Regulation

 

Math Sucks

If necessity is the mother of invention,
Then I'd like to kill the guy who invented this
The numbers come together in some kind of a third dimension
A regular algebraic bliss.

Math does not suck!!! Economists would benefit by three-dimensional thinking.

Economists classify goods by the two dimensions of rival and exclusive.

Source: https://www.econlib.org/the-correlation-between-excludability-and-rivalry/

By excludable, it is meant that the good has a price or some other means that is used to exclude the good from non-payers. Rival means that if the good is being used then someone else can not use that same good. In this way there are more than just Private Goods (Excludable and Rival) versus Public Goods (Non‑excludable and Non-rival). It also includes Common-Pool Resource Goods (Non-excludable and Rival) and Club Goods (Excludable and Non-rival). Club Goods are also often called Private Monopolies because it also includes Cable TV, electricity, land-line telephones, etc. (i.e. my using Cable TV, or electricity, does not mean that my neighbor cannot also watch the same station on Cable TV, or use electricity.)  Private in this case does NOT mean the government is excluded from the operation. Some private monopolies (e.g. water, sewer) are often operated by public/government agencies).

To these two characteristics, dimensions, I would also like to propose adding a third: Regulation. It may also highlight why there are so many disagreements over Common-Pool Resources and Club Goods/Private Monopolies. In each economic transaction the buyer/consumer may have a different perspective/frame of reference than the seller/producer.

Both buyers and sellers agree that Private Goods should be Regulated. Sellers want to be assured that their goods can not be stolen, and that the medium of exchange used in the transaction can be trusted (e.g. no counterfeiting). Buyers want to be assured that the goods are represented correctly (truth in advertising laws, labeling, FDA, etc.) and are produced in a manner that they find acceptable (labor laws, OSHA, etc.). By contrast, both the buyer and the seller agree that Public Goods are un-Regulated.

The problem is that buyers and sellers do not have the same perspective, frame of reference, for Common-Pool Resources and Club Goods/Private Monopolies.

Sellers should want to be assured that there are sufficient Common Pool Resources for the production of their goods and should want those Common Pool Resources to be regulated. The buyer wants these goods available at the lowest price and may not care that the Common Pool Resources are regulated leading to what economists call the “Tragedy of the Commons.”

The seller wants to be assured that a price can be charged for Club Goods/Private Monopolies which requires regulation, while the buyers may not care that the goods are regulated (e.g. Napster/”free“ music, pirated movies, etc.)

Regulation is not necessary if all of the parties in the transaction can be trusted. By regulating you are saying that at least one of the parties can not be trusted, which is why you are regulating. So in addition to raising the cost by requiring regulation, the very act of regulation may offend some people. But if you trust everyone, but always cut the cards card (trust but verify) then you are regulating. So thus even Ronald Reagan was in favor of regulations, he was just disagreeing about what regulations he wanted.

Holocaust Remembrance

 

I, I Who Have Nothing

I, I who have nothing
I, I who have no one
Adore you and want you so
I'm just a no one with nothing to give you but, oh
I love you

To all of the outcasts, you are NOT no one.

On tomorrow's Holocaust Remembrance Day, let us remember all of the outcasts. The Jews were outcast by Christian and Islamic societies. At some point, the fundamentalists in each faith decided that the collection of interest was forbidden and those who collected it were outcasts. However both societies had to come face the fact that they needed interest. (maybe not as high as the 50% implied by the adage that “a bird in the hand is worth two in the bush”, but still). The Jews did not view interest as wrong. Consequently Jews became the world’s bankers who made loans and charged interest. Why do you think Shylock in Shakespeare’s Merchant of Venice was a Jew? Why do you think Jews came to be over-represented in the banking industry, most famously by the Rothschilds? Because if you outcast those who collect interest, then why is a surprise that outcasts then dominate the sector that deals with interest. You reap what you sow.

The entertainment industry was once considered to be demeaning, so unsurprisingly many of the earliest pioneers in Hollywood and comic books were Jews. (For example, while they may have anglicized their names, Jack Warner was born Jacob Warner and Stan Lee was born Stanley Liberman.) If you outcast a people and outcast a sector, but you value that sector, then why is it surprising that outcast people come to dominate the sector that you value. No one should ever be an outcast. Love is the most important thing that can be given. I may not be a Jew, but on behalf of all of your fellow outcasts, you are appreciated and remembered.

Society

 

When I was Young

When I was young, it was more important
Pain more painful
Laughter much louder
Yeah, when I was young
When I was young.

But now I am old.

I would propose that there are fours stages of man. The first stage is when we are born, At that time we are an individual and have to be trained to enter the second stage, to be civilized (funny word that. It literally means the process of living in a city, i.e. a group). At that point we have learned how to be part of society. The next stage comes when we see ourselves as an individual again and rebel against that society. Hopefully, we will enter the fourth stage and realize that society is just a collection of individuals like us, and we willingly join that society as an individual. In doing so society also needs to see itself as nothing more than a collection of diverse individuals and to respect those individuals.

When you are young, you rebel against society. But when you are old, you realize that you are a group animal, and that society is the group which you must join. If you get to that fourth stage not only you, but society, will benefit.. You are an individual, probably older, and society is nothing more than a collection of individuals. If people, or society, have arrested development, and are stuck in an earlier stage, they are to be pitied, not scorned.

Electoral College

 

Sophisticated Lady

Educated lady with your college degree
Amazes me why you just can't see
Learned everything from your books on the shelf
But no one ever taught you how to think for yourself

But does that Sophisticated Lady have an Electoral College degree?

The winner of the Electoral College has not been the winner of the popular vote in many recent Presidential elections. This has prompted calls for the elimination of the Electoral College. But before calling for the elimination of the Electoral College, isn’t it worth examining why there is an Electoral College in the first place. The Electoral College was instituted because the President was supposed to have broad representation from the People of ALL of the states, and not merely the popular vote winner. Otherwise the popular vote winner might be decided only by those states with the largest populations. The Electoral College was intended to ensure that the President have broad support across all of the states, large and small.

However the framers did not foresee the formation of Political Parties. It was originally proposed that the leading vote getter in the Electoral College would be President and the second leading vote getter would be Vice President. This resulted in the election of 1796 where the President, John Adams, was from one party while his Vice President, Thomas Jefferson, was from a different political party. It also resulted in the Electoral Crisis of 1800 when Thomas Jefferson (the nominee of the Democratic-Republican Party for President)  and Aaron Burr (his party’s proposed Vice President) got the same number of votes (and if you don’t know who Aaron Burr is then watch Lin-Manuel Miranda’s Hamilton. He was “the damn fool that shot him” and the man who “stood for nothing”). This led to the 12^th Amendment which required separate Electoral College votes for President and Vice President. The formation of political parties also changed the way that the Electoral College worked. The winner of the popular vote might no longer have desired broad support of the states. Under a two party system, the winner of the popular vote and the electoral vote should still be the person who received more than 50%. However in the event of more than two parties, the Electoral College votes are mostly awarded to the person who received the plurality of the votes in a state, but that person may not have received a majority of the votes in that state.

Of the 59 presidential elections, the winner of a majority of the popular vote also won a majority of the electoral vote in 37 of those elections. A third party participated in 13 of the 29 elections where no candidate won a popular majority.  In two of those third-party elections, (Woodrow Wilson in 1912 and Ronald Reagan in 1980), the difference between the percentage of the Electoral College and popular votes exceeded 40%, falsely giving the impression of a mandate to the winner. In the 9 elections where there was no major third party (i.e. the victor might not receive a majority of the popular vote), that ranges from a low of 46.09% of the popular vote and 56.50% of the Electoral College vote for Donald Trump in 2016 to a high of 49.72% of the popular vote and 56.42% of the Electoral College vote for John F. Kennedy in 1960.

I do not have the state-by-state votes to see how this would impact the elections, but based on these results, I would propose that Electoral College votes NOT be awarded unless a candidate receives a majority (NOT A SIMPLE PLURALITY) of the state votes in a Presidential election. The Electoral College would still meet, but would not consist of a pre-specified number of votes (so Nate Silver’s famous 538 would be no more). It is suggested that this might ensure that the winner of the popular vote more closely tracks with the winner of the Electoral College vote, even in the presence of third‑party candidates. This is intended that a Presidential winner have not only the most votes, but a broad representation of the state's votes.  This might not change the results of the election of 2016, but it would more closely heed the Spirit of the Law.

I realize that some states (i.e. Maine and Nebraska) award Electoral College votes on the basis of the votes in Congressional districts, but awarding Presidential Electoral College votes on the basis of votes for President in Congressional districts makes the fight over the mapping of those Congressional districts even more contentious. The proposed modification to the Electoral College does not deal with the number of Congressional seats or the mapping of districts. (Although I personally prefer the adoption of the Wyoming rule for the number of Congressional seats,
 https://dbeagan.blogspot.com/2021/05/apportionment-ii.html, and I do not think that a political party which has an interest in the mapping of Congressional districts can be unbiased in developing such a mapping, i.e. I am anti-Gerrymandering. But one battle at a time.)

Trinities II

 

Three Is a Magic Number

Three is a magic number
Yes, it is, it's a magic number
Somewhere in that ancient mystic trinity
You get three as a magic number
The past and the present and the future
Faith and hope and charity
The heart and the brain and the body
Give you three as a magic number

Then why do Triumvirates not work very well?

And here I thought I was being really clever with my blog post, https://dbeagan.blogspot.com/2022/09/triads.html  Turns out I was unconsciously ripping off School House Rock. (I would like to claim that I didn’t see that episode of School House Rock, but that isn’t very believable, is it?). But if three is a magic number, then why are triumvirates (three people) such an unstable way of political power sharing? Is mortality the reason?

A triumvirate would seem like the best mechanism for exercising political power. A majority of a triumvirate (2/3) is always also a supermajority and is almost the mean of a standard normal distribution plus one standard deviation (68%). But that assumes that one of the decisions is NOT to destroy the losing third party. In the event of destruction, the triumvirate becomes a two-person group and either of those parties has an incentive for destroying the other party. And the process of destroying the other parties is likely to be very messy for the entire society.

If every party in a triumvirate is immortal, can’t be destroyed, then it is stable. If the individuals can be destroyed, then the triumvirate becomes unstable, and quickly becomes a battle to become the one winning party.

So an amendment if you would, three is a magic number, if, and only if, all of those three are immortal and can’t be destroyed.

Leadership III

 

Climb Every Mountain

Climb every mountain
Ford every stream
Follow every rainbow
'Till you find your dream

I am looking for a leader to help me climb that mountain.

If we are going to climb a mountain, and we can’t climb that mountain in one trip, then we have to establish base camps. Each base camp is not the top of the mountain.  And the first base camp might be the safety of our living room.  But if we are always satisfied with a base camp, and want to retreat to the last base camp rather than climbing, we will never climb the mountain.  MAGA is retreating to the last safe base camp.  I want to follow a leader who is going forward, not backwards. The song does say dreams, not memories.

Probability

 

Born Under a Bad Sign

Born under a bad sign
Been down since I begin to crawl
If it wasn't for bad luck
You know I wouldn't have no luck at all

“You've gotta ask yourself one question: “Do I feel lucky?" Well, do ya, punk?”

We live in a random world of probabilities, not certainties. We may expect the world to be deterministic, to always have a single answer, but that does not appear to be how the universe works. The fact that we expect it to be deterministic, does not mean that we should treat it as deterministic. That only will lead to false solutions and misunderstandings. If the universe is random, then not every game will lead to the same outcome, all other things being equal. We can find the most likely outcome, but we can’t find the guaranteed outcome. Not only is TANSTAAFL, There Ain’t No Such Thing As A Free Lunch, true, but TANSTAAST, There Ain’t No Such Thing As A Sure Thing, also appears to be true. Trying to find a sure thing is a fool’s errand. You can find the most likely outcome, but you still have to play the game.

Even though it is not the most likely outcome, sometimes the underdog will win. Every once in a while, the Number One seed in the NCAA March Madness Basketball tournament, will lose to a Number Sixteen seed. It may have only happened once. Entering the 2023 tournament, since the tournament expanded in 1986, No. 1 seeds were 147-1 all-time against No. 16 seeds. But we still fill out our brackets and watch the games. And maybe, just like in 2018, there will be an upset like the Number Sixteen seed University of Maryland, Baltimore County beating the Number One seed Virginia in the first round. So fill out those brackets and get lucky. There may be lots of brackets, but there is not a guaranteed bracket.