Hat tip to Boortz again: one of his reading assignments includes this link to a blog site: "Let’s throw some serious sand into the gears of the government machine. They have asked for real property, so let us send it to them," and provides addresses of the five Justices and some of the New London bad guys to which you can send dirt from your own property. I'm thinking of shipping off some Louisiana soil myself to Justice Bow Tie.

Also, I was immensely relieved to hear this morning on NPR's "Morning Edition" that officials ruled Roy's (of Siegfried and Roy) tiger to be innocent in his mauling. Not very exciting, but click on the "listen" button, and at the 20-second point, hear the dismissal of another possible reason for the tiger attack (prior to dismissing "a scheme by animal rights activists"). I guess W talking about the "Streak of Evil" would just confuse people.

According to the official web site for How Stella Got Her Groove Back, the 1998 film

is based on Terry McMillan's best-selling novel of the same name - the story was inspired by McMillan's real-life romance with a young Jamaican who indeed was twenty years her junior.

McMillan, 53, is now divorcing her husband Jonathan Plummer, 30, saying he has admitted being gay and only marrying her to get a green card. Plummer has filed for spousal support and royalties from the book. According to one news report

Plummer says he didn't know he was gay when he met McMillan in June 1995 when, recuperating from her mother's death, she visited the Negril resort where he worked.

"I was a 20-year-old kid when I met her and had no idea that she was anybody other than an attractive older woman," he said.

Let this be an object lesson to women who might otherwise get carried away with “Stella’s Top 10 Reasons to Date a Younger Man”.

The news never reports absolute risk. That's because in most cases the associated probability is low. They want us to worry, because the more we fear. the more likely they are to retain our attention. This site by the Florida Museum of Natural History provides some nice data on comparative risk of shark attacks.

Over the last 50 years in Florida there have been 8 fatal shark attacks. Over the same period there have been 13 fatal attacks by allaigators, a species we protect.

Congress spends almost $100 million a year for in-depth background reports on a wide variety of topics. It then denies you easy access to those reports over the Internet. This site by Open CRS attempts to collect those reports and make them available on line.

A Congress that can’t understand the marginal cost of distributing these already researched reports is less than their marginal benefit to the public, shouldn’t be trusted with our dollars.

Following up on Robert's post below, I can see a whole new chain of hotels, called "Souter Inns" which could be built on every property that Justice Souter (and the others on the court who joined in the Kelo opinion) owns in the United States. The opinion specified only "well thought out" economic development plans and a positive probability that there would be increased jobs and taxes as a result of any development option that a city would consider. Why stop at one property?

Here in Arlington, where we have our own land grab underway for the Cowboys stadium project, there was an audible sigh of relief from the powers-that-be when the Court decided in favor of localities taking property. However, our esteemed mayor stated that the court case really had little connection to what is going on in Arlington because the city will own the stadium and lease it to the team.

Thus, even if the court had come down on the other side it would have left open the question of public takings for "publicly owned" development that is, in turn, leased to a private enterprise for well below market value. Who exactly is the residual claimaint of development?

What's to stop house-farm developers from refusing to pay market value for farm land on the edges of town (here land is going for 50-60k per acre in some parts) when they can pressure the localities to pay a lower price? There is no "hold out" in that case - no individual or few individuals standing in the path of "progress" - and yet the court's opinion would still seem to prevail.

Headline on an article in Lebanon’s Daily Star: “Iraq's Central Bank builds credibility with rock-steady dinar value”. Meaning:

The dinar's current value of 1,465 to the benchmark U.S. dollar is virtually unchanged from January 2004, when the introduction of new banknotes to replace the Saddam-era denominations was completed.

But the same article, a few paragraphs later, shows that there’s a fly in the ointment:

In May, CBI governor Sinan al-Shabibi was quoted by Reuters as forecasting that the inflation rate, estimated at 30 per cent in 2004, could fall to 20 per cent this year. The CBI currently estimates annual inflation at around 17 percent.

A basic arbitrage proposition of monetary economics (“purchasing power parity”) tells us that two currencies can’t maintain a fixed exchange rate (together with free trade and financial markets) unless they have the same inflation rate. US dollar inflation isn’t anywhere near 20-30 percent. So I’d say the headline is precisely wrong: the Iraqi monetary expansion that is driving 20-30% inflation is on a collision course with the fixed exchange rate. Continued pegging of the exchange rate at its present "rock-steady" level is not credible. Expect a devaluation unless the central bank brings inflation down.

How to bring inflation down? Some western economists have suggested inflation targeting for Iraq. But as Matt Sekerke and Steve Hanke calmly point out (pdf file), Iraq presently lacks what would seem to be the minimal institutional requirements for inflation targeting (a functioning banking system, a market for government bonds, etc.). Dollarization is the more reliable option for bringing actual credibility to Iraq’s money.

Weare, New Hampshire (PRWEB) Could a hotel be built on the land owned by Supreme Court Justice David H. Souter? A new ruling by the Supreme Court which was supported by Justice Souter himself itself might allow it. A private developer is seeking to use this very law to build a hotel on Souter's land. [Press Release.]

[HT: Brad Smith]

BTW, Craig is right (see below). That Google Earth thing is seriously cool. I just took a birdseye tour of the Grand Canyon including the hiking route I'm planning for April '06.

Google earth

Tim Cavanaugh of ReasonOnline interviews Scott Bullock of the Institute of Justice, the attorney who argued the Kelo case before the Supreme Court. Hat tip: NKB.
(P.S. It took me a while, but I finally figured out that the headline that Reason gave the interview is a play on the Sex Pistols' album title ...)

Here's a funny ad (1.4 MB .wmv) for the on-line auction site, aucland.com.

You gotta love the Coase Theorem!

[HT: Jody]

My good friend, former DoL blogger, and Ashland University history professor John Moser, has a new book out titled Right Turn: John T. Flynn And The Transformation Of American Liberalism. I just bought a copy. Get yours while you can!

Now that NASA is planning to resume flights of the shuttle, there will be extensive news reports on the related risks. The real question, of course, is how safe is safe enough. I am not one who believes that every hint of risk must be removed from our lives before we leave home (although most accidents do happen in the home). It is hard to argue, however, that the costs of shuttle outweigh the benefits. Never has a nation given so much in return for so little.

How much more knowledge of the universe would we have gained had the dollars spent on the shuttle been spent on unmanned space exploration? NASA needs to get over it public relations gimmicks (teachers in space) and get on with some real science. Otherwise, it is just another government expenditure boondoggle.

From Down Under comes this story on zombie dogs.

SCIENTISTS have created eerie zombie dogs, reanimating the canines after several hours of clinical death in attempts to develop suspended animation for humans.


Posted by Ralph R. Frasca at 07:58 AM  ·  TrackBack (1)



Light Posting

Right now I'm busy putting some final changes to my paper for the Western Economic Association meetings in San Francisco. Then I need to really start studying for comps and sneak moving in as well. So blogging will be light.

Posted by Joshua Hall at 06:04 AM  ·  TrackBack (1)



June 27, 2005
What Free Market?

In one of today's Supreme Court decisions, the court sided with the FCC by saying the FCC could decide whether or not high-speed cable internet services were "information services" or "telecommunications services." The FCC had previously ruled cable internet to be "information services" and thus unregulated and not subject to the common carrier rules that regulate phone lines (and hence DSL internet). A lower court disagreed with the FCC and the Supreme Court today reversed saying it was up to the FCC to decide because the statute was ambiguous. (If the FCC had decided cable internet was "telecommunications", then that would be ok too.)

Interestingly, Justice Thomas wrote the majority decision and Justice Scalia wrote the dissent (proving yet again that Thomas is not Scalia's lapdog as most lefties believe).

The NYT had this to say in reference to Scalia's dissent: In a dissent, Justice Scalia, wrote that the commission's ruling was trying to further a free-market agenda through "an implausible reading of the statute, and has thus exceeded the authority given it by Congress."

I haven't read Scalia's dissent in its entirety (here are the opinions if you want to read them) but I'm trying to figure out why the Times had to drag the "free-market agenda" stuff into the article. Scalia's point (right or wrong -- I don't know or really even care that much) is that the FCC misread the statute. Whether or not the FCC's decision was pro-free-market or anti-free-market was not Scalia's concern. His concern was the statute and the FCC's (mis)interpretation of it.

But the NYT never misses a chance to take a shot at the "free-market agenda".

Posted by Robert Lawson at 09:36 PM in Law  ·  TrackBack (1)



Iraq War Casualties

This is an interesting depiction of Iraqi War casualties from March 2003 through June 2005. It is apparent that the "insurgency" is mainly concentrated in the so-called Sunni triangle - with lots of activity in Bagdhad, obviously.

There seem to be many in the government that are talking down our military. This is not terribly surprising because the "war" isn't a galvanizing war such as WWI, and especially WWII. It is not clear that any war we might be involved in would be as "galvanizing" as previous conflicts. Whether sitting members of Congress made a habit of stating that "we are losing" in WWI, or WWII, I don't doubt that it happened. I know that there was continual bickering during the Civil War - but it is still bad form in my opinion.

At a 2000 Liberty Fund conference I argued that the U.S. didn't have the stomach for D-Day style tactics and casualties. Our capital intensive military, which became necessary after the draft was ended, had basically reduced the casualty count to such an extent that it would be difficult to imagine the U.S. population "accepting" 4,000 dead in a day.

I wonder if we wil see more calls for our extrication from Iraq given the female casualties we suffered last week. This was the center of another discussion between myself and a few others at the Liberty Fund conference - whether the U.S. military should place women in combat situations. My claim was that sufficiently high female casualties would turn popular support against any war (rather than against withdrawing female soldiers and marines), which if known by our potential enemies would make our military a less effective deterrent.

If female casualties mount in Iraq, it will be interesting to see if those who insisted on women having equal access to military MOS's and enemy fire are the first to insist that we must withdrawl because of female casualties.

Posted by Craig Depken at 12:43 AM in Politics  ·  TrackBack (0)



June 25, 2005
Latin American Sweatshop Report

Apparel-maker Fruit of the Loom has its headquarters in Kentucky, but employs 7000-9000 at its two plants in El Salvador. The Louisville Courier-Journal sent its reporter Wayne Thompkins to one of the plants in El Salvador to check on conditions. What did he find when he interviewed workers there (who defied a company policy instructing them not to speak to reporters about their jobs)?

Despite Fruit of the Loom's no-talk policy, there were workers willing to talk outside its Export Salva plant, and most were happy with the conditions.

Employees said that because the company uses a piecework system -- payment is based on the amount of work produced of a specific item -- they are motivated to produce as much as they can.

Before she came to Fruit of the Loom, Graciela Rivera, 35, said she had been a street vendor in Sonsonate. She said she was robbed and the thieves took everything she owned. Through her friends, she got a job at the plant. Six years later, she said she is happy and well-treated there.

Vilma Ruth Erazo, 30, was a bookstore cashier in Sonsonate. She said she is making more money at the plant than at the store, allowing her to better support her mother and two children.

"All the (job) slots are full," Erazo said. "There's not much turnover. Why would anybody stay with a company where they don't want to be? Everybody must have a favorable impression of the place, otherwise they would quit."

Posted by Lawrence H. White at 06:32 PM in Economics  ·  TrackBack (1)



Calculational curiosity

The government of Azerbaijan has announced a currency redenomination: one new Manat will equal 5,000 current Manats. New banknotes will replace current notes in 2006.

5000:1 seems a peculiar choice. Typically in a redenomination the ratio is a simple power of ten: 1 new = 100 or 1000 or 10,000 old units. Converting pricetags then requires merely lopping off zeroes. With 1 new = 5000 old, sellers must lop off three zeros and then divide by 5, or lop of four zeros and then multiply by 2. Why impose the extra hassle?

Was the government deadlocked between ministers who wanted to redenominate at 1000:1 and those who wanted 10,000: 1, and so decided to split the difference? Or (more likely) is it because 5000 current Manats are at the moment worth very close to US$1, and the country is already heavily dollarized?




Posted by Lawrence H. White at 05:44 PM in Economics  ·  TrackBack (0)



Has Tom Cruise been reading Tom Szasz?

Shades of "The Myth of Mental Illness": The star of War of the Worlds challenges psychiatry and its methods, in an interview with Matt Lauer on NBC's Today show. Cruise had recently criticized Brooke Shields for revealing that she had taken an anti-depressant drug for her post-partum depression, and Lauer asks him to explain:

Cruise: I've never agreed with psychiatry, ever. Before I was a Scientologist I never agreed with psychiatry. And when I started studying the history of psychiatry, I understood more and more why I didn't believe in psychology.

And as far as the Brooke Shields thing, look, you got to understand, I really care about Brooke Shields. I think, here's a wonderful and talented woman. And I want to see her do well. And I know that psychiatry is a pseudo science.

Lauer: But Tom, if she said that this particular thing helped her feel better, whether it was the antidepressants or going to a counselor or psychiatrist, isn't that enough?

Cruise: Matt, you have to understand this. Here we are today, where I talk out against drugs and psychiatric abuses of electric shocking people, okay, against their will, of drugging children with them not knowing the effects of these drugs. Do you know what Aderol is? Do you know Ritalin? Do you know now that Ritalin is a street drug? Do you understand that?

[...]

Lauer: I'm just saying. But aren't there examples where it works?

Cruise: Matt. Matt, Matt, you don't even — you're glib. You don't even know what Ritalin is. If you start talking about chemical imbalance, you have to evaluate and read the research papers on how they came up with these theories, Matt, okay? That's what I've done. Then you go and you say where's the medical test? Where's the blood test that says how much Ritalin you're supposed to get?

ADDENDUM: I didn't mean to suggest more of an overlap between Szasz and Scientology than really exists. As is clearly explained here, while the religion of Scientology shares some "anti-psychiatry" conclusions with the libertarian Szasz, their arguments are quite distinct.

Posted by Lawrence H. White at 12:42 PM in Politics  ·  TrackBack (0)



June 24, 2005
A future of empty big boxes

The blogosphere is abuzz with justifiably outraged reactions to the Supreme Court’s anti-property-rights ruling in Kelo v. New London. (See Julian Sanchez in particular.)

What will be the practical result of the decision? Expect more tales like these. (I don’t know about the other cases summarized there, but the summary is accurate regarding my neighboring town of Maplewood, MO.)

Instead of commercial real estate redevelopers doing the hard (but not impossible!) work of assembling large land parcels through voluntary transactions, they will increasingly ask local governments to assemble parcels for them through eminent domain, promising future tax revenues in return.

A commercial real estate report here in St. Louis made the following revealing comments before the ruling:

With so much of retail development occurring in inner cities or inner ring suburbs, developers and economic development agencies will be watching for a U.S. Supreme Court ruling on eminent domain. Most close-in retail development sites require land assemblage and demolition of existing buildings before proceeding with new construction. Eager for the sales tax revenue produced by new, and especially upscale retail development, economic development agencies employ local governments’ eminent domain authority to condemn and assemble land for projects that will produce jobs as well as taxes. Often just the threat of condemnation is enough to speed negotiations between developers and property owners.

Do you like that ring of efficiency? “Speed negotiations”. Sounds so much nicer than “get property owners to knuckle under and sell for less”. The report continues:

Depending on state statutes and local government ordinances, eminent domain can be used to acquire blighted areas for clearance and redevelopment. The definition of blight has been extended in some places to include underperforming economic yield as well as physical blight.

In other words: your land is now up for grabs whenever the town council imagines that a different use might generate more tax revenue for them. Town officials, always hungry for tax revenues, are empowered to project themselves into the role of finding the greatest-revenue-generating use for local real estate. How can they resist? Don’t we all love to play SimCity?

The result to be expected, contrary to well-meaning officials’ intentions, is misuse and waste of land (not to mention the hardships of involuntarily uprooted families). When private developers buy up land through voluntary transactions, they face a market test. If a shopping center or office complex flops, the developer loses his own money and will have trouble getting bank loans the next time. Wishful thinking is thereby constrained. The market ruthlessly weeds out incompetence. When town officials grab land through eminent domain, to assemble a parcel to sell to a developer (more cheaply than he could have managed without eminent domain, otherwise he wouldn’t have waited) whose shopping center flops, where is the personal penalty for the town officials? At most, if voters are informed enough to hold them accountable, they face a slightly higher chance of being voted out (if still in office), or a slightly reduced budget to play with (unless tax revenues can be enhanced somewhere else). Wishful thinking has almost free rein.

So my prediction: expect to see a few more half-empty shopping centers ten years from now.

Posted by Lawrence H. White at 04:38 PM in Economics  ·  TrackBack (3)



Old Woodies

In the '60s, surfers drove woodies. As a post-ironic consumer of ersatz surf culture (surf music especially, but I even once subscribed to the short-lived lifestyle magazine Beach Culture) since my grad-school years in LA, I drive a "woodie" version PT Cruiser (complete with custom-made surfboard-styled wood rear shelf, surf stickers on the rear windows, and a hula girl wiggler doll on the dash). But for the truly obsessive-nostalgic, only a genuine vintage wood-bodied car will do. You can witness their fetish-objects (some with surfboards on top) at the noteworthy fan site www.oldwoodies.com

Posted by Lawrence H. White at 01:17 PM in Culture  ·  TrackBack (1)



June 23, 2005
The solution to illegal immigration?

Now, I am no big-city lawyer, but I have been perplexed at the lack of action on the part of anyone up in D.C. as we absorb up to 60,000 illegal transfers across our southern border each month. (Would we care if they carried AK-47's? Just a question.) I was beginning to think that there simply was no plan to do anything about the borders, but maybe there is a plan after all.

Perhaps, knowingly or not, two of the three branches of government are not-so-slowly solving our illegal immigration problem. Remembering that there were few people sneaking East over the Soviet frontier, arguably because just about anywhere else in the world was better than being in the Soviet Union, we can make the U.S. a very inhospitable place, thereby reducing the number sneaking North across our frontier.

We might have to change the name of the country to make the signal crystal-clear, why not F.U.S.A.? Fascist (or your other favorite 'f' word) United States of America?

Part (1)

"The Congress shall have power to prohibit the physical desecration of the flag of the United States." (Proposed "flag burning" amendment passed U.S. House June 22, 2005)


Message? Your private property is not your's, especially if destroying it will hurt someone else's feelings. Don't come to El Norte because whatever you think you are going to earn, keep, or send home is really not yours to begin with. The government can put you (us) in jail for doing something with your property that can only hurt "feelings?"

(Side note: The proposed amendment is a disaster in the making - what constitutes a flag? Is a flag made out of fireworks on the fourth of July out of the question? If my flag has 55 stars and 14 stripes, can I burn it? Is my flag my property or not? rrrrr)

Part (2):

Though the city could not take petitioners' land simply to confer a private benefit on a particular private party...the takings at issue here would be executed pursuant to a carefully considered development plan, which was not adopted “to benefit a particular class of identifiable individuals...The city has carefully formulated a development plan that it believes will provide appreciable benefits to the community, including, but not limited to, new jobs and increased tax revenue." (Kelo v. New London, June 23, 2005)


Message? The government does know what is the best use of your property, even if more than YOUR feelings are damaged in the process, e.g., there are real economic damages. All the government needs is a "carefully considered" and "carefully formulated" plan that has someone's seal of approval that it might (maybe, perhaps, could be, when pigs fly) create new jobs AND TAX REVENUE!!! Oh, the court came up with a good one there. As long as the beast can feed, which the court has now told us is an unambiguously good thing, then all bets are off.

With a few more good ideas like this we are on our way to reducing freedom in this country to the point that others won't want to come here - hey at least the local plumber will keep his job, but only if it generates tax revenue!

Part (3):

Of particular relevance here is Wickard v. Filburn, 317 U. S. 111, 127–128, where, in rejecting the appellee farmer’s contention that Congress' admitted power to regulate the production of wheat for commerce did not authorize federal regulation of wheat production intended wholly for the appellee’s own consumption, the Court established that Congress can regulate purely intrastate activity that is not itself "commercial," i.e., not produced for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.



For those of you who don't recognize this quote, it comes from Gonzales v. Raich (June 6, 2005) better known as "Medical Marijuana." The court goes one better in the very next sentence:



In both cases, the regulation is squarely within Congress' commerce power because production of the commodity meant for home consumption, be it wheat or marijuana, has a substantial effect on supply and demand in the national market for that commodity.


What? The wheat industry has been cartelized (by Congress!!) like the marijuana industry and Farmer Filburn undermines the wheat industry by growing a few bushels on the side for him and the missus? This is simply not credible given the facts.

Moreover, the statement implies that somehow Raich and Mason (the two folks who sued) growing their own marijuana would "upset" the market for marijuana. In Filburn, regulating wheat production was assumed to be aimed at maintaining a high price for wheat - I suppose for the sake of farmers, because who cares about consumers (oh, the dead weight loss)? Is the Controlled Substances Act intended to maintain a high price for illegal drugs?

(Side note: The Gonzales vs. Raich case centered on the DEA destruction of SIX marijuana plants. Hardly a threat to the cartels in Ol' Mexico and elsewhere. Farmer Filburn harvested nearly 12 acres of wheat above his allotment. - Old Farmer Filburn was hardly a threat to the world wheat industry.)

Message from Gonzales vs. Raich? Congress has known what's best for you to put in your stomach and lungs (but not beside them), going on 70 years. Remember, Congress decides what you will do with your private property. Besides, there is a chance you might sell your private property to someone else and we can't have that.

Yep, the F.U.S.A. - we are well on our way. Come a few more years when our freedoms are about the same as Ol' Mexico, El Norte won't look so appealing.


Posted by Craig Depken at 09:40 PM in Law  ·  Comments (13)  ·  TrackBack (1)



KELO V. CITY OF NEW LONDON

The Kelo decision is now available.


The U.S. Supreme Court, in a 5-4 vote, rules that the "Takings Clause" in the U.S. Constitution permits local governments to seize residential and commerical property for private development. In a strongly worded dissent, Justice O'Connor rebukes the majority's conclusion, asserting that "the beneficiaries are likely to be those citizens with disproportionate influence and power in the political process," giving government a "license to transfer property from those with fewer resources to those with more."

Links at Findlaw

Majority Opinion
Justice O'Connor's Dissent
Case Docket
Attorney For Petitioners
Attorney For Repondent

Doesn't look good. Any comments?


Posted by Ralph R. Frasca at 03:35 PM in Law  ·  Comments (1)



Alan Greenspan, free banker?

Greenspan to the Senate Committee on Finance today:

Financial markets, if left free to continuously reprice interest rates and asset values, will identify and respond to imbalances far sooner than a system based on administrative edict. In market-based financial pricing systems, automatic adjustments are inherent. But in a highly administered system, supervisors can identify emerging imbalances only when these imbalances become visibly large and are already troublesome. Adjustment in a system requiring human intervention is accordingly far less flexible than in a system based on the automaticity of markets.

Okay, the context was a discussion of China’s pegged exchange rate system. But doesn’t the argument generalize?

Text of entire remarks here. Hat tip: Fred Foldvary.

Posted by Lawrence H. White at 02:50 PM in Economics  ·  TrackBack (0)



Who cares about property rights? American Idol is on!

Sigh. I'm sure I won't be the first on this site to express anger/sadness at this decision today.
I should have looked more closely at house prices in Nassau last year at the APEE conference.

Posted by Tim Shaughnessy at 12:21 PM in Politics  ·  TrackBack (4)



Outsourcing and academic tenure

In the course of an unfortunate ad hominem attack on a good economist, blogger Deb Frisch raises an interesting question:

3. Tenured university professors enjoy the most protected jobs in the country. They don’t produce anything like “goods” that are consumed in the market. Isn’t it a little bit hypocritical for economics professors to argue for outsourcing and worship the market? Has any economics professor argued for abolishing tenure or opening up the competition for the $25 million the National Science Foundation spends every year on economics research to foreign labor? I reckon there are economists in Bangalore who would do research for less than the $20,000 a month American economists charge NSF. It would be nice if economics professors would put their mouths where their money is and argue for outsourcing their own jobs.

I’m a tenured university professor at a state university, and I argue for free trade, which includes the freedom to outsource. (As for “worshipping” the market, I always liked my teacher Thomas Sowell’s line: “I don’t have faith in the market; I have evidence.”)

I also think the net effects of tenure are probably negative at state universities in a competitive academic market like the US/Canada. Competition gives us our best hope for academic hiring (and firing) to be based on merit or productivity rather than politics or whim. Competition doesn’t help if all hiring committees have the same strong political biases that override considerations of merit or productivity, or the same mistaken views on what constitutes merit or productivity, but in those cases tenure only makes the problem more permanent.

I’d leave the question of tenure at private universities up to those universities. Better private schools (e.g. the University of Rochester) already offer five-year non-tenure contracts in some cases. Lesser private schools, I predict, would have a harder time hiring productive faculty (i.e. would have to pay more) without some form of tenure.

Has any economics professor argued in writing for abolishing tenure? Yes, across the political spectrum, and it’s not hard to find them. If you Google “abolish tenure economist” you quickly find tenure abolition defended by liberal Robert Reich, libertarians Robert W. McGee and Walter Block, and conservative Martin Anderson.

Has any economics professor argued for opening up the NSF to foreign competition? Not that I know of, but it’s not a bad idea. Though not quite as good an idea as abolishing the NSF. Disclaimer: I’ve never had an NSF grant.

ADDENDUM: Law firms and accounting firms have a form of tenure; it's called "becoming a partner". (A new hire with a freshly minted degree has a probationary period, then either becomes partner or is let go.) Is it any of our business to opine on whether this is a good idea for law firms and accounting firms? No, we presume that competition among the firms will sort it out. Academic tenure is only a public policy issue because so many universities are tax-supported. The only way to finally discover the optimal set of academic tenure systems would be to privatize all the universities.

Posted by Lawrence H. White at 10:36 AM in Economics  ·  TrackBack (3)



Calvin and Hobbes

The complete Calvin and Hobbes comic strip is now available in a nice three volume hardbound set. $89.50.

UPDATE: This is an example of Ralph's post on "dynamic pricing". The link above is the one I received in my inbox (as a subscriber to the daily comic strip service). The $89.50 price I got is lower than the $94.50 price advertised on the regular web site.

Posted by Robert Lawson at 09:09 AM in Culture ~ in Economics  ·  TrackBack (1)



Dynamic Pricing

“Dynamic pricing” is apparently a new term for a kind of price discrimination. Anita Ramasastry discusses whether it should be illegal in an article at Findlaw. Dynamic pricing is when businesses adjust prices for each consumer based upon that consumer’s profile. Moreover, that profile is updated as the business accumulates additional information on the consumer.

Businesses can easily do this on the Internet by placing cookies on your computer that track your interests. Unknowingly, you may be charged more or less for airline tickets or hotel reservations based upon your computer clicks. Consumers who believe they have been unfairly targeted for higher prices are, of course, offended. But is a law banning these practices the best way to deal with the situation?

Doesn’t the use of the Internet cut both ways? While it allows businesses to cheaply collect information on consumers, it also lets consumers more cheaply collect information on businesses, products and services. I don’t buy a consumer durable without first checking out prices at competing sellers on the Internet. In the good old days that would have required trips to several stores and lots of gas.

The price discrimination model demonstrates that with efficient price discrimination some consumers will pay more than the average non-discriminatory price, while others will pay less. If you are a savvy shopper with a more elastic demand, you are likely to benefit from price discrimination and the ignorance of others. So, maybe price discrimination is not such a bad idea. However, I would monitor those tracking cookies if I were you.


Posted by Ralph R. Frasca at 08:42 AM in Economics  ·  TrackBack (1)



June 22, 2005
An economist-blogger “shorts” the housing bubble

Left-of-center blogger Mark A.R. Kleiman, professor of public policy at the UCLA School of Public Affairs, doesn't just yap about bubble-inflated house prices. He’s actually acted: he’s sold his upscale westside LA house and moved into an apartment. Kleiman wryly describes his move as “putting my money where Brad DeLong's mouth is.”

Here’s the LA Times account.
Here’s Kleiman’s own account.

Time will tell whether Kleiman made a shewd move.




Posted by Lawrence H. White at 05:30 PM in Economics  ·  TrackBack (2)



G-money

PayPal, now owned by eBay, is presently the sole giant in online payments. (Disclaimer: I am a frequent PayPal user, and I have made over 400 purchases on eBay.) Rumors that Google, the dominant search-engine service, has begun working on some kind of payments service caused eBay stock to fall slightly on Monday. Google’s CEO now confirms work on something in the payments area, but says that Google will not be challenging PayPal head-to-head.

PC World reports:

Google has confirmed that it is developing an online payment system, although it says it has no plans to take on EBay's PayPal service.

Following media speculation about such a move, the chief executive of the Web search giant, Eric Schmidt, told reporters in the United States that the company is working on payment services that would extend its existing online products and advertising services.

Google does not plan to launch a person-to-person stored payment system that would compete directly with PayPal, but it is working on a payment system to improve the way e-commerce is done, Schmidt told reporters, according to the U.K. representative.

It’s far from clear what would constitute “a payment system to improve the way e-commerce is done”. Some speculate that it means adding a “pay” button to the Google taskbar, or integrating payments into Google’s comparison-shopping engine Froogle (a service I also recommend, if you haven't tried it).

Business Week’s Robert D. Hof argues that it would be foolish to challenge PayPal because of its dominance. Pertinent factoids: Paypal has 72 million accounts. Off-eBay merchants now account for 29% of PayPal's total payment volume. Citibank tried to challenge PayPal with its C2it service, and gave up. Yahoo! did likewise with Yahoo! Payments.

Hof implies that PayPal is a network good: the more members use it, the more useful it is to each member. No newcomer can establish critical mass without a hugely expensive campaign to attract a critical mass.

I’m frankly puzzled as to where the network properties are supposed to lie in online payments. (In auctions, yes, but that’s a different business.) No commercial bank has ever monopolized offline payments (i.e. deposit transfers). PayPal piggy-backs on the commercial banking deposit-transfer system; so too could a new online payment system. It wouldn’t be a big deal for any consumer to have a G-money account in addition to a PayPal account so it needn’t be a winner-takes-all market. I had a C2it account (cost me only a few minutes to open and nothing to maintain), in addition to my PayPal account, before C2it closed. And don’t we all have multiple credit card accounts?

Posted by Lawrence H. White at 02:53 PM in Economics  ·  TrackBack (1)



Howl's Moving Castle

Little bit and I went to see Howl's Moving Castle last night (see also the Disney site). I give it 4.5/5.0 stars. We are big fans of Hayao Miyazaki's work. As usual, this one was visually stunning, beautifully scored, and filled with the fantastic. As we left, we just kept saying "Wow!" to each other.

The anti-war message was even more obvious than in Castle in the Sky (1986), but was not overpowering. Also, the story line was perhaps not as tight as his other movies and I felt less sympathy for the characters than usual, but these are minor complaints. I think we're going to go back to see the subtitled version (instead of the dubbed version) next.

Posted by Robert Lawson at 11:03 AM in Culture  ·  TrackBack (2)



Cinderella Man

Libertas, the site mentioned by Lawrence White below, has a good review of Cinderella Man. I found it an unexpectedly enjoyable film. Other reviews have compared it to Seabiscuit, a call for social justice. However, it is instead a tale of individual strength, perseverance and commitment to family. It also provides a sense of the misery and poverty that accompanied the Great Depression. For Braddock, welfare was not an entitlement. It was a loan that was to be repaid.

Posted by Ralph R. Frasca at 10:21 AM  ·  TrackBack (1)



June 21, 2005
Liberty Film Festival

The 2005 Liberty Film Festival, which bills itself as “Hollywood's premier event for conservative and libertarian film,” will be held October 21-23 in West Hollywood, California. It’s a counter-Sundance, you might say. And they do say:

The Liberty Film Festival showcases films that celebrate the traditional American values of free speech, patriotism, and religious freedom.

[...]The LFF takes no positions on candidates, legislation or ballot initiatives. Of course, most (not all) of the people who operate the LFF are indeed Republicans or libertarians. And most of the people who run Sundance are Democrats.

The festival is co-directed by the husband-and-wife team of Jason Apuzzo and Govindini Murty, who also have a conservative film blog called LIBERTAS. Murty recently appeared on American Movie Channel’s “Film Club” discussing the (not-to-be-missed) supermarionation comedy Team America -- which by the way is now available on dvd with restored marionette-sex footage.




Posted by Lawrence H. White at 06:01 PM in Culture  ·  TrackBack (3)



What the EU Constitution is about

German Chancellor Gerhard Schröder, no doubt flabbergasted by the French and Dutch voters’ rejection of the proposed EU constitution, as well as UK Prime Ministers Tony Blair’s lack of enthusiasm for the project, frankly acknowledges that he views the EU constitution as a device for centralizing power and promoting the welfare state rather than for promoting free trade and migration:

Schröder said that the continent's welfare state and its "values" were under threat […]

"At its heart, it is about the question, which Europe do we want?" he said. "Do we want a single Europe that it able to take action, a true political union as is foreseen in the constitution? Or do we want a big free-trade union, do we want to go from the European Union back to the European Economic Community?"



Blair, no doubt with an eye to the British voters' coolness toward Brussels, is demanding that the EU

overhaul and reform farm subsidies which swallow some 40 percent of the EU budget.

Good luck with that, Tony. George W. Bush has given up on trying to reform US farm subsidies.

Posted by Lawrence H. White at 02:24 PM in Economics  ·  TrackBack (0)



June 20, 2005
How is this NOT progressive?

From the Tax Foundation comes this report on the number of people who have ZERO (or close to it) federal tax liability. Granted some of these might be the super-rich, but I would wager the vast majority are those on the left side of the income scale.



When the percentage of those who have no federal tax liability approaches fifty percent or more, will the class-baiters be satisfied that the tax system is finally "progressive?" How high does the percentage have to be until Atlas will shrug?

Here's an idea: let's get 100% of the people to have no federal tax liability. Alas, the beast must feed.

Posted by Craig Depken at 05:20 PM in Economics  ·  TrackBack (1)



Grad School Blogging

A former student has started a blog: Laments of a Grad Student. I plan to check back often.

Posted by Robert Lawson at 01:14 PM  ·  TrackBack (0)



My last five movies

On a zero-to-four-stars scale:

Madagascar (2005, dir. Eric Darnell) ** Cute. I didn't find it as funny as Shrek or Toy Story, but the six-year-olds down the row whooped it up.

Reshma aur Shera (1971, Hindi, dir. Sunil Dutt) *** Basically a Romeo (Sunil Dutt as Shera) and Juliet (Waheeda Rehman as Reshma) story set among the proud and violent desert folk of Rajasthan. Remarkable cinematography. Amitabh Bachchan is excellent in a supporting role.

Touch of Evil (1958, dir. Orson Welles) **** The film noir classic, with Welles as the corrupt US cop, a tanned Charlton Heston as the honest Mexican cop, and Janet Leigh once again finding trouble in a low-rent motel.

Shatranj ke Khilari [The Chess Players] (1977, Hindi, dir. Satyajit Ray) ***
The great Ray's first film not in Bengali, but instead a mixture of Urdu and English. Slow-paced but charming. Sanjeev Kumar and Saeed Jaffrey are marvelous as the title characters.

Destry Rides Again (1939, dir. George Marshall) ** Light comedy with Jimmy Stewart and Marlene Dietrich.


Posted by Lawrence H. White at 11:45 AM in Culture  ·  TrackBack (0)



DUI Laws in Ohio

In a working paper of mine that investigates the impact of lowering blood alcohol limits (available here), I mention some seemingly bizarre drunk driving laws in various states, including the fact that it is illegal to drive a lawn mower or a snow mobile while intoxicated. I mention the laws in passing, suggesting that many DUI laws are aimed at an extreme minority.

Nevertheless, the law is on the books and the law can be enforced. From Delhi, Ohio comes this story:

They arrested 22-year-old Joseph Mundy early Wednesday morning and charged him with drunken driving. The odd part: Mundy was behind the wheel of a riding lawnmower.

Police say he and a companion drove the mower down the middle of Covedale Avenue.

He was reportedly headed to the Kroger on Delhi Pike, some three miles from his house.

Police say Mundy's blood alcohol level was more than twice the legal limit for driving.

Ignorance of the law, or of my paper, is no excuse young man.

Posted by Craig Depken at 11:20 AM in Law  ·  TrackBack (0)



Give me your tired, your poor, your remitters

I've contributed an op-ed appearing on Tech Central Station today. It begins:

Immigrant workers often send some of their earnings to family members back in the home country. Critics of immigration have begun expressing concerns about such remittances.

In particular, I criticize frettings about remittances by Victor Davis Hanson. If I do say so myself, read the whole thing.

Posted by Lawrence H. White at 11:06 AM in Economics  ·  TrackBack (0)



Online Gambling Ban?

A friend [HT: Paul] writes in with this link saying, "Sometimes it's hard to be a Republican. Why don't they just leave us alone?"

Indeed. How about they let us do anything that's peaceful?

Posted by Robert Lawson at 09:44 AM  ·  TrackBack (0)



June 19, 2005
Fahrenheit 451

With our own politicians comparing U.S. prisons to the Soviet gulag it is sobering to hear from someone like Pavel Litvinov who was there. It is also sad to know that Fahrenheit 451 (not 911) is real.



The man took Sinyavsky to the furnace room, where a group of people were squatting in the dark recesses. In the light of the furnace flame, one of the men got up and started to recite the biblical passages by heart. When he stopped, the stoker, an old man, said: "And now you, Fyodor, continue." Fyodor got up and recited from the next chapter. The whole text of the Bible was distributed among these prisoners, ordinary Russians who were spending 10 to 25 years in the gulag for their religious beliefs. They knew the texts by heart and met regularly to repeat them so that they would not forget. And this happened in 1967, when the gulag had become smaller and the Soviet regime milder than it had been under Stalin.


Posted by Ralph R. Frasca at 10:31 PM in Politics  ·  TrackBack (0)



June 17, 2005
Buzzword of the day

From Buzzwhack.com:

Deja poo: The feeling that you've stepped in
this bull before.


I like that one.

Posted by Craig Depken at 01:21 PM in Funny Stuff  ·  TrackBack (0)



Busy Day at CNN.com

First, it seems almost 3/4 of us prefer to watch movies at home rather than the theater, according to an AP/AOL poll (and cnn.com's online poll). A quick search on Econlit didn't seem to show very many articles that analyze consumer substitutability between theater and home movies. John Lott and Russell Roberts have one in Economic Inquiry about price discrimination for movie theater popcorn, but I'm sure that is only one reason why demand is becoming less elastic. The story also notes that "the poll found that people who use DVDs, watch pay-per-view movies on cable, download movies from the Internet and play computer games actually go to movies in theaters more than people at the same income levels who don't use those technologies. That suggests the technology may be complementing rather than competing with theatergoing." There seem to be a lot of different research-related ideas here. If anyone knows of any papers, or, heck, if anyone is interested in working on a paper, I'd be willing to discuss.

In the "do as we say..." category, it seems PETA isn't very ethical when it comes to dead animals. But, hey, it's not like the dead dogs and cats are complaining.

Then, this article highlighting the celebration of conspicuous consumption.

Oh, and Bob's last five movies question, with my 4-star ratings: Donnie Darko (****), The Life Aquatic (***), Team America (**), Eternal Sunshine of the Spotless Mind (****), and Big Fish, I think (**).

Posted by Tim Shaughnessy at 12:34 PM in Misc.  ·  TrackBack (2)



Take 10

A new survey by the Governors Highway Safety Association found that the highway patrol tends to give motorists a cushion of up to 10 miles per hour. This will come as no surprise to most of us. They conclude:

This practice creates an unsafe comfort level at high speeds and is a potential safety hazard, according to the report being released Monday by the Governors Highway Safety Association. The group found that 42 states allow drivers to regularly exceed the speed limit before they are stopped. "This cushion truly exists across this country and in some cases is more than 10 mph above posted limits," said Jim Champagne, the association's chairman.

"Law enforcement needs to be given the political will to enforce speed limits and the public must get the message that speeding will not be tolerated," said Champagne, who also is executive director of the Louisiana Highway Safety Commission.


Of course, driving is unsafe at any speed. The optimal speed is the one that balances marginal benefits and marginal costs. That the majority of drivers vote with their lead feet for more speed needs to be respected rather than admonished.

Survey of the States: Speeding

Posted by Ralph R. Frasca at 11:51 AM  ·  TrackBack (0)



What are the last five movies you've seen?

Here are mine (all recommended):

Million Dollar Baby (2004) Surprisingly good movie. The ending was disappointing though. If you're on a respiratory and can communicate, can't you just tell the doctors to unhook you?

Millions (2004) Excellent film about two kids who find a bunch of money. British film.

It's a Mad, Mad, Mad, Mad World (1963) A classic. There's a scene in this one that I never noticed before that they basically copied in the movie Airplane!.

Eat, Drink, Man, Woman (1994) Very good movie made in Taiwan. Chick flick basically (not that there's anything wrong with that.)

The Hudsucker Proxy (1994) I wish the Cohen's made more PG movies.

Posted by Robert Lawson at 10:59 AM in Culture  ·  TrackBack (2)



June 16, 2005
Getting your security fix....

Wow. This (from WaPo) is pretty ugly:

Cyber-security officials in Great Britain issued an unusually dire alert today, warning that hackers are targeting e-mail-borne viruses against U.K. government agencies and high-profile British corporations with the aim of stealing sensitive and lucrative data.

The increasingly sophisticated attacks appear to be custom made for each target, focusing specifically on individuals who have jobs working with commercially or economically sensitive data, according to a document released today by the National Infrastructure Security Coordination Centre. The attackers craft the e-mails so that they appear to originate from trusted contacts, news agencies or government departments, using distribution lists to target large numbers of recipients with similar interests, the report noted.

ATSRTWT.

Posted by Michael Munger at 05:30 PM in Economics  ·  TrackBack (0)



Hamilton Naki

The Economist has the 'rest of the story' (with apologies to Paul Harvey) about the famed first heart transplant by South African doctor Christiaan Barnard in 1967. The heart was taken from the donor body (a white woman) by -- gasp! --a black man, Mr. Hamilton Naki. Later Dr. Barnard transplanted it into the recipient to the acclaim of the world.

Naki was a highly skilled surgeon but because he was black he was not allowed to operate on whites in Apartheid South Africa. The hospital skirted this law by hiring (and paying) him as a gardner. Naki just died at the age of 78.

But get this. Mr. Naki would not be allowed to operate in the United States either--not because he is black of course, but because...

Read More »

he never went to medical school or even college! It turns out he worked his way up the ranks at the medical center by first assisting with operations on animals and then on people. He was so skilled that he eventually trained a good portion of the white doctors on the intricacies of heart and liver transplantation.

« Close It

Posted by Robert Lawson at 02:32 PM in Politics  ·  TrackBack (1)



Agri-Subsidies: Good or Bad for the Third World?

Trent McBride at catallarchy.net asked me to weigh on this debate about the impact of agri-subsidies on the third world. He asks this provocative question, I’m all for eliminating agricultural subsidies for a whole host of reasons. Helping the world’s poor doesn’t seem to be one of the benefits. Usually we scoff at terms l