The Ambrosini Critique

I learned Scheme in school and my favorite text books, in any subject, is Structure and Interpretation of Computer Programs, but every day of my working life I used PERL to hack something or other together…

Next, concoct plausible explanations for your new, statistically significant anomaly. … Under no circumstances should you test these explanations… In other words, your explanations, though plausible, are false. The result is probably due to random variation. This should not discourage you from completing your article. Write up your doubts in a separate note several months later.

Finally, check the literature to make sure your idea is original. If it isn’t, which is likely, mention your predecessor prominently in your acknowledgments, and include a footnote in which you pick a few nits.

(erm, is it tomorrow yet?)

In my opinion, public policy on greenhouse warming needs desperately to steer a middle course, which is not yet there, for dealing with possible climate-change disasters. This middle course emphasizes the option value of waiting for better information, takes seriously whether or not possibilities exist for …nding out beforehand that we are on a worst-case trajectory (and knows how much early-warning sensors cost to install), confronts the possible options of undertaking politically-incorrect emergency measures if a worst-case nightmare trajectory happens to materialize, and otherwise attempts constructively to have some kind of a game plan for what might be coming up. The point is to supplement traditional mid-distribution analysis of, and action on, climate change by putting research dollars into early detection of rare disasters and beginning a serious public dialogue about contingency planning for worst-case scenarios akin to the way Americans might debate the pros and cons of an anti-ICBM early warning system. It may well turn out that the option value of waiting for better information about catastrophic tail events is negligible (because early detection is impossible, or it is too expensive, or it comes too late, or because nothing practical can be done about undoing greenhouse warming anyway), but these are conclusions we need to reach empirically, rather than postulating them initially.

Until we start seriously posing and trying to answer tough questions about rare global-warming catastrophes, we will not make real progress in dealing constructively with the nightmare scenarios and we will continue to cope with them inadequately by trying to shoehorn disaster policy into an either-or response category where it won’’t fi…t. The Stern Review has its heart in the right place — –it is not nice for us to bequeath to our great-great-grandchildren the enormously unsettling uncertainty of a very small, but essentially unknown (and perhaps unknowable), probability of a planet earth that in hindsight we allowed to get wrecked on our watch. However, the Review does not follow through formally on this really unsettling part of the global warming equation –which a generous interpretation of its bad economics might say is the underlying motivation for its overall alarmist tone –except indirectly, by choosing [unrealistic model parameters] in order to reverse-engineer the drastic slowing measures that it intuitively wants to impose on greenhouse gas emissions to neutralize the nightmare scenarios.

— Martin L. Weitzman

… the night is still young. In any case, its appropriate, today being Lincoln’s birthday and all, that the best thing I’ve read today would be something Lincoln said:

I have said and I repeat it here, that if there be a man amongst us who does not think that the institution of slavery is wrong in any one of the aspects of which I have spoken, he is misplaced and ought not to be with us. And if there be a man amongst us who is so impatient of it as a wrong as to disregard its actual presence among us and the difficulty of getting rid of it suddenly in a satisfactory way, and to disregard the constitutional obligations thrown about it, that man is misplaced if he is on our platform. We disclaim sympathy with him in practical action. He is not placed properly with us.

— Abraham Lincoln

There’s irony in grabbing this off Prof. Delong’s weblog. Lincoln, after all, was a partisan— “The sentiment that contemplates the institution of slavery in this country as a wrong is the sentiment of the Republican party… The Democratic policy in regard to that institution will not tolerate the merest breath, the slightest hint, of the least degree of wrong about it.” — but he was able to mix partisanship with pragmatism. He was not shrill.

Here’s some citations I’d like to add to the history reading group’s list:

• The First Modern Economy: Success, Failure, and… – Google Book Search
• Proto-Industrialization: The First Phase of the Industrialization Process
• Bringing the Covert Structure of the Past to Light
• Pre-Modern Economic Growth Revisited: Japan And The West
• Inequality, Arnold Kling
• The Theory of the Leisure Class – Google Book Search
• INCOME INEQUALITY IN THE UNITED STATES, 1913-2002*
• Family Income Mobility – How Much Is There and Has It Changed?
• The New Deal Legacy, Arnold Kling
• The Great Crash 1929 – Google Book Search
• Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression
• Does Monetary Policy Matter? A New Test in the Spirit of Friedman and Schwartz
• Monetary factors in the great depression
• Forecasting the Depression: Harvard versus Yale
• Prices During the Great Depression: Was the Deflation of 1930-1932 Really Unanticipated?

Before I go on, I must be explicit that I have long been skeptical of “green.” Unlike “green” folks, I am not especially inspired by nature. Yes, often nature is pretty and soothing to visit. But to get my blood pumping with excitement and awe you must show me a cityscape — Manhattan’s skyline, above all — and not forests or mountains or beaches. My tastes run decidedly in favor of those amenities of civilization that allow me to escape nature. So the reason I am skeptical of “green” is that “green” people, more and more, seem to elevate their taste for nature into a moral proposition — which, because I don’t share their taste for nature, causes them to regard me and others like me as morally deficient.

– Don Boudreaux

(I should note, I don’t share Don’s preferences… I just think its important to say that just because I have a preference for something, nature for example, I shouldn’t feel compelled to hoist my preference for that thing onto others, as the NeoAths do by making those preferences “moral propositions”.)

Or so says Paul Krugman:

Right now, many people are uninsured because … insurance companies “game the system to cover only healthy people.” So the Edwards plan, like Schwarzenegger’s, imposes “community rating” on insurers, basically requiring them to sell insurance to everyone at the same price…
[M]arketing and underwriting — … screening out high-risk clients — are responsible for two-thirds of insurance companies’ overhead. With insurers selling to government-run Health Markets, not directly to individuals, most of these expenses should go away, making insurance considerably cheaper…
So this is a smart, serious proposal. It addresses both … the uninsured and the waste and inefficiency of our fragmented insurance system.(emph added)

In other words, inefficiency could be reduced, i.e. profits could be higher, if insurance companies didn’t screen the “high risk” clients.

Those Insurance CEOs should be fired and someone who knows how to maximize profits in that market needs to replace them. Perhaps Krugman, or John Edwards, could do a better job?

(h/t MR, my fav econ blog)

Ok budding third world despots, I see you there Scott, let’s say it together…. Price… Controls… are… BAD!!!!