Archive for the Category Misc.


What is a foul, and what is not a foul

I recently did a post complaining about the modern NBA.  For those who haven’t watched any games since the 1990s, I thought you might be interested in knowing how games are refereed today.  This link shows a play from last night, which is not considered a foul.

And this link shows another play, where a foul is called.

Nothing more exciting that watching skilled actors pretending to be fouled on three point shots.

The biggest Mafia Don of them all

In Hollywood films, the term “protection money” refers to money that organized crime extorts from a business, ostensibly for providing protection.  In fact, the Mafia is not protecting business at all; they are threatening them and then extracting money in exchange for not carrying out their threats.

In the 21st century, the US government has become one of the world’s largest criminal gangs, extorting money from weaker countries.  Our government claims the moral high ground, insisting that our rules are based on ethical principles when we put sanctions on rogue nations like North Korea and Iran.  But that’s not what’s actually going on; the foreign policy excuses merely provide a fig leaf for the US to use its muscle to steal money from other countries.

President Donald Trump thinks America is being ripped off. “We have spent $7trn—trillion with a T—$7trn in the Middle East,” he told a crowd last year, exaggerating slightly. “You know what we have for it? Nothing. Nothing.” To right this perceived wrong, Mr Trump has long favoured seizing Iraq’s oil. But after he hinted at the idea with the Iraqi prime minister (who demurred), his aides admonished him. “We can’t do this and you shouldn’t talk about it,” said H.R. McMaster, the national security adviser at the time, according to reports. Still, Mr Trump may be getting what he wants from Iraq in other ways.

I’ve often been critical of Trump, but I must grudgingly give him credit here for being honest, unlike his advisors.  While we are no better than the old-fashioned imperialist powers that tried to loot resources from weaker nations, Trump’s advisors have found more subtle ways to achieve his mercenary objectives:

When America reimposed sanctions on Iran last year it gave some countries extra time to stop buying Iranian oil before they would lose access to the American market. Most were given 90-day exemptions. In November Iraq, which shares a long border with Iran, was given half that time to cut off electricity and gas imports. As it negotiated for extensions, American companies made a push for Iraqi contracts. In December, Rick Perry, the energy secretary, led America’s largest trade delegation to Iraq in over a decade. “It was a quid pro quo,” says an oilman. “You give us priority and we’ll give you an exemption.”

The strategy seems to be working. General Electric, an American company, has muscled in on a big contract to upgrade Iraq’s decrepit electricity grid, which had been earmarked for Siemens, a German firm. American companies have also signed deals to supply Iraq with grains and poultry, important Iranian exports. Chevron and Exxon, American oil giants, have avoided the inconvenience of a bidding process by negotiating directly with Iraq’s oil ministry for large concessions. A previous Iraqi government put off a decision on Exxon’s bid to help boost Iraq’s oil export capacity and build a desalination plant. Now it is said to be a priority.

We claim that these sanctions are necessary to prevent Iran from developing nuclear weapons.  But while its (supposedly) essential that Iran not get nukes, it’s even more crucial that the lucrative deals available in Iraq go to US companies, not German companies.

The NYT reports that the same process is going on with 5G networks, where the US is trying to pressure foreign countries to avoid using Huawei equipment:

The White House’s focus on Huawei coincides with the Trump administration’s broader crackdown on China, which has involved sweeping tariffs on Chinese goods, investment restrictions and the indictments of several Chinese nationals accused of hacking and cyberespionage. President Trump has accused China of “ripping off our country” and plotting to grow stronger at America’s expense.

Mr. Trump’s views, combined with a lack of hard evidence implicating Huawei in any espionage, have prompted some countries to question whether America’s campaign is really about national security or if it is aimed at preventing China from gaining a competitive edge.

Administration officials see little distinction in those goals.

“President Trump has identified overcoming this economic problem as critical, not simply to right the balance economically, to make China play by the rules everybody else plays by, but to prevent an imbalance in political/military power in the future as well,” John R. Bolton, Mr. Trump’s national security adviser, told The Washington Times on Friday. “The two aspects are very closely tied together in his mind.”

Tied closely together?  I’m no fan of Bolton, but give him credit for honesty.  And Trump also chimed in on the issue.  After Meng Wanzhou was arrested by the Canadians (at our behest), we stabbed Canada in the back by hinting that she might be released if China gave us a better trade deal:

President Donald Trump has linked Ms Meng’s legal fate to the prospects of America getting a good deal in trade talks with China.

Unfortunately, no one told Trump he was supposed to keep his mouth shut; that the US wasn’t supposed to admit to our actual motives:

US officials argue that their criminal case against Huawei, which erupted when Ms Meng was detained by Canadian officials late last year, and the trade talks are on two separate tracks and have nothing to do with each other.

Western media outlets were then shocked and horrified that the evil Chinese had the temerity to arrest Canadian citizens in retaliation.  How dare they politicize this important national security issue!  Of course the Chinese government was wrong in this case, but where is the outrage against the US government?  “That’s right Canada, go out on a limb and arrest this important Chinese executive for us, but we’ll let her go if the Chinese do a trade deal where they promise to buy our goods instead or yours.”

The French firm Alstom was involved in bribing countries such as Indonesia to get lucrative deals selling power equipment.  That’s unfortunate, but it’s certainly none of our business.  Of course that didn’t stop the US from arresting a French executive and throwing him in jail.  What happened next is interesting:

According to executives there at the time, Alstom first explored a deal with GE just after Mr Pierucci’s guilty plea in July 2013. Legal pressure on Alstom, and on Mr Pierucci, seemed to ease once it became possible that much of his employer would come under GE’s ownership. For one thing, the arrest of executives stopped. The fourth to be detained in the case, while in the American Virgin Islands, was seized one day before news of the deal became public on April 24th 2014. Two months later, in the same week that Alstom’s top brass signed off on the sale to GE, Mr Pierucci’s long-standing bid to be released on bail was approved, after 14 months inside.

There is no suggestion of wrongdoing by GE itself, merely that American supremacy in imposing anti-corruption norms globally may have given American firms an advantage. GE had an edge over non-American firms vying to buy Alstom’s assets, such as Siemens of Germany and Mitsubishi of Japan, insofar as their legal departments may have been less well-versed in negotiating American legal settlements.

That mattered. In the purchase agreement, GE agreed to pay whatever fine was meted out to Alstom Power for past wrongdoing, even though the fine the French firm faced also related to past activities of other parts of the group. Foreign rivals interested in joining the bidding would also have to gauge the size of that potential legal liability, but may have been at a disadvantage: GE, like other American firms, employs multiple former DOJ staffers, according to their LinkedIn profiles. . . .

An American group such as GE could also help Alstom navigate judicial waters. Lawyers for GE conferred with the French firm’s lawyers ahead of its agreement with the DOJ, long before the deal formally closed. The DOJ settlement mentions how GE promised to “implement its compliance programme and internal controls” at Alstom. In American courts, such assurances may carry more weight coming from well-known local firms, not foreign ones.

The US is becoming increasingly effective at using its financial and military clout to extract resources from other countries.  Look for the Europeans to retaliate with huge fines imposed on our tech firms.  More than one country can play the nationalism game.

PS.  When did it become OK to endorse nationalism?  During the first 60 years of my life, nationalism was pretty universally viewed as evil, by both the left and the right.  It was seen as a cause of both WWI and WWII, not to mention destructive trade wars and lots of other bad things.  Now we suddenly have a president who is a self-avowed nationalist:

In Berlin, meanwhile, diplomats have been poring glumly over The Virtue of Nationalism, a book by the Israeli writer Yoram Hazony, which Mr Mitchell had told them was the key to the Trump administration’s Europe policy.

Mr Hazony’s book — published in 2018 to fervent applause from conservative commentators in the US — purports to provide the theoretical gloss on Mr Trump’s tweets: nationalism as the cure to “liberal imperialism”. The two main “empires” he has in mind are post-cold war, liberal-interventionist America and the EU.

Teutonic brows are furrowing presumably at passages from the book such as this: “The European Union is a German imperial state in all but name . . . Should the United States ever withdraw its protection . . . a strong European executive will be appointed by Germany.” Mr Hazony goes on to write that a “German-dominated EU” is an “imperial order”, that “will work to delegitimise and undermine the independence of all remaining national states”.

Never mind that this is spectacularly misinformed about the status of nation states in Europe or Germany’s power over them and the EU. Repress, if you can, the realisation that Mr Hazony thinks the EU could succeed where the Nazis failed. And try to ignore the question implied by both Messrs Pompeo and Hazony: to what imaginary golden age of nationalism exactly should Europe’s clock be turned back? 1989? 1945? 1918?

But the nationalism “bench” in DC still seems pretty thin, and hence Trump ends up stocking his administration with lots of traditional Republicans like CIA National Intelligence director Dan Coats, who just informed Congress that Trump’s views on Iran, Syria and North Korea are deluded:

North Korea is unlikely to abandon its nuclear weapons because the regime views the bombs and their missile delivery systems as critical to its survival, according to the worldwide threat assessment from the US intelligence committee. . . .

In justifying his decision in December to remove military forces from Syria — which prompted the resignation of defence secretary Jim Mattis — Mr Trump said the US had “defeated Isis in Syria”. But the intelligence community made clear in its assessment on Tuesday that the threat from the terrorist group remained.

“While Isis is nearing territorial defeat in Iraq and Syria, the group has returned to its guerrilla warfare roots while continuing to plot attacks and direct its supporters worldwide,” Mr Coats told the committee. “Isis is intent on resurging and still commands thousands of fighters in Iraq and Syria.”

Mr Coats also said the intelligence community “do not believe Iran is currently undertaking activities we judge necessary to produce a nuclear device” even after Mr Trump withdrew the US from the 2015 nuclear agreement.

Trump keeps appointing what he himself calls the “best people”, like Dan Coats and Jerome Powell, and then keeps telling us what idiots they are:

Donald Trump has accused his own intelligence services of being “naive” about Iran after top US security officials contradicted his statements about the dangers of the nuclear threat posed by both Iran and North Korea.

Naive?  Say what you will about Trump, we’ve never had a funnier president.


How to fix the NBA

Last night in the NBA there were three games (out of 6) where teams scored over 140 points.  Even the lowly Hawks put up 142 against OKC’s strong defense.  When regular NBA games begin to resemble the infamous 2017 All Star game, it becomes about as boring as watching someone else rack up 100,000 points playing pinball. Yawn.

The NBA needs to get rid of the three point shot, which will bring back interior defense.  Or at least move the line back a couple of feet. Did you know that Top Jackpot Casinos has a list with the best online casinos and the features that they offered?

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I’d also like to see the NBA reduce the frequency and duration of stoppages in action.  Here are 8 suggestions for doing so, and I’m pretty sure that at least one is actually a good idea, specilally if you are betting for which you will want to learn more using the last link.

1.  Give officials discretion to not call 24 second violations if the defense gets the rebound and is about to start a fast break.

2. Give officials the discretion not to call a foul on a fast break when doing so would advantage the defense.  Here I’m thinking of where the defender reaches in as the player is flying by at midcourt, and fouls him but doesn’t really stop the progress toward the rim.  To avoid outright “tackles” on fast breaks, make that type of foul just as serious as the current rule for fouling from behind on a fast break.  This won’t completely stop the problem (fouls that cause turnovers would still be called), but it will lead to some additional fast breaks on “reaching” fouls.

3.  When the ball hits the top of the backboard, don’t stop play.  It will usually come down and someone can rebound it.  Ditto for “wedgies”—let players fight for the ball.

4.  Do jump balls less often.  Go back to the old rule where jump balls only occur when the tie up lasts a couple of seconds.  Don’t call jump balls on blocked shots, but also don’t call a travel if the person blocked comes back down with it.  Just keep going.

5.  No instant replay review of calls, except during stoppages like end of quarter or time outs.  It’s just a game, people.

6.  Don’t call a defensive foul when the defender is roughly straight up and the offensive player slides by on a drive, with modest contact.  I see lots of such fouls being called.  Let people play defense.

7.  Reduce the number of free throws by awarding only 2 when a three point shooter is fouled.  The penalty should fit the damage, and the damage caused to the offense by fouling a three point shooter is no worse than the damage caused by fouling someone at the rim.  The expected points lost is roughly the same.

8.  Speed up free throws.  Allow only 5 seconds to shoot, once the official hands the player the ball.

Players will get a bit more tired if the action speeds up, but then just use the bench a bit more.

Misconceptions about corporate welfare

There are many distortions in the US economy.  As a result, a decision by a corporation to move to a new area often has important spillover benefits.  Indeed this is also true of many individuals.  California would gain significant net benefits if Warren Buffett were to move here from Nebraska.  These are not good reasons, however, to oppose a national policy that discourages sweetheart deals that try to induce interstate migration.

Here’s an analogy.  The fact that Barry Bonds hit more home runs after using steroids is not a good argument against a major league ban on steroid use.  (There may be good arguments against such a ban–I’m agnostic.  But the effectiveness of steroids for individual players is not such an argument.)

Suppose that California collects $10 billion in revenue from corporate income taxes.  Also suppose that the optimal corporate tax rate is zero.  Now assume that California raises the tax rate on most corporations, in order to cut the rate on a favored few.  Revenue stays at $10 billion.  If you look at the select few beneficiaries in isolation, it might look like the subsidies make sense.  They may add net benefits to the state, even at the reduced tax rate.  But that ignores what Bastiat called “the unseen”.  The negative effect on non-favored companies.

New York may gain net benefits from attracting Amazon.  But how many firms will leave New York as a result of the higher taxes imposed on other companies, as a result of the subsidies provided to Amazon. In my view, states should compete for business and for individuals by offering an attractive economic climate for all people.

I do understand that other approaches are possible.  You could have state officials in California visit billionaires in New York, offering a 5-year income tax holidays if they moved west.  These billionaires would pay more in sales and property taxes than they’d use in public services. Meanwhile, New York officials could do the same.

Does this make sense from a national perspective?  It’s hard to see how—even if you think state income taxes are a bad idea.  For instance, this type of policy regime tends to encourage corruption.  Resources are wasted on the negotiations.  Individuals will game the system by moving around to earn tax holidays.  Companies will do the same.  Politicians are babes in the woods compared to big corporations—look how Wisconsin’s governor got taken to the cleaners by Foxconn.

Just say no.

To summarize:

1. When considering the benefits from attracting favored firms, one needs to consider the indirect effect on non-favored firms.

2. Even in the rare case where corporate sweetheart deals help a given state after accounting for the negative effect on other firms, it’s still probably in the national interest to a have a policy that discourages such deals.  As an analogy, even if monopsony power means that the optimal tariff for big countries is positive, it probably makes sense for the US and the Eurozone to sign a free trade agreement with zero tariffs.

Let’s adopt a policy of treating individuals equally, and also treating companies equally.  That policy is likely to be best in the long run, even if there are occasions where favoring a certain person or company might produce local benefits. Don’t underestimate the value of simple, clear and transparent tax regimes that treat everyone equally.


Saving regret

Suppose everyone were rational in their saving decisions.  Now assume that a social scientist decides to interview 10,000 people, to see if they regret how much they had saved when young.  Of this group, 8000 are old people who are still alive, 650 are in heaven, and 1350 are in hell.  The average person expresses no regret—they saved the right amount.  However, there is an interesting pattern.  On average, the 8000 living interviewees express regret for not saving more, while the 2000 who are dead express regret for saving too much when young.

This thought experiment may have some relevance to a study by Axel H. Börsch-Supan, Tabea Bucher-Koenen, Michael D. Hurd, and Susann Rohweddery, linked to by Tyler Cowen:

We define saving regret as the wish in hindsight to have saved more earlier in life. We measured saving regret and possible determinants in a survey of a probability sample of those aged 60-79. We investigate two main causes of saving regret: procrastination along with other psychological traits, and the role of shocks, both positive and negative. We find high levels of saving regret but relatively little of the variation is explained by procrastination and psychological factors. Shocks such as unemployment, health and divorce explain much more of the variation. The results have important implications for retirement saving policies.

This study excluded the dead population, and only interviewed those still living.  Further support for my “survivor bias” hypothesis comes from this finding, on page 29:

A third conclusion is that, by a number of self-assessed measures, a substantial percentage of respondents view their economic preparation to be adequate, yet they nonetheless express saving regret.

I’m unusual in having extremely strong saving regret in the other decision.  I strongly regret saving too much when young, and even when middle-aged.  (I’m now 63.)

Off topic, here’s the county where I live, and where Reagan said good Republicans go to die, in the two most recent elections:

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