Financial literacy

It is sadly uncommon, according to research, the Freakonomics Podcast reports.

The Tax Foundation vs. The CBPP

The Tax Foundation ranks state tax climates. (NH comes in sixth.)

Jon Shure says the ranking is unhelpful.

Good advice from the Center on Budget and Policy Priorities

From Micheal Leachman, here (more here):

Corrections spending is absorbing a growing share of states’ budgets (see map), leaving less for education, health care, and other priorities. Some states have adopted criminal justice reforms that reduce costs while protecting public safety — offering effective addiction treatment to more people convicted of drug-related crimes instead of incarcerating them, for example, or imposing sanctions other than prison time for people who miss meetings with their parole officer.


More states might implement these reforms if lawmakers had a rigorous assessment of the likely impact on the state budget, such as expected cost savings. Unfortunately, many states do a poor job of producing this vital assessment (called a “fiscal note”), as a new report from CBPP and the ACLU explains.

If you look at the chart at the end of the report, you find that New Hampshire enacted 17 "significant adult corrections bills", none with fiscal notes.


Unrelatedly, the CBPP also recommends annual, rather than biennial, budgeting. (New Hampshire is biennial.)

Free Staters are taking over New Hampshire. Or not.

Diane Lacy, President of the NH State Employee Association (via Skip Murphy):

let’s be clear; the speaker [of the NH House, Bill O'Brien] is not exactly our typical Republican. He is a Free Stater. These people, these sponsors that are going out there with the legislation are Free Staters. They are not the typical Republicans.

...

We’ll have a conversation with our neighbors, all of our communities, about the values that are important to NH because one thing is clears: NH is being taken over by the Free Staters and we are not going to stand for it.

I don't know what Diane Lacy is smoking.

A Free Stater is a person who has moved to New Hampshire as part of the Free State Project. The Free State Project is "an effort to recruit 20,000 liberty-loving people to move to New Hampshire. We are looking for neighborly, productive, tolerant folks from all walks of life, of all ages, creeds, and colors who agree to the political philosophy expressed in our Statement of Intent, that government exists at most to protect people's rights, and should neither provide for people nor punish them for activities that interfere with no one else." (According to the website.)

Bill O'Brien is not a Free Stater. And it's pretty easy to figure this out, since he's been living in New Hampshire since before the Free State Project was founded in 2001.

(There is a small group of people who lived in New Hampshire at that time, who are technically Free Staters. They did this by signing the statement of intent before New Hampshire was chosen in 2003. Bill O'Brien did not do this. And most people who did this are Libertarian Party activists and hardcore libertarians, which Bill O'Brien is not.)

If Lacy had stated that Bill O'Brien was a Tea Partier, on the other hand, that would be plausible.

And what about sponsoring legislation and taking over New Hampshire? I've seen persuasive arguments that Free Stater state representatives are having some influence on NH politics. They certainly seem to sponsor plenty of legislation. But with only 12 or 15 representatives, out of 400, that influence is very limited.

Not only that, but many Free Staters actually oppose the right-to-work legislation Lacy is concerned about. Here's the 2004 platform of the Libertarian Party on this issue:

The Principle: We support the right of free persons to voluntarily establish, associate in, or not associate in, labor unions. An employer should have the right to recognize, or refuse to recognize, a union as the collective bargaining agent of some, or all, of its employees.

Solutions: We oppose government interference in bargaining, such as compulsory arbitration or the imposition of an obligation to bargain. Therefore, we urge repeal of the National Labor Relations Act, and all state right-to-work laws which prohibit employers from making voluntary contracts with unions. We oppose all government back-to-work orders as the imposition of a form of forced labor. [Bold added.]

If Diane Lacy wants to return to reality, I recommend this article about changing Republican politics by Betsy Russell in the Idahoan Spokesman-Review. It draws on the views of four political science professors.

Can you guess what they say?
Hint: it starts with "T", and ends with "Party".

Raising Keynes

That's the title of yesterday's show on The Exchange, featuring Russ Roberts (George Mason University, EconTalk, EconStories) and Jared Bernstein (Center on Budget and Policy Priorities, former Obama adviser, econ blogger).

I can't help but disagree with Russ, and agree with Jared, on practically everything. Political philosophies often influence what subjects an economist studies, what data he (or she) examines, how they evaluate the data, and how strong the results need to be before they are convinced.

But there is an underlying reality, and it's not hard to see. Economists have gathered plenty of macroeconomic data, and have created sensible models which explain that data. New Keynesian models, in particular, work well. So well, in fact, that many high-profile economists who are branded as anti-Keynesians by the media rely on Keynesian reasoning to make their arguments.

Sticky prices, FTW.

In this case, Russ Roberts' argument that economics is just a bunch of philosophy, because the world is too complicated to understand, is simply a cop-out. Though I have to give him credit for being one of the more civil non-Keynesians around.

[Sort of cross-posted at Free Keene.]

An earlier broadcast of The Exchange, The 2012 New Hampshire Economy, is also worth a listen. In general, The Exchange is excellent.

Did psychopaths cause the financial collapse?

Clive Boddy makes the case, as reported by Brian Basham at The Independent:

In a paper recently published in the Journal of Business Ethics entitled "The Corporate Psychopaths: Theory of the Global Financial Crisis", Clive R Boddy identifies these [monstrous] people as psychopaths.
"They are," he says, "simply the 1 per cent of people who have no conscience or empathy." And he argues: "Psychopaths, rising to key senior positions within modern financial corporations, where they are able to influence the moral climate of the whole organisation and yield considerable power, have largely caused the [banking] crisis'.
...
Cut to a pleasantly warm evening in Bahrain. My companion, a senior UK investment banker and I, are discussing the most successful banking types we know and what makes them tick. I argue that they often conform to the characteristics displayed by social psychopaths. To my surprise, my friend agrees.
He then makes an astonishing confession: "At one major investment bank for which I worked, we used psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles."

Here was one of the biggest investment banks in the world seeking psychopaths as recruits.

Bloomberg has more.

Here's the abstract for Boddy's paper (and the article is here):

This short theoretical paper elucidates a plausible theory about the Global Financial Crisis and the role of senior financial corporate directors in that crisis. The paper presents a theory of the Global Financial Crisis which argues that psychopaths working in corporations and in financial corporations, in particular, have had a major part in causing the crisis. This paper is thus a very short theoretical paper but is one that may be very important to the future of capitalism because it discusses significant ways in which Corporate Psychopaths may have acted recently, to the detriment of many. Further research into this theory is called for.

I'm very curious to see what that further research reveals.


HT: Charlie Stross.

As New England experiences a "dramatically" warm winter, the Doomsday Clock moves closer to midnight

The Washington Post has one story:

At the National Arboretum, the white petals of snowdrops — normally an early spring flower — have unfurled. In Maine’s Acadia National Park, lakes still have patches of open water instead of being frozen solid. And in Donna Izlar’s back yard in downtown Atlanta, the apricot tree has started blooming.
It’s not in your imagination. The unusually mild temperatures across several regions of the country in the past few months are disrupting the natural cycles that define the winter landscape.

What began as elevated temperatures at the start of fall in parts of the United States have become “dramatically” warmer around the Great Lakes and New England, according to Deke Arndt, chief of the Climate Monitoring Branch at the National Oceanic and Atmospheric Administration’s National Climatic Data Center. And the Washington area is on track for its fourth-warmest year on record, along with its seventh-warmest December.
That, in turn, has created conditions in which plants are blooming out of season and some birds are lingering before moving south. [And in which New England doesn't get its colorful fall foliage.]
“It’s a weird kind of fall blending right into spring,” said Scott Aker, head of horticulture at the National Arboretum. [HT: Granite Geek.]

Climate Central has the other:

This just in! The Doomsday Clock has just moved one tick closer to midnight. It now stands at a mere five minutes before the hour, and we all know what that means.
OK, maybe we don’t. I took an informal poll of friends and family, and their response, more or less, was: “The what?”
It’s kind of sad, really. Back in the day, the DC really meant something. It was invented in 1947 by the directors of the Bulletin of the Atomic Scientists — a magazine founded just two years earlier by Manhattan Project scientists who were horrified by what their newly invented atomic bomb had done to Hiroshima and Nagasaki. The Clock was intended to show, in graphic form, just how dangerous nuclear war really was, and it was initially set at seven minutes to midnight—midnight being the end of the world, more or less.
...
In 2007, the Clock people decided to diversify their litany of doom: they added climate change to nuclear weapons as a second major threat to the world. “A dire challenge to humanity,” they called it, as they nudged the clock down from seven minutes to midnight to five. It went back up to six in 2010, thanks to small but hopeful signs about nuclear weapons reduction and what were called “pockets of progress” on climate change. And now, as the result of a symposium held on Monday of this week it’s at five again. [HT: Climatide.]

I only know about the Doomsday Clock from Alan Moore's Watchmen. Didn't realize it was still around.