Coyote Blog

With 3 games to play, we still have three possible winners. Jeff Charleston (if memory serves a long-time coyote bracket leader), Bill Pearson and DontFollowMyAdviceImADummy.  Best of luck to everyone

In a tradition that goes back well over  a decade on this blog, it's time for our 2019 just-for-fun bracket challenge.  You know how it works -- fill out your bracket for the NCAA men's basketball tournament before noon Eastern this Thursday.  First prize  is lots of adulation and a 1 year free subscription to Coyoteblog.  Second prize is a two-year subscription.

We are using the usual scoring method -- 1 point for each correct pick in the first round, then 2 points in the second round, then 4, 8, 16 and 32.  This gives each round the same number of possible points.  In addition, there is a bonus for each game you correctly pick an upset equal to the difference in the two seeds, so there is some incentive to take a bit of risk with your picks.

This year's theme is the ongoing battle of Tesla bulls and bears ($tsla and $tslaq respectively).  You don't have to be part of that mess to play, but if you want to self-identify with a side, put it in your team name. If you need anonymity, you can use a fake name and make sure to check the box not to show your email address publicly.

It is totally free to play (I have paid the fees) and you can sign up and find our bracket here.  

http://www.pickhoops.com/TSLATSLAQ

In a tradition that goes back well over  a decade on this blog, it's time for our 2019 just-for-fun bracket challenge.  You know how it works -- fill out your bracket for the NCAA men's basketball tournament before noon Eastern this Thursday.  First prize  is lots of adulation and a 1 year free subscription to Coyoteblog.  Second prize is a two-year subscription.

We are using the usual scoring method -- 1 point for each correct pick in the first round, then 2 points in the second round, then 4, 8, 16 and 32.  This gives each round the same number of possible points.  In addition, there is a bonus for each game you correctly pick an upset equal to the difference in the two seeds, so there is some incentive to take a bit of risk with your picks.

This year's theme is the ongoing battle of Tesla bulls and bears ($tsla and $tslaq respectively).  You don't have to be part of that mess to play, but if you want to self-identify with a side, put it in your team name. If you need anonymity, you can use a fake name and make sure to check the box not to show your email address publicly.

It is totally free to play (I have paid the fees) and you can sign up and find our bracket here.  

http://www.pickhoops.com/TSLATSLAQ

General Electric (GE) has complained for years about Connecticut's (its current corporate home) taxation and regulatory policies.  Recently, it said it was moving for greener pastures, and was leaving for... Massachusetts?

Seriously?  This is like moving from North Korea to China to get more freedom of speech.  Boston's top state income tax bracket is perhaps a point lower than CT's but Florida or Texas have rates of zero, and a much lower cost of living and real estate.

Granted that Boston has its attractions for a company trying to change its public perception to being a technology company.  But I can't shake the suspicion this has something to do with a relocation giveaway to GE from the city and state.  GE has become one of the biggest supporters and beneficiaries of crony capitalism in the country.   I have to believe they cut some sweetheart deal that will eventually funnel a bunch of Massachusetts taxpayer money into GE coffers.  After all, if cities will throw away a half billion dollars in taxpayer money to attract an NFL team that does business for just 24 hours a year in the city (8 games x 3 hours per game), how much will politicians pay of their citizens' money to be able to list "attracting GE" as a lead bullet in their re-election talking points?

I was not at all surprised to see that average SAT scores varied strongly by income bracket.  What has surprised me is how quickly everyone has grabbed for the explanation that "its all due to test prep."  It strikes me that the test prep explanation is a sham, meant to try to hide the real problem.

First, Alex Tabarrok says that most of the research out there is that test prep explains at most 20% of the variation by income, and probably less.  This fits my experience with test prep.  I have always felt that 90% of the advantage of test prep was just taking a few practice tests so when the actual test days come, the kids are comfortable they understand how each section of the test works and are not thrown by the types of problems they will face.  My feeling is that most of what you can learn in fancy test prep courses is in those books they sell for about $40.  We sent our kids to a course that cost a lot more than $40, but frankly I did not do it because I thought they would get any special knowledge they could not get in the book, but because I was outsourcing the effort to get them to do the work.  Seriously, I think a parent with $40 and the willingness to make sure their kids actually goes through the book would get most of the benefit.

Which raises the question of whether test prep is correlated to income because of its cost, or whether it is correlated to income because high income folks are more likely to place value on their kids testing well and make them do the prep work.  We will come back to this in a minute.

So if its not test prep, what does drive the difference?  I don't know, because I have not studied the problem.  But I can speak for our family.  My kids do well on SAT-type tests because they go to a tough rigorous private school.  Let's take one example.  When my daughter was a sophomore in high school, she scored a perfect 80 (equivalent of the SAT 800) on the writing and grammar section of the PSAT.  Now, my daughter is smart but no Ivy-bound savant.  She took no prep course.  My daughter aced the PSAT grammar because her freshman teacher drove those kids hard on grammar.  I am talking about a pace and workload and set of expectations that kids in our junior high school start talking about and dreading two years before they even get to the class, and this at a school already known for a tough work load.

This teacher is legendarily fabulous, so obviously that is hard to replicate everywhere.  But she is fabulous because my kids actually came away excited about Homer and other classics.  This is what I pay private-school money for.  But what she did in grammar, what got my daughter her perfect score, could be emulated by about any competent teacher...theoretically.  But in fact it can't happen because such an approach could never survive in a public school.  The work expectations are way too high -- parents and students would revolt.  It only works for those who self-select.

Well, it only works today for those who self-select and can afford a private school.  Unfortunately, we have an education system where everyone is forced to pay tuition to what is at-best a teach-to-the-mean school.  If one wants more, they have to be wealthy enough to pay tuition to a second school.  Which is why school choice makes so much sense.  Why should only the wealthy  have the ability to self-select into more intensive programs?  BUt this is a conclusion most the education establishment is desperate for people not to reach.  Thus, the hand-waving over test prep.

Of course, there are a million other wealth, genetic, and parental effects that come into this equation.  For example, my kids read for fun, probably in large part because my wife and I read for fun.  How many kids read 10+ books outside of school each year?  They do this not because my kids are awesomer than other kids, but simply because that was the expectation they grew up with, that we spend free time reading books.   Other families might spend their free time, say, doing home improvement projects such that their kids all grow up great woodworkers.  I am not sure one set of activities is superior to another, but my kids end up testing well.  Of course, I am not sure they can use a screwdriver.  Seriously, over Christmas break I asked my 20-year-old son to pass me the Phillips head screwdriver and he had no idea which one that was.

I was thinking about the question above of how one separates out parental expectations from all the other effects (like parental DNA and income and quality of schools, etc.)  I interview high schoolers for Princeton admissions, so I have come to learn that some public high schools have advanced programs, to allow kids some self-selection into a more rigorous program within the context of public schools (this is usually either an AP program, an honors program, or an IB program).  By the way, the existence of these programs at public schools correlates pretty highly with the average income of that school's district.

Here would be an interesting study:  Take high schools with some sort of honors program option.  We want to look at the income demographics of the kids who chose the honors program vs. those who choose the standard program.  We would therefore want to look only at high schools that take all comers into the honors program -- if they have some sort of admissions requirement, then this would screw up our study because we want to test solely for how demographics affect the choice to pursue a more rigorous, college-oriented program.  I would love to see the results, but my hypothesis is that test-prep is a proxy for the same thing -- less about income per se and more about parental expectations.

This photo is kind of cool of a disassembled VW (via Twisted Sifter)

But this response from the from a user at the Club GTI forum is simply awesome.  An excerpt:

They left the 3/4 sync hub pressed onto the input shaft, and captured by that would have to be 3rd gear, because 3rd isn't on the floor.

The selector detent bolt is missing as well.

They're short one roller bearing, unless it is in the case still.

They're missing the 13mm nut to hold the selector bracket to the selector assembly.

They show 12 of the 14 bolts used around the trans casing, missing the 2 shorter ones under the selector area.

5th gear circlip and washer are missing.

5th gear retention bolt and washer are missing.

They're short one 17mm drain/fill plug too.

etc. etc.  This is exactly the guy I want in charge of the engine overhaul on the next aircraft I fly in.

Here are the standings of our bracket challenge.  I have been light on blogging because I have been on the road for 2 straight weeks, which has left me both underwater with work and a bit out of sorts.

To join, go to http://www.pickhoops.com/CoyoteBlog2013 and sign up, then enter your bracket. This year, you may enter two different brackets if you wish.

It's Free!  Must be in by 12:18 EDT today.

NOTE:  We had some sort of massive fail with the WordPress scheduler where this post failed to post at the scheduled time.  For some reason, if it misses the scheduled minute it is supposed to post, it fails (it does not just post a minute late).  So this is 3 days late and we likely won't have many folks join, but its free and a nice bracket site and you are welcome to join between now and tomorrow.

Back by popular demand is the annual Coyote Blog NCAA Bracket Challenge. Last year we had nearly 140 entries. Yes, I know that many of you are bracketed out, but for those of you who are self-employed and don’t have an office pool to join or who just can’t get enough of turning in brackets, this pool is offered as my public service.

Everyone is welcome, so send the link to friends as well. There is no charge to join in and I have chosen a service with the absolutely least intrusive log-in (name, email, password only) and no spam. The only thing I ask is that, since my kids are participating, try to keep the team names and board chat fairly clean.

To join, go to http://www.pickhoops.com/CoyoteBlog2013 and sign up, then enter your bracket. This year, you may enter two different brackets if you wish.

Scoring is as follows:

Round 1 correct picks: 1 points
Round 2: 2
Round 3: 4
Round 4: 8
Round 5: 16
Round 6: 32

We have upped later round scoring to try to keep things more competitive at the end. Special March Madness scoring bonus: If you correctly pick the underdog in any round (ie, the team with the higher number seed) to win, then you receive bonus points for that correct pick equal to the difference in the two team’s seeds. So don’t be afraid to go for the long-shots! The detailed rules are at the link.

Bracket entry appears to be open. Online bracket entry closes Thursday, March 21st at 12:18PM EDT. Be sure to get your brackets in early. Anyone can play — the more the better. Each participant will be allows to submit up to two brackets.

Submit your NCAA bracket here

Note: This post sticky through 3/15.  Look below for newest posts.

Back by popular demand is the annual Coyote Blog NCAA Bracket Challenge.  We typically have about 150 entries.  Yes, I know that many of you are bracketed out, but for those of you who are self-employed and don’t have an office pool to join or who just can’t get enough of turning in brackets, this pool is offered as my public service.

Everyone is welcome, so send the link to friends as well.  There is no charge to join in and I have chosen a service with the absolutely least intrusive log-in (name, email, password only) and no spam.  The only thing I ask is that, since my kids are participating, try to keep the team names and board chat fairly clean.

To join, go to http://www.pickhoops.com/CoyoteBlog and sign up, then enter your bracket.  This year, you may enter two different brackets if you wish.

Scoring is as follows (its the same scoring we have always used)

Round 1 correct picks:  1 points
Round 2:  2
Round 3:  4
Round 4:  6
Round 5:  8
Round 6:  10

Special March Madness scoring bonus: If you correctly pick the underdog in any round (ie, the team with the higher number seed) to win, then you receive bonus points for that correct pick equal to the difference in the two team’s seeds.  So don’t be afraid to go for the long-shots!   The detailed rules are here.

Bracket entry appears to be open.  Online bracket entry closes Thursday, March 15th at 12:18pm EDT.  Be sure to get your brackets in early.  Anyone can play — the more the better.  Each participant will be allows to submit up to two brackets.

Here is the top 10 in the bracket challenge after the first week.  Sadly, both of my brackets are in the bottom half.  Apparently, it is statistically impossible for me to do better than 15th place  (thank God for technology so that hope is dashed and I can no longer fool myself about my future chances).  Even worse, my son made the top 10.  More results here.

It is good to see the President take time out of his busy schedule to submit a bracket in our competition.

To join, go to http://www.pickhoops.com/CoyoteBlog and sign up, then enter your bracket.

To join, go to http://www.pickhoops.com/CoyoteBlog and sign up, then enter your bracket.  This year, you may enter two different brackets if you wish.

The deadline is Thursday at noon, Eastern time.

Todd Ramsey has won our annual bracket contest - actually, he had it locked up last week statistically, but I did not want to discourage everyone.  Yours truly had his worst finish every, coming in *cough* mumble mumble, but importantly placed ahead of my son Nic, which is all that matters around our household.  The full rankings can be found here.

I thought the finals were great, and I am sure Butler fans will be replaying that last shot in their heads for years, in the same way I can still see Alonzo Mourning or this backdoor cut in my sleep.

To join, go to http://www.pickhoops.com/CoyoteBlog and sign up, then enter your bracket.   More here.

A lot of the lefty sites are gearing up the "poor aren't sharing in the benefits" bandwagon again.  This is usually brought out of the garage whenever someone wants to put a really progressive soak-the-successful tax plan on the table.  So get ready.

The key to parsing their argument is to understand the following distinction:  Do you care about quintiles, or individuals?  Because if you care about quintiles, then there is no doubt that the real median income of the lowest income quintile has not advanced much over the last 15-20 years.  But quintiles are not individuals, and the evidence is that individuals are still doing well, whatever bracket they begin in.  Because you see, while the average for the bottom quintile may not be much higher than the average for that bracket a decade ago, the fact is that the people in that bracket have changed.   As Mark Perry writes:

A common misperception is that the top or bottom income quintiles, or the top or bottom X% by income, are static, closed, private clubs with very little turnover - once you get into a top or bottom quintile, or a certain income percent, you stay there for life, making it difficult for people to move to a different group. But reality is very different - people move up and down the income quintiles and percentage groups throughout their careers and lives. The top or bottom 1/5/10%, just like the top or bottom quintiles, are never the same people from year to year, there is constant turnover as we move up and down the quintiles.

He quotes some stats from Jeffrey Jones and Daniel Heil:

How much income mobility exists in America? Research consistently affirms that there is substantial upward income mobility in the United States, with the lowest income earners typically showing the strongest results. A Treasury Department study of the 1996"“2005 period used IRS income tax data to discern considerable mobility: more than 55% of taxpayers moved to a different income quintile. More than half the people in the lowest fifth of earners moved to a higher quintile over this period (29% to the second, 14% to the third, 10% to the fourth, and 5% to the highest).

Moreover, there is a great deal of movement in and out of the top income groups. The Treasury data show that 57% "of households in the top 1% in 2005 were not there nine years earlier." The rich sometimes get richer, but they get poorer as well. The study also reveals that income mobility has increased, not decreased, during the past twenty years. For example, 47.3% of those in the lowest income quintile in 1987 saw their incomes increase by at least 100% by 1996. That number jumped to 53.5% from 1996 to 2005.

The Pew Economic Mobility Project tried to track actual people, and not brackets, from tax returns.  This is an imperfect science, but the only real way to look at income mobility.  They found that 90% of white children and 73% of black children whose parents were in the lowest income quartile in the base period were later to be found in higher income quartiles.  But this chart, from the same study, is really telling:

(click to enlarge)

That is a pretty amazing picture, marred only by something apparently bad occurring with the kids of middle class African Americans.

So how can there be so much income gain everywhere without the averages for the lower quintile increasing.  I would offer at least two explanations:

1. Immigration. As people gain skills and seniority, they progress to higher income brackets and out of the lower quintile.  However, there is a constant stream of low-skill immigrants moving to this country to fill in the bottom quintile.  It we were to do a quintile analysis apples to apples leaving out new immigrants in the period, I guarantee you would see the median income for the lower quintile increase.  As I wrote before:
   

   Frequent readers will know that I am a strong supporter of open immigration....However, I am tempted to become a close-the-border proponent if the left continue to use numbers skewed by immigration to justify expansions of taxation and the welfare state.  Whether they are illegal or not, whether they should be allowed to stay or not, the fact is that tens of millions of generally poor and unskilled immigrants have entered this country over the last several decades.  These folks dominate the lower quintile of wage earners in this country, and skew all of our traditional economic indicators downwards.  Median wages appear to be stagnating?  Of course the metric looks this way "” as wages have risen, 10 million new folks have been inserted at the bottom.  If you really want to know what the current median wage is on an apples to apples basis back to 1970, take the current reported median wage and count up about 10 million spots, and that should be the number "” and it will be much higher.

   By the way, even for these immigrants, their position in the lower quintile represents upward mobility for them.  Being in the middle of the lower quintile probably is a huge improvement over where they were in their home country - almost by definition, or they would not be working so hard to get here.

2. Safety Net. Some large portion of the bottom quintile are supported by the US government's safety net.  And there are pretty good fiscal reasons why the typical real incomes generated by that safety net have not increased over the last 20 years.  And even beyond the fiscal issues, there are incentives issues as well -- at some point, increasing how lucrative the safety net is can reduce the incentive to get off the safety net and find a job.  Just ask the Swedes.  There is a delicate balance between humanity and sustaining folks vs. killing their motivation.In some ways the left's use of the lack of lower quintile progress as an indictment of American capitalism is wildly ironic.  Basically what they are saying is that the 80% of people who support themselves through capitalist endeavor are doing progressively better but the 20% of the people supported by the government are stagnating -- and therefore we need to increase the role of government.

We had 144 brackets entered (thanks everyone!) and this is the distribution of picks.   Interestingly, the most popular first round upset pick (excluding 9-8 games) was #10 Maryland over #7 California, with 61% calling the upset.  And the majority were right, as Maryland won today over Cal.   Overall the picks show an incredible lack of respect for the Pac-10 and the Big-12, with teams like Cal, Washington, Missouri, Oklahoma, and Kansas getting a lot of votes to fall in early to mid round upsets.  North Carolina garnered the most picks to win it all, followed by Louisville and Pitt.

Brackets are due circa noon Eastern time on Thursday.  Right now we have 107 brackets!  This should be a blast this year.

To join, go to http://www.pickhoops.com/CoyoteBlog and sign up, then enter your bracket.  This year, you may enter two different brackets if you wish.  The detailed rules are here.

Online bracket entry closes Thursday, March 19th at 12:20pm EDT.  Be sure to get your brackets in early.  Anyone can play "” the more the better.  Each participant will be allows to submit up to two brackets.

Kevin Drum posts this chart as a one-picture refutation of McCain's statement that we are living in the best of times.

Um, OK.  We all got wealthier.  And the problem is, what?  That someone else got even wealthier than I did?  So what.  Do we really have to keep refuting this zero-sum economics-of-envy argument?

I won't get into the whole zero-sum thing, because the chart itself proves that the world can't be zero-sum, since everyone got richer on average.  But here is a full refutation of zero-sum wealth arguments.  Also, a zero-sum wealth quiz here.

Looking at changes in income brackets is
always misleading. In the US, most folks are migrating up the brackets
as they age and gain experience. So most folks benefit not just from
the increase in their bracket but a migration to the next bracket.

To this last point, the bottom end of the bracket is being flooded
with new immigrants (legal or not) with poor skills and often no
English. They drag down the averages, again understating how well the
typical person is doing.  Lifetime surveys of individuals rather than percentile brackets always demonstrate that individuals gain wealth over time much fast than this type of analysis demonstrates.  And even the new immigrants at the bottom are presumably gaining vs. their previous circumstances, or else why else would they have immigrated in the first place.

Here is an alternate response to whether we are in the best of times.

By the way, here is an interesting article on why using a single inflation rate for the poor and the rich to get real income growth may be incorrect.  There is an argument to be made that the poor have a lower inflation rate than the rich, thanks to Wal-Mart.

Note: This post sticky through 3/20.  Look below for newest posts.

We had a blast with it last year, so back by popular demand is the annual Coyote Blog
NCAA Bracket Challenge.  Yes, I know that many of you are bracketed
out, but for those of you who are self-employed and don't have an
office pool to join or who just can't get enough of turning in
brackets, this pool is offered as my public service.   

Last year we had close to 100 entries, and we expect more this year.
Everyone is welcome, so send the link to friends as well.  There is no
charge to join in and
I have chosen a service with the absolutely least intrusive log-in
(name, email, password only) and no spam.  The only thing I ask is
that, since my kids are participating, try to keep the team names and
board chat fairly clean.

To join, go to http://www.pickhoops.com/Coyote and sign up, then enter your bracket.  This year, you may enter two different brackets if you wish.

Scoring is as follows:

Round 1 correct picks:  1 points
Round 2:  2
Round 3:  4
Round 4:  6
Round 5:  8
Round 6:  10

Special March Madness scoring bonus: If you correctly pick the underdog in any round (ie,
the team with the higher number seed) to win, then you receive bonus
points for that correct pick equal to the difference in the two team's
seeds.  So don't be afraid to go for the long-shots!   The detailed rules are here.

Bracket entry appears to be open.  Online bracket entry closes
Thursday, March 20th at 12:20pm EDT.  Be sure to get your brackets in
early.  Anyone can play -- the more the better.

Typically, wealthy individuals and investors will work hard to delay declaration of income and to push taxes off as far into the future as possible.  The present value of taxes paid a year from now are less than paying the taxes today.

But over the last several weeks, I have had casual conversations with entrepreneurs and individuals from the moderately to very wealthy, and almost to a one they have said they are trying to pull income into 2007 and 2008 in anticipation of potentially large increases in capital gains tax rates and the rates at the top of the bracket.

On a different topic, a friend and I depressed ourselves in a bar last night laying out the case that the next decade may in many ways be a repeat of the 1970s.  Already, we see both parties reverting to the economic prescriptions they promoted in the 1970s.  Further, this week may herald the beginning of an inflationary monetary and fiscal policy combined with government enforced structural limits on growth (e.g. Co2 abatement policy, trade protectionism, price controls, high marginal tax rates and capital gains tax rates, lending restrictions, etc.)  We are seriously discussing nationalizing a major industry (health care) for the first time since the 1970's (when nationalizing oil was seriously considered).  Currently we have a Republican President who is less market-oriented than his Democratic predecessor, and at least as clueless on economic issues as were Nixon and Ford.  All that's left to do is elect a new Jimmy Carter in 2008...

Congrats to Rob Nieweg for winning the 2nd Annual Coyote Blog bracket challenge!

To win in the Coyote Blog bracket pool.

The others get passed because they don't have the right teams in the finals, despite a lot of good picks to date.  They chose...poorly.  Full disclosure, I am in 44th, but I vault up to 27th with a Florida win.  Go Gators.

I know it has become a cliche to point it out, but I am still amazed we can go through a whole season and a whole bracket of 65 and get down to the same two teams who were in the football championship game.