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Ken Houghton

Articles by Ken Houghton

2024 Life and Death Game Theory Interlude: Voting is An Affirmative Action

6 days ago

If You Choose Not to Decide, You May be an American

Restating the premise of my earlier post: Voting is an affirmative action. The more difficult voting is, the more turnout will be reduced. A voter in Oregon needs only to fill out and mail a ballot at any point over a period of time before an election. By contrast, some states allow voting only during certain hours on Election Day. Others may add a set of proscribed days and times before then, often only weekend time. Schedules need to be arranged, choices made.

For example, in the time between that earlier post and now, Tammy Murphy has “suspended” her Senate campaign and endorsed Andy Kim. I’m be willing to bike through a little rain to vote for him, so I will probably vote in November. I

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2024 Election Life and Death Game Theory: Introduction

March 11, 2024


Assumption #1: Voting is an affirmative action. You have to be willing to do it. When I say, “if it’s raining, I’m not going to waste my time voting for Joe Biden and Tammy Murphy,” it will not change the outcome of the Presidential or, probably, even the New Jersey Senate election. But the turnout will be lower than a sunny day would be. Similarly, “if it’s only drizzling, I’ll probably vote for Andy Kim, at which point I might as well vote for Biden,” sets another level. The number of contests, the preference for the candidates, the weather all affect voter turnout because voters have to want to vote for or against someone or something. (See, for instance, the bid to get a measure on the Florida ballot to make women’s

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We’re Happy, Free, Confused, and Lonely at the Same Time

September 12, 2023


I really was going to skip today, even as–indeed, because–it is the 50th anniversary of 11 September. The original 11 de Septiembre, that is.

Once is history, twice is parody. Feuerbach, as with Marx, was an optimist.

Chile took only 17 years to get rid of Pinochet, and they did it at the ballot box. Twenty-two years later, the U.S. is still recovering something, though I’m no longer certain what.

Are we trying to avoid torture? No, Ron DeSantis is treated as a Governor. And a Serious Candidate for President.

Indeed, have we made any progress from the observations of Siva Vaidhyanathan to the late, very lamented Scott Eric Kaufman eight years ago? If anything, I suspect point 4 (“Iraq had nothing to do with the 9/11 attacks but

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Free Lunches, Portfolio Allocation, and Equity Premia: Part 1

August 19, 2023

TANSTAAFL. There Ain’t No Such Thing as a Free Lunch. Someone pays, somehow. The standard textbook example is pilots who refill their plane at a gas station that offers them a “free” steak dinner while charging five cents a gallon more than another station at the same airport. The pilot and co-pilot get $50 dinners for free, the gas station gets an “extra” $150 for the gas sold, and everyone is happy.

I believe this story is better at explaining the Money Multiplier effect than cui bono-ing the transaction. The restaurant might not exist without the cross-subsidy. The pilots spend their “spare” cash on other things. The owners of the gas station and restaurant have a more positive cash flow than they would have otherwise and therefore pay

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David Reilly, 28 Feb 1956 – 22 April 2021

April 28, 2021

Dave Reilly died peacefully in his sleep, of “natural causes,” last Thursday morning. At least, I hope it will still be last Thursday morning by the time I finish this post.

Better known in the blogsphere as Lance Mannion, he has been a friend and an inspiration for about fifteen years now. And an intimidation.

He was a fast, great writer. We attended a couple of the same panels at the Clinton Global Institute. Ten minutes in, I would still be trying to find a hook and he would have 750 words words written.

His appreciation of Lawyers Guns & Money notes that they hadn’t “engaged with him nearly as much recently.” Part of this is that LG&M expanded its own coverage the arts and part is that–especially after his wife’s surgery a couple of

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Trade Incentives and Whoppers: A Finger Exercise

April 2, 2021

Nick Rowe was looking for the role of money in the Heuristic Macro Model, which is often used to introduce students to Trade economics. The problem he discovered is that there is only a role for money if there is friction in the model, and therefore a two-household (or household-firm or firm-firm) model makes money if not superfluous, then at least a poor substitute to direct barter.

Following is a “finger exercise” for introductory economics the way (I think) it should be taught, using that heuristic model and the Whopper story that often is used at the start of Introduction to Economics.1

Telling a Whopper

The Whopper story basically has the eager student challenging talk about scarcity and optimal reource allocation by saying, “But I can

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Wisconsin ex-Dane and Milwaukee Counties

June 9, 2020

In comments to NDD’s post, Terry says:
Wisconsin—except for Milwaukee and Madison —basically opened up with no restrictions as a result of the Wisconsin Supreme Court ruling 4 weeks ago and much to the delight of the late night comics people flocked to taverns without regard of masks or social distancing. I certainly expected to see numbers bump up by now but in fact they have fallen steadily
Cool if true, but, as Warner Wolf said, let’s go to the video tape data:
author calculations from NYT County-level data
I’m seeing a pop in cases about two to three weeks after the ruling, which rather matches Terry’s (and the world’s) initial expectations.
If you look at the time after those two well-predicted spikes, they look as if they might—best case—return to

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Random Acts of Counties, and Some Malice

June 8, 2020

Chattahoochee County, Georgia, had a significant increase in cases from a relatively high (ca. 50) base. Fort Benning’s new cases appear to be the source, even as those are not fully reported in the NYT data yet.
Scurry County, Texas, is more typical; a 1200% (not a typo) increase—but from a base of two (2). Curiously, the Snyder, TX, website still lists 33 cases in the county, while the NYT data indicates about seven of those have been removed.
This is independent of the Huntsville, Texas, prison facility with significant issues, which is in Walker County. There have been more than 900 new cases there in the past eight days.
Arkansas has been a microcosm of what not to do, so it’s no surprise that both Jackson and Nevada Counties there are showing

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Pure Coincidence

June 7, 2020

Protecting Your Business From Legal Liability During Reopening
May 15 @ 11:00 am – 12:00 pm
In this brief 30-minute webinar, we will step business owners through the liability concerns when reopening following the COVID-19 shutdown. Bobbi Berkhof will inform entrepreneurs why following local, state, and federal recommendations may help protect the business from lawsuits, potentially stemming from employees and customers.

Or, in table form:

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The Cass County, Indiana, Easter Effect

May 24, 2020

As noted in my last post, I have been looking at data. This usually causes trouble, and today is no exception.
As anyone who was paying attention predicted, the “Easter Effect”–a large gathering of people (“EC” or Otherwise) in an enclosed area that likely has multiple asymptomatic carriers (and likely a few with symptoms) is a recipe for infection. With a two- to three-week gestation period, that there was going to be an increase in cases at the end of April was well known. The only question was how much. Without running the numbers carefully, it looks as if it was about 10% above trend.

But the overall data covers for a lot of local sins. If you look at the places that have a high percentage of people infected, the relatively large Metropolitan Areas

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The Comic Stylings of FRED, Employment Edition

May 18, 2020

I’m back to playing with data, so there will probably be more posts coming soon. (Sorry.)
Meanwhile, this one was irresistible. FRED® has a “Natural Rate of Unemployment” data series. Apparently, the evil of the United States is that—except for the second half of the Clinton Administration where it was worth people’s while—Americans Just Don’t Work Enough,

Same graphic, excluding last month and with the monthly employment data averaged to match the Quarterly NAIRU.
[embedded content]

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THE Important Graphic from April’s Unemployment Report

May 11, 2020

What happens when you downsize a large number of people? Well, it depends on the cohort downsized. In this case,
[embedded content]
That’s correct; Average Hourly Earnings skyrocketed from $28.67 to $30.01: up $1.34.
For context, that one-month change matches the average hourly earnings growth from September/October of 2018 until March of this year–18 months of increases in a month. And all it took was eliminating the jobs of about 6% of the U.S. population (not just workers).

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F**king Old Enough to Vote

September 12, 2019

It’s That Day again. I mostly stayed off Facebook (except for birthday greetings) and Twitter, but even LinkedIn has posts of now-yellowed newspaper articles of survivors–and probably some of those who didn’t.
In another ten years, it will be as far from 11 Sep 2001 as that date was from 11 Sep 1973.
At least now, most people know what a sh*t Rudy Giuliani was, both in setting up the firefighters for disaster and moving the NYC Office of Emergency Management Command Center from the safest location in the city–the basement of 1 Police Plaza–to the 23rd floor of a building in a complex that had already been bombed once before he did it. While he and Bernard Kerik got to Be Adulterers on taxpayer money, somewhere between one-third and one-half of the 343

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Projection is an Art, not a Science, especially for the SSA

April 25, 2019

The scary headlines of the past few days have been well-discussed below by Dale Coberly and Barkley Rosser.
Data, however, is only as good as its assumptions, and the overall trend is well worth a glance. (Note: I took the 2013-2017 data from BC professor (and director of their Center for Retirement Research) Alicia H. Munnell’s Table 1 here.
Year of Trustees Report:
First year outgo exceeded income excluding interest
First year outgo projected to exceed income including interest
Year trust fund assets are projected to be exhausted

Note that last year’s projection that 2018 would have a funding shortfall turned out to

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What a Difference Three Days Makes?

April 4, 2019

March 27:
TEGUCIGALPA (Reuters) – The United States said on Wednesday it had reached an agreement with three Central American countries to carry out joint police operations in the region, as the Trump administration seeks to stem the flow of migrants across its southern border.
The governments of Guatemala, Honduras, El Salvador and the United States said in a statement they had agreed to a series of measures, including joint police work, improved border security, and efforts to deter international crime and curb “irregular migration.”
March 30:
WASHINGTON/EL PASO, Texas (Reuters) – The U.S. government cut aid to El Salvador, Guatemala and Honduras on Saturday after President Donald Trump blasted the Central American countries for sending migrants to the

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The Bank is the Colour of Malpasspractice, not Dead Televisions

February 6, 2019

If you want to understand why Mark Thoma’s 12-year daily-and-then-some blogging effort has become intermittent, consider that President Shit-for-Brains has made his nomination for the person to ru(i)n the World Bank.
David Malpass.
This David Malpass.
The best part of the nomination so far? This Twitter feed from Charles Kenny.
Brad DeLong concurs.
And I’m not the only one bringing back my writings from almost a decade ago. David Glasner at Uneasy Money remains in fine form. (via Krugman on Twitter)
ETA: pgl, chez delong, notes this 2012 piece from Bruce Bartlett as well.

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In the New Gilded Age, Capital is not for Investment

October 18, 2018

Many years ago, Goldman Sachs published research showing that, from about 1995 to 2004, more money had been taken out of S&P 500 companies in dividends and share buybacks than the companies had earned during that period.
You would think Boards of Directors and Shareholders would know better than to do it again. You would be wrong (registration required):
Stock buyback activity in US equity markets is simply staggering at present: $646 billion for the 12 months ending June 2018 for the companies of the S&P 500. Total dividend payments aren’t far behind, at $436 billion. The bright spot: the total of the two is $1,082 billion, only 90% of 12 month trailing operating earnings of $1,197 billion. That’s a better buffer than existed in 2015/2016, and an

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Is this Short Covering, or Are the Suckers Flooding the Market?

September 24, 2018

Via ElNuevoDia at LG&M, “Gamblers are now betting that Kavanaugh will not be confirmed.”
The market in question, at PredictIt, seems rather straightforward. Note, though, that the contract only opened five days ago (18 September) and traded consistently in the 60-70% range through yesterday (22 Sep), closing at 61% and only reaching as low as 55%.

In the past two hours, more than 20,000 transactions has occurred, which is greater than the volume on any previous day, with no trade higher than 60, and none in the past hour above 42. (It is 9:13 EDT as I write this.) The 24-hour graphic is impressive in its consistency:

until it’s not.
The open question is whether the buyers at the lower level are the same people who were selling in the 60s and 70s (the

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Ten Years Have Got Behind You

August 14, 2018

It has been almost ten years since:
Bear Stearns folded
Lehmann collapsed of its own free will
I posted on this blog
All of the above
Those who guessed “c” or “d” are optimists. Those who are expecting a long series of posts dwelling on the correct answer of “b” (with some references to “a” and AIGFP) will not be disappointed.
But this is an introduction. I have been trying to think of how to simplify ten years of lessons as if there were one root cause. And I think I finally have it.
Two friends were claiming that Democratic politicians have to be nice, noting that otherwise Republicans will obstruct anything they try to do if there is ever a free election in the United States again. My response of “So what?” (a more direct version of my usual “Ma nishta

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Minimum Wage Effects with Non-Living Wages

April 22, 2018

I’m teaching “Economics for Non-Economists” this semester. This is an interesting experiment, and is strongly testing my belief that you can teach economics without mathematics so long as people understand graphs and tables. (It appears that people primarily learn how to read graphs and tables in mathematics-related courses. Did everyone except me know this?)
Since economics is All About Trade-offs, our textbook notes that minimum wage increases should also mean some people are not employed. Yet, as I noted to the students, in the past several decades, none of the empirical research in the United States shows this to be true. (From Card and Kreuger (1994) to Card and Kreuger (2000) to the City of Seattle, in fact, all of the evidence has run the other

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Any Economist Who Talks about Rational Investment is Full of Shit, Hoosier Edition

February 23, 2017

CPAC had a gathering of Republican Governors today. As Jennifer Hayden (@Scout_Finch) on Twitter noted, the Brownback/Walker/etc. panel was called “How to ruin your state’s economy with one easy tax cut.”
So naturally my thoughts shifted to the one way blowing up your state’s economy could be ameliorated: if some unearned windfall occurred. Could a Legislature be saved from itself?
Lo and behold, the PowerBall jackpot was won by a ticket in Lafayette, IN, last night. The Indianapolis Star (Dan Quayle’s ancestral paper, fwiw) notes that this is the second large-value ticket won in the Hoosier State in the past nine months:
A Powerball ticket purchased in Lafayette is worth about $435 million this morning, a Hoosier Lottery official said Thursday….
In July, another Hoosier hit a big jackpot in the Mega Millions game. That ticket, worth about $541 million, was sold at a Speedway gas station in Cambridge City.
One great thing about having people win nearly $1,000,000,000 in the lottery is the tax windfall for the State.

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“Tell Me What Democracy Looks Like”

February 1, 2017

I have a face for radio and a voice for mime. My Eldest Daughter, on the other hand, can project.
She proves it for about thirty seconds of this (badly-mixed, overorchestrated) NPR video (starting around 3:30).
[embedded content]

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