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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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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... 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.

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.

Oil-rich Dubai Buys Big Stake in DaimlerChrysler.

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?

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?

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)

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.]

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.

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.

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.

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?

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).

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.

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.

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.

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

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

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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".

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!

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.

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

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.]

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.

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

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.?

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.

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.

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.

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...

But sometimes they act as if they were robots...

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!

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.

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

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.

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.

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."

"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.

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

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.

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).

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.

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