Half Sigma

Why doctors are clueless about investing

Warren of Coyote Blog writes:

At Harvard Business School, I had a great investment management class with a professor who has schooled many of the best in the business. If an investment we were analyzing turned out to be a real dog, he would ask us "who do you sell this to?" and the class would shout "doctors!"

Doctors are clueless about investing because they know absolutely nothing about the world of business. They are not required to take any classes in accounting, finance, or economics, and then they work in a socialist sector of the economy.

Yet at the same time, doctors have huge egos. Part of it comes from making life and death decisions, and part of it comes from working at hospitals where everyone treats the doctors like they are superior beings. So they get it into their heads that they know everything, even everything about investing, when in reality they have no clue.

Stockbrokers love to have doctors as clients, especially the type of doctor who likes to think he’s a bigshot. The bigshot doctor feels like a real bigshot investor while the stockbroker churns away his account.

So when the author of Coyote Blog notes that he heard a dentist (even worse than a doctor) giving out residential real estate investing advice, this is a sure sign that we’re near the top of a housing bubble.

Plus-sized women not welcome?

An article in today’s Washington Post informs us that young “plus-sized” women are unable to buy clothes in fashionable retail stores.

There is one paragraph from that article that seems full of wrong and misleading information:

The moves [referring to retailers discontinuing plus-size lines] struck some industry watchers as counterintuitive -- if only because Americans are becoming heavier. In 2002, 16 percent of teens were considered overweight, more than triple the figure in 1980. The average woman in her twenties weighs almost 29 pounds more than women did in 1960, according to the Centers for Disease Control and Prevention.

First of all, the 29 pounds figure seems too large to possibly be true. I don’t buy it. Someone at the Washington Post has failed to do proper fact checking.

Secondly, because weight is not distributed evenly between the social classes and races, 16 percent of teens being overweight does not translate to 16% of a clothing store’s sales being made to overweight shoppers. Hispanic and black women weigh more, on average, than white women, and poor women, on average, weigh more than rich women. Stores catering to white women in the upper half of the income distribution probably only have a tiny percentage of potential customers who are overweight.

This type of article might make women, for some unknown reason, mad at heterosexual men. I would like to point out that the fashion industry is run nearly entirely by women and gay men.

A blogger’s trip to Washington, DC

Jacob Lyles, who seems to be some kind of libertarian, writes about his trip to Washington, DC. (Hat tip: Scott Scheule at Catallarchy).

I found some of what he wrote especially interesting. For example:

The humbled cityscape of DC is directly a result of hubris at its center. The entire city is a monument to the arrogance of politicians. There is a law in Mordor [Mordor is the evil land in J.R.R. Tolkien’s The Lord of the Rings] that no building may be taller than Mount Doom [another Tolkien analogy], the Capitol Dome from which the eye of government watches and controls the world’s affairs. As a result of the ordinance, this masterwork of city planning has a problem with urban sprawl.

I have the same complaint about DC, which is that it would be a better city if it had taller buildings. The arbitrary zoning law restricting the heights of buildings does indeed cause urban sprawl, and even worse, it causes exurbanization, which is why the commutes in the DC area are so bad. (See my post Traffic is bad? Blame the commuter.)

Their walls are emblazoned with slogans trumpeting the virtues of the city’s masters. They use words like freedom, liberty, and equality when they speak of the gifts of government.

Once again, I agree with Jacob, people look at the words without really bothering to consider if they still apply to our modern government.

Finally, Jacob provides us with his thoughts on modern art:

After we left the classical exhibit we proceeded to a display of the work of Ed Ruscha. This “artist” was a no-talent hack. Some of his work resembled scribbles that I had done in middle school. Other famous canvases were literally just nonsensical words written in a plain font on a plain background. Ruscha felt that meaning confined a work of art, and often he tried to avoid it. If he were a character in “The Fountainhead”, Ellsworth Toohey [the socialist who hates people with talent] would be his patron.

I too believe that modern art was a liberal plot (and a very successful one at that) to suppress the truly talented artists. Liberals hate the fact that ability isn’t distributed equally in the population, so they endorse a form of “art” that requires little ability. (See my recent post Thoughts on ability grouping in primary and secondary education.)

Missile defense for commercial airplanes?

An article in the NY Times explains how Congress wants to waste $10 billion on missile defenses for commercial airplanes. $120 million has already been wasted on this project. Even worse, the airlines would be required to pay for maintenance on these systems which, according to the article, could exceed $1 million per year per plane. (That would be an ongoing expense of $6.8 billion per year if installed on 6,800 planes.)

Why is this a big waste of money? Because shoulder fired missiles, the type that this defense system is designed to protect against, just aren’t that big of a threat to large commercial airplanes.

A friend of mine who was flew F-15s in the U.S. Air Force and who was a pilot for Delta Airlines once explained to me that a small missile couldn’t take out a large commercial airplane because they are too big and can be landed even if one of their engines are hit. The article seems to bear out what I was told:

Part of the reason for the relatively low ranking of missiles among threats is that large passenger airliners are designed to fly after the loss of an engine, even if that engine explodes, industry experts said.

The article also mentions two instances in which shoulder fired missiles were launched at commercial airplanes. In 2002, two missiles were fired at a Boeing 757 in Kenya and both missed. And in 2004, a missile was fired at an Airbus A300 on takeoff from Baghdad, and although this missile hit and disabled the plane’s hydraulic system, the pilot was still able to land the plane. So it seems that these missiles are 0 for 3 against large commercial airplanes.

Microsoft millionaires and the arbitrariness of wealth.

Today's NY Times has an article about Microsoft millioniares, they being the approximately 10,000 Microsoft employees who became millionaires because their stock options went into the stratosphere.

This article demonstrates the random nature of who becomes wealthy and who doesn’t. I’m not saying that the Microsoft employees weren’t brighter than average and didn’t put in a lot of hours. But there are lots of bright people who work hard and don’t get anything out of it at all. These Microsoft millionaires were just extraordinarily lucky to be in the right place at the right time.

In fact they were more than just lucky, they were probably somewhat stupid, because those who understood the wise investing principle of diversification would have sold their Microsoft options as soon as they could and invested the proceeds in other assets. But the stupid employees who let their money ride were the ones who hit the biggest jackpots.

The example of the Microsoft millionaires is definitely counter to the Ayn Randian notion that the richest people are only those who are the most capable and most productive.

Paul Krugman says we’re running out of bubbles

I’m two days late linking to Paul Krugman’s 5/27/05 NYT column, but it’s one well worth reading. Paul Krugman makes a concise but excellent case for why a collapsing housing bubble will lead to bad economic times ahead. This is a rare case in which Paul Krugman is 99% correct, and he even avoids unnecessary Bush bashing (which he only does when he feels he has something really important to say).

Before I read his column, I was thinking the exact same thing this week, how a huge global recession (maybe even a depression) seems unavoidable. I also believe that the higher housing prices rise before they finally collapse, the worse it will be.

Donald Luskin notes the one weird statement in Krugman’s piece:

the Fed's ability to manage the economy mainly comes from its ability to create booms and busts in the housing market.

I don’t care for Alan Greenspan much either, but implying that the Fed has no power except to create housing booms and busts is certainly a huge overstatement.

Traffic is bad? Blame the commuter

This WaPo article about commuting was published in February, but it’s still showcased on the Metro web page so the editors must think it’s really important.

The writers of the article blame the workers for their own misery.

In spite of increasingly long and frustrating commutes, the survey found that Washingtonians remain addicted to their cars. Three in four area commuters drive to work alone.

Notice the use of the word “addicted.” Implying that going to work is as evil as using crack cocaine. The writers of that article need to take a realistic look at where the office buildings and residential buildings are located in the Washington, DC metro area.

I hate traffic as much as the next person, but there is no faster way for me to get to work and back than to drive alone in my car. The nearest Metro station (Metro being the silly name for Washington, DC’s subway system) is miles from where I have to work. And my situation is hardly unique.

Whose fault is this? Certainly not the worker’s fault. The worker is a victim of where his employer happens to be and where the housing is located. And right now, commercial and residential buildings are going up like mad all over the outlying counties far removed from convenient public transportation.

Now government officials, if they chose, could zone some dense development around existing undeveloped Metro stations, thereby making it possible for people to actually use Metro to commute. But they choose not to. And the Washington Post, instead of blaming the government for the problem, blames the commuter.

The economics of cheating

This essay is inspired by the chapter in Levitt’s book Freakonomics (see my review) in which he writes about cheating. But I think his book was long on stories and short on analysis. So here is some of my analysis.

The obvious reason why people cheat is that they gain some kind of benefit from it.

No Child Left Behind’s impossible goal

I don’t mean to keep blogging about education, but this morning I couldn't help but notice this NY Times article about No Child Left Behind which “requires schools to bring all students to grade level over the next decade.”

This is obviously an impossible goal because some children simply don’t have the innate ability to read at grade level. The definition of grade level is based on what the average child is capable of.

It will be really interesting to see what happens in a year or two when everyone fully realizes that this goal simply isn’t going to happen.

Thoughts on ability grouping in primary and secondary education

I’m going to use this post to respond to some of the comments from my previous post on genes and success. In the comment section, I endorsed what educators refer to as ability grouping.

Ability grouping is opposed by liberals who hate the idea that children have different levels of ability. So we see the typical liberal response, which was a comment by probligo:

Separating children on the basis of a perceived ability is wrong, totally wrong. That is an approach that smacks of eugenics; the kind of experimentations that Mengele carried out; the kind of pseudo-science that people use to denigrate those who are different in race or belief or religion...

Notice the hysterical liberal reaction, bringing up images of Nazi Germany, as if somehow I suggested that children should be sent to gas chambers or something. Liberals often bring up Hitler and Nazis when they can’t make a rational argument.

The ability difference between children is real, not “perceived.” When we give reading tests to children, some will score several grades levels above their real grade, and others score several grades below. Only a crazed liberal could possibly think it makes sense to put children of such widely differing abilities together in the same classroom.

I don’t merely endorse intra-school grouping, but recommend that school districts create separate schools for differing ability levels. I was the beneficiary of such ability grouping when I was a high school student. Stuyvesant High School in Manhattan uses a competitive admissions test to select only the brightest students in all of New York City. The result was a far better public high school than ever would have been possible otherwise.

My wish is that future students from middle class families that can’t afford private school tuition have the opportunity, like I had, to attend a first class public school.

One of the reasons why I was so outraged by the bogus Newsweek article about the “best high schools” is because it seems like a typical liberal plot to discredit selective admissions high schools by excluding them from the list.

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Responding to what mikeca said:

Since when does society have an obligation to ensure that a person’s intelligence is “property nurtured and directed towards a useful occupation?” What happened to personal responsibility?

Only the most crazed libertarians disagree with the notion that society does have an obligation to provide education for children so they can indeed be properly nurtured and directed towards a useful occupation. I can’t for the life of me see how the notion of “personal responsibility” can truly apply to school aged children who lack the wisdom, experience, and reasoning ability to really understand the world around them. The law certainly recognizes this, which is why we have juvenile courts, and why children under the age of eighteen are not held liable for any contracts they enter into.

If lousy schools ruin intelligent children and prevent them from achieving the success they should have had based on their intelligence, then I certainly do hold society responsible. And sometimes intelligent children do get ruined when they are thrown into a school where all their peers are so much less intelligent that they don’t relate to them, and the intelligent child who seems different gets ostracized and fails to develop social skills that are needed down the road as an adult. Then we wind up with the stereotypical intelligent loser.

Genes and success

An article by David Wessel in the W$J says:

Consider the genes that a person inherits. Somewhere between a third and 40% of the link between a parent's income and a child's has to do with genes, researchers find. It's easy to assert that if smart successful people have smart kids who are successful, so be it.

I have little doubt that genes are an important component of how much income one earns. But unfortunately David Wessel tries to check some of the political correctness by kicking the book The Bell Curve.

But despite the celebrated case for the power of inherited IQ made by the authors of "The Bell Curve," most other researchers find that IQ explains very little of the way parents pass advantages to their children. Only "a modest fraction of the economic resemblance between parents and children" is tied to their IQs, says Harvard University sociologist Christopher Jencks.

Liberals hate The Bell Curve because they want to believe that everyone is equal, the the fact that we genetically inherit our intelligence demonstrates that we are not born equal at all. Equal under the law, yes, but not equal in ability. I wouldn't pay attention to anything that some liberal Harvard professor says on this topic. But I will anecdotally point out that the correlation between intelligence and income is far from perfect, or I'd be making a lot more money.

Other genetic inheritances may be more economically valuable -- and may cause Americans more discomfort. "Traits like 'ability' are widely seen as legitimate sources of economic inequality," Mr. Jencks and colleague Laura Tach write in an essay for a forthcoming book on mobility. "Traits like beauty and skin color are not seen this way."

Indeed one's appearance is an important component of one's earning ability, a fact that few people acknowledge. Kudos to Mr. Wessel for writing about it. And obviously physical appearance is an hereditary trait to a certain extent. Yet probably, with height excepted, intelligence is actually influenced by heredity to a higher degree than physical attractiveness! I don't think people realize to what a large extent the illusion of attractiveness is environmental. Nor do they realize to what a large extent intelligence is hereditary.

Maybe Newseek was right

The news today (WaPo article) suggests that Korans were routinely "mistreated" at Guantanomo Bay.

Now I should point out that I could really care the less if a Koran was "abused." It's just a book for crying out loud, not a human being. But I previously pointed out that the Newsweek story about the Koran incident was more believable than the Pentagon's denials, and the news today gives further credence to my original take on the matter.

Family and the city

A post at Catallarchy by Randall McElroy made me think about the topic of families leaving the city.

I think it represents a very significant and unfortunate trend that middle class families have left the city. It is now a place where only the childless, the wealthy, and the very poor live.

The two main reasons for families leaving the city are usually given as: (1) housing costs are too high in the city; and (2) schools are better in the suburbs. Liberals are responsible for both of these problems.

The high cost of housing is an issue that I’ve written about a lot. Liberal politicians like to interfere with the free market in ways that prevent new housing units from being built, and make the ones that do get built more expensive to build. One reason why suburbs have less expensive housing is because suburban voters are more Republican than urban voters, and Republican politicians take a more free market approach to residential construction and landlord-tenant law.

Liberal policies have also destroyed the education in the cities though forced integration of schools. It’s hard to explain this without being blunt, and maybe even “racist,” but the truth is that white parents don’t want to send their children to schools that are largely composed of minority students. They may say something politically correct to polltakers and journalists, but when it comes to their own precious little kids’ wellbeing, they do whey they feel is best even if what’s best is “racist.” So if they can’t find a predominately white public school in the city, they move to a school district where mostly white people live: a school district in the suburbs.

Only vouchers can bring middle class families back to the city. Vouchers will allow parents to choose a school they feel comfortable with.

Today’s Washington Post housing article

(1) April sales of previously owned homes up 15.1% since April 2004. The largest such increase in 25 years. (Comment: in a normal housing market, prices stay even with inflation.)

(2) “Some analysts warn that the higher home prices go, the greater the possibility of a painful drop in house values at some point.” (Comment: a drops are painful because people can buy homes with 10% down or less, so a drop greater than 10% will cause some homeowners to have negative equity in their house.)

(3) “Meanwhile, the hot real estate market is supporting the nation's overall economic growth by giving consumers more money at a time of lackluster wage growth and high energy costs, analysts said.” (Comment: huge recession coming when housing prices come tumbling down.)

Link: Home Sales Continue at Torrid Pace, WaPo, 5/25/05

Inequality and housing inflation

At Café Hayek, Russ Roberts is still arguing that there is no problem with inequality or social mobility.

Russ says that real (in economist-speak, “real” means adjusted for inflation) income for families in which there are two spouses and both work rose from $50,000 in 1970 to $74,000 in 2000 (presumably that’s in 2000 dollars). An increase of 48%, that doesn’t sound so bad. (I agree with Russ that comparing two wage earner families is the correct comparison to make.)

But let’s look at the price of housing. My parents bought a house in the Staten Island, one of New York City’s four outer boroughs, for $27,500 in 1968. Today they can sell that house for around $425,000.

Now let’s convert that to real dollars so we can make a comparison. According to the BLS, the CPI-U is 194.6 today, 172.8 in July 2000, and 35.3 in October, 1968. So my parents’ current house value in 2000 dollars is $377,390. But the purchase price in 2000 dollars is $134,618. That’s an increase of 180%.

So we see, during the time frame in which real income increased by 48%, the price of a house in Staten Island increased by 180%.

Considering that being able to afford a house is the key criterion that people use to determine how they are doing, the couple earning $50,000 in 1970 is better off than the couple earning $74,000 in 2000. The first couple can afford to buy a house, the second couple can’t.

(Of course this is only an anecdote, and the increase in prices of houses in Staten Island may not reflect other housing markets.)

Should the government pay for Viagra?

Viagra is what I would call a “recreational drug.” No one needs to be taking it. Losing one’s sex drive used to be considered a normal part of getting older.

So I am sort of outraged that Medicaid is using my tax dollars to help poor people have sex. As if poor people weren’t already having enough sex.

Tyler Cowen mentions this in the context of a story about convicted sex offenders getting government paid Viagra. I think the bigger problem is that everyone with Medicaid is getting this benefit.

Class and college in the NY Times

Of all the articles so far in the NY Times Class series, the article on college is the absolute worst. Just about everything here is wrong, or based on some liberal agenda not bound to reality.

The article has the basic supposition that college is Good, and if only everyone went to college then everyone would have nice middle class jobs with good salaries and all our country’s problems would go away.

This is patently false. College only benefits society as a whole to the extent that the economic productivity of the college attendee is increased by an amount greater than the cost of the education. No one has ever proved this to be the case for the vast majority of college students.

As I explained in my previous post, more about student loans and the value of a college education, statistics which show college graduates earn more, on average, than non-college graduates do not in any way demonstrate that college has a net economic benefit either for the graduate personally or for society as a whole.

It should be obvious that in a society where every single person had an additional four years of formal education beyond high school, there would still be a need for factory workers, retail store workers, and all the other lousy jobs that are now done primarily by non-college graduates. So such a society would simply have all these lousy jobs performed by people with four extra years of formal education and no one would be better off because of it.

In our society, most people who are intellectually capable of succeeding at college do in fact attend and graduate from college. For this we must thank the SAT, a test which the article wrongly mentioned in a negative light. (Liberals hate the SAT because liberals worship equality, and the SAT shows that we are not all intellectually equal.) No modern institution has done more for class mobility than the SAT. Thanks to the SAT, a student from an economically deprived background can demonstrate that he is intelligent enough to succeed in college. (I’ve previously expressed concerns that the new SAT is a step backwards in this regard.)

Do only conservatives think rationally about healthcare?

Somewhat liberal Matthew Yglesias writes:

But let's say conservatives are right. Let's say the main problems with the US healthcare system really are overconsumption (i.e., third party payment encourages people to use health care services they don't really need) ...

I don’t understand why it’s a conservative position to note that giving something away for free causes people to consume more of whatever is being given away. This is basic economics.

This sounds to me like a confession that only conservatives think rationally while liberals live in a fairyland.

Richard Posner on spam

Richard Posner writes:

A genuine externality created by the Internet that may call for some kind of government regulation is the phenomenon of "spam."

He goes on to explain how spam burdens recipients while only providing a tiny benefit for the spammer.

This is very similar to my recent post on trackback spam and libertarianism where I explained how spamming is a negative sum activity and I recommended making it illegal or taxing it.

I guess great minds think alike.

Does blogging help you find a job?

Michael Higgins has a post about this subject over at his Chocolate and Gold Coins blog. His post gives my blog a big plug, which is gratifying to my ego. Although his post his thoughtful and well worth reading, I’m going to have to respectfully disagree with his take that employers will be impressed by your blog.

In fact, the reason why my real name is not on my blog is because I don’t want people typing it into Google and finding me. But I just Googled myself right now, and to my horror my old blog came up as the top result because I left my name on the template! So I just removed my name and hopefully it will sink in the search results real soon. However, even though I am incredibly easy to find via Google, not a single employer I ever interviewed with bothered to find my blog, as far as I know. Women I’ve dated have found my blog. It’s interesting how women will put more effort into researching their dates than employers will into researching their job applicants.

My own take is that blogging requires a lot of intelligence to do well and it’s not a coincidence that a high percentage of top bloggers have Ivy League degrees. Ivy League schools only accept the most intelligent applicants. Writing skills are also required for blogging, and in fact blogging ought to improve one’s writing skills because practice always improves a skill. But skill in writing and intelligence, though correlated with each other, are also separate attributes.

Mr. Higgins writes that having a successful blog also requires good marketing skills, and this I agree with as well. Marketing your blog requires intelligence, an understanding of the importance of marketing, and a lot of effort. (I’m not so sure I put in enough effort to ever become an A-list blogger.)

So with blogging demonstrating all sorts of good things about a job applicant, what’s the downside? First of all, most employers are scared off by the unusual. Employers aren’t really looking for the best applicant, they’re looking for the safest applicant. The applicant least likely to make the hiring manager look stupid for hiring him. Because blogging is a big unknown, it’s a red flag to the employer.

Successful blogging requires a lot of effort, but employers don’t want employees who put a lot of effort into their hobbies, they want employees who put a lot of effort into their jobs.

A blogger with a truly successful blog (mine doesn’t reach such a lofty level) has power. Employers don’t want employees with power. They want powerless employees who can easily be bossed around. An employee with a well read blog can write about how much his employer sucks, and thousands of readers will then find out about it.

Employers tend to have an extremely narrow focus when looking for employees. So the fact that you have great writing skills and can market a blog means absolutely nothing unless maybe you’re trying to find a job in journalism or internet marketing. If employers really cared about your writing skills, they'd ask for a writing sample. I have found that no one ever asks for a writing sample unless you're applying for a job as a lawyer or as a writer. Employers are lazy and uncurious when it comes to hiring practices.

With all the negatives associated with blogging, my advice is to keep your blog hidden from current and potential future employers. However I’d love to hear other people’s take on this topic.

Hedonic methods, inflation, and college textbooks

The blog Catallarchy has a post about hedonic methods and inflation. And there is a recommended free link to a WSJ article.

The U.S. Bureau of Labor Statistics uses hedonic methods to calculate the Consumer Price Index. In other words, the BLS uses complicated models to compare items being bought today to non-identical items bought in the past. The BLS explains it as follows:

The idea behind hedonic models is that items can be thought of as bundles of item characteristics. Hedonic models estimate values for the individual characteristics of a good or a service. Parameter values from hedonic models can be used by CPI analysts to calculate changes in quality between two items with different characteristics.

How does one compare a college textbook today with a college textbook from twenty years ago when they are different books? The BLS has a paper explaining. The number of pages, the subject, and whether it’s hardcover or softcover turn out to be important units of comparison.

The problem with hedonic methods is that they tend to understate true inflation by overvaluing current items. For example, thanks to new technologies in printing, color printing is a lot less expensive than it used to be. It’s now pretty common for college textbooks to be printed entirely in color. Does this mean that the $50 textbook bought today is really worth $100 because that’s how much a full color book would have cost twenty-five years ago? I say no because the color pages are merely an artifact of how cheap it is include that feature and they do not substantially increase the pedagogical usefulness of the book. (Similarly, I'm not a millionaire because the computer which I'm using to write this blog post has greater computing power than a multi-million dollar computer from the 1960s.)

Thankfully the BLS is ignoring color as a way to compare textbooks. But one factor the BLS does use which I disagree with is whether the book is published by a “major publisher.” According to the BLS paper, being published by a major publisher adds $4.46 to the cost of a book. But does this reflect higher quality? I doubt it. What it most likely reflects is the superior marketing power of the major publisher. This touches a theme I write about a lot in my blog, which is that larger organizations have superior bargaining power and enjoy marketing economies of scale.

Does it benefit the student that the publisher made higher profits on the book because of its superior marketing power? The answer is no. Therefore this factor should have been excluded from the regression analysis. Consolidation in the textbook publishing industry, resulting in a higher percentage of books being published by “major publishers,” will cause an increase in the average price of textbooks. But the BLS will consider these higher prices to be quality improvements and by doing so will understate the true rate of inflation in college textbooks.

Class and religion in the NY Times

Like the other articles in the series, today’s class article is mostly anecdotal, and the story is about Tim Havens, an evangelical Christian who attended Brown University and did his bit to try to bring Christ to the Ivy Leagues.

Being loudly religious is low class. This isn’t going to change just because evangelical Christians are making more money than they used to.

After reading the article, I’m not sure if I should laugh at the evangelicals’ futile attempts to transform the Ivy Leagues (not a chance in hell of that happening), or be worried about a shadowy secret organization of super wealthy evangelical Christians trying to control society.

Once again, I recommend the novel I am Charlotte Simmons by Tom Wolfe for its depiction of class differences among students at elite universities.

Review of Star Wars Episode III - Revenge of the Sith

It’s been a few years since Episode II. Anakin (Hayden Christensen) no longer looks like the kid from the Dell commercials. In fact, he now sports a retro hairdo reminiscent of Luke Skywalker circa 1977.

Lucas finally got the message that people don’t like Jar Jar Binks. He only makes the briefest appearance and thankfully has no speaking lines. Too bad the other characters have to talk. Whenever anyone opens their mouth, you have to grimace. Are they all horrible actors, or is it the lines they are forced to say? I’m afraid that it’s both.

One bright spot amidst the otherwise lousy acting was Yoda. He may be incapable of speaking a single sentence with the subject and object in the correct order, but he does it with feeling. Yoda has definitely brought it up a notch since the last movie and deserves to win the Academy Award for Best Muppet Actor.

Episode III is less of a kid’s movie than any other Star Wars movie, even the first one. In nearly every scene, someone’s (or something’s) limbs are being chopped off. Cute robots get very little screen time; most of the robots we see are evil robots. There are no Ewoks. Besides Yoda, the only aliens that are even remotely cute are the Wookies, and those guys have a hard edge to them.

The problem with this movie, besides the acting, is the lack of suspense. Basically, everything about this movie’s plot is pre-ordained. You know exactly what’s going to happen to all of the major characters because we all saw the original Star Wars. So it’s no surprise that Chancellor Palpatine (Ian McDiarmid) is evil, or that Anakin Skywalker joins him and turns to the Dark Side, or that Yoda and Obi Wan (Ewan McGregor) live and all the other Jedi die, or that Obi Wan and Anakin/Darth Vader have a big fight at the end in which Anakin’s body is maimed and he has to spend the rest of his life looking like the Darth Vader we remember from the original movies.

I liked Episode II better. In Episode II, we weren’t quite sure exactly what was going to happen. In Episode II, it was hilarious to see Yoda pick up a lightsaber and have a duel with an evil Sith. Yoda sees a lot more action in Episode III, but it’s no longer funny. We’ve seen this sight gag before. In fact, Episode III is the most humorless Star Wars movie to date.

In Episode III, George Lucas tries to move from sci-fi to sci-phi. That’s phi for philosophy. But it’s not very good philosophy.

“The Jedi only know one side of the Force. To truly understand the Force, you need to know both Sides,” Chancellor Palpatine tells Anakin. It’s almost as if George Lucas remembered the Star Trek episode in which the transporter splits Captain Kirk into the good Kirk and the bad Kirk. Without his bad side, Kirk couldn’t be an effective leader. But of course, ever since his success with the original Star Wars (the story which was shamelessly but very effectively copied from J.R.R. Tolkien), Lucas’ ego is way too big to ever watch someone else’s creative works. Any resemblance to other fiction is purely a coincidence.

“If you're not with me, then you're my enemy,” Anakin tells Obi Wan. “Jedi don’t speak in absolutes,” responds Obi Wan. But don’t they? Aren’t they absolutely certain that only bad can come from knowing the Dark Side? Isn’t this a movie about Good and Evil in which everyone is clearly on one side or the other? At least the first movie had main characters, such as Han Solo and Chewbacca, who gave the appearance of not being on any side other than their own.

Anakin’s “slide” into evil makes absolutely no sense. One day Anakin buys completely into being on the side of Good, except for him secretly marrying Padme Amidala (Natalie Portman) and being eager to be promoted to “Master Jedi.” (Oooh, how evil it is to want a wife and a promotion at work!) But then a day later he’s killing children.

I give Episode III two out of five stars. The special effects were great, but otherwise the movie was boring and pointless. What a huge disappointment.

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Around the blogosphere:

Ed Driscoll agrees that the movie was bad. “These three prequels are so far removed from the tone and the fun of their predecessors from '77 to '83 that it's sad.”

Vodkapundit explains why Anakin’s slide into evil was so believable. Huh? Was he watching the same movie? Pete the Elder was also watching a different movie. “The actual path Anakin follows to the dark side was better and deeper than I expected.”

PunditGuy compares the Jedi Council to the Catholic Church. This is an obvious comparison, because both institutions require celibacy. However, the reason for the Jedi Council requiring celibacy, that being married encourages one to succumb to the Dark Side of the Force (yes, that’s right), doesn’t apply to the Catholic Church.

Ninme rightfully complains about the original version of the original movies not being available on DVD. “George Lucas is to be encouraged to release the original originals on DVD. Hans shot first, damnit.” This echoes the point in my review that unlike the characters in Episode III, Hans Solo was not a caricature of Good or Evil. I would certainly buy a copy of the original Star Wars on DVD if it were ever released.

Marginal Revolution has a fantastic post about whether the Jedi Council is really Good. “As I understand it, they vote each other into the office, have license to kill, and seek to control galactic affairs. Talk about unaccountable power used toward secret and mysterious ends.”

Immigration is bad; response to Russell Roberts

Rusell Roberts responded to my previous post about immigration. He links to an interesting CBO report.

So let’s look at the following chart from the CBO report which shows the foreign-born population from 1850 to 2000:

What we notice is that through 1910, the foreign-born were a relatively high percentage of the population, and their numbers peak at 15% in 1910. After 1910 the percent of foreign-born begins a steady decline, bottoming out at less than 5% in 1970. But now that number is back up to an alarmingly high 12% in 2002, which is an amount at which it has not been in over 70 years.

It’s fine to say that historically a lot of immigrants moved to America, but it was way back in history. The America of the 1800s isn’t the America of today, and it’s not an America we want to go back to. We had slavery back then, for one thing.

The periods of peak immigrant population were not very good times to be a worker. The peak in the graph which occurs in 1910 is only a year before the infamous Triangle Fire of 1911 which killed 146 workers because management intentionally locked the fire exits.

Quality of life for the average American improved significantly after immigration began to decline. But rising immigration after 1970, along with globalization, is once again causing the gap between rich and poor to widen. Unless we do something to reverse the trend, social inequity will continue to increase.

The pro-immigration lobby is an unholy alliance between liberals and rich capitalists. Liberals feel guilty that they live in a rich nation while the rest of the world is poor, so they want to make America more like a third world country to redistribute the world's wealth and ease their guilt; and also liberals cynically believe they will strengthen their political position because immigrants are more likely to vote Democratic. The rich capitalists support immigration because they want cheap labor to work for them and increase their profits.

It’s the regular Americans who are being hurt by immigration, and no one is looking out for the interests of regular Americans.

Review of Star Wars: Episode II - Attack of the Clones

Below follows a review I wrote a long time ago about the previous Star Wars movie, Episode II - Attack of the Clones.

Are young workers undervalued?

A post at EconLog quotes a line from a Paul Graham article:

The most productive young people will always be undervalued by large organizations, because the young have no performance to measure yet, and any error in guessing their ability will tend toward the mean.

The above paragraph, if true, demonstrates that the labor market is not an efficient free market as libertarians would like us to believe. Workers who lack bargaining power or lack the ability to market themselves (creating the perception of high value where none actually exists) get the short end of the employer employee relationship.

But can Arnold Kling’s advice to young people to start their own businesses instead of being employees really work for more than just a very tiny percentage of exceptional young people? The answer is no.

Most businesses are really about marketing and sales, and not about the quality of the product produced. Can one who is unable to sell himself as an employee magically be able to sell himself as an entrepreneur? Most likely not, because these are the same skills. The unfortunate reality is that the person best able to obtain a big salary for himself is the same person who will be most successful in starting his own business.

Furthermore, there just isn’t much room in the economy for many more small businesses. As I explained in a previous post about small companies, big businesses have marketing economies of scale that allow them to sell their products even though their products may be inferior to the products of smaller competitors.

The poor little Corcoran Museum

I am saddened to find out that the Corcoran Museum is having fundraising problems. It will have the cancel its plan to erect a new buliding.

The Corcoran is a nice little museum where I took a photography class a year ago. Unfortunately it has trouble competing for attention being in the same city as the National Gallery of Art and the Smithsonian Institution. The National Gallery of Art is not part of the Smithsonian, but like the Smithsonian it's funded by your federal tax dollars. How can a donor supported museum compete with the unlimited spending power of the government?

The National Gallery of Art is slated to receive $97 million in FY 06, and the Smithsonian $615 million. Government funding for culture is a multi-billion dollar affair. (See WaPo article.) That's some serious money.

That said, I never liked the design of the new Corcoran building. It looks totally out of place next to the rest of the museum.

Rising immigration, falling salaries

Russell Roberts, author of The Invisible Heart: An Economic Romance, posts some disturbing figures about immigration in his Cafe Hayek blog.

“The proportion of the workforce that is foreign born” remained stable at about 6% between 1960 and 1980, but has since been soaring and was 13.2% in 2000. Pro-immigration people have argued that immigration is nothing new and that the United States has always had immigration. However, Roberts’ statistics show that the percent of immigrant workers more than doubled over a twenty year period.

Roberts also explains that the average immigrant has a lower wage than the average American. The obvious conclusion is that immigrants are lowering salaries in the U.S. for people who were born here because employers can turn to a substitute good, a foreign born employee willing to work for less money.

Apprentice Blogging: Kendra wins as predicted here

As I previously predicted here and here, Donald Trump picked Kendra as the winner of the third season of The Apprentice.

What Donald Trump disliked most about Tana was how she put down her team members (calling them the Three Stooges for example) when they were out of earshot. This is probably good business advice. Never call you subordinates the Three Stooges.

Steinbuch v. Cutler lawsuit in newspaper

News of the lawsuit that Robert Steinbuch filed against Jessica Cutler appeared today in the pages of a semi-real newspaper. But you read about it here first!

Writing under the nom de plume "Washingtonienne," Miss Cutler last year briefly kept an X-rated online diary of her simultaneous relationships with up to six men around town, including an unidentified Bush administration appointee.

What about “F,” the married “Chief of Staff” who paid Miss Cutler for sex? The most likely choice is Brian Gunderson who an anonymous email source said sometimes goes by his middle name “Frizzell.” The source also said that Jessica is his type and that he’s “weird enough to have to pay for sex.”

I’m worse than Newsweek.