Maternity Photoshoot

This winter during a family reunion, I had the honor of doing a maternity photoshoot for my oldest cousin and "cuzzle" (family nickname for cousin-in-law). They are expecting a little boy!

We were working with a time crunch; it was freezing outside and the shoot lasted only ten minutes! Thankfully within that time I was able to find a nice corner of their neighborhood to take pictures in, and they were very willing models! These are a few of my favorites from the day.

The photoshoot went beautifully and since I was able to edit the pictures the same day, my cousins, the new-grandma, and the new-great-grandma all got to sit down in the living room and look through all of the photos together.  

Aren't they just the sweetest couple?!

I might start sharing more photoshoots on my blog, since photography is another great passion of mine. Over the past year I've had the honor of doing a couple of senior photoshoots and even being the second photographer at a wedding! 

The baby is coming soon, and the whole family is excited for the first wuzzle! (Have I mentioned that my family is crazy? My cousins decided that the new baby would be our "first cousin once removed" and hence would be our first Wuzzle).

Best of luck to the new family! :)

Beware of Greeks Bearing Bonds

Once again, the news is full of opinions that Greece might be forced to leave the Euro. Once again, it makes little sense to me. U.S. corporations, municipalities, and even states default, and do not have to leave the dollar zone as a result.

Most recently, the story goes, if Greek banks can't use their Greek government bonds as collateral with the ECB, the Greek government will have to leave the euro so it can print Drachmas to bail out the banks. There are of course many ways in which this makes little sense -- if the bank has promised Euros, then a Drachma bailout does not stop a default. The government would have to pass a law "converting" euro deposits to Drachmas. But consider the story anyway.

Another common story right now: If Greece were to default, it would have a hard time borrowing to fund primary deficits. By leaving, it can print up Drachmas to pay bills.

OK, here's the obvious solution: Greece can print up small-denomination zero-coupon bearer bonds, essentially IOUs. They say "The Greek government will pay the bearer 1 euro on Jan 1 2016." Greece can roll them over annually, like other debt. Mostly, they would exist as electronic book entries in bank accounts, but Greece can print up physical notes too.


Who will buy? Most of Greece's spending is transfer payments, to pensioners, health care, government workers, and so on. Greece can pay all of these with IOUS. It can "recapitalize" or lend to banks with these.

Sure, they'll trade at a discount. Probably a hefty discount.  If Greece accepted the IOUs at face value for tax payments, however, the discount might not be that large.  Mostly, the discount would reflect risks that Greece either change its mind about accepting its own debt for tax payments, or that it would suspend the roll over, essentially defaulting on this new class of debt.

Yes, this proposal amounts to creating a separate or dual currency, while staying on the euro. That is exactly the point. Not only does a country in default not need to change currencies, in modern financial markets, a country doesn't even need the right to print money in order to, well, print money! Bonds are money these days. There's the Drachma conversion, devaluation and inflation so many commenters desire, can happen (the latter when promises are inevitably broken) all  without leaving the Euro.

I gather California did something similar recently, paying bills with transferable IOUS and thus avoiding the prohibition on states printing money. Commenters let me know if you remember the details.

To be clear, I don't recommend this path! This is a theoretical-possibility blog post, not an advice-to-Greece blog post. (Advice remains, stop fooling around, massive structural reform tomorrow morning, grow like crazy, pay off debt.) And yes, it would be a horrible fate for government workers and pensioners. However, maybe better than the alternative: "leaving the euro" means having bank accounts (what's left after the run) transformed to inconvertible drachmas, and being paid in drachmas, with the whole point is to inflate away the value of the same government claims. So promises for euros might be better. Who knows, maybe eventually the Germans and the IMF might pay these off too.

This works nicely as a matter of economics. If readers know what would stop Greece from doing it legally, I would be curious to know. Of course, "the Germans aren't that dumb" is one good answer, and such debt would count against the debt and deficit limits. But that doesn't really get at the question. The question is, do the legal restrictions against Greece printing money and spending it in the euro would stop Greece from printing up "debt" and paying bills directly with such debt rather than raising euros on capital markets?  Opinions?

Update

There are lots of different ways to market the same thing, and skirt pesky laws and international agreements. Another: sell "tax indulgences." For 95c today, you can buy a transferable coupon that is acceptable for 1 euro of tax payments next year. This is nicer actually as there is no need to default or roll over. The "roll over" happens automatically. Taxpayers cash in this year's indulgences, the government sells next year's.

Bachmann, Berg and Sims on inflation as stimulus

Rüdiger Bachmann, Tim Berg, and Eric Sims have an interesting article, "Inflation Expectations and Readiness to Spend: Cross-Sectional Evidence" in the American Economic Journal: Economic Policy.

Many macroeconomists have advocated deliberate, expected inflation to "stimulate" the economy while interest rates are stuck at the lower bound. The idea is that higher expected inflation amounts to a lower real interest rate. This lower rate encourages people to spend today rather than to save, which, the story goes, will raise today's level of output and employment.

As usual in macroeconomics, measuring this effect is hard. There are few zero-bound observations, fewer still with substantial variation in expected inflation.  And as always in macro it's hard to tell causation from correlation, supply from demand, because from despite of any small inflation-output correlation we see.

This paper is an interesting part of the movement that uses microeconomic observations to illuminate such macroeconomic questions, and also a very interesting use of survey data. Bachman, Berg, and Sims look at survey data from the University of Michigan. This survey asks about spending plans and inflation expectations. Thus, looking across people at a given moment in time, Bachman, Berg, and Sims ask whether people who think there is going to be a lot more inflation are also people who are planning to spend a lot more. (Whether more "spending" causes more GDP is separate question.)

The answer is... No. Not at all. There is just no correlation between people's expectations of inflation and their plans to spend money.

In a sense that's not too surprising. The intertemporal substitution relation -- expected consumption growth = elasticity times expected real interest rate -- has been very unreliable in macro and micro data for decades. That hasn't stopped it from being the center of much macroeconomics and the article of faith in policy prescriptions for stimulus. But fresh reminders of its instability are welcome.

At first blush, this just seems great. Finally, micro data are illuminating macro questions.


It's cleaner than the  Hagedorn, Manovskii and Mitman paper I blogged last week, because many of the aggregation issues are absent. There, I complained that employment in one state might be  gained by business moving from another, which would not be an available channel for the whole economy. Here, if we know that people who expect more inflation spend more, it's an easier jump that if we all expect more inflation we all want to spend more. This aggregation problem is usually one of the biggest stumbling blocks for the project to measure macro effects from micro data.

Now, for a little whining. This isn't really criticism as I don't know how to do any better. But it does make for a very well-done example in which to ponder the limitations of the micro evidence on macro questions methodology.

Here are Table 1 and 2, the "baseline specification."

It's a probit regression. The left hand variable is whether a person answered yes or no to the question,

Q1: “About the big things people buy for their homes—such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or a bad time for people to buy major household items?” 

The main right hand variable, ("Inflation expectations (1Y)") is the answer to the question,

Q2: “By about what percent do you expect future prices to go (up/down) on the average, during the next 12 months?”

The main fact is that the top row of numbers are all essentially zero, decently well measured, and nonetheless statistically insignificant. Where it is significant, in the zero-bound years, it's negative -- higher inflation expectations are associated with plans to spend less, not more!

So far, so good. But what are all those other numbers in the table? Well, these are "controls," extra right hand variables in the regression.

What in the world are they doing there? The fact is not "people with higher inflation expectations don't plan to spend any less." The fact is that "people with higher inflation expectations, holding constant their expected financial situation and income, their expected change in nominal interest rate and aggregate business conditions, ..., a long vector of aggregate variables, and then the whole Table 2 of demographic variables, don't plan to spend any less." Hmm.

The long list of "controls" brings back memories of all the regression horror stories I was taught in graduate school (thank you Tom Rothenberg).

Left shoe sales = a + b price + c right shoe sales + error. 

Wage = a + b education + c industry + error. 

(In case the latter isn't obvious: including industry helps a lot to "explain" wages and raise R2. But the point of education is to let you change industries from fast food to computers, so you absolutely do not want to "control" for industry!)

What are all the controls doing here? Could we not at least start with OLS, a clean digestible fact, or a graph so that poor bloggers have something to brighten up posts?

I asked the correspondent who sent me the paper (thanks) who opined that the referees probably made the authors do it, and out of a reasonable concern. Maybe the correlation between inflation expectations and spending plans across people does not measure the causal effect, what if we change inflation and leave other things constant?  It could well be that the correlation of expectations across people is zero, reflecting other forces at work, but if we raise everyone's inflation expectations, then we would raise everyone's spending.

Most simply, just because we put inflation expectations on the right hand side of a regression and spending on the left, does not mean that changes in inflation expectations across people cause their spending plans to change.

Demographic controls seem reasonable. Suppose the fact was that women all expected higher inflation and planned to spend a lot, while men expected low inflation and did not plan to spend a lot. One would not want to use that correlation to measure how increasing expected inflation for all of us would affect our spending. Such a demographic correlation is much more likely a result of other causes affecting both variables (inflation expectations and spending). This really remains the deep issue of micro to macro implications: Does a correlation across people tell us what happens if something affects all of us?

But if demographic controls changed the result a lot over OLS, one would be very suspicious. A correlation that survives controls is a lot more persuasive than a correlation that only emerges with controls. It's much nicer to say there is a raw correlation, and verify that it is not the result of differences between demographic groups, than to say the correlation is only measured after demographic controls. Because no set of controls is perfect. (The implicit assumption "my controls perfectly capture all the reverse causation or all third variable influences" pervades regression analysis.)

Many of the controls are macro variables. There are almost as many controls here as time data points. Year dummies would have removed all the time-series variation and left us the pure cross section a lot more simply.

The first set of controls for other expectations strikes me as the most fishy. Why would we measure the effect of a change in expected inflation holding constant expected unemployment? The whole point of the macro experiment is to raise both expected inflation and to lower expected unemployment.

This is the hard nut of all regression analysis: why does the right hand variable vary? People spend a lot of effort on the left hand variable, but that's actually less important. What caused the variation in your data? We don't have randomized experiments. Why is it that households have such widely (insanely!) varying expectations of inflation? Until we know that, it's really going to be hard to tell whether their similarly widely varying spending plans are because of higher inflation expectations, or because inflation and spending plans are both results of some third cause.

The paper isn't much help on this issue. At least I wish they (or much of any regression work) at least asked the question. They don't even really discuss the "controls" in this way; why expected inflation varies, and then control for determinants of expected inflation that are correlated with determinants of spending.

The discussion of the control variables sounds a lot like the habit of assuming everything on the right is a "cause," and fishing for R2, like left shoes in the right shoe equation, and industry in the wage equations.

With respect to the coefficients on the economic control variables, we obtain for the most part plausible and significant estimates,... the expected financial situation of the household and its real income, the expected business conditions (idiosyncratic and aggregate), the current financial situation, and the current real household income all have significantly positive effects on the reported spending readiness. In addition, a positive judgement of US economic policy also affects spending dispositions positively. Moreover, an expected increase in future nominal interest rates makes people want to spend more today,  while higher economic uncertainty in the form of stock market volatility, inflation volatility and higher unemployment rates (both current and expected) decrease the probability that people find buying conditions favorable ...

But enough whining. My point is that micro, regression-based analysis has its limitations too. This seemed like a good example on which to remind graduate student readers of common regression pitfalls: Always ask what caused the variation in the right hand variable. Use minimal controls, not the kitchen sink. Make sure the partial effects of your regression (move x holding z constant) make sense. And so on.

But I don't think I could have done better, as making sense of why people's expectations are as widely dispersed as they are seems a big challenge.

It's still a powerful observation, and I trust it's there in the OLS with minimal controls. People who expect more inflation do not plan to spend more. If you think raising all our expected inflation will make us all spend more, you have some creative explaining to do.

Update: Eric responds:

On your point about all the control variables . . . we did (more or less) what you suggest in the blog post. If you look at Table 3, we drop all of the idiosyncratic control variables in one specification and get essentially the same results; also in Table 3 we do the version with time fixed effects instead of aggregate controls. If you go to the online appendix, in Table 8 we show raw correlations between expected inflation and buying attitudes. We also split the raw correlation by a large number of different demographics. In Figure 7 we show plots of time-varying raw correlations between expected inflation and spending attitudes -- it is the analog of Figure 6 in the main paper which plots a time-varying marginal effect based on the probit estimation. Basically this all shows exactly what you ask for in the blog post -- the correlation/coefficient between expected inflation and buying attitudes does not depend on the controls.

I admit not reading all the way through or the online appendix. They also confirm that the early drafts started with raw correlations. There is an interesting writing (and editing and refereeing) conundrum, should a paper start with the "main" result, or should one start with suggestive robust facts and correlations and then address objections with a more sophisticated model. It's not an easy question -- Most papers drag you through 10 tables of motivation and summary statistics and suggestive correlations before getting to the point, and I really admire that this paper had the main result on Table 1.  OTOH, by going the other way around busy bloggers miss the interesting correlations in online appendix Table 8!

Considering the Riddles of 'Unexplained Phenomena'

 The materialized 'Katie King' is shown with the entranced medium Florence Cook and Dr. J. M. Gully.

 

 

In this article, I am considering reports about interaction with the communicators from the ascended realm who are known as 'John King' and 'Katie King' in the annals of Spiritualism.  To develop a perspective of these entities, one consideration is some of the occurrences reported in A Biography of the Brothers Davenport (1864) by T. L. Nichols, M.D.

Ira Erastus Davenport and William Henry Davenport were born in 1839 and 1841.  A sister, Elizabeth Louisa, was born in 1844.  The family resided in Buffalo, New York.  In 1846 the family heard raps and various other strange noises.  Four years later, there was news of "the Rochester Knockings" in relation to the Fox family.  When the Davenport family seated themselves around a table to see what would develop, a complex sequence of strange and bizarre events began to unfold.

One incident involved the younger brother, William, glimpsing a stranger "so tall that he can scarcely stand up in this room . . . a real giant" although other family members saw nothing.  "The boy said, 'He says he is not of this earth; his name is William E. Richards . . .'"  Soon thereafter "the home of the Davenports was filled, day and night, with eager enquirers" as seances began to be held regularly.

At the morning and evening parties of curious investigators into these strange phenomena, there were now not only heard the ringing of bells, thrumming of musical instruments, movements of various objects without apparent cause, including the three Davenport children, but hands, seemingly human, were both felt and seen.  A hand and part of an arm would rise above the table, plainly visible, and allow itself to be felt for a moment, when it would dissolve, melt into air in the very grasp and under the eyes of the spectator.  Then a voice, coming out of space, at first inarticulate, but later condensed as it would seem in a large horn or trumpet provided for the purpose, spoke distinctly to them, conversed with them, answered their questions, and advised or directed their proceedings.

The voice was asked, among other things, what was its name. It replied that names were of no consequence — one would do as well as another, and they might call it ' John King,' which they do to this day, or familiarly ' John.'  This ' John,' the name of a voice, said to the father of the Davenports that he must take his two sons away from Buffalo, that it was dangerous for them to stay, and that they were needed elsewhere.

The biographer of the brothers in his book commented:
  

It will be observed that I have ventured no opinion, and offered no theory, respecting the nature of this intelligent force.  It called itself, in the first instance, 'Richards'; then it adopted the name of 'John,' or 'John King.'  It, or something, professed to be ' George Brown, of Waterloo,' who had been murdered for his money; and it, or something else, declared itself to be ' John Hicks,' poisoned by his wife, like ' Hamlet's father.

Then —

It was not long after the Davenport Brothers commenced to visit places where they were unknown, and where the wonders exhibited in their presence, and to which their presence seems to be in some way a necessary condition, created an intense and wild excitement, breaking out at times into blind and violent opposition and persecution, before tests began to be required to satisfy people more or less that they were not imposed upon by artful jugglers.

News of the Davenport family engendered among people a response of antagonism.  While holding an exhibition seance in Maine, a rabble of drunken sailors had been paid to drive the Davenport brothers out of town.  The assailants were overcome.  The author wrote:

"Well," I said to Mr. Ira Davenport, when he had got so far in the narrative of this affair, as I have substantially given it, "what happened then?  Did you go away and try some less belligerent neighbourhood !"

"No; we stayed there.  ‘Morgan’ told us to go on."

"But a while ago it was ‘John,’ or ‘John King,’ who seemed to have the direction of your affairs."

"Yes, but at this time it was Henry Morgan, the buccaneer.  We had some more seances and from that time everything was perfectly quiet and satisfactory."

I am not sufficiently familiar with the life and character of Captain Henry Morgan to be able to say whether he was a likely person to manage such manifestations as were given in presence of the Brothers Davenport, but a bold buccaneer ought to be ‘some’ in a fight.

Consistent blog readers may recall the statement from a 'controlling spirit' speaking through trance medium Mrs. J. H. Conant in 1869: ". . . In the first place, it should be understood that these séances are not controlled at all times by the same spirit, but for each occasion an intelligence is selected best adapted to that occasion."

Eventually chroniclers of Spiritualism would share their own experiences in relation to the entities known as 'John King' as associated with Henry Morgan, his wife 'Katie Lambert' and their daughter 'Katie King.'  Nandor Fodor wrote in Encyclpaedia of Psychic Science (1966) about John King: "In the early years of English spiritualism it was the aspiration of many mediums to secure his influence.  Mrs. Marshall was the first, Mrs. Guppy, Miss Georgina Houghton, Mrs. Firman, Williams, Eglinton and Husk followed, whilst in America he was claimed by the Holmeses and Mme. Blavatsky in her early career . . . In comparatively recent times John King took charge of the physical phenomena of Mrs. Wriedt in London.  He greeted the sitters of Williams' and Cecil Husk's circle by their names . . . He said in many messages that Eusapia Paladino was his reincarnated daughter but he seldom spoke, if so only in Italian and through the entranced medium."

Many photographs of the materialized 'Katie King' were taken by William Crookes and the photos that have been preserved may be viewed via a Google Images search.  It has been reported that the original photos taken by Crookes were destroyed after his passing.  The fact that the materialized Katie King resembled medium Florence Cook has been hastily assumed by some people as evidence of fraud when the conditions for such a predicament have been articulated in Spiritualist accounts.

William Crookes (1832-1919) was a prominent physicist and chemist honored with many prestigious awards.  He had presided for intervals over such organizations as the Royal Society, the Chemical Society, the Institution of Electrical Engineers, and the British Association.  Readers knowledgeable about materialization phenomena who have read his testimonials will wonder what it is that may make the human mentality susceptible to any manner of rationale to deny or reject eyewitness testimonials such as those of Crookes about the mediumship of Florence Cook (1856-1904) and the materializations of 'Katie King.'  Letters of Crookes on these topics were published in Spiritualistic journals and are included in his book Researches in the Phenomena of Spiritualism (1874). 

During seances, Crookes discovered that when Katie appeared she "was as material a being as Miss Cook herself" when manifesting.  Medium Florence Cook was a fifteen-year-old schoolgirl at the time.  A curtain separated the library ("used as a dark cabinet") with the medium from where the seance participants were sitting in the adjoining laboratory for the seances in the home of Crookes.

 

The following excerpts are from his book’s final section "The Last of Katie King" subtitled "The photographing of Katie King by the aid of the electric light."  Five sets of photographic apparatus were utilized with Crookes being aided by an assistant.  Altogether Crookes obtained "forty-four negatives, some inferior, some indifferent, and some excellent."
 

One of the most interesting of the pictures is one in which I am standing by the side of Katie; she has her bare foot upon a particular part of the floor.  Afterwards I dressed Miss Cook like Katie, placed her and myself in exactly the same position, and we were photographed by the same cameras, placed exactly as in the other experiment, and illuminated by the same light.  When these two pictures are placed over each other, the two photographs of myself coincide exactly as regards stature, &c., but Katie is half a head taller than Miss Cook, and looks a big woman in comparison with her.  In the breadth of her face, in many of the pictures, she differs essentially in size from her medium, and the photographs show several other points of difference.

 But photography is as inadequate to depict the perfect beauty of Katie's face, as words are powerless to describe her charms of manner.  Photography may, indeed, give a map of her countenance; but how can it reproduce the brilliant purity of her complexion, or the ever-varying expression of her most mobile features, now overshadowed with sadness when relating some of the bitter experiences of her past life, now smiling with all the innocence of happy girlhood when she had collected many children around her, and was amusing them by recounting anecdotes of her adventures in India? 

 
One evening I timed Katie’s pulse.  It beat steadily at 75, whilst Miss Cook’s pulse a little time after, was going at its usual rate of 90.  On applying my ear to Katie’s chest I could hear a heart beating rhythmically inside, and pulsating even more steadily than did Miss Cook’s heart when she allowed me to try a similar experiment after the séance.  Tested in the same way Katie’s lungs were found to be sounder than her medium’s, for at the time I tried my experiment Miss Cook was under medical treatment for a severe cough.

Your readers may be interested in having Mrs. Ross Church's, and your own accounts of the last appearance of Katie, supplemented by my own narrative, as far as I can publish it.  When the time came for Katie to take her farewell I asked that she would let me see the last of her.  Accordingly when she had called each of the company up to her and had spoken to them a few words in private, she gave some general directions for the future guidance and protection of Miss Cook.  From these, which were taken down in shorthand, I quote the following: "Mr. Crookes has done very well throughout, and I leave Florrie with the greatest confidence in his hands, feeling perfectly sure he will not abuse the trust I place in him.  He can act in any emergency better than I can myself, for he has more strength."  Having concluded her directions, Katie invited me into the cabinet with her, and allowed me to remain there to the end.

After closing the curtain she conversed with me for some time, and then walked across the room to where Miss Cook was lying senseless on the floor.  Stooping over her, Katie touched her, and said, "Wake up, Florrie, wake up!  I must leave you now."  Miss Cook then woke and tearfully entreated Katie to stay a little time longer.  "My dear, I can't; my work is done.  God bless you," Katie replied, and then continued speaking to Miss Cook.  For several minutes the two were conversing with each other, till at last Miss Cook's tears prevented her speaking.  Following Katie's instructions I then came forward to support Miss Cook, who was falling on to the floor, sobbing hysterically.  I looked round, but the white-robed Katie had gone.  As soon as Miss Cook was sufficiently calmed, a light was procured and I led her out of the cabinet.

"Was It Katie King?" is the title of an article that appeared in the December 1874 edition of The Galaxy magazine.  F.J. Lippitt wrote about attending a series of seances in Philadelphia, where the 'Katie King' that manifested showed a somewhat different appearance and mannerisms from those reported of the London counterpart.  The Philadelphia exhibition seances had been arranged by Dr. Henry Child, who Lippitt wrote had informed him that Katie "was the daughter of a famous pirate known as John King . . . and that this was the third sitting of the circle at which she had appeared."

In answer to questions, she said she used to go to Mr. and Mrs. Holmes's sittings in Quebec Street, London; that she had been in the spirit world over one hundred years; that she was eighteen years old when she went there; that her father was a pirate captain, known as "the pirate Morgan," but whose real name was King, and that this was her name.

Lippitt also questioned the materialized 'John King.'

. . . he said he was the same John King that produced the physical manifestations at Koontz's house in Ohio some years ago, and who accompanied the Davenports; that he died some two hundred years ago; that he was called "Commodore Morgan"; that he was not happy yet, "it requiring a very long time to atone for such deeds as his."


. . . he said he was born in 1636, and was knighted by Charles II.

 
At another sitting Katie returned a blank page of note paper with a handwritten letter stating —

Flowers are not trifles, as we might know from the care God has taken of them everywhere.  Not one unfinished; not one bearing the mark of a brush or pencil.

Fringing the eternal borders of mountain ranges; growing on the pulseless head of the gray old granite; everywhere they are harmonizing.

Murderers do not ordinarily wear roses in their button-holes.  Villains seldom train vines over their cottage doors.

Katie King

Lippitt mentioned the handwriting was unlike that of Mr. Holmes except for the formation of the two capital Ks.

But those who have investigated this strange subject tell us there is strong testimony tending to show the existence of a certain psychical relation between the alleged spirit and the medium, causing sometimes a resemblance between them in their modes of action, and even in their personal appearance.

Lippitt described the variety of characteristics he had seen among the many different faces that appeared during the seances.

The complexion of most of the faces was anything but natural.  Some of them, of a dead white, looked like plaster busts, and others more like wax figures than real flesh and blood.  Again, in all of them (except Katie King) there was, more or less, a fixedness of look and immobility of features.  This was even the case, in some degree, with John King while he was talking with us.

Now I closely watched Katie King's countenance through an opera glass every time she appeared, and I invariably saw that, on her face being first visible, the eyes, as well as her other features, were perfectly natural in their appearance, the eyelids having all the mobility of those of a living person; but several times, after her face had been a little longer visible than usual, the eyelids lost their mobility, the whites of the eyes became glassy, and began to prolong themselves downward, looking like viscid masses about to roll down her cheeks!  Of this change she always seemed to become suddenly conscious, hastily withdrawing her face from the window [curtained circular aperture in the materialization 'cabinet']; at which, after a few moments, it would appear again, with the eyes as natural as at first.

5.  Supposing Katie King to be a spirit, is she the identical Katie King that has been showing herself in London for the last three years to Professor Crookes and others?

The picture taken of her [Katie King] in London by magnesium light, in which Dr. Gully is seen holding her hand, represents a totally different person.  There is not the slightest trace of a likeness between them.

. . . our Katie seems to have been somewhat confused about her name.  At first she told us her father's real name was King, though he was known as "the pirate Morgan."  Afterward, she told us the reverse of this: that his real name was Morgan, and that her own name was "Annie Morgan."  At the London Katie's farewell appearance she gave her name as "Annie Owen de Morgan"; and though this was on the 21st of May last, nine days after our Katie King began her appearances in Philadelphia, she made no allusion to her exhibitions in America.

But whether she be "Miss de Morgan" or not, our American Katie would really seem to be the spirit of some English country girl who may have died two hundred years ago.  "Her speech bewrayeth her."  "Of course," she pronounces "of coorse"; "nice" she calls "noice"; "I'll thump you" she pronounced "I'll thoimp you."  Her favorite epithet "stupid" she pronounced like the English, and  not like most Americans, "stewpid."

Also in 1874, the book by Henry T. Child, M.D. was published Narratives of the Spirits of Sir Henry Morgan and His Daughter Annie, Usually Known as John and Katie King.  The book was subtitled: "Giving an Account of Their Earth Lives, and Their Experiences in Spirit Life for Nearly Two Hundred Years."  The narratives are comprised of descriptions of their separate experiences on Earth, the perspectives of each concerning their experiences in 'spirit life,' and 'joint experiences.' 

The narrative of John King includes a statement that Henry Morgan was "the name I had assumed, and by which I was always known during my earth-life."  One of the metaphysical perspectives stated in this narrative concerns the concept of a Judgment Day.

Much has been said of a day of judgment, and a great Judge.  I soon found that that day was all the time, and that Judge was the conscience in the interior depths of our own souls.

 
In the Introduction to the chapters about "Annie Morgan, usually known as Katie King," her narrative begins:

My dear friend and brother:—

I should be very sorry if you inferred from the manner in which I appear and speak to you and other friends when I am materialized, that that is a criterion of my present condition, and that the rude and trifling manner in which I sometimes express myself, on these occasions, is a real reflection of my interior state. 

 

. . . whenever a spirit approaches a medium, it must be more or less materialized, first to come into the atmosphere of the earth and then into that of the medium.  If it present itself in a materialized form it is obliged under a law to appear, as nearly as may be, as it was when it passed from the earth.  Thus a child of earth though grown to maturity in spirit-life, returns as a child.  Deformed persons present their deformities with precision.  This refers to their first appearances.  After much experience we are able to modify our forms, so as to approach nearer to our interior conditions.  Sometimes children after they have become accustomed to materialization, are able to present themselves in the adult form, to which they have attained in spirit-life.

Spirits retain not only the recollection of their earthly conditions and appearance, but also the power of assuming them in spirit-life whenever it is desirable.  You will see the importance of this power of maintaining or recurring to the primitive conditions of spirit-life at least for a time, and until all those to whom a recognition is necessary shall have passed into that state, and this power is retained, so as to be easily excercised until after all who are living on the earth at the time a spirit enters this world have also passed on, so that the new-born spirit can not fail to recognize its friends and relatives.

I am requested to say to you that all spirits when they return to earth, whether they communicate or not, are absolutely subject to this law. 

 

 

We intend to visit and aid mediums in this country and in Europe, wherever the conditions are at all favorable.

In the "Joint Experiences" narrative, a cited book is Modern American Spiritualism: A Twenty Years' Record of the Communion Between Earth and the World of Spirits (1870) by Emma Hardinge.  In the same chapter of Child's book, the manifestations experienced by the Davenport family are addressed and the statement is quoted by Child: "We desire you to give some of the statements that were recorded at that time, as made by us."

"I am to be known as 'John King.'  My mission is not to the select few, but to the millions; for I intend to demonstrate human immortality and spirit-power to the masses, till my name shall be a household word from one end of this continent to the other; aye, and even across the roaring seas shall it go . . ."

The narrative received by Child includes the declaration that ". . . the statements made by spirits under these conditions must be received by great caution, the conditions often interfering with the expression of the real sentiments . . . Mankind will learn this great truth, that communications from spirits are reliable in proportion to the perfection of the conditions, both of the spirit and the medium, at the time they are given."

This blog has profiled many extensively documented cases of transcendental communication.  Consistent readers may recall some advice similar to the preceding statement about "communications from spirits" as shared in one of the Direct Voice recordings documenting the mediumship of Leslie Flint when the speaker is identified as Dr. Cosmo Lang (1864-1945) as recorded on July 13, 1988 during a Leslie Flint Direct Voice seance:

"You see, you have to remember above all else probably that the Voice of the Spirit—although it is in a sense not limited—to some extent can only be utilized and given out according to the situation and the moment and the time when it takes place.  The Voice of the Spirit, as I put it in this fashion, is innumerable souls.  You may have a communication from one person and yet the majority of that which is being said by that person is due to the influence of innumerable other peoples who are also on the same, as it were, length — a wavelength as you term it and transmitting down through different vehicles of expression."

Milestone: This is blog post #250 when it doesn't seem all that long ago when I first started publishing articles under the title "Interesting Articles, Links and Other Media."  In the 2014 article "'Gef': A Modern Sphinx as an Esoteric Lesson about Oneness", I reported how the ultimate solution to many metaphysical riddles was presented to me.  It has been my inclination ever since to learn about other 'paranormal' cases and, as I wrote in the first blog post, "help readers find noteworthy sources of information concerning metaphysical and spiritual topics."

Uber and Occupational Licenses

I enjoy moments of agreement, and common sense in publications where it's usually absent. Eduardo Porter writing in the New York Times on the lessons of Uber vs. Taxis for occupational licensing is a nice such moment.

[Uber's] exponential growth confirms what every New Yorker and cab riders in many other cities have long suspected: Taxi service is woefully inefficient. It also raises a question of broader relevance: Why stop here?

Just as limited taxi medallions [and ban on surge pricing, and the mandated shift change  -JC] can lead to a chronic undersupply of cabs at 4 p.m., the state licensing regulations for many occupations are creating bottlenecks across the economy, raising the prices of many goods and services and putting good jobs out of reach of too many Americans.

... like taxi medallions, state licenses required to practice all sorts of jobs often serve merely to cordon off occupations for the benefit of licensed workers and their lobbying groups, protecting them from legitimate competition.

...“Lower-income people suffer from licensing,” Professor Krueger told me. “It raises the costs of many services and prevents low-income people from getting into some professions.

This is an all too often overlooked effect of so much government-induced cartelization. The costs of higher prices are paid by middle and lower income people. And many job opportunities are denied to lower income people.


Why does this happen? The public choice school points out that the government can charge, in the form of political support as well as money, the beneficiaries of its induced cartels, and that impoverishment of the unlucky breeds support for government programs for the unfortunate, whose votes it also buys.  When did you see an anti-inequality protest with signs saying "repeal occupational licensing laws?"

In a study commissioned by the Brookings Institution’s Hamilton Project, Morris Kleiner of the University of Minnesota found that almost three out of 10 workers in the United States need a license from state governments to do their jobs, up from one in 20 in the 1950s. By cordoning off so many occupations, he estimates, professional licensing by state governments ultimately reduces employment by up to 2.8 million jobs. The trend worries the Obama administration. The president’s budget, to be unveiled on Monday, will include $15 million for states to analyze the costs and benefits of their licensing rules, identify best practices and explore making licenses portable across state lines.

The rest of the budget may be DOA, but perhaps Congress will see the value in this proposal. Of course, it's not obvious new studies are needed. We have over a half century of such studies, from Milton Friedman's 1946 Ph.D Dissertation, the "Occupational licensure" chapter in his1962 Capitalism and Freedom, to, more recently (random examples via google search) a 200 page review from the Institute for Justice (Cato coverage here) and many more. Edit copy, edit paste, could save about $14.99 million bucks. Still, cheap at the price.

Portability is an interesting issue too. In the past, Americans moved a lot more. It's a lot harder to do now, especially for lower-income Americans blocked by licensing from moving to a hot state.

Only a handful of occupations are licensed in every state, according to a report by the Institute of Justice, a free-market advocacy group opposed to many occupational licenses.

Notice that the Institute of Justice is "a free-market advocacy group opposed to many occupational licenses," implicitly questioning the validity of their statements, while the Brookings Institution is just the "Brookings Institution," not a ... well, you fill in the quote.  Ah well, it's still the New York Times, don't get your hopes up too far for unbiased reporting.

... Among the tangle of regulations, it is not hard to find rules that defy common sense. An athletic trainer must put in 1,460 days of training to get a license in Michigan. An emergency medical technician needs only 26.

As we know, occupational licensing is even worse in Europe. Here we come. In slides for his paper with Lee Ohanian on European Stagnation, Jesús Fernández-Villaverde tells the Zidane story

• Zinedine Zidane is one of the top 5 soccer players of all time. He won pretty much everything (World Cup 1998, Euro Cup 2000,....)
• After retiring, in 2013-2014, he was assistant coach for Real Madrid. Extremely successful year for Real Madrid.
• In August 2014, he becomes main coach for Real Madrid B Team

but...

• ... he is sued by the director of the Spanish National Football Coach Education Centre because he does not have a three year higher education degree in Soccer coaching.
• Fined and expelled from Spanish league.

Soccer being a lot more important than taxis, it ended well for Zidane. Not so, however for Uber, now banned in Spain.

Back to the Times

Workers in licensed occupations can make up to 15 percent more than unlicensed workers with similar skills, according to research by Professors Kleiner and Krueger.

But the claim that they protect consumers often rings hollow.

A study of regulations for mortgage brokers, for instance, found that states with licensed brokers did not enjoy fewer foreclosures but did suffer more expensive mortgages.

... While the tougher restrictions add to the cost of care, they do not have any discernible effect on its quality: Well-child medical exams cost 3 to 16 percent more in states where nurses cannot issue prescriptions, according to one study, but their infant mortality rates are no better. Malpractice premiums, a measure of safety, are about the same.

“Professional organizations that push for licenses can’t say, ‘We want to erect a fence around our occupation,’ so they say it is to protect public health and safety,” said Dick M. Carpenter II, research director at the Institute for Justice. “It is an assertion with zero evidence.”

The WSJ offers a similar story by Tom Gordon about do it yourself legal clinics, no surprise under attack by lawyers on similar "protection" grounds. But of course we expect that from WSJ, a ... how did that Institute for Justice quote go?

Not mentioned. Uber teaches us that star ratings are far more effective than taxi commissions to induce quality. I ride Uber not because of the price. But because every single driver so far is courteous, safe, and the car clean.

A Health Care Thought

The Uber analogy prompts a health care analogy. The conversation around health insurance problems routinely asserts the big problem with health care market is that people don't pay out of pocket.

But people pay for taxis predominantly out of pocket. And before Uber, we got awful service.

Health care with big copays under the ACA and ACO may look a lot like hailing a cab on New Year's eve. In the rain. Supply competition is the key to reaping the benefits of markets.

Seven Quick Takes Friday

1. This "Quick Takes" isn't so quick because there is so much going on!

2. CHRISTMAS!

Christmas break was fantastic. Nothing beats a family as amazing as mine, and I spent the month playing games, having late discussions, making and eating good food, playing with my little siblings, and basically just relaxing.

I did not sleep on an actual bed for eight nights of my break due to traveling and having guests over. It was so incredibly worth it!

One of the best parts?

50 people + 1 house + 1/2 week + board game marathons, good food, talent shows, charades, improv, engineering discussions, baby showers, fire juggling, late nights, dance parties, art lessons, robot wars, and more = MY AMAZING FAMILY!

3. Studio time-- also, I GOT A TORCH!

This Christmas break I had an entire week to spend in my little studio and made a lot of jewelry which will be appearing on my Etsy as soon as I get time to photograph the pieces here in my dorm.

But the best part?

I HAVE A TORCH.

Like, a propane and oxygen torch which gets to a couple thousand degrees and will let me solder, fuse, and melt metal.

I have been having so much fun experimenting and learning. This summer, when I have access to my torch again, I hope to come out with a new line of fine jewelry!

My first big project was developing a puzzle ring! These rings are SO fascinating to me. Expect more on this blog soon. :)

This ring's bezel is too big, but I'm soooo close to getting the hang of this.

I also have been perfecting the electroforming process that I blogged (and despaired) about several months ago. This is a tulip leaf turned copper!

I also made my own etchant with muriatic acid which makes life so much easier for my metalwork. This is a quote booklet I designed! It took forever but I love it. :)

4. Calligraphy

For Christmas, my grandparents gave me a dip pen for calligraphy. I'll be needing it for my illustration classes in the future, but I'm so glad that I got it early because I am experimenting with calligraphy!

 

When I was younger (somewhere between nine and eleven) I started learning calligraphy using my mom's scrapbooking felt pens. 

(My mom isn't very crafty, but the times that she has done crafty activities like scrapbooking and stamping with friends has really served me well by giving me access to awesome craft supplies!)

I had a cheap fountain pen with removable nibs that a friend gave me for my twelfth birthday, but after eight years of use the nibs were worn down. I hadn't really done calligraphy since the last Lord of the Rings poem illustrations I did two years ago.

I think that pointed pen calligraphy is going to be my new favorite thing. This is the first piece I made with that technique (from my instagram).

Pointed pen allows me to get the varying line widths and the cursive-style writing. I just need to practice more!

Also, nerdiness is important, even in calligraphy. This is a piece that I calligraphic with a broad nib. It's in Quenya, Tolkien's Elvish language, written in the Elvish script Tengwar:

5. Visiting a jeweler's.

My grandmother's wedding band was badly damaged recently, and they took it to a jeweler's for repair. This jeweler's isn't your ordinary retail place; they actually design high-end jewelry pieces.

AND I GOT A TOUR!

The family that owns the business was so welcoming and showed me around the entire studio, even letting me watch their mill, laser solderer, and 3D printer in action! And the main jeweler showed me the tiniest little torch head I've seen in my life. The flame is so small that you can only see it under a magnifying glass. I also got to see the inclusions in a real emerald with the magnifying glass!

They sent me home with some sample molds. This is SO AWESOME guys. Went I took at Metals class at my school, it was all with hand tools-- even for the advanced students. For lost-wax casting, students had to use a flex shaft to carve the one-use wax mold by hand.

This studio creates molds in a CAD software (3D modeling) to the customer's specifications. They then either mill a mold and inject it with wax (the left blue ring) or print it with resin in a 3D printer (the red one-- which was a setting for a ginormous stone and I got to try on the real ring!). The molds are then placed in dentist plaster, the wax/resin is melted, and the molten silver, gold, or other metal is poured in.

IT'S AWESOME. And look at how tiny and detailed everything is!

I had this puzzle box that my brother printed in my purse, since I was showing it to my grandpa during that trip. The jewelers were fascinated by it and it led to a really cool discussion about the different kinds of new technologies out there.

Since I love jewelry so much, and love it even more that I've seen a real designer's studio, I started looking around for jobs at jewelers' for the summer since I can't find any graphic design internships. I really hope my leads turn out. Working at a jeweler's would be an amazing experience.

6. 2014 in Books

Farewell, 2014. This is my year in books. It is one of my shortest booklists ever, with giant blocks of audiobooks (and podcasts) representing long drives and homework hours for my art and design classes. 

I'm a little bit hard of hearing, and I've never been good at understanding people during phone calls. 

Last year, during my Drawing I class, we were allowed to listen to our headphones. I started listening to the Harry Potter audiobooks. I started off listening to books I've read already, and over 2014 I worked up to listening to new books. I still have a hard time hearing and retaining all of the information, but I can proudly say that I've listened to The Great Gatsby without having read it first and I followed along just fine! Listening to books is a very different experience, but I enjoy having something entertaining/intellectual to do while drawing, and my listening skills have been improving dramatically. I can now follow along with conversations in our noisy dining hall without getting headaches!

It's so interesting to go back and revisit these titles and the real-life stories I experienced over this last year. My hope is that over this next year I will have the energy to savor some classics I've always wanted to read. Which of these books have you read and do you have any recommendations for 2015?

7. LOGOS

 

 My painting from my first freshman art class, Fresh Aire, is on the front cover of my university's journal of undergraduate research! The painting was intended as a technical exercise for class, but I took the opportunity to explore the theme of synesthesia.

7.  It is January and school has begun!

Last semester was a rough one. Despite having amazing friends and great activities every which way, by the end of the semester I lived each day simply to see it done and mark off items on my "to-do" list. It was a variety of things: having 27 hours of classes a week (plus homework), getting behind on work for my Shoppe, and (most predominately) some very bad experiences with a certain professor.

On the face of the matter, I did well. I'm maintaining a good GPA. I took calculus for the sake of learning calculus and expected to barely pass the class, but thanks to help from my professor and a math-teacher-in-training-friend, I got an A! (Plus it's really fascinating, sooooo...) I was active at my campus ministry, found some time to hang out with friends, and even stayed on track with laundry. In Color Theory, I painted pieces that I am fairly proud of, and in my Literature gen-ed called Heroic Quest I finally had a chance to study and discuss some deep philosophical pieces.

Outward appearances aren't everything, though, and I was restless, overwhelmed, and disillusioned. Praying, thinking, tinkering, reading, writing, and drawing-random-things-in-my-sketchbook took a backseat. Several of my classes were unfulfilling and in many ways a colossal waste of time and money. (My parents ruined me for school by teaching me to love learning; I would much rather get a B in a class that I learned a lot from than a perfect grade because I wasn't challenged). I even became irritated at good friends because I have a hard time saying no and felt a lot of pressure to always be doing things. Put me in a group setting and I will talk to everyone-- but the biggest thing that I learned from last semester is that I need alone time to refocus. (Also I need more than five hours of sleep to keep from panicking).

My biggest goal for this semester is to allow myself to unapologetically take time for myself. It is the times that I feel I should be doing everything that I need to step back. I'm usually not the kind of person to spend five hours on Netflix when I am overwhelmed; I am the kind of person who will just do more things. Jack of all trades, master of none, and a very discontent Jack at that. There are a lot of very good things in my life right now, far outweighing my legitimately stressful problems. Isn't it possible to make the most of every opportunity and also stop to smell the flowers?

Unemployment insurance and unemployment

"The Impact of Unemployment Benefit Extensions on Employment: The 2014 Employment Miracle" by Marcus Hagedorn, Iourii Manovskii and Kurt Mitman is making waves. NBER working paper here. Kurt Mitman's webpage has an ungated version of the paper, and a summary of some of the controversy. It's part of a pair, with "Unemployment Benefits and Unemployment in the Great
Recession: The Role of Macro Effects" also including Fatih Karahan.

A critical review by Mike Konczal at the Roosevelt Institute blog, and a more positive review by Patrick Brennan at National Review Online are both interesting. Both are thoughtful reviews that get at facts and methods. Maybe the tone of the economics blogoshpere is improving too. Bob Hall's comments and response on the earlier paper are also worth reading. This is a bit deja-vu from the observation that North Carolina experienced a large drop in unemployment when it cut benefits. My post here, WSJ coverage, and I think there are some papers which google isn't finding fast enough at the moment.

The basic issue: I think it's widely accepted, if sometimes grudgingly, that unemployment insurance increases unemployment. If you pay for anything, you get more of it. People with unemployment insurance can hold out for better jobs, put off moving or other painful adjustments, and so on. The earlier paper points out that there are important general equilibrium effects as well. We should talk about how UI affects labor markets, not just job search.

Quick disclaimer. Let's not jump to "good" and "bad."  Searching too hard and taking awful jobs in the middle of a depression might not be optimal. Pareto-optimal risk sharing with moral hazard looks a lot like unemployment insurance.  Perhaps that disclaimer can settle down the tone of the debate.

But the question remains. How much?  How much does unemployment insurance increase unemployment? And the related macro question, just why did unemployment in the US suddenly drop coincident with sequester and the end of 99 week unemployment benefits?

Method is important. Too much media coverage starts and stops with "study finds unemployment insurance raises unemployment." And then the next day "study finds unemployment insurance crucial to stopping people from dying in gutters." If we focused on the facts, we'd all get along better.

In macro, we always are faced with the problem that interpreting time series, we never know what else changed. Sure, congress lowered unemployment benefits and the economy took off. But lots of other stuff happened. Maybe it's "despite" not "because."

This paper is part of a new breed trying to get around this problem by looking at cross-sectional evidence. Roughly, the evidence in this paper builds on the fact that Congress' action had different effects in different states.

Bob Hall described the strategy compactly:

They compare labor markets with arguably similar conditions apart from the UI benefits regime. In their work, the markets are defined as counties and the similarity arises because they focus on pairs of adjacent counties. The difference in the UI regimes arises because the two counties are in different states and UI benefits are set at the state level and often differ across state boundaries. The research uses a regression-discontinuity design, where the discontinuity is the state boundary and the window is the area of the two adjacent counties....

Table 3 contains the basic number, which the authors digest as

We find that a 1% drop in benefit duration leads to a statistically significant increase of employment by 0.0161 log points.  In levels, 1.8 million additional jobs were created in 2014 due to the benefit cut.

(Small complaint: economists should not write that jobs "were created," especially economists writing in the search, match and labor-supply tradition, to say nothing of passive voice and strong causal inferences.) I tried to digest the fact a bit more, but stopped here:

Column (1) of Table 3 contains the results of the estimation of the effect of unemployment benefit duration on employment using the baseline specification in Equation (6).

If commenters can vocalize the actual fact in words, fixed effects, controls and all, I'd be grateful.

Bob Hall echoes standard but important complaints.

The issues that arise in evaluating the paper are those for any regression-discontinuity research design: (1) Are there any other sources of discontinuous changes at the designated discontinuity points that might be correlated with the one of interest? (2) Is the window small enough to avoid contamination from differences that do not occur at the discontinuity point but rather elsewhere in the window?

In words, is there something else about state policies that changed at the same time in the "generous" vs. "stingy" states? And are counties really small enough to capture only the border effects?

The deeper issue in evaluating this paper, I think, comes from blowing the county results up to the aggregate, as Bob but it

The authors conclude that, absent the increase in UI benefits, unemployment in 2010 would have been about 3 percentage points lower.

The jump back from micro to macro isn't so easy either.  For example, suppose the expansion came from selling more goods from expanding states to contracting states. Then you'd see a micro effect but no macro effect. I don't think that's the case, but I have been skeptical about other papers jumps from micro to macro. For example, if the Federal government spends a trillion dollars in the desert, and a bunch of businesses move to sell donuts to the construction workers, you get a nice stimulus. That doesn't mean stimulus works for the economy as a whole.

This is a small nitpick. The basic fact is interesting, and I think a lot harder to dismiss.

It's interesting that so much of the pushback, both from Bob and from Mike Konczal's critical review comes down to theory, not the fact.

Update: Wednesday's Wall Street Journal covers the paper. The WSJ spends more time on the macro question, the claim that unemployment insurance actually boosts the economy via stimulus.