Names – The Last Shall Be First

October 16, 2014
Posted by Jay Livingston

What to name the baby has become more and more of a problem. A few generations ago, you could give a boy a name that had always been in the family. When is the last time your heard a parent call, “Junior, come here”?  Parents in a high-status family could give a son a family name as a first name. Calvin Trillin used to say that his upper-class Yale classmates in the 1950s were named things like Thatcher Baxter Hatcher, III (and had nicknames like Mutt and Biff).

In more recent generations, parents have been choosing names the way they might choose a work of art for the living room. It has to be different – you don’t want the same thing that everyone else has – but not so different that it’s weird. And if you are a college-educated person of some taste, an enlightened person, you don’t want a name that’s the equivalent of those cottage-and-stream cliches or Elvis on black velvet.

Hence, the proliferation of books with advice on what to name the baby. The graph from Google nGrams shows the number of mentions of the phrases “what to name the baby” and “baby names” in books since 1900.

Even during the baby boom (1946-1964), interest in baby names did not increase. That boom didn’t start until the late 1970s. 

My favorite baby-name book was Beyond Jennifer & Jason : The New Enlightened Guide to Naming Your Baby.  As the title says, you want to get beyond the currently popular names – the book was first published in the 1980s – and note also that word Enlightened.  The title of the most recent edition is Beyond Jennifer & Jason, Madison & Montana: What to Name Your Baby Now.

As the lede in a Huffington post (here) put it, “We’re always looking for baby names that are wonderful but also unusual.” It then offered a list of “100 great names given to fewer than 100 babies in the U.S. last year.” The names on the 100 under 100 are not so unusual as to be weird. Many are revivals (Winifred and Mamie, Roscoe and Chester), some are foreign transplants (Pilar and Romy, Laszlo and Aurelio), some are borrowed from other things – flora and fauna mostly.

Then are the last names that have become first names

• Baker
• Baxter
• Mercer
• Shepherd
• Slater

These follow others that have already become widely popular, though they first started out as names that enlightened, upscale parents chose – like Carter as in Burden (b. 1942), identified by the Times as a “progressive patrician”). Last year, Carter was the 32nd most popular name for boys. Here are others in the top 100:

• Mason (4th)
• Hunter (36th)
• Taylor (59th for girls)
• Tyler (63rd)
• Parker (74th)
• Cooper (84th)

Like Thatcher Baxter Hatcher, these names suggest ancestry going back to the Mayflower and before that to landed English gentry. But only to our American ears. No upper-class British parent would have given a kid these names.  Like Thatcher and Baxter and Hatcher, they are the names of commoners whose family names come from an occupation.  These are ordinary tradespeople. (Hatcher is topographical – like Hill or Forest – rather than occupational. It denotes someone who lived near the gate or hatch. Baxter is a variant of Baker.)

Parker et. al are not so popular across the pond. Only two of these trade-names made the UK top 100 last year –  Mason (27th) and Tyler (37th) – and I suspect that neither of these will turn up very often on the rolls of Eton.  In Britain, if you want to suggest good family, you don’t give your kid a name like Baxter or Cooper.  George, Harry, William, and James will do nicely, thank you, especially if they are prefaced by something like Prince.

World Standards and American Exceptionalism

October 14, 2014
Posted by Jay Livingston

Today is World Standards Day. “The aim of World Standards Day is to raise awareness among regulators, industry and consumers as to the importance of standardization to the global economy.” It seems like a good idea, everyone using the same standards and measurements. It makes stuff like the Internet possible. It’s sort of like the metric system. Everything from machine parts to scientific reports made in one country can be used in any other country. Almost.

Map of countries officially not using the metric system

At least we’re in good company – Myanmar and Liberia.

The map reminded me of Ann Coulter’s rant  against soccer back during the World Cup.  It was, I hope, her attempt to be funny à la Stephen Colbert – which made her a conservative imitating a liberal imitating a conservative. The Colbert ploy allowed her to be more outrageous than usual in her xenophobia and flaunting of American exceptionalism.

The increased popularity of soccer in the US, she said, is “a sign of the nation’s moral decay.” Among her supporting theses was this:

Soccer is like the metric system, which liberals also adore because it's European. . . . Liberals get angry and tell us that the metric system is more “rational” than the measurements everyone understands. This is ridiculous. An inch is the width of a man's thumb, a foot the length of his foot, a yard the length of his belt. That's easy to visualize. How do you visualize 147.2 centimeters?

American exceptionalism is, at least in part, the idea that the rules everyone else plays by do not and should not apply to the US.  The underlying assumption is that our ways are better. It follows therefore that we should pay no attention to anything outside our shores, and the rest of the world should be like us.*

As for World Standards Day, we do celebrate it – just not today. In the US, World Standards Day will be October 23, a day when no other country will be celebrating it.

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* Often mixed in with this arrogance is a resentment of foreigners who do not follow our example and do not do what we tell them to.  The Coulter and Colbert oeuvre must have many examples, but the one that comes to mind readily is Randy Newman’s “Political Science” (this version  is from 1972, when the song was new and Newman was young – or do I mean when the song was young and Newman was new?)

HT: Shankar Vedantam

Author or Economist - Greg Mankiw and the Principal-Agent Problem

October 7, 2014
Posted by Jay Livingston


Greg Mankiw regularly comes to the moral and economic defense of the very, very, very rich (here for but one example). He himself is also rich (though without the verys) thanks in part to his best-selling economics textbook.

(If you haven’t been a student for a while, you might think that the $286.36 is not a misprint. It isn’t.)

Planet Money recently asked why college textbooks were so expensive (the $286 for Mankiw’s 7th edition at Amazon is actually $17 less than the price on the 6th edition). Their answer: the principal-agent problem. The student (i.e., the principal)  shells out the $286, but the decision as to which book the student must buy is made by the professor (the agent). The agent need not care so much about price; it’s not his own money that’s paying for the book.

The result is that textbooks cost much more than they would in a market where students were free to make their own consumer decisions or where the agent paid attention to price.*  So Planet Money asks bluntly if a textbook author is “making more money than he should.”

It’s an economics question, and since Mankiw’s is the best selling economics textbook, Planet Money called Greg Mankiw.  But it seems that the person they reached was not Greg Mankiw the Economist. It was Greg Mankiw the Author.

Mankiw the Economist might have answered that yes, in a market that operated according to ideal principles, textbook prices would be lower. Under the current system, authors, publishers, and bookstores are getting “rents.” They are making more money than they should.

Instead, the answer came from Mankiw the Author, who justified his royalties in two ways:

1.  Hey, lots of people get away with this. It’s “not unusual” said Mankiw. When our doctor recommends a procedure, when our auto mechanic picks out the replacement parts, when our contractor buys materials – in all these areas and others, we “rely on someone else to look out for our best interest and . . . help us make an informed decision.”  The Planet Money reporter pointed out that health care, car repair, and home contracting are precisely the areas where people complain about getting screwed by their agents. So yes, it’s not unusual (as economist Tom Jones might have said, “It’s not unusual to be screwed by anyone”). But it’s still an economic and moral problem.

Mankiw does admit that “there’s a risk” that the agent will not “do due diligence.”  “But a good professor would do that.”

Economist Mankiw would, I hope, point out that the principal-agent problem is a distortion of the market.  It puts the agent in a position of inherent conflict of economic interest, and conflicts of interest make it harder for people to be virtuous. Mankiw the Economist might even recommend a free market that does not rely on the virtue of the agent (“a good professor”). But Mankiw the Author has no problem with the current system.

2.  Hey, no big deal – it’s just a few bucks.  For students, Mankiw says, “the biggest expenditure is not money, it’s time. Giving them the best book. . .  is far more important than saving them a few dollars.” 

Mankiw the Economist might have said that those “few dollars” are excess profits. Whose pocket those dollars should wind up in is, of course, a moral question, not an economic one. But in his writing in defense of huge salaries and low taxes for CEOs and hedge-funders, Mankiw blends the moral into the economic, so it’s interesting that he omits it from his discussion of textbook prices.

The Planet Money reporters, to their credit, turned to other economists (who are not also textbook authors), and they looked at a different textbook market – high school. In college, the student is not the one who decides which book to buy, the professor is, and profs don’t have to worry about price. In any case the student is buying only one book. Not a lot of leverage there. 

But with high school texts, the school district is both decider and buyer.  Unlike the professor-as-decider (agent), the school district as decider-and-buyer (agent and principal) does care about the price. A lot. The school district is also buying those books by the carload, so it can exert some pressure on price.  Consequently, publishers’ profit margins on high school books are only 5-10%. On college textbooks, profits are closer to 20-25%.

I’m sure that Mankiw’s book is a very good book, and Mankiw himself sounds like a nice man. But if you want to know about who wins and who loses in the principal-agent problem, maybe your primary source of information shouldn’t be the agent.

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* If the professor is the author of the book, his economic interest runs directly opposite to the interests of the student. The more money he can make the students pay for the book, the more money he makes, so we have the principal-vs.-agent problem. Some schools, including Montclair State, have policies aimed at preventing professors from making money in this way. I think it’s a New Jersey state law. I do not know if Harvard requires Mankiw to give up the royalties that come from sales to students in his courses.

Failed Prophecy and Sunk Costs

October 3, 2014
Posted by Jay Livingston

Four years ago, twenty-three economists (mostly conservative) signed a letter to Ben Bernanke warning that the Fed’s quantitative easing policy – adding billions of dollars to the economy – would be disastrous. It would “debase the currency,” create high inflation, distort financial markets, and do nothing to reduce unemployment.

Four years later, it’s clear that they were wrong (as Paul Krugman never tires of reminding us). Have they changed their beliefs?

Of course not.

Bloomberg (here) asked the letter-signers what they now thought about their prophecy.  Here’s the headline:

Fed Critics Say ’10 Letter Warning Inflation Still Right

This despite the actual low inflation.

(Click for a larger view. The original graph is here.)

I don’t know why I assume that high-level economists would be more likely than some ordinary people to change their ideas to adjust for new facts. Fifty years ago, in The Structure of Scientific Revolutions, Thomas Kuhn showed that even in areas like chemistry and physics, scientists cling to their paradigms even in the face of accumulated anomalous facts. Why should big-shot economists be any different? It also occurs to me that those in a profession who will be more resistant to change are the most eminent.  After all, it’s the people at the top who have the greatest amount invested in their ideas – publications, reputations, consultantships, and of course ego. Economists call these “sunk costs.”

So how do they maintain their beliefs? 

Most of the 23 declined to comment; a few could not be reached (including Ronald McKinnon, who died the previous day).  Of those who responded, only one, Peter Wallison at the American Enterprise Institute, came close to saying, “My prediction was wrong.”

“All of us, I think, who signed the letter have never seen anything like what’s happened here.”

Most of the others preferred denial:

“The letter was correct as stated.”  (David Malpass. He worked in Treasury under Reagan and Bush I)

“The letter mentioned several things . . and all have happened.” (John Taylor, Stanford)

“I think there’s plenty of inflation -- not at the checkout counter, necessarily, but on Wall Street.” (Jim Grant of “Grant’s Interest Rate Observer.” Kinda makes you wonder how closely he’s been observing interest rates.)

Then there was equivocation. After Thursday night’s debacle – Giants 8, Pirates 0, knocking Pittsburgh out of the playoffs– someone reminded me, “Hey, didn’t you tell me that the Pirates would win the World Series?”
“Yes, but I didn’t say when.”

Some of the letter-signers used this same tactic, and just about as convincingly.

“Note that word ‘risk.’ And note the absence of a date.” (Niall Ferguson, Harvard)

“Inflation could come . . .” (Amity Shlaes, Calvin Coolidge Memorial Foundation)

The 1954 sociology classic When Prophecy Fails describes a group built around a prediction that the world would soon be destroyed and that they, the believers, would be saved by flying saucers from outer space.  When it didn’t happen, they too faced the problem of cognitive dissonance – dissonance between belief and fact.* But because they had been very specific about what would happen and when it would happen, they could not very well use the denial and equivocation favored by the economists. Instead, they first claimed that what had averted the disaster was their own faith. By meeting and planning and believing so strongly in their extraterrestrial rescuers, they had literally saved the world. The economists, by contrast, could not claim that their warnings saved us from inflation, for their warning – their predictions and prescriptions – had been ignored by Fed. So instead they argue that there actually is, or will be, serious inflation.

The other tactic that the millenarian group seized on was to start proselytizing – trying to convert others and to bring new members into the fold.  For the conservative economists, this tactic is practically a given, but it is not necessarily a change. They had already been spreading their faith, as professors and as advisors (to policy makers, political candidates, wealthy investors, et al.). They haven’t necessarily redoubled their efforts, but the evidence has not given them pause. They continue to publish and sell their unreconstructed views to as wide an audience as possible.

That’s the curious thing about cognitive dissonance. The goal is to reduce the dissonance, and it really doesn’t matter how. Of course, you could change your ideas, but letting go of long and deeply held ideas when the facts no longer co-operate is difficult. Apparently it’s easier to change the facts (by denial, equivocation, etc.). Or, equally effective in reducing the dissonance, you can convince others that you are right. That validation is just as effective as a friendly set of facts, especially if it comes from powerful and important people and comes with rewards both social and financial.

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* This blog has had previous posts on cognitive dissonance:

• You loudly preach the dangers of vaccine. Then it turns out that the one scientific paper supporting your views used faked data. Do you change your beliefs? (here)
• You rail against “gun-free zones” as evil and dangerous. Then your son smuggles a .357 into his officially gun-free university dorm, making his room considerably less gun-free. He uses the gun to commit suicide. Do you change your beliefs? (here)
• You predict that the Republicans will win the presidential elections because they’ve secretly rigged the electronic voting machines in key states. When the Democrat wins those states, do you change your beliefs? (here)