Yes, David Brooks Really *Is* That Stupid...
"The Childish Babbling of a Say..."

links for 2009-09-17

  • Another view: we’re all impulsive and impatient in the same way, but over a narrow range of goods that are quickly and cheaply satisfied. If you’re poor, these temptations are a big fraction of your income. If you’re even somewhat wealthy, they are not. Temptations are declining in income. The paper runs through half a dozen perplexing patterns of behavior, and shows that these simple assumptions can explain a great deal. This approach has a great deal in common with hyperbolic discounting, but is empirically distinct (and has very different policy implications). Parsing out and testing these subtleties strikes me as one of the most important frontiers in the study of poverty. Declining temptation, if true, could explain all sorts of odd behaviors. With more than a few Uganda and Liberia surveys on the horizon, I’m now scheming ways to test whether it’s true.
  • I decided to see how wise Cochrane is by going back to look at his... Asset Pricing. On what has happened in the last few years, it is utterly useless. In the index I went to find the following words/phrases: "fat tails" "kurtosis" "leptokurtosis." They are not there, even though pretty much all practitioners and a large literature already existed discussing how to explain the ubiquity in practically all asset markets of exactly those phenomena. He has a big fat zero to say about them, nothing. I did find "bubbles," which he discusses briefly near the end of the book (pp. 399-402). He seems to recognize that they might exist, but his discussion is strictly in terms of "rational bubbles."... The model of rational bubbles he discusses supposedly must go on forever, which he then sneers at because "Infinity is a long time...The solar system will end at some point."
  • Julius Rosenberg--a Communist--did, indeed, run a spy ring of which Ethel Rosenberg was likely not a member. She was, nevertheless, used as a "lever" in an unsuccessful attempt to pry a confession from Julius. On any number of subsequent occasions, I endorsed these findings. Had Peretz (or, I might add, Applebaum) done any research to support their ad hoc accusations, or even bothered to read the end of Sam Roberts's September 21 New York Times story on Sobell's admission, they would have known my position and seen me quoted saying, "I wish Morty and Ethel and Julian had been open about what they had and hadn't done, or in Morty's case, ‘come clean' before this, but these guys thought they were helping our ally in wartime, and yes, they broke the law, shouldn't have done what they did, and should have been proportionally punished for it." I also happen to believe that Colonel Rudolph Abel, Theodore Hall, and Morris and Lona Cohen, among many others, were Soviet spies.