A thought

Robin: A thought occurred to me about medical spending. There exists a classic economic model that would be consistent with medical spending being completely uncorrelated from health outcomes – that of a monopoly with the ability to implement price discrimination. (In other words, it’s exactly what you’d expect if people paid widely varying amounts of money for the same average quality of treatment.)

Doug S., in a comment here. I’d never thought of it like that, but now that the idea has been formulated, I wonder how close to the truth this is.

Robin Hanson’s idea about health care spending is, in case you didn’t know, that appr. half of all US health care spending is pure waste with no measurable effect on outcomes. This link provides a graph that illustrates the cost-effectiveness (or lack thereof) of the US health care system by plotting per-capita-spending and longevity for different countries.

October 27, 2008 Posted by | health care, USA | Leave a comment

Life imitates art

A semi-related link here.

October 26, 2008 Posted by | economics, random stuff | Leave a comment

Aristotle (i)

It is not correct to speak of modesty* as a kind of virtue, because it is more like a feeling than a state. It is defined, at any rate, as a sort of fear of disrepute, and it has an effect very like that produced by the fear of danger; modesty makes people blush, and the fear of death turns them pale. So both appear to be in some sense corporeal, and this is thought to be more the mark of a feeling than of a state. The feeling is not appropriate to every age: only to youth. We consider that adolescents ought to be modest because, living as they do under sway of their feelings, they often make mistakes, but are restrained by modesty. Also, we commend a modest youth, but nobody would commend an older man for being shamefaced, because we think that he ought not to do anything to be ashamed of. In fact shame is not the emotion of a good man, if it is felt for doing bad actions, because such actions ought not to be done (and it makes no difference whether the things done are really shameful or are only thought to be so; they should not be done in either case); so the emotion ought not to be felt. It is the bad man who ought to feel shame, because he is the sort of man to do a shameful deed; but it is absurd to think that being so constituted as to feel shame at doing something shameful makes you a good man, because modesty is felt about voluntary actions, and the good man will never voluntarily do bad ones.

Modesty can only be good in a conditional sense: that if the agent were to do so-and-so he would be ashamed; but this is not true of the virtues. Although shamelessness, that is, not being ashamed to do what is disgraceful, is a bad thing, it does not follow any the more from this that to be ashamed if one behaves disgracefully is a good thing. […]

*: aidõs

From Aristotle’s The Nicomachean Ethics, which I’m reading at the moment. What most people know about Aristotle’s teaching, if anything, is probably limited to his conclusion in book II: in all our conduct, it is the mean that is to be commended, but there’s a bit more to it than just that.

October 25, 2008 Posted by | books, ethics, philosophy | Leave a comment

The daily (monthly?) work of a human rights commission

Ezra Levant is back:

In her letter to me today, Dagenais says she’s finally [US: after two months have passed] going to pass my defence along to the commissioners who will rule on whether I’ve commited a hate crime by republishing an Op-Ed by an Alberta pastor named Rev. Stephen Boissoin. You’ll recall, Rev. Boissoin has been fined, given a lifetime ban on expressing his faith, and ordered to publicly renounce his faith, for daring to express a politically incorrect religious view.

If the commissioners find me guilty, they’ll prosecute me before the Canadian Human Rights Tribunal. In the thirty years they’ve been prosecuting section 13 “hate speech” cases, they’ve never lost. Political prosecutors in Iran and China would be impressed.

But here’s where Dagenais becomes a symbol of everything that’s wrong with the CHRC and its censorship fetish: she blacked out portions of my defence before passing it on to the commissioners. Seriously — she censored what I wrote in my own defence, before she passed it along to the people who will sit in judgment of me. She’s only allowing me to say things in my defence that she approves in advance.

This is surrreal.

October 23, 2008 Posted by | Canada, censorship, freedom of speech | Leave a comment

Anna Schwartz on the “credit market disturbance”

Here is an interview with her, HT: Greg Mankiw.

An excerpt:

The problem with that idea [the original Paulson plan] was, and is, how to price “toxic” assets that nobody wants. And lurking beneath that problem is another, stickier problem: If they are priced at current market levels, selling them would be a recipe for instant insolvency at many institutions. The fears that are locking up the credit markets would be realized, and a number of banks would probably fail.

Ms. Schwartz won’t say so, but this is the dirty little secret that led Secretary Paulson to shift from buying bank assets to recapitalizing them directly, as the Treasury did this week. But in doing so, he’s shifted from trying to save the banking system to trying to save banks. These are not, Ms. Schwartz argues, the same thing. In fact, by keeping otherwise insolvent banks afloat, the Federal Reserve and the Treasury have actually prolonged the crisis. “They should not be recapitalizing firms that should be shut down.”

Rather, “firms that made wrong decisions should fail,” she says bluntly. “You shouldn’t rescue them. And once that’s established as a principle, I think the market recognizes that it makes sense. Everything works much better when wrong decisions are punished and good decisions make you rich.” The trouble is, “that’s not the way the world has been going in recent years.”

Instead, we’ve been hearing for most of the past year about “systemic risk” — the notion that allowing one firm to fail will cause a cascade that will take down otherwise healthy companies in its wake.

Ms. Schwartz doesn’t buy it. “It’s very easy when you’re a market participant,” she notes with a smile, “to claim that you shouldn’t shut down a firm that’s in really bad straits because everybody else who has lent to it will be injured. Well, if they lent to a firm that they knew was pretty rocky, that’s their responsibility. And if they have to be denied repayment of their loans, well, they wished it on themselves. The [government] doesn’t have to save them, just as it didn’t save the stockholders and the employees of Bear Stearns. Why should they be worried about the creditors? Creditors are no more worthy of being rescued than ordinary people, who are really innocent of what’s been going on.

In 2002, Mr. Bernanke, then a Federal Reserve Board governor, said in a speech in honor of Mr. Friedman’s 90th birthday, “I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”

“This was [his] claim to be worthy of running the Fed,” she says. He was “familiar with history. He knew what had been done.” But perhaps this is actually Mr. Bernanke’s biggest problem. Today’s crisis isn’t a replay of the problem in the 1930s, but our central bankers have responded by using the tools they should have used then. They are fighting the last war. The result, she argues, has been failure. “I don’t see that they’ve achieved what they should have been trying to achieve. So my verdict on this present Fed leadership is that they have not really done their job.”

October 18, 2008 Posted by | economics | Leave a comment

The latest project

I think Pollini plays it just a little too fast for my liking, I’d say it shouldn’t take less than 4.30, but you get the general idea…

October 14, 2008 Posted by | Chopin, music | 2 Comments

Et par tal

Udvalgte tal fra statistikbanken (alle tal angiver antal sigtelser):

1995: 270
2006: 367
Ændring i perioden: +35%

Voldsforbrydelser i alt:
1995: 10.198
2006: 15.315
Ændring i perioden: +50%

Vold o.l. mod offentlig myndighed:
1995: 1.267
2006: 2.727
Ændring i perioden: +115%

October 14, 2008 Posted by | kriminalitet | Leave a comment

Troubled Sleep

I have been reading Jean-Paul Sartre’s La Mort Dans L’Ãme in an English translation (Troubled Sleep) by Gerard Hopkins. The book is the third and last part of his trilogy Les Chemins de la Liberté (The Roads to Freedom).

Here’s a (longish) quote from the book, page 370, from a conversation between two french POWs, the communist Brunet and his, friend(?), Schneider. Brunet is speaking:

You know perfectly well that there are certain natural laws and that it is the way of buildings to stay standing when they have been built in conformity with those laws. Why, then, should I spend my time wondering about the policy of the U.S.S.R. and why should I raise the question of my confidence in Stalin? I have complete confidence in him, yes, and in Molotov and in Zhdanov – as much as you have in the solidity of these walls. In other words, I know that history has its laws and that, in virtue of those laws, an identity of interest binds the country of the workers and the European proletariat. I give no more thought to these things than you do to the foundations of your house; my knowledge is the floor under my feet and the roof over my head. In that certainty I live and behind that certainty I shelter. That is what makes it possible for me to carry on with the concrete duties the party assigns to me. When you stretch out your hand to grasp your mass cup, the mere fact of that gesture postulates a universal determinism. Similarly with me, my every act, no matter how trivial, affirms implicitly that the U.S.S.R. is the vanguard of World Revolution.

I’ve liked the book until now, and I only have 50 pages or so to go. It’s well written, and especially the first part of the book gives a great insigth into the ‘spirit of the time’ when the Germans broke through and the French had to deal with the fact that they were, unlike 25 years before, definitely losing the War, and losing it fast. The chaos, the uncertainty, the panic, the choices and dilemmas people confronted, the random events that would decide a person’s fate for years to come, if not for ever. Sartre does this very well. Yeah, I know, Sartre was a commie, and commies aren’t cool, but the book is about so much more than that; and when Sartre actually makes the case for communism, indirectly, you can just as easily use the very same passages to criticize him and that part of his ‘thinking’.

October 9, 2008 Posted by | books | Leave a comment

A game

10 min. blitz,

(anonymous player) – US:

1.b4?! … Nf6,
2.Bb2 … d6,
3.c4 … e5,
4.e3 … Nc6,
5.b5 … Ne7,
6.d4 … exd4,
7.Qxd4 … Nf5,
(a strange move, and certainly not the best. Qd2 seems like the obvious move to me) … Be7,
9.Nf3 … 0-0,
10. Be2

… d5 (I was spending quite a bit of time on that move, I’ll admit that),
11. cxd5 … Nxd5,

Before move 10, I was wondering if 12.e4 would be ‘a killer’ or not. I found that it wasn’t; white hasn’t castled yet! If 12.e4 then Bb4+ followed by 13.Nbd2 (or Nc3 or Bc3, but then white doesn’t gain anything by the e4-move) and black has 13…Nf4! followed by 14…Re8 if white takes with the pawn. This position is not materially balanced, no, but it looked to me as if the attack was worth it:

Fritz agrees, and for instance gives this (quite complicated) line: 14.exf5 … Re8, 15.Be5 … Nxe2, 16.Qxd2 … Bxf5 (black shouldn’t play …f6? yet of course, as this is refuted by 17.Qc4+!, after which black is dead), 17.0-0

… Bxd2, 18.Rad1 (if Nxd2 … f6 follows. The check on c4 doesn’t help white after …Be6) … Bg4, 19. Rxd2 …. Bxf3, 20.Qe3 (the b-pawn is hanging if he takes with the rook) … Qe7. White can in other words not hold on to his material advantage if he plays e4 even if he plays correctly, so my intuition about the d5 move and the resulting complications was correct. Besides, complicated games are more interesting 😉

I couldn’t use my calculations regarding 12.e4 to anything, however, as white decided not to sharpen the game by e4, but instead chose to play a completely different move:

12. Bc4 … Bb4+,
13. Ke2
(Nbd2 is probably better) … c6,
14. Qb3 … Nfe7,
15. Rd1 … Ba5,
16. e4

… Nf5+,
17. Kf1 … Qc7??
(I was starting to feel that I had to move my pieces a bit faster or I’d soon be in time trouble. So I played a bit faster and threw away the game by completely missing 18.Be5! Luckily, so did my opponent)
18. g3? … Ne6,
19. Be5
(one move too late…) … Qb6,
20. Nd4 …

21. Qf3 … cxb5,
22. Nxb5 … Qg6!
(threatening to take on e4 as well as threatening …Bg4),
23. Bd6 … Bg4
24. Qa3 … Bxd1,
25. Bxe7 … Qxe4!,

Black’s position is winning, but that I’d win as fast as I did I had no idea (even if my opponent was nearing the one minute mark and severe time trouble I did not think he’d miss a mate in one. He did)

26. Bxf8?? … Qh1++


October 8, 2008 Posted by | Chess | Leave a comment

FDR and the US economy during the 30’es

Here are some US unemployment numbers from the 30’es (follow the link for source and further comments):

1930: 8.7%
1931: 15.9%
1932: 23.6%
1933: 24.9%
1934: 21.7%
1935: 20.1.%

I have a few more stats to add to this picture. Below is a table of annual compounded GDP growth rates for selected countries/areas, 1925-1938:

Belgium: 2.3*
Denmark: 2.4
France: -0.2
Germany: 4.1
Italy: 1.8
Netherlands: 1.3
Norway: 3.4
Sweden: 3.1
Switzerland: 1.9
United Kingdom: 2.5
Europe: 2.2
Canada: 1.8
United States: 1.0
Japan: 3.8

(*: 1924-1938)

Source: Kenwood & Lougheed, Growth of the International Economy 1820-2000, edition, p.177, table 18. Their source is A. Maddison, ‘Growth and Fluctuation in the World Economy, 1870-1960’, Banca Nazionale del Lavoro Quarterly Review (June, 1962), Table 5, p.141.

Only one of the countries in the above listing, France, did worse than the US during this period. No, FDR and his ‘New Deal’ can’t be blamed for the first 8 years, but…

Incidentally, every time you hear someone compare the current crisis with the Great Depression, have the above unemployment figures in mind. The current US unemployment is around 6%.

October 6, 2008 Posted by | economics, history, USA | Leave a comment

Americans aren’t too fond of their politicians

Congress was front and center in the national news last week and the American people were far from impressed. If they could vote to keep or replace the entire Congress, 59% of voters would like to throw them all out and start over again. The latest Rasmussen Reports national telephone survey found that just 17% would vote to keep the current legislators in office.

Today, just 23% have even a little confidence in the ability of Congress to deal with the nation’s economic problems and only 24% believe most Members of Congress understand legislation before they vote on it.

Only half (49%) believe that the current Congress is better than individuals selected at random from the phone book. Thirty-three percent (33%) believe a randomly selected group of Americans could do a better job and 19% are not sure (see crosstabs).

A separate survey found that just 11% of voters say Congress is doing a good or an excellent job.

Rasmussenreports has more, via Glenn Reynolds.

October 6, 2008 Posted by | politics, USA | Leave a comment

Beware of wishful thinking!

An excerpt from Eliezer Yudkowsky’s latest post on OB:

Looking back on the magnitude of my own folly, I realized that at the root of it had been a disbelief in the Future’s vulnerability – a reluctance to accept that things could really turn out wrong. Not as the result of any explicit propositional verbal belief. More like something inside that persisted in believing, even in the face of adversity, that everything would be all right in the end.

Some would account this a virtue (zettai daijobu da yo), and others would say that it’s a thing necessary for mental health.

But we don’t live in that world. We live in the world beyond the reach of God.

Many who are atheists, still think as if certain things are not allowed. They would lay out arguments for why World War II was inevitable and would have happened in more or less the same way, even if Hitler had become an architect. But in sober historical fact, this is an unreasonable belief; I chose the example of World War II because from my reading, it seems that events were mostly driven by Hitler’s personality, often in defiance of his generals and advisors. There is no particular empirical justification that I happen to have heard of, for doubting this. The main reason to doubt would be refusal to accept that the universe could make so little sense – that horrible things could happen so lightly, for no more reason than a roll of the dice.

But why not? What prohibits it?

In the God-universe, God prohibits it.

It is a long post, so I’d just add: …and when God’s not around, the answer to the last question is basically this: Nothing.

To me, this insight is crucial. Everything is not “going to be allright”, just because we think it ought to. The Universe doesn’t care about the human concept of ‘fairness’, much less your concept of fairness. Never has, never will. If you don’t understand this, if you don’t keep remembering this insight, you will fall prey to wishful thinking; and wishful thinking will muddle your thoughts and make it harder for you to interpret reality as it is rather than as you think it should be.

The insight is not new to me, but I shall admit that it was not an easy one to grasp at the time, and I still struggle to grasp the full consequenses of it. It is very easy to see why people would fall prey to this line of thought, even if they have rejected God: Basically, it makes you feel good, and the alternative is very troubling – there are a lot of hard questions to deal with if you give it up after first having believed it and invented reasons for legitimizing your divinely inspired optimism.

The loss of ‘order’ is probably what hurts the most when you ‘get the message’. But the orderly world the unfounded optimism gives you is neither more nor less orderly than the chaotic world you actually live in today. The idea of a ‘Divine Plan’, the idea of ‘historical laws’ – neither give you order, all they can ever give you is the illusion of order. An illusion that prevents you from seeing the world as it really is; the world without ‘historical necessities’, the world without ‘divine plans’.

And no, after you’ve taken off your blindfolds you shouldn’t conclude that ‘nature is cruel’ or some such. ‘Nature’ isn’t cruel, ‘nature’ isn’t evil, it doesn’t have an opinion one way or the other; ‘it’ doesn’t give a damn. To quite a few atheists, ‘Nature’ would seem to care about as much about you as ‘God’ does.

October 4, 2008 Posted by | history, quotes, religion | Leave a comment