Saturday, November 3, 2012

And this is why you remember to hit "publish" when you're done.

Originally written just prior to the 2012 election.

I just googled "Romney landslide."  Given that ol' Nate Silver is predicting an 80% chance of Obama winning (83% as of this writing) I just want to get the results down, for the record:  (Wayne Allyn Root is a capitalist evangelist and serial entrepreneur.)  Gives a lot of hunches and perceived trends, but mostly focuses on, "hey, I've called races correctly before".

Mark Tooley predicts a Romney landslide, but only among the (increasingly irrelevant) white evangelical demographic.  Doesn't really count. :  Dick Morris, possibly the wrongest person in politics, predicts Romney landslide.  Nate Silver's response to the prediction?  "Sell Romney on InTrade!"

For the record, he's predicting (as of 10/30, eight days before the election), that Romney will take Indiana, North Carolina,  Florida, Virginia, and Colorado, perhaps also Ohio, New Hampshire, and Iowa.  He's calling Pennsylvania, Michigan, Minnesota, and Wisconsin the new battleground states.  He is also predicting 53 Republicans, 47 Democrats in the Senate.  I believe he'll be proven somewhere between "thoroughly" and "laughably" on the wrongness scale, but we'll see.  David W. Thornton has Romney winning 331 to 207.    Prediction seems to hinge entirely on "the Incumbent Rule", which says that undecided voters mostly break for the challenger.  There have been a few famous elections where the rule obviously held, but for the most part it seems to be a myth.

"David W. Thornton is a freelance writer and commercial pilot. He writes from the perspective of a conservative Christian and economic libertarian. He is a graduate of the University of Georgia and Emmanuel College."

The laughably awful Unskewed Polls is predicting the widest Electoral College margin of anyone I can find, 337-201 in favor of Romney.  Their prediction strategy -- actually, their entire reason for existing -- is to recalculate actual polls, based on the assumption that every single polling organization (including right-leaning Rassmussen and Fox News) are oversampling Democrats and undersampling Republicans.

Other Unskewed predictions to test against:  Romney wins Florida 52%-44%.  Romney wins Colorado, 52%-46%.  Romney wins Iowa, 49.4%-48.6% (too close to round).  Romney wins Nevada, 57%-42%.  Romney wins New Hampshire, 48%-47%,  North Carolina 57%-42%, Ohio 50-49%, Pennsylvania 50-47%, VA 52-46%.  Note, these predictions not only include the "unskewed" poll numbers, but also assume a 3/1 advantage for Romney among undecided voters.  It's hard to imagine this being even close to right.

For a similar exercise, visit: 

Thursday, July 5, 2012

Mia Love: Hater

Note: Mia Love is running for Utah's 4th congressional district against Jim Matheson, who it appears I will once again be forced to vote for.

Candidate Mia love has gone on record to say that her priority is to "balance the budget," and to explain just how she'll do that.  Setting aside the fact that the country has had a truly balanced budget for perhaps fifteen of the last two-hundred years, I'll admit that deficit spending is a problem.  It's not the problem, as Love seems to think, but it's a problem.

But given the programs she's got in her sights, her solutions are akin to losing weight by taking a chainsaw to your leg.

Mia Love’s targets (via the Salt Lake Tribune):

Eliminate HUD housing programs.

Cut food subsidies by 50 percent

End K-12 subsidies
End college assistance

Cut Earned Income Tax Credit in half

End Environmental Protection Agency grants

Eliminate Corporation for National & Community Service (includes AmeriCorps)
Love would also privatize Amtrak, the air traffic control system, and the Army Corps of Engineers; end subsidies to the Public Broadcasting Service; eliminate various energy-efficiency and research programs; and cut various health department grants by half.

Her list is a Who's Who of the investments this country makes in itself.  Cuts in education?  Cuts to the EPA?  Raising taxes on the poorest Americans by cutting the EITC?  Make it harder -- or even impossible -- for the poor to find affordable housing?  Stop refurbishing buildings to be more energy efficient?  It seems like Mia Love's typifies the thinking of the modern Republican Party:  If it makes our society more humane or invests in the future, it's got to go.

And here's the kicker.  From the story: "[Love's plan] doesn’t touch the Defense Department, an area Love said she needs to understand better before recommending cuts."  But she understands HUD well enough to eliminate it?  She understands the EPA well enough to virtually defund it?

What we should do instead

Austerity has shrunk every economy where it's been tried, so cutting a dollar from anti-poverty programs is the same as taking a dollar from the till of the grocery store the recipient shops at.  That's income the grocery store won't be paying taxes on, and if they lay off a worker as a result of the lost sales, you betcha we'll lose even more income with which to pay our debts.  By contrast, the money we send to the wealthy in the form of tax cuts has little stimulus value; it will most likely sit in a bank account or go to pay down debt.

Further, the current national deficit is caused in part by the stagnant economy.  When the economy is poor, wages go down which drives down revenues.  Meanwhile, many of the anti-poverty programs like food stamps and unemployment need to pay out more.  Speed up the economy, and both those problems are solved.

The "tough choice" may sound morally satisfying, but we're trying to run an economy, not put on some sort of Puritan morality play.  The "smart choice" would be to continue assisting the people who are struggling, raise taxes on the "job creators" for doing such a sucky job creating jobs, and invest in the laundry list of things that will put us on the road to future economic solvency. 

That list includes health care and nutrition programs for poor children (making them more productive down the road), investing in infrastructure (especially by remodeling buildings to increase their energy efficiency and expanding mass transit and Internet services), increasing funding for basic scientific research, and tightening regulations against the pollutants that have the most damaging effects on human health.  For example, the new MACT regulations are supposed to drive up energy costs, but for every dollar added to the nation's electric bill, about $10 will be subtracted from our health care bill.

We should also be cutting expenditures where it doesn't make sense.  The DoD is bloated and needs to be radically pared back or given a secondary mission.  The justice department needs to stop wasting money trying to control marijuana.  The FDA could do it way cheaper.  Farm subsidies to any corporate entity with a budget of over $10M/year is just stupid. 

But for the Love of Mia, cutting support for people who are trying to get an education?  Cutting research on the next generation of energy technology?  How does that make any sense?

Wednesday, June 27, 2012

Because you care what I think about lotteries

A brief discussion with a friend who now lives in a lottery-enabled state (read: not Utah) got me thinking about lotteries in general. In the mind of the average taxpayer, the lottery is some kind of blessed magical fairy creature: the government gets revenue to provide services, and you don't have to pay for any of it. Yay!

But the reality is a lot uglier, more like a slimy cave troll: it raises the effective tax rate on people who are simultaneously poor, desperate, and mathematically challenged, while lowering tax rates for people who can better afford to pay. So it's inherently regressive. The fact that it's voluntary doesn't mitigate the ickiness much.

I went looking for an article that estimated the ROI for a lottery ticket. It's about fifty cents on the dollar once you account for income taxes and the fact that the cash payout is much lower than the advertised prize. Yes, the cash payout is the one to plug into the equation. Just roll with it.

But even that may be overstating the value. I'm sure people buy tickets for lots of reasons, but to simplify the discussion, let's assume that every person who buys a ticket does so to receive a small chance of never having to work another day in their life. It sounds fairly reasonable, but it entirely changes the effective value of a lottery ticket. To see why, we need to account for something called...

The Law of Diminishing Returns

The law of diminishing returns comes out of economics 101. It says that, the more you have of something, the less valuable another one of those things is. Take eyeballs. If you have no eyeballs, and someone fits you up with a working eyeball, that eyeball is very, very valuable. Now say that you have one eyeball, and someone fits you with a second eyeball. You might end up with a wider range of vision, but it's not nearly as dramatic a change in your life. Now say that someone hooks you up with a third, fourth, and fifth eyeball. You look at them with all your eyes, and think to yourself, "how are you being helpful?"

It works similarly for television sets, bottles of beer, cars, and laptops. In fact, most useful things become dramatically less useful as you get more of them. This includes money.

Say that your income rises from $0/month to $1000/month. Now, rather than starving in the street, you can suddenly afford food and a roof over your head. Maybe bus fare as well, if you're lucky. Now let's raise your income again, from $1000/month to $2000/month. Now you can afford slightly better food, a slightly classier roof over your head, a car instead of a bus, perhaps health insurance, and the occasional luxury item. Now let's raise your income again, to $3000/month. You use it to start buying organic food, a house of your own, a slightly nicer car, more comprehensive health insurance, and start saving for retirement.

I could go on like this all day, but the point is that, each time your income is raised, you use the new money to buy less value than the old money was buying. I'm 35, so let's assume I'll live another fifty years. How big a lottery jackpot would I need to give me $3000/month for the rest of my life? About $1.8M (pretending the jackpot doesn't accrue interest). A jackpot of $18M would give me $30K a month, which is more than I could imagine spending on myself.

So if your goal is a comfortable income, a $100M jackpot is barely more valuable than a $20M jackpot, which is only a fair amount more valuable than a $2M jackpot. In the astonishingly unlikely event that you win the lottery, most of the "return" comes in the form of a useless pile of money piled on top of the much smaller pile of money that you would actually miss if it disappeared.

What does this mean for you, gentle ticket-buyer?

  1. This cannot be stressed enough: DO NOT BUY LOTTERY TICKETS!!!
  2. It would be better for participants if lotteries were restructured so that, instead of having one $300M jackpot, it had 300 $1M jackpots (or perhaps even 3000 $100K jackpots). If people are dumb enough to buy these tickets in the hopes of gaining a better life, let's give them a slightly better shot at it.
  3. The law of diminishing returns can also apply to other forms of gambling, or any game where money is on the line. If you're playing "Deal or No Deal," it suggests that you should walk away way sooner than an ordinary ROI calculation would suggest. Remember that the ROI doesn't distinguish between a 100% chance at $500K and a 50% chance at $1M. But the latter will make a somewhat smaller impact on your life.

Tuesday, May 8, 2012

Self-driving cars: Safety and Liability

Why would we want self-driving cars? Self-driving cars could reduce auto fatalities, let people be more productive with their driving time, lower stress, liberate people who aren’t able to drive for themselves, and do away with the concept of the ‘designated driver’. Later on, when self-driving cars dominate, they’ll be able to talk to each other to reduce traffic congestion by coordinating maneuvers and by letting each other know which roads are too congested. Lots of other, more speculative goodies may also be there for the taking.

Trust me, you’re going to love it.

So where’s the problem? In two words: legal liability. By removing the driver from the equation, the auto manufacturer is making the car’s on-board software (which is part of the product they’ve sold) responsible for any accidents that might occur. Even if the overall accident rate drops significantly, the manufacturers can’t succeed if they’re paying out several million dollars each time the system fails.

Further, you can expect that in many of the collisions between human-driven and automated cars, the human will be at fault but the judicial system will convict the machine instead. So even a perfect system doesn’t eliminate the liability issue.

There are other problems as well. Each state in the US has a thicket of laws explaining in detail how a driving vehicle should behave, and most of these laws assume that there is a human at the wheel. Manufacturers aren’t going to field self-driving cars in any state where it’s unclear whether the “driver” spoken of in the laws refers to the person sitting behind the wheel or the software that actually controls the car.

You got a solution? I have some ideas. I’m nowhere close to being an expert in this domain, so be very skeptical of them.

Let’s start by certifying the self-driving systems. I’m imagining four levels of certification:

  1. Experimental Autonomous Vehicle
  2. Highway-only Autonomous Vehicle
  3. General-purpose Autonomous Vehicle
  4. Driverless Vehicle

Level 1 is meant for manufacturers who are still refining their technology, and for new, incompletely tested software builds for existing hardware configurations. These cars could only be used in self-driving mode if there was an alert employee of the manufacturer sitting behind the wheel, ready to take control of the car in an emergency.

Level 2 is meant for public use, but autonomous driving mode would only be available on the highway. My thinking here is that normal highway driving is a much easier problem to crack than driving through a neighborhood. The driver would not have to be paying attention to the vehicle, but he or she would still need to be able to take over and operate the vehicle at a moment’s notice.

This level is meant as an interim step on the way to fully autonomous vehicles. There would still need to be an awake, licensed, sober driver sitting behind the wheel.

Level 3 is much like Level 2. The only real difference is that autonomous mode could be engaged on surface streets as well as highways.

Level 4 (Driverless Vehicle) should be self-explanatory: the person using the vehicle does not require a license, and doesn’t have to be able to operate the vehicle. Puke-your-guts-out drunk? No problem. Nine years old? No problem. Blind in one eye, can’t see out the other? The roads are yours to command.

Level 4 also opens up the possibility of microcar delivery services. So when you order a pizza, a small electric vehicle – perhaps large enough to hold ten extra-large pizza boxes – delivers it to your driveway. So long as there are legacy drivers (a.k.a. “humans”) on the road, these little cars are going to have to drive very defensively.

But all these levels require some sort of certification, to ensure that they’re safe being used in those ways. I’m guessing this would be the responsibility of the NTSB, but what do I know? Now, testing in the real world isn’t easy. Human drivers are actually pretty safe, (2009 passenger fatalities were 1.14 per 100M vehicle miles) so you have to put a lot of miles on an autonomous car before you can show that it’s safer.

So I expect that much of the certification testing will be done in software, in virtual simulations that demonstrate the vehicle’s responses to different scenarios. This form of testing might be required for each new version of the onboard software. So the certifying agency is going to need a data center full of computers, and (if the testing regimen is going to be efficient) there will need to be standards for auto sensors so that they can be accurately be simulated.

Post-certification testing would be very helpful. If all the cars on the road were collecting and submitting data about the driving situations they get in, what choices they make, and how those choices succeeded or failed, new and dicey situations could quickly be added to the testing suite. Thus, the next version of the onboard software would be better able to handle those situations.

But the specifics of the testing regimen are less important than the results: vehicles that pass the tests and are certified for the appropriate level should be expected to be “safe.” For Level 1 (Experimental Vehicle), we might be lenient, targeting maybe 3 fatalities per 100M miles, meaning that they’re actually somewhat less safe than the average human driver. For Levels 2 and 3, we’d expect a much higher safety standard, say 0.5 fatalities per 100M miles. Level 4 would need to be dramatically safer, to the point where people would eventually consider it irresponsible to question the vehicle’s judgment. A target of 0.05 fatalities per 100M miles would reduce auto deaths by over 95%. I think that’s the sort of safety standard that would be needed before you could persuade the public that we should trust these vehicles completely.

Now, these safety standards wouldn’t be static. As we gain familiarity with the problem space, it might be possible to dramatically tighten the standards, saving even more lives. Or we might discover that, however we try, we can’t make an automated vehicle that is significantly safer than your average human driver.

Legislation: Once the certification is in place, it’s much easier to write appropriate legislation. Here’s what I propose to get the legal liability issues out of the way: If the vehicle has been certified, and the vehicle is being used as described in the given level, both the driver and the auto manufacturer are absolved of any legal liability. Their insurance company will pay their auto damages and medical costs, and the other driver’s insurance will pay those damages.

For Levels 1, 2, and 3, from a legal standpoint, the person operating the vehicle should be considered the driver. For level 4, the vehicle itself should be considered the driver, and laws that presume the driver to be a human being will not apply.

The bigger point here is, this technology presents huge opportunities to make our lives better, and it would be a shame to let legal liabilities block it for decades. Manufacturers will need some immunities from lawsuits (or at least caps on payouts) before it’s safe to enter the market, but that immunity should come at a price: they need to show that their cars are much safer than human drivers.

Friday, April 27, 2012

Why did Henry Ford pay better wages?

[response to Minimum-wage Misconceptions over at, wherein I put on my Pretend Economist Hat.]

Nice article, but I do want to say something about Henry Ford. I've often heard this motivation dismissed as mythical: Ford did not raise wages in order to create demand for automobiles within his company.

I suspect that's true, because when you look at the economics of such a move, it doesn't make any sense. First, there's nothing stopping your workers from spending the wage increase on the many things that aren't automobiles. Second, there's nothing stopping them from buying their autos from your competitors. Finally, even if you ignore those (huge) problems and assume that every dollar you send out in increased wages is applied to the purchase of one of your cars, you're still losing money hand over fist. If your profit margin on an auto is 20%, then for every dollar you put into raising wages, you can't get more than twenty cents back.

If Ford's goal was to use that money to increase demand for automobiles, it would have been much more sensible to use it to lower the selling price of his cars.

Ford's real motivation in raising wages, as I understand it, was to reduce employee turnover, and also to act as a bonus in exchange for some demands that he put on his employees that his competitors didn't (no alcohol, no gambling, learn English).

So if you're a single company, who mostly sells its products to people outside the company, raising is a losing strategy for boosting demand.

But raising wages does make a lot more sense when discussing a national economy, where most of the goods and services being sold are sold to your fellow citizens. In that case, most of the money a company loses in the form of higher wages will come back to it in the form of increased demand for their products.

Friday, April 6, 2012

Mitt Romney is telling the truth about gas prices.

I just heard that Mitt is denying his big oil ties, his support for oil subsidies, his opposition to increased fuel economy standards. Instead, he says, Obama's "attack ad" is simply Obama refusing to take responsibility for the fact that gas prices have doubled under Obama's watch.

At first, I was incensed. Then I realized, he was actually paying Obama a backhanded compliment. Check out this here chart:

Hey, he's right! Gas prices have doubled between December 2008 and the now times. But does that mammoth dip just before Obama took office look a little suspicious?

Obama took office just as the economy bottomed out, and just as gas prices hit their lowest point in several years. These two things are not a coincidence: when the economy struggles, demand for gasoline goes down, so gas prices drop. As the economy has recovered, demand has risen.

So to the extent that Obama can take credit for the economic recovery, he also shares the blame for rising gas prices. I guess Mitt's saying that Obama should have done right by American drivers by keeping the economy hobbled.

Mitt has to know this. He and his economic advisers can't be quite that ignorant, but I'm sure he can imagine that the voting public can be that ignorant.

Wednesday, March 21, 2012

What is a "luxury?"

Cross-posted from the comments board of the WSJ:

StlJoe wrote, "I didn't have a cell phone until I was over 30 and yet somehow I had been working for 8 years."

::golf clap::

It's one thing to "not have a cell phone." A cell phone is a luxury. But when you're job hunting, having some way for an employer to contact you to schedule a job interview is an absolute necessity. And I'll bet $10,000 (that's the standard Republican betting rate, right?) that at no point in your job hunt did you have to apologize to an employer for not having a phone number. I'll bet you didn't ever have to put a homeless shelter down as your primary mailing address either.

If you consider a cell phone to be a "luxury" that you could easily forego, it's because you've always had a land line for conducting the necessary business of life. Can you even imagine trying to run your life via the payphone half a block away? Or begging phone time from your neighbor three doors down every day?

Have you even bothered to try imagining it?

In other words, have you ever questioned your privileged viewpoint?

Here's a handy mnemonic: "No cell phone, no problem. No phone service, no job."

I'll bet you'd be horrified by the idea of government paying for internet access as well, even though the Internet is now the primary means for hunting for jobs, educating citizens, contacting government officials, and a whole host of other activities critical to being a part of modern society. I could talk about this until I'm blue in the face, and you'll just respond with, "I ain't paying poor people to surf Facebook all day."

It always angers me when Republicans disparage simple, cost-effective ways to improve the lives of poor people -- even if these services increase their ability to find and keep employment -- as "paying for luxuries." Short-sighted, blinkered... grumble grumble.

Sunday, January 22, 2012

390 parts per million. Do you know how small that is?

I see, over and over again, the claim that CO2 is less than 400ppm (0.04%) of the composition of the Earth's atmosphere. That's entirely correct. The conclusion we are meant to draw is that such a tiny fraction of a sliver of a gas can't possibly have a noticeable effect on the climate.

QED, right? Can a very small amount of a substance dramatically alter the behavior of a complex system?

200-300mg of cyanide constitutes a lethal dose. A large human weighs perhaps 100kg. So the lethal dose of cyanide is about 3ppm.

0.1 mL of dimethyl mercury can be fatal. An adult has perhaps 30 L of volume, which figures out to about 33ppm.

The LD50* of ricin is 22 parts per *billion*, or 0.02ppm.

So such an argument, standing by itself, carries zero weight.

* the dose that kills 50% of the subjects it's given to.