Sizing up the Republican field

During tonight's debate Dave Weigel tweeted "there are people who catch leprechauns who are less lucky than Mitt Romney this year." 

Yep.  McCain in '08, Romney in '12.  It's great to be a Republican.

Behavioral economics - Daniel Kahneman

In my two years at Cornell the Professors that stood out were Harold Bierman who taught finance and Richard Thaler who taught economics.  From the latter the course of note was on behavioral economics of which he was a leading light.  The field drew heavily on the research of Daniel Kahneman and Amos Tversky. 

Behavioral economics essentially contends with the assumption of economics that people are rational actors, and through experiments finds how people consistently contradict what they would do if they were truly rational. 

Examples that I readily recall is that the people’s cost/benefit functions aren’t linear but rather curve so it is steeper to start and then tails off.  In time for the Christmas holidays this suggests an optimal strategy of wrap your gifts separately and pay in one bill (or in the lingo segregate your gains, consolidate your losses).

The other was the market anomaly—at least at the time—that markets tended to go down first thing on Monday, and go up towards the conclusion of trading on Friday.  This was a blow to efficient markets theories that always amused me (when are you in a better mood, at the start of the work week or its conclusion?).

What prompts the above is an article in Vanity Fair by Michael Lewis on Daniel Kahneman http://www.vanityfair.com/business/features/2011/12/michael-lewis-201112

As I’ve remarked on occasion MBAs are far from knowing everything, but that shouldn’t lead you to believe that they don’t know anything.  Behavioral economics was one of things I took away from Cornell’s Business School and have carried with me since the late 80’s.

Steyn nails it

Mark Steyn neatly summarizes our current political situation today.  First he quotes Gerald Ford as saying “a government big enough to give you everything you want is big enough to take away everything you have.”  Well maybe.  But Steyn’s rewrite of the quote is spot on: “a government big enough to give you everything you want isn’t big enough to get you to give any of it back.”

http://www.nationalreview.com/corner/282654/state-union-mark-steyn

Herman Cain in light of the harassment allegations

On Herman Cain, a few observations

1. Herman Cain reminds me of a business colleague of mine who went through an executive evaluation.  He passed along to me—because he knew how much I’d enjoy it—that on intelligence he came out on the high end but compared to high level executives he was off the charts.   Cain strikes me as a CEO to the nth degree, affable, charming but not someone who is going to wow you with his smarts.
2. In last Friday’s G-File Jonah Goldberg noted Cain’s tendency to say in a pinch that he’d consult the experts.  That you can turn over government policy to the “experts” is a progressive not conservative idea.
3. The truly damning allegation isn’t Cain’s apparent attempt to corner the Bill Clinton vote, but rather that he thought of running in 2001.  Think about that for a second.  That Cain isn’t very conversant with the issues, particularly foreign policy, is scary enough but that he evidently did nothing over a ten year period to fill in the gaps should be a deal breaker.
4. The conservative attraction to Cain illustrates the movement’s current predicament.  It distrusts the elites, but in looking for alternatives outside the credentialed conservatives run the risk of adopting those who aren’t qualified. 

P.G Wodehouse and current affairs

"A feeling is gradually stealing over me," he writes, "that the world has never been farther from a war than it is at present … I think if Hitler really thought there was any chance of a war, he would have nervous prostration."   [1939] 
http://www.guardian.co.uk/books/2011/nov/04/pg-wodehouse-life-in-letters?CMP=twt_gu

Republican nomination, where we're at

On Twitter, Rich Lowry asks “has a presidential nominating contest ever been so farcical?”  Meanwhile Jonah Goldberg observes that “many conservatives are reconciled to a Romney victory the way they are to the inevitability of catching the seasonal flu.”

Cutting defense spending

Defense spending is one of those issues that is almost immune to argument.  Ultimately it comes down to how you view the world.  Still, a good column on the subject today from Robert Samuelson.  http://www.washingtonpost.com/opinions/the-dangerous-debate-over-cutting-military-spending/2011/10/28/gIQAnPWEXM_story.html

Among the points that Samuelson makes:

Ø      Defense spending was 4.4% of total federal spending last decade compared to the 40 to 50% that went to the defense in the fifties and sixties when the country was poorer.

Ø      Comparing national expenditures on defense are misleading because they have significantly different salary and procurement costs.  A Chinese soldier costs far less than an American one.

Ø      Defense is job number one for government. 

To Samuelson’s points I would add that this is one area where you don’t want it to be close.  Evenly matched militaries result in horrifically bloody stalemates.  America has shown little tolerance for casualties and long campaigns; that doesn’t go well with small military advantages.