On-line gambling

I’ve never gambled on-line and I have no intention of ever doing so. But, I think it is ridiculous the lengths our government has gone to prevent adults from doing so. It wasn’t enough to actually move all the gambling servers to Caribbean islands, etc.,– that seems reasonable enough that you won’t let the actual company exist within the US– but they’ve actually made it very hard to use your credit card with an on-line gambling company. Sure there’s problems with gambling, but there’s also problems from eating too much fast food. The government is well within its rights to nudge us one way or another, but, in general, should let adults behave as adults when it is clear they are engaging in consensual actions that don’t directly harm others.

Big Steve, who does enjoy his on-line poker (from Canada) makes the point of the hypocrisy of all this given all the state-sponsored lotteries.

My basic view is that if states can run lotteries, then citizens should be able to gamble online.  They actually have a decent chance of winning in a poker tourney, whereas the lottery is mostly for people who do not understand math.  Which one is more or less moral?  Yes, poker online can give gambling addicts more opportunities to lose their money, but keeping it illegal is just going to move those folks deeper underground.  Yes, kids can play online but not in regular casinos and that is a problem.  But how about we give parents some responsibility on that.  There are all kinds of things online–we need to figure out how to handle that challenge besides all or nothing, one size fits all solutions…

But I am not clear why adults cannot gamble online if states are actively promoting gambling in another form–lotteries–where the odds are much more against the player.  I do, however, understand the desire for politicians to play to certain blocs of voters to demonstrate that they are sufficiently religious/observant.  So, I am not sure the status quo will be changed, but there has been more progress than I would have expected.   I guess I shouldn’t gamble on the outcome.

I’d love to see this Puritan impulse in our government go the way of laws against using birth control.

More of this

I wish there were more Anthony Weiners in Congress.  This is simply awesome:

Chart of the day

Via Ezra:


I like his take, too:

At the moment, I’d put my money on a two-year extension of all the tax cuts, including those for the rich. But either way, we’re talking about adding $3+ trillion onto the debt, and the Republican position is that we should add even more than that. Meanwhile, we’re cutting food stamps to pay for Medicaid.

The Ownership society

Much to my dismay, WordPress does not allow you to embed Daily Show or Colbert videos.  Urgh.  It’s with your time to click through, though, to watch Colbert take down supply-side economics as only he can.

The $320K/year Kindergarten teacher

Fascinating Dave Leonhardt column (and here’s a blog post) on the apparent life-long effects of having a good vs. bad Kindergarten teacher.

How much do your kindergarten teacher and classmates affect the rest of your life?

Economists have generally thought that the answer was not much. Great teachers and early childhood programs can have a big short-term effect. But the impact tends to fade. By junior high and high school, children who had excellent early schooling do little better on tests than similar children who did not — which raises the demoralizing question of how much of a difference schools and teachers can make…

Just as in other studies, the Tennessee experiment found that some teachers were able to help students learn vastly more than other teachers. And just as in other studies, the effect largely disappeared by junior high, based on test scores. Yet when Mr. Chetty and his colleagues took another look at the students in adulthood, they discovered that the legacy of kindergarten had re-emerged.

Students who had learned much more in kindergarten were more likely to go to college than students with otherwise similar backgrounds. Students who learned more were also less likely to become single parents. As adults, they were more likely to be saving for retirement. Perhaps most striking, they were earning more.

Short version: kindergarten teachers are really important (not to suggest others aren’t too, but there’s probably something about shaping a child’s first classroom educational experience) and we ought to take this more seriously:

Mr. Chetty and his colleagues — one of whom, Emmanuel Saez, recently won the prize for the top research economist under the age of 40 — estimate that a standout kindergarten teacher is worth about $320,000 a year. That’s the present value of the additional money that a full class of students can expect to earn over their careers. This estimate doesn’t take into account social gains, like better health and less crime.

We need to treat teachers like professionals, pay them like professionals, and have expectations like professionals.  We don’t really do this.  Part of me cannot help wondering how much of this is because elementary and secondary education is a field traditionally dominated by women.   Here’s also a good opportunity to plug perhaps my favorite Gladwell article ever on teacher quality.  You really should read it.

Friday Book Post: the Big Short

So, finished reading The Big Short at the beach last week (I was way over-optimistic on my beach reading— only finished this and got a little under way on The Poisoner’s Handbook). As expected, really great book on the financial crisis– highly recommended.  It was pretty technical at times, but it kind of had to be to really tell the story.  Anyway, I could write a huge post on this, but just a few points that really struck me that I’m going to restrict myself to.

1) Bond rating agencies were really dumb.  I already knew that, of course, but I just did not realize how jaw-droppingly stupid the people rating the toxic assets were.  I did know that this whole mess would’ve never happened without the ratings agencies giving AAA ratings (as solid as US T-bills) to absolute crap, but I was shocked to find out how moronic (I’m running out of words on this point) they were.  Here’s what really killed me.  Apparently, a person with a credit (FICO) score of 615 and above is quite unlikely, historically-speaking, to default on a loan.   Thus, Moody’s and Standard & Poor’s required that the average, i.e., mean, FICO score for a CDO (a slice of a collection of mortgages be 615.  They did not look at the individual mortgages at all.  Thus the Wall Street wizzes very quickly gamed the system.  Load up CDO’s with a bunch of awful mortgages to people with FICO scores of 450 and just make sure you balance them off with an equal number of people with 780– thus, your mean of 615.  Problem is, a mortgage to someone with a FICO score is pretty much doomed to fail, and these were a huge portion of the CDO.  Yet, these financial instruments got AAA ratings– again, suggesting they are basically no-risk investments.  Nuts!!!!   Bill Gates walks into a bar, the average patron in the bar is now a millionaire.  Rocket science, this ain’t.

2) Investors are over-privileged and stupid.  One of the heroes of the book is an investor, Mike Burry, who saw this coming and made huge returns for himself and his investors.  This guy was pulling in amazing profits for his investors, but once he started lagging the market for just a little while they were all ready to bail.  Do they really think they should always be having great returns?  Apparently so.  A lot of investors missed out on a lot of money because they were not patient with Burry when it was quite clear he was seeing things other people were not.

3) Incentives matter.  Again, not exactly a new point, but critical to this big mess is that the giant Wall Street Firms incentivized short-term profit, rather than long-term gain, at almost every step.    In fact, many of the people who basically destroyed our economy walked away multi-multi millionaires.  I think financial reform may have tried to address this to a degree, but I suspect not nearly enough.  Far too much of Wall Street is incentivized for what is truly little more than short-term gambling with no larger social benefit.  That sucks.

4) Read it.

Metaphor of the day

I know I have plenty of my own stuff to say, but sometimes it seems tempting to just have my blog link automatically forward over to Jon Chait.  To quasi-paraphrase Carly Simon, when it comes to liberal blogging, “nobody says it better.”  Anyway, I love his metaphor for the Republican supply-side approach to taxes:

Imagine a man who has to lose weight. Either he needs to eat fewer calories or burn more of them. Conservatives are arguing that he should exercise less, because this will force him to eat less food. Foster writes, “Lower taxes are evidently what the American people want, which is especially galling to the tax-increase crowd.” And it’s true — Americans want to keep their spending and tax cuts too. Diets that promise to let you spend all day on the sofa and still eat lots of delicious food are also popular.

Ending the filibuster

Sadly, too many moderate/conservative Senate Democrats are too stupid to realize that the filibuster needs to be ended, and that if they don’t do it, the Republicans surely will next time they get the chance.   First, Cohn:

And now the bad news:

Five Senate Democrats have said they will not support a lowering of the 60-vote bar necessary to pass legislation. Another four lawmakers say they are wary about such a change and would be hesitant to support it.

The nine senators wary of or opposed to abolishing the filibuster include some of the caucus’ most conservative members, including Max Baucus, Ben Nelson, and Mark Pryor. And that’s hardly surprising.

When it takes 60 senators to pass all legislation, the Democratic leadership has to rely on these people not only for their votes but also for their cache among Republicans. In other words, Democrats aren’t going to get Charles Grassley to vote for a bill if Max Baucus doesn’t vote for it, too. That’s going to matter even more next year, after the elections, if/when the Democrats lose seats and need Grassley (plus a few others) to move legislation.

Of course, the filibuster empowers individual Democrats at the expense of the party as a whole. If it’s sixty-votes-or-bust for the next few years, Democrats may be done passing major initiatives.

And now, Jon Chait wonderfully lays out the logic of this all:

In reality, the Senate does not function in anything like the idealized way that Senators imagine. It’s the House with a supermajority requirement (except for the budget.) Here’s Jon Tester:

“I think the bigger problem is getting people to work together,” he said. “It’s been 60 for a long, long time. I think we need to look to ourselves more than changing the rules.”

It’s been 60 since 1975. And for the majority of that time, the filibuster was a weapon of strong protest, not a routine supermajority requirement. But the old rare use of the filibuster was an unstable equilibrium. You can’t have a competitive system where one side can use its most powerful weapon anytime it chooses but is expected not to do it that often. If baseball teams were allowed to deploy two extra fielders any time they wanted, but were expected to save the move for moments when they really needed a stop, how long would it take before every team always deployed 11 fielders? [me: love this metaphor]

The rare use of the filibuster survived as long as it did because the legacy of Jim Crow created an odd arrangement where party ties did not correspond to ideology. That era is not going to return. The political environment is competitive and parties are not going to leave a weapon lying on the ground.

That’s why the filibuster’s days are numbered: The majority does have the power to change the rules at the outset of a session. Democrats will make this notion a part of the party litany and demand it of candidates, and eventually the older Senators will be replaced by younger ones. More likely, the Republicans will simply change the rules first. This will happen the next time Republicans gain control of the White House, the House of Representatives, and more than 49 but fewer than 60 Senate seats. The old institutionalist concept of the Senate is mostly dead on the Republican side anyway. Gaining control of the White House and both chambers of Congress simultaneously is pretty hard to do anyway. There’s no way Republicans are going to allow Democrats veto their agenda in such circumstance out of loyalty to a 1970s-era compromise.

I think this is spot-on.  Republicans are simply better at the game of politics.  Democrats are happy to shoot themselves in the foot.  In the modern filibuster era, there’s no way the next 51+ Republican Senate will be willing to govern with one hand tied behind their back.

PSA: You need more vitamin D

Seriously.  Nice article in the Times sums this up.  I listened to a podcast on this a while ago and was intrigued to learn that the current RDA standard were based on not incurring a crippling disease from Vitamin D deficiency, rather than determining a level which is truly healthy.  At my last physical I was quite surprised to learn I was just barely in the healthy range after making a concerted effort to get more Vitamin D (despite my very imperfect physique, I started jogging topless in the summer just to get the extra rays).  Anyway, here’s a bit from the article:

While studies continue to refine optimal blood levels and recommended dietary amounts, the fact remains that a huge part of the population — from robust newborns to the frail elderly, and many others in between — are deficient in this essential nutrient…

Studies indicate that the effects of a vitamin D deficiencyinclude an elevated risk of developing (and dying from) cancers of the colon, breast and prostate; high blood pressure and cardiovascular disease; osteoarthritis; and immune-system abnormalities that can result in infections and autoimmune disorders like multiple sclerosisType 1 diabetes and rheumatoid arthritis.

Most people in the modern world have lifestyles that prevent them from acquiring the levels of vitamin D that evolution intended us to have. The sun’s ultraviolet-B rays absorbed through the skin are the body’s main source of this nutrient. Early humans evolved near the equator, where sun exposure is intense year round, and minimally clothed people spent most of the day outdoors…

Dr. Michael Holick of Boston University, a leading expert on vitamin D and author of “The Vitamin D Solution” (Hudson Street Press, 2010), said in an interview, “We want everyone to be above 30 nanograms per milliliter, but currently in the United States, Caucasians average 18 to 22 nanograms and African-Americans average 13 to 15 nanograms.”

Vitamin D supplements are very affordable– think about it.  The Greene family is getting them.

The real point of reality shows

After deciding to watch about 20 minutes of “Toddlers and Tiaras” last night, I’m more convinced than ever of my main theory on reality shows– the are there to make you feel better about yourself by comparing yourself to the people on the shows.  Reality TV as ego boost.  One of my guilty pleasures is watching Wife Swap on occassion with David.  Invariably, both families are extreme and nuts in opposite ways.  This way, everybody gets to feel totally superior to both families (e.g., the ones that make their kids wear sterile masks versus the ones that live in utter filth).  Anyway, after watching the beauty pageant parents last night for a while I said to David, “these parents make the ones on Wife Swap look like ‘Parents of the Year'”.  They could simply rename that show “How not to parent” or “parenting fail.”  I have to admit to being pretty entertained, though.  And whatever mistakes I may make as a parent, I’m sure a hello of a lot better than that.  :-).

The politics of “stupidity”

As I’m sure I’ve mentioned before, I love it when EJ Dionne gets really worked up– I wish he’d do it more.  Still, despite a whole column on stupidity in our politics, being EJ, he’s pretty oblique in calling out Republicans or conservatives by name as actually being overwhelmingly responsible for all this stupidity.  A sampling:

Start with taxes. In every other serious democracy, conservative political parties feel at least some obligation to match their tax policies with their spending plans. David Cameron, the new Conservative prime minister in Britain, is a leading example.

He recently offered a rather brutal budget that includes severe cutbacks…

That could never happen here because the fairy tale of supply-side economics insists that taxes are always too high, especially on the rich…

The notion that when we are fighting two wars, we’re not supposed to consider raising taxes on such Americans is one sign of a country that’s no longer serious. Why do so few foreign policy hawks acknowledge that if they lack the gumption to ask taxpayers to finance the projection of American military power, we won’t be able to project it in the long run?…

Then there’s the structure of our government. Does any other democracy have a powerful legislative branch as undemocratic as the U.S. Senate?

When our republic was created, the population ratio between the largest and smallest state was 13 to 1. Now, it’s 68 to 1. Because of the abuse of the filibuster, 41 senators representing less than 11 percent of the nation’s population can, in principle, block action supported by 59 senators representing more than 89 percent of our population. And you wonder why it’s so hard to get anything done in Washington?

Good stuff, all of it.

I’ll use small words: the stimulus worked

One of the most frustrating things of late is that in many quarters it is considered a liability to have supported the stimulus and is taken as a matter of faith that it didn’t work at all. Of course, the evidence to the contrary is quite overwhelming.  Via Yglesias:

Annie Lowrey observes that “that the stimulus — the $787 billion American Reinvestment and Recovery Act — had less impact and proved less important than the government’s monetary policy and financial-market stabilization measures, like the Fed buy-up of mortgage-backed securities.” And this isn’t because ARRA didn’t work: “the fiscal stimulus alone appear very substantial, raising 2010 real GDP by about 2%, holding the unemployment rate about 1.5 percentage points lower, and adding almost 2.7 million jobs to U.S. payrolls.” [emphasis mine]

I still the Democrats should go on the offensive on this.

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