Diplomatic Parking Tickets
Usually, it’s New York City that complains bitterly about its diplomat parking ticket situation. The U.N. may be a beacon of hope and peaceful negotiation around the world, but it brings with it workers who use their immunity to park in front of fire hydrants, red zones, and anywhere else they please – it’s the stuff of urban legends and West Wing episodes.
Washington, D.C. is getting in on this complaining game. According to a new article on WTOP.com. D.C. takes the #2 spot with a diplomat ticket total of more than $500,000. New York City is owed a grand total of $17.2 million.
In 2003, the state department issued dire warnings to embassies in New York and D.C. threatening to withhold foreign assistance if parking tickets were not paid. So far though, it seems no foreign assistance has been withheld. Read More »
Am I Good Enough to Compete In a Prediction Tournament?
Last spring, we posted on Phil Tetlock’s massive prediction tournament: Good Judgment. You might remember Tetlock from our latest Freakonomics Radio podcast, “The Folly of Prediction.” (You can download/subscribe at iTunes, get the RSS feed, or read the transcript here.)
Tetlock is a psychologist at the University of Pennsylvania, well-known for his book Expert Political Judgment, in which he tracked 80,000 predictions over the course of 20 years. Turns out that humans are not great at predicting the future, and experts do just a bit better than a random guessing strategy. Read More »
Operation Twist 101
Given the confusion about Operation Twist, here’s an explanation.
What is Operation Twist? Basically the Fed can’t reduce short-term interest rates any further—they’re already at zero. So they want to reduce long-term interest rates instead. They do this by buying long-term bonds. When you buy more of something, you raise the price. And when you raise the price of a bond, you lower the interest rate. So what the Fed is doing, is lowering long-term interest rates.
How does the Fed pay for these bonds? With QE1 and QE2, the Fed effectively just printed the money. (They “expanded their balanced sheet.”) Instead, they are selling short-term bonds, and using the proceeds to buy the long-term bonds. Now selling a bunch of short-term bonds will—usually—lower their price, raising short-term interest rates. That’s why people call this “Operation Twist”—it should “twist” the yield curve—lowering long-term interest rates (which is what matters when you buy a house, or when a firm borrows to buy new machinery), but it also raises short-term interest rates.
Raising short-term interest rates is a bug, not a feature. But fortunately, this time, the effect on short-term interest rates will be small. Why? The Fed has already committed to keeping short-term interest rates near zero for the next couple of years. And so given this commitment, the 2-year bond will also be close to zero. Read More »
Follow the Money
I’m back to inviting readers to submit quotations whose origins they want me to try to trace, using my book, The Yale Book of Quotations, and my more recent researches.
Jay K asked:
A friend recently quoted the Washington Post as saying ‘Follow the money’ during the Watergate days. I thought it was just a line from the movie ‘All the President’s Men’. But is the phrase older than that?
This is usually said to have originated in William Goldman‘s screenplay for the 1976 film All the President’s Men, uttered by the source called “Deep Throat.” (It does not appear in the earlier book by Carl Bernstein and Bob Woodward.) Read More »
and 
. If you haven’t seen it yet, the movie features Steven Levitt and Stephen Dubner, and was made by a dream team of documentary directors. Paste Magazine named it one of the 