Ailuropoda economicus

The Jury’s still out on whether humans respond to incentives, but it’s clear that some species do.

The world’s first live broadcast of a panda birth has been called off after experts said the “mother” involved may have been faking the pregnancy to receive better treatment.

Wu Kongju, an expert at the Chengdu Giant Panda Breeding Research Centre where Ai Hin is kept, explained that not all “fake” pregnancies among the animals are just down to hormonal changes.

“After showing prenatal signs, the ‘mothers-to-be’ are moved into single rooms with air conditioning and around-the-clock care,” Wu told Xinhua. “They also receive more buns, fruits and bamboo, so some clever pandas have used this to their advantage to improve their quality of life.”

Photo taken by Kevin Dooley, used under Creative Commons license.

Do addicts need help…

…or do narcissists need mocking?

IN my last year on Wall Street my bonus was $3.6 million — and I was angry because it wasn’t big enough. I was 30 years old, had no children to raise, no debts to pay, no philanthropic goal in mind. I wanted more money for exactly the same reason an alcoholic needs another drink: I was addicted.

Our Galtian Overlords ladies and gentlemen… And oh it gets better…

The first year was really hard. I went through what I can only describe as withdrawal — waking up at nights panicked about running out of money, scouring the headlines to see which of my old co-workers had gotten promoted. Over time it got easier — I started to realize that I had enough money, and if I needed to make more, I could. But my wealth addiction still hasn’t gone completely away. Sometimes I still buy lottery tickets.

What bizarre behaviour, worrying about money and occasionally gambling, I’m sure none of my readers could possibly sympathise.

.@Give_Directly to 1,300 Poor Households in Kenya


Give Directly are my favourite charity and they should be yours too. They give money to poor people. Not just any poor people, but really poor people in East Africa. There’s a minimum of bureaucracy and they are innovating new ways to remove the bureaucracy which currently exists. It is simplicity itself, and it works. And you can donate this month and double your donation.

Supporting Give Directly gives you the warm glow of helping the most needy people imaginable, but more importantly it also gives you the warm glow of having your ideological predispositions confirmed. If you’re anything like me you just can’t beat it. Donate and you too can bask in the heroin-like glow of confirmation bias.

They regularly audit and they get amazing results. Business and agricultural income increased 28% of the average grant size, implying a 28% annual rate of return. With a doubled donation you’ll be getting a 128% rate of return. Plus mental health improves, crime and conflict doesn’t change, it doesn’t cause localised price inflation and it reduces domestic violence and increases female empowerment.

They’ve also begun using community-based targeting: in a subset of villages, they got the community to help them categorize households by poverty level. Wherever there’s cost and bureaucracy they’re looking for ways to remove it. Wherever there is local knowledge they’re looking to use it. So far:

  • Most people think housing materials are the best indicator of poverty — reaffirming the criteria we already use. Furniture and source of income were also popular.
  • People generally agree on how to apply the housing criteria. When we asked communities to categorize each household as “rich” or “poor”, they agreed in 9 out of 10 cases.
  • Engaging local leaders in the process can help, but also raises a risk that they will ask for “compensation” for tasks they are supposed to do for free.

Honestly, if you’re not supporting this charity (I think this would particularly suit Jackart, Chris and Frances) I don’t know what’s wrong with you. Oh, and they have no marketing budget, so yes, you will have to put up with regular half press release, half begging letter posts here, essentially, forever. Or until we end poverty. So its up to you really.

Will Half The UK Be Obese Before 2050? Are The Press Credulous Nincompoops?

No. Yes. For fucks sake, what is wrong with the media? Lots, I suppose, but I’ll concentrate on their innumeracy and credulousness for now. I will also cover their prejudice and scientific illiteracy. Which is a lot to do in under 1000 words, but when you’ve such densely packed stupidity as our Obesity Crisis Bleughly etc. you can really go to town.

First, a little history lesson: in 2007 a report commissioned by the government stupidly predicted that if people continued getting obeser at the same rate by 2015 36% of males and 28% of females would be obese. By 2050, 60% of males and 50% of females would be obese. By the end of the century everyone would be obese and robots would need adamantium reinforcements to maneuver the nation’s vast bulk. A nightmare scenario, I’m sure you’ll agree. Here’s the chart:

British fat

Yesterday, the National Obesity Forum stupidly updated that stupid extrapolation. Rather than half of Britain becoming obese by 2050 they believe this will happen much sooner and that we need to something about this. Especially for the children. It’s always for the children (or the women). Their report helpfully recommends negging on fat people, bullying children who don’t like PE and the creation of government sinecures for ex-Forum busybodies. 

To come up with their dread warning, they’ve used an extra five years of data from the UK to update the projection above. It’s a projection not a prediction because of the data they leave out. If they included data from the US their scaremongering would fail and these busybodies might have to get real jobs: America’s stopped fattening. We don’t need to hypothesise about how fat we could get, we know. None, none more fat.

America fat

Something that can’t go on forever, won’t. That’s a simple thought, but scaremongers know when you’re scared you don’t think. Waistlines can’t expand forever. Eventually a population has to stop getting fatter and now we now know when this happens. America, the land where everything’s big, is no longer the land where everything’s getting bigger. When a third of a society get obese obesity levels off.

Predicting that half of Britain will become obese, when we’ve recently discovered the obesity event horizon should earn you derision. Instead it gets you wall to wall coverage. Incapable of crunching the numbers, the press report as fact a ludicrous projection using incomplete data and biased methods. I don’t want you to confuse my anger with surprise, this is par for the course. Innumeracy and credulousness covered, let’s talk about the press’s prejudice and scientific illiteracy.

Being fat is unhealthy right? Wrong. Okay, not fat, but being obese is bad, right? Wrong. Dead wrong, in fact. And I have a meta-study to prove it.

final_cochrane_logoThe words “I have a meta-study” should inspire joy or dread, depending on your position. A meta-study is a study of studies and they’re incredibly useful. You can read more halfway down this old post on how they save lives and reveal truths that might otherwise be hidden.

We’ve been looking at obesity for a very long time, and lots of individual studies have been done, but each has its own problems and each has its own margin of error. Collating several studies allowed researchers to look at 3 million subjects, from 12 countries, and use only the best data to assess the effects of weight gain on health.

The results might surprise you. They found that people with a Body Mass Index of 18.5-25, the “healthy” people, have higher mortality risk than every group of people up to BMIs of 35. The obese were less likely to die than the “healthy” people and the overweight people were significantly less likely to die than the “healthy” people.

Pick a random 5’4″ woman weighing 8 stone (remember to say hello). She has a higher mortality risk than a 14 stone woman of the same height (say hello to her too). You might be incredulous, you might even be angry: but I have a meta-study.

The below table isn’t very layman friendly, but click through to the paper, or read this op-ed, if you don’t believe me. I’m not saying you should gain weight, or lose weight, I’m saying that weight is a particularly poor indicator of health and that you should care about your weight a lot less. Especially care less about other people’s weight.


Not only are predictions of a looming obesity crisis based on nonsense maths, they’re based on nonsense science and reported by a nonsense press. The press are incapable of holding people with a shiny pdf and a slick press release to account. Because of this its all too easy for people to be bullied and for public health (physical and mental) to suffer.

Policy Bullshit Bingo: Robert Rubin in the @FT edition

I wanted an early night. But Nooooooo. Robert Rubin had to publish something stupid and now I’ve had to stay up to mock it. Scheduled to land at 9am. I hope you’re all feeling bitter this morning.

Debates persist in the US and eurozone about growth and job creation versus fiscal discipline. This false choice diverts fiscal focus away from a balanced approach that could achieve both imperatives.

Yes, it’s a false choice and that is why literally nobody on earth is proposing it.

The US recovery remains slow by historical standards – even if recent signs of improvement are borne out. One reason is that our unsound fiscal trajectory undermines business confidence, and thus job creation, by creating uncertainty about future policy and exacerbating concerns about the will of Congress to govern. Business leaders frequently cite our fiscal outlook as a deterrent to hiring and investment.

Actually, in the US policy uncertainty has come from Republic malfeasance in the legislature. It has nothing to do with fiscal policy.

A sound fiscal trajectory is also a prerequisite for interest rates conducive to growth.

Interest rates are zero, and are low a long way out. I don’t think its the 1990s anymore Mr Rubin. Although your glasses are!


Continued unsound fiscal conditions will almost surely destabilise markets at some future point.

Oh, it will “will almost surely destabilise markets at some future point”? That’s a concrete foundation on which to make policy decisions…


Recent reductions in deficit projections do not change the basic structural picture – except that healthcare cost increases are slowing – and are partly based on sequestration, a terrible policy that already looks too onerous to stick.

Policy successes which address exactly what I worry about do not count. For no specific reason.

In the eurozone, the threat is more immediate. Bond markets in troubled countries were in dire conditions until the European Central Bank’s famous – and as yet unimplemented – 2012 promise to do “whatever it takes”.

The promise was the action. You want to bet against the ECB? No? Then it worked, the plan was implemented.

The right criterion for action, however, is not the absence of alternatives, but an assessment of costs and benefits.

This sentence stands apart as a magnificent example of self-parody.

In the US, there are widely posed questions about the benefits of QE3, but the risks are significant. One is that central bank action will reduce market pressure on political leaders to act.

You read that right. The danger is this policy might work. Then people won’t listen to Robert Rubin’s terrible advice. Never waste a good crisis eh Robert?

Yet waiting too long to tighten heightens the risk of inflation at some point. The Fed’s dramatic expansion of bank reserves could feed excessive credit growth. Along with the possible erosion of Fed credibility on inflation, that could also feed inflationary expectations.

If they are feed inflationary expectations nobody is doing much about it. The TIPS spreads on US debt doesn’t show anything. You can lend money to the US government and get a nominal return guaranteed, or an inflation protected return guaranteed. The difference tells you a lot about expected inflation. If inflation was coming you could sell one and buy the other. But that hasn’t happened. Look at expected inflation from 5 year bonds:

fredgraph (1)

Such a regime should be enacted now to stabilise, or preferably reduce, the ratio of debt-to-gross domestic product over 10 years, and protect discretionary spending. Implementation, designed in ways difficult to undo, should be deferred for a limited period to allow for recovery. Fiscal discipline could provide room for reasonable stimulus to create jobs. The partially cancelled sequestration should be fully rescinded to eliminate its fiscal drag. Fiscal funding should come largely from revenue increases and beginning the entitlement reforms necessary for long-term sustainability – as President Barack Obama has proposed.


Structural deficit reduction would address growing deficits in the decades beyond the next 10 years. The eurozone, too, should reject false choices. Instead, it should strike the right balance between fiscal discipline to win market and business confidence, and macroeconomic room for growth.

Unconventional monetary policy and stimulus can be part of a successful economic programme for a period of time. But they are no substitute for fiscal discipline, public investment and structural reform.

Welcome to your policy elite, they’ve literally learned nothing in the last 15 years. They’ve especially learned nothing in the last 5.

4 charts that prove you know nothing about the housing market

As we all know, Thatcher privatised our housing stock and pocketed the funds. She made billions from Right to Buy and we provided billions in subsidy to the already well-to-do, but she didn’t bother to build any more houses so we got screwed. That’s where our housing problem comes from. A picture tells a thousand words and a big white space probably tells even more:


But not so fast! It might look like a lot of housing is getting built after the war, but that’s misleading. As not so many of us know, we didn’t just build lots of housing, we cleared slums on a vast scale. 15% of the UK’s population was affected and the overall building rate looks a lot less impressive. The blue line (via Neal Hudson) shows the net effect.

Bc-gTOCCIAAb2CU The post-war years still look good, but at a lot less stellar. Thatcherism doesn’t come out of this well, but New Labour? They look good. Which was news to me, as I’m sure it’s news to you. the housing stock expanding at its fastest rate for decades during the mid-2000s…despite us…not really building many houses. “Hang on, how does that work?” you’ll be asking. “Don’t worry.” I say, “this is 2014 and all explanations now come in chart format!”

Bc-igZLCEAA770k (1)

What this graph shows, again from Neal Hudson, is that houses were being built, but they were also being subdivided and other stock was being brought into use. Houses were cut in half (or more) and commercial properties were converted. The high prices that tight housing supply created actually caused the number of terraced houses in London to decrease from 2001-2011, such was the rate of flat conversions. So New Labour did have a solution and it was high prices. But it would be remiss to blame New Labour, when you can blame Old Labour. There’s bipartisan support for that.

Not so fast! As a different all of us know, it was the Town and Country Planning Act of 1947 that caused the housing shortage. The 1930s saw a phenomenal rate of private home building, far in excess of anything achieved before or since, only brought to a standstill by Hitler and rearmament. Private builders can build lots of housing and the Planning Act is one reason they didn’t when the state stopped building. But there’s no wishing away the Planning Act for a magical return to the 1930s.


“Build more houses” is a good rally cry, but how? NIMBYs have rights. These rights are property rights. When they bought their houses they also bought the right to block other building nearby. This wasn’t a mistake, this is what they were told and what people consider normal. That’s a right in anyone’s book. If we want to build more housing we will have to expropriate them or buy them. And they ain’t selling cheap.

You know nothing about the housing crisis and that any easy solution you have is wrong (except maybe a simple plan). You should also realise there’s no libertarian solution to the housing crisis through deregulation. These rights are held inalienable. The same rights block a social democratic solution of more council housing. The only thing that remains is a Stalinist solution: the socialisation of property rights and the liquidation of NIMBYs as a class.

If you want to blame Attlee, Blair or Thatcher for the housing crisis you haven’t been paying attention. And you’re not nearly being ambitious enough with your cliches. The real villain behind the housing crisis, if there is one, is Hitler. And like Hitler the only solution will be Stalin.

UPDATE: Now with bonus chart!

A very good point, and one which partially vindicates the slowdown in homebuilding in the 1980s (although not its continual stagnation). The below chart shows the deceleration, stall and gradual increase in population growth from 1960-2010. Graph of United Kingdom: Population growth (annual %)

If negative interest rates are a tax then positive interest rates are a subsidy from the future

I find people’s instinctive negativity about about negative interest rates a little annoying. This post is particularly strange. I pick it out for no other reason than Frances Coppola tweeted it.

Interest rates are kind of a fiction. When we save we’re buying something now to sell later, that is what is actually happening and it is intermediated by finance. Islamic Finance has a much clearer mechanism to illustrate this. People do not expect the European economy to be much large in the medium term than it is now, this means that  durable assets, equity and other savings vehicles won’t be worth much more either this makes finding a positive return difficult.

This has nothing to do with Keynesian ideas of natural rates of interest or socially optimal policy. Transmitting purchasing power through time is just really difficult so periods of negative interest rates shouldn’t be seen as an aberrant tax but as a consequence of technological stagnation in finance or terrible macropolicy making.

I think you can make a very strong case for bot. Finance has grown faster than the rest of the economy since the 1940s but it hasn’t proven four times as effective at intermediating.


I’m on record calling the ECB insane and I’ll do it again. Bad policy making is an incredibly important reason for why interest rates might go south of zero. It’s difficult to be confident we’ll be richer in the future than the past when unemployment in Europe is doing this:


At the moment far too many people want to buy stuff now relative to the future. Ten percent of firms close each year. You need to spend one percent of your home’s value on upkeep each year. This is another way of saying that buying stuff now and then selling it for more in the future is a pretty amazing thing, low interest rates, even negative interest rates are nothing to be amazed by. They’re the only way to reconcile the present and the future.