Monetary Policy and the Wisdom of Learning to Swim

Very Smart Scott Sumner: http://www.themoneyillusion.com/?p=31309

The high points:

1. Monetary policy is sufficiently complicated that it's hard to have a coherent discussion, since many people can't even agree on what "loose money" looks like.  (eg, was money tight or loose in 2009?)
2. He defines "loose money" as causing the interest rate to fall faster (or below) the Wicksellian rate.
3. Claims too much focus on what to do if you're already on the zero lower bound, because we should be pursuing policy that avoids such an outcome: "I think that’s a really bad way of thinking about the problem, like discussing what to do if the bus is flying over the guardrail."
4. That's good as far as it goes, but, uh...

Or, to carry on the metaphor

Now that the bus is pretty much in the river, swimming lessons seem like a prudent idea.

Notes on having a large playful dog

Mita wrote an email to somebody who will be dog sitting for us.  Here are some choice excerpts. Note the emphasis on Rain eating everything and anything.  

• Krinkle's kennel should be kept between Rain and the bed, or else she'll find a way to eat the bed through her kennel. She's done it before...
• Rain will eat ANYTHING. I mean ANYTHING. So when we're around the house, we keep the bedroom and bathroom doors shut. [...] She will eat/play with your socks, underwear, shirts, etc.
• Krinkle ehhh...knows sit. 
• Kennel they both stay in the kennel when you're not in the house so they don't get bored and...eat through the couch. 
• [Krinkle is] Very sweet[, but] bad with other dogs. If you take him to the dog park, please hold him in your arms at all times or else he is likely to start fights he can't finish. 

America First

Trump doesn't want to accept Syrian refugees--he wants to "put Americans first"

I feel like I've heard that phrase before.

Seriously though... this guy, and his huge base of support, is terrifying.

Deadwood--a jolly show about a genocide

From the "later" pile.  That is to say, a post that I started months or years ago, and am editing and finishing now.  Hence the bit about "shoveling snow." I guess I wrote this some time in February...
Also, fair warning, if reading about casual apologias for genocide has the potential to ruin your day, you should consider not reading this.

Shoveling snow turns out to be good for thinking.  While shoveling out my car this morning, I finally put my finger on what's been bothering me about a show I was watching: Deadwood.

It's a western staring Timothy Olephant playing a burnt out law man who moves to a lawless camp of Deadwood South Dakota. The place is entirely law-free (for the whites) because it's on an Indian reservation, with the express goal of taking the land and gold deposits from the Indians living there. The show is, fundamentally, a light and enjoyable show about the experiences and exploits at the leading edge of a genocide.

After watching it, I'm left with the question: Can you tell the story of the perpetrators of a genocide, in a way that makes you sympathetic, and still fall within the bounds of decency?

My first thought was that it's a little like when Nabokov wrote about terrible people in a way that makes you sympathetic (eg. Humbert Humbert), but there you're supposed to feel bad because you're sympathetic.  That's not what's happening here, they just tell the story straightforwardly--you're supposed to root for Olephant's character, and then when the show's over, finish your beer and go to bed, sleeping soundly because Olephant saved the day again.

My first reaction after thinking this through was to be horrified, but I also think there is value in remembering the banality of evil. Like virtually every other Jew I know, a significant part of my family was murdered in the 1930s or 1940s, and while I might be more comfortable thinking of this as an inhuman act of evil, it wasn't.  It was a very human act of evil--some young man, almost certainly younger than me, actually did the deed, and he had hopes, dreams, a mothers and maybe a girlfriend.

Do I want to know his story? Are these stories that we need to tell? Do we need to tell stories like this to remind ourselves that normal people have the capacity to do great evil, or do we need to avoid stories like this, so we don't distract from the horror of a genocide? Is it better to highlight the inhumanity of the act, or the humanity of the actors? I don't know the answers here, just that the questions matter.

All that said, however--I'm pretty sure the writers didn't think this deeply.  My guess is that they just wanted to write a western, and didn't even realize they'd written a happy little show set in the midst of a genocide.

**a somewhat relevant note on timing--the Holocaust was closer in time to the American genocide (aka "The Indian Wars") that inspired it than it is to present day. None of this is ancient history.

Language Matters (Slavery Edition)

Much of the language we use to describe slavery and the civil war, even the language used by people who otherwise know better (myself included) perpetuates romanticized views of the era. Brought to my attention by @gaumwhat, this great article has a more detailed explanation, argument, and advice.

The distilled version, however is:

• plantations ⇒ slave labor camps (“plantation” evokes a pleasant pastoral image)
• slave owners ⇒ enslavers (you can’t own a person. even if the law says otherwise.)
• Union Troops ⇒ United States troops (It was an insurrection, not a fight between two nations)
• Compromise of 1850 ⇒ Appeasement of 1850 (enslavers made demands, the north gave in, then enslavers made more demands, and initiated the bloodiest war in history)

Some of this is clunky, so maybe there are better options, but it’s a good start for adjusting our language to avoid implicitly legitimating a horror that is literally beyond the comprehension of nearly everybody alive today.

​

Medicine as Information--some pretty wonderful policy implications

Many medications should be viewed as information in pill form.  One great example is Sofosbuvir, about which several things are true:

1. It cures hepatitis C  pretty darn reliably
2. The company that developed it charges something like $100,000 for a treatment regimen.
3. All but about $300 of that cost goes to cover Research and Development costs, and profit for the company.

The important thing to see here is that the cost of curing one more person of Hep C is something like $300, but the cost to develop the drug was quite high, so if we don't let drug companies charge lots of money, nobody's going to develop a drug like this in the first place.  Unfortunately, at $100,000 per cure, a lot of people are going to go un-cured.

Fortunately, there is a solution here that literally makes everybody happy.  The government (the folks that pay for a TON of Hep C treatment already) offers the patent holder a big chunk of cash for the drug patent, and then immediately places it in the public domain. Here are the advantages:

1. The drug company is happy, because they get to take their profit for the drug right away.
2. Americans with Hepatitis are happy, because they no longer have Hepatitis.
3. Overall cost of healthcare in the country goes down, because fewer people have liver cancer and cirrhosis.   

This is literally Econ 101,  use of a two-part tariff to eliminate deadweight loss from a monopoly. 

notes on the actual costs associated:

Total value of Gilead (owner of Sofosbuvir patents) ~150 Billion, as of this writing
They have a pretty big portfolio of drugs, so lets guess that the value of the sofosbuvir patents is about half their value as a company, or about 75 Billion. 


Number of people with Hep C in the USA is roughly 2.7 Million 

If the government paid 75 Billion to buy the patent and make it public domain, the cost works out to about $28,000 per cure. 

Seriously, this is a no-brainer.  We can more or less cure Hep C in America for $28,000 per cure, which doesn't even count the benefit of basically eliminating future infections.  The only catch is that it requires big government intervention.

I don't get it

Pretty frequently, you hear about cops (Chicago or LAPD, for instance) beating confessions out of suspects, and the news stories always seem to assume without question that the motivation is to get a confession.

It doesn't add up to me though. If you're a dirty cop looking to close the case by getting a confession, your options are either:

1) Beat the suspect until he confesses, and then testify at trial that the suspect confessed.
OR
2) Testify at trial that the suspect confessed.

Obviously there's no recording of the interrogation, since otherwise option 1 would be impractical, so there's really no practical reason for the beating most of the time.  Either way, the cop comes out and lies about what happened, and the suspect goes to jail.

So is it just pure sadism, beating the hell out of some poor kid for the fun of it?  Or does the cop tell himself that the kid wouldn't have confessed if he wasn't guilty, and thus the confession is true and the beating justified punishment?

Either way, I don't think I've seen that explored in news stories, which is funny since the link between the beating and closing the case is not immediately self-evident.