Coyote Blog

New study results, via Tyler Cowen:

We estimate the effect of extreme weather on life expectancy in the US. ... However, the
increase in mortality following extreme heat appears entirely driven by
temporal displacement, while the increase in mortality following
extreme cold is long lasting. The aggregate effect of cold on mortality
is quantitatively large. We estimate that the number of annual deaths
attributable to cold temperature is 27,940 or 1.3% of total deaths in
the US. This effect is even larger in low income areas. Because the
U.S. population has been moving from cold Northeastern states to the
warmer Southwestern states, our findings have implications for
understanding the causes of long-term increases in life expectancy. We
calculate that every year, 5,400 deaths are delayed by changes in
exposure to cold temperature induced by mobility. These longevity gains
associated with long term trends in geographical mobility account for
8%-15% of the total gains in life expectancy experienced by the US
population over the past 30 years. Thus mobility is an important but
previously overlooked determinant of increased longevity in the United
States. We also find that the probability of moving to a state that has
fewer days of extreme cold is higher for the age groups that are
predicted to benefit more in terms of lower mortality compared to the
age groups that are predicted to benefit less.

Your welcome, America. 

Via the Washington Post:

It has become a Capitol Hill ritual: A few senators, always including the New York Democrat Charles E. Schumer, introduce a bill to punish China
if its leaders do not raise the value of the nation's currency. Photos
are taken, news releases are issued, but nothing really happens.

This
year, the atmosphere on the Hill is markedly different. Powerful
senators from both sides of the aisle, Schumer among them, are pushing
two bills that threaten retaliatory action if China does not budge. For
the first time, the idea is gaining broad support. The bills are moving
swiftly through the Senate, and many analysts expect one will pass.

If the bill's authors are successful, the effect at a minimum will be to raise consumer prices in the United States and lower them for Chinese citizens.  So we are going to "punish" China by making our own citizens pay higher prices.  How does this make any sense?  Also, in the process, let's make sure we reduce the capacity of China to buy US government debt, which to this point has been reducing the cost of the Federal budget deficit.

Tyler Cowen argues this is the best we can expect -- the worst is a substantial debalization in the Chinese economy... and ours.  I wrote much more on continuing to allow the Chinese government to subsidize American consumers here.

From Tyler Cowen:

The power of wealth creation to produce net value is extraordinary.
Most of America's poor are already among the best-off of all humans in
world history.  We should be putting our resources, including our
advocacy and our intellectual resources, into wealth creation as much
as we can.

From Marginal Revolution:

The FASAB has asked
that the United States government start including future Medicare and
Social Security liabilities in current budget deficit figures:

Monday,
the Federal Accounting Standards Advisory Board released a proposal in
which the government would have to account for the cost of future
Social Security payments year by year as people build up entitlements.

Seen in advance of its release by the Financial Times, the switch in
accounting practices would be an international accounting anomaly, as
most other governments treat social insurance as a political commitment
to pay future benefits rather than a financial liability, the newspaper
said.

The FASAB is made up of six independent members who support the
proposal and three opposing members from the U.S. Treasury, the White
House Office of Management and Budget and the Government Accountability
Office.

I support this change despite the fact it may result in what I consider bad outcomes (e.g. big tax increases) as the magnitude of future liabilities become clear.  Tyler Cowen also argues it may make these programs harder to scale back, since it shifts the future payments from a political promise to a financial commitment.  But just like free speech, one has to be consistent in one's support for transparency.

If this all seems arcane to you, let me give you some perspective.  Today, Jeff Skilling was given over 30 years in jail for various accounting-related frauds, supposedly hiding losses and liabilities from shareholders's view.  But what Skilling was convicted of doing were minor, subtle accounting tricks involving penny-ante sums of money compared to the egregious games Congress plays with accounting for the federal government's future liabilities.  Skilling was accused, for example, of booking future liabilities in certain joint ventures where they were hard to find; the feds, in contrast, do not book future liabilities at all.