Posts tagged ‘Tyler Cowen’

The Teaching Company (Also Known as Great Courses)

A while back I was writing about something -- the Civil War I think -- and I mentioned that I had been lucky enough to have James McPherson as a professor.  I remember a comment on the post that said something like "yes, yes we know, you went to Princeton."  I certainly was lucky, and that school contributed a lot to what I am.  But as far as attributing sh*t I know to a source, Princeton is in at least second place.   By far the greatest source of what I know about history, art, music and even about the sciences comes from the Teaching Company.  And that is available to all of you, no SAT required.

I just checked my account and I have taken 71 courses from them, including 54 history courses**.  I think I have taken, for example, pretty much all the courses on this list in a Tyler Cowen post.  I began my journey taking courses on things that had always interested me but I knew a fair amount about already, such as the history of Ancient Rome or the Civil War or WWII.  But the most fun I have had has been taking courses on periods I knew little about -- such as Daileader's great histories of the Middle Ages or the History of China.  And I have had the most fun taking courses on things I knew NOTHING about, such as the history of India, of pre-Columbian American civilization, and of nomadic civilizations of Asia.

The key thing to remember is:  never pay rack rate.  Everything goes on sale from time to time.  Today until midnight, for example, they are having a 70% off sale on a subset of their stuff.  You can still get cd's and dvd's if you want but I used to get the digital download for my iPod and increasingly just stream the audio from an android app and stream the video from their Roku app.


** My family thinks I am weird because I listen to these courses as I run and work out (instead of music).  But it turns out this was not nearly as weird as when I have done Pimmsleur language courses while I am running.  If you want to really take your mind off your running, try to diagram a sentence in your head to figure out which of freaking German article you should be using.  Also, it creates a nice reputation around the neighborhood for eccentricity if you babble in foreign languages as you run.

Reversing Cause and Effect?

I hate to quibble about a paper that supports my preconceived notions, but I am bothered by this as linked by Tyler Cowen

We quantify the amount of spatial misallocation of labor across US cities and its aggregate costs. Misallocation arises because high productivity cities like New York and the San Francisco Bay Area have adopted stringent restrictions to new housing supply, effectively limiting the number of workers who have access to such high productivity. Using a spatial equilibrium model and data from 220 metropolitan areas we find that these constraints lowered aggregate US growth by more than 50% from 1964 to 2009.

Isn’t it possible that cause and effect are being reversed here? I accept that zoning in places like SF make it more expensive. I would have concluded that this higher cost of living allows only the most productive to live there — less productive folks can’t afford it. So the high average productivity of these cities might partially be a result of their higher costs, not because the zoning somehow increases productivity, but because the zoning creates a sorting process where only the most productive may enter, which brings up the averages.  So a reduction in zoning and living costs would cause the productivity numbers for the city to average down as lower-productivity earners can move in.

The Middle Class Is Shrinking Because They Are Becoming Rich

I have made this point before, but Tyler Cowen has a great chart from a new study.  The explanation is here, but basically they have defined the bands based on some income break points corrected for family size and inflation over time.


A reader sent me a nice note with this link, saying that I had been right many years ago when I began making this point.  That's good, but I will also confess to be wrong on a related point -- I said 8 years ago that the one good thing about having a Democratic President was that the media would become much more positive suddenly about the economy.  On that, I was wrong.  The media still has a strong bias towards telling everyone that their life is getting ever worse, even when no such thing is true.

Our Permission-Based Economy

The decline in new business formation in this country shouldn't be a surprise -- in industry after industry, numerous bits of government permission are needed to proceed with a new idea into a new market.  If, like Uber, you plow ahead ignoring these roadblocks, you will likely spend the rest of your life in court (as does Uber).

I thought about all this when reading this article on awesome portable automated systems that can maintain a person's insulin level.  What an amazing advance in safety and life quality for people!  The part that struck me was this line from a woman when she first saw one:

Sarah Howard became interested after she met Ms. Lewis last year. “My first question was: Was it legal?” said the 49-year-old, who has Type 1 diabetes, as does one of her two sons. “I didn’t want to do anything illegal.”

It is pathetic that this is the first reaction of Americans when they see an awesome new innovation.  And it turns out that she is right to worry.  Because if one avails oneself of the normal division of labor, in other words if one lets someone more expert to build the device or program it, then it is illegal.  Only if one downloads all the specs from the Internet and builds and programs it oneself is this fabulous device legal.

The only restriction of the project is users have to put the system together on their own. Ms. Lewis and other users offer advice, but it is each one’s responsibility to know how to troubleshoot. A Bay Area cardiologist is teaching himself software programming to build one for his 1-year-old daughter who was diagnosed in March.

This is roughly the equivalent of having to go fell a tree and mine graphite in order to makes one's own pencils.  It is simply stupid.   All because the government will not let us make our own decisions about the risks we want to take with medical products.  So if you don't have the skills or the time to put one together, you can wait 5 or 10 years for the FDA to get around to approving a professionally-made version.

Hat tip to Tyler Cowen, who by the title of his post obviously also saw the I, Pencil analogy.

Update:  I give it 12 months before someone at the FDA demands that these home-made devices be regulated, and at least registered with the government.  I wonder if in 10 years the government will be demanding registration of 3D printers?  After all, they potentially incredibly empowering to individuals and can let folks work around various product bans like this.   Exactly the kind of empowerment that government hates.

A Blast From My Childhood

Apparently, the sea monkey and x-ray glasses business empire is being fought over by several people.  I would have bet that the business did not exist any more, but apparently it still sells several million dollars a year of the little engineered brine shrimp.  This is a fascinating article throughout, both on the history of sea monkeys, the marketing genius that made it work, and the current legal fight.  Link via Tyler Cowen.

Never, Ever Trust Media Reporting of Scientific (Or Quasi-Scientific) Studies -- The Github Sexism Study and the Response.

I recommend this article (via Tyler Cowen) on the interesting topic of whether women's open source software contributions on Github are accepted more or less frequently than those of men.   The findings of the study are roughly as follows:

They find that women get more (!) requests accepted than men for all of the top ten programming languages. They check some possible confounders – whether women make smaller changes (easier to get accepted) or whether their changes are more likely to serve an immediate project need (again, easier to get accepted) and in fact find the opposite – women’s changes are larger and less likely to serve project needs. That makes their better performance extra impressive....

Among insiders [essentially past contributors], women do the same as men when gender is hidden, but better than men when gender is revealed. In other words, if you know somebody’s a woman, you’re more likely to approve her request than you would be on the merits alone. We can’t quantify exactly how much this is, because the paper doesn’t provide numbers, just graphs. Eyeballing the graph, it looks like being a woman gives you about a 1% advantage. I don’t see any discussion of this result, even though it’s half the study, and as far as I can tell the more statistically significant half.

Among outsiders, women do the same as/better than men when gender is hidden, and the same as/worse than men when gender is revealed. I can’t be more specific than this because the study doesn’t give numbers and I’m trying to eyeball confidence intervals on graphs. The study itself say that women do worse than men when gender is revealed, so since the researchers presumably have access to their real numbers data, that might mean the confidence intervals don’t overlap. From eyeballing the graph, it looks like the difference is 1% – ie, men get their requests approved 64% of the time, and women 63% of the time. Once again, it’s hard to tell by graph-eyeballing whether these two numbers are within each other’s confidence intervals.

OK, so generally good news for women on all fronts -- they do better than men -- with one small area (63 vs 64 percent) where there might or might not be an issue.

This was an interesting side bit:

Oh, one more thing. A commenter on the paper’s pre-print asked for a breakdown by approver gender, and the authors mentioned that “Our analysis (not in this paper — we’ve cut a lot out to keep it crisp) shows that women are harder on other women than they are on men. Men are harder on other men than they are on women.”

Depending on what this means – since it was cut out of the paper to “keep it crisp”, we can’t be sure – it sounds like the effect is mainly from women rejecting other women’s contributions, and men being pretty accepting of them. Given the way the media predictably spun this paper, it is hard for me to conceive of a level of crispness which justifies not providing this information.

So here is an example press report of this study and data:

Here’s Business Insider: Sexism Is Rampant Among Programmers On GitHub, Research Finds. “A new research report shows just how ridiculously tough it can be to be a woman programmer, especially in the very male-dominated world of open-source software….it also shows that women face a giant hurdle of “gender bias” when others assess their work. This research also helps explain the bigger problem: why so many women who do enter tech don’t stick around in it, and often move on to other industries within 10 years. Why bang your head against the wall for longer than a decade?” [EDIT: the title has since been changed]

This article, and many many like it, bear absolutely no relationship to the actual data in the study.  Since the article of course is all most people even read, now a meme is created forever in social media that is just plain wrong.  Nice job media.

Public Key Encryption

This video, linked by Tyler Cowen, is the best I have seen to simplify the basic theory of public key encryption:

This follow-up video takes this basic understanding and explains RSA encryption

Soviet Architecture in Arizona

I think it was Tyler Cowen who linked to this photo spread on surviving examples of Soviet architecture.  A few of the buildings are almost compelling.

This was one example, in Bratislava


But you don't have to go to Bratislava to see something like it.  You can find something similar in Mesa, Arizona -- this is the city hall.


Kudos to the photographer for getting the shadow on the concrete pylon on the right to be positioned almost perfectly to fill out the missing part of the building.    I actually don't mind the Tempe building, it looks good in context, more public sculpture than building (particularly since this is likely a really inefficient building, with minimal floor space for the money spent to build it).


It's Hard to Find Partisan Blogs that Actually Try to Engage with the Opposition

I try really hard to read some partisan blogs from the Left and Right so I see what they are saying and don't wallow in some libertarian echo chamber.  I have read Kevin Drum on the Left for year because, while I often disagree with him, he is willing to engage with opposition arguments rather than just dismissing them as the rantings of racist cis-gendered Koch-funded, uh, whatevers.

Unfortunately his guest bloggers seem to be cut from a different cloth (by the way, best wishes to Drum who is struggles with some awful health issues).  Here is Max Sawicky today:

In this post from just last weekend, Kevin links to a bit from Tyler Cowen. That was your first mistake, Brother Drum. I realize linking is not endorsing, though KD offers a limited, tentative 'interesting possibility' type of approval. You see, the prolific and very smart Tyler hails from the zany economics department of George Mason University. No good can come from referencing him. These characters spend all their time excoriating Government and social protection for the working class from tenured, Koch-subsidized positions at a public university. Sweet.

This is unfortunately what substitutes for debate nowadays.  His conclusion seems to be "don't read people that disagree with me, read only folks who work off the same assumptions.  Stay in the echo chamber!"  This is exactly what I try to avoid, but the ubiquity of this sort of ad hominem argumentation is making it really hard.

Bitcoin, Short Sales, and Volatility

I am fascinated by Bitcoin and would love to see it be a success.  But Tyler Cowen has a quote that reflects some of my concerns about it:

…bitcoins are an uncomfortable combination of commodity and currency. The commodity value of bitcoins is rooted in their currency value, but the more of a commodity they become, the less useful they are as a currency.

Bitcoin is in the midst of an enormous price bubble, with increases in value of as much as 50% over just a few days.  This is astounding volatility for even a commodity, much less a currency.

Cowen said something at the end of the post, almost as a throw-away, that got my attention:  "There is, by the way, no current way to short Bitcoin."  The reason this caught my eye is that I have argued a long time that short selling is an important mechanism to reduce market volatility.

Every time we get to a market bubble or problem, insiders always start arguing against short selling saying it makes volatility worse and undermines markets.  But what they are really saying is that they like volatility so long as it is up. They had no problem with the bubble that propelled their securities up, they just don't want them to come back down to Earth.

In certain bubbles, when interest in a certain asset class gets really frothy, anyone who is skeptical of the asset and its new high values will sell and get out.  This means that as the bubble grows, all the skeptics are long gone from the market.  No longer owning the asset, these skeptics have no further "vote" or influence on the price.  Short selling is a way for skeptics to continue to influence the price and asset values.  To this extent, I think it tends to limit the peak of bubbles, just as bottom-fishers limit the debt of troughs.

Bitcoin would likely benefit from skeptics having some sort of influence on bitcoin values.  But without a way to short, Bitcoin values are driven solely by wacky anarcho-capitalists (e.g. people like me) and people fearful of Cyprus style depositor losses.  Essentially all the true believers are bidding against themselves.

Immigration and Median Income

I have hypothesized that immigration may have an effect on median income -- not because it is bad for the economy per se but just form the fact of adding millions of new people in the bottom quartiles would tend to shift the median downwards (just the pure math of the thing).

I have only given them a quick glance at this point, but Tyler Cowen links several studies that tend to say my hypothesis is false.

Also, here is an interesting discussion about the median income stagnation hypothesis itself and how sensitive it is to the end point, pointing out in particular that most folks start their analysis from a point within Nixon's wage and price controls, which skew the data - shifting the start point forward even a couple of years makes most of the stagnation go away.  He builds on a post by Brink Lindsey showing historic median income growth over a longer time frame, implying the aberration may have been the boom of the 1950s and 1960s rather than the lower growth rates of today.

I would normally find this a fascinating debate if it weren't for the dark cloud behind it that half the folks arguing the point wish to use it as a justification for further reductions in economic liberties.

Same Here

Tyler Cowen writes:

If aggregate demand is so low, why are profits so high?

TJIC responds

SmartFlix  [TJIC's company] has show paper losses every year it's been in existence "¦ but I expect that this year it will show it's first ever paper profit.

"¦which is not a sign of macroeconomic health, but is, in fact, a sign of my very poor expectations for the economy.

Ditto here. We will probably show our largest paper profit this year, but it is mainly because we have cut way back on investment in new projects.  And this has nothing to do with demand - we are experiencing a boom, as the recession pushes Americans towards lower cost recreation of the type we operate, at the same time it cuts state budgets and makes them more amenable to our business model of private operation of public parks.

So why are we cutting back investment?  I run a very low margin service business. Here is a simplified calculation: We make, say, 8% of revenues before taxes and accelerated depreciation. 50% of our costs are labor, and the new health care law may raise our labor costs by 8% or even more.  A four percentage point cut in margins is not a big deal to Microsoft, but it is to us.  Until we figure out how this all will play out, we are still investing but only in above-average opportunities.

When we invest in a new project, it hits that year's income in two ways.  First, we have accelerated depreciation on the new capital equipment.  And second, we typically have a startup loss in the first year.  In the last few years of rapid growth, we have had close to zero paper earnings because of these growth effects.  Once we take our foot off the pedal this year, though, we will show a large positive income.  For us, reduced growth and investment = higher short term reported profits.

Arrogant Ignorance

Years ago I coined a term for a number of people I deal with in business -- "arrogant ignorance."  I don't mind running into folks who are young and inexperienced and admit such -- in fact, I like educating and training people and sharing what limited knowledge I have accumulated.  But what really sets me off are folks who have no idea about the subject on which they are making decisions but act as if their judgment is beyond question.  This tendency seems to be reinforced by organizations that have few real performance metrics and where, as such, looking like one knows what he or she is doing is more important than actually doing anything.

More recently, I found that this effect already has a name - Dunning-Kruger, though I think my term is much more evocative.  Anyway, this is an interesting article on Dunning-Kruger and its legitimacy in describing actual human behavior.

Via Tyler Cowen

Another Great Argument for Open Immigration

Via Tyler Cowen:

Female migrants should on average be prettier, ceteris paribus, than those who stay in the old country.

Other Thoughts on Oil Prices and "Speculation"

As a followup to my point on oil prices, here are a selection of posts on oil prices and speculation that have caught my eye of late:

McQ writes about the charge of "inactive" oil leases, which Democrats attempted to use as an excuse for not opening up new lease areas for drilling

Tyler Cowen has a big roundup on the topic, with many links, and Alex Tabarrok has a follow-up.  Cowen discusses rising oil prices in the context of Julian Simon here.

Michael Giberson also addresses speculation, while observing that non-industrial buyers have not increased their position in the futures market as oil prices have risen

Finally, via Scrappleface:

When the U.S. Supreme Court reconvenes on the first Monday in
October, the nine Justices may consider whether the Constitutional
preamble clause "secure the Blessings of Liberty to ourselves and our Posterity" guarantees an individual right to drill for oil.

Now that the court, in a 5-4 ruling on the Heller case, has upheld
the Second Amendment right of "the people," not just state-run
militias, to keep and bear arms, some scholars say the court may be
willing to go the next logical step and recognize the peoples' right to
acquire their own fuel.

US Poverty Rate

Tyler Cowen links to Lane Kenworthy Saying:

]Poverty comparisons across affluent nations typically use a "relative"
measure of poverty. For each country the poverty line "” the amount of
income below which a household is defined as poor "” is set at 50%
(sometimes 60%) of that country's median income. In a country with a
high median, such as the United States, the poverty line thus will be
comparatively high, making a high poverty rate more likely...

There is actually at least one study out there by a left-leaning think tank that sort of addresses this (though not exactly).  The study first shows US and European income of the bottom 10 percentile vs. the median income of that country.  Not surprisingly, since US median income is so high, the bottom 10 percentile have a low share.  BUT, they then do the numbers a second, time, showing the bottom 10 percentile income in each country all compared to US median income, ie all with the same denominator,  here, the US poor do at least as well as most European countries.  The comparison shows clearly that while the US has more income inequality, it is not because our poor are poorer but because our rich and middle class are richer.   Here is that second study:


When Calling in Sick Is Not Enough

I was tempted to title this post "markets in everything", but I just couldn't steal that moniker from the Marginal Revolution folks.  USA Weekend has a story about the Alibi Network, which will, for a price of course, create an alibi for you:

Whether you
are looking to skip a day of work or to secretly leave town for the
weekend, Alibi Network can provide fake airline receipts or phone calls
to your boss explaining your absence and even mock up an entire
itinerary for a bogus conference you were "attending." Rarely has lying
been so creepily airtight.

Chicago-based company charges from $75 for a simple phone call to
thousands of dollars for extensive lying, on top of a $75 annual fee.
The most popular service is the "virtual hotel," in which the fibber
can provide a boss or family member with the phone number of a hotel
where he's supposed to be. The number rings to one of Alibi's phones,
which are staffed by actors who will answer as if a particular hotel
has been reached. The incoming call then can be forwarded to the
fibber's cellphone, making it seem as if he's in a certain city even
though he's not. (We use "he" here, but half of Alibi's members are

requests involve a creative solution. One working stiff asked the
service to get him out of a boring, week-long training class that was
mandated by his office. The solution: Alibi hired an actor to dress up
as a courier and barge into the class, informing the man that his house
had been robbed and he needed to go home right away. Another request
involved a married woman with small children who longed for a relaxing
weekend away from the kids. Alibi concocted a story that the woman had
won a free spa weekend in a prize drawing and hired an actor to call
her home and leave a voicemail message informing her of her "win."

For those of you of need of such services, perhaps on January 2 nursing your hangover, their web site is here.

Update:  Tyler Cowen informs me that I am waaaayyy behind the times, and that this company actually was the first entry in "Markets in Everything" several years ago.  That's what I get for trying to take a break from blogging.

Very Interesting Observation

From Tyler Cowen:

The NIH works as well as it does because the money is mostly protected
from Congress. It is not a success which can easily be replicated. The
more money is at stake, the more Congress wants to influence
allocation. We should guard this feature of the system jealously and
try to learn from it. If we can.

I had not ever thought about it this way, but this is probably a correct observation about government:  The more money in a program, the more likely it is that Congress will want to direct that money to take political credit for it and reward their cronies, and therefore the more likely the program is to fail.

Not Surprising in the Least

Via Tyler Cowen:

The Asian
Development Bank presented official survey results indicating China's
economy is smaller and poorer than established estimates say. The
announcement cited the first authoritative measure of China's size
using purchasing power parity methods. The results tell us that when
the World Bank announces its expected PPP data revisions later this
year, China's economy will turn out to be 40 per cent smaller than
previously stated......The number of people in China living below the
World Bank's dollar-a-day poverty line is 300m - three times larger
than currently estimated.

Well, this is a bit sad, as I would hope everyone likes seeing people emerge from poverty**.  But it is really not surprising.  Strongly state-run economies are notoriously hard to measure from the outside, and westerners systematically overestimated the size of the economy of the old Soviet Union.

**  I make this statement because I am an optimistic guy full of confidence in the generally good intentions of mankind.  Because if I were not such a person, and actually judged people by their actions, I would come to the conclusion that a lot of people DO NOT want people in countries like China to emerge form poverty.  Trade protectionism, apologias for looting dictators like Castro or Chavez, anti-globalization riots, anti-growth initiatives, and calls for rollbacks in fossil fuel consumption all share in common a shocking disregard for people trying to emerge from poverty -- often from folks on the left who purport to be the great defenders of the poor.  I tried to explain the phenomenon before, at least among self-styled "progressives':

Progressives do not like American factories appearing in third world
countries, paying locals wages progressives feel are too low, and
disrupting agrarian economies with which progressives were more
comfortable.  But these changes are all the sum of actions by
individuals, so it is illustrative to think about what is going on in
these countries at the individual level. 

One morning, a rice farmer in southeast Asia might faces a choice.
He can continue a life of brutal, back-breaking labor from dawn to dusk
for what is essentially subsistence earnings.  He can continue to see a
large number of his children die young from malnutrition and disease.
He can continue a lifestyle so static, so devoid of opportunity for
advancement, that it is nearly identical to the life led by his
ancestors in the same spot a thousand years ago.

Or, he can go to the local Nike factory, work long hours (but
certainly no longer than he worked in the field) for low pay (but
certainly more than he was making subsistence farming) and take a shot
at changing his life.  And you know what, many men (and women) in his
position choose the Nike factory.  And progressives hate this.  They
distrust this choice.  They distrust the change.  And, at its heart,
that is what the opposition to globalization is all about - a deep
seated conservatism that distrusts the decision-making of individuals
and fears change, change that ironically might finally pull people out
of untold generations of utter poverty.

Well, boys, I reckon this is it - nuclear combat toe to toe with the Roosskies

What guy wouldn't want one of these?


Hat tip Tyler Cowen

Arizona: Saving Northerner's Lives Since 1912

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. 

Stop Right There or I Will Shoot Myself!

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.

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.

Best Passage I Read This Week

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.

The Feds May Have to Come Clean

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:

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

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

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.