Would the Trillion Dollar Coin Even Work?

I am a little surprised to see that there are many serious news outlets taking the trillion dollar news story seriously. I am highly skeptical that it would even work if it was tried simply because there would be so few opportunities for it to be circulated. How many of the treasury's debts are held by single entities holding $1 Trillion of bonds? Even if there was one individual, who would they be able to conduct business with that would be able to give change for a Trillion? If it's a nuclear option, then it's just having the bomb, but no way to deliver it.

Friday The 13th Gets No Love

This chart showing how common individual days are for birthdays has been making the rounds this week. One thing that sticks out to me is that there is a light band in the middle of the chart. It lies right at the 13th, no doubt due to superstitious parents not wanting their children to be born on a Friday the 13th. I was born on a Friday the 13th and am not superstitious, but I like the quasi-horror association. I wouldn't have it any other way.
You can find the source data a click away, but it only has each day's ranking and not the number of births per day. It's impossible to tell how large of a difference exists between days, you can only tell that of every day of the month the 13th averages the lowest rank. I would be interested in finding some raw data to see how a Friday the 13th compares to a non-Friday the 13th and if there is a spike on the days before. I would imagine that just like buildings omitting the 13th floor and airplanes skipping the 13th row, there is a general bias against the 13th, but it's even stronger for Friday the 13ths. Without data I can only speculate.

Now Unnecessarily Social

I don't know why, but I decided to set up Facebook and Google+ websites for this blog. Should anyone decide that they wish to follow it through those means they can do so through the links below:

OFC on Facebook

OFC on Google+

The Value of a Soul To an Atheist

Last week's Freakonomics Radio episode had an interesting wager by a Christian offering to buy atheist souls:

Caleb B: What is it about the idea of a soul that even people who confess to not have one are hesitant to sell it? I have been trying, for the better part of ten years, to buy a soul. I’ve offered a dollar amount, between $10 and $50, for someone to sign a sheet of paper that says that I own their soul. Despite multiple debates with confessed atheists, no one has signed the contract. I have been able to buy several people’s Sense of Humor and one guy’s Dignity, but no souls. Additionally, will any Freakonomics reader take me up on this? I’m willing to spend $50 on souls.

He is trying to make a point that because only one atheist has taken him up on this offer, that means most atheists believe they have a soul. However, I beg to differ. I think this looks at it as a binary question. I would bet that it's not that most atheists believe that there is absolutely no such thing as a soul so much as that they believe it's unlikely that there is a soul.
If asked to quantify what the likelihood is that the soul exists, most wouldn't say 0% but probably something far under 50%. If, for example one answered that they thought there was a 1% chance of the soul existing is it really worth only $50 to sell it off for the 1% chance that they damn their eternal after-life? If the answer is "no" is that an indicator that they believe in the soul or is it merely an indicator that the amount offered is too low? I would argue it's the latter. I would wager that even among atheists there is supply and demand for something that they believe is unlikely to be real.

Ignorant and Indignant

LA Times Columnist Eric Weiner writes about how students are walking out of Greg Mankiw's class in protest. I actually agree quite a bit with his objections to some of the mainstream ideas. Particularly this statement:

These students are frustrated by a field that they believe could provide so much to society but instead is mired in outmoded thinking. Today's economics is dominated by ideas, like the efficient market hypothesis, making such sweeping generalizations that they render human beings practically unrecognizable. Do people ever have "perfect information" or a complete understanding of their best interests? Of course not. They're humans.

I agree. I think that there is a lot of value in the hypothesis, but that it's more of a question of relative efficiency vs absolute efficiency. Still I think it's very presumptuous to reject it before even learning it because it does not conform to your worldview.

In a follow-up article he writes:

Of course, this raises the question, is EC 10 a standard introductory course? Mankiw’s economic ideas are very much part of the mainstream political economy that has dominated American economic thinking for decades -- from the Reagan and Bush administrations, to the Clinton administration, to the second Bush administration, to the Obama administration. In other words, Mankiw’s ideas are not a political issue since the leaderships of both parties have pursued policies that are very similar to those that he espouses.

However, they are protesting introductory economics. This is like saying that because we can't find dark matter Newtonian physics is invalid and instead students should enroll in a Deepak Chopra physics course or because cancer exists Darwin was wrong and Kent Hovind must be right. Whether or not the ideas Mankiw presents are correct or not, they are the mainstream view and if you're going to criticize something you should at least understand it first.

"It is the mark of an educated mind to be able to entertain a thought without accepting it." - Aristotle

Also, change everything in his articles from sentences about economics to sentences about climate science. Does the author still agree that students should avoid the mainstream view and go straight for an alternative view?

The Narrative of Conservative Fear

In recent years some on the left have promoted a narrative that conservatives ideology is motivated by fear. This seems to be all too convenient for liberals and I think that there is a lot of confirmation bias surrounding this narrative. I decided to take a look at what one of the more frequently cited studies had to say. Here is an article analyzing it on Psychology Today and here is a link to the study itself. Looking at the study I have some commentary:

1. It is UK conservatives and liberals, which are not exactly the same thing as in the US although pretty close. I think it would an interesting followup if they give a questionnaire to see how specific aspects of conservatism and liberalism correlate to these areas of the brain. I would also like to see more political points of view included.
2. This is a specific group of liberals and conservatives. The study says:
   A total of 90 healthy volunteers (mean 23.5 ± 4.84 standard deviation [SD], 55 female) was recruited from the University College London (UCL) participant pool.
   Basically what this is saying is that it is composed of young college students. I wonder how it would look if they examined political views of the army or older liberals and conservatives. Who knows, maybe those who are young and conservative oriented with smaller amygdalae tend join the military instead of go to college. I'm not saying that my hypothesis it disproves their hypothesis, just that I think the reality is much more complicated than this study implies.
3. Though the graph shows a scale of 1-4, they actually asked on a scale of 1-5 with 3 being middle-of-the-road and 5 being very conservative and yet nobody identified themselves as very conservative.
4. There is a lot of overlap. At the bottom of the post I took the image off of the study website and highlighted the overlap area upper/lower bounds. I scoured the website for the raw data, but couldn't find it (they had a scatter graph, but I think that would be damn near impossible to turn back into data), so from what I can tell it appears that the line represents standard deviation range of participants (I read the paper, but it's very technical. If anyone who has a better understanding of the way this methodology works has any criticism of my analysis please feel free to jump in). I used the pixel locations to extrapolate the numbers of these boundaries (tables to the right of the image) and with figure A 27% of the area is occupied by all 4 political categories and with figure B it's 34%. Without the data though it's hard to say how many participants of each group fall within these boundaries. Either way this shows that conservatives tend to have larger amygdalas and smaller cingulate, but not always.  There are conservative participants with bigger cingulate and smaller amydala than some very liberal participants. This may explain some conservatism, but not all of it.
5. Slightly left and moderate appear to fall right in the middle range of amygdalae and cingulate. Using the same assumptions as #3 and the supplemental materials show that there are 2 moderate participants that have the smallest amygdalae in the whole group. Center-left and moderate groups have very similar ranges to the very liberal group, but conservatives lie way outside those other three.
6. The report also states:
   We found that increased gray matter volume in the right amygdala was significantly associated with conservatism (Figure 1B) (R = 0.23, T(88) = 22.22, p < 0.029 corrected). No significant correlation was found in the left amygdala (R = 0.15, T(88) = 21.43, p = 0.15 corrected; see Figure S1 available online for the individual gray matter volumes of the ACC and amygdala).
   I don't know if there is any functional difference between the two amygdalae, nor if it implies anything, but I thought that was unusual.
7. From what I can tell of the supplemental materials (which plots the data points) the correlation is not particularly strong. I count 13 "very liberals" and 14 "conservatives" and of those only 5 of the liberals and 6 of the conservatives lie inside their respective circles. If this circle is supposed to represent 1 standard deviation it seems off since from what I remember STDev is supposed to encapsulate 68% of the results and yet in this instance it accounts for less than half (if you know more about statistics, please feel free to jump in).
8. The body of the text states:
   The gray matter volumes of ACC and the right amygdala allowed the classifier to distinguish individuals who reported themselves as conservative from those who reported themselves as very liberal with a high accuracy (71.6% 6 4.8% correct, p = 0.011). This suggests that it is possible to determine the self-expressed political attitude of individuals, at least for the self-report measure we used, based on structural MRI scans.
   This seems to indicate that using these variables you can distinguish between 1 & 4, but what happens if you throw 2 & 3 in? Given the supplemental material it looks like it would be a lot harder to identify a 1 or 4 in the entire set of 90 participants.

	Figure A Upper 0.78 0.57 0.61 0.14 Center 0.22 0.03 0.05 -0.41 Lower -0.33 -0.49 -0.51 -0.96 1 2 3 4
	Figure B Upper 0.42 0.52 0.77 1.02 Center -0.11 -0.09 0.01 0.38 Lower -0.66 -0.71 -0.75 -0.25 1 2 3 4

All that said I am not criticizing the study itself or its authors. Many of the things I outlined are expressed in the study. I am, however criticizing the willingness of those on the left who jump on this study to demote their opponents without questioning to what degree it is useful.
With the implications of this study, I think it is one that is worth repeating in many conditions, with more variables surveyed and larger number of participants. I am sure you will find some groups within the right that tend to be more fearful and maybe even more of a tendency to be more fearful overall, but I think that this will never explain the entirety of the political spectrum.

The Robot Mind-Body Problem

There is something unsettling about this video. It is a machine whose movements are human and yet so much about it is completely inhuman. It invokes the uncanny valley response to the fullest degree and creates fears of a Terminator style machine uprising (just look at the video title). However it's missing something very important; intelligence. This machine is not the product of natural selection it is merely designed with the sole purpose of walking. It can't refill its power source, it doesn't care if it's deactivated or destroyed, it has sense of purpose of action. In other words it has no sense of self-preservation.
The most dangerous thing about it is that a human being still controls it (and that is a big deal if used in war or even domestic enforcement since it would remove the user's fear of death). But because our brains are set to recognize anthropomorphic beings as potential threats, this fits that mold and we see it as such.

Poetic Justice

While I don't think presidents have much control over the price of oil (although there is some evidence that the strength of the dollar does have an effect on the price of oil, and the president does have some influence over the strength of the dollar), I can't help but find it something of poetic justice to see oil prices rising again under President Obama. He certainly campaigned by blaming his predecessor for the price of gas, so there is something poetic that he would face the same problem as president.

Pat Robertson, making sense

I was pretty surprised to see this article headline: Pat Robertson Speaks Out For Marijuana Legalization. Yep, you read that, Pat Robertson is in favor of legalizing marijuana. He says it makes no sense to lock people up in jail and turn them into hardened criminals for smoking pot. Imagine that, now if we can only convince him to follow that line of thinking on many other darling conservative social issues.

WSJ Contrasts Banks Response to Different Home Stakeholdership

Today's episode of The Wall Street Journal This Morning highlighted a WSJ print article titled For the Costliest Homes, Foreclosure Comes Slowly (which is unfortunately behind a subscription wall). The purpose of the article is to examine the difference between how banks treat the foreclosure of bigger loans vs. smaller loans. Not terribly surprising banks tended to accommodate big borrowers more than small borrowers. One interesting thing that they noted was that the smaller loans were not on the books of the banks and thus they did not take the hit from foreclosing. With the large places, they are on the banks books and do take the hit from the writedown. Incentives matter.

Phenomenal Salon Article On Power Worship and Picking a Political Team

Repulsive progressive hypocrisy

Not something I would brag about.

VP Biden was recently quoted as saying 'Osama Bin Laden is dead and General Motors is alive'. It only cost us $280 billion for bin Laden and $14 billion for GM. Those are the conservative estimates.

The Case for Cars pt 2

One of my last OFC v1 posts was title The Case for Cars. In it, I quoted from a book stating that traditional combustion engines were more efficient at generating energy than alternative power sources. Well today I stumbled across an interesting artcile from Exxon Mobil (feel free to take it with a grain of skepticism, but energy density should be a fairly objective metric to measure) titled "How many gallons of gasoline would it take to charge an iPhone?" In it they demonstrate that the energy density of hydrocarbons are just simply higher than other traditional sources of fuel.
I definitely want to see more efficient transportation technology emerge, but I don't think it's a good idea to exclude one of the most energy dense fuel sources from the search.

Does This Mean Science Is All Wrong?

I stumbled upon a video on youtube titled "Science v's God : Its The Collapse Of Physics As We Know it" and it's basically a clip from a science show on theoretical physics. In it, Michio Kaku admits that scientists have yet to reconcile quantum mechanics with astrophysics, but the implication of the title of the video implies that because the theory is incomplete the whole of physics is false.
This is not how science works. Science is not about a singular static narrative, but rather it's about understanding emerging through a process of trial and error. As such unknown or wrong portions of a theory do not instantly invalidate the whole larger theory, it merely means that there is something left to discover.
Take Mendel's inheritance theory for example (and I am about to butcher some scientific history. This link does a much better job at it). At the time, he discovered that when traits were passed down from parents to children, some traits were expressed more frequently than others and that some traits could sometimes appear if neither parent had expressed the trait. This lead him to conclude that some traits were recessive and only expressed if both pairs were present, while others were dominant and always expressed when one instance of the gene was present. However at the time of his discovery Mendel did not know about how the traits were expressed.
He did not have any concept of DNA, but that did not mean that his entire theory was wrong, only that the mechanics had yet to be discovered. New discoveries lay the groundwork for later theories that yield a deeper understanding of their field. Mendel's discovery helped point later researchers in the right direction and without it Watson and Crick probably would not have discovered DNA when they did.
Because physicists do not have an answer of why their models of the very small world do not apply to the very large world and vice versa, does not mean that there is no answer or that they will not discover an answer. Prior theories may require some adjustment or new theories may be fill in the gaps, but it is unlikely that all of physics will be thrown out.

Nobody Understands Debt Like Paul Krugman

There are many critiuques of Paul Krugman's article Nobody Understands Debt that are far better than anything I could write. But I wanted to pick an issue with one of his points

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

This is sloppy reasoning. He makes it sound like justification for eating a slice of cake after a work-out. The implication is that stakeholders and borrowers are one and the same, but they're not. Whether talking about the treasury bonds borrowed against the treasury or bonds issued to the public, separate entities in the government borrowed from different groups or individuals either directly or indirectly and must be paid back when due back.