Perverse Incentives Are Endemic (TM)
Posted by Marc Hodak on June 7, 2008 under Revealed preference | 
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Quick, quick. Congress has a choice between saving the world in 2020, or getting votes in 2008, what do they choose?
This is not a trick question. It’s a sigh of relief.
Posted by Marc Hodak on May 11, 2008 under Revealed preference | Read the First Comment
In democracies, politicians running for office must:
1) Claim that they want power for altruistic reasons,
2) Carefully disguise their raw lust for power, an obsession that necessarily consumes anyone willing to go through the gauntlet of modern elections,
3) Very carefully leave unmentioned the distinguishing characteristic of government while promising all sorts of governmental largess.
So it’s kind of refreshing (in a pointy-headed, academic way) to see a regime where their thirst for power is completely out in the open, where those in power don’t pretend to give a rat’s *ss about anything other than keeping it. The Burmese junta is completely open like that. Amazing. Dissent or challenges of any kind? Not tolerated. Democracy? Out of the question.
In democracies, politicians disguise the fact that in a choice between their stated ideals versus getting power, most of them consider ideals expendable. In Burma, they are completely open to everyone (but their own people, if they can manage it) that in that in a choice between helping millions of their fellow citizens versus risking losing any part of their grip on power, their fellow citizens are expendable.
Posted by Marc Hodak on March 19, 2008 under Revealed preference | Comments are off for this article
On our way back from dropping our big guy off at college, we looked at schools with our little guy. (We call him the “little guy” although he’s now the biggest member of the family.) We looked at a cross section of schools–big, small, public, private, urban, rural, etc. His verdict was in favor of bigger, small-town campuses. UVA scored well on these criteria.
We also figured out on this trip that New York kids apply in out-sized numbers to schools in the mid-Atlantic. Why? The obvious answer is that there’s lots of us. The more complete answer, especially when faced with paying private school rates for public schools (a.k.a., out-of-state tuition), is that many state schools (UVA, UNC, Maryland, etc.) are pretty good. SUNY, on the other hand, is among the worst systems in the country. New York state should be ashamed of itself, but then I know what New York politics is like, and shame is not part of the equation.
We also got some more insight into how the average kid chooses a college, even though this is our second student. One has in-school and on-line resources to help determine the appropriate criteria for choosing. One has publicly available judgments of various institutions along the dimensions of those criteria. And stuff. In the end, it seems to come down to reputation and physical attractiveness. And, of course, by that little thing we know of as admissions. And maybe who gives you money to offset those outrageous tuitions. (College or a new house?)
Posted by Marc Hodak on March 13, 2008 under Revealed preference | 2 Comments to Read
This entry begins to answer a very relevant, but rarely asked question in the debate on immigration: how much is immigration worth to relatively unskilled immigrants? In other words, if you were relatively poor living outside of the U.S., how much would it be worth to become one of the poor inside the U.S.? The answer appears to be a small but significant risk to your life plus $4,000.
That, plus the mindless persecution of native Americans from England, France, Germany, etc. who don’t think we have any room for more. Plus the plans of idiot politicians who have no idea what they’re up against in trying to stem this tide, and are willing to betray the liberties of those who live here legally to try to stop those that don’t.
Now, if poor people are willing to pay thousands of dollars to get across our border illegally, how much can we increase the cost per person with all the measures that the most outrageous wall-builders are planning to implement? Will that increase their costs significantly? At all?
Posted by Marc Hodak on March 1, 2008 under Revealed preference | Read the First Comment
Congress regularly blasts the military for being inefficient. And when the military puts a major contract up for bid, and the best consortium wins, Congress is outraged because the consortium includes a European company.
The troubling thing is that Congressional outrage is generally reported at face value.
“It’s stunning to me that we would outsource the production of these airplanes to Europe instead of building them in America,” said Republican Senator Sam Brownback about the Pentagon’s decision.“We should have an American tanker built by an American company with American workers,” said Republican Representative Todd Tiahrt.
The problem with the way these articles are written, emphasizing the party of the speakers rather than their home states, is that they separate important information across the page, leaving the reader with the impression that where the congressman stood was divorced from where they sat. I think it would have been more instructive to write it like this:
“It’s stunning to me that we would outsource the production of these airplanes to Europe instead of building them in America,” said Kansas Senator Sam Brownback about the Pentagon’s decision. Kansas is where Boeing, the losing bidder, had promised to build the plane if they had won the bid.“We should have an American tanker built by an American company with American workers,” said Representative Todd Tiahrt, Representative to the Fourth Congressional District of Kansas, where Boeing would have made the planes.
Then there is no need to pretend that Congress speaks with one voice on this issue by burying this tidbit toward the end of the article.
Alabama Senator Richard Shelby welcomed the decision. “Not only is this the right decision for our military, but it is great news for Alabama,” he said.
By that point, you won’t have to guess where the winning bidders are assembling these planes.
Posted by Marc Hodak on February 27, 2008 under Revealed preference | 3 Comments to Read
That comes from a famous quote by the recently departed William F. Buckley, Jr. The full quote was, “I’d rather be governed by the first 2000 names in the Boston phone book than by the dons of Harvard.”
Buckley was speaking to the leftist bias of Harvard’s faculty, but I have always preferred to repeat that quote, at least the first part, as a paean to randomness. In particular, I believe that a degree of randomness in who governs us would be a good thing–I would like to see legislators selected by lot, much as we select jurors.
Selecting legislators by lot would have various benefits:
– It would eliminate the rampant corruption of the legislature. I’m not taking about a congress-critter taking bribes on the sly to urge on some bill. I’m talking about the wholesale, routine purchase, or at least rental of legislators by their big money supporters. Legislators need campaign contributions. They can’t get elected without them. Therefore, they need to do what it takes to get those contributions, and what it takes is responsiveness to the concerns of the contributors.
– It would undercut the rationale for so much government spending. Most of those contributors want the government to do something for them. What kind of an ingrate would take a contributor’s money–cash they use to get elected–and then deny that contributor something they want from the government? A one-term ingrate. The economics of the market for political power is the same as other markets in that money talks, bullshit walks.
– It would end the extortion of citizens by the legislature. Most of those contributors who aren’t trying to get the government to do something for them are trying to keep the government from doing something to them. Legislators, especially powerful committee heads, are keenly aware of the power they wield, and they know how to use that power. In fact, they have little choice. Nature abhors a vacuum, worst of all a power vacuum. Whoever has the power to shake down moneyed interests stands to gain from using it. If they won’t, someone else will.
– It will eliminate the excuse to undermine our free speech and other civil rights. The reason we haven’t been able to stop money from corrupting our legislature is partly because so much is at stake, but also because campaign contributions are a protected form of speech. Limiting that speech endangers some of our bedrock liberties. Eliminate campaigns and you eliminate the need for campaign funding, and the need for any restrictions on campaign funding. Voila, more liberty.
– No more gerrymandering. Most people have a vague idea of how thoroughly corrupted the election process has become. While civic idealists trumpet the virtue of voting, most people instinctively know that they don’t choose their congressmen–their congressmen have chosen them, through the re-districting process. In my urb, there is no point having anything but a Democratic candidate. I didn’t choose her; the party bosses did that for me. Unless pictures come out in the week before election of her blowing a mule, this one has been decided. Even then, the election might still be close.
I know this modest proposal is far from perfect. The 25th guy in the Boston phone book might be a complete moron–I mean worse than the kind of people that typically get elected. Some of these people may not be rational, or even sociable. At least people who are elected are liked by some number of citizens.
There are those that might be concerned that Ma Kettle, Joe Sixpack, Don Ho, et. al might be too untrained and diverse to get much done. I think that’s a feature, not a bug. I just don’t think we are suffering from a dearth of laws, or that we just can’t live without more of them every single term.
Nevertheless, I think the random representatives would get stuff done. Having sat on a jury, I know that the average person is generally reasonable, especially in situations demanding group deliberation. If anything, too many people are willing to go along to get along. But, on the whole, I have found random juries (albeit with some judicial screening) to be conscientious, conservative, and reasonable.
I think it’s worth an experiment. Some town, or county perhaps, can try this before it gets promoted to the state or federal level. I think it would energize the citizenship of the place that adopted it. Let’s do it for Bill B., God bless him.
Posted by Marc Hodak on February 25, 2008 under Revealed preference | Read the First Comment
Today I went to my local federal court house for jury duty. Unlike the typical professional who sees jury duty as a nuisance, I actually like the idea of jury duty. As long as it doesn’t get in the way of certain client or family needs, I think hearing a case would be pretty cool. I actually sat on a jury once, and haven’t been picked since. According to lawyer friends, I should never expect to be picked again.
Since my last jury stint, over 20 years ago, the jury selection technology has gotten pretty sophisticated. Here’s how one lawyer friend puts it:
Defense attorneys don’t want smart people on the jury. They’re looking for people with barely enough reasoning to follow a Mother Goose tale, but also with enough sense to know that they can’t quite figure it all out.
Prosecutors and plaintiffs attorneys consider such people way too intelligent for their juries. They look for complete morons, people who don’t even know that they don’t know what the frig is being said by either side. They want people who believe conspiracy theories. It goes without saying that prosecutors like people who respond to authority figures with an “Uh huh. OK,” reflex.
What this means for justice depends on what is being prosecuted. In traditional criminal cases like burglary or homicide, the accused are generally not too far from the typical cross-section of jurors in terms of class and culture. In white collar criminal cases, modern jury selection practices guarantee that the defendant won’t have anything resembling true peers on their jury. They’re more likely to have jurors saying things like “I didn’t know anything about what they talked about.” or, “For a man who knew every aspect of the business, why didn’t he know what was going on?” The joke in the white-collar world is that you don’t want to be judged by twelve people who were too stupid to avoid jury duty.
All the same, I like our judicial system. While far from perfect, at least it’s not as politicized as our other branches of government. I think a lot of that benefit has to do with the randomness of jury selection. I actually believe that our legislature would be far better if congress-critters were selected by lot rather than by elections. What we’d lose in the quality of the individuals placed into office, we would more than make up for by the lack of influence peddling, false promises, savior complexes, and other cynical political theater that mark our current system.
I think I would be fine with the first 200 people in the phone book being our legislators for brief periods of time. Amateur lawmakers would know their temporary status, would probably not be too keen in working that hard in coming up with new rules, but would be keenly aware that they would be spending far more of their lives living under those rules than enjoying whatever gains they may have had in making them.
Posted by Marc Hodak on February 18, 2008 under Revealed preference | Comments are off for this article
That’s a quote from a Serbian nationalist. What it looks like to rest of the world is that NATO and the UN have provided a space where Kosovars can express their collective preference about the locus of power over them, and they decided overwhelmingly to move it out of Serbia and into their own territory.
Kosovo has been recognized by some countries and denounced by others. The line of demarcation is pretty clear: If your country has managed to keep all its cultures and regions at reasonable peace with each other, then you are happy to see Kosovo gaining its independence. If your country is held together by raw power, and has a strong, separatist movement looking to pull power away from the center, then you are against the independence of Kosovo.
Posted by Marc Hodak on February 8, 2008 under Revealed preference | Comments are off for this article
A city council outside of St. Louis was the target of a disgruntled citizen who went on a shooting rampage. This story recounts the unfortunate loss of life that ensued. Two police officers just doing their jobs were slain. Two council members and the Public Works commissioner were killed as well. The mayor was also shot and is in critical condition. The story relates how the gunman was apparently aiming for council members, especially the mayor.
Now is not the time for jokes about how one might get to this point versus City Hall. I was reading this story for the tragedy that it was, for the Kirkwood community where this happened, for the families of those slain, and especially for the cops who were at the wrong place at the wrong time. Then I come across this:
Deputy Mayor Timothy Griffin said this morning. “This is a tragedy of untold magnitude.”
Now, I would be much more than upset at losing friends and colleagues. But I would hope that I wouldn’t publicly lose my sense of proportion, especially if I were a public official.
Posted by Marc Hodak on February 4, 2008 under Revealed preference | Read the First Comment
McCain gets down to brass tacks:
“I can lead this nation and motivate all Americans to serve a cause greater than their self-interest,” he said while campaigning at a fire station in New Jersey.
So, what could he mean by that?
A) Some other individuals’ interest (not you or me or John McCain)
B) Some collective interest
C) John McCain’s self-interest
“A,” of course, is a dummy variable that makes this list comprehensively exhaustive; we can safely dismiss it out of hand. It’s highly unlikely that John McCain intends to make your or my self-interest subservient to some particular for John Smith’s self-interest.
“B” seems plausible. Almost everyone falls for it, but it can’t be “B.” “Interest” is a characteristic of consciousness, and a collective has no consciousness. No matter how much we’re “all in it together,” we can’t taste each other’s food, experience each other’s triumphs, or (no matter how much our politicians try) feel each other’s pain. Collective “interests” can be more loosely defined as the product of decision rules accounting for the interests of distinct individuals, but even with that semantically sloppy substitution of one kind of “interest” for another, that doesn’t save “B.” Decision rules can’t yield rational results without defaulting to the decisions of a dictator. In other words, the “collective interest,” if we attempt to glean it through a collective decision-making process like voting, is really just the leader’s interests in disguise, or, at best, the interests of the most powerful agenda-setters.
So, the correct answer is pretty close to “C.” Fortunately, it’s easy to understand what John McCain’s self-interest is; John McCain is all about getting elected. No one gets this far in politics by accident, without being acutely, intensely aware of where their personal interests intersect with the voter’s willingness to hand them power–not McCain or Romney or Hillary or Obama. Each of these politicians has survived this far in an extraordinarily demanding tournament for power by selling the interests that motivate them as somehow more noble and worthy than yours or mine. Amazingly enough, they achieved this by disguising their self-interest as “something larger than our self-interests.” And, more amazingly enough, tens of millions of individuals buy it.
UPDATE: BTW, Mr. McCain, Reagan would not have said that. His pitch was about how the government should serve the people (largely by getting out of their way), not the other way around.
