us, and my taxes have been filed. What was my marginal tax rate this year? Well, that is a really good question. It looks to me like I was right at the cusp of getting hit with the Alternative Minimum Tax. Last year, I did get caught by that, but this year, for some odd reason unknown to me, I did not. It was close; the calculation required computes your tax under the regular code and under AMT, and if AMT is greater, then you pay according to that.
In an earlier post this year, I noted my uncertainty then as to my marginal tax rate, saying it would be either 26% or 42%. It turned out to be more like the 42%, the regular code rate plus Medicare and the effects of phasing out exemptions and deductions.
What kind of tax code do we have, where during the year when I am making income-earning decisions, I cannot determine what my effective tax rate will be? I mean, let's just totally screw up our incentives. If I had made an additional $10,000, I would have netted $7200 (AMT, with the rate this year of 28%) or $5800 (regular code). Anyone who says that a 14% difference in your rate of pay will not make a difference in what you do, is talking nonsense.
As I said before, the Democrats have a chance to show the country that they can respect individual privacy (easy for them); construct a reasonable tax code and manage government spending (not too hard; Bill Clinton did a fair job); and maintain a strong national defense posture (seemingly impossible for the current Democrats). Probably if they got two out of three, they would have a chance to govern for a while. One out of three should mean the wilderness for them.
In an earlier post this year, I noted my uncertainty then as to my marginal tax rate, saying it would be either 26% or 42%. It turned out to be more like the 42%, the regular code rate plus Medicare and the effects of phasing out exemptions and deductions.
What kind of tax code do we have, where during the year when I am making income-earning decisions, I cannot determine what my effective tax rate will be? I mean, let's just totally screw up our incentives. If I had made an additional $10,000, I would have netted $7200 (AMT, with the rate this year of 28%) or $5800 (regular code). Anyone who says that a 14% difference in your rate of pay will not make a difference in what you do, is talking nonsense.
As I said before, the Democrats have a chance to show the country that they can respect individual privacy (easy for them); construct a reasonable tax code and manage government spending (not too hard; Bill Clinton did a fair job); and maintain a strong national defense posture (seemingly impossible for the current Democrats). Probably if they got two out of three, they would have a chance to govern for a while. One out of three should mean the wilderness for them.
Friday, April 06, 2007
An Excellent Blog for Climate Change
I continue to be impressed by Robert Pielke Sr.'s blog on climate science.
Here is a quote from him on a likely underlying goal of the climate change alarmists: As discussed on Climate Science and Scitizen (e.g. see and see), the underlying reason for this aggressive campaign to focus on the human emissions of carbon dioxide from fossil fuels as the main culprit is to promote energy policy changes, not to develop an appropriate comprehensive climate policy.
The most recent guest post by Professor Ben Herman of the University of Arizona is also worth reading for anyone who is willing to question some of the predictions and policy prescriptions being bandied about.
Here is a quote from him on a likely underlying goal of the climate change alarmists: As discussed on Climate Science and Scitizen (e.g. see and see), the underlying reason for this aggressive campaign to focus on the human emissions of carbon dioxide from fossil fuels as the main culprit is to promote energy policy changes, not to develop an appropriate comprehensive climate policy.
The most recent guest post by Professor Ben Herman of the University of Arizona is also worth reading for anyone who is willing to question some of the predictions and policy prescriptions being bandied about.
Apple and DRM
Lot's going on with Apple and DRM. The EU is threatening antitrust action against iTunes, and Apple and EMI announced a new deal on DRM-free music.
Let's think about the EMI deal. EMI, with Apple's partnership, is going to make its library (ex-Beatles!) available on iTunes without DRM, and in close-to-CD audio quality.
The catch? Instead of the usual $.99 per song, EMI's songs will go for $1.29.
What accounts for the higher price? We have a few choices, not mutually exclusive:
1. Songs unencumbered by DRM are worth more, so the price is higher.
2. Songs of higher audio quality are worth more, so the price is higher.
3. Songs without DRM are going to spread more, reducing purchases by other users of the same song, so they have a higher marginal cost and therefore should sell for more.
4. As I pointed out in this post, Apple should be concerned that if iTunes songs are priced below their "stand-alone" profit-maximizing price, then entry by competitors into the portable musice device market is aided. From the perspective of pricing iTunes songs and iPods, Apple should be pricing songs lower than their stand-alone price, but above marginal cost. To eliminate the aid to entry, Apple has incentive to introduce DRM, preventing iTunes songs from playing on other devices.
If Apple drops DRM for some songs, then to maintain a deterrent to entry, it should increase the price of songs.
5. Last argument, it may be that EMI is simply charging a higher royalty to Apple for its songs (why?) and Apple is simply charging the relevantly higher price.
My choice of answers? A combination of all of these. Look at it from EMI and Apple's perspectives. Everything points to a higher price for the DRM-free songs (and by the way, the DRM-encumbered songs are still available at a lower price). "Let's try it and see what happens."
Based on my own recent experience in hitting the 5-machine limit, I would probably opt for the higher priced version. If there were no choice available, I would likely buy almost the same number of songs at $1.29 instead of $.99, when the higher price was for a higher quality and DRm-free version.
Let's think about the EMI deal. EMI, with Apple's partnership, is going to make its library (ex-Beatles!) available on iTunes without DRM, and in close-to-CD audio quality.
The catch? Instead of the usual $.99 per song, EMI's songs will go for $1.29.
What accounts for the higher price? We have a few choices, not mutually exclusive:
1. Songs unencumbered by DRM are worth more, so the price is higher.
2. Songs of higher audio quality are worth more, so the price is higher.
3. Songs without DRM are going to spread more, reducing purchases by other users of the same song, so they have a higher marginal cost and therefore should sell for more.
4. As I pointed out in this post, Apple should be concerned that if iTunes songs are priced below their "stand-alone" profit-maximizing price, then entry by competitors into the portable musice device market is aided. From the perspective of pricing iTunes songs and iPods, Apple should be pricing songs lower than their stand-alone price, but above marginal cost. To eliminate the aid to entry, Apple has incentive to introduce DRM, preventing iTunes songs from playing on other devices.
If Apple drops DRM for some songs, then to maintain a deterrent to entry, it should increase the price of songs.
5. Last argument, it may be that EMI is simply charging a higher royalty to Apple for its songs (why?) and Apple is simply charging the relevantly higher price.
My choice of answers? A combination of all of these. Look at it from EMI and Apple's perspectives. Everything points to a higher price for the DRM-free songs (and by the way, the DRM-encumbered songs are still available at a lower price). "Let's try it and see what happens."
Based on my own recent experience in hitting the 5-machine limit, I would probably opt for the higher priced version. If there were no choice available, I would likely buy almost the same number of songs at $1.29 instead of $.99, when the higher price was for a higher quality and DRm-free version.
Friday, February 09, 2007
Steve Jobs on DRM
Steve Jobs posted this week on the Apple site a letter in which he argues for the abolition of digital rights management (DRM) software for online music. If DRM were abolished, then any songs purchased from iTunes could be played on any device, and vice versa -- music purchased on any other sites could be played on iPods.
Not too long ago, I wrote a post on why it could be in Apple's interests to prevent iTunes songs from playing on other devices. My basic argument had to do with assumed pricing of songs on iTunes. I argued that Apple was pricing songs above marginal cost, but below the price they would set if they were not also selling iPods. Essentially, Apple was, I argued, trying to prevent new entrants into the portable music player market from getting the benefits of relatively cheap songs from iTunes. New entrants obviously would find entry into the device market easier with a full iTunes library at low prices ($.99).
So what might have changed, in order for Jobs to call for no restrictions on songs purchased on-line?
Three possibilities. One, if Jobs' description of the contracts with the music publishers is correct, then they could shut down the iTunes site within weeks of a determination that Apple's DRM has been hacked. That is a big albatross to have circling over one's head all the time. It is not clear that Apple will be able to stay ahead of the hackers. Jobs may have had to agree to this contract clause when nobody knew whether iTunes would take off, but I suspect he has a bit more negotiating clout at this point.
Two, with more and more online music sellers, we are likely to approach marginal cost pricing of songs. With marginal cost pricing, and more music available, the ability to deter entry into the device market by keeping iTunes songs only for the iPod disappears.
Three, I don't think the incentive to deter entry into the device market is nearly as strong as it was when the iPod was new. Apple has a huge lead, both technologically and in the marketplace, and it is moving on to a whole new competitive arena with the iPhone. The advantages to Apple of having (cheap) songs from other sellers able to be played on its iPods and iPhones outweigh the advantages to Apple of having its songs not be playable on other devices.
I predict that Jobs' recommendation will be accepted.
Not too long ago, I wrote a post on why it could be in Apple's interests to prevent iTunes songs from playing on other devices. My basic argument had to do with assumed pricing of songs on iTunes. I argued that Apple was pricing songs above marginal cost, but below the price they would set if they were not also selling iPods. Essentially, Apple was, I argued, trying to prevent new entrants into the portable music player market from getting the benefits of relatively cheap songs from iTunes. New entrants obviously would find entry into the device market easier with a full iTunes library at low prices ($.99).
So what might have changed, in order for Jobs to call for no restrictions on songs purchased on-line?
Three possibilities. One, if Jobs' description of the contracts with the music publishers is correct, then they could shut down the iTunes site within weeks of a determination that Apple's DRM has been hacked. That is a big albatross to have circling over one's head all the time. It is not clear that Apple will be able to stay ahead of the hackers. Jobs may have had to agree to this contract clause when nobody knew whether iTunes would take off, but I suspect he has a bit more negotiating clout at this point.
Two, with more and more online music sellers, we are likely to approach marginal cost pricing of songs. With marginal cost pricing, and more music available, the ability to deter entry into the device market by keeping iTunes songs only for the iPod disappears.
Three, I don't think the incentive to deter entry into the device market is nearly as strong as it was when the iPod was new. Apple has a huge lead, both technologically and in the marketplace, and it is moving on to a whole new competitive arena with the iPhone. The advantages to Apple of having (cheap) songs from other sellers able to be played on its iPods and iPhones outweigh the advantages to Apple of having its songs not be playable on other devices.
I predict that Jobs' recommendation will be accepted.
The Consensus on Global Warming
A really good blog to keep up on science of climate change that you won't read elsewhere is Roger Pielke's blog.
Roger notes two attempts to remove state climatologists -- David Legates in Delaware and George Taylor in Oregon -- because of their failure to follow the consensus views on global warming. Roger also gives the cite to Heidi Cullen's (of the Weather Channel) post where she speaks about having the American Meteorological Society remove their seal of approval from meteorologists who "can't speak to the fundamental science of climate change" and about the inability of some meteorologists to differentiate between "solid, peer-reviewed science and junk political controversy." Take a look at Roger Pielke's resume and tell me if you see anything other than solid, peer-reviewed science. About all you will see on his site is peer-reviewed science, and it is good stuff.
So what kind of consensus is this, if by speaking out against it you are vilified?
Wait -- another late breaking item, Ellen Goodman from the Boston Globe says
"I would like to say we're at a point where global warming is impossible to deny. Let's just say that global warming deniers are now on a par with Holocaust deniers, though one denies the past and the other denies the present and future."
Now if you read my post on warming from February 1, you will see I agree that global warming (that the average global temperature has increased in the last 100 years) is tough to deny. But that, I don't think, is what Ms. Goodman means when she refers to the deniers of global warming. I suspect that if I said to her that maybe the best response to warming is to make sure that the world economy grows at a good rate for the next 100 years so that our children have the capital and capacity to adapt to climate change, she would consider me a denier. Or if I said that it simply did not make good economic sense to spend a lot on reducing CO2 given the cost of reductions and the relatively minor benefits that would be forthcoming, she would consider me a denier. Or if I said that it was not clear just how much of the warming of the last 100 years was due to anthropogenic greenhouse gas emisssions, she would consider me a denier. Read her editorial and tell me if I am wrong.
At any rate, bringing the Holocaust into the argument over climate change is just going way over the edge.
Roger notes two attempts to remove state climatologists -- David Legates in Delaware and George Taylor in Oregon -- because of their failure to follow the consensus views on global warming. Roger also gives the cite to Heidi Cullen's (of the Weather Channel) post where she speaks about having the American Meteorological Society remove their seal of approval from meteorologists who "can't speak to the fundamental science of climate change" and about the inability of some meteorologists to differentiate between "solid, peer-reviewed science and junk political controversy." Take a look at Roger Pielke's resume and tell me if you see anything other than solid, peer-reviewed science. About all you will see on his site is peer-reviewed science, and it is good stuff.
So what kind of consensus is this, if by speaking out against it you are vilified?
Wait -- another late breaking item, Ellen Goodman from the Boston Globe says
"I would like to say we're at a point where global warming is impossible to deny. Let's just say that global warming deniers are now on a par with Holocaust deniers, though one denies the past and the other denies the present and future."
Now if you read my post on warming from February 1, you will see I agree that global warming (that the average global temperature has increased in the last 100 years) is tough to deny. But that, I don't think, is what Ms. Goodman means when she refers to the deniers of global warming. I suspect that if I said to her that maybe the best response to warming is to make sure that the world economy grows at a good rate for the next 100 years so that our children have the capital and capacity to adapt to climate change, she would consider me a denier. Or if I said that it simply did not make good economic sense to spend a lot on reducing CO2 given the cost of reductions and the relatively minor benefits that would be forthcoming, she would consider me a denier. Or if I said that it was not clear just how much of the warming of the last 100 years was due to anthropogenic greenhouse gas emisssions, she would consider me a denier. Read her editorial and tell me if I am wrong.
At any rate, bringing the Holocaust into the argument over climate change is just going way over the edge.
Thursday, February 01, 2007
The Eiffel Tower is Dark!
The news media is in high gear in anticipation of the IPCC summary for policymakers that will be issued tomorrow. I think I will have to go into hiding for a couple days or my blood pressure will go through the roof. Leave it to the French to darken the Eiffel Tower to reflect the seriousness of the event.
So about 12 years ago, in my Environmental Economics course at Tuck, I had a "skeptic" in to class to discuss climate change -- Robert Balling. Now in the interest of balance, I also invited to the class Donella Meadows (Limits to Growth) and she did attend. It was one of my all time favorite class sessions. The students who were there probably still do not realize how lucky they were to see Balling and Meadows square off -- and agree on much of the science, but not on the policy implications!
So it sounds like one of the news bytes will be that mankind is "very likely" to be a cause of some (how much?) of the warming we have observed. Twelve years ago, Balling, a skeptic, would have agreed to that. I remember him going through the data, with a focus on moderate warming, especially at night and in winters, and more rainfall generally. That, he said is global warming. The question then, and now, is what we should do about it.
So the IPCC summary will try to make a big deal out of the "very likely" language, and all the media will try to use it to say that all skeptics have been discredited. I don't know of any skeptics who deny the theory of climate change (i.e., the causal relationship to CO2) or indeed any who would not agree that some of the warming we have observed in the last 100 years is "very likely" due to human influence.
That is just not the point.
It will be interesting to see the spin if, as I expect, the expected temperature increase and expected sea level increases both fall from previous expected values. How do you spin that into more of a crisis?
So about 12 years ago, in my Environmental Economics course at Tuck, I had a "skeptic" in to class to discuss climate change -- Robert Balling. Now in the interest of balance, I also invited to the class Donella Meadows (Limits to Growth) and she did attend. It was one of my all time favorite class sessions. The students who were there probably still do not realize how lucky they were to see Balling and Meadows square off -- and agree on much of the science, but not on the policy implications!
So it sounds like one of the news bytes will be that mankind is "very likely" to be a cause of some (how much?) of the warming we have observed. Twelve years ago, Balling, a skeptic, would have agreed to that. I remember him going through the data, with a focus on moderate warming, especially at night and in winters, and more rainfall generally. That, he said is global warming. The question then, and now, is what we should do about it.
So the IPCC summary will try to make a big deal out of the "very likely" language, and all the media will try to use it to say that all skeptics have been discredited. I don't know of any skeptics who deny the theory of climate change (i.e., the causal relationship to CO2) or indeed any who would not agree that some of the warming we have observed in the last 100 years is "very likely" due to human influence.
That is just not the point.
It will be interesting to see the spin if, as I expect, the expected temperature increase and expected sea level increases both fall from previous expected values. How do you spin that into more of a crisis?
Tuesday, January 16, 2007
Why is the Islamic Bomb So Slow in Development?
This is probably a naive question. Maybe someone can answer it quickly for me.
The Manhattan Project started in 1942 and in 1945 the United States detonated three nuclear bombs, including an enriched uranium bomb and a plutonium bomb.
Fast forward sixty years: The Iranians have been allegedly working for several years on developing a nuclear bomb but are, by some projections, still years away from being able to produce one (leaving aside the ability to deliver it).
What is going on here?
The Manhattan Project started in 1942 and in 1945 the United States detonated three nuclear bombs, including an enriched uranium bomb and a plutonium bomb.
Fast forward sixty years: The Iranians have been allegedly working for several years on developing a nuclear bomb but are, by some projections, still years away from being able to produce one (leaving aside the ability to deliver it).
What is going on here?
Friday, January 12, 2007
Apple's Effects on Competitors
What a wonderful company Apple is. Who else can you turn to for virtually all of your Christmas presents? From iMacs to Macbooks to iPods, plus all the third-party complementary products, the possibilities for great gifts are unending.
But the topic of the evening is profiting from induced changes in competitors' market values.
S. Jobs announced this past week the new iPhone from Apple (so long as it works on Verizon, I see several such phones in my family's future).
Apple's share price increased by 8.3% on the day. This is pretty amazing, given that the market was expecting a big announcement. Apple clearly surpassed expectations.
But who should suffer from Apple's mobile phone innovation? Two companies that should be hurt by Apple's perceived successful entry into the mobile phone market, in terms of revenues, profitability and value, are Palm and Research in Motion (makers of the Blackberry). Palm fell by 6%. Research in Motion fell by 7.9%.
Now Apple officers trading in Apple shares would clearly violate insider trading laws as the officers of Apple owe a fiduciary duty to Apple shareholders. But that legal argument does not apply to Apple officers, or Apple itself, trading in the shares of Palm or Research in Motion. No fiduciary duty owed there, and mere trading on proprietary information is clearly not illegal. In fact, one could argue that Apple created and owns the information on its innovation, so why can't it trade on it?
Wouldn't it have been a great trade to sell short Palm or Research in Motion, if you knew just what S. Jobs was going to do at MacWorld? And guess what -- for an Apple employee to do such a trade would not be illegal (to the best of my knowledge that is, and I do note that it could violate Apple corporate policy). Perhaps the best idea would have been for Apple's corporate pension fund to have sold short shares in competitors prior to the conference. Not only would Apple make money from the entry into the mobile phone market, but it would also make a fortune from the decline in fortunes of its competitors!
But the topic of the evening is profiting from induced changes in competitors' market values.
S. Jobs announced this past week the new iPhone from Apple (so long as it works on Verizon, I see several such phones in my family's future).
Apple's share price increased by 8.3% on the day. This is pretty amazing, given that the market was expecting a big announcement. Apple clearly surpassed expectations.
But who should suffer from Apple's mobile phone innovation? Two companies that should be hurt by Apple's perceived successful entry into the mobile phone market, in terms of revenues, profitability and value, are Palm and Research in Motion (makers of the Blackberry). Palm fell by 6%. Research in Motion fell by 7.9%.
Now Apple officers trading in Apple shares would clearly violate insider trading laws as the officers of Apple owe a fiduciary duty to Apple shareholders. But that legal argument does not apply to Apple officers, or Apple itself, trading in the shares of Palm or Research in Motion. No fiduciary duty owed there, and mere trading on proprietary information is clearly not illegal. In fact, one could argue that Apple created and owns the information on its innovation, so why can't it trade on it?
Wouldn't it have been a great trade to sell short Palm or Research in Motion, if you knew just what S. Jobs was going to do at MacWorld? And guess what -- for an Apple employee to do such a trade would not be illegal (to the best of my knowledge that is, and I do note that it could violate Apple corporate policy). Perhaps the best idea would have been for Apple's corporate pension fund to have sold short shares in competitors prior to the conference. Not only would Apple make money from the entry into the mobile phone market, but it would also make a fortune from the decline in fortunes of its competitors!
Friday, December 08, 2006
Environmental Dilemmas
More craziness from across the river in Vermont.
So the voters in Norwich approved a bond issue to install a wood-fired boiler for the elementary school. Hanover's new Middle School has one of these, and I imagine that with heating oil prices being so high, the investment's ROI ex post is looking pretty nice. (By the way, I live about half a mile from that boiler and do not notice any ill effects, including no ill effects from the wood chip delivery trucks.)
Norwich voters had one study by a consulting firm available to them when they approved the boiler, and the study said that the emissions from the wood boiler would be nothing to worry about.
Now a new study has been presented (why was this new study done...hmmmm?) showing not only that emissions would be worse, but that the emissions would fall outside of the EPA rules that would be enforced...starting in 2010!!
Even more hilariously, all the EPA regulations are irrelevant in the regulatory sense, since the Norwich furnace is too small to fall under the EPA's regulatory umbrella.
But nonetheless, this new study has put the boiler on hold.
I imagine that in Norwich, VT, more copies per capita of Al Gore's book on climate change have been purchased than anywhere else. Yet here we have an economically sound investment that will reduce net CO2 emissions...and it fails because of the age-old "not in my backyard" argument. Give me a break, please.
Sometime in the future we are going to face some real tradeoffs and we will not be able to say no to everything. Boy, if we can't even put a wood stove in Norwich, how are we ever going to site a nuke in Burlington??
So the voters in Norwich approved a bond issue to install a wood-fired boiler for the elementary school. Hanover's new Middle School has one of these, and I imagine that with heating oil prices being so high, the investment's ROI ex post is looking pretty nice. (By the way, I live about half a mile from that boiler and do not notice any ill effects, including no ill effects from the wood chip delivery trucks.)
Norwich voters had one study by a consulting firm available to them when they approved the boiler, and the study said that the emissions from the wood boiler would be nothing to worry about.
Now a new study has been presented (why was this new study done...hmmmm?) showing not only that emissions would be worse, but that the emissions would fall outside of the EPA rules that would be enforced...starting in 2010!!
Even more hilariously, all the EPA regulations are irrelevant in the regulatory sense, since the Norwich furnace is too small to fall under the EPA's regulatory umbrella.
But nonetheless, this new study has put the boiler on hold.
I imagine that in Norwich, VT, more copies per capita of Al Gore's book on climate change have been purchased than anywhere else. Yet here we have an economically sound investment that will reduce net CO2 emissions...and it fails because of the age-old "not in my backyard" argument. Give me a break, please.
Sometime in the future we are going to face some real tradeoffs and we will not be able to say no to everything. Boy, if we can't even put a wood stove in Norwich, how are we ever going to site a nuke in Burlington??
Friday, November 17, 2006
Unbelievable
It still has not really hit me that we have a socialist in the US Senate. And, even more amazing, he is from the state just across the river from me. Vermont.
It's funny how smoking marijuana affects some people.
It's funny how smoking marijuana affects some people.
An AMT Idea
There has been some more talk about fixing the Alternative Minimum Tax since the Democrats took over Congress (also see my earlier post). Maybe we can actually get some tax reform in the next couple years? That would be a real miracle. The Bush administration’s failure to get Social Security reform and failure to get any tax reform loom large in my evaluation of its overall success.
So here is a free idea for the Democrats. From this point on I start charging.
The issue of revenue neutrality is not being looked at creatively. Discussion has focused on making sure that if some people gain from tax reform, others will have to lose, if we are to maintain revenue neutrality. This ignores the fundamental inefficiency of taxes, which is that they drive a wedge between what one individual earns and what that individual takes home. The wedge causes individuals to forego income-earning possibilities that do not yield enough after-tax income to compensate for the opportunities sacrificed as a result of earning the income (e.g., leisure). If the tax wedge is reduced, then individuals will earn more, yielding more tax revenue, and making themselves better off.
The problem has always been that if you reduce taxes to reduce the wedge, you lose a lot of revenue on income that would have been earned and taxed anyway. This makes tax reduction costly from the point of view of the government’s treasury. The point is very similar to the concept of marginal revenue in the economics of pricing: if a company reduces its price to sell more product, it picks up some additional revenue from the new units sold, but if it has to reduce price on all the units that would have been sold anyway, then total revenue could actually decline.
But the principle remains: tax rate reduction is mutually beneficial, between individuals and the government. In principle, we should be able to strike a bargain that makes both entities better off.
So here is how we might do that. Now all the details of this are not worked out, but I am rather intrigued by the idea.
Right now, I don’t really know if my marginal tax rate for income earned in 2007 is going to be around 42% or around 26%. It will be 42% if I don’t get caught by the AMT and it will be 26% if I do get caught by the AMT. So let me choose at the beginning of the year how I want to be taxed. I will promise the IRS that, so long as my income is at least as high as it was in 2006, then I will pay at least the same amount of taxes that I paid in 2006. But, and this is the kicker, for any additional income that I earn over and above my 2006 income, I will pay only the AMT marginal tax rate, i.e., 26%.
Imagine that I have an opportunity to make an additional $10,000 in 2007. If my marginal rate were 42%, my take-home pay would only be $5800. At that rate, I might choose to spend that time out at my camp instead of earning the income. But if my marginal rate were only 26%, I would forego $7400 by going to camp instead of to work.
So promise me a lower rate on only my incremental income, and I will earn more. The IRS will take in more revenue than it did before, and possibly more than it would have without this tax innovation (I say possibly more since some people would have taken the income earning option even with the higher tax rate).
The point of this scheme is to make tax reform revenue neutral at the level of the individual, not necessarily across individuals. And we define revenue neutrality relative to the prior year’s tax payments.
To make this even more attractive, you could let me “buy down” my marginal tax rate on new income by foregoing some deductions such as mortgage payments. So I would agree to pay 26%, say, on more of my income (I won’t deduct mortgage interest) if you lower the rate of taxation on new income I earn to, say, 24%.
This idea is very similar to health insurance plans that require us to choose at the beginning of the year what kind of plan we want, and how much money we want to put into a reimbursement account. Let’s extend that principle to taxation, remove some inefficiency, and make everyone better off.
So here is a free idea for the Democrats. From this point on I start charging.
The issue of revenue neutrality is not being looked at creatively. Discussion has focused on making sure that if some people gain from tax reform, others will have to lose, if we are to maintain revenue neutrality. This ignores the fundamental inefficiency of taxes, which is that they drive a wedge between what one individual earns and what that individual takes home. The wedge causes individuals to forego income-earning possibilities that do not yield enough after-tax income to compensate for the opportunities sacrificed as a result of earning the income (e.g., leisure). If the tax wedge is reduced, then individuals will earn more, yielding more tax revenue, and making themselves better off.
The problem has always been that if you reduce taxes to reduce the wedge, you lose a lot of revenue on income that would have been earned and taxed anyway. This makes tax reduction costly from the point of view of the government’s treasury. The point is very similar to the concept of marginal revenue in the economics of pricing: if a company reduces its price to sell more product, it picks up some additional revenue from the new units sold, but if it has to reduce price on all the units that would have been sold anyway, then total revenue could actually decline.
But the principle remains: tax rate reduction is mutually beneficial, between individuals and the government. In principle, we should be able to strike a bargain that makes both entities better off.
So here is how we might do that. Now all the details of this are not worked out, but I am rather intrigued by the idea.
Right now, I don’t really know if my marginal tax rate for income earned in 2007 is going to be around 42% or around 26%. It will be 42% if I don’t get caught by the AMT and it will be 26% if I do get caught by the AMT. So let me choose at the beginning of the year how I want to be taxed. I will promise the IRS that, so long as my income is at least as high as it was in 2006, then I will pay at least the same amount of taxes that I paid in 2006. But, and this is the kicker, for any additional income that I earn over and above my 2006 income, I will pay only the AMT marginal tax rate, i.e., 26%.
Imagine that I have an opportunity to make an additional $10,000 in 2007. If my marginal rate were 42%, my take-home pay would only be $5800. At that rate, I might choose to spend that time out at my camp instead of earning the income. But if my marginal rate were only 26%, I would forego $7400 by going to camp instead of to work.
So promise me a lower rate on only my incremental income, and I will earn more. The IRS will take in more revenue than it did before, and possibly more than it would have without this tax innovation (I say possibly more since some people would have taken the income earning option even with the higher tax rate).
The point of this scheme is to make tax reform revenue neutral at the level of the individual, not necessarily across individuals. And we define revenue neutrality relative to the prior year’s tax payments.
To make this even more attractive, you could let me “buy down” my marginal tax rate on new income by foregoing some deductions such as mortgage payments. So I would agree to pay 26%, say, on more of my income (I won’t deduct mortgage interest) if you lower the rate of taxation on new income I earn to, say, 24%.
This idea is very similar to health insurance plans that require us to choose at the beginning of the year what kind of plan we want, and how much money we want to put into a reimbursement account. Let’s extend that principle to taxation, remove some inefficiency, and make everyone better off.
Thursday, November 09, 2006
On Fisheries and Science in the Headlines
Last week, a group of scientists were very successful in getting their study on fisheries reported broadly throughout the world's media. See, for example, Collapse of All Wild Fisheries Predicted in 45 Years.
Anyone who knows me knows that I care a lot about the state of fisheries, both fresh and saltwater. I value fisheries for recreation and for food, as well as for their overall role in a healthy ecosystem.
But I cannot support the headline claim of this recent study. A story in the Seattle Times ,"Will seafood nets be empty? Grim outlook draws skeptics," tears it apart particularly well, showing first the graph that supposedly supports the prediction of complete collapse in 45 years. It looks like the authors were not content to simply project a trend forward, they actually projected a nonlinear trend forward -- a nonlinear trend with increasing negative slope!! Even worse, one of the authors accidentally included the Seattle Times in an email meant for someone else. Quoting from the ST article:
"In a note to colleagues that was mistakenly sent to The Seattle Times, Worm wrote that the projection could act as a "news hook to get people's attention."
"One reason why nobody cares about marine biodiversity is that there seemed no clear end in sight," he continued. "...
Well, it's time to wake up — IF the current trend continues we will see drastic consequences in our own lifetime."
I know how nice it is to get one's research results written up well in the national media. But doing bad science to get people's attention is really sad.
Anyone who knows me knows that I care a lot about the state of fisheries, both fresh and saltwater. I value fisheries for recreation and for food, as well as for their overall role in a healthy ecosystem.
But I cannot support the headline claim of this recent study. A story in the Seattle Times ,"Will seafood nets be empty? Grim outlook draws skeptics," tears it apart particularly well, showing first the graph that supposedly supports the prediction of complete collapse in 45 years. It looks like the authors were not content to simply project a trend forward, they actually projected a nonlinear trend forward -- a nonlinear trend with increasing negative slope!! Even worse, one of the authors accidentally included the Seattle Times in an email meant for someone else. Quoting from the ST article:
"In a note to colleagues that was mistakenly sent to The Seattle Times, Worm wrote that the projection could act as a "news hook to get people's attention."
"One reason why nobody cares about marine biodiversity is that there seemed no clear end in sight," he continued. "...
Well, it's time to wake up — IF the current trend continues we will see drastic consequences in our own lifetime."
I know how nice it is to get one's research results written up well in the national media. But doing bad science to get people's attention is really sad.
The Political Party We Need
It was getting a little hard to defend some parts of the Republican Party's agenda and actions, so I am not entirely heartbroken over the election. And the rest of the world should note how quickly and smoothly the US can change its political standing. The system does work. I think a strong case can even be made for Allen to not challenge the Virginia result. The chance of overturning it would seem to be low, while the benefits of taking the high road seem large.
What I long for is a political party that would be conservative on economics (especially spending and regulation), and on national defense, but liberal on many social issues, particularly those concerning individual rights and privacy. If the Democrats could claim that ground, they would get a lot of Republican support. Or, I could imagine a part of the Republican Party discarding some of the more religious, social conservatives for a more Libertarian leaning party. The problem there is that we would have three parties, with the two on the right sure to lose to the one on the left. Could a three party system be sustained in the US today? Maybe.
I worry that the Democrats will go too far to satisfy those furthest to the left on spending, regulation, and general "government is the answer to all questions" issues. If they resist that, relying more on Bill Clinton's views on the role of government in the economy, they could be a real powerhouse.
What I long for is a political party that would be conservative on economics (especially spending and regulation), and on national defense, but liberal on many social issues, particularly those concerning individual rights and privacy. If the Democrats could claim that ground, they would get a lot of Republican support. Or, I could imagine a part of the Republican Party discarding some of the more religious, social conservatives for a more Libertarian leaning party. The problem there is that we would have three parties, with the two on the right sure to lose to the one on the left. Could a three party system be sustained in the US today? Maybe.
I worry that the Democrats will go too far to satisfy those furthest to the left on spending, regulation, and general "government is the answer to all questions" issues. If they resist that, relying more on Bill Clinton's views on the role of government in the economy, they could be a real powerhouse.
Those Missing Bass Signs...
See my post immediately below on the lack of Bass signs around Hanover during the recent campaign. Now it seems that some of the Bass signs may have been stolen.
I was reading a story in the Valley News last night about someone in Enfield who had been arrested for taking Bass signs from alongside the road. The police followed the individual home and, when the perp failed to respond to their requests to appear at the front door, they knocked the door down! The poor fellow was arrested on two counts of possession of stolen property.
As I have had my own campaign signs stolen from my front yard, and my Bush sticker ripped off my truck's bumper, I was feeling pretty good about this story. But then I realized I knew the culprit! He is the son of a friend, and he used to babysit for my kids all the time! Ah, the follies of the youth. I hope they go a little easy on him. I don't think Bass lost because of a few signs being stolen.
I was reading a story in the Valley News last night about someone in Enfield who had been arrested for taking Bass signs from alongside the road. The police followed the individual home and, when the perp failed to respond to their requests to appear at the front door, they knocked the door down! The poor fellow was arrested on two counts of possession of stolen property.
As I have had my own campaign signs stolen from my front yard, and my Bush sticker ripped off my truck's bumper, I was feeling pretty good about this story. But then I realized I knew the culprit! He is the son of a friend, and he used to babysit for my kids all the time! Ah, the follies of the youth. I hope they go a little easy on him. I don't think Bass lost because of a few signs being stolen.
Monday, November 06, 2006
Bass vs. Hodes, US Representative for NH
So I have observed many electoral campaigns in the Upper Valley of NH, having lived here now for 23 years. Republicans have been an endangered species for a long time around here, and it is getting even more lonely of late. That said, I have never seen such a dearth of Republican campaign materials. No signs, no posters, no ads in the papers...Well, one sad little ad in the Valley News half-heartedly telling Republicans that their vote matters. Meanwhile, the Democrat Hodes has simply blanketed the landscape with campaign stuff. I can't drive anywhere without Hodes intruding on my thoughts.
If Charlie Bass loses his House seat, I will not be surprised. I understand better than anyone the idea of optimizing use of resources, but the incremental cost of doing a LITTLE SOMETHING even in a Democrat stronghold is so low that it has to be worthwhile. The complete lack of any effort around here makes me suspect that the Bass campaign is asleep at the wheel. Not a good indicator.
Well, I would be perfectly happy if the result tomorrow is Democratic control of the House and Republican control of the Senate. For a Libertarian, gridlock reads: Less new legislation.
Tomorrow should be interesting. Of course, given the last couple elections, we might not get final results for some time.
If Charlie Bass loses his House seat, I will not be surprised. I understand better than anyone the idea of optimizing use of resources, but the incremental cost of doing a LITTLE SOMETHING even in a Democrat stronghold is so low that it has to be worthwhile. The complete lack of any effort around here makes me suspect that the Bass campaign is asleep at the wheel. Not a good indicator.
Well, I would be perfectly happy if the result tomorrow is Democratic control of the House and Republican control of the Senate. For a Libertarian, gridlock reads: Less new legislation.
Tomorrow should be interesting. Of course, given the last couple elections, we might not get final results for some time.
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