Tyler Cowen on the economics of ratings systems:
Evaluation systems with fewer and grosser distinctions are often more credible because they are easier to monitor.
On the topic of Spin magazine going from rating records on a scale of 1 to 5 to a scale of 1 to 10.
So the big news on Twitter among Ruby programmers is that the “hashrocket” operator has been deprecated. For those of you who aren’t Ruby programmers, here’s what that means. If you want to declare a hash literal in Ruby, right now you can do it like this:
my_hash = { :foo => "1", :bar => "2" }
Also, many methods accept hash literals as an argument, so you can do things like this:
url_for :controller => 'posts', :action => 'index'
At some point, that notation will be unsupported, and hash literals will have to declared in a different way.
When the version of Ruby is released that doesn’t support this notation, it will be incompatible with a massive amount of Ruby code. My advice to the Ruby developers would be not to do it. I don’t know what the rationale is for removing it, but the result is going to be lots and lots of servers that are simply never upgraded to that version of Ruby.
They should take a lesson from the PHP people. The migration from PHP 4 to PHP 5 has taken forever as a result of much smaller incompatibilities than this one.
Economics tells us that we have to be careful about the incentives that result from our actions. Removing the hashrocket operator creates a strong incentive to leave the Ruby upgrade path.
Update: Sometimes rumors on Twitter are just rumors on Twitter. I don’t see any mention of deprecating the => operator in the Ruby Subversion repository.
How would the Romans handle the financial crisis? Tom Ricks has the answer.
Matthew Yglesias’ father told him this:
To this day I remember when I was in eighth grade and my father first explained to me that there was a man named Alan Greenspan who ran a government agency that watched with an eagle eye for the day when there might be an insufficient number of unemployed people. If too many people had jobs, he was supposed to swoop in, tighten the money supply, and make sure some people lost their jobs. Otherwise, wages might get too high!
It’s important to remember this whenever people start talking about how people on welfare need to go out and find jobs, that we don’t need universal health care, and we need to get rid of “entitlements”. We have an economy managed by a central bank that tries very hard not to let unemployment get too high — or too low. Combining that with a federal government that refuses to extend aid to the people who we, as a matter of policy, keep out of work seems cruel.
Arnold Kling deciphers two contrary outlooks on the economic stimulus package. One from Kevin Murphy and another from Brad DeLong.
It’s a great, short look at competing economic philosophies, and why there’s such difference of opinion regarding the stimulus package. I don’t agree with Kling’s conclusion, but his explanation is very much worth reading.
One of Murphy’s key criticisms of fiscal stimulus is that to some degree, it will pull private resources into the public sphere, where they will most likely be allocated less efficiently. As unemployment rises, the degree to which this will occur shrinks. Given that companies announced over 68,000 layoffs just today, these concerns would appear to be diminishing.
Tyler Cowen and Alex Tabarrok both lay out their alternatives to massive fiscal stimulus today. Both argue along roughly the same lines — play defense and wait for the measures already taken to work. Tyler also helpfully quoted Warren Buffett’s argument for stimulus yesterday.
It’s important to remember in this argument that nobody really knows what’s going to work and economists are relying on the philosophies that have gotten them this far. The main line of argument right now seems to be over the consequences if the policy we pursue misses the mark. Is it worse to not pursue fiscal stimulus and find that we really needed it or is it worse to run up a big deficit and find that doing so was insufficient to address the crisis?
Robert Reich once said that defense procurement is what passes for industrial policy in America. Here’s that idea made plain.
I think I’m going to stick with Eisenhower on this one.
Calculated Risk has a graph showing the trends in shipping traffic at the Port of Los Angeles. Inbound traffic was 20% lower in December than it was in December, 2007. Export traffic was down to 2005 levels.
It looks like the entire world is going to have to get used to a size L economy, not just the United States.
In the meantime, the stimulus bill was introduced in the House of Representatives today. The opening bid is $825 billion, $550 billion of which is spending.
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