Government Pensions

As shown by the bankruptcy of Detroit, government pensions are not guaranteed, in large part because the do not meet any reasonable accounting standards. Left and right should be able to find some way to ensure that government pensions are held to the same minimal accounting standards to which private industry pension funds are held. Some discussion of the problem here.

Satriani

Morning in America watch

The deficit for 2013 dropped to $680 billion, from $1.1 trillion in 2012, bringing the debt to the lowest level since the end of the Great Bush Recession.

Plastic Jesus

goto fail;

Having made my share of stupid programming errors it is good to see that the professionals make them too. Appple's serious goto fail security flaw was due to just one extra line of code in C, an extra (goto fail;) line.

This mistake would have been discovered automatically if they had used Python, due to an indentation error.

    OSStatus err;
        if ((err = ReadyHash(&SSLHashSHA1, &hashCtx)) != 0)
            goto fail;
        if ((err = SSLHashSHA1.update(&hashCtx, &clientRandom)) != 0)
            goto fail;
        if ((err = SSLHashSHA1.update(&hashCtx, &serverRandom)) != 0)
            goto fail;
        if ((err = SSLHashSHA1.update(&hashCtx, &signedParams)) != 0)
            goto fail;
            goto fail;
        if ((err = SSLHashSHA1.final(&hashCtx, &hashOut)) != 0)
            goto fail;
    fail:
        return err;

Good non-technical discussion of the problem here.

Hipster rock anthem

The stickiness of class - Part Deux

Gregory Clark, the author of 'The Son Also Rises: Surnames and the History of Social Mobility' discussed earlier, has an article in the New York Times that raises some interesting and some questionable claims. The interesting parts relate to his main thesis that it can take several centuries for a high class or low class family to regress to the mean i.e. become average. Class advantage or disadvantage is hard to shake. The questionable part of his article is his insistence that much of this effect is related to genetics. It is unclear to me why people with no training or obvious knowledge of genetics are so taken with genetic determinism. There are multiple critiques of his position in the comments but the most obvious is that he has no information about the marriage partners of the males whose names he follows through history. If you are going talk breeding you have know who bred with who.

Greenspan - Putz

Of all the people who deserve to have their reputations permanently blackened by the Great Recession there is no more deserving candidate than Alan Greenspan, an ideologically blinded hack for the ages. The ultimate takedown of Greenspan's incompetence has yet to written but Reason magazine gives it a half-assed shot in their recent review of his book - 'The Map and the Territory' (even the title is a rip off). Notable quotes:

Greenspan never considers the possibility that his own actions contributed to the housing bubble and the ensuing financial collapse.

you can understand the “irrational exuberance” of the years preceding the crash of 2008 as a rational response to the Federal Reserve Bank’s artificially low interest rates. But not if you are Alan Greenspan, the man who chaired the Fed from 1987 to 2006.

He does not raise the possibility that the Fed’s expansionary policies had something to do with driving the inflation-adjusted federal funds rate—the rate that banks charge one another for short-term loans of reserves—below zero for almost two years.

Greenspan, like many behavioral economists, is quick to blame market actors for irrational choices rather than asking whether policy makers have distorted signals or incentives in ways that lead rational actors to bad outcomes.

Given Greenspan’s belief about the cause of lower interest rates, the only explanation he can offer for over-building is irrationality. He never seems to consider the alternative hypothesis, that the Fed might have turned all the lights green.

Morning in America watch

Peggy Noonan's column in the Wall Street Journal criticizing Obama's handling of the crisis in the Ukraine has proven to be spectacularly ill-timed, given the subsequent collapse of the pro-Russian government and the ascendancy of a pro-Western democratic movement.

Original Sin for atheists

Of the various ideas that come from the Old Testament the concept of Original Sin is the one that I find most interesting. I had, however, never thought of Original Sin as being an essential part of my moral code until reading this brief discussion, the key line of which is 'We need Original Sin as a restraint against our arrogant – and possibly evil – self-certainty'. To understand and accept your own capacity for evil is a valuable starting point for any moral code.

The stickiness of class

Much has been written about income mobility in recent years, generally implying that there is a considerable mobility between generations. These studies do not jibe well with my experience of social mobility. This book review in the Economist addresses this disconnect, arguing that class is very sticky and class mobility is very low even over a large number of generations. Long time frames are always difficult to relate to personal experience but you can get a sense of the argument from your own extended family. There is considerable income variation within my family, covering more than half of the income percentile range, from a pastor of a small rural congregation up to an oil company executive. Yet, they all belong to the same middle class social group. If you look at the children in the next generation, outcomes and parental income do not co-assort. All of the pastor's children attained four year degrees from decent universities as did the oil executive's children. The prospective incomes of this next generation are largely unaffected by the previous generation's income. No one accumulated sufficient wealth to permanently move their lineage into the upper class nor did anyone fall into a permanent underclass.

Individual incomes are a noisy signal displaying considerable variation from generation to generation. This noise largely reflects individual choices whereas class, although much harder to define, is quite stable over long generational time frames. The fortunes of individuals within the family rise and fall, but the fortunes of the family remain relatively stable, based on long established class attributes. The review addresses what this means for social policy, concluding that some mechanisms to promote social mobility are a good idea if we wish to avoid both permanent underclasses and overclasses.