Marginal Revolution

When No Means Yes

... Having voted against the administration's climate change bill on the record means that at least some of these House Democrats will be able to vote for what emerges from a House-Senate conference later in the year. Therefore, the chances of a climate bill being enacted this year is now much greater than it was 24 hours ago.

That's the ever-perceptive Stan Collender on the politics of the climate change bill.

The Netflix prize has been won

Details of the competition are here.  The winning team is here.  Background on the prize is here.  Previous MR coverage is here.

Bravo!  I should note that current "recommender" systems don't much help me make further selections.

I thank Jüri Saar for the pointer.

New markets at Intrade.com

Here is the home page.  As I post this, Bernanke's reappointment (a good idea) is running at 70, Waxman-Markey is running at 50, and health care reform at 35, c'mon people get the volume on those contracts up.

Credible threats

Here is one of them:

Ms. Feinstein has threatened to vote against Mr. Obama’s health care bill if it draws Medicare funds from high-cost areas like California to low-cost areas of the country.

She is, of course, a Democrat and a progressive.  The article is instructive throughout.

The Green Dam is Down

This is welcome news and in combination with recent events in Iran provides an interesting commentary on the state of free expression in the world today.

Caving to public pressure, China on Tuesday said that use of its controversial "Green Dam Youth Escort" software is not required....The ministry official added that while all computers sold on the mainland will feature the filtering software, individuals are free to decide whether they use it. 

How to follow current events

On Iran, Andrew Sullivan > Σ MSM. 

Megan McArdle offers some reasons why.  I would add that MSM is unwilling to rely much on information aggregators such as Twitter and they are reluctant to report things in the uncertain, hanging narrative kind of way that blogs (sometimes) excel at.  MSM needs the definitive-sounding soundbites for people who are tuned in for only a few minutes and don't come back or don't come back with any memory of what was said before.

We're seeing a revolution in coverage of current events right before our very eyes.

Apportioning Blame for the Deficit

David Leonhardt's column breaking down the "causes" of the budget deficit has been widely reported and the bottom line repeated many times: 

President Obama’s agenda, ambitious as it may be, is responsible for only a sliver of the deficits, despite what many of his Republican critics are saying.

I have two problems with the analysis.  First, the NYTimes' excellent graphics department this time goes overboard with a big and difficult to read chart.  Matt Yglesias does much better summarizing the point with that old standby, the pie chart:

Second, although not "wrong" the Leonhardt's analysis doesn't reveal the arbitrariness of this way of apportioning deficit blame.  

The reason why the hundreds of billions of dollars of spending in Obama's agenda is said to be responsible for only a "sliver" of the deficit is that the agenda also includes taxes, thus the net effect is low.

Now Obama deserves kudos for a more honest budget process.  Indeed, if the only choices are the tax and spend party and the no-tax and spend party then I prefer the former for both economic and political reasons.  Thus as political accounting Leonhardt's conclusion is reasonable.

I suspect, however, that many people will not see that the economic accounting is arbitrary and potentially misleading.  To see why, imagine that President Bush increased taxes in the last days of his administration and Obama increased spending in the first days of his administration.  We would then be in exactly the same economic position as we are now but everyone would be writing about how "Obama's ambitious agenda is responsible for a large portion of the deficit."  In other words, if it were not for Obama's spending, the deficit would be hundreds of billions of dollars lower. 

Washington is all about political accounting but we should not be misled into thinking that because Obama's agenda accounts for only a "sliver" of the deficit that this makes it a modest or cheap agenda.  The agenda is big and expensive and every dollar of spending is a dollar that adds to the deficit.  

Sentences to ponder

Iraqis are actually demanding that Kuwait pay compensation for facilitating the 1991 U.S.  "invasion" of Iraq...

In case you weren't sure, that's a story about right now, June 2009.  Here is more.

Is the Geithner plan dying a natural death?

Via Ezra Klein, we learn from the WSJ:

A government program designed to rid banks of bad loans, part of a broader effort once viewed as central to tackling the financial crisis, is stalling and may soon be put on hold, according to people familiar with the matter.

Ezra comments:

...the reasons appear to be twofold. First, few investors or banks want to work with the government. And second -- and maybe more importantly -- few investors and banks now think they'll have to. The banks, in particular, are apparently enthused by their ability to raise private capital, and now think they can wait out the market turmoil and sell their toxic assets in a few years, when they'll be worth more money.

And then:

Recently, I asked an administration official which government program we'd remember as making the most difference in averting catastrophe. Where will the history books place the credit?

"It'll be the Federal Reserve," he replied. "It'll be their decision to increase the size of their balance sheet from whatever it was before the crisis to whatever it is now."

Sonia Sotomayor and economics

Google yields this:

President Obama is apparently going to nominate Sonia Sotomayor to the Supreme Court. But, you rightly say, what is the Sports Economics angle in this story? Judge Sotomayor was the judge who issued an injunction that said MLB teams could not impose a collective bargaining agreement nor use replacement players to start the 1995 season, effectively ending the 1994-95 MLB strike.

James Kwak offers some general comments.  He describes her as a "moderate" on economic issues.  And here is another source on copyright:

A lot of freelancers know the centrist Sotomayor best from NY Times Company v. Tasini, in which a large group of freelance writers sued the Times for putting their articles into LexisNexis without further permission or compensation.  Sotomayor, a district judge at the time, ruled in favor of the Times based on her interpretation of the Copyright Act of 1975. The decision was reversed on appeal and the reversal was upheld by the Supremes -- a win for the contractors, but not from Sotomayor.

Addendum: Here is a good summary article.