Division of Labour: January 2005 Archives
January 31, 2005
How long will the 'Boys be in Arlington?

The new "master agreement," just now being released to the Arlington City Council (but not yet to the public), is supposedly the same as was proffered back in November except for one big difference: the initial lease is for 30 years, next is a 10 year option, after that comes six five year options.

Headline on local 10:00PM news? "Cowboys could be in Arlington for the next 70 years!"

70 years!? How the news anchor read the script with a straight face is beyond me.

The Fort Worth Star-Telegram called this evening for a comment on the 70 year plan. I predicted the new stadium would likely not last thirty years, much less 70 years, and therefore such projections about how long the Cowboys will stay in Arlington are silly. I then suggested that the city of Arlington and the Cowboys could have included 400 years of options for all they are truly worth - we'll see if that makes it into the paper.

Here was my off-the-cuff list of 70+ year old stadiums: The Rose Bowl, Soldier Field, Fenway Park, and Wrigley Field (more stadium information is here). A few other stadiums made it to the 70 year mark before being torn down, but such stadiums are today's exception not the rule.

In Dallas, Reunion Arena was built in 1983 and was obsolete by 1998 when the city voted to fund American Airlines Arena. In Arlington, the old Turnpike Stadium, renamed Arlington Stadium, was built in 1965 and hosted the Rangers for 21 years before Arlington had to build a new stadium (Ameriquest Field, nee The Ballpark in Arlington) in 1994.

The 70 year prediction is the latest in a long list of "benefits" our fair city can expect from hosting the Cowboys. I think this is one of the "intangible benefits" that Jerry Jones predicted for the city of Arlington immediately after the November vote.

Note: Cross posted at Heavy Lifting for the Arlington locals.

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Posted by Craig Depken at 11:59 PM  ·  TrackBack (5)

When is enough enough?

A general strike was (finally?) called in Swaziland last week, evidently with little effect and fanfare Telegraph story here:

After banning sex and spending millions on palaces for beauty-queen wives, Africa's last absolute monarch, King Mswati III, faced rare popular protest yesterday [January 26] when Swaziland's underground opposition called a general strike.

One amazing tidbit that would land a local dog-catcher in hot water in most countries:

Some 39 per cent of adult Swazis are infected with HIV/ Aids, the highest proportion in the world. King Mswati responded to the crisis in 2001 by banning virgins from having sex for five years. Any man caught deflowering a virgin would be fined one cow.

This law proved too rigorous for the king. Months later, he chose a 17-year old bride and fined himself one cow.


Shouldn't we hear more about these excesses? Why doesn't Bush spend a little capital on calling out these types of rulers? Is it because there is no "imminent threat" from Swaziland?

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Posted by Craig Depken at 08:33 PM  ·  TrackBack (91)

I wish more of those who defend free speech ...

... understood that it's a right against government censorship. There's no abridgement of a man’s right of free speech when a private college declines to give him a microphone on its premises.

Reports Newsday:

Hamilton President Joan Hinde sent an e-mail to faculty on Sunday, repeating the position that "however repugnant one might find Mr. Churchill's remarks," the college was committed to his right of free speech and would not rescind its invitation.

Ward Churchill, in case you've missed the controversy, is the Colorado University professor who wrote that the victims of the 9/11 attack on the Twin Towers had it coming, because as willing participants in "America's global financial empire," they were "little Eichmanns" complicit in US military aggression.

Churchill's entire rant is here.

Posted by Lawrence H. White at 06:53 PM  ·  TrackBack (89)

You really can't make this stuff up

Please file under the Law of Unintended(?) Consequences:

A 25-year-old waitress who turned down a job providing "sexual services'' at a brothel in Berlin faces possible cuts to her unemployment benefit under laws introduced this year..

The government had considered making brothels an exception on moral grounds, but decided that it would be too difficult to distinguish them from bars. As a result, job centres must treat employers looking for a prostitute in the same way as those looking for a dental nurse.


But the story saves the best for last:
"Now that prostitution is no longer considered by the law to be immoral, there is really nothing but the goodwill of the job centres to stop them from pushing women into jobs they don't want to do."

No wonder Europe is in trouble, they are relying upon the law to determine morality.

Posted by Craig Depken at 02:50 PM  ·  TrackBack (2)

Vertical Integration?

Oil-rich Dubai Buys Big Stake in DaimlerChrysler.


Posted by Robert Lawson at 11:00 AM  ·  TrackBack (7)

January 30, 2005
Wanted: Curator of Mollusks

So you got your Ph.D. with a specialty in mollusks, have one year of curatorial experience and one year of molluscan systematics experience. Last year, your parents were just about ready to put their foot down on the whole molluscan systematics episode, but now they really need to know what you are going to do with your education.

The dream job might have just opened up at the Delaware Museum of Natural History.

We got more than 500 applications for a job opening at UTA...how many applications will trickle in to Wilmington?

Posted by Craig Depken at 02:17 PM  ·  TrackBack (3)

How many Starbucks is too many Starbucks?

Perhaps 165 in a five mile radius, as in Manhattan? (More comments here) In Arlington, I have 8 Starbucks but only 3 Walmarts, within a five mile radius of my house.

Find your Starbucks intensity at the Starbucks Locator. Who drives 50 miles for a Starbucks?

Posted by Craig Depken at 12:30 PM  ·  TrackBack (3)

Does it really matter what Bill Gates makes?

The strict answer is, "yes it does matter," because incentives matter. However, I don't think this is what people mean when they say that Bill Gates (or Alex Rodriguez or Roger Clemens or Tom Cruise) makes too much money. What comes across to me is a real (and unfortunate) emotional duress about salary inequality, probably because those in duress have less income than Bill.

For some, what Bill Gates makes really does seem to matter. For instance, if you are promoting the L-curve of income distribution. All of us plebes make up the bottom leg of the distribution and Bill Gates contributes the vertical leg. It's really not a distribution, per se, but why let that ruin the fun.

Do the people who agree that the "L-curve" is a justification for income redistribution make their consumption decisions based upon someone else's income? Do they make consumption decisions based upon the hope that Bill's income will be redistributed to them one day? Do they enjoy their Arby's Roast Beef less because Bill is worth $40B+? I hope not, but then again people are crazy animals.

I don't know how old this is, but it seems that we economists still have a lot of work to do.

(Note: the original entry has been edited - the old "revise and extend my remarks" we hear on C-SPAN)

Posted by Craig Depken at 12:14 PM  ·  TrackBack (7)

Calling out the profs

I am a really big fan of academic freedom; I use it myself to the fullest extent and rely on its protections. But I wouldn't mind seeing a few more academics called out on the carpet like this. Freedom is a two-way street baby.

[Thanks to Dave for the pointer.]

Posted by Robert Lawson at 11:06 AM  ·  TrackBack (1)

Long lines to vote?

The big news two hours before the polls close in Iraq (6:30am CST)? Between 800 and 1000 people in line to vote in Fallujah. Okay, I don't know if I trust the reports from anywhere outside of the Green Zone in Baghdad, but there are lines to vote?

Back in November, long lines to vote in the United States were evidence of conspiracy and voter surpression and intimidation. Given what is happening in Iraq today, perhaps we can put to rest the idea that lines are evidence of voter intimidation. When more people want to vote than can fit into the available voting booths (something that happens on a regular basis), excess demand causes lines. Maybe our good friend Henry Waxman, who has asked the GAO to investigate the long lines here in the States last November (letter here, more pressing issues here), needs a memo.

Initial reports suggest that the Iraq vote took place with less than thirty killed, and more than 70% voter turnout, including women. There are a lot of things different and, perhaps, lacking from this election, but if it had been predicted in January 2003 that an election of any sort would be held in January 2005? Who would have taken action on that?

How will the Dems and the anti-Bush folks play it now? Thirty percent didn't vote so the election is invalid?

A tip-o-the-Depken-hat to the Bush administration (people if not philosophy) and our soldiers, sailors, marines, and airmen.

Posted by Craig Depken at 07:54 AM  ·  TrackBack (5)

January 29, 2005
CNN Just Can't Help Itself

So I'm baching it this weekend (Pee Wee and my better two-thirds are visiting family in SC) and sleep until about 10:00 before heading to the kitchen to make some coffee. I turn the tv on for some weather info and background noise (usually provided by Pee Wee). The tv just happens to be on CNN and I hear Kelli Arena make this comment about new AG Alberto Gonzales:

"Instead of upholding the law of the land, he will be pushing the Bush agenda."

So let me see if my groggy ears heard this correctly--the Bush agenda is illegal? I don't think I've taken it out of context--I don't think there were any qualifiers about torture memos, Gitmo detainees, or the like. Just to be sure, I'll check Lex/Nex next time in the office; if I have quoted Ms. Arena unfairly I'll post a correction.

UPDATE: Here are Arena's comments from the show's transcript:

Well, the big concern, as expressed loudly by Democrats this week, is that he will just be an extension of the White House. That instead of upholding the law of the land, that he will be pushing the Bush agenda.

It appears that Arena is repeating Dems claim that the Bush agenda is illegal rather than taking that position herself.

Posted by E. Frank Stephenson at 11:52 AM  ·  TrackBack (4)

January 28, 2005
Viewing Tip

John Stossel Takes on Myths, Lies and Nasty Behavior tonight at 10 (eastern). I'll be watching--unless the coming ice storm knocks out the power.

Posted by E. Frank Stephenson at 06:34 PM  ·  TrackBack (5)

Quiz Time

CNN reports:

Security fee on plane tickets may double

The response:

Debby McElroy, president of the Regional Airline Association, criticized the proposal as taxing an industry that already carries one of the highest tax burdens.

"This could put further pressure on airline revenues at a time when many carriers are struggling for their very survival," McElroy said.

Question a la Kling: Taking Ms. McElroy's statement at face value, what is the incidence of the ticket tax and what does it suggest about the elasticity of demand for tickets?

Posted by E. Frank Stephenson at 06:25 PM  ·  TrackBack (9)

Undergrad demographics

Co-blogger Frank (below) notes that the undergrad population at his institution, Berry College, is now nearly two-thirds female. That’s an uncommonly high percentage, but indicative of the trend: the total U. S. undergraduate population has gone from under to over 50% female in the last twenty-five years, and the female majority is growing.

Robert J. Samuelson reports that “Women now earn a third more bachelor's degrees than men (712,331 against 531,840 in 2001).” The National Center for Educational Statistics reports: “In 2000, females accounted for 55 percent of full-time enrollment and 58 percent of part-time enrollment.”

What is driving the increasing percentage of female undergraduates? I hypothesize the combination of two things: the higher variance of males’ academic talents (the “males at the tails” phenomenon), combined with the expansion of higher education to accommodate more than half of the college-age population. Suppose that the male and female talent distributions have the same mean, and that each sex is half of the population, but that male distribution has a larger variance. The female distribution is then more highly peaked at the mean. As college attendance goes from 50% toward 60% or more of the total population, more women will be added than men (if the admission decision is by talent). With men over-represented in the lower tail of the academic-talent distribution, they are increasingly under-represented in the college population.

I haven't found the actual college-going percentage, but it’s clearly above 60%, based on these figures from a University of Maryland site. From 1980 to 2000, “For families with incomes below $33,000, the college-attendance rate increased from about 40 percent to nearly 60 percent. For families with incomes above $80,000, the college-attendance rate increased from about 70 percent to about 83 percent.”

As the baby boom fades, and colleges with excess capacity dip deeper into the college-age pool to fill their dorms, the percentage attending college can be expected to continue rising. But the percentage of undergrads who are female won’t necessarily keep rising: that depends on whether the percentage of females in the marginal percentile being added continues to exceed their percentage in the existing college population. Beyond some point, the percentage of males begins to rise again (it would have to return to 50%, once everybody attends college).

Posted by Lawrence H. White at 05:38 PM  ·  TrackBack (72)

For those who miss hockey

All five of you can watch old hockey fights in this open directory.

Family in town has kept me off the grid...have a good weekend.

Posted by Craig Depken at 05:16 PM  ·  TrackBack (10)

One Big Cow Pie

From CNN,

Massive cow manure mound burns for third month

Meanwhile,

A southeast Georgia dairy has received $200,000 from the U.S. Department of Agriculture to install a system that converts manure into energy and fertilizer.

Just think of the synergies* ...

*Yes, synergies is a BS buzzword, but its use seems entirely appropriate in this context.

Posted by E. Frank Stephenson at 01:57 PM  ·  TrackBack (8)

Males at the Tails II

Interesting tidbit from author Kingsley Browne, as quoted by Bryan Caplan over at EconLog:

although men hold the highest-status jobs, they also hold the lowest ones. Moreover, although women hold many of the lowest-paying jobs, men have a virtual monopoly on the least attractive jobs.

Browne notes than men dominate 24 of the 25 "worst" jobs as ranked by The Jobs Rated Alamanac.

Posted by Lawrence H. White at 01:12 PM  ·  TrackBack (4)

New GMU Economics Website

Quite beautiful ... and about time. The old one was showing its age.

Posted by Joshua Hall at 01:08 PM  ·  TrackBack (0)

What tax next?

Now that we have added vanity taxes to sin taxes, could the Roman pee tax be next?

Posted by at 01:03 PM  ·  TrackBack (2)

The Economist on Larry Summers

I normally find the Economist excellent throughout, but this comment (registration required) on the Summers affair left me speechless.

The Economist:

Worse, from a scientific viewpoint, Mr Summers may have compounded the problem by mentioning it. A slew of scientific research shows that if people are told they will fail, they will do so.*

First of all, he didn't tell all women that they will fail. Second, if presenting a testable hypothesis that might explain observable phenomena is not "scientific" then what is? Keeping your mouth shut or parroting whatever the conventional wisdom is? That is no way to increase understanding of the world.

* "Birdbrained: Are Women Naturally Bad Scientists?" The Economist, 22 January 2005.

Posted by Joshua Hall at 12:34 PM  ·  TrackBack (3)

Corporate Social Responsibility

Following up on some of Bob's postings on Capital University's winter commencement, last week's Economist has an excellent article (registration required) making a very similar point to Bob's - namely that profit-seeking organizations are prosperous only to the extent they help others satisfy their wants.

An excerpt:

[The thinking behind corporate social responsibility] is wrong. The goal of a well-run company may be to make profits for its shareholders, but merely in doing that - provided it faces competition in its markets, behaves honestly and obeys the law - the company, without even trying, is doing good works. Its employees willingly work for the company in exchange for wages; the transaction makes them better off. Its customers willingly pay for the company's products; the transaction makes them better off also. All the while, for strictly selfish reasons, well-run companies will strive for friendly long-term relations with employees, suppliers and customers. There is no need for selfless sacrifice when it comes to stakeholders. It goes with the territory.*

*"The Good Company," The Economist, 22 January 2005.

Posted by Joshua Hall at 12:14 PM  ·  TrackBack (3)

Skyline Chili

Lileks reminds me of one of the things I miss most about Ohio - Skyline Chili. I sure do miss taking Hamilton there on Wednesday nights (kids eat free). My favorite: 4-Way with onions.

Posted by Joshua Hall at 11:49 AM  ·  TrackBack (2)

Adverse Selection

Today's The Born Loser comic nicely illustrates the problem of adverse selection.

Posted by Robert Lawson at 10:14 AM  ·  TrackBack (3)

Nip, Tuck, and Tax

Following New Jersey's September 2004 lead, Washington and Illinois are considering "vanity taxes" on plastic surgery and Botox. No information is provided on whether states will charge progressive rates for larger enhancements.

Posted by E. Frank Stephenson at 09:48 AM  ·  TrackBack (3)

January 27, 2005
James Taranto* Will Love This

A certain charming (see 3rd item down for the reference) NY Times columnist whose editorial liberties spawned the term "Dowdification" has an email address "liberties@nytimes.com". Perhaps she got the address when Jayson Blair departed.

*Taranto writes the WSJ's "Best of the Web Today" feature.

Posted by E. Frank Stephenson at 11:40 PM  ·  TrackBack (1)

Re: Males at the Tails

Larry's recent post on the greater variance in men's math abilities reminds me of a recent discussion about male/female enrollments in Berry's business school. Berry is nearly two-thirds female, but two of the majors in its business school, economics and management have 75% or so male students. (The school's other three majors, accounting , marketing, and finance, are all close to the overall college ratio with accounting being a bit more female and finance being a bit more male.) When one of my colleagues expressed concern about the maleness of econ and management my immediate response was that the ratios might be the result of sorting by academic ability. (Note to my Berry student readers: Please do not forward this to your management major friends. I am, of course, merely referring to group statistics not individual attributes.) As one might expect if the math ability hypothesis is operative, several econ students (maybe a fourth) are majoring or minoring in math.

There's another interesting angle to this discussion. Berry's econ faculty members are all male but it's management faculty members are evenly split between men and women. Hence the heavily male enrollment in both majors suggests that having female faculty members doesn't seem to have a big "role model effect" in attracting female students to management.

Posted by E. Frank Stephenson at 11:26 PM  ·  TrackBack (3)

The Winter follows the Summer

There is a chilling flip side to the assault on Larry Summers. No doubt the same people that attack Summers for raising probing questions don’t think twice about indoctrinating their students in the latest fashionable ideology. It has always been my strong belief that the college campus should be a forum in which the young and the old are free to test unpopular and novel ideas. However, I have been astonished lately by the willingness of my colleagues to use the power of the podium to advance their pet social agendas.

As an undergraduate student in the early 1960s in charge of inviting guest speakers for the economics club, invitations were extended to the entire range of the political spectrum, from the John Birch Society to the Communist Party. Moreover, all of these speakers were received without protest and were listened to politely. This was a much different time and a much different situation than exists on campuses today. By the end of the 1960s most campuses became radicalized. While the nominal purpose of the radical movements was to open up debate on campuses, the real effect was to drown out less popular ideas. And those ideas that were most often threatened were those in defense of private markets.

Hayek argues that liberals believe good government depends on good people. If government is bad it must be that bad people have somehow taken control. It is a surprisingly simplistic view of the world, adopted by many who consider themselves ponderous intellectuals. It contrasts strongly with that of conservatives, who are willing to accept people as they are. Conservatives put their faith in the system rather than individuals. That may sound strange, because we are always told that it is the liberals who emphasize social forces and it is the conservatives who emphasize the individual.

It is because liberals put their faith in individuals to form a more perfect government that they must monitor individual imperfections. It is of crucial importance that these imperfections be rooted out, whether by shouting down offending ideas or by a more pernicious trip to the gulag. The liberal ideology is incompatible with open debate. The only purpose of open debate as Larry Summers now knows is to root out those with offending ideas. It is to label those who want to limit the federal intrusion into women’s rights misogynists and those in favor of equal opportunity racists. To take a judicial nominee like Charles Pickering who stood up to the Klan and label him a racist, can only be justified if the ends trump the means. With the rise of the liberal domination of campuses it is no wonder that debate has been reduced to ad hominem attacks and one-sided presentations.

Posted by at 09:06 PM  ·  Comments (1)  ·  TrackBack (2)

More ways not to refute Larry Summers

Sorry to harp on this topic, but I wanted to produce one more bit of yield from my investment in trolling through the blogosphere.

PZ Myers offers a treasure trove of non-refutation methods here.

1. Argue that where there are many causal factors, it is wrong to think that any particular factor is important:

these statistical games [citing the different distributions of male and female math test scores] may be correct, but if and only if the property of success in science and math is a simple one, with one quantifiable attribute that is an indicator of this mysterious parameter called “math ability”

2. Relatedly, argue that to view any one factor as important is to deny all others:

people like Summers are trying to impose a single simplistic standard on scientists

3. Use the ad hominem freely -- Summers’ supporters are “chauvinists”, and Steven Pinker is a bunko artist:

One extremely popular source among the defenders of chauvinism is Steven Pinker. […] If people started walking out on presentations of fact-free, unsupported hypotheses, Pinker wouldn’t have a career.

4. Deny that there is any relevant evidence on male-female differences from math test results, or from anywhere else:

Summers ... presented a badly formed hypothesis with no evidence to support it

5. Compare the Summers Hypothesis to creationism:

This is exactly what we see from creationists, too.

6. Accuse Summers of bad faith:

We consider hypotheses of innate differences all the time in science; that’s very different from an administrator using half-baked ideas to rationalize away cultural stereotypes and prejudicial policies.

7. Turn "prejudice explains the observed pattern" from a hypothesis to a fact, and claim that its explanatory importance renders genetic factors of no possible relevance:

It just seems to me that the fact that women are subject to widespread, long-term bias against their scientific abilities, yet some still persevere and manage to make it, is convincing evidence that the “hypothesis” that they are innately inferior in these fields is bogus.

8. Insulate your position from refutation by refusing to look at any statistical evidence gathered in the world as it currently exists:

You can come back and tell me about “distribution curves” and “long tails” when the playing field is level and you can actually legitimately provide appropriate data.

To be fair, buried in Myers' rhetoric is one valid point:

you can’t use these kinds of distributions to argue for innate differences—they can be equally well (better, to my mind) explained by environmental factors.

If it were true that the different distributions of male and female teenage math test scores can be largely explained by environmental factors, then increasing the representation of women in science would still remain an uphill battle – only it would be a battle against deep-seated (child-rearing) culture rather than against our genes. The relatively small number of females among the top scientists would still be due to a relatively small pool of females choosing to enter those fields, rather than to "prejudicial policies" by universities.

Posted by Lawrence H. White at 06:43 PM  ·  TrackBack (28)

Males at the Tails

Todd Zywicki, over at The Volokh Conspiracy, helpfully restates a key element of the controversial Larry Summers Hypothesis as follows:

The distribution of natural endowments for math abilities for men show[s] the same mean but greater variance than math abilities for women. Therefore, men will be disproportionately represented at the tails of the distribution relative to women.

Summers offered this as possibly a part of the explanation for the statistical over-representation of men in the very upper end of the distribution of math users (namely, among professional scientists and engineers). Todd notes that greater variance also has an implication less flattering to males: “there are likely to be more men in society than women with unusually poor and below-average math skills."

Washington Post columnist Robert J. Samuelson now points to evidence that males dominate the lower tail of other distributions:

Compared with girls, more boys take drugs for attention-deficit disorder (80 percent of users are boys); more are held back (8.3 percent vs. 5.2 percent among 5- to 12-year-olds); more are high school dropouts (12.2 percent vs. 9.3 percent among 16- to 24-year-olds); and the gap between boys and girls on reading tests is widening.

Posted by Lawrence H. White at 04:20 PM  ·  TrackBack (4)

How not to refute Larry Summers

From a news follow-up article, “Do genes play a role in science gender gap?”, by Carolyn Y. Johnson of the Boston Globe:

Summers was faulted by some conference participants and others for drawing a link between test scores and career success -- a link that they said has been disproved by research.

Really? Disproved? Research has shown that there’s no link? This is research I’d like to see.

Yu Xie, a sociology professor at the University of Michigan who spoke at the conference, has shown that men outnumber women 2-to-1 in the top 5 percent of scorers on math tests -- research that Summers cited in his talk. But Xie said in an interview that his studies show that not all the best scorers succeed professionally, and not all men with successful science careers received the top scores.

Sorry, those aren't the research results we need to show that there’s no link. Of course not 100% of the top-5% scorers end up in the top (say) 10% of their fields. But surely more than 10% do? What is the percentage? Of course not 100% of all men with the most successful (top 5%) careers are among the top 5% of test scorers. But surely more than 5% of the most successful scientists are? What is the percentage? I would find it hard to believe that there’s no link, that the top 5% of test scorers are not more heavily represented than others (are not more than 5% of the population) among successful career scientists. I await the evidence to the contrary.

Let me borrow an analogy from David Bernstein of The Volokh Conspiracy. Suppose a hypothetical Larry Winters says that perhaps, in part, goyishe men dominate the National Basketball Association because there is a link between height and basketball success, and goyishe men are more heavily represented among the very tallest. The analog to Xie’s comments would be: “But wait! Not all the tallest people have successful NBA careers! And not all successful NBA players are above the 95th percentile in height!” True and true, but beside the point. Less-than-perfect correlation doesn’t show that height doesn’t matter, or that there’s no link between height and professional basketball success.

Xie and Kimberlee Shauman of the University of California at Davis, who coauthored ''Women in Science: Career Processes and Outcomes," concluded that no single factor could explain why women did not make it into the most elite science positions, and that a combination of social, cultural, and psychological factors were probably at work.

Again, not the evidence we need. Lots of other factors also matter, sure. Test scores are not a perfect predictor (do not have an r-squared of 1.00), sure. That doesn’t show that test scores have no predictive value, other things equal. Or even that test scores aren’t a better predictor than any other single factor or combination of factors.

To be fair to Prof. Xie, please notice that he isn't quoted as saying that the existence of a link has been disproved. That claim the reporter only attributes to an unnamed "they".

Posted by Lawrence H. White at 03:54 PM  ·  TrackBack (5)

Comic-nomics

The light blogging from me the last week or so is the result working long hours putting the finishing touches on a new paper that tries to use comic strips to teach basic economics. Hagar the Horrible knows his public finance! I'm quite happy with the early returns and am now thinking of turning it into a book proposal.

If anyone has any comic strips (no editorial comics please) that you want to share with me, I'd be happy to take them. E-mail me at rlawson at capital dot edu

Thanks!

Posted by Robert Lawson at 03:23 PM  ·  TrackBack (3)

Legislative Busybody Update

Proposal would make spinning wheel covers illegal in Iowa. Yet another reason to be libertarian ...

ADDENDUM: I'd also like to welcome Ralph Frasca to our merry band of bloggers and thank him for his kind wishes for Pee Wee (who's recovering nicely). Had the timing of my job search 8 years ago worked out a bit differently, we might have been colleagues for the past several years.

Posted by E. Frank Stephenson at 01:28 PM  ·  TrackBack (2)

Property Rights

Every right is precious. 5th Circuit Rules in Rappers' Battle Over Phrase 'Back That Ass Up'

Posted by at 09:32 AM  ·  TrackBack (3)

January 26, 2005
Where's the Oomph?

The following is taken from an article (sorry not yet online) in the most recent Runner's World magazine:

On average the men's marathon performances were 10.71 times slower than their 5k performances, while women's performances were 10.45 slower. In other words, women slowed down less. They seemed to have more endurance. Moreover to quote my [statistician] friend: "While the difference might seem small, it is in fact very statistically significant because the sample size is so large." (Emphasis mine.)

Ugh!!! Very statistically significant? What the #$^@ does that mean? I'm sure the journalist took it to mean something like "very important". But it doesn't mean that at all. In actuality, statistically significant means something more like "under certain assumptions which may or may not be true, the estimated relationship is unlikely to be zero." But the big question is not whether the estimated relationship is nonzero, the big question is whether the estimated relationship large or small. As Deirdre McCloskey would say, "Does it have oomph?" In this case the difference isn't that large; that is, there's no oomph. So who cares if it is statistically significant?

Btw, based on the estimated 10.71 ratio between marathon and 5k PRs, my estimated marathon time is 3:36 (since my 5k PR is 20:09). This turns out to be pretty accurate since my actual marathon time last year was 3:34.

[Welcome also to new co-blogger Ralph Frasca, an econ prof at the University of Dayton.]

Posted by Robert Lawson at 11:20 PM  ·  TrackBack (1)

Club for Growth Social Security Blog

The Club for Growth has started a blog devoted to Social Security private accounts. There are several funny cartoons (I liked this one in particular), and the bloggers include Herman Cain a fine but unsucessful candidate for senate from GA.

Posted by E. Frank Stephenson at 02:34 PM  ·  TrackBack (1)

What Do You Get When You Cross Beer and Jolt?

AB's new beverage B-to-the-E. De gustibus ...

Posted by E. Frank Stephenson at 02:02 PM  ·  TrackBack (3)

Biggest disappointment in the list of Oscar nominations

No nominations in any category for the funniest film of the year, Trey Parker and Matt Stone's Team America. I was hoping at least for a best original song nomination for "America, F@#$ Yeah!", following the precedent of the nomination for the same filmmakers' "Blame Canada" from South Park: Bigger, Longer, and Uncut.

Maybe the lack of nominations has something to do with the fact that much of the film's humor comes from pointedly ridiculing left-wing Hollywood actors? For example, from identifying them as members of the Film Actors Guild, or F.A.G.?


Posted by Lawrence H. White at 12:02 PM  ·  TrackBack (5)

Medical Bills

I wish Frank Stephenson’s child a rapid recovery. With four children of my own, I was a frequent visitor to the emergency room. I don’t plan to enter a guess in Frank’s medical bill lottery. Before he picks a winner, he will have to first determine what he actually owes. In my experience, that is not too easy. Am I the only one that has trouble deciding whether a letter from the doctor’s office is actually a bill or simply a statement of past services that will be covered by my health insurance? Moreover, most of the time it is not even clear what past services are listed. When my mother was in the hospital she received bills from doctors who had apparently peaked into her room while she was unconscious. Of course, none of them bothered to indicate why they were visiting an unconscious woman. We tried to guess at that from the specialty listed on the envelope.

What particularly irks me is that these obtuse statements seem peculiar to the medical industry. My plumber sends me concise and informative statements. I know precisely what I am being billed for and how much remains to be paid.

Is there a reason for these poorly written communications from hospitals and physicians? Are their billing agencies uniquely inept or is there some other reason? Is it possible that vague statements produce multiple collections from the patient and from the insurer? There has to be an underlying rationale.

Posted by at 10:33 AM  ·  TrackBack (2)

January 25, 2005
Two bridges too far?

Arnold Kling at EconLog poses the following riddle, adding a twist to Don Boudreaux’s
example
of a for-profit bridge:

[Suppose the following:] You charge $1 at off-peak times, and $5 at peak times. You get 10,000 off-peak riders per day and 1000 peak-time riders per day, for $15,000 a day in revenue. Suppose that breakeven revenue is $6,000 a day.

Now, suppose that a competitor opens a bridge. Then my guess is that the toll will be competed to zero when there is no congestion, so that both bridge-owners become dependent on the congestion charge to recover fixed costs. At peak time, price competition is less fierce, because riders are willing to pay a little extra to be on a less congested bridge. However, there are only 1000 people willing to pay $5 a day for the privilege of a peak-time ride, so now neither bridge can recover its costs.

For Discussion. In the bridge example that I laid out, what is the socially optimum number of bridges?

First, I have a nit-picking objection to Kling’s example. With two bridges and the same 1000 drivers, congestion at peak time should be less than with one bridge. A peak-time driver therefore gets a better product (a faster trip) for his $5. So shouldn’t the number of people willing to pay $5 be greater with two bridges? In his example, it’s the same in both cases (1000 people).

Anyway, to answer the discussion question: given only Kling’s data, we can’t tell whether two bridges are better for social wealth than one. The bridge owners jointly go from $9000 in surplus to negative $7000, a loss of $16,000. But 10,000 people who used to pay $1 now cross for free, adding $10,000 in consumer surplus. We don’t know how many more, for whom $1 was too high, benefit now that the bridges are free off-peak. If the demand curve for off-peak travel is linear from (say) zero QD at $2, to 10,000 QD at $1, it hits 20,000 at $0. The area of the added consumer surplus (rectangle plus triangle) would be $15,000 (and the traffic would be no worse). Other shapes and positions for the demand curve would give other amounts, some of them greater than $16,000.

Clearly an example can be formulated in which both of two (indivisibly sized) bridges lose money, even though a single bridge would make a profit, and the loss in producer surplus is known to exceed the gain in consumer surplus. If we suppose that two bridges have been built, then we conclude that the market has failed to reach the efficient outcome. But given the data of such a case, why would the second bridge be built? If the second entrepreneur can anticipate what will happen, won’t he choose not to build?

Here’s the most important point: Kling is asking the wrong question. As F. A. Hayek argued in “The Use of Knowledge in Society,” calculating the social optimum when “we” have all the relevant information “is emphatically not the economic problem which society faces. … The reason for this is that the ‘data’ from which the economic calculus starts are never for the whole society ‘given’ to a single mind which could work out the implications, and can never be so given.”

Only under a regime of open competition, which requires free entry, do we begin to learn where the demand curves actually lie and where the breakeven point (minimum cost) actually lies. So the more fundamental question is: What is the best method for society to determine the number of bridges? And the answer is: Free entry.

Posted by Lawrence H. White at 04:34 PM  ·  TrackBack (4)

Was Larry Summers right after all?

The ostritch approach to science really gets on my nerves. The "I don't like that hypothesis, so I will disparage it" attitude reminds me of a line in, I think, The Hitchhiker's Guide to the Galaxy that goes something like "If you can't see it, it can't see you." (I could be wrong on the source, it's been a while since I read those books). Both statements are equally dangerous regardless of how politically correct.

Don't look now, but Larry Summers might have been right after all.

Posted by Craig Depken at 03:54 PM  ·  TrackBack (2)

Lucky or not?

I skirted jury duty by not having my name called for the seven jury pools. In essence each juror is given a "number" and the pools are allocated on a lottery basis. I had a bad feeling that today I would be called to serve because the three other times I have been called up I have gotten off the hook.

It turns out that I didn't "win" in the jurry lottery, which is consistent with my inability to match numbers in the Texas Lottery.

Found this while surfing around. I assume that if Kerry had won, the toon would look very similar. Also, would the Repubs be screaming that the vast majority of counties went for Bush even if he lost the electoral college, and therefore Kerry didn't have a mandate? I think so...
Image hosted by ImageHost.org
But sometimes they act as if they were robots...

Posted by Craig Depken at 03:46 PM  ·  TrackBack (21)

That's F. A. Hayek, not Salma Hayek

The inaugural issue of the NYU Journal of Law & Liberty just came in the mail. The contents are available as .pdf files here.

I’d say the journal is off to a flying start: the issue’s theme is “Hayek and the Law”, and the article contributors include Andy Morriss, John Hasnas, G. Marcus Cole, Richard A. Posner, Ellen Frankel Paul, Richard A. Epstein, and the trio of Scott Beaulier, Pete Boettke, and Chris Coyne.

As a bonus, Israel Kirzner reviews Lanny Ebenstein’s book Hayek’s Journey, and Ebenstein reviews Bruce Caldwell’s book Hayek’s Challenge (with a response by Caldwell and reply by Ebenstein). Sparks fly!

Posted by Lawrence H. White at 02:49 PM  ·  TrackBack (32)

Is Hollywood Becoming a Red State?

A quick glance at this year's Oscar nominees reveals no listing for a large scruffy fellow named Moore. (Apparently this is partly his Moore's own doing as he didn't enter his film in the documentary category. Given his masterful cut-and-paste work, you'd at least think he'd get a nod for best editing!) More generally, films of a lefty orientation such as "The Motorcycle Diaries" and "Vera Drake" received few nominations, though "Supersize Me" got a nod for best documentary. By contrast, "The Aviator", which co-blogger Larry nominated for "Most Economically Literate Movie of the Year", got a spruce goose full of nominations and Mel Gibson's "The Passion of the Christ" got three nominations albeit in secondary categories.

Posted by E. Frank Stephenson at 10:06 AM  ·  TrackBack (5)

Alert System for Social Security

There's a new color-coded alert system for Social Security. (Hat tip: Mike DeBow)

Posted by E. Frank Stephenson at 08:57 AM  ·  TrackBack (33)

January 24, 2005
What would you need

if the asteroid hit tomorrow and modern life as we know it was over?

This was an interesting topic on local radio last night: the host asked for what life skills we might need, individually or as a group, to survive in the post-disaster world without our modern marvels. My top four coincided with what other people suggested, although there were a lot of "silly" suggestions such as the ability to make paper and ink and the ability to make aspirin. Such things would seem of second or third order concerns, but then again it was local talk radio.

My list:

1) ability to make fire
2) ability to hunt, gather, and prepare food (non poisonous)
3) ability to purify water
4) ability to make shelter.

After that, I would hope individuals would recognize their comparative advantages and organize into mutually beneficial trade (after all isn't that what we preach in class). But isn't it more likely that the majority (or all) of the survivors of such a calamity would revert to a zero-sum mentality, at least in the short to medium run?

If this is the case, does that argue for a "retreat" somewhere in the rural hinterlands that you can go to (assuming you could get there) and avoid as much contact with others as possible, at least until the initial zero-sum game is finished? It doesn't sound efficient, but perhaps it would be in a second-best world.

Posted by Craig Depken at 06:08 PM  ·  TrackBack (21)

William F. Buckley on Rand's Passing

Found in the William F. Buckley archive at Hillsdale College. I don't think Buckley is necessarily correct on this, especially the "risked giving to capitalism that bad name" part, but I thought I'd pass it along.

"The Fountainhead, " read in a certain way, is a profound assertion of the integrity of art . What did Miss Rand in was her anxiety to theologize her beliefs. She was an eloquent and persuasive anti-statist, and if only she had left it at that, but no. She had to declare that God did not exist, that altruism was despicable, that only self-interest is good and noble . She risked, in fact, giving to capitalism that bad name that its enemies have done so well in giving it ; and that is a pity . Miss Rand was a talented woman, devoted to her ideals . She came as a refugee from communism to this country as a young woman, and carved out a substantial career . May she rest in peace, and may she experience the demystification of her mind possessed.*

*William F. Buckley, "Ayn Rand, R.I.P." National Review, 2 April 1982.

Posted by Joshua Hall at 02:58 PM  ·  TrackBack (24)

How to be a philosophizer

Tips on how to be a philosopher. Some good ones:

Technique 6

Respond to an article or book that you have not read. Be relentless.


and
Technique 10

Spend some time - one or two seconds - concocting the most outrageous ethical conundrum possible. It should involve Nazis in some way.


Makes me think that there is room for a similar list on how to be an "economist."

Posted by Craig Depken at 02:13 PM  ·  TrackBack (25)

I Though Constitutions Existed to Bind Politicians

"To tie the hands of legislators in a way they can't effectively govern is contrary to our form of government," Harris, an Ashland Republican, said Tuesday.

Posted by Joshua Hall at 01:33 PM

A new way to scare your kids straight

1.5 million of these guys might be living in your bed.

Posted by Craig Depken at 01:32 PM  ·  TrackBack (1)

Soft Drink Diversity

Responding to Larry's post, one possible reason for an expansion of pop flavors in recent years is that the market for soft drinks is more heterogeneous due to changing demographics. Pepsi-Cola's Code Red, for example, is aimed at the Hispanic and African-American markets.

Perhaps the increase in disposable income among teenagers and young adults has also increased the diversification of soda lines.

Posted by Joshua Hall at 12:49 PM  ·  TrackBack (27)

Some questions about soft drinks

1. Why has there been such a proliferation of flavors in the last few years? Pitch Black Mountain Dew, Cherry Vanilla Dr. Pepper, Holiday Spice Pepsi. And it’s not just sodas: Minute Maid now makes frozen orange juice blended with tangerine flavor, and alternatively with passionfruit flavor.

My guess: people are drinking more soft drinks every day. (Which begs the obvious question, why?) Taste buds get jaded. That leads to a demand for greater variety. A second possibility, also question-begging: supermarket shelf space has for some reason gotten cheaper.

UPDATE: Josh's demand-side hypothesis (above) has promise. Test: Is it true that the new flavors are consumed disproportionately by growing demographic groups? Here's an alternative supply-side hypothesis that a colleague suggested over lunch today: the IT revolution has made it now much cheaper than it used to be for a bottler to manage inventories of 20 different flavors. This hypothesis, generalized, has the implication that we should also see a proliferation of newly sized products, like boxes of miniature Ritz crackers. And we do.

2. Now that we have varieties of Diet Coke flavored with vanilla, cherry, lemon, and lime, what's next? My guess: Chocolate Diet Coke. Back in the days when girls wore poodle skirts, soda fountains served Chocolate Cokes.

3. What were they thinking when they released Mixed Berry 7up Plus? It tastes awful.

4. Why can't you get unsweetened iced tea in a can? Is it because it would taste even more like the can than the awful sweetened Nestea-in-a-can already does?

5. Why is iced tea in a bottle so much more expensive than soda in a bottle? Don't they both consist of 98% water?

Btw, the best unsweetened iced tea in a bottle is Tejava brand, available at Trader Joe's. To take the slightly bitter edge off, add a splash of Minute Maid light lemonade (which tastes better than Tropicana).

Posted by Lawrence H. White at 10:35 AM  ·  TrackBack (30)

Of my 15 minutes of fame, I still have 14:45 left

At the very end of a segment on “Analyzing Private Retirement Accounts,” NPR’s “All Things Considered” yesterday used only a small sound bite from my interview. Audio is available here.

Posted by Lawrence H. White at 10:17 AM  ·  TrackBack (26)

January 22, 2005
Updates on Previous Posts

1. Some lawyers have now opined on the ownership of the ball used for the last out for the World Series. Glad to see that at least one agrees with my take that the Cardinals have a better claim to the ball than the Red Sox. Alas the article also commits a pet peeve of mine--it uses the grating phrase "Red Sox Nation" (it's the nation part not the Sox part that chafes) instead of "Red Sox fans" or some other formulation.

2. As many readers know, Friday's WSJ carried Harvard prof Ruth Wisse's op-ed (subscription required) defending Larry Summers. Wisse, repeating a friend's quip, asks of the woman who walked out on Summers "what better evidence of underprofessionalism than a scientist who becomes nauseated at the mere hint of a theory that differs from hers?" Later, Wisse writes, "Lobbying for women in the name of greater diversity, they [critics of Summers] used the club of gender to silence diversity."

SUPPOSE FOR SAKE OF DISCUSSION that Summers's innate differences hypothesis is at least partly responsible for the paucity of women in science. (I emphasize the beginning of the previous sentence to make it clear that I am not claiming that the hypothesis is correct. I merely want to assume it is correct for discussion purposes.) This might suggest that disciplines with larger shares of female profs were either inherently easier than the sciences or that men have innate inferiority in the attributes necessary for success in those disciplines. Hence, I wonder if there is a reasonable basis to conclude that some women heavy disciplines are inherently easier than the sciences? Without getting myself into deeper #$%^ by naming any specific disciplines, I suspect that those disciplines dominated by a postmodernist/deconstructionist search for some -ism or another under every rock (or, as I'll probably hear soon, in every blog posting) are indeed easier than physics, chemistry, and the like.

By the way, my previous post on the Summers kerfuffle is here.

3. In posts here and here, I questioned the AARP's claim that the taxable wage threshold for the payroll tax has not been fully adjusted over time. An article ("On Social Security, It's Bush vs. AARP") in yesterday's WSJ lends some insight. The article reports that Social Security "was designed so that taxes would apply to 90% of all wages" and that "the share of overall national wages subject to Social Security payroll taxes has slipped to 84%" because of relative increases in high wage earners.

This 90% business is a rather novel use of the notion of adjustments over time; we economists tend to think of indexing for inflation as I did in my previous posts. Neither the article nor a quick search of AARP's website could find any basis for AARP's claim that the payroll tax base historically has been targeted to 90% of aggregate wages. AARP's own documents do, however, suggest that it has been a bit cavalier in it's public calls for adjusting the base up to $140k: "If the wage base were 90 percent, the taxable maximum would be more than $130,000 by 2008." In other words, probably not fully up to $140k and not until after 3 more years of economic growth.

Posted by E. Frank Stephenson at 11:50 PM  ·  TrackBack (29)

Friday Evening in the ER

So we're having a glorious 65 degree day here yesterday and, after 90 minutes of biking around some of Berry's 27,000 acres with my buddy Chris, I pick Pee Wee up from pre-school (located here on campus), get his training wheel equipped bike out of my car's trunk, and let the tot loose. A mere 5 minutes later, he has broken both bones in his forearm (it was obvious even to this kind of doctor) and we're headed for the ER. He was a trooper about it (hardly any crying--plus he thought X-rays were pretty cool), and the folks at Floyd Medical Center took good care of him.

But let's make some lemonade from Pee Wee's lemons. I'm opening the comments section for a game of "Guess that Doctor's Bill"! Yup, take your guess at how much it'll cost (the total bill not merely my responsibility net of insurance) for Pee Wee's arm repair. The services include an ER visit, 2 sets of Xrays (before and after setting the break), a visit from the orthopedist to set the break, some local anethesia, a fiberglass cast that comes up to the elbow, a dose of tylenol or similar pain med, and an icepack (I hope I haven't forgotten anything). In addition to the total tab, let's speculate on the tylenol price. My guess is $1,500 for the total tab and $10 for the tylenol. If the co-pays etc. don't set me back too much, I might just send some Berry College paraphenalia to the closest guesses.

ADDENDUM: I have a few other posts on my mind; hopefully regular blogging will resume this evening after junior goes to bed.

Posted by E. Frank Stephenson at 03:07 PM  ·  Comments (8)  ·  TrackBack (30)

Tullockania

Lots of us are Tullock fans.

He has a reputation as a nasty jerk, but it is just not true. Plus, even if it IS true that he can be mean-spirited in the attack, he is absolutely gleeful in defense, and impossible to offend. For me, that matters a lot.

He has certainly affected my own teaching. For my Public Policy class, I talk about the relation between mandating safety equipment and human risk-taking behavior. Everyone knows the Peltzman story (Peltzman, S., “The Effects of Automobile Safety Regulation,” JPE, 83:677, 1975.), but it is hard to get across to students.

So, I use the "Tullock Steering Column" to get the idea across. (Yes, Gordon really said this, many times; see p. 4)

I ask, innocently, if mandating safety equipment makes cars safer. The kids sense a problem, but of course the answer has to be "yes", right?

Wait, maybe not. I pull out a bona fide, 1944-era Army issue bayonet. It's 18 inches long, and looks like a small sword. I attach it to a toy steering wheel on one of those toy dashboards my kids used to have, which I now use for class.

And, I ask: with this Tullock Steering Column, would the number of accidents go up, or down? And, the answer is, way WAY down. In fact, all aspects of driving behavior would be much less risky.

In my evaluations, the students may recall nothing else. But they remember this, and the "point" of the story. Thanks, Gordon!

Posted by Michael Munger at 11:32 AM in Economics

Fascist CATO and Reforming the SS

(SS means Social Security. But you knew that).

I often miss things, I'll admit. Don't understand, don't quite get the point, that kind of thing.

But this....surely this is just incoherent babbling. (I'm saying that, this time, my lack of understanding is not really my fault, see).

There is some pretty strange stuff here, but check this:

The wealthy oligarchical families that had directed the Synarchist/Nazi movement from 1921-45—and were defeated by Roosevelt—saw in the Mont Pelerin Society the instrument to re-establish that program internationally. The Mont Pelerin Society's economics was no different than that of the Bank for International Settlements, Hitler, or Mussolini.

I'm pretty sure there are some differences, actually, between the MPS and Hitler. And there are certainly differences between CATO and Hitler. (Though...Boaz used to have that little mustache....Hmmmm).

LaRouche seems to have become a leftist (again), or else is just living on his own little plane of existence. (You might enjoy this)

On the other hand, it is true that one can make pretty good arguments against privatization of Social Security. To me, it comes down to two questions:

1. If someone takes their retirement funds, and squanders them on blue sky, get-rich-quick schemes, will we as a society let them starve? Or will we reward them for risk-taking behavior by giving them another stake to squander?

2. Which scheme gives government more power, and more ability to interfere with both markets and peoples' private lives? Social Security makes us all beholden to the SSA, and the funds can be used for redistributive purposes like the notorious "supplemental" Social Security activities of the 1980s. On the other hand, if everyone had money in the stock market, or bonds, or whatever, there would be irresistible political pressures to intervene to prop up security prices, or force interest rates down, or whatever.

I am cautiously in favor of increased privatization, but only cautiously. I don't think we can trust government not to reward extreme risk-taking, and I don't think we can trust ourselves not to force government to meddle in securities markets. While I might concede in principle that a thorough transformation to private ownership and management of pension funds is a good thing, the sort of 1/3 transformations being proposed might end up looking like power "deregulation" in California.

In other words, if we are not willing to try full-blown market solutions, it is by no means clear that we won't just make people skeptical about the market in temporizing "solutions" that are doomed to fail.

(nod to RP of SN)

Posted by Michael Munger at 10:50 AM in Politics

Easier? Harder? Well one of those...

The Tax and Expenditure Limitation (TEL) idea continues to generate debate. On a normative level, there's plenty of room for disagreement about the desirability of TELs. Basically, if you favor more government spending you're against a TEL and if you're in favor of less you're for a TEL. On the positive level, likewise, there's room to debate the impact of a TEL on economic growth for example. Fair enough.

But the amount of plainly wrong and contradictory argumentation going around is really astounding.

Consider today's Columbus Dispatch article with these two gems:

Yesterday, [House speaker] Husted went on record against it, saying the amendment could gut essential government services, burden local governments and relieve legislators of their responsibility to make hard choices. (Emphasis mine.)

[A TEL] GOP leaders warn, would bring tough choices about cutting aid to schools; closing prisons, parks and libraries; eliminating home care for the elderly; or reducing other services. (Emphasis mine.)

Posted by Robert Lawson at 10:16 AM  ·  TrackBack (56)

January 21, 2005
The One and Only Tullock II

As told to me by a former GMU grad student:

Tullock's teaching load is 1 course per year--a graduate seminar. One year, 8 students were enrolled in the seminar. Tullock enters class on the first day of the term and announces in a gruff voice, "There are 8 more students in this class than is optimal."

Posted by Robert Lawson at 03:36 PM  ·  TrackBack (18)

Baseball Fights

As we start gearing up for spring training (pitchers and catchers report Feb. 14!), here's a QuickTime movie of some baseball fights. They might also provide a fix for the three people who miss hockey fights.

The best is saved for last...Nolan Ryan owning Robin Ventura.

Posted by Craig Depken at 12:39 PM  ·  TrackBack (26)

On TELs and Recessions

In the press release supporting the Ohio TEL proposal co-blogger Bob says, "In any case, a TEL proposal can easily be combined with a proposal for a budget stabilization fund (‘rainy-day fund) to help offset the problem of a recessionary budget crunch."

It's astute for Bob to address this issue because the "TEL will cripple us during recessions" is one of many specious arguments that statists will trot out to oppose restraints on spending. While a rainy day fund may have merit, it is not necessary to have one linked to a TEL based on inflation plus population growth. Since inflation is still present during most recessions (a quick peek at the inside back cover of a handy principles text indicates that there have been year-over-year increases in the CPI since 1960) and because population continues to grow during most recessions, the effect of a TEL would be no different during recessions and expansions. Note that (unfortunately in my view) nothing in the TEL prohibits raising tax rates during a recession to offset a decrease in the tax base (income or sales) as long as the tax rate increase would not lead to a growth in revenue greater than inflation and population growth.


Posted by E. Frank Stephenson at 11:28 AM  ·  TrackBack (28)

On the technology of protest

I am not the only one who has picked up on the lack of innovation in protest chants. Yesterday saw little improvement. C-SPAN has 4 hrs of streaming video of the A.N.S.W.E.R. Coalition protest. It is pretty entertaining at times.

Brain Becker, head of ANSWER, gives the opening speech - at 2:28 into the streaming video, his phone rings and he actually checks who it is - as if he would take the call.

First chant at 14:30 -"Bush says get back, we say fight back. Bush says more war, We say no more." It didn't last very long.

Other chants:
"U.S. out of Iraq - Bring the troops home"
"Hey Bush, what d'ya say, how many kids did you kill today?"
"No justice, no peace - U.S. out of the Middle East"
"Racist, sexist, anti-gay - George Bush go away"
"Racist, sexist, anti-gay - Bush - Cheney go away"
"What d'we do, fight the power - Bush's killing by the hour"
"Bush you can't hide - we charge you with genocide"
"George Bush go away - how many people did you kill today?"
"Hey Hey, Ho Ho - We won't go for Texaco"

Overall, a little disappointing. The technology of chants just doesn't seem to be improving. The first ANSWER chant was obviously too complicated for the average protestor.

Another lesson: Don't ask a question you don't know the answer to. Brian Becker comes back later in the protest and asks the following two questions after complaining about how many jobs have been lost during the first Bush administration:

"How many people skipped work today?" Answer - lots of applause.
"How many people are looking for work?" Answer - no applause, crickets chirping

Oops...

Posted by Craig Depken at 11:02 AM  ·  TrackBack (27)

Fabulous Stories About Property Rights

While doing the familiar song-and-dance about private ownership and the tragedy of the commons in class Wednesday, one of my students gave a fabulous example. A student from India said that India (or at least some city or region) went from communal ownership of rickshaws to private ownership of rickshaws. Apparently when the rickshaws were collectively owned, the operators would skimp on maintenance and use inferior fuel. Policymakers realized that privatizing rickshaw ownership would create an incentive for the owner/operators to appropriately maintain them. Immediately after class I put Mr. Google to work looking for some documentation of the rickshaw story (not because I doubt the student's veracity but because I want to share the story with future classes) but came up empty. I'd be grateful for any reader suggestions.

Another student's example of the tragedy of the commons warmed my Berry Bike heart. She reported that Elon also has a problematic communal bicycle program. This time Mr. Google was useful in finding some background info (and some great photos!):

In a large heap on the outskirts of Elon’s Physical Plant lies a pile of the lost and forgotten, those that fought the good fight but spent their last days suffering through rugged use they just weren’t designed for. These are the bikes of Ride, Rack and Relax.

The bikes used for the Ride, Rack and Relax program, a school-sponsored initiative to provide students with access to bikes for cross-campus trips, have become the target of student misuse. In recent weeks, at least two bikes have been spotted and removed from the train tracks that run through campus. Another bike, according to Smith Jackson, dean of Student Life, was left mangled after being struck by a passing train. While no damage was done to the train, Jackson warns that similar incidents could have catastrophic results.

Posted by E. Frank Stephenson at 10:49 AM  ·  TrackBack (29)

Not Funny

For an example of how pathetic the lefty Bush-haters have become check out Patti Davis's inaugural address for President Bush.

Posted by E. Frank Stephenson at 10:25 AM  ·  TrackBack (3)

Reasons to celebrate and mourn on January 21

January 21, 1924: Vladimir Illyich Lenin dies.

The world is relieved of one tyrrant but his legacy causes the death of incalculable millions - perhaps 100 million or more? (Table here and some research here. Don't forget the Black Book of Communism)

Given Pres. Bush's speech yesterday, an agenda promoting freedom, regardless of how successful, is much more promising than the agendas of fear and death that characterized Lenin and his disciples.

Posted by Craig Depken at 09:51 AM  ·  TrackBack (26)

January 20, 2005
The One and Only Tullock

Public Choice was excluded from a 1980 Journal of Economic Literature article on publication lags because "Professor Gordon Tullock refeerees submissions to Public Choice himself and usually has a response in the mail within 48 hours." *

*Gary Yohe, "Current Publication Lags in Economics Journals," Journal of Economic Literature, Vol. 18, No. 3. (Sep., 1980), pp. 1050-1055.

Posted by Joshua Hall at 10:27 PM  ·  TrackBack (30)

How I avoided jury duty

Scene: Athens, Georgia, a courtroom. A pool of about fifty potential jurors, including me, is being questioned by the defense attorney. Next to him sits his client, a young black male who has been accused of raping a white woman.

Attorney: Now, by show of hands, do any of you think that members of certain groups in our society are more likely to commit violent crimes than members of other groups?

Me, thinking to myself: Hmm, what would a “no” answer imply? That the prison population is a perfect cross-section of the general population? Clearly not the case. That any demographic over-representation in the prison population is entirely due to bias in arrests and convictions? Hard to believe.

Here are the sort of numbers that were in the back of my mind.

ucrjailpop.gif

(Source here. The most recent Bureau of Justice Criminal Offenders Statistics are here.)

I raise my hand. (Yes, I am saying, what I know indicates that not every group commits violent crimes at the same rate.) No other hands go up.

Read More »

Posted by Lawrence H. White at 08:00 PM  ·  TrackBack (26)

What's your next vehicle?

Perhaps it should be the ultimate geek machine: a custom built Badonkadonk Land Cruiser:

The specs:

  • Carries cargo or a crew of up to five internally or on the roof.
  • Piloted from within the armored shell or from an exposed standing position through the hatch.
  • 6hp Tecumseh gasoline engine, top speed 40 mph.
  • Includes head/tail and turn signal lights, trim and underbody lighting.
  • 400 watt premium sound with PA system, plush interior, and external camera.

    The cost: $19,999.95.

    Hat tip to colleague Courtney LaFountain.

    Posted by Craig Depken at 05:53 PM  ·  TrackBack (30)

    Those of you who listen to National Public Radio ...

    ... may be interested to know that they just interviewed me about the substitution of private retirement accounts for Social Security. (Hint: I'm for it.) The interviewer was Jim Zarroli; we talked for about half an hour. I got to go to the campus radio station's recording studio, talk into a real radio-station-type microphone, and wear headphones (just like Molly Shannon and Anna Gasteyer used to do in their SNL skits about the fictional NPR recipe show)! He said he expects excerpts to be used for a segment of "All Things Considered" sometime this weekend. Remarkably, he said he contacted me because he saw my letter to the editor of the St. Louis Post-Dispatch (the substance of which is also here).

    Posted by Lawrence H. White at 04:07 PM  ·  TrackBack (240)

    How to avoid jury duty?

    Act smart or act stupid? I have been called to jury duty for the fourth time in eight years. I have yet to make it to jury selection, but this time I have a bad feeling.

    I always figured that my PHD would come through eventually, even if I tried to hide it by kicking into my North Georgia twang. But then, I find this story out of Memphis with some instructions on how to avoid jury duty:

    Right after jury selection began last week, one man got up and left, announcing, "I'm on morphine and I'm higher than a kite"
    and
    Another would-be juror said he had had alcohol problems and was arrested for soliciting sex from an undercover officer. "I should have known something was up," he said. "She had all her teeth."
    and
    Another prospect volunteered he probably should not be on the jury: "In my neighborhood, everyone knows that if you get Mr. Ballin (as your lawyer), you're probably guilty." He was not chosen.

    Lesson learned.

    Posted by Craig Depken at 03:57 PM  ·  TrackBack (19)

    Early Base Ball

    Following up on Craig's post on early base ball images, I have my own collection of early base ball images--mostly woodcuts from Harper's Weekly--posted on-line here.

    Actually if you go back far enough say to the 1850s and early 1860s, base ball was "just a game." It was initially played by gentlemen's clubs in the NYC area. Of course, it didn't take long for competitive play and commercialism (not that that's a bad thing!) to take over.

    Btw, co-blogger Josh and I play vintage base ball by the rules of 1860 for the Ohio Village Muffins.

    Posted by Robert Lawson at 01:46 PM  ·  TrackBack (22)

    Back when it was "just" a game

    Okay, it was never just a game, but the romance of early baseball still dominates. Here is a fascinating set of pictures of baseball's early days available at the Library of Congress. One of my favs: this one of spectators at a Pittsburgh-Detroit World Series game in 1909:

    Could we expect such dedication from fans today? Perhaps a team should run an experiment.

    Posted by Craig Depken at 12:29 PM  ·  TrackBack (36)

    How should you adjust for inflation?

    Determining the relative value of an amount of money in one year compared to another is more complicated than it seems at first. There is no single "correct" measure, and economic historians use one or more different series depending on the context of the question.

    This nifty website will adjust for inflation in five different ways.

    [Thanks to Dave for the pointer.]

    Posted by Robert Lawson at 09:26 AM  ·  TrackBack (31)

    January 19, 2005
    Have the writers of Baby Blues been reading Russ Roberts?

    Baby_Blues010305.gif

    Compare to Russ Roberts' classic essay, "If You're Paying, I'll Have Top Sirloin". Russ blogs here. The Baby Blues archive is here.

    Posted by Lawrence H. White at 04:58 PM  ·  TrackBack (36)

    The iPod Shuffle Game

    Following Will Baude, Will Willkinson and Lynne Kiesling, here are the last ten (of 8000+) songs that came up on shuffle on my iPod.

    1. Kenny Rogers - "Ruby, Don't Take Your Love to Town" from 20 Greatest Hits
    2. Pearl Jam - "Soon Forget" performed live 09/04/00 Merriweather Post Pavilion
    3. Kelsey Grammer - "Cape Feare (Gilbert & Sullivan Medley)" from Go Simpsonic with the Simpsons
    4. Jim Croce - "One Less Set of Footsteps" from the 50th Anniversary Collection
    5. Eminem "Drug Ballad" from The Marshall Mathers LP
    6. Poison - "Fallen Angel" from Poison's Greatest Hits: 1986-1996
    7. David Bowie - "Scary Monsters (and Super Creeps) from The Singles
    8. Puff Daddy - "It's All About the Benjamins (Dave Grohl Rmx)" from No Way Out
    9. Pearl Jam - "Footsteps" from Lost Dogs
    10. Smash Mouth - "Then The Morning Came" from Now That's What I Call Music 4

    Posted by Joshua Hall at 03:43 PM  ·  TrackBack (24)

    Life is better than fiction...

    Adventures at Taco Bell.

    Beautiful...if it's true.

    Posted by Craig Depken at 12:16 PM  ·  TrackBack (37)

    Supply curves slope upward

    At least for professors.

    Another good classroom example.

    Oregon institutes a salary freeze for all public employees, including professors, and then finds it difficult to recruit professors.

    Posted by Craig Depken at 11:56 AM  ·  TrackBack (22)

    From the Dumb Criminals Department ...

    From today's AJC:

    But a would-be thief who tried to drop in to a Philly Connection shop through a ventilation system Tuesday probably should have given a little more thought to his legwork.

    Store owner Altaf Merchant turned the lights on at his Cleveland Avenue cheese-steak shop Tuesday morning to find a pair of legs dangling from the ceiling.

    The burglar had planned to climb down the narrow ventilation chute that opened up above the store's grill.

    He managed to get his legs through, but the fit turned out to be too snug for the rest of him.

    So there he dangled, for eight hours — from 2 a.m., when store cameras first show him coming in, to 10:30 a.m., when Merchant walked in.

    Posted by E. Frank Stephenson at 09:20 AM  ·  TrackBack (21)

    Good News--Georgia Colleges Have Low Graduation Rates

    Apparently there is still a modicum of standards for graduating from college in Georgia:

    All but two of Georgia's 18 public four-year colleges and universities graduate fewer than half of their students after six years. Six of the schools graduate fewer than a quarter of their students, research by the Education Trust, a Washington nonprofit advocacy group for students in k-12 and post-secondary schools showed.

    Of course, the Education Trust drew the wrong conclusion from the report. Instead of calling for admitting fewer students with little probability of succeeding,* it " emphasized the need for institution-wide commitment to better retention and graduation rates and pointed to some examples of schools that have improved." Translation: Even more grade inflation and dumbed down degrees are on their way.

    *Or at least succeeding at 18 year olds. I've long suspected that many students who struggle (lack focus or direction?) in college when they are 18 might do much better when they are, say, 25.

    ADDENDUM: There's a modest campaign contribution that will be mailed to the first Georgia legislator who uses the study to call for (1) tightening the eligibility standards for Georgia's HOPE Scholarship to include a class rank or SAT score criterion instead of useless high school grades, or (2) closing one or more of Georgia's state colleges.

    Story here.

    Posted by E. Frank Stephenson at 09:16 AM  ·  TrackBack (24)

    January 18, 2005
    It's a small world?

    Eugene Volokh quotes Deborah Chinn:

    It's not a small world, it's a small bourgeois clique.

    This reminds me of one of my favorites (first heard from Rick Stroup):

    It's not a small world, it's just narrow at the top!

    Posted by Robert Lawson at 10:06 PM  ·  TrackBack (29)

    Monopsony power works!

    Yet another excellent example for the classroom.

    Posted by Craig Depken at 09:21 PM  ·  TrackBack (26)

    More evidence that we're worth something

    Today's snail mail box provided the December 2004 Minneapolis Fed Quarterly Review with an article by Zvi Eckstein and Eva Nagypal titled "The Evolution of U.S. Earnings Inequality: 1961-2002" in which they have the following picture: employment1.JPG
    HSD indicates High School Dropout, HSG indicates High School Graduate, SC indicates Some College, CG indicates College Graduate, and PG indicates Post Graduate.

    It is an interesting graph - especially the decline in High School dropouts in the workforce. Perhaps us college profs are worth something after all.

    Posted by Craig Depken at 09:13 PM  ·  TrackBack (27)

    Ohio TEL Proposal

    Today the Buckeye Institute in Ohio released this report titled "Should Ohio Limit Government Spending and Taxes?" It was co-authored by myself and co-blogger Josh along with Russ Sobel (West Virginia University) and Barry Poulson (U. of Colorado). It outlines the case for a constitutional tax and expenditure limitation (TEL) in Ohio.

    Needless to say the special interests and their media mouthpieces are already screaming that such proposals will cause mass starvation, illiteracy, and disease throughout the land.

    My press conference remarks are copied below for those interested.

    Read More »

    Posted by Robert Lawson at 04:30 PM  ·  TrackBack (23)

    The Aviator

    Bryan Caplan over at EconLog thinks that the award for “Most Economically Literate Movie of the Year” should go to A Day Without a Mexican.

    I haven’t seen that one yet, so I’ll nominate a different movie for the award: The Aviator, the Golden-Globe-winning biopic about Howard Hughes that I just saw this weekend.

    One of the major plot strands of The Aviator illustrates the theory of rent-seeking with a stunning real-life example. Pan American Airways (and a US senator in its pocket) try vilify Hughes (owner of TWA) in order to get Congress to give Pan Am a legislated monopoly of trans-Atlantic routes. (I find it amusing that the scheming Pan Am CEO is played by Alec Baldwin, and the scheming senator by Alan Alda, two of Hollywood’s best-known advocates of the beneficence of government intervention.) Hughes, played by Leonardo DiCaprio, refuses to knuckle under to their extortion, and speaks out for free competition at a Senate hearing that the senator has staged to embarrass Hughes.

    One clever exchange from the hearing: the senator declares that, unlike Hughes, the CEO of Pan Am is out to serve the public, not to make a profit. Hughes retorts: “I’m sure his shareholders will be happy to hear that.” (I’m happy to report that the audience around me laughed.)

    Beyond the movie’s economic literacy, Ed Hudgins of the Objectivist Center has praised it for illustrating Randian moral lessons, while the moderator of a Marxist mailing list has panned it for distorting Hughes' real life to make him look like a Randian hero.

    Posted by Lawrence H. White at 04:04 PM  ·  TrackBack (36)

    Dancin' with the devil

    Interesting "presentation" by Joel Spolsky (private business owner) on why business owners, especially in the software industry, might want to reconsider going in with a Venture Capitalist. His main point is that venture capitalists have different objective functions than company founders and therefore founders run the risk of being disappointed.

    Spolsky contends that the main differences between VCs and company founders include different risk tolerances (VCs are less risk averse and founders are more risk averse), the ability to diversify risk (VCs have the ability, founders don't), the desired timing of return (VCs want it sooner), desire for "sustainable" growth (founders want steady, slower growth and VCs want sporadic, faster growth), and selection bias (VCs seek high-return projects which often involve high-risk, therefore only high-risk projects are funded).

    A couple of interesting quotes:

    Specifically, founders would prefer reasonable success with high probability, while VCs are looking for fantastic hit-it-out-of-the-ballpark success with low probability. A VC fund will invest in a lot of startups. They expect about seven of them to fail, two of them to trudge along, and one of them to be The Next Netscape ("TNN"). It's OK if seven fail, because the terms of the deal will be structured so that TNN makes them enough money to make up for all the losers.

    But founders are much more conservative than that. They are not going to start ten companies in their lifetime, they're going to start one, maybe, two.


    and
    VC [Venture Capitalism] is now doing a perverse kind of selection - looking for the founders with business ideas where the founders themselves think the idea probably won't work.

    Found at Dane Carlson's Business Opportunities Blog

    That's probably it for me today...

    Posted by Craig Depken at 01:17 PM  ·  TrackBack (32)

    Prof. DeLong's opinion

    on social security reform is offered in this short essay: "Bush's Crash Test Economics".

    I have no desire to get into a policy debate over social security, mainly because I haven't studied the issue enough. Nevertheless, however insightful Prof. DeLong's analogy between car repairs and social security, in my book he blew it with his final statement:

    If I were a betting man, I would put my money on Bush's incompetence. After all, that seems to be the common denominator of every policy controlled by his White House.
    Every policy?

    Posted by Craig Depken at 12:23 PM  ·  TrackBack (19)

    Why the dot-com era ended

    Here's a funny depiction of the business model that sold a million books but failed to generate significant profit for those who implemented it.

    More drawings here. I like this one about graduate school.

    Posted by Craig Depken at 12:10 PM  ·  TrackBack (221)

    Pull Pin, Toss Grenade ...

    Larry Summers hypothesizes that innate differerences between men and women may be partly responsible for the relatively small number of women in math and science. Kerfuffle ensues.

    On one hand it's fun to see libs hoist on their petards. On the other hand, it seems to me that instead of getting huffy and walking out--as one person did--that the proper response is to have a reasoned discussion about the merits (or lack thereof) of Summers's innate differences hypothesis. (Note that Summers also posited two other hypotheses--ATSRTWT.)

    PS: This is post number 500 on DOL and the fun's just getting started!

    Posted by E. Frank Stephenson at 09:39 AM  ·  TrackBack (28)

    Hot and Bothered

    This gives the expression a whole new meaning.

    Posted by E. Frank Stephenson at 09:19 AM  ·  TrackBack (195)

    January 17, 2005
    We don't need no stinkin' government sewers

    Is it true, as some fecal-statist wag quoted below has claimed, that “When you use the bathroom, your s*** is carried away by a government built sewer system”?

    Not generally. A glance at Jon C. Schladweiler's online history of sewerage (ain't the internet amazing?) reveals that many of the first American sewers were privately built (the private benefits were rather obvious). So much for the notion that without government we would have no sewers. But the private sewers were typically later municipalized when developers found that they could get taxpayers to take over the cost of maintenance:

    “during the mid-1800s … many sewers were initially designed, built, owned, and (supposedly) maintained by private individuals or companies. Sooner or later, they wanted the involved/adjacent cities to take them over, which most of them willingly did.”

    Even today, most governments that finance the building of sewer systems don’t do the actual building; they contract that out to a private construction company. Try googling "sewer construction bids".

    Posted by Lawrence H. White at 06:06 PM  ·  TrackBack (29)

    What kind of party will it be?

    You can't bring the following to the inauguration:

    Prohibited Items

    Firearms, weapons of any kind, ammunition (either real or simulated), explosives of any kind (including fireworks), knives, blades, or sharp objects (of any length), aerosol sprays, coolers, thermal or glass containers, mace, pepper spray, sticks, poles, pocket or hand tools (such as a leatherman), packages, backpacks, large bags, duffel bags, suitcases, laser pointers, posters, signs, placards (including supports structures), animals other than guide dogs or service dogs assisting handicapped individuals, strollers, chairs, umbrellas, alcoholic beverages, and any other items at the discretion of the security screeners that may pose a potential safety hazard.

    From the less than impressive Capitol Police webpage. That doesn't sound like a party I would want to go to.

    Also, check out the salary and benies that the U.S. Capitol Hill Police get.

    Posted by Craig Depken at 04:29 PM  ·  TrackBack (30)

    Touche

    At The Fly Bottle, a Social Security post led to a comment-section debate on libertarianism. One of the posters pulled out the tired argument of the type "you go to a government school you can't be against government." Specifically, the poster said:

    When you use the bathroom, your s*** is carried away by a government built sewer system.

    To which an anonymous poster responded:

    Septic tanks: Making the world more libertarian, one toilet flush at a time.

    Posted by Joshua Hall at 03:46 PM  ·  TrackBack (37)

    Time waster of the day

    Who is this insane weatherman? Is he in Asheville, NC?

    The weathermen here in the DFW area are very serious about their jobs, perhaps because twisters can fire up within a half hour. The one around here who seems the most accurate (how there can be any variance is beyond me) wears a bow tie and is 180 degrees away from our good friend linked to above.

    Posted by Craig Depken at 03:42 PM  ·  TrackBack (34)

    Another Point on Class Size

    Following up on Frank's post, Hanushek makes a Hayekian-type of knowledge argument in that paper that I think is quite apt. He says:

    "The real difficulty is that we do not know how to describe, a priori, situations where reductions in class size will be beneficial. Thus it is not possible to legislate only good outcomes from the state capitol...."*

    I make a similar argument here, when I say:

    A national or central office may sometimes have superior access to information about national trends. But for highly specific knowledge -- the need for more teachers, the effectiveness of class size reduction, the need for after-school programs, the quality of school infrastructure -- the subordinate units in daily contact with the relevant facts can compile, analyze, and utilize knowledge regarding education in a more cost-effective manner. Federal flexibility reforms neither increase nor reduce federal dollars going to education. Rather, they reflect the differences in knowledge between decision-making units and the common goal of increased student achievement that all concerned policymakers, be they federal, state, or local, are working towards.

    * Eric A. Hanushek, “The Evidence on Class Size,” in Susan E. Mayer and Paul E.
    Peterson, eds., Earning and Learning: How Schools Matter (Washington, D.C.:
    Brookings Institution Press, 1999), p. 162.

    Posted by Joshua Hall at 12:56 PM  ·  TrackBack (26)

    "let's just have the players play naked"

    My friend JC of Sabernomics is crabby about sanctimony over steriods. Read far enough down his long post and you'll come to this line: "Pot is certainly not performance-enhancing, but it probably makes being on the Devil Rays at least funny."

    Posted by E. Frank Stephenson at 12:56 PM  ·  TrackBack (27)

    Reason #2638 to love capitalism

    Date: January 17
    Outside temp: 12 degrees F
    Price of grapes: 99 cents

    grapes.jpg

    Posted by Robert Lawson at 12:35 PM  ·  TrackBack (2)

    Journalistic Mush on Class Sizes

    From a recent article on class size in the Atlanta paper:

    Research has found a clear benefit for elementary school students who spend several years in classes with no more than 18 students, particularly for poor or minority students.

    Yet in the same article this paragraph appears:

    "The research on class size is ambiguous," said Brian Stecher, a senior social scientist at the Rand Corp., a nonprofit policy research organization in Santa Monica, Calif.

    If the research is so clear then why does the writer quote someone as saying it is ambiguous? Pick one.

    ADDENDUM: Here's a paper on class size written by leading education scholar Eric Hanushek. He finds no significant relationship between class size and student performance. In this article in Ideas on Liberty I suggest that class size reduction advocates mistakenly make the implicit assumption that the new teachers hired to reduce class sizes are of equal quality as the existing teachers.

    Posted by E. Frank Stephenson at 12:34 PM  ·  TrackBack (1)

    Dispatches from the Anointed--Yet Again

    This column by Joel Connelly of the Seattle Post-Intelligencer appeared in my local paper yesterday. It's a pretty standard leftist op-ed piece but one part caught my attention. Writing of the House Majority Leader, Connelly says, "DeLay, a former pest exterminator, has ..." What purpose does it serve to list DeLay's previous occupation? Does Connelly routinely list the previous occupations of elected officials in his columns? I suspect that his purpose here was to belittle DeLay and to convey a sense of his own supposed intellectual superiority. Perhaps I'm too sensitive on this one. After all, one sometimes hears that Bill Frist and Tom Coburn are physicians. But if I'm correct Connelly's swipe makes it clear why Democrats have electoral problems--they proclaim to care for ordinary folks but look down their noses at folks who hold ordinary jobs.

    Questions to ponder (a la Arnold Kling): One also reads that Denny Hastert is a former wrestling coach--does this refute or support my take on Connelly? As for Democrats, I think their prior occupations are listed less frequently (quick now, what did Nancy Pelosi or Tom Daschle do before becoming politicians?). Could it be that Democrats are less likely to have actually been "working people" prior to becoming pols?

    Posted by E. Frank Stephenson at 12:17 PM  ·  TrackBack (199)

    Junk Science?

    most child cancers and leukaemias are probably initiated by such [air pollution] exposures...

    Most? Maybe this study is correct, but we've seen enough such studies over the years to warrant skepticism.

    I'm sure that all the studies debunking it won't get the same kind of press.

    Posted by Robert Lawson at 09:19 AM  ·  TrackBack (4)

    Who's really stingy with tsunami relief?

    I remember a lot of jokes being made after France allegedly promised a mere $140k for tsunami relief while the UN and others were accusing the United States of being "stingy."

    Well, it turns out that France has upped their tsunami relief contributions to about $55m. However, Bulgaria comes in with the lowest "official" contribution at $140k and Cyprus with $370k. Meanwhile, the U.S. is pretty low on the ranking of contributions per billion of GDP and per-capita contributions but we rank second in overall contributions (which include private contributions) [more here]

    Do we not pick on the Bulgarians because it isn't as much fun? Is it because we implicitly understand that Bulgaria probably doesn't have a lot to offer in the first place? Or do we just make fun of the French because they often seem a little bit poopy about things?

    Posted by Craig Depken at 12:35 AM  ·  TrackBack (3)

    January 16, 2005
    Martin Luther King, Jr.

    As usual, I will be avoiding my university's MLK Day of Learning tomorrow.

    Instead, as is my habit at this time of year, I have just reread King's timeless "Letter from a Birmingham Jail." This is one of those classics that is worth reading at least once a year. ATSRTWT.

    This allows me to offer up a belated tribute to Frank Henderson, a former professor of mine at OU who died in 2003. Frank was one of the first graduates of Central High School in Little Rock and I believe it was in his Political Theory course as a freshman that I first read King's letter. Quite simply he was the best professor I ever had.

    Posted by Robert Lawson at 08:43 PM  ·  TrackBack (5)

    Would this be possible today?

    Harry Thompson at Auburn University has this (old) picture of AU's Comer Hall.

    How many deans, student activists, and state legislators would abide livestock grazing in the front yard?

    Posted by Craig Depken at 06:00 PM  ·  TrackBack (4)

    Partly empty, partly narrow

    It seems to me that there are three broad classes of arguments that explain why human societies have governments (by which I mean something very close to Max Weber’s notion of “an organization with a monopoly on the legitimate use of force.”) There are innumerable variants, of course, and advocates often mix the arguments, but the three justifications seem analytically distinct.

    1. EFFICIENCY: Internal coordination problems—Groups of people face daunting obstacles in realizing gains from trade and cooperation. Resort to some form of hierarchical, third-party enforcement mechanism may be inevitable. Almost without exception, the form of this hierarchical organization we observe is government. Under this reasoning, then, governments exist to define and defend property rights, administer the production of public goods, and adjudicate disputes. To be successful, of course, proponents of this perspective have to do more than just show government is capable, in principle, of carrying out these functions. The question is whether government is, in practical terms, the best way to solve problems of coordination, free riding, and internalizing external effects of private action.

    2. SECURITY: Protection from external aggression—It can clearly be argued that national (or for that matter, village) defense is simply another public good. But it is a different, and probably logically antecedent, public good. The capacity to ensure borders, and create confidence in security of rights and property, from outsiders, seems to be one of the first things that makes humans form “societies” (as opposed to governments) in the first place. Of course, to accomplish this guarantee of security, a society must be able to create, maintain, and direct an armed force powerful enough to deter attack, or defend against attacks. It seems, at least in practical terms, that if you take a society, add an army, and mix well, you get a government.

    3. POWER: Preserve privileges—An important motivation for the actions of real governments is the protection, and rhetorical legitimization, of the rights and privileges of elites. The objective definition of “elites” is problematic, since over time it is government power, itself, that creates rights and privileges. Nonetheless, thinkers as diverse as Karl Marx and Wilhelm von Humboldt perceived the danger that the very creation of government, at least in the sense of an organized hierarchy capable of directing coercive force, may be based on protection of power or privilege.

    The reason to go through this little exercise (i.e., wondering why we have governments in the first place) is that a misunderstanding about what government is can lead to bad prescriptions about what it should do. The three explanations I have offered, efficiency, security, and power, are very different; governments constituted primarily to achieve one of these goals may not respond well to demands to achieve the others. As the reader no doubt knows already, economists tend to take the first path, emphasizing efficiency, or justifying government based on “market failures.” Political scientists have often chosen the second path, emphasizing the role of the “state” and its military power in ensuring national security. Sociologists have gravitated toward the third rationale for government’s existence, investigating the structures of governance as institutions for maintaining and protecting power.

    Here is what I want to know…why don’t we recognize that regardless of why we create governments, relying on them at the margin for more and more “solutions” runs afoul of an avoidable truth:
    We must not overlook here one particular harmful consequence, since it so closely affects human development; and this is that the administration of political affairs itself becomes in time so full of complications that it requires an incredible number of persons to devote their time to its supervision, in order that it may not fall into utter confusion. Now, by far the greater portion of these have to deal with the mere symbols and formulas of things; and thus, not only are men of first-rate capacity withdrawn from anything which gives scope for thinking, and useful hands are diverted from real work, but their intellectual powers themselves suffer from this partly empty, partly narrow employment. (Wilhelm von Humboldt, The Limits of State Action, Indianapolis: Liberty Fund, pp. 29–30)

    Posted by Michael Munger at 04:13 PM in Politics

    You mean Jennifer Aniston is available?

    As you’ve no doubt heard, Brad and Jennifer have split up.
    Well, who cares? Everyone, apparently, to judge by the proliferation of gossip columns, tabloid magazines, and web sites. Why do celebrities inspire such fascination and devotion? Not being a celebrity watcher or gossip hound myself, I naturally turned to my primary source of insight into human behavior… The Theory of Moral Sentiments.

    Inside we find the secret of celebrity worship revealed… it’s the sympathy principle, of course!

    It is because mankind are disposed to sympathize more entirely with our joy than with our sorrow, that we make parade of our riches, and conceal our poverty.

    This fundamental principle of human nature provides the motivation that leads us to strive to better our condition:

    To be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation, are all the advantages which we can propose to derive from [the pursuit of wealth]. It is the vanity, not the ease, or the pleasure, which interests us. But vanity is always founded upon the belief of our being the object of attention and approbation.

    Smith clearly had Brad Pitt in mind when he described “the rich man”:

    Every body is eager to look at him, and to conceive, at least by sympathy, that joy and exultation with which his circumstances naturally inspire him. His actions are the objects of the public care. Scarce a word, scarce a gesture, can fall from him that is altogether neglected. In a great assembly he is the person upon whom all direct their eyes; it is upon him that their passions seem all to wait with expectation, in order to receive that movement and direction which he shall impress upon them; and if his behaviour is not altogether absurd, he has, every moment, an opportunity of interesting mankind, and of rendering himself the object of the observation and fellow-feeling of every body about him.

    So don’t feel guilty… next time you’re in the supermarket checkout isle go ahead and grab a Sun, or Globe, or Inquirer! But please, no Weekly World News.

    (All quotes are from Part I. Of the Propriety of Action, Section III. Of the Effects of Prosperity and Adversity upon the Judgment of Mankind. Text courtesy of The Library of Economics and Liberty.)


    Posted by at 12:50 PM  ·  TrackBack (3)

    Dogtown/Little River Canyon

    Still wanting some furniture for our recently completed basement, we were delighted to learn recently of a nifty furniture store located in (as Dave Barry would say, I am not making this up) Dogtown, Alabama. So today my wife and I loaded Pee Wee into the Stephenson-mobile and set out on the 45 minute drive to this furniture mecca. Dogtown is located atop Lookout Mountain and consists of little more than the Akins Furniture Mart, a restaurant that is only open on Fridays and Saturdays, a church, and a few dozen houses (depending on where the locals consider the unmarked boundaries of Dogtown to lie). Yet in this unlikely place, there is a 100,000+ square foot furniture store that was much busier than the suburban Atlanta stores that we browsed looking for basement goodies. The company apparently does little advertising--though it has a website here--but its reputation for helpful service and bargain prices draws people from miles away.

    So what was our haul? A leather recliner, a couple of end tables, and four bar stools for about a week's worth of salary (my dear wife tells me similar stools were selling for at least twice as much in a recent Pottery Barn catalog). I doubt I could have made even rough equivalents (visions of wobbly stools should come to mind here) of such furniture in as little time. Aren't reputation effects and capitalism wonderful? (Thanks to the folks at Akins and to our friends Chris and Edma for the tip.)

    To top off our family outing, we explored Little River Canyon--a 500-foot deep gorge known as the Grand Canyon of the East (yes, that's a bit of puffery, but it's gorgeous). There were a few houses at the top of the sheer canyon walls that reminded me of the house in Hitchcock's "North by Northwest" (one of my favorite films). It amazes me that I haven't visited this natural wonder at least once previously during the eight years I've lived within an hour of it. But I'll be back ...

    Posted by E. Frank Stephenson at 12:03 AM  ·  TrackBack (3)

    January 15, 2005
    Larry, y'gotta have a website...

    Why? Because otherwise people won't know about L&M Phillips 66 in Lyons, Kansas.

    Hit their site and turn up the speakers. I'm from Georgia, and the site should be banned for the midi file alone.

    One interesting tidbit:

    For the week of April 29, 2002 to May 6, 2002 our special is:

    Lube Oil Filter (LOF)
    For $16.95
    This includes a 29 Point insepction


    a) It looks like they didn't run the spell check, and
    b) It looks like they lost the password to the site.

    Found via one of the best time-waster blogs I have come across: Gas Station Websites

    The dot-com craze really got to these gas station folks, and a bunch of other small businesses too I bet. There's a masters thesis in estimating how much "false" GDP was attributed to cyber-sites that were essentially sunk costs.

    Posted by Craig Depken at 11:31 AM  ·  TrackBack (171)

    January 14, 2005
    Why do we sign for credit card transactions?

    If my credit cards were stolen, I would want someone to verify the "signature" of the thief before completing a transaction with my card. My "sig" is fairly unique and therefore hard to copy. Yet, I have never had anyone question or seemingly ever look at the signature, especially when I sign an electronic signiture pad and it records some scrawl that looks nothing like my signature. The most confirmation done around here (DFW area) is perhaps asking for a picture ID (like a driver's license). I have often thought that we could do away with the signature alltogether, although I am sure there are additional legal costss if caught signing for the use of a stolen credit card - being accused of forgery and so forth.

    This cat undertook the "experiment" that I have dreamed of trying but never had the guts. How bad does the signature have to be before someone will question the authenticity of the card holder? He found that nobody questioned his signature - even when it was simply an 'X.'


    This is probably not surprising as credit card companies will cover most fraudulent transactions - so neither the companies nor the legit card holders are overly concerned. Moreover, there is no cost to the clerk who accepts a stolen credit card. Principal-agent problems abound.

    I like his final idea: "I'm thinking of changing my name to 'I Stole This Card.'"

    Posted by Craig Depken at 02:15 PM  ·  TrackBack (80)

    What countries would you buy or sell?

    Alex Tabarrok over at MR asks what countries are overvalued or undervalued (in whatever sense).

    For what it's worth, here are my selections in regional pairs:

    Sell: Botswana
    Buy: South Africa

    Sell: Costa Rica
    Buy: Mexico

    Sell: Ireland
    Buy: Iceland (a.k.a. the "next Ireland")

    Sell: China
    Buy: India

    Sell: Canada
    Buy: U.S.

    Posted by Robert Lawson at 10:49 AM

    January 13, 2005
    Is absence evidence of non-existence?

    Thanks for inviting me to join DoL!!

    My first post concerns the end of the WMD search in Iraq. Is it possible that the weapons are in the country and our military/intelligence folks simply can't find them? I know most people take the lack of WMD as evidence that they never existed, and that is one possibility.

    However, keep in mind that

    Researchers have discovered the hidden laboratory used by Leonardo da Vinci for studies of flight and other pioneering scientific work in previously sealed rooms at a monastery next to the Basilica of the Santissima Annunziata, in the heart of Florence. (Story here)

    Someone had to know where Leonardo was going every day, and yet the laboratory sat literally under everyone's nose for 500 years. Here's part of the explanation:

    Part of Leonardo's suite was walled-in after stables were built on an adjoining lot. Also discovered recently by the researchers was a previously unknown staircase dating back to 1430, which they believe was the work of the Florentine sculptor and architect Michelozzo di Bartolommeo. They also found paintings in a second-floor room, which they think are the work of the artist Morto da Feltre, who Vasari said was drawn to the monastery by the presence of Leonardo.

    Let's see, 500 years for the laboratory, 575 years for the staircase, and a "second floor room" that nobody knew about? And we give up on the WMD search after twenty months?

    Thanks again for inviting me to DoL!!

    Posted by Craig Depken at 11:55 PM  ·  TrackBack (178)

    Inflation? We don't need no stinkin' inflation!

    1989: Tandy 5000 MC (20 Mhz Intel 80386, 2MB RAM) $8,499

    2005: Dell 8400 (3.2 Ghz Pentium 4, 1GB RAM, 250GB Hard drive) $1,549

    Posted by Robert Lawson at 08:47 PM  ·  TrackBack (4)

    Sad news from Bollywood

    Actor Amrish Puri, perhaps the greatest screen villain in Bollywood history, died yesterday and was cremated today. Judging by the Indian press coverage, he was most famous for his role as the super-villain Mogombo in the 1987 film Mr. India. Mogambo was the kind of villain who refers to himself in the third person: one the first bits of Hindi I ever learned was his repeated declaration "Mogambo kush hua!" -- "Mogambo has become happy!" I don’t recommend the film; Anil Kapoor is awfully weak as the invisible-man title character. But do listen for a clever reference to Mogombo vs. Mr. India in the opening scene of the just-released Bollywood gangster film Musafir.

    In the West, Puri’s best-known role was as the villain Mola Ram in Indiana Jones and the Temple of Doom (1984). Amrish Puri is not to be confused, by the way, with the veteran Bollywood actor’s actor Om Puri.

    I’ve only seen a few of Amrish Puri’s 200+ film roles, but the one I’d most recommend is his turn as leader of a gang of dakus (bandits) in Yateem (1988).

    Posted by Lawrence H. White at 06:12 PM  ·  TrackBack (0)

    Welcome Craig!

    I'm pleased to report that Craig Depken of Heavy Lifting has also joined our merry band of bloggers, though he will continue some posting on his blog. In addition to being a sports economist, Craig also has a knack for sniffing out funny items from the far corners of the web.

    Posted by E. Frank Stephenson at 04:52 PM  ·  TrackBack (1)

    No Kid Rock at Bush concert

    Isn't it about time for the Republican Party to chill out a little bit?

    Posted by Robert Lawson at 01:49 PM  ·  TrackBack (182)

    How Quickly They Forget

    While doing a bit of office archaeology (if the conventional wisdom that a cluttered desk is indicative of an active mind is correct, then my brain must be Einsteinian), I came across a photo of Georgia's governor that appeared in the Rome News-Tribune shortly after the November elections. The caption read,

    Georgia voters this week handed Purdue the chance to become the state's most powerful chief executive in decades when they gave him a Republican House of Representatives to match his GOP-run Senate.

    Hmmm... it is indeed true that for the first time since Reconstruction Republicans control both houses of the GA legislature and the GA governor's mansion. But this will hardly make Purdue "the state's most powerful chief executive in decades" because for over 100 years Democrats controlled the legislature and the governor's office.

    Similarly, many readers have probably read about Wisconsin Senator Russ Feingold's road trip to Alabama. It's a classic display of the vision of the anointed. Feingold blames Republicans for the plight of the poor in what "may well glow as the reddest spot on the whole map [of the U.S.]." There's just one problem: As yesterday's "Best of the Web Today" pointed out, Democrats governed Alabama for over a century and only in the past decade or so have Republicans been voted into power.

    Posted by E. Frank Stephenson at 12:02 PM  ·  TrackBack (7)

    January 12, 2005
    Another question about currency

    What should the spacing of currency denominations be? Today in the US we’re accustomed to 1 - 2 - 5 – 10 – 20 - 50 - 100 for paper notes (in dollars), but (curiously) the pattern is slightly different for coins (in cents): 1 – 5 – 10 – 25 – 50 – 100. Why is there no longer a 2-cent coin? Why a 25-cent rather than a 20-cent coin? (In the UK and many other countries there is a 2-cent coin, and the coin between 10 and 50 is a 20, not a 25.) In the 19th century, many US banks issued $3 bills.

    What economists have written on the topic so far is not very helpful. (One of the better, but still unsatisfying, papers is abstracted here.) Typically they’ve postulated some single objective, like minimizing the number of tokens one needs to offer to make change in a random transaction, and derived the corresponding “best” denominational structure. (Some have actually declared that spacing of 1 – 3 – 9 – 27 would therefore be optimal.) That approach isn’t very illuminating about what we real-world money-users with multiple objectives would actually prefer. Our objectives presumably also include economizing on the computation difficulty of figuring out which tokens to collect to make change (which argues for a base-ten system like the current system), and economizing on the value of (non-interest-bearing) tokens one needs to carry (otherwise, in pursuit of the first two objectives, we’d want to have and carry a coin of every possible denomination: 1 – 2 – 3 – 4 – etc.).

    Based on the note denominations that were common back when competing banks chose them, I’m pretty confident that having a base-ten (decimal) system – anchored by 1’s, 10’s, and 100s – has passed a market test in the US. I’m less confident about the current curious set of intermediate denominations (2’s, 5’s, 25’s).

    Posted by Lawrence H. White at 02:37 PM  ·  TrackBack (2)

    Alex Tabarrok nails it

    In this post on the payroll tax. I believe it was Buchanan who first pointed out that it is incorrect to talk about a tax as being "progressive" or "regressive" without looking at how those tax revenues are dispensed. I believe he says it in one of the papers in Volume 1 of his collected works but the book is at home and the volume is not yet available at econlib.org.

    Note: Despite knowing this, I still often refer to a particular tax as progressive or regressive because 1) I don't think hard about what exactly I'm saying, or 2) I'm talking to other economists and I want a shorthand to explain how the average tax rate rises with income.

    Posted by Joshua Hall at 08:53 AM

    January 11, 2005
    Free Market Money

    Larry properly points out that the dollar coin debate is about more than whether coins are better than paper currency (or rather at what margin coins become better). I like the higher valued coins and he doesn't. This is ok; value is subjective. I'm sure I like a lot of things that Larry doesn't. So he sensibly writes, "People who feel differently are free to adopt the dollar coin for their own use. Why deny the rest of us our preferred option?"

    I just assumed that the production cost advantages of coins would pass a market test and therefore should be implemented. I suspect but admit that I don't know that the production cost advantages of dollar coins outweigh the inconvenience cost of the coins. He thinks the inconvenience costs outweigh the production cost advantages. One of us is right and the other is wrong.

    If this debate was to occur in a marketplace we might find private currency providers providing only coins because they are so much cheaper and long-lasting than paper bills OR we might find the opposite and find only paper in circulation because consumers refuse to use coins OR we might find both coins and paper bills circulating. Ultimately profit and loss would determine the best system at any point in time. But the big point is that as long as the government controls the monetary system and there is no real marketplace in currency, we'll simply never know.

    So we agree that the only way to settle the debate (coins v. paper) is to get the darned government out of the business of providing us with currency.

    P.S. I agree also with Larry that so-called network externalities are grossly overstated. Even if you believe in network externalities (as a possible problem), you still have just justify giving the government a monopoly (a known bad idea) and then hope that they pick the right technology.

    Posted by Robert Lawson at 10:44 PM  ·  TrackBack (11)

    Scouts vs. Statheads

    This is a fascinating roundable discussion in Baseball America. From the intro:

    Instead of continuing to report on the gulf between the two sides, Baseball America is bringing them together. For the first time since the great “Moneyball” debate began two years ago, we have gathered two longtime scouts and two statistics experts to discuss all the great issues in this arena: the risks of high school pitchers, the use of minor league statistics, plate discipline as a tool and much more.

    The four participants were Gary Hughes, the Cubs’ assistant general manager and a scout for more than 30 years with many clubs; Eddie Bane, the Angels’ scouting director and a former top pitching prospect himself; Gary Huckabay, one of the lead analysts for Baseball Prospectus and a statistical consultant for the Athletics; and Voros McCracken, another top numbers man who also consults for the Red Sox. All four were eager to finally sit down with the other side, debate these issues and—most importantly—let Baseball America readers listen in afterward.

    ATSRTWT. I, for one, am amazed at how defensive (and sometimes rude) the scouts are.

    Posted by Joshua Hall at 07:55 PM

    In Honor of...

    the fact that tomorrow's seminar features a job candidate four years younger than I am, here are some of the lyrics to "Dinosaur" from one of my favorite (but little-known) bands, the Corbin-Hanner Band.

    Used to be, I had a lot of fun in the city
    I listened to the jukebox and tried to stay out of fights
    And now and then a sweet young girl in a red dress
    All gussied up, man what a sight....and you know that
    Flashing lights sure make me dizzy
    And the music's very strange to my ear
    It looks like they turned Smokey Joe's into a spaceship
    I'll be leaving just as soon as I finish my beer
    And I must be a
    Dinosaur
    Should've died out a long time before
    Have pity on a dinosaur

    Corbin and Hanner are great songwriters. Several of their songs became top 40 hits for other artists, such as "Beautiful You" by the Oak Ridge Boys. While most of their songs are covered by country artists, their sound is more "roots rock." I highly recommend "Work Song," "Beautiful You," or "For the Sake of the Song" as an introduction to their work.

    Posted by Joshua Hall at 07:22 PM

    The Fate of One-Dollar Coins in the US: Counterpoint

    I am largely skeptical of claims that the market has failed to adopt this or that efficiency-enhancing improvement because of “network externality” problems. Proponents of the problem’s relevance often illustrate it (as in the dollar coin article Robert Lawson cites below) with the example of fax machines, but note that fax machines did in fact manage to gain widespread adoption without subsidies or mandates. (For more on the rarity of network externality tragedies, see the debunking by Liebowitz and Margolis.)

    It is true that the dollar coin hasn’t caught on in a big way, and probably won’t unless the dollar bill is withdrawn. But the reason need not be a network externality problem. It could instead simply be that for most of us the dollar coin, being heavier and bulkier, is less convenient to carry around. I don’t know about you, but after a week in London or Belfast I’m usually bemoaning the weight and bulk of the pound coins that have accumulated in my pockets. People who feel differently are free to adopt the dollar coin for their own use. Why deny the rest of us our preferred option?

    The fact that the dollar coin costs the government less to maintain (because a dollar bill wears out in 12-18 months) doesn’t mean that forcing it into use would be efficient. Not if its benefits to the public (net of carrying costs) are lower, too.

    But maybe I'm wrong; maybe the benefits of the one-dollar bill aren't great enough to justify its greater cost. The only way really to know is to let the market decide. So here’s a compromise proposal: Withdraw the one-dollar Federal Reserve Note, but let US commercial banks issue their own one-dollar notes if they think there’s a market for them. Note that one of the private commercial banks in Scotland, where it is allowed, still issues one-pound paper notes.

    Posted by Lawrence H. White at 03:23 PM  ·  TrackBack (3)

    The Relentless Expansion of Federal Powers

    From Reason Magazine:

    The only thing that's clear is that the man who pulled Ashley Owen White over and accused her of speeding wasn't a sheriff's deputy, a police officer, or a highway patrolman. No, Carlton Patton works for the federal Environmental Protection Agency. White says she was headed towards the Euless, Texas, library to vote, when Patton pulled up beside her and flashed a badge. Then he turned on his emergency lights and pulled her over. He also called for police backup at some point. Patton says White was doing 30-35 mph in a 25 mph school zone. Patton denies she was speeding. Each accuses the other of refusing to provide identification. A Tarrant County prosecutor says Patton had authority to stop White for speeding. The Fort Worth Star-Telegram cites 34 classes of officers authorized to stop people for traffic offenses, and EPA officials aren't among them. It says Texas law allows federal law enforcement officials to arrest or search only someone caught committing a felony, and speeding is a misdemeanor.

    Posted by Joshua Hall at 12:23 PM

    The Fate of One-Dollar Coins in the U.S.

    Count me among the (apparently few) people who like the idea of the dollar coin. Here's an article (.pdf) about it.

    Bottom line: Unless we scrap the paper dollar people aren't going to switch to the coin. I say let's do it, and while we're at it, let's scrap the useless penny.

    Posted by Robert Lawson at 09:45 AM  ·  TrackBack (2)

    Carden Paper

    In a post after the Southern Econ meetings, I extolled the virtues of a clever paper by Wash U. grad student Art Carden. (Carden examines the effect of the rule of law--or lack thereof--on economic growth using lynchings as a proxy.) His paper is now available here.

    Posted by E. Frank Stephenson at 09:37 AM  ·  TrackBack (1)

    "100 things we didn't know this time last year"

    From the BBC, useful stuff such as herrings' means of communication, accented ducks, the real names of the Scooby Doo characters, and the number of emails Bill Clinton sent while president. (Hat tip: Mini-me.)

    Posted by E. Frank Stephenson at 09:11 AM  ·  TrackBack (2)

    January 10, 2005
    More evidence that the second generation tends to assimilate

    Asian Variety Show, a Bollywood-focused TV show pitched at NRIs (Non-Resident Indians) in North America, recently ranked its Top 20 Videos of 2004. In the number one position is a song with all-English lyrics by a Canadian artist (albeit of Indian extraction, judging by his name, Raghav) whose music is thoroughly American pop (sounds like an N’Sync wannabee).

    More evidence of the globalization of popular culture (besides the fact that I watch Bollywood TV shows): in the number two position is the Thai-born pop sensation, Tata Young, also singing in English. Her video is available on her website. True story: the singer’s parents (Thai mother, American father) named their daughter after visiting India and seeing advertising everywhere for the famous Indian tea (and steel!) brand Tata.

    Btw, for my money, AVS is the second-best Bollywood hour on cable’s International Channel. The best is Showbiz India, which offsets the hype with refreshingly frank movie reviews by Ritu Mahindru.

    More on the globalization of popular culture in a Reason magazine interview with economist Tyler Cowen, and in Tyler's book.

    Posted by Lawrence H. White at 09:52 AM  ·  TrackBack (151)

    World Series Ball Kerfuffle

    The Red Sox are demanding that first baseman Doug Mientkiewicz turn over the ball that was used for the last out of the World Series. Hmmm ... it seems to me that if a team has a legit claim on the ball it is the St. Louis Cardinals not the Red Sox since Game 4 was played in St. Louis rather than Boston. I presume--perhaps incorrectly--that the home team provides the balls. It might also be the case the MLB provides special World Series balls, in which case MLB would own the ball rather than either the Cardinals or Red Sox.

    Posted by E. Frank Stephenson at 09:41 AM  ·  TrackBack (2)

    Bonehead Play of 2005

    Thanks to readers for the excellent suggestions on the bonehead play of 2004.

    Now for an early start on 2005:

    1. Jets Eric Barton:

    The game was all but over, but Barton gave the Chargers a new life, roughing Drew Brees with a senseless forearm to his helmet. It ruined a dramatic goal-line stand. Brees, under heavy pressure by Victor Hobson and Barton, retreated in the pocket and made a fourth-down heave into the end zone. It fell incomplete.

    The Jets had begun to celebrate, but the penalty gave the Chargers a first down at the 1 with 16 seconds left. Brees (31-for-42, 319 yards) tossed a 1-yard scoring pass to Antonio Gates, who beat rookie Erik Coleman to culminate a 10-play, 88-yard drive. Overtime.

    2. Randy Moss makes an ass of himself.
    The NFL will probably be lighten Mr. Moss's paycheck a bit over this stunt.

    Posted by E. Frank Stephenson at 09:31 AM  ·  TrackBack (2)

    Lawn Mower Drag Races: Don't We Feel Safer Now?

    An audit of the Texas's spending of $600m in homeland security funds found numerous irregularities including the purchase of a trailer to take lawn mowers to lawn mower drag races. Read the depressing, but predictable, story here.

    Here in GA, the Rome News-Tribune reports (1/5; sorry no link) that Floyd County commissioners are considering spending "$120,000 for half the cost of an armored SWAT truck to share with the city [of Rome]. Homeland-security grant money could be available for the purchase."

    Posted by E. Frank Stephenson at 09:22 AM  ·  TrackBack (4)

    Commencement Address

    A few weeks ago I posted some criticisms about the Winter Commencement address at my shop, and one reader wrote to criticize me. The provost has provided everyone with a copy of the address. Unfortunately, it's copyrighted, so I will copy only a couple snippets below:

    Between our Social Security system, our national deficits, the startling signs of moral neglect in some corners of our religious life, the nauseating failures of judgment and ethics in many leading businesses, and the inability for so many in our communities to gain access to health care, food, affordable rental housing and quality childcare, I am afraid that if stewardship was the course we were taking right now, we wouldn’t exactly make the honor roll.

    In Ohio alone, since 2000 we lost more jobs than any other state and personal income has shrunk from sixth highest in the nation in 1960 to 24th today, and, we rank 39th in % of residents with four year college degrees. And the best we can do is focus on concealed weapons and same sex marriages.. Talk about fiddling while Rome is burning…

    And, being among those who are more highly educated, you have an even greater responsibility to put that knowledge to a good purpose. William Sloan Coffin, once wrote, “The primary problems of the planet arose not from the poor, for whom education is the answer; they arise from the well-educated for whom self-interest is the problem.”

    UPDATE: I forgot to quote my favorite: ...companies like Kintera, Starbucks and Toronto’s MUCH Music and others have found a way to be very prosperous while also helping others.

    The implication is that it's the rare for-profit company that is prosperous while helping others--only a few have "found a way." Pure rubbish. The fact is that for-profit companies operating in free markets become prosperous only when they help others.

    Posted by Robert Lawson at 09:22 AM  ·  TrackBack (2)

    January 09, 2005
    “Chromosomes and Genes”

    An interesting obituary from The Economist on televangelist Billy James Hargis.

    An excerpt:

    Yet in 1974 both male and female students at the American Christian College, and three male members of the college choir, the All-American Kids, claimed Mr Hargis had deflowered them. One couple allegedly made the discovery, on their wedding night, that Mr Hargis had slept with them both. He strenuously denied wrongdoing, citing the biblical love of David for Jonathan, blaming “chromosomes and genes” (an unexpectedly scientific explanation) and threatening to blacklist his defamers. Later, when the scandal had caused the collapse of his college and his empire, he defended himself with a line that has since become a televangelical favourite: “I was guilty of sin, but not the sin I was accused of.”

    Full article here.

    Posted by Joshua Hall at 01:30 PM

    Battle of the Sexes II

    Regarding my last post, co-blogger Larry points me to this link about women and men competing head to head in shooting.

    Women were admitted to Olympic shooting events in Mexico City in 1968, competing in mixed events with the men until Los Angeles in 1984.

    Some disciplines, however, remained mixed, and China's Zhang Shan made history by becoming the first woman to win a mixed event with victory in the skeet in Barcelona in 1992.

    That was the last time men and women were allowed to compete side by side, and Zhang was unable to defend her title in Atlanta as a result.

    Posted by Robert Lawson at 10:03 AM  ·  TrackBack (3)

    January 08, 2005
    Yet another advantage of privately issued banknotes

    On Dec. 20, a well-organized gang (the IRA is suspected) stole some £26.5 million in currency from Belfast's Northern Bank. The currency consisted almost entirely of the Bank’s own notes. (Northern Ireland, like Scotland and Hong Kong, still has private note-issue. The Northern Bank is one of four private issuers in the province.) To thwart the gang, the Bank has now announced that is withdrawing all its notes from circulation and replacing them with the same design in a different color, rendering the stolen money worthless. You couldn't do that with stolen Federal Reserve Notes! More on the story from the Belfast Telegraph here.

    More reasons why commercial banks, not government central banks, should issue currency here.

    Posted by Lawrence H. White at 04:51 PM  ·  TrackBack (1)

    Battle of the Sexes...

    Question: Is there any athletic endeavor where women can compete heads up against men at the top level?

    It would seem that the answer is "no." But we now have a contender. In the world of ultra-marathons (distances upwards of 50 miles and commonly 100+ miles), women are increasingly competitive at the top level. Even in regular marathons, the time difference between the top woman and top man is often a matter of only a few minutes.

    There is apparently a pretty big tradeoff between muscle strength and mass in long distance running. Muscle is good for running of course so men should have an advantage here, but mass is bad (think of having to lug an extra 20-30 pounds for 100 miles) and here women should have an advantage. For shorter distances, the advantages of muscles outweigh the disadvantages of mass. This is why is is doubtful a woman would ever compete with a man (at the elite level) in the 100 meter dash. But at longer distances, the advantage of muscle stength is at some point offset by the disadvantage of added weight, and women can compete effectively.

    If anyone has any other nominations for athletic events where women are competitive with men at the elite level, please e-mail me.

    Posted by Robert Lawson at 11:40 AM  ·  TrackBack (0)

    January 07, 2005

    In the course of his “party line” defense of Social Security, Brad DeLong makes the following surprising statement:

    “But private accounts funded by cutting Social Security contributions are a bad idea: Robbing Peter to pay Paul is in general not a good idea.”

    Excuse me? If we’re going to talk about “robbing,” we’d have to say that Social Security currently robs young Paul to pay old Peter. Reducing the amount of Social Security taxes taken from Paul’s wages therefore isn’t a matter of robbing Peter to pay Paul, but of no long robbing Paul to pay Peter. DeLong’s way of putting it makes sense only if we assume that Peter rightfully owns Paul’s income in perpetuity. Elizabeth Anderson over at Left2Right works hard deny that “liberals, in order to justify taxation, must believe that the government owns all property to begin with,” but DeLong apparently affirms it on behalf of Peter. (Don Boudreaux over at Café Hayek has recently grappled with understanding Barry Schwartz, who in criticizing Social Security privatization also seems to flirt with the government-owns-it-all position.)

    I agree with DeLong that robbing Peter to pay Paul is in general not a good idea. That’s in fact why I think that the Social Security system is not a good idea.

    Posted by Lawrence H. White at 09:28 PM  ·  TrackBack (161)

    Ben Powell on Steroids in Baseball

    From the Independent Institute:

    Baseball is a business that responds to consumer demands. Senator McCain should have no more influence over what policies the organization adopts than any other fan. The senator is free to attend games or not. There should be no special role for government in determining what type of policy gets adopted. The government’s only role should be to commit to not using major league players’ private test results for public prosecution.

    ATSRTWT.

    Posted by Joshua Hall at 08:58 PM  ·  TrackBack (2)

    UN Waste

    Click here for a nifty editorial cartoon on the UN's wastefulness in delivering disaster aid.

    Posted by E. Frank Stephenson at 01:22 PM  ·  TrackBack (158)

    Welcome Ed

    A big welcome to Edward Bierhanzl to the blogger list. Ed was a professor of economics at Florida A&M University in Tallahassee, FL, and is now starting work for a private consulting firm. He has written a lot on labor market policy especially in Europe.

    In a few weeks he'll be moving to D.C. so we're going to call him our "Washington Correspondent." How many blogs can claim to have one of those?

    A couple years ago Ed related this story:

    Last year at the SEA meetings in Baltimore, I was in the elevator and witnessed the following: the elevator gets to the lobby, and there is a woman (economist) waiting to get in and a man (economist) waiting to get out. The woman pauses to allow the man to exit first, the man pauses to allow the woman to enter the elevator first. After a couple of seconds of just standing there, they both make a move for the door - but as each sees the other moving, they pause again to allow the other to go first. More standing still occurs until finally the door starts to close. The man in the elevator jabs his arm out at the last instant to prevent the doors from closing, and the two stumble past each other as they simultaneous switch places. The door finally closes, and as the elevator starts to move the economist is heard to say, under her breath, "Manners are never optimal."

    Posted by Robert Lawson at 10:45 AM  ·  TrackBack (2)

    African-American Literature Recommendations

    As long as I can remember I have had an interest in African-American history and literature. For example, in middle school I won the Black History Month trivia contest.

    I owe this interest to my mother who filled my library with a variety of books, including children's books on prominent African-Americans. I especially remember this book about Garrett Morgan, the inventor of the stoplight.

    At Ohio University I became interested in economics through Rich Vedder's classes in Economic History. Given my interest in African-American history it was not suprising that I was drawn to research on the economics of slavery such as Time on the Cross by Robert Fogel and Stanley Engerman.

    Thinking it would be a good idea to hear the orthodox African-American history, I decided to minor in African-American studies at OU. While I benefited from the history classes that I took from Robert Rhodes, the classes I most enjoyed were those on African-American literature taught by Vattel Rose. The two authors I most appreciate him introducing me to are Charles Chesnutt and Zora Neale Hurston. I highly recommend Chesnutt's short story "The Wife of His Youth." A good article on Chesnutt can be found here.

    David Beito at Liberty and Power got me thinking about this with this excellent post on Hurston today.

    Posted by Joshua Hall at 09:19 AM  ·  TrackBack (3)

    January 06, 2005
    How Does The Right-Wing Media Craft Its Message?

    A reader [Hat tip: Kelly] forwarded this little screed to me (see text pasted "below the fold").

    My Summary: BOOO HOOOO--those dirty right wingers "quote from the opponent out of context," use "loaded terminology," "attack people and their credibility," and "find some vulnerability in the opponent make that the focus for evaluating him or her."

    I'm so glad left-wingers never resort to THOSE dirty tricks!

    Read More »

    Posted by Robert Lawson at 03:20 PM  ·  TrackBack (212)

    Kung-Fu Fighting for Freedom

    The acclaimed mainland Chinese action film Hero, starring Jet Li, is now available on dvd. The cinematography is breathtaking. The plot is highly engaging. But the finale disappointed me in the extreme. Jet Li's character has the option (he spends the entire film skillfully getting himself into this position) to kill or not kill a tyrant. From a Lockean standpoint, he makes the wrong choice. I shudder to think of what political philosophy the writer/director Zhang Yimou meant to convey.

    For a more libertarian Jet Li film, seek out Once Upon a Time in China II. In it Jet's character, Wong Fei-Hung, battles for an open and modern society against a gang of xenophobes (their slogan: "Kill all the foreigners, then we'll have peace").

    Posted by Lawrence H. White at 12:19 PM  ·  TrackBack (3)

    Is reintroducing conscription good for South Africa?

    A friend (and now hiking buddy) in South Africa passes this along for anyone interested in conscription (with a South Africa spin).

    Read More »

    Posted by Robert Lawson at 08:46 AM  ·  TrackBack (2)

    January 05, 2005
    New Issue of The Cato Journal

    Is now available on-line. I've quickly browsed through it and there are some good articles of which I will highlight two.

    Co-blogger Bob has an article with Randy Holcombe and James Gwartney titled "Economic Freedom, Institutional Quality,and Cross-Country Differences in Income and Growth." Bob presented this paper at WVU this fall and it received a good reception.

    GMU grad students and job market candidates Peter Leeson and Chris Coyne of Common Knowledge have an excellent paper on "The Plight of Undeveloped Countries." The work that GMU students are doing (through the Mercatus Center) in development economics is exciting stuff.

    Posted by Joshua Hall at 02:25 PM  ·  TrackBack (3)

    Something Odd about the WSJ/Heritage Index

    Frank Stephenson's post below piqued my curiosity, so I looked into how the WSJ/Heritage people construct their Index of Economic Freedom. It turns out that their score for "fiscal burden of government" (one of ten components of a country's overall score) is rather oddly constructed. Here's how Ed Feulner of Heritage describes it:

    What do we mean by "fiscal burden of government"? It's the category that measures marginal tax rates and the year-to-year increase in the level of government spending as a percent of gross domestic product.

    More specifically, a country's "fiscal burden" score is averaged from three components: its highest personal income tax rate, its highest corporate tax rate, and its rate of change of government spending / GDP.

    There are at least two glaring problems here: (1) If we're measuring the current level of the burden of government, we should look at the size of government spending relative to GDP, rather than its growth rate. (2) If we only look at personal and corporate income tax rates, we miss the importance of value-added taxes, which are high in European countries (e.g. 17% in the UK), and of excise taxes.

    The two problems in combination imply that if we can get odd results when comparing two countries with different-sized governments. Take a country with a government the size of, say, the current-day US (35.9 percent of GDP, according to the WSJ/Heritage figures), and another with a much larger government, say the current-day Denmark (56.6 percent of GDP), where the second country finances the difference entirely with value-added taxes. Despite its much larger government, the second country's "fiscal burden" score won't be any higher. Consistent with that, Denmark's reported 2005 "fiscal burden" score (3.6) is actually better than that of the US (4.0).

    Posted by Lawrence H. White at 02:07 PM  ·  TrackBack (4)

    Taxation and Free Agency

    An excellent article by ESPN.com's Darren Rovell. An excerpt:

    The Astros have reportedly offered Beltran a deal that would pay him an average of $16 million per year for six years. That means a New York team would have to offer Beltran at least $16,680,000 per season in order for the free agent outfielder to get a value commensurate with the Astros deal. That doesn't even take into account the fact that, according to cost of living calculators, Beltran would have to pay about 2.5 times more for the same standard of living in New York when compared to Houston.

    Posted by Joshua Hall at 12:20 PM  ·  TrackBack (2)

    Fallacy of Composition

    In teaching econ principles, it's easy to present students with examples of reverse causation or the failure to hold other things constant. I've found it more difficult to present interesting examples of the fallacy of composition, but no more. The WSJ (subscription required) recently ran an article about NFL players playing without hip, knee, or thigh pads in order to run faster. Here's a quote from the article (taken from the Sports Law Blog):

    "Speed, man," says Rams safety Antuan Edwards. "The game is so fast, you want to be as light as possible." Mr. Edwards ditched leg pads when he entered the NFL five years ago. "You feel a difference," he says. "At least you want to think you feel a difference."

    Here's the fallacy--if all players go padless then their relative speed (which is what matters since they have to outrun each other not a stopwatch) would probably change little. Of course, some players may think the risk of injury without pads is sufficiently great that they choose not to go padless. In this case, padless players obviously would gain an advantage relative to other players.

    I'm surprised that the NFL (the micromanaging league that recently fined Clinton Portis $5,000 for wearing red socks) doesn't mandate pads, especially if the WSJ article is correct that padless players are more susceptible to injury.

    ADDENDUM: I'd also like to extend a warm welcome to our new bloggers Michael, Deirdre, and Larry!!

    UPDATE: I've now tracked down the full WSJ article and have two clarifications. First, the article doesn't take a definite stance as to whether padless players are more susceptible to injury. It reports that NFL trainers think the reduction in pads has increased injuries, but that NFL injury data show no increase. Second, it might be better to view the padless trend as a prisoners dilemma rather than the fallacy of composition. The article indicates that the padless trend is due in part to "peer pressure" and to padded players thinking they are "at a disadvantage competing against someone who is not." Moreover, the fallacy of composition requires that everyone think his speed will increase with less padding. It's not clear that Edwards or any other player quoted in the article makes this assertion. (Hap tip to Larry White on the prisoners dilemma angle.)

    This post and the feedback to it remind me of Steve Landsburg's Armchair Economist, which Landsburg attributes to lunch discussions with his colleagues. What are the economics of padless players in the NFL? Is the phenomenon better viewed as the fallacy of composition or a prisoners dilemma? Blogging allows the lunch bunch to be dispersed in both time and place.

    Posted by E. Frank Stephenson at 10:04 AM  ·  TrackBack (1)

    Does this dress make me look fat?

    Ah, the question every husband hates to hear.

    Now researchers explain what we guys have known all along:

    Psychiatrists have located the part of the brain which 'lights up' when a woman's weight and size are under scrutiny. They say it is the same area responsible for anger and fear - which could explain why women tend to take personal remarks so... personally.

    Posted by Robert Lawson at 09:30 AM  ·  TrackBack (3)

    Something Rotten in Denmark (and UK and ...)?

    The WSJ/Heritage Index of Economic Freedom was released yesterday. (Note: This is not the EFW index calculated by co-blogger Bob and Jim Gwartney.) In the WSJ/Heritage index the US ranks 12th, behind Denmark and the UK. It also has Sweden, Finland, Canada, the Netherlands, and Germany as the five countries immediately below the US. This just doesn't pass the smell test--the U.S. is less free than the home of the National Health Service and only slightly more free than a country where government spending accounts for half or more of GDP?

    Instapundit links to more discussion of the rankings.

    Posted by E. Frank Stephenson at 09:24 AM  ·  TrackBack (5)

    Why Don't We Trust Government?

    Why is it that Americans don't seem to trust government? We have less regulation than most countries, and the argument "private citizens know better than government what to do with their money" seems persuasive to many. Why? Why not shining, happy people?

    The answer is very old, and it involves answering a question with a question, or maybe two: As Jouvenal, in his sixth satire, asked, "Quis custodiet ipsos custodes? (Who will guard the guardians?)." Plato, in the Republic, has Socrates and Glaucon give this exchange, "Surely the guardian is the last man in the world who should be allowed to get drunk and not to know where on earth he is!" "That would be ridiculous. A guardian to want a guardian himself!". My other question/answer, then is this: why is it that people on the left, and many people in other "developed" nations, DO trust government?

    The answer is that the U.S. is different. The idea that the "guardian" would need no monitor was a conceit of Plato (and the French); it had no part in the framing of the U.S. system of government. The very foundations of our constitutional system of divided powers reflect a mistrust of government, or at the very least a mistrust of the governors.

    Yet, after the election, the Democrats are piteously wondering aloud why people don't trust government. "Why don't they like us?" Since people don't now much about how government works, how come they don't like it? Ludwig von Mises gives an interesting reconciliation of the apparent contradiction. In Bureaucracy, von Mises notes:
    Bureaus specialize in the supply of those services the value of which cannot be exchanged for money at a per unit rate..As a consequence of the above, bureaus cannot be managed by profit goals and "the economic calculus". In the absence of profit goals, bureaus must be centrally managed by the pervasive regulation an monitoring of the activities of subordinates. (pp. 47-49).

    That is, it is tempting to try to reform government agencies, to revise organization charts and create new bureaucracies and scrap old ones. It is hard to understand what is going on, but it seems as if we could do better, if we could just get the right people in office to run things. People don't really understand what is wrong, it is true, but they are right to believe that something is wrong.

    The conclusion one should draw from this is disturbing, as William Niskanen points out in Bureaucracy and Representative Government. If, as von Mises claims, bureaucracy is the sine qua non of the territorially extensive state, then criticism of bureaucracy is wrong-headed, and attempts to reform through reorganization may be disastrous. Bureaucracy cannot be improved, and its performance is simply not comparable with profit-seeking organizations, because the incentives and hierarchies in the two forms are fundamentally different.

    Citizens may say, and believe, that the problem is unresponsive bureaucracy, or corruption, but these are the essential features of governments of large nations. The solution is a citizenry with an actual understanding of the economic and political forces that make government inherently incapable of carrying out the tasks we want to assign to it. But this is clearly beyond the reach of news media who themselves lack this basic understanding of economics.

    What about the educational system? As Niskanen (Bureaucracy and Representative Government, 1971; 7-8) points out, von Mises concludes his discussion "with the hope, almost pathetic in retrospect, that a broader education in economics will reduce the popular support for large government and the consequent pervasive bureaucracy."

    There isn't much hope in this direction, either. Education in economics is rare (I'm not counting the trade studies in business or marketing, or the applied mathematics often taught in undergraduate economics departments). So, citizens have no theoretical capacity to focus their accurate, but inchoate, perception that something is wrong. So, we reform away, appointing task forces and study groups.

    But I have an answer for you. It comes from Edmund Burke, in his then-anonymous Vindication of Natural Society (1756):

    "In vain you tell me that Artificial Government is good, but that I fall out only with the Abuse. The Thing! the Thing itself is the abuse!"

    One cannot blame the FORM of government for its failings. Simply the existence of a pervasive, intrusive nanny state, doing the only things it can do, explains why people don't trust government. You can't blame a dog for eating out of the garbage. But you can put a lid on the garbage can. In the U.S., people are worried that the lid is coming off.

    Posted by Michael Munger at 09:18 AM in Politics  ·  Comments (4)  ·  TrackBack (5)

    Adam Smith's "natural course of things"

    You may have noticed some changes here at DoL lately. Besides the excellent new additions to our list of bloggers (welcome Mike, Deirdre and Larry!), I've added an Adam Smith quote to the top of the sidebar. The plan is to change this to a new Smith quote every so often.

    This quote was suggested to me by co-blogger, Frank and was a new one to me. Here's the complete quote:

    Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things. All governments which thwart this natural course, which force things into another channel, or which endeavour to arrest the progress of society at a particular point, are unnatural, and to support themselves are obliged to be oppressive and tyrannical. -Adam Smith (1755) as quoted by Dugald Stewart, Account of the Life and Writings of Adam Smith, LL.D. (1793).

    I especially like the "all the rest being brought about by the natural course of things" part that so obviously relates to Smith's invisible hand principle. To me this is just another example (at a very early point in his career) of Smith's understanding of the (classical) liberal order.

    Still I find it amazing that some folks on the left are trying to coopt Smith as one of their own. First, there was Emma Rothschild's book, and more recently an article by William D. Grampp. This latter work was the subject of a nice rebuttal by Peter Minowitz in the latest Econ Journal Watch. ATSRTWT

    Posted by Robert Lawson at 09:04 AM  ·  TrackBack (107)

    January 04, 2005
    Some Data on Ohio's Public Schools

    Nothing unusual here given the emphasis placed on lowering average class sizes in recent years.

    k12teach.GIF

    Posted by Joshua Hall at 10:50 PM  ·  TrackBack (3)

    Free Speech on Campus

    FIRE's Guide to Free Speech on Campus is out.

    FIRE’s Guide to Free Speech on Campus focuses on the threat to freedom of expression posed by the imposition of speech codes, under various misleading names, on campuses across the nation. This Guide identifies the most effective arguments against such codes on private, public, and sectarian campuses, and demonstrates how the mere application of rules of legal equality go a long way to reforming current abuses. Here students will find the vocabulary with which to combat oppressive codes, regulations, and censorship and the answers to such difficult questions as:

    1. How can I wage a successful campaign against speech codes at my school?

    2. How do I respond to the claim that colleges and universities must by law adopt policies that restrict speech in the name of combating “sexual harassment,” “racial harassment,” and other forms of allegedly unlawful discriminatory conduct?

    3. What are the modern history and current status of the United States Supreme Court's view of the nature and scope of the First Amendment's protection of free speech and academic freedom, especially as this concept pertains to college and university campuses?

    4. What is the modern history and current status of the United States Supreme Court's view of the nature and scope of academic freedom?

    Posted by Robert Lawson at 10:31 PM  ·  TrackBack (2)

    Will Eisner has Died

    From USA Today:

    Will Eisner, the artist who revolutionized comic books with the popular newspaper supplement The Spirit and taught generations of soldiers how to maintain their equipment with the Joe Dope series, has died. He was 87.

    Will Eisner created the comic strip, The Spirit, in the '30s.

    Eisner died Monday at Florida Medical Center in Lauderdale Lakes of complications from quadruple bypass heart surgery last month, according to Denis Kitchen, Eisner's publisher for three decades.

    Eisner was one of the greatest storytellers the comics world has ever known. His A Contract With God is one of the finest things I have ever read.

    My condolences to his family.

    Update: As usual, Lileks has more.

    Posted by Joshua Hall at 08:36 PM  ·  TrackBack (2)

    Updated News from Peter Boettke

    He details his time in London as the F.A. Hayek Memorial Lecturer.

    Posted by Joshua Hall at 03:45 PM  ·  TrackBack (1)

    Economics in the Movies

    From our old co-blogger, Dirk Mateer.

    Posted by Joshua Hall at 03:41 PM  ·  TrackBack (1)

    Krugman on Social Security

    Paul Krugman observes that the proposal to replace Social Security with personal retirement accounts – letting young people opt out of paying Social Security taxes if they will also opt out of future benefits – “won’t do anything to strengthen the system’s finances”. True -- but that has never been the point of the proposal. The point is to strengthen the taxpayers’ finances by letting them earn better returns on their money. Investing in a diversified portfolio of stocks and bonds, a 30-year-old worker can expect to earn more than twice the retirement income that Social Security will return from the same stream of dollars deducted from his or her pay (see the calculator at www.socialsecurity.org). The discrepancy is even larger for younger workers.

    Krugman lauds Social Security as “a demonstration that a modest amount of taxing and spending can make people’s lives better and more secure.” But if making people’s lives better and more secure is honestly the goal, how can he object to letting those people opt out of the system who correctly believe that investing their own money would provide them with a better and more secure life after retirement?

    Posted by Lawrence H. White at 03:30 PM  ·  TrackBack (3)

    Today's Rejected Letter to the Editor

    One of the greatest lessons I learned while working for the Joint Economic Committee was the importance of using clear and precise language when writing. The Joint Economic Committee was my first job out of Ohio University and I was eager to make a good impression so when I was given my first assignment I read and wrote like a madman and produced a 45 page draft in about a month. I vividly recall my disappointment at receiving a copy of my paper back from my boss covered in red ink. Many of his comments were urging me to be more precise about what I was saying. Twenty-seven drafts later my 45 page draft had turned into an 11 page policy study.

    Journalists don't have the same luxury of taking several months to write up a story. At the same time, language does matter. So when a story talks about a proposal shifting school funding from "local taxpayers" to the "state" I had to respond.

    Here is the original article and what follows is my letter to the editor.

    To the editor:

    Constantly referring to the shifting of payment between “local taxpayers” and the “state” makes is seem as if funding schools at the state level is costless for Toledo-area taxpayers because the “state” is picking up the tab, not taxpayers at the state level. The reality is that the state of Ohio has to get its revenues from somewhere and any reduction in local property taxes will have to be made up with increases in state taxes such as the sales or income tax. It is therefore possible that Toledo-area taxpayers might pay more in combined local property taxes and state taxes such a shift than before it.

    Sincerely,

    Joshua Hall

    Posted by Joshua Hall at 02:54 PM

    Re: Socialism: If at first you don't succeed...

    While it may seem quaint for college students proclaim themselves socialists, these "experiments" have cost millions of lives. It's unfortunate that the world periodically needs reminding of the perils of socialism and even more unfortunate that we're probably going to have that lesson provided for us again in the coming years. I'm thinking specifically of Venezuela and the Dec. 24 WSJ article about attempts to make a "new man" who "labor[s] contentedly in utopian cooperatives."

    Posted by E. Frank Stephenson at 01:30 PM  ·  TrackBack (2)

    Illarionov R.I.P. II

    Alas, my prediction about Andrei Illarionov's future in the Kremlin appears to have been correct:

    "Putin Demotes Adviser Critical of the Kremlin" (NYT)

    [Hat tip: Paul]

    Posted by Robert Lawson at 01:21 PM  ·  TrackBack (3)

    Socialism: If at first you don't succeed...

    A freind pointed me to this wonderful little essay that appeared in the student newspaper at our undergraduate alma mater.

    A taste:

    No experiment has ever gone right on the first or even the first few times. All we can do is learn from these experiences and ensure that future attempts at a socialist transformation of society will be successful.

    [Hat tip: Paul]

    Posted by Robert Lawson at 01:16 PM  ·  TrackBack (1)

    Welcome Deirdre!

    I am happy to announce that Deirdre McCloskey has agreed to join our merry group of bloggers.

    I'm sure McCloskey needs little introduction to our regular readers. She made my wish list for a Nobel Prize (as well as Josh's).

    McCloskey, a Distinguished Professor of Liberal Arts & Sciences and Professor of Economics, History, and English at the University of Illinois at Chicago, has called herself a "postmodern free-market quantitative gender-crossing Christian feminist."

    Anyone with that many adjectives has to be a great blogger don't you think?

    Rather than list out all of her accomplishments, go check out her Amazon.Com listings here.

    Buy a few of her books while you're there!

    Posted by Robert Lawson at 12:01 PM  ·  TrackBack (2)

    Tsunami-nomics

    There's been much teeth gnashing about countries bordering the Indian Ocean not having a tsunami warning system as do the coutries bordering the Pacific. While unbelievably unfortunate given the enormity of the disaster, it's consistent with the economics of risk and uncertainty. For example, other things equal, one should take precautions against events with higher probabilities than against events with low probabilities. Since the Pacific has more seismic activity, it is sensible to expect countries bordering the Pacific to have installed a warning system. Similarly, avoiding risky events is costly and wealthier people/societies can better afford the cost of avoiding the risk. Hence it's not surprising that weathy countries around the Pacific (Japan, Australia, U.S.) have installed a system whereas poorer countries bordering the Indian Ocean (Indonesia, Sri Lanka, the east coast of Africa) have not.

    Craig Depken has an interesting post on the tsunami and corruption. In respsonse to the tut-tutting over the tsunami, Don Boudreaux points out that millions of Indians, Sri Lankans, and Indonesians live shorter lives because they lack economic freedom.

    Posted by E. Frank Stephenson at 11:58 AM  ·  TrackBack (6)

    Syllabus Prep

    Among my tasks for this week is putting the finishing touches on my class syllabi for the coming semester. While Berry students attend class fairly regularly and are generally polite to one another in class, I got a chuckle from Mike Adams's latest column.

    Here are a couple of excerpts:

    I received your recent email asking to be excused from the first two days of class. I am sorry that your mother bought your plane ticket before consulting the schedule for the semester. That happens a lot. In fact, it happens to at least one of my students every semester. But, please don’t worry. I am going to handle your situation under a new policy I have initiated for the coming semester.

    Under my new policy, students with special needs will be able to open a “special needs account” every time that they need to be exempt from the rules that apply to everyone else. Vouchers will be deposited in the account in an amount that accurately reflects the magnitude of each student’s special need. Two vouchers have been deposited in your account to handle this week’s absences.

    ...

    Since the rewarding of need and the corresponding punishment of achievement has been such a failure, there is only one rational thing to do. We must reverse the process. That is why, today, I am announcing a plan to deduct one point from your final average for every special needs voucher that you accumulate during the semester. The points will go to students who do not ask for special treatment but, instead, follow rules and seek to earn credit based upon individual merit.

    Posted by E. Frank Stephenson at 11:05 AM  ·  TrackBack (4)

    Atlanta's Assault on Liberty

    It's been a difficult few weeks for liberty lovers in Atlanta. Consider the following news items:

    1. "Atlanta Mayor Shirley Franklin has slapped a fine of $500 a day — up to a maximum of $90,000 — on Druid Hills Golf Club because it denies spousal benefits to partners of gay members of the private club." (Full story here.) So much for freedom of association.

    ADDENDUM: Although the use of government power in this case or others might be appealing to gay activitists, they might want to be a bit circumspect. While living in a different city, I recall there was a lesbian bar/social club. I doubt that club would be pleased for its city government to fine it for not admitting men.

    2. "Businesses that provide services to Atlanta city government would be encouraged — but not forced — to pay their employees at least $10.50 an hour under a new "living wage" ordinance.

    The legislation, adopted Monday by the Atlanta City Council, would give preference to companies bidding for city work if they pay their employees the prescribed amount." (Full article here.) Freedom to contract--ha!!

    About a year ago, I participated in a panel discussion at Georgia State University on the proposed living wage ordinance. One of the other panelists was a businessman who claimed to be "socially conscious" or something of the sort. As part of his advocacy of a living wage for Atlanta, this fellow detailed how his garment factory in LA chose to hire workers who could sew 50 shirts per hour at $10 per hour instead of paying the minimum wage to workers who could only sew about 25 shirts per hour. (I don't recall the exact numbers he used but there were "high productivity" and "low productivity" workers who could sew shirts with equal labor cost per unit.)

    It's just fine for business owners to choose high pay/high productivity workers, but it misses the point. If a city adopts a living wage mandating a wage of, say, $10 per hour then it is effectively making the low wage/low productivity workers unemployable. While businesses might simply substitute the more productive workers and congratulate themselves for paying "living wages," workers who cannot sew fast enough to justify the $10 per hour rate will not find jobs.

    Posted by E. Frank Stephenson at 10:47 AM  ·  TrackBack (6)

    January 03, 2005
    Introducing ... Killer Grease Mungowitz

    I'm extremely excited to announce the addition of Michael Munger to Division of Labour. He is a talented and prolific scholar whose old blog was a must read for me.

    He has a long essay on democracy, coming out next week as the monthly featured article on EconLib .

    Here is an excerpt:

    It is fine to celebrate the great achievements of democracies, once they
    are firmly established. But such celebrations confuse cause and effect. The
    reason democratic nations have personal liberties, property rights, and
    rule of law is not that they are democracies. Rather, nations that have
    those things embody the entire package of the Western tradition of good
    government. Requiring that government actions hinge on the consent of the
    governed is the ribbon that holds that bundle together, but it is not the
    bundle itself. Fareed Zakaria identified this "bundle" problem perfectly.

    "The reason democratic nations have personal liberties, property rights,
    and rule of law is not that they are democracies. Rather, nations that have
    those things embody the entire package of the Western tradition of good
    government."

    For people in the West, democracy means "liberal democracy": a political
    system marked not only by free and fair elections but also by the rule of
    law, a separation of powers, and the protection of basic liberties of
    speech, assembly, religion, and property. But this bundle of freedoms?what
    might be termed "constitutional liberalism"?has nothing intrinsically to do
    with democracy and the two have not always gone together, even in the West.
    After all, Adolf Hitler became chancellor of Germany via free elections.
    (The Future of Freedom, p. 17, emphasis mine).

    So just what is democracy? In our mental potpourri, good government leads
    the list. But then what is 'good government?' A starting point could be
    voting and majority rule: most people can choose for all of us, and
    majorities can impose their will on minorities.

    Such blanket endorsements of majority rule make me wonder whether democracy
    is a fraud or just a conceit. As William Riker pointed out in his 1982
    book, Liberalism Against Populism, the claim that "fair" processes always,
    or even often, lead to "good" outcomes ignores much of what is known about
    institutions and institutional change. If people disagree, and if there are
    several choices, democracy is manipulable, even dictatorial. For modern
    political science, this is called the "Arrow Problem," after Kenneth Arrow.

    If all we mean by democracy is a civil myth, a conceit, it could be useful.
    The idea of democracy honors common people, calming the mind and pleasing
    the agora. If democracy is a fraud, however, then we are in bleaker and
    more sinister terrain. The pretense that in the multitude we find rectitude
    is dangerous: many of us would love to impose our "wisdom" on others.
    Saluting the collective wisdom is simply a way to hold other citizens down
    whilst we steal their purses, or pack their children off to war.

    And it has ever been thus. As Polybius tells us:

    "The Athenian [democracy] is always in the position of a ship without a
    commander. In such a ship, if fear of the enemy, or the occurrence of a
    storm induce the crew to be of one mind and to obey the helmsman,
    everything goes well; but if they recover from this fear, and begin to
    treat their officers with contempt, and to quarrel with each other because
    they are no longer all of one mind,?one party wishing to continue the
    voyage, and the other urging the steersman to bring the ship to anchor;
    some letting out the sheets, and others hauling them in, and ordering the
    sails to be furled,?their discord and quarrels make a sorry show to lookers
    on; and the position of affairs is full of risk to those on board engaged
    on the same voyage; and the result has often been that, after escaping the
    dangers of the widest seas, and the most violent storms, they wreck their
    ship in harbour and close to shore."

    Polybius, Histories, Book VI, Chapter 44, ca. 130 B.C. (Translated by
    Evelyn S. Shuckburgh, 1889).


    This is not a call for dictatorship, however. The core of the Arrow problem
    is that societies choose between two evils: the tyranny of a Hitler or the
    potential for incoherence described by Polybius (and Condorcet!). Rather, I would claim that "democracy" without the safeguards of constitutional liberalism is both tyrannical and incoherent, the worst system imaginable.

    (Read the whole essay next week, on EconLib).

    Posted by Joshua Hall at 07:41 PM  ·  TrackBack (4)

    Interesting Books

    Sports econ meets golf--yup, it's "Golfonomics" the somwhat new (published in March) book applying economic analysis to golf. If only I'd known about it in time to put it on my Christmas list ...

    Another book I only recently became aware of is Tom DiLorenzo's "How Capitalism Saved America." This nugget came to me as a gift from my brother-in-law and sister-in-law (thanks Kelly and Todd). I've almost finished reading it and have found lots to like--citation of work by Tom Bethell ("The Noblest Triumph") and Cox and Alm ("Myths of Rich and Poor"). Best of all--co-blogger Bob's EFW work gets three pages and two tables of coverage!

    Posted by E. Frank Stephenson at 02:36 PM  ·  TrackBack (2)

    The Economy According to Toure

    According to CNN's "Pop Culture Correspondent" Toure (apparently a qualification for being a pop culture correspondent is using only one name): "The U.S. economy is still in the doldrums." (This statement was part of his "Question of the Day" on the Thursday 12/30 "American Morning" program.)

    Doldrums? The unemployment rate is 5.4%, over 2 million jobs have been added in the last year and a half, and GDP grew at a nifty 4% plus during 2004. It appears that the only thing in the doldrums is Toure's brain--of course, what else should one expect from a bloke who sported one those awful "Vote or Die" t-shirts on tv last summer? Even CNN can do better than this garbage.

    Posted by E. Frank Stephenson at 02:20 PM  ·  TrackBack (2)

    Junk Science?

    News item:

    Young drivers are more likely to suffer rollover crashes in SUVs.

    A government study found drivers aged 16 to 24 have a 68 percent higher risk of rollover in an SUV than an older driver does.

    This item was reported as part of the ongoing anti-SUV jihad, but maybe teen drivers of all vehicle types drive faster and more recklessly than people in older categories. (The only thing this blogger is rapidly approaching is middle age.) Indeed, although it is not a perfect apples-to-apples comparison to the SUV article, the chart below indicates that teen drivers have about twice the fatality rate as do those of us in higher age brackets.

    teen_chart_2002.gif

    Posted by E. Frank Stephenson at 01:58 PM  ·  TrackBack (7)

    A Rotten Way to Start a New Year

    Having enjoyed the company of a cranky 3 year old for a delayed flight, a missed connection, and a rescheduled flight that was also delayed (the joys of flying in the midwest this time of year), I'm now thankfully back home from my fun in the northern Michigan snow. (Look for some pictures of said cranky 3 year old in a few days.)

    Here's even worse news about the onset of a new year: Michael Moore is beavering away on his next film project. He intends to bring his charm and intellectual rigor to bear on pharmaceutical companies. Maybe we shouldn't look a gift horse in the mouth. Perhaps someone will dig into Moore's family tree and find a family member who wouldn't be alive today if not for the product of one of Moore's targets. (Wouldn't it be rich if Moore himself relied on pills to control hypertension or cholesterol? It's entirely possible given his physique.) Or perhaps someone will advocate showing Moore's films without paying him royalties as a way of making the point that he espouses theft of intellectual property. (This isn't to say that there are not legit issues about intellectual property rights, but Moore's film will likely aim for the low road rather than a serious discusson of patents and the like.) Or, since Moore will no doubt bloviate about a "right to health care," someone will ask Moore if he's the one who would like to be obligated to the involuntary service that would be implied by the existence of such a positive right. (Note to co-bloggers: I've got dibs on "Moore advocates slavery" as the title for a future blog posting.)

    By the way, imdb indicates that Moore plans to call the film "Sicko" and that he "got the idea for the movie while he was shooting in Canada for Bowling for Columbine (2002), and heard that Canadians don't have to pay for healthcare." Maybe he needs to see "Barbarian Invasions" which Bob posted on awhile back and which--thanks to a Christmas gift to myself a la Bob's wife's shopping for herself--I've now seen. The first half or so of the film is a scathing take on socialized medicine that, if it is a reasonable portrayal of Canadian healthcare, indicates that Canadians pay dearly for their healthcare with shorter and/or less pleasant lives.

    Posted by E. Frank Stephenson at 01:26 PM  ·  TrackBack (3)

    A Recent Letter to the Cleveland Plain Dealer

    Inspired by Don Boudreaux I've been writing some letters to the editor recently. Here is one that I don't believe will run. It is in response to this article.

    To the editor:

    The recent article on declining enrollment in the Cleveland schools fails to mention that the departure of students to other education options (i.e., charters, suburban districts) has actually resulted in higher per pupil spending in the district. According to data from the Ohio Department of Education, spending per pupil has risen from $7,833 in FY 2000 to $11,121 in FY 2004 – a 40 percent increase.

    Sincerely,

    Joshua Hall

    Posted by Joshua Hall at 11:54 AM

    January 02, 2005
    Welcome to 2005

    A good start to the new year:

    (1) My Seminoles won on Saturday.

    (2) I was able to take advantage of the unseasonably warm weather and spend the day hiking in the Hocking Hills. I figure I hiked about 15 miles in total. This pic from above Cedar Falls.


    cedarfalls22.jpg

    Posted by Robert Lawson at 07:53 PM  ·  TrackBack (121)

    January 01, 2005
    Medical Quiz

    Q: What disease is considered 100% lethal if contracted and not treated.

    a. AIDS
    b. ebola
    c. bird flu
    d. rabies

    Read More »

    Posted by Robert Lawson at 09:16 PM  ·  TrackBack (4)

    Price Expectations and Demand

    People are often shocked at how the demand for a product can increase merely based on the expectation that prices will be increasing in the future. We see this in oil markets quite often when current demand (and hence the current price) increases at the slightest whisper of unrest in the Mideast. It makes sense of course to attempt to buy more today if you expect the price to be higher tomorrow. Ironically, this desire to buy more today in order to avoid tomorrow's higher price results in the price getting bid up today. Still people complain in conspiratorial tones about how oil prices go up even though supplies have not been disrupted. There's no conspiracy folks, this is just how supply and demand work.

    The people of Vietnam are providing an object lesson in how demand today reacts to expectations of the future. Apparently they are buying record numbers of cars just prior to the imposition of a new car tax.

    Posted by Robert Lawson at 08:10 PM  ·  TrackBack (147)

  • The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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