Boinged

November 7, 2009
Posted by Jay Livingston

This blog has a small but select readership. I have data to back that up – at least the part about small. I use Google Analytics to track the number of visits. On Monday, the counter seemed to go haywire. When I checked it late in the afternoon, the number of visits was about 600,.

The mystery was soon solved since Google Analytics also shows where people had linked in from*. In this case it was Boing Boing. It had listed my post with the four charts on healthcare costs, and the hits just kept on coming. By day’s end, the total was nearly 2600. That’s what being Boinged will do.


The effect wears off quickly, though not as quickly as the euphoria.

*Google Analytics is not entirely trustworthy on this. It showed a dozens of referrals from a site for forums devoted exclusively to discussions of the Mazda Miata. Also several from a site which has items only about the making of wooden boats.

A Funny Thing Happened on the Way to the Meltdown

November 3, 2009
Posted by Jay Livingston

“The financial system nearly collapsed,” he said, “because smart guys had started working on Wall Street.”

Calvin Trillin in an op-ed in the Times a couple of weeks ago, supposedly quoting some guy he meets in a bar. But Trillin was writing as a humorist, not a reporter (he does both very well), and I strongly suspect that his informant in the midtown bar was just something he made up for laughs, from the 1950s Brooks Brothers clothes to the theory about the financial debacle.

The theory goes like this: Wall Street used to be run by guys who got into decent schools because of family; they finished in the lower third of the class. Nice guys, not especially bright, and, by current standards, not especially greedy. (A certain ex-president comes to mind.) But when Wall Street started offering insanely high payoffs, the really smart guys got in – the math majors from MIT, physics Ph.D.s from CalTech.

“Did you ever hear the word ‘derivatives’?” he said. “Do you think our guys could have invented, say, credit default swaps? Give me a break! They couldn’t have done the math.”

And how did that lead to calamity?

“Why do I get the feeling that there’s one more step in this scenario?” I said.

“Because there is,” he said. “When the smart guys started this business of securitizing things that didn’t even exist in the first place, who was running the firms they worked for? Our guys! The lower third of the class! Guys who didn’t have the foggiest notion of what a credit default swap was. All our guys knew was that they were getting disgustingly rich, and they had gotten to like that. All of that easy money had eaten away at their sense of enoughness.”

Funny, right? It interrelates some stylized facts that aren’t really related – math geniuses replacing pleasant college grads; the spread of greed; Wall Street collapsing. That’s what humor writing often does – stretches the plausible till it becomes unrealistic. And besides, the theory fits only one instance – the current one.

Generally speaking, you don’t turn to NBER* papers for a good chuckle or for confirmation of humorous speculation. I doubt that Calvin Trillin has a stack of these papers on his nightstand. I certainly don’t. But via a link at Brad DeLong’s blog) I found this abstract of one published last December:

We use detailed information about wages, education and occupations to shed light on the evolution of the U.S. financial sector over the past century. We uncover a set of new, interrelated stylized facts: financial jobs were relatively skill intensive, complex, and highly paid until the 1930s and after the 1980s, but not in the interim period. We investigate the determinants of this evolution and find that financial deregulation and corporate activities linked to IPOs and credit risk increase the demand for skills in financial jobs. Computers and information technology play a more limited role. Our analysis also shows that wages in finance were excessively high around 1930 and from the mid 1990s until 2006. [emphasis added] --Thomas Philippon and Ariell Reshef, “Wages and Human Capital”

The same thing was going on in the 1920s too. Wall Street jobs were skill intensive, complex, and highly paid. And look what happened in 1929.  ’Taint funny McGee.

*National Bureau of Economic Research

Top of the Charts

November 2, 2009
Posted by Jay Livingston

In case you wondered about what we in the US pay for health care compared with those unfree unfortunates who suffer under various forms of socialized medicine, here are some graphs showing the advantages of what Republicans here tell us is “the best health care system in the world.”

The graphs are from the International Federation of Health Plans. I’ve selected only four – to show the relative costs* of

• an office visit
• a day in the hospital
• a common procedure (childbirth without complications)
• a widely used drug (Lipitor)

(Click on a chart to see a larger version.)

You can download all the charts here, but be warned: it gets boring. We’re number one in every chart, at least in this one category of how much we shell out.

Since we have the best health care in the world, this must mean that you get what you pay for. Our Lipitor must be four to ten times as good as the Lipitor that Canadians take.


*Udate: As Phenompbg says in his comment below, these amounts are what providers are paid by governments or other insurers, not what the patient pays, which in many Eurpean countries is essentially nothing. See the footnotes for the tables in the original document. Or look at the comments on this at Boing Boing, a discussion which is remarkably civil (do they monitor comments?).

Hat tip: Ezra Klein.

It’s Your Funeral

November 2, 2009
Posted by Jay Livingston

“Current funeral fashions . . . illustrate the sad truth that, as a society, Americans are no longer sure what to do with our dead.” So says theologian Thomas Long in an All Souls’ Day op-ed in the Times.

He mentions some of these fashions:

coffins emblazoned with sports logos; cremation urns in the shape of bowling pins, golf bags and motorcycle gas tanks; “virtual cemeteries” with video clips and eerie recorded messages from the dead; pendants, bracelets, lamps and table sculptures into which ashes of the deceased can be swirled and molded.

If you don’t believe him, take a look on line, here for example.

(Click on the image for a larger view.)

But the source of this diverse emporium of funeral stuff isn’t our uncertainty over what to do with our dead. Instead, it rises at the intersection of two cherished American ideals: capitalism and individualism.

The American tendency to turn ceremonial occasions into commerce is certainly not news. As Robert Klein said of Washington’s Birthday (back when there still was a Washington’s Birthday and not the generic Presidents’ Day), “I’m sure the father of our country would be pleased to know that his birthday is being honored with a mattress sale.”

Even our most solemn moments, funerals, are opportunities to cash in, as was noted long ago by two Brits – Evelyn Waugh in a comic novel (The Loved One, 1948), and Jessica Mitford in a book of serious reporting (The American Way of Death, 1963).

The combination of capitalism with our value on individualism and freedom of choice gives us in funerals what it gives us in everything from automobiles to breakfast cereal: a wide variety of products.

The loser here is tradition. But tradition has never held much power in the US. “Because that’s the way we’ve always done it” doesn’t win many arguments here, especially not when it goes up against rational utilitarianism (“but it would be cheaper and quicker to do it this way”). Tradition is also losing out to self-fulfillment and self-expression. Tradition emphasizes the community – past, present, and future – over the individual. It links the individual with past generations and future generations. In most societies, funerals emphasize the primacy of the group and celebrate the deceased as a member of that group, whatever his particular individual quirks might have been.

The new look in funerals celebrates the individual for precisely those things that made him an individual – his particular interests – even though these have nothing to do with the traditions of the community.

One family asked for a memorial service on the 18th green of their father’s favorite golf course, “because that’s where dad was instead of church on Sunday mornings, so why are we going to church,” Mr. Duffey said. “Line up his buddies, and hit balls.” Another wanted his friends to ride Harleys down his favorite road, scattering his ashes. [From an article in the Times four years ago.]

The same trend has transformed other religious events like confirmations (“Select a confirmation party theme that celebrates the guest of honor’s hobbies or passions”) and of course, bar mitzvahs.

a beach themed party will put everyone in a tropical mood. Decorate with orange, pink and green lighting and maybe even some tiki torches! String tiny lanterns across the ceiling and use brightly colored flowers in vases for the centerpieces. Everyone will enjoy a limbo contest especially when it’s played along with some Hawaiian music.

(And I was worried that the previous post’s picture of a Weimaraner wearing a tallith and yarmulke might have been seen as sacrilegious. What was I thinking?)