Championships on the Cheap

There are a few qualities that no amount of game-time statistics captures. Some are hackneyed terms such as "leadership", "poise", and "being a locker room guy".

However, one that I find to be very important, seems to get lost in the discussions. This trait is a star player's willingness to take a pay-cut.

We all feel bad for Kevin Garnett. Poor KG - he has no supporting cast. Poor KG - it isn't his fault. Well, it might not be his fault on the court, certainly. He is remarkably efficient and anchors a (surprisingly) good defense despite being the only strong defensive player on the team. Despite his mediocre clutch-time capacity, he is one of the top 5 forwards in the league. But off the court? I argue that some of his team's woes are his own doing. Garnett takes one of the highest salary's in the league and makes it very difficult to build either a deep team or hire many talented teammates. In fact, he holds the 3rd highest single-season salary record, and also has led the NBA in salary for 4 straight season. During that expensive run, his T-Wolves got out of the post-season once, and he also had a 13-18 playoff record (a terrible 41.9% win-loss record!).

Hogging up the salary cap seems to be a quick way to kill the development of your team. Of the top 40 highest paying seasons in NBA history, only Michael Jordan, Shaquille O'Neal, and Rasheed Wallace have won rings in any of those seasons. Certainly this is not inflation adjusted, but my point will eventually about Duncan (a player in the modern era) so things like inflation adjustments serve only to further demonstrate what little pay he takes.

Enter Duncan. He has 3 rings, 2 MVPs (should have 3), 3 Finals MVPs, and has been a perennial All-NBA and All-Defense Team member (only player in history to be on both each of his first 9 seasons in the NBA, and will likely make it 10 this season). His highest paying season ever comes ranked as #47 on the list at $15 million. More perspective. Chris Webber, Juwan Howard, Allan Houston, Penny Hardaway, J-Kidd, AI (yes I like his play, but his terrible contracts cost him talented teammates), Starbury, Kobe Bryant (yeah he sells jersey's, but call me back when he is on the same plateau as Duncan), and even Michael Finley have made more money and have enjoyed loftier contracts.

I think the irony is that of all the players on the list (except for Jordan, possibly...) Duncan is the one who least needed to purchase his own teammates. He can play up-tempo (remember when he wiped the floor with Nash, 4-1, playing fast two years ago) or the slow game - he defends extremely well in both situations, and is phenomenally offensively efficient. There is not another player on that list (other than Jordan) who can do this. Even today, if you were to pick 1 player to build a team around (the rest of your team is arbitrary/random) - Duncan would clearly be the consensus choice.

What is even more interesting is that - over the last 20 years - only 4 of the championship teams had the highest paid player. 2 were Jordan seasons (97, 98) and 2 were Shaq seasons (2000, 2006). That's it. End of story. It gets even more interesting if you start looking at percentage of maximal salary that the key player on a winning team held. The lesson learned is that unselfish players who are willing to give up 20-40% of there salary (like Duncan giving up $13 million relative to Garnett) are able to attract qualitity players. Just think, with $9 million he bought Horry and Brent Barry. Consensus is that Duncan is a better player at the end of the day than KG (who is also great). Now certainly Duncan + Horry + Barry + $4 million > KG, no?

Thus, in addition to being a great leader, clutch-performer, defensive stalwart, multiple-time MVP, and the most consistent player in the post-Jordan era - perhaps Tim's greatest virtue is his unselfishness - his willingness to concede $15 million year in and year out and instead opt for talented teammates while emphasizing that character matters a damn lot in a sport where most stars lack it.

MVP Race and All-Star Picks

MVP Race
Name (PER, Roland Rating)

1. Dirk Nowitzki (29.9, 15.5)
2. Tim Duncan (27.3, 13.8)
3. DWade (30.4, 16.7)
4. Gilbert Arenas (27.1, 15.5)
5. Steve Nash (26.0, 11.3)
6. Yao Ming (29.1, 13.5)
7. LeBron James (26.6, 14.1)
8. Kobe Bryant (25.6, 10.1)


This list is not that controversial - though perhaps the ordering might be. First, we address why Tim Duncan is so high despite not being as flashy as Kobe, James, or Nash. Well, he flat out is a more efficient player - for one. And two, adding to the fact that he has the 6th best (or so) PER in the league, let us remind ourselves that PER is an offense-biased metric. Considered to be the best defensive big man in the league (aside from arguably Ben Wallace), Tim is having a phenomenal season both offensively and defensively (in terms of efficiency) despite playing diminished minutes. Of course, as usual he plays quality minutes and gets his team a comfortable lead whenever he is in the game by impacting both ends of the floor. The Spurs would not be where they are (this year or for any of the last 9 years) without TD. It seems that we have gotten too used to his stellar play to be willing to bestow upon him another MVP-type accolade.

Second, I've been asked why DWade is on this list. For some odd reason, people seem to think that an MVP must be on the best team in the league. Barkley even went as far as to say "When I won MVP ... sure Michael was the best player ... but I should have won ... we were rewarded for being the best team". He repeated the same argument about Malone. But the best team has a lot more to do with coaching, management and scouting. A great system goes a long way to sustaining a great team, without even having great players (remember the Kings of old?). Of course, great players can (and sometimes are) members of excellent systems, and this should not be held against them. The obvious example here is Tim Duncan. The Spurs are probably the best run organization in the league - their scouting record (especially international scouting) is absurdly impressive. They look for character of players. They are extremely well coached. Etc. But the Spurs' system hinges on the unique play of a gifted forward/center who is skilled at screen settings, passing out of doubles, is virtually unguardable, all while being the mainstay of one of the best defenses in the league. Does anyone else other than TD fit this bill? Possibly, possibly, KG comes close. And that's the end of the list. The point to take away from this is we ought not judge what player was the most valuable based on the system - we must judge based on his own play. Wade's Heat are 15-12 with him on the floor and have not won a game with him out. That's the difference between 5th/6th seed versus last place in the Eastern Conference. His PER is league-high, as is his Roland Rating. Why, then, do I put him only at 3? I will be the first to maintain that PER, RR, and other statistics are not without their own faults. While they give us powerful metrics to better understand the game, they are not the last word.

Third, Yao is so low because he is a little hurt and his team (thanks to in part to McGrady's sort-of resurgance) is doing ok. The Rockets seem to be doing fine for two reasons. First, McGrady is a brilliant, absolutely brilliant passer as well as scorer. But second, and much more importantly, JVG's system is working. The Rockets are the league's best defensive team this year - with or without Yao. Yao may now be the league's best center. Still, I am hard pressed to say he is more valuable to the Rockets than is Nash, Gilbert, TD, or Dirk to their teams.



All-Star Picks

Leastern Conference
C Dwight Howard
F Jermaine O'Neal
F LeBron James
G Gilbert Arenas
G Dwyane Wade
Chris Bosh
David Lee
Michael Redd
Caron Butler
Vince Carter
Paul Pierce
Chauncey Billups


Western Conference
C Yao Ming (injured - so we have 13 players instead of 12)
F Dirk Nowitzki
F Tim Duncan
G Steve Nash
G Kobe Bryant
Kevin Garnett (14.3 - Roland Rating)
Josh Howard (12.0)
Carmelo Anthony (9.4)
Tracy McGrady (9.1)
Tony Parker (8.7)
Amare Stoudemire (8.1)
Shawn Marion (7.4)
Allen Iverson (7.0 - adjusted for time in both teams)

A Case for HR 1498

The United States trade deficit hit a record $69.9 billion in August, up from $68 billion in July. The deficit with China rose to $21.9 billion and China’s continual trade surpluses in 2006 indicate that the United States drives the road of ballooning trade deficits. US workers watch helplessly as their jobs drift overseas and domestic consumers increasingly purchase foreign goods as a result of the deficits. “Made in the USA” is no longer what it used to be.

To make matters worse, the Chinese government intentionally depreciates the value of its currency, the Yuan, by holding vast amounts of both US and other foreign securities. By purchasing and holding US treasury bonds, China has effectively pegged its currency to the dollar and consequently, keeps prices artificially low inside of its borders with an excess supply of Yuan in the market. China acquires $20 billion worth of foreign security holdings monthly and soon will surpass one trillion dollars of outside currency held. The amount China spends annually on depressing its currency is equivalent to one quarter of its exports worldwide, effectively a twenty-five percent export subsidy according Peter Morici, former chief economist at the US International Trade Commission. House bill HR 1498 reverses this trend, allowing the United States to curb the unfair Chinese measures that have let the deficit swell to its current size by justly taxing Chinese products.

China’s protectionist actions hurt US manufacturers already contending with low wage earning workers in China. In the globalized world, the effects of Chinese trade policy are not restricted to the manufacturing industry. Companies use undervalued labor to export services such as healthcare. X-rays and MRI scans of American patients are analyzed overnight by licensed doctors overseas and ready for American physicians in the morning to act on. Thus, as medical jobs are also outsourced, the impact of Chinese governmental policy resonates all over America, not solely in our factories.

These arguments are not new, nor are they unique to the United States; however, a notable solution for the United States lies within trade law. China’s twenty five percent export subsidy is tantamount to a tariff protectionist measure that lies outside of World Trade Organization (WTO) parameters for acceptable protectionism. HR 1498, the Chinese Currency Act, declares Chinese currency manipulation as unfair and encourages the US to take legal action against China under US trade law by imposing countervailing duties. This would allow the United States to tax incoming products from China to offset the effects of the subsidy. The bill helps the US by making it more expensive and ineffective for the Chinese government to pursue their currency devaluing practices.

This is not protectionism to shield infant industry from competition, nor is it protectionism to help gain first-mover advantage like the United States did with Boeing, or Europe with Airbus. Chinese trade practice is unjust and the United States is justified retaliating through the WTO. This administration has been unsuccessful in forcing China to abide by international trade standards, despite China’s membership in the WTO. HR 1498 gives the United States legal recourse to tax Chinese products, helping domestic producers and bringing much needed revenue to the government.

While counter tariffs may appear a short term solution, the effects of HR 1498 are long term. Other countries are currently inclined to follow China’s example and manipulate their currencies to maintain competitiveness in world markets. By taking a firm stand against unethical action by other governments, the United States signals to China and others that the United States and WTO members will not tolerate exploitative trade practices. Moreover, HR 1498 helps keeps jobs here at home in the United States for both manufacturing and the service industries by leveling the playing field. It helps preserve the legitimacy of WTO agreements by preventing individual countries from circumventing them. The bill helps the United States stand strong at a time when US political capital is scarce in the international community. The US needs to turn down the road of significantly reducing trade deficits, not allowing them to exponentially grow. HR 1498 is a step in that direction.

Thoughts/comments?
-Abhi

Bad Math in Economics

I sometimes feel that economists go wrong when they try to over-apply mathematical theory to their problems. At times, they seem to force the issue.

Don't get me wrong. Math is a language beautifully suited to model many things. We all know that math is useful in physics - to the point that people seem to mistake mathematical models of physics as necessary truths as opposed to viewing them as models. It is useful in computer science. It is useful in chemistry - well sort of. At least it is useful in quantum chemistry where representation theory is used. And math is useful in bio as well. Well, ok, maybe not in bio. But you get the point.

And I certainly don't feel that mathematics is limited as a language to model the "hard" sciences. I think math has utility in describing flows of discourse in Foucault's Archaeology of Knowledge. And the logical positivists and metamathematicians were no slouches either.

The problem I have with the way math is employed in economics is that, sometimes there is a tendency to feel that simply because things are stated in mathematical terms, they are more rigorous - hence more right. And in that impulse, researchers (at times) seem to forget that - well - what matters is not the theorem itself but how well the real world issue maps onto the conditions for that theorem to hold. For example, it is not uncommon to read horrible economics papers, exploiting some local phenomenon and accidentally applying the result as some global pheonomenon to comment on larger-scale results.

Making matters worse, it is not uncommon to read papers and analyses that seem to force issues and positions out of topological convenience. The problem is that results are contingent on fairly arbitrary and convenient assumptions at times. Lots of natural settings aren't Hausdorff spaces (ignore this if you have no idea what that means). The common response is, "well, look we aren't trying to say exactly what goes on. we are trying to get a partial analysis - get closer to the truth or get a better idea of how this one factor might contribute, ceteris paribus." Look, that is cute and all - but here is where that fails. Some of these assumptions that are made literally make the conclusion entirely different. It isn't necessarily a continous function - a slight change in the assumptions of your model does not mean that your conclusion is perturbed only by a bit. In fact, there is no reason a priori for us to think that conclusions are so perturbation-robust in the first place in many of these situations. These are assumptions that should be rigorously justified - but usually they are not because ... well ... to put it mildly, the assumptions are made because it is too hard to deal with the detailed problem in the first place.

At the end of the day - it is important to take a lot of the theory with a grain of salt. And it is important to see if they are robust to assumption-perturbation. Only if this is the case, can we utilize the models to conclude stuff about these "partial analyses" in the first place.

Studying Deja Vu

How Stuff Works is a fun site. Excerpt below:

"Another theory is based on the way our brain processes new information and how it stores long- and short-term memories. Robert Efron tested an idea at the Veterans Hospital in Boston in 1963 that stands as a valid theory today. He proposed that a delayed neurological response causes deja vu. Because information enters the processing centers of the brain via more than one path, it is possible that occasionally that blending of information might not synchronize correctly."

Find more here.

Is CNN an Irony Free Zone

I'm pretty surprised that no one started cracking up after technology responded to the President.

In the meantime, I really liked this that was posted on Cowen's website. Watch that and read it with this.

John Stewart Takes on .... Kermit

I absolutely love YouTube. Kermit on The Daily Show here.

George Bush vs. Himself ....?

I absolutely love this clip. President George W. Bush debates Governor George W. Bush.

It's pretty amusing how the Republicans can launch such a great "Flip-Flopper" campaign, but the Democrats don't have the brains to come up with material that The Daily Show can.

"I don't think our troops oughta be used for what's called nation building ... Let me say this to you - I wouldn't use force, I wouldn't use force."