Paul McCartney In Madison

We accompanied the Lady de Gloves, our sister, and a friend to see Paul McCartney at the Kohl Center in Madison.  Wow! it was worth the trip.  Paul gave a three hour tour (just like Gilligan) of 38 songs from the Beatles, Wings, and his solo work.  You need to see him before this musical treasure is gone.

Paul’s voice is not the instrument it once was but he is still a joy to listen to.  What make it a great show is the songs, the organization, his presence, and his musical skills.  Paul is onstage for all three hours playing a variety of guitars, keyboards, and a (baby?) grand piano.  It makes three hours fly by.

Paul is a star and he knows it because he can still connect to us. At one point amidst all the applause he says (approximately) I think I’ll take a second to drink it all in.  It wasn’t a talk-fest like some concerts (Donovan) we have been to but he did have some great stories.  The one we liked was very brief and concerned writing Being For The Benefit Of Mr. Kite and the relationship we saw with expertise.  Paul related, as many knew, that a substantial part of the lyrics came from a poster of John’s.  Paul made a self-depreciating comment something like, “After that there wasn’t much to writing it.”  Of course there was much to it.  The first step was to see the germ of the song on the poster.  The second step was to flesh it out.  Several steps later there is a song worth including on Sgt. Pepper.

The organization of the show starts with the brass section showing up in the third (?) song in the audience in about section 105.  Shortly after they closed off part of the stage to do some of the older Beatles songs as a small group.  Later, Paul did a couple of solos on a cube that rose up (15 feet?) from the stage.  The pyrotechnics in Live And Let Die scared the bejeezus out of us.  The video content was interesting.  We especially liked the tribute to George.

And there are great songs even without playing Yesterday!  We could list a half dozen songs he should have added.  Paul is still the popular rocker he was with the Beatles so his library is 50 plus years of joy.  Sure there was a song about bullying and another about segregation (Blackbird) but it was not a woke show.  It was fun.  It was great fun.  You should see Paul while you still can.

 

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Geo-political Examples

As the Art of Blogging says writing posts takes time.  A couple of days ago we said we were going to have two posts linking Kevin Williamson and maps but each of them proved more time consuming than we thought.

Alert: We are heading off continent to places that might make blogging difficult.  Any post could be the last one until about Christmas.  End Alert.

Maps were one of our first loves.  We still love them and we especially love the paper kind that we grew up with.  We remember getting the state road atlas and checking for new Interstates because they were new then.  We checked to find the town with the smallest population in each state.  It was no surprise that we got Prisoners Of Geography: Ten Maps That Explain Everything About The World by Tim Marshall as a birthday present.  Here is his website where you can buy the book.  It is worth buying and reading.

Sidebar: We take expertise very seriously.  Some parts of this review are a bit speculative.  We will try to keep you informed.  End Sidebar.

Tim has written Geo-politics 101 without the theory.  Despite our love of maps we tend to see the world economically so it was worthwhile for us but we need another book to extend our education.  Tim’s book will be interesting and useful to lots of folks because it is exactly about ten maps.  Whoever wrote the subtitle that the maps explain everything is way overstating Tim’s case.  He thinks that geography is important but just that.  He uses ten maps as examples.  On page 7, Tim talks about obeying and ignoring the rules of geography but the only one he seems to give is when the land is hard to defend the leaders push outwards.  Then he gives Russia as the example of the rule.  Rules need more than one example.

A minor quibble is the quality of the maps.  They are sometimes hard to read and sometimes leave off some of Tim’s main topics.  For example, the maps of Pakistan on p. 188 and p. 194 leave off Gwadar.  The Chinese investment in Gwadar is a major issue in both the China map and the India and Pakistan map.  Gwadar does show up in the map that opens India and Pakistan on pp. 180-181.  We know the problems about the economics of publishing but better maps would help.

Here is where will will push the limits of our expertise to try and help you understand Tim’s book.  We don’t want this post to be book length so we can’t be very academic.  Consider Ann Coulter, Jonah Goldberg, and Kevin Williamson as authors.  Although one might try and excommunicate the others from the conservative denomination, most of us recognize all of them as very different but still conservative.

Our take is that Ann is a prosecutor.  She is marshaling the evidence to try and prove her case.  If there are any weaknesses in her arguments you will not hear it from her.  She keeps herself on task and deals with a specific subject for a popular audience.  Given her legal background her writing style is not a surprise.

Jonah is an academic at heart.  The appendix in Suicide of the West is one piece of evidence.  The second is that he wants to generalize but he recognizes the difficulty of generalization and so he often considers alternative arguments.  He wants to write a popular book that an academic could enjoy.

Kevin loves controversy.  He tweeted some things that got him fired at The Atlantic.  That he went to The Atlantic in the first place tells you something about him.  He has amazing insights that he thunders down upon us in wonderful prose.

Tim isn’t interested in being Jonah.  He wants to be Kevin but he will have to settle to be Ann.  An example of why he isn’t the other two is Tim’s discussion of Venezuela in Latin America.  It is brief but it leaves out that Venezuela has the largest oil reserves in the world.  That is a big part of its geography.  To convince the unconvinced you must deal with the obvious problems in argument you are trying to make.

We recommend Tim’s book.  It gave us much to think about and changed our perspective in some areas.  If you don’t take every word as the gospel you will be better for reading it.  We are.

 

Data And Implications

Zoe Chevalier at US News has an article on per capita drinking by state.  New Hampshire wins with a score of 4.76 gallons per capita.  The next highest are Delaware with 3.72 and Nevada with 3.46.  Tenth place is South Dakota with 2.87 so NH is a runaway winner in alcohol consumption right?

Here is the problem: Zoe tells us that the NIAAA report that her data comes from uses alcoholic beverage sales compared to census population.  Zoe is measuring state sales per capita rather than consumption.  You have probably already noticed one problem state: Nevada.  What happens in Vegas stays in Vegas is another way to say that out-of-state folks go to Nevada to drink.  Folks from Nevada are not consuming all the alcohol sold in Nevada.  Thus, the ratio is not a good measure of per capita alcohol consumption in Nevada.

New Hampshire has state liquor stores with low prices and a small population. It ranks 41 of 50 at 1.3 million.   Residents from neighboring states go to buy alcohol in NH.  Here is an example:

The “No Taxation on our Libations!” promotion is the first time that New Hampshire has offered a specific discount to lure out-of-state shoppers. Residents of Maine, Massachusetts and Vermont can receive a discount equal to double their home state’s sales tax. For Mainers, that means 11 percent off a purchase of up to $149.99. New Hampshire shoppers, and those from outside the three-state region, will get a flat 13 percent off.

So NH sells lots of alcohol per capita but we don’t know anything about consumption from Zoe’s data.  We don’t know if there is a reason for Delaware’s rank.

We can’t always measure what we want.  We have to use proxies like sales to estimate consumption.  But you need find really good proxies or control for the problems.  Nevada and New Hampshire are big problems for Zoe.

Medical Pricing

Steve Cohen’s article on hip replacement prices in the WSJ struck a chord for several reasons.  We had a family member just get a new hip.  Transparent prices are critical to have effective markets.  Medical prices have always seemed very odd, especially for procedures that are pretty standard.

We often talk about expertise here and we plead guilty to lack of expertise on medical pricing.  Part of this post is to remind ourselves to find out more.

We want to discuss the oddity of medical prices.  In Steve’s article he says that he had both hips replaced and

[T]he hospital had charged $175,000 for my right hip and $180,000 for the left. The insurance company had paid discounted rates of $75,000 and $77,000.

The physicians and other professionals involved in these surgeries have amazing skills but the procedures are pretty standard with a variety of specialists making sure that the surgeon can be efficient.  We saw it in person for eye surgery and we were impressed by the capitalism at work in all the specialization.  Because of part of the specialization was to administer drugs we don’t remember all of the details but we were queued up like planes on a runway and rolled down to operating room for take-off.

The point is they need a full queue to maximize profits with all these specialists.  How does it benefit them to announce a price that is more than double the actual price?  We are sure that there is a reason for the difference but we don’t know what it is.  Our assumption is that essentially all of these procedures are covered, in large part, by insurance.  Perhaps it is a faulty assumption.  When we went in for our procedure we met with the financial person who looked at our insurance and said we don’t need to talk about prices other than this small blue bag you need to bring (we are not making this up).  It cost us a few bucks.  Perhaps the high list price is actually used but our priors are that there is a bureaucratic explanation.  We are open to suggestions and plan to look ourselves.

Gatekeeping: A Theory

We are supportive of Bari Weiss and her efforts on free speech but we recently took issue with her comment that she wanted to have gatekeepers.  When she was summarizing the Intellectual Dark Web (I.D.W.) she said:

I get the appeal of the I.D.W. I share the belief that our institutional gatekeepers need to crack the gates open much more. I don’t, however, want to live in a culture where there are no gatekeepers at all. Given how influential this group is becoming, I can’t be alone in hoping the I.D.W. finds a way to eschew the cranks, grifters and bigots and sticks to the truth-seeking.

We think that this paragraph could be interpreted in several different ways but Bari seems explicit on supporting the need for gatekeepers.  Before we propose a theory we have some information on Bari, some current examples, and some information about us.

David French at NRO provides information about how Bari got started in the opinion business around 2004.  She was a student at Columbia and David was president of FIRE (consider donating).  There was a dustup at Columbia between the professors and the students.  Read the whole thing but David’s summary is:

In other words, Bari is doing exactly what she did in 2004 and 2005. She perceived intolerance and called it out. She decried an unwillingness to debate and a university that seemed closed off to dissenting ideas. It is not censorship to critique censorship. It’s not bullying to criticize bullying. And it’s most definitely not “racism” to raise credible concerns about anti-Semitism.

She has dealt with bullies before.  It has long been a goal of folks on the left to limit the speech of others.  There are some recent examples.  The WSJ covers the trashing of George Mason University.  Here is part of it:

All of this UnKoch nonsense is part of the left’s attempt to stifle conservative ideas in the guise of an attack on “dark money.” The Kochs are so “dark” that the progressives decided to use their name. And speaking of dark money, UnKoch My Campus isn’t a nonprofit and doesn’t file regular financial disclosures.

In addition, several of the folks in Bari’s story on the I.D.W. are attempts by the left to silence dissent.  We worry about meeting our standards in putting forth a theory on gatekeepers.  Expertise is important and we can’t be expert in all the areas necessary for our theory.  Still, that is the nature of theories.  They can be falsified or supported by empirical evidence.  Let’s give it a try.

Our theory is that we can compare political information to economic information.  No individual can deal with the either set of information but somehow the market can distill it.  We doubt that the market for political information is as efficient as the market for economic information but we think it is a reasonable description.  Let’s call it the Nearly Efficient Market for Political Information (NEMPI).

Thus, there are an extraordinarily large number of gatekeepers in NEMPI.  Some have large influence and others have close to no influence but enough folks are aware of their history and most of the gatekeepers worry about their history.  Their history causes their influence to wax and wane.  The I.D.W. is waxing in the NEMPI.

Free speech is the key attribute of the NEMPI.  With reasonably free speech we get NEMPI.  Folks want to reduce free speech or designate gatekeepers in order to eliminate the NEMPI.

The one difference we see between financial markets and NEMPI is timing.  Financial markets react quickly while the NEMPI takes more time.  We think that is OK because elections only happen every so often.

So our NEMPI theory is that everybody is a gatekeeper and the influence of each gatekeeper varies over time.  No individual can evaluate all the gatekeepers but free speech allows different individuals with different talents and points of view to provide information over time.  Bari, the I.D.W., legacy media, and all the others contribute information that informs politics.  NEMPI, let’s test it.

Baseball, Conservatism, Expertise

Baseball and conservatism are at least loosely tied together.  George Will is the classic, but not only, example.  We read all sorts of blogs and other communication devices to take advantage of gathering expertise.  Unfortunately, everyone that puts out these communications is going to say something that he shouldn’t.  The reason that it gets said is we can’t help ourselves.  There was an NRO article that asserted that the NFL undervalued black quarterbacks.  Perhaps only because we were busy, we just managed to refrain from commenting.  We are convinced that neither the author nor MWG is an expert on the qualities of an NFL quarterback.

We all want to go beyond our expertise.  Although we sometimes refrain, it is a problem for everyone who opines for fun or profit.  In his newsletter, Jonah Goldberg, who admits to being not much of a sports guy says:

Baseball, as Al Capone explains in The Untouchables, is a game that marries team effort with individual achievement. But the team effort is only on defense. On offense, the player stands alone.

The last bolded sentence is false.  If you are the hitter do you want Rickey Henderson (1406 stolen bases) or Harmon Killebrew (19 stolen bases in 23 years) on first?  If you are the hitter do you want Babe Ruth or Mario Mendoza coming up next?  If you are trying to score from third do you want to stand alone or do you want the on-deck hitter to tell you how to slide?  Yes, the batter does literally stand alone at the plate versus the pitcher but it is more complicated than that.  We are sure that like Jonah we will be equally guilty of opining beyond our expertise soon.  It is a danger and we should welcome the feedback.

Taxes, Expertise, And Information

Kevin Williamson in the NRO Corner is upset about part of the Senate tax bill.  The Senate GOP is planning to tax stock options at the at the date of vesting.  Stock options is shorthand for a variety of equity instruments that are used as compensation.  What is not clear is how exactly the employee’s income would be measured in the proposed bill.

Sidebar: We account (recognize the expense for financial reporting purposes) by recognizing the fair value as the employee earns compensation.  Earning might coincide with vesting.  We don’t think that the Senate intends to use fair value measurement but we are not entirely sure.  Because financial accounting and tax accounting have different goals they are often different.  End Sidebar.

Kevin says:

You can award the options at a lower price than the current price of the stock: If you give the employee the option to pay $90 a share for 1,000 shares of stock currently priced at $100 a share, then you have given that employee $10,000, notionally.

The relevant definition of notionally would seem to be: not real or actual; ideal or imaginary.  We see that you have really given the employee more that $10,000 unless the option expires immediately.  The employee may end up with more or less than $10,000 but the value of that option is almost surely more than $10,000 because the best possible final value can easily be $40,000 but the worst possible final value can only be zero.  That’s why folks are willing to take options where the current price of the security is below the strike price in the option.  The fair value of Kevin’s option is surely more than $10,000.  Even so, we think if the Senate went in that direction it would be the worst possible incentive.

The information problem is knowing what the bill actually says.  We haven’t found anyone who cites the bill so we don’t know what it says.  We agree with Kevin but we want to know how income is measured and what would happen to old options.  Kevin reports and comments that:

The Senate estimates that the measure would produce an extra $13.4 billion in revenue over ten years, but that’s either moving forward revenue that eventually would be collected by taxing the options when the options are exercised or, worse, by taxing people on gains that aren’t actually realized—most startups fail, after all, but they may fail after employees’ shares are vested.

We agree that the Senate proposal is moving the revenue forward.  It is probably creating less total revenue since the startups that succeed do so in a big way.  Even an aging star like Apple has gone from 107 to 174 in the last year.  That surely produced income for the Feds and the state of California this year.

We support Kevin’s position because it is consistent with most tax rules.  You pay taxes on what you were paid in 2017 rather than what you earned.  We need more data to make a stronger position.  How is income measured under the Senate proposal?  What would be the total take keeping the old rules?  What would be the total take if we relaxed the rules as the House suggests?  The tax bill is not going to be perfect but let’s try to limit the number of stupid things in the tax bill.  We think Kevin has identified one of the stupid things but we need a variety of expertise to make a really compelling case.