Friday, February 20, 2009
Sports Stadiums and the Stimulus Multiplier
I'm not a fan of demand-side stimulus efforts (in my best case scenario, you get inflation which might help with sticky prices / wages) so you can imagine my dislike for the stimulus bill, which seems to be best summarized as "throw a lot of money at pet Democrat projects and see if it helps the economy" and I've been looking for the best angle to convince my liberal friends that this is a *really* bad idea.
So I was happy to see this connection from Russ Roberts (both sets of facts I was well aware of, but I had not made the connection) as the first point is something that I think most liberals acknowledge so maybe the rest of the steps will follow.
1) Spending on construction for the Olympics / sports stadiums are net money losers for a local economy. (The Knoxville World Fair of 1982 is a notable exception to this rule as it netted $64.00 to go along with its wigsphere). Sometimes they're justified as a luxury good for the city (like a park), but they're not certaintly not money makers.
2) Further, the actual # of net jobs created by these construction projects has been shown to be 0. (see the cafe hayek post for a summary or this paper). Once you grant that there's not a net positive economic impact from the government building a new stadium, that's pretty easy to see as the government is just shifting funds around (robbing Peter to pay Paul, as such) and that's what the empirical surveys have shown.
3) So clearly, not all government spending has an associated multiplier that is greater than 1. Personally, I would expect that new spending with a multiplier > 1 to be the exception rather than the rule. Government funded research projects that transition to the private sector (ala the Internet and some drug research) and some infrastructure such as the interstate system (its multiplier is actually decreasing with time due to increasing maintenance costs) are the examples I can think of. But their payback is not immediate, i.e., doesn't satisfy the timeliness goal of a stimulus package.
4) While some infrastructure has a positive RoI, clearly lots do not (such as the stadium, but see also the bridges to nowhere in Japan and almost in Alaska).
5) With the default position that most govt spending will not have a multiplier effect > 1 (which generally follows the rule 90% of all new ideas are crap, though my personal assessment of the ratio for govt plans is higher), what's the likelihood that a hastily slapped together plan patched together from things that had not independently demonstrated their value enough to otherwise receive funding will have a multipler > 1?
Random asides:
The Keynesian idea that government spending has a multiplier > 1 is motivated by the assumption that money flowing through the government has a greater velocity than money flowing the private sector (enough to offset the implicit inefficiency that comes from x spending y's money on something that y likely would not have bought). When people saved money in mattresses, this was true.
But since people now save their money in banks which can and do loan out multiples of every dollar saved (fractional reserves) and government treasuries are 1-to-1 (1 dollar borrowed / spent comes from 1 dollar invested) the velocity argument actually cuts against government spending, and even more sharply when you consider the long appropriation cycles now used by the government (case in point see the stimulus bill allocations out beyond 2011).
Further, if you buy the theory that the problem with the economy is insufficient credit availability, what will be the effect when the government soaks up $1 trillion in investment capital? Even if it's financed from overseas, that's still investment capital not invested elsewhere which decreases the (world wide) aggregate credit supply.
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So I was happy to see this connection from Russ Roberts (both sets of facts I was well aware of, but I had not made the connection) as the first point is something that I think most liberals acknowledge so maybe the rest of the steps will follow.
1) Spending on construction for the Olympics / sports stadiums are net money losers for a local economy. (The Knoxville World Fair of 1982 is a notable exception to this rule as it netted $64.00 to go along with its wigsphere). Sometimes they're justified as a luxury good for the city (like a park), but they're not certaintly not money makers.
2) Further, the actual # of net jobs created by these construction projects has been shown to be 0. (see the cafe hayek post for a summary or this paper). Once you grant that there's not a net positive economic impact from the government building a new stadium, that's pretty easy to see as the government is just shifting funds around (robbing Peter to pay Paul, as such) and that's what the empirical surveys have shown.
3) So clearly, not all government spending has an associated multiplier that is greater than 1. Personally, I would expect that new spending with a multiplier > 1 to be the exception rather than the rule. Government funded research projects that transition to the private sector (ala the Internet and some drug research) and some infrastructure such as the interstate system (its multiplier is actually decreasing with time due to increasing maintenance costs) are the examples I can think of. But their payback is not immediate, i.e., doesn't satisfy the timeliness goal of a stimulus package.
4) While some infrastructure has a positive RoI, clearly lots do not (such as the stadium, but see also the bridges to nowhere in Japan and almost in Alaska).
5) With the default position that most govt spending will not have a multiplier effect > 1 (which generally follows the rule 90% of all new ideas are crap, though my personal assessment of the ratio for govt plans is higher), what's the likelihood that a hastily slapped together plan patched together from things that had not independently demonstrated their value enough to otherwise receive funding will have a multipler > 1?
Random asides:
The Keynesian idea that government spending has a multiplier > 1 is motivated by the assumption that money flowing through the government has a greater velocity than money flowing the private sector (enough to offset the implicit inefficiency that comes from x spending y's money on something that y likely would not have bought). When people saved money in mattresses, this was true.
But since people now save their money in banks which can and do loan out multiples of every dollar saved (fractional reserves) and government treasuries are 1-to-1 (1 dollar borrowed / spent comes from 1 dollar invested) the velocity argument actually cuts against government spending, and even more sharply when you consider the long appropriation cycles now used by the government (case in point see the stimulus bill allocations out beyond 2011).
Further, if you buy the theory that the problem with the economy is insufficient credit availability, what will be the effect when the government soaks up $1 trillion in investment capital? Even if it's financed from overseas, that's still investment capital not invested elsewhere which decreases the (world wide) aggregate credit supply.
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Thursday, February 19, 2009
God Bless You, Elton John
Coming soon to a theater near you - perhaps the most awesomely bad movie ever made...
Pride and Predator.
Also I hear that I may have to go to Chicago in June for some tea or some party or something. (I could tell you more, but I don't practice Santelli and I ain't got no crystal ball...)
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Pride and Predator.
In what seems like related news to me, two iPhone app makers are in court arguing over who has the rights to the phrase "Pull my finger" to advertise their farting iPhone app. (link)Elton John's Rocket Pictures hopes to make the first Jane Austen adaptation to which men will drag their girlfriends.
Will Clark is set to direct "Pride and Predator," which veers from the traditional period costume drama when an alien crash lands and begins to butcher the mannered protags, who suddenly have more than marriage and inheritance to worry about.
Also I hear that I may have to go to Chicago in June for some tea or some party or something. (I could tell you more, but I don't practice Santelli and I ain't got no crystal ball...)
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Saturday, February 14, 2009
How things change
Those who knew me in undergrad as that guy who never came to class and played StarCraft all day (or Civ or WarCraft or one of several other games) might find this post surprising, but those who've interacted with me over the last several years (and /or seen the blogging rate drop off) won't be.
Me, I think I'll have to appropriate "work-a-holic force-of-nature" to my sig.
And for a little context to that post, on the day I met with Ashwin, I (in approximate order of completion):
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Me, I think I'll have to appropriate "work-a-holic force-of-nature" to my sig.
And for a little context to that post, on the day I met with Ashwin, I (in approximate order of completion):
- finished up and delivered a 125 page report I had started Monday night (only about 40 pages were brand new as it drew heavily on intermediate reports though getting in all the required formatting was the most time-consuming part)
- put together a 1 hour presentation (but cut down from a previous 2 hour presentation with about 15 minutes of new material)
- reviewed that report and presentation with a sub for about 30 minutes (they didn't write any of it, but while they're a "sub", they're a much much bigger / experienced company and they were willing to give me feedback prior to submission based on an earlier draft).
- had a 40 minute meeting with Ashwin to loosely scope out 3 different proposals,
- had a telecon debrief for an hour with a project sponsor (and some subs)
- met with my business partner for about 15 minutes
- met with another guy at VT to discuss a different set of proposals and general interactions with a funding agency,
- met with the PI on a project CRT is funding at VT to clear up some contracting paper work (more accurately VT is a sub to CRT on a project)
- and got a quote from VTIP on officially licensing back some of my IP
- then some other random phone calls while I was driving (e.g. setting up the schedule for a trip next week)
Of course, other stuff was also done (like dropping in on Thason, driving for 3 hours and shopping some). But that day started at 5:00 AM and finished by 8:00 PM, which is a bit lax as I could've gotten some more stuff done (patents to file, papers to write / review) before I went to sleep at 11:00.
Labels: CRT, Virginia Tech
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Friday, February 13, 2009
Wherein I ruin your weekend productivity
Behold, Desktop Tower Defense 1.9. (0.4 better than 1.5, plus with sequential missions, multiplayer and stuff!)
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Friday, February 06, 2009
Tomorrow's News Today
I was in a Subway today, and its owner told me that starting Monday the original $5 footlong deal would resume (i.e., all subs, not just the subset that happens to normally be less than or just over $5).
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Tuesday, February 03, 2009
More plagiarism
But not of me this time.
This time it's Indiana University that was plagiarized. By Southern Illinois University. Specifically, SIU plagiarized IU's ... plagiarism policy. (read more).
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This time it's Indiana University that was plagiarized. By Southern Illinois University. Specifically, SIU plagiarized IU's ... plagiarism policy. (read more).
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Sunday, February 01, 2009
What Jody Sees When He Listens to Music
Pretty much my whole life I've gotten my jollies out of reinterpreting lyrics to songs to tell a radically different story which then gets vividly played out in my mind everytime I hear the song.
For instance in 7th grade I used to go around and tell the other kids that "Yesterday" was actually Paul's lament about suddenly losing a testicle which drove away the woman he loved ("Suddenly, I'm not half the man I used to be..." "Yesterday, love was such an easy game to play...") though as Matt and Mike may be able to attest, I would also change "Oh, yesterday came suddenly" to "Oh, castration came suddenly" as I thought it added to the effect.
So now whenever I hear Yesterday on the radio, I flash on a younger Paul McCartney lying in a hospital bed (now half the man) breaking down in tears while a stunning brunette walks out the door.
To ruin more music for you, here's what I think about / see when I hear a few other songs.
You're a Woman, Izer
(link) Britney discovers her female friend nicknamed "Izer" on the dance floor and confronts her because Izer likes to dress up like a man, seduce women, and then spring the "surprise" on them back at Izer's place. Nonetheless, because of her latent bisexuality, Britney wonders if Izer and her could be a couple, but because of the world's homophobia, it could never be.
Dolores O'Riordan's Stinky Coma Boyfriend
(link) Dolores's boyfriend was in a near fatal car accident which left him blind and deaf, and completely paralyzed except for his anal sphincter and some sensation in his finger. She now communicates with her boyfriend via a form of Morse code where she tugs on his finger and he farts.
Yesterday, however, Dolores came into his room to see him communicating with his ex - a fact that disturbs her so greatly she confronts him (as best as someone can be confronted via finger pulling, farting Morse code). He, however, is confused about who he should be with (the age-old current versus ex dilemma holds even for coma-boy), so he somewhat passive-aggressively tries to drive Dolores away by letting them "linger".
The Chilli Peppers Come Out of the Closet
(link) Anthony Kiedis contemplates Flea's ultimatum that if they're going to continue to be together, Anthony is going to have to go beyond just backstage oral flings and move their relationship into the open and, ahem, "take it on the other side". More a bi-player than a gay homemaker, Anthony does not relish the envisioned side-splitting pain from anal or the potential lost female loves - the latter because he thinks that societal pressures will prevent him from effectively switching teams again. However, he does not want to give up Flea either. Confused, Anthony, repeatedly contemplates suicide.
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Sure they may not all work perfectly, but I think they work better than the Dark Side of Oz, which I imagine a lot of you paid money to see. And with my shlock, the images indelibly burned into your brain came for free.
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For instance in 7th grade I used to go around and tell the other kids that "Yesterday" was actually Paul's lament about suddenly losing a testicle which drove away the woman he loved ("Suddenly, I'm not half the man I used to be..." "Yesterday, love was such an easy game to play...") though as Matt and Mike may be able to attest, I would also change "Oh, yesterday came suddenly" to "Oh, castration came suddenly" as I thought it added to the effect.
So now whenever I hear Yesterday on the radio, I flash on a younger Paul McCartney lying in a hospital bed (now half the man) breaking down in tears while a stunning brunette walks out the door.
To ruin more music for you, here's what I think about / see when I hear a few other songs.
You're a Woman, Izer
(link) Britney discovers her female friend nicknamed "Izer" on the dance floor and confronts her because Izer likes to dress up like a man, seduce women, and then spring the "surprise" on them back at Izer's place. Nonetheless, because of her latent bisexuality, Britney wonders if Izer and her could be a couple, but because of the world's homophobia, it could never be.
Dolores O'Riordan's Stinky Coma Boyfriend
(link) Dolores's boyfriend was in a near fatal car accident which left him blind and deaf, and completely paralyzed except for his anal sphincter and some sensation in his finger. She now communicates with her boyfriend via a form of Morse code where she tugs on his finger and he farts.
Yesterday, however, Dolores came into his room to see him communicating with his ex - a fact that disturbs her so greatly she confronts him (as best as someone can be confronted via finger pulling, farting Morse code). He, however, is confused about who he should be with (the age-old current versus ex dilemma holds even for coma-boy), so he somewhat passive-aggressively tries to drive Dolores away by letting them "linger".
The Chilli Peppers Come Out of the Closet
(link) Anthony Kiedis contemplates Flea's ultimatum that if they're going to continue to be together, Anthony is going to have to go beyond just backstage oral flings and move their relationship into the open and, ahem, "take it on the other side". More a bi-player than a gay homemaker, Anthony does not relish the envisioned side-splitting pain from anal or the potential lost female loves - the latter because he thinks that societal pressures will prevent him from effectively switching teams again. However, he does not want to give up Flea either. Confused, Anthony, repeatedly contemplates suicide.
=======
Sure they may not all work perfectly, but I think they work better than the Dark Side of Oz, which I imagine a lot of you paid money to see. And with my shlock, the images indelibly burned into your brain came for free.
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