About belief

Just a quick one from a conversation I had today.  When we're talking about persuasion, we're really talking about two very different tasks.

Sometimes we argue about how to do things, and normally in that discussion the relevant information is about the world and how it works.  The way we convince people in that context is by showing them evidence about the way the world works--facts, studies, that sort of thing.

The other thing we argue about is what we should care about. These sorts of arguments about first order beliefs--which we just take as given in the former class of argument--aren't at all amenable to facts, studies, and figures.  Persuasion on these points is essentially an act of conversion and is effected mostly through personal relationships if at all.

Now, first order beliefs are held with varying strengths, and sometimes things that should be higher order beliefs--empirically testable ideas about how the world works--are treated as first order.  But, I'd say that's more or less the structure of things.

Who do you side with?

I thought this was an interesting attempt at getting people to look at their politicians by the issues.  The choices were nice in that they gave additional options for a little more nuance, but the policy questions were high enough level that you could still pretty obviously pick the party-signalling choice, which probably isn't super useful for making people think twice about their preferred candidate.  Also, who the hell is Jill Stein?

Here's the quiz: http://www.isidewith.com/presidential-election-quiz

Here're my results: http://www.isidewith.com/results/20218768

ACA Ruling (part 1 - The One Man Majority)

The Supreme Court ruling on the Patient Protection and Affordable Care Act is, well, complicated.  One of its most interesting features is that the "majority opinion", or the opinion holding legal weight, is  held in its entirety only by one man--Chief Justice John Roberts.  In this post we'll focus exclusively on his opinion, which is as follows:

1. The Anti-Injunction Act does not impede the States' ability to bring suit against the ACA
2. The Individual Mandate cannot be upheld under the Commerce Clause or the Necessary and Proper Clause
3. The Individual Mandate, being functionally identical to a tax and enforced under the Tax Code, is within the taxing powers of congress and therefore Constitutional
4. The Federal government unduly coerces the states in its conditioning all medicaid funding on the ACA's expansion of medicaid, only new funding may be so conditioned

Basically the only thing the entire court agrees on is (1).  The Anti-Injunction Act is a law saying that people can't sue to avoid a tax until they've actually paid the damn thing.  Roberts says that congress explicitly said that the penalty associated with the Individual Mandate is not a tax, and therefore the Anti-Injunction Act doesn't apply. (This gets a little weird later on, when the Individual Mandate is determined to be a tax, but the takeaway is just that congress has the power to say what things are and aren't taxes for the purposes of the law, but not for the purposes of the constitution.  That actually makes a lot of sense, since otherwise the Feds could do anything, call it a tax, and have it be constitutional.)

Roberts joins the conservative dissent in stating (2) that the Individual Mandate is unsupported by the Commerce Clause because it regulates inactivity, rather than activity.  Frankly, I think this distinction is weird and stupid, but I'll put off arguments until after I've gone through the dissenting opinions.

Roberts, along with the liberal dissent, points out (3) that because the Individual Mandate is exercised through the IRS,  is governed by the laws governing taxation, is levied at least in part to provide revenue, and is not punitive (it never exceeds the value of purchasing insurance, and is usually substantially less), it is a form of tax for constitutional purposes, and, as such, is constitutional under the taxation powers of congress.

Finally, in agreement with a large block of both liberal and conservatives (though some Justices still dissent), Roberts rules (4).  I don't fully understand this argument, but it seems like the basic claim is that federal-state programs have to be looked at as contracts between the federal government and state government.  The medicaid expansion greatly exceeds the scope of changes the states could have reasonably expected when signing on to the program, therefore their original contracts must remain valid regardless of whether they decide to expand their programs to the new medicaid levels.  That's the theoretical justification, which I find weak.  The practical justification is much stronger.  Basically, the amount of money involved in medicaid amounts to 10% or more of most states' budgets.  Giving up that funding would be fiscal suicide for most states.  Therefore, the states have no real choice but to accept the changes to medicaid.  The Justice rightly points out that a similar tactic could be used to coerce the states to enact basically any law, even those that the federal government has no right to enact, which would pretty much defeat the purpose of Federalism.

Higgs Boson

I don't understand anything about how the Higgs Boson stuff works, what we're going to do with the new knowledge, or really anything about physics.  But! here's a cool thing to take away:  Science made a prediction with theory, well before we even had the capability to test that theory.  We then built the capability, and tested the prediction.  It was verified.

That simple story, and ones like it, are at the root of human achievement.  It's good to be human.

Optimal intellectual property protection (part 2)

In which the state of current copyright law is discussed, a meager calculation is effected shewing the exercise of said law necessary to compensate rights-holders for their losses, and the stage is set for act 3.

The major U.S. laws currently in place to handle copyright infringement on the internet are: The United States Copyright Law, and the DMCA.  Under the former, the maximum penalty for an infringer is $150,000 dollars per copyrighted work.  An unknowing infringer--somewhat not protected by fair use provisions, but not willfully breaking the law--suffers a minimum penalty of $200 dollars per copyrighted work.  Recent rulings have indicated that the granularity of a work is on the song (as opposed to album) level.  Now, judging from iTunes, the market value of a song is about $0.99.  That's quite a mark-up.  Real world awards have reached truly astronomical levels, but let's look at a recent case, in which a judge knocked down a $675,000 dollar fine to $67,500 for willful infringement for 30 songs.  That's $2,250 a song, down from an initial $22,500 a song.

Just working with the music numbers for a moment, things look a little like this:

In 2007, the RIAA report estimates sales losses of 3.7 billion dollars with their (quite reasonable) download substitution estimator.  I'm ignoring their physical piracy numbers because they don't apply to the intarwebs points I want to make.  To make up for this they'd have to levy the minimum fine on 18,500,000 (by the RIAA estimates, 0.3% of 6 billion yearly illegal downloads), the maximum fine on 24,667, or the judge determined "reasonable" $2250 fine on 1,644,445 instances of illegal downloads.  Even the largest of these would be a tiny percentage of enforcement.  Of course, the RIAA only managed to file 20,000 lawsuits (primarily ending in settlement) by 2008 when they mostly stopped doing that on account of it being hilariously unpopular.  It seems like the settlements were generally between the "reasonable" and minimum fine levels, so the RIAA clearly wasn't going to recoup costs through these lawsuits.  Since they gave up that tactic, they have focused on the DMCA, and on producing bigger, badder, scarier versions of it. 

At issue in the DMCA and its would-be successors is the burden of enforcing copyright laws.  Basically, the DMCA explicitly prohibits circumvention of copyright protections regardless of whether such circumventions are used to violate copyright, enacts the mechanism of "takedown notices" which limit the liability of compliant online service providers (OSPs) in exchange for rapid response to notification of infringement by copyright holders, and permits subpoenas of OSPs for user identity information.  Copyright holders feel that these provisions are insufficient, and have proposed a variety of legislation holding hosting sights responsible for infringing content posted by users.  Obviously, this imposes substantial costs, risks, and responsibilities on social networks and community content sites.

All this sets things up quite nicely for part 3: actual cost-benefit analysis!
Potential costs: money of social network sites, money of taxpayers, money of RIAA and member organizations.
Potential benefits: greater compensation of copyright holders, deterrence of copyright violation.

Of course, that's only if you forget that the goal of IP law is to incentivize the development of intellectual property.  So, we'll be taking a look at the incentive maximizing level of IP protection as well.  All that to come.

Macroeconomic quicky

Recessions and depressions occur when total spending--and therefore total income--is reduced.  This reduction of total spending is brought on by an increase in demand for money, either to hold as savings or to use to pay down debt.  Once you have your head around this, the Federal Reserve remedies for depressions and recessions--lower interest rates and higher inflation--become kind of obvious: they're both just ways to increase the supply of money, and reduce the demand for it.  It also becomes obvious that government austerity exacerbates the problem; it's just one more player contributing to the reduced spending and resulting reduced income.

Obviously, there are a bunch of wrinkles in this story, but sometimes it helps to just look at the simple fundamentals of a situation.  Those fundamentals indicate we should have more government spending, higher inflation, and lower interest rates.  Since interest rates are already at 0, we've only got two options left.

Let's have a little chat about Republicans

Once upon a time, Republicans were conservatives, and followed to a significant extent the primary dictate of conservatism:

conservatism - a political or theological orientation advocating the preservation of the best in society and opposing radical changes.

It seems clear that with Republicans routinely promoting the elimination or dramatic restructuring of things like Medicare, Medicaid, and Social Security, that fundamental position has been abandoned.  But, I don't think it is right to say that modern Republicans are entirely unprincipled, or that they are merely advocating the interests of their wealthy donors (though they are certainly pursuing policies that primarily favor the wealthy).  Rather, I think the best way to view Republican ideology is through the lens of psychology.

Republicans understand the direction of human psychology, and the sorts of motivations that impact people's behavior.  It's true that higher marginal tax rates make people less excited about making more money; I've experienced that first hand.  Likewise, it's true that the leap from something for nothing to a-little-more-something for a-lot-more-work is significant.  If you stop your thinking there, then it is obvious that things like unemployment benefits and high marginal tax rates are ridiculous, silly, and probably counterproductive.

The trouble, of course, is that you can't stop there: you have to measure the size of the effect.  Basically everyone in Republican-land is assuming very-large, even dominating, effects from these psychological factors.  Thus things like "the confidence fairy", "regulatory uncertainty","bond market vigilantes", a preoccupation with "moral hazard" and the like.  Sadly, in most cases the empirical evidence seems to indicate that these psychological effects, though often real, are quite small.  The far side of the Laffer Curve--the hypothetical curve depicting the point at which increases in tax rate actually reduce tax revenues through disincentive effects--is estimated to be around a 70% tax rate.  Likewise, unemployment benefits increase unemployment rates much less than one might naively expect, especially in severe recessions like the one we are in.  As for the confidence fairy, bond market vigilantes, and regulatory uncertainty--they just don't seem to apply to our current situation.

Basically, Republicans show an interest in and a sense of human psychology which is intuitive, substantially correct, and praiseworthy.  Liberals are all too often guilty of ignoring the human, social, and psychological aspects of situations.  However, when it comes to accurately describing the way the world works, you'd be much better off dropping the psychological variables from your equations than the mechanical ones.  Or, best of all, keeping them all in and looking at what the econometrics data is actually telling you.  Doing that tends to show that optimal economic policy is much more closely aligned to Keynesian policies than Austrian ones.  Just goes to show that even if your intuitions are broadly right, it is still important to look at the data.

A little post-script:
It does seem that Republicans tend to forget their psychology when it comes to looking at regulating business.  Much, if not all, of the recent bank legislation is about avoiding the "moral hazard" created by federal guarantees on bank deposits, and for some reason that isn't subject to the same psychological rational as unemployment benefits.  Hard to see why, really, except for a sort of team "give the rich what they want" mentality.  That's a bit annoying.

Also, it's worth pointing out that a lot of people think that the financial collapse was brought on by Republican banking deregulation, and the conservatism as defined earlier would have been the exact impulse--that the rules of the past were laid down with wisdom and shouldn't be so easily cast aside--that protected us from that silliness.  In a proper conservative-liberal dichotomy, the liberals should have been pushing for the deregulation, and the conservatives should have been saying "hey man, we made those rules for a reason".

In my mind, both of these failures of Republicans to follow either their "human nature" or "conservative" ideologies is strong evidence of regulatory capture; the business interests have at least partially conquered the Republican party and put them to use on the behalf of banking against the best interests of society.