For that special lady in your life...

More here. HT: The Filter.

As Alan Greenspan leaves office to a flurry of media praise, it is well to recall his adeptness as subtly managing the press, as revealed in this Columbia Journalism Review piece from the middle of his tenure. One wonders whether Greenspan has tutored Ben Bernanke in this aspect of the art of central banking. Bonus revelation in the piece: how it wasn’t an accident that Alan Blinder’s remark embracing a Phillips Curve tradeoff became infamous.

It will be interesting to see whether Greenspan, the erstwhile gold standard advocate, becomes more openly skeptical of central banking once no longer at the helm. If you think that’s implausible, consider that Paul Volcker in 1990 wrote: “And if you say a central bank is essential to a market economy, I have to ask you about Hong Kong, which has no central bank at all in the absolute epitome of a free market economy. Yet it does quite well in terms of economic growth and stability.” (No link available; Volcker, “The Role of Central Banks,” in Central Banking Issues in Emerging Market-Oriented Economies (Federal Reserve Bank of Kansas City, 1990), p. 3.)

Fans of Team America: World Police will remember the scene (profanity-laced video clip here) in which the weapons inspector Hans Blix threatens to write a stern letter to him if Kim Jong-Il won’t allow Blix to inspect Kim’s palace for weapons of mass destruction. Apparently the real Hans Blix found it funny too: in the video clip from a news conference linked here, he comments on the scene (even quoting KJI’s use of the f-word).

Hat tip: Reason Hit & Run

Do you set your watch ahead, on purpose?

You are the enemy. Here's why.

The nominal price of copper reached a record high of $2.23 a pound last week, having risen 57 percent over the past year. Result: your old (pre-1982) pennies are worth more melted down than as coins. The Pittsburgh Tribune-Review has the numbers, and a comment on the arbitrage possibility:

Today's pennies are copper-plated and mostly zinc. But from 1864 to mid-1982, the coin was 95 percent copper and weighed 3.1 grams. With copper selling for $2.23 a pound, a pre-1982 [US] penny actually is worth about 1.45 cents -- 45 percent above face value -- based on its copper content. […] But good luck finding a willing smelter.

Sure, it doesn’t pay you or me to find a smelter for a single jar of pennies. But what about Coinstar? At what price of copper do they melt down the pennies they collect rather than return them to circulation?

This could have been far worse. Who brings a loaded Glock to a safety training session? I sure hope this is some sort of hoax.

For those of you who don't (or can't) click through, the video depicts a student training session on gun safety. Shortly after saying that he is the only one professional enough to handle a gun, the officer accidentaly shoots himself in the leg.

Kudos to co-blogger Craig for his blurbs in this weekends WSJ article on the economic impact to cities hosting the Super Bowl. (The article requires a subscription, but there's a lengthy excerpt on The Sports Economist.)

PS: My blogging has been light for the past month and will likely be so for the next month because of my involvement in a search in my department and the Berry presidential search.

Brad DeLong kindly quotes my recent entry questioning press descriptions of Randy Kroszner’s monetary policy thinking as “mainstream,” and comments:

Randy Kroszner is, as I said, eminently well-qualified to be on the Board of Governors. But, as I have also said, only one of him! Most Federal Reserve Governors should be "mainstream" in monetary policy. All don't have to be.

I certainly agree with DeLong's first and last sentences. And to be clear, I never meant to suggest that it’s a negative for monetary policy thinking to be “non-mainstream” (as most would consider my own!). On the contrary, I consider it a great credit to Kroszner’s scholarship that he’s been willing to explore monetary policy ideas outside the usual parameters (optimizing within the status quo institutional framework).

As for DeLong’s middle two sentences: I personally think we could stand more than one thinker on the Board of Governors who is more deregulatory and “hard-money” than the mainstream. Even leaving aside the possibility of reforming the monetary regime, the time-consistency literature has taught us that we can all benefit from having monetary policy set by a central banker who is more hawkish on inflation than the median citizen.

In Joseph Heller's remarkable world:

"That's all he has to do to be grounded?"
"That's all. Let him ask me."
"And then you can ground him?" Yossarian asked.
"No. Then I can't ground him."
"You mean there's a catch?"
"Sure there's a catch," Doc Daneeka replied. "Catch-22. Anyone who wants to get out of combat duty isn't really crazy."
There was only one catch and that was Catch-22, which specified that a concern for one's own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn't, but if he was sane he had to fly them. If he flew them he was crazy and didn't have to; but if he didn't want to he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle.
"That's some catch, that Catch-22," he observed.
"It's the best there is," Doc Daneeka agreed.

In our own remarkable world:

WASHINGTON (Reuters) - The U.S. Army has forced about 50,000 soldiers to continue serving after their voluntary stints ended under a policy called "stop-loss," but while some dispute its fairness, court challenges have fallen flat.

...

"As the war in Iraq drags on, the Army is accumulating a collection of problems that cumulatively could call into question the viability of an all-volunteer force," said defense analyst Loren Thompson of the Lexington Institute think tank. "When a service has to repeatedly resort to compelling the retention of people who want to leave, you're edging away from the whole notion of volunteerism."

Story here.

From the Jan. 29, 1906 NYT:

Amzi L. Barber denied unequivocally...that the new independent asphalt association is a trust.

"It is nothing of the sort," he said. "It was organized simply to improve the quality of the work, and in order to do that it was necessary to increase the price somewhat. The prices at which work had been done were so unremunerative that the work was necessarily not of the class to stand wear, and the result was damage to the business of asphalt paving."

How crafty. Sub-standard pavers win contracts by low bidding, but, alas, there is a winner's curse. So, the answer is to join together to increase prices (but not as a cartel) and this will a) protect the "honest" pavers who could do good work if only they were paid enough, and b) ensure that the overall reputation of the industry is upheld.

Evidently spin didn't begin in the 1990s.

Maybe not a big deal, but Texas A&M is protecting its "12th Man" turf.

Athletics director Bill Byrne said this week he's received e-mails from A&M supporters complaining about the Seahawks' "brazen use of the 12th Man theme at their home playoff games."

Byrne said A&M has contacted the Seahawks about the issue. He said he wrote the Chicago Bears and Buffalo Bills in the past about halting their 12th man themes once the university made them aware of the trademark registrations.

Byrne said Seattle, though, "has been slow-rolling us."

Story on ESPN.com.

It is a commonplace to hear people complain that prices always increase. However, over time the price of many (most?) consumer products actually drop, especially when controlling for quality. Sure, a car costs $23,000 today but it is safer, more fuel efficient, and perhaps more "fun," all of which translates into a lower cost per mile driven than cars from twenty years ago.

From the Jan. 28, 1906 NYT is an advertisement for the Washington and Southern Railway:

MARDI GRAS - NEW YORK TO NEW ORLEANS AND RETURN - $37.75.

Tickets on sale February 21 to 27, good returning until March 3, 1906. Extension of limit March 16th can be had by depositing ticket and paying 50 cents at New Orleans.

I don't know how long it would have taken to get from the Big Apple to the Big Easy on a train, but I would figure two days or so. The folks over at EH.net estimate the following 2004 values for the $37 round trip:

In 2004, $37.75 from 1906 is worth:
$789.69 using the Consumer Price Index
$628.95 using the GDP deflator
$3,459.73 using the unskilled wage
$4,577.43 using the GDP per capita
$14,789.21 using the relative share of GDP

Ouch. As a relative share of GDP, the train trip was extremely expensive. However, it wasn't too cheap using the CPI adjusted figure. Today's cost of flying from NYC Laguardia to New Orleans? Travelocity has reasonably timed flights for around $160. Travel time from NYC to NO is about 2.5 hours.

Wow.

Despite my warning (weren’t they listening?) that the confirmation process could be quite interesting, the White House announced today that one of its nominees to fill the two vacancies on the Federal Reserve Board of Governors is Randy Kroszner. (The other is Kevin Warsh; both had been widely identified in recent weeks as being on the “short list”.) Reuters had this to say about Kroszner:

While his monetary policy views are not well known, economists said he would likely be in the mainstream. One University of Chicago colleague has said Kroszner would be a "sound money guy."

I’m starting to wonder whether anyone besides me has actually read Kroszner’s monetary writings (as of today!). I've been the intellectual target of some of Kroszner’s monetary writings ("Scottish Banking Before 1845: A Model for Laissez-Faire?" Journal of Money, Credit, and Banking, May 1989, 221-31, with Tyler Cowen (reprinted in Lawrence H. White, ed., Free Banking (Aldershot, UK: Elgar 1993)), and the reviewer of others (Journal of Institutional and Theoretical Economics 152, June 1996, 419-22). But really, just look at the title of his book with Tyler Cowen, Explorations in the New Monetary Economics (Cambridge: Basil Blackwell, 1994): does that sound “mainstream” to you?

Student athletes all too often get a bad rap in our society. I bet the experience of others is similar to mine: student athletes are often very good students, especially after controlling for the amount of time they dedicate to their sport. While there are some "bad" students who are good athletes, there are also a lot of "bad" students who are not athletes.

Today, The Chronicle of Higher Education released its estimation of graduation rates for 2005. The news is pretty good, and even the Chronicle has a hard time coming up with a negative spin. However, there is evidently a two year negative trend in African-American male basketball players and all women basketball players. I do not subscriber to the "two observations is a trend" school of thought, but alright.

I grabbed the 2005 data and threw it into STATA. Here's a picture of overall athlete grad rates versus student grad rates:

There is a positive correlation between the graduation rates of the overall student body and for the athletes on a given campus. Simple regression results of the relationship are:

. reg athleterate studentrate


      Source |       SS       df       MS              Number of obs =     315

-------------+------------------------------           F(  1,   313) =  296.84

       Model |  2.94129942     1  2.94129942           Prob > F      =  0.0000

    Residual |  3.10144223   313  .009908761           R-squared     =  0.4867

-------------+------------------------------           Adj R-squared =  0.4851

       Total |  6.04274165   314    .0192444           Root MSE      =  .09954

------------------------------------------------------------------------------

 athleterate |      Coef.   Std. Err.      t    P>|t|     [95% Conf. Interval]

-------------+----------------------------------------------------------------

 studentrate |   .5320662    .030882    17.23   0.000     .4713036    .5928288

       _cons |   .3115148    .018301    17.02   0.000     .2755062    .3475233

------------------------------------------------------------------------------

If we restrict the constant to zero, we get :

. reg athleterate studentrate,nocons


      Source |       SS       df       MS              Number of obs =     315

-------------+------------------------------           F(  1,   314) = 6199.51

       Model |  117.917099     1  117.917099           Prob > F      =  0.0000

    Residual |  5.97240012   314  .019020383           R-squared     =  0.9518

-------------+------------------------------           Adj R-squared =  0.9516

       Total |    123.8895   315  .393299999           Root MSE      =  .13791

------------------------------------------------------------------------------

 athleterate |      Coef.   Std. Err.      t    P>|t|     [95% Conf. Interval]

-------------+----------------------------------------------------------------

 studentrate |   1.032438   .0131125    78.74   0.000     1.006638    1.058237

------------------------------------------------------------------------------

While the slope coefficient is statistically different from one, the economic/behavioral difference is not significant.

In other words, as the general student body goes, so goes the student athletes. What? Student athletes are similar to non-student students? I know this flies contrary to general opinion, but in my experience this is more often the case than not. What I haven't figured out, either personally nor from the literature, is whether this is in spite of or because of the tutoring/acadmic advising infrastructure dedicated to student athletes on many campuses around the country.

Perhaps stories about student athletes are sexy and "socially responsible," especially on campus where many look down their nose at sports in general and the expenditure of dollars on athletics specifically. However, in my mind the correlation is very reassuring (and not surprising) - it is likely that the vast majority of student athletes are much more like their non-athlete counterparts than is generally believed.

(STATA data file)

From AdAge Daily:

The Federal Trade Commission today reached a $15 million settlement with ChoicePoint for failing to properly protect consumers’ financial data nearly a year after the data aggregator revealed a security breach of its system.

Where's my share of the $15 million? Oh yeah, it went into the highway bill or some other earmarked project.

Selling the name of a stadium is big business nowadays. Here in Arlington, the Rangers sold the name of the "Ballpark in Arlington" to Ameriquest mortgage company - changing the name to "Ameriquest Field in Arlington." The powers-that-be insist that Arlington is supposed to be kept in the name, and it does show up in print occasionally, but for the most part people just call it Ameriquest Field. (more Ameriquest sponsorships here)

I remember a working paper by Michael Leeds (and a couple of coauthors) that investigated the long-run returns to companies that purchase naming rights and found them to be negative. Perhaps buying naming rights is a bad decision in general, or it is a bad signal that a company is out of marketing ideas and plasters their name on a stadium in a last gasp?

Ameriquest pays $2 million per year for the naming rights of the Arlington stadium (for another twenty nine years) but just settled with the Feds for $325m after being accused of misleading customers etc. (Official company press release, Local sports writer Randy Galloway's take on the issue)

I wonder if having your stadium named after a bankrupt/troubled company has any impact on the revenues/attendance/popularity of a team?

Torus Trooper is a pretty cool game. I score a lot of points even though I am not exactly sure what I am doing.

However, it is the type of game you should have on your laptop. On a plane, I can imagine it would get a little bit more attention than Freecell.

In the "learn something new every day" category, the Jan. 26, 1906 NYT reports that the Society for Prevention of Cruelty to Animals was pressuring companies that contracted to carry the mail to not use lame/older horses.

A letter to the editor from one W. Franklin Brush states:

I think it right to state that I have twice during the past month reported to the society the fact that I had seen a lame horse attached to United States mail wagon...I should think from what I have seen during the past few years of the horses which are used in the mail service that an Inspector of the Society for Prevention of Cruelty to Animals might very often hold up a mail wagon without undue suspicion of graft.

First, who knew the SPCA had been around for one hundred years? I figured the SPCA started in Hollywood sometime during the 1970s with the whole "no animals were harmed in the making of this movie" claim. Second, I wonder about the odds of a lame-horse delivery wagon for the U.S. Postal Service (albeit out-sourced to a contract) versus a lame-horse delivery wagon for, say, Sears-Roebuck or Marshall Field.

More time wasters : PACMAN / DONKEY KONG / ASTEROIDS / FROGGER / SPACE INVADERS / and more...

Ah, the nostalgia. These take me right back to junior high... (Yikes! What a horrible memory. Junior high sucked.)

The official announcement about the new World Marathon Majors has been made.

Here's a summary from the Boston Globe:

To be called the World Marathon Majors, the series will include races in Boston, London, Berlin, Chicago, and New York City, with the idea of raising the profile of running.

The Olympics and World Championship also will count in the series, which begins April 17 with the Boston Marathon.

Runners will get points for placing among the top five in each race -- 25 points for a win, down to 1 point for fifth.

Runners have to compete in three races over two years to be eligible for the prize, and if they run more, only their top four results will count.

Three races over two years. Whew. This puts to rest my preliminary reaction that doing five races in a single year would be impossible.

Tank Wars ala Atari 2600.

Oh, the memories.

An excerpt from Dave Barry’s Money Secrets, via NPR:

The problem was that gold is too heavy to be constantly lugged around. So, to make it easier for everybody, governments began to issue pieces of paper to represent gold. The deal was, whenever you wanted, you could redeem the paper for gold. The government was just holding your gold for you. But it was YOUR gold! You could get it anytime! That was the sacred promise that the government made to the people. That's why the people trusted paper money. And that's why, to this very day, if you–an ordinary citizen–go to Fort Knox and ask to exchange your U.S. dollars for gold, you will be used as a human chew toy by large federal dogs.

Because the government changed the deal. We don't have the gold standard anymore. Nobody does. Over the years, all the governments in the world, having discovered that gold is, like, rare, decided that it would be more convenient to back their money with something that is easier to come by, namely: nothing. So even though the U.S. government still allegedly holds tons of gold in "reserve," you can no longer exchange your dollars for it. You can't even see it, because visitors are not allowed. For all you know, Fort Knox is filled with Cheez Whiz.

Barry’s account is actually much more accurate than standard money and banking textbooks (like Miller and VanHoose), which imagine that a benevolent governments instituted fiat money to (somehow) lower transaction costs for the public.

Nice post on Congress, Craig. Essentially, Craig asks two pretty complicated and related questions. First, what is happening to partisanship in Congress over time? Second, what is the cause of the observed profile? (And maybe third, what is the effect?)

While there are some problems with using unanimous-opposition votes to measure partisanship, these reasons are kinda arcane and IMO best left to other forums.

To the first question, an alternative measure is “party polarization,” simply the difference between the two parties’ mean (or median) scores on ADA, NOMINATE or other (e.g., NTU) scores. This is actually a big topic in the political science literature (various papers by Keith Poole and Howard Rosenthal; APSR 1999 by Groseclose, Levitt, and Snyder; Public Choice 2001 by Bernie Grofman et al.). The consensus is that the parties are becoming more polarized over the past couple of decades. You can see this also in the unanimous-opposition chart that Craig posted.

To the second question, Carlos Ramírez and I have a paper in Public Choice (download from RePEc here) examining not only the trend in polarization but how it cycles with the economy. Among other results, we find that greater inflation leads the parties to converge. Thus, a partial response: the historically low inflation we’ve had for at least the past decade seems to explain at least a portion of the greater polarization in Congress.

I have some ongoing research on this, which I might discuss depending on how referees respond.

Watched CNN yesterday while eating lunch, and they had a story about parents and "advocates" suing Viacom and Kellogg for the advertisement of unhealthy cereal and snacks. Who are the "advocates?" Even though they may not have convinced us all to give up 2% milk or Mexican food, it's the Center for Science in the Public Interest. I guess public interest science is defined as legal representation in lawsuits.
They will ask a Massachusetts court to enjoin the companies from marketing junk foods to audiences where 15 percent or more of the audience is under age eight, and to cease marketing junk foods through web sites, toy giveaways, contests, and other techniques aimed at that age group.
Why eight? Why 15 percent? Does CSPI not care about the other 85%? Or about obese nine-year-olds?
'As a parent, I do my best to get my kids to eat healthy foods,' said Sherri Carlson, a plaintiff and mother of three. 'But then they turn on Nickelodeon and see all those enticing junk-food ads...This irresponsible marketing to young children undermines my efforts as a parent and must be stopped.'
I suppose if your efforts as a parent are so weak that you can't either a) monitor what your kids watch on TV (get a TiVO and skip past the sugary ads!) or b) resist your kids' pleas in the grocery store, you probably do need help from enlightened advocates and the police power of government.

Ford closes a bunch of plants and people are in an uproar. On Kudlow & Company yesterday, Larry wondered whether the government will ever close up any of its obsolete or inefficient operations for cost-cutting.

From Congressional Quarterly (reg req'd) comes one way to view partisanship on Capitol Hill. It is clear that partisanship, as measured by unanimous votes from one side or the other have become more numerous. Is this the result of redistricting, in which the majority of house seats are essentially locked into one party or the other?

However, a couple of points. Bush was able to work with Democrats here in Texas while governor. Admittedly, it is possible that Texas Democrats are closer to national-Republicans than national-Democrats, but given some of the recent antics of the Democrats here in Texas I wonder.

I wonder if any readers can point me to recent research on the question of causation in partisanship. It is a classic identification problem which good econometrics should be able to flesh out, but every instrument I think might help seems doomed.

Patrick Chisholm writes for the Christian Science Monitor,

The political left in America is emerging victorious.

No, this isn't about the damage that Jack Abramoff's mischief has done to the political right. Nor is it about President Bush's lousy poll numbers. And it doesn't refer to Democrats' recent win of two governorships.

It's about something much deeper; namely, that the era of big government is far from over. Trends are decidedly in favor of that quintessential leftist goal: massive redistribution of wealth.

ATSRTW(sorry)T.

[HT: Paul G.]

I am not an expert in the various alternative fuels that are available today, however a letter to the editor from the Jan. 23, 1906 NYT hints that tax policy might have shifted us AWAY from alcohol based fuels?

I'll let you decide:

In this country much pure ethyl alcohol is made from sugar waste - and, by the way, a great deal of our whisky is made from this product by suitable diluting and "doctoring" - the cost of production being as low, perhaps, as 8 cents per gallon. In fact, it has been seen sold in the past as low as $2.25 per gallon in carloads. As the tax is $2.07 per gallon, this is proof positive that the cost of production does not exceed 18 cents per gallon. At anything like 20-cents a gallon it would prove a formidable competitor of gasoline for use in explosion motors.

In other words, the excise tax on liquor made it cost prohibitive to use alcohol in combustion engines. Therefore, we moved towards gasoline/diesel engines and subsequent technology focused there. One wonders what we would be driving today if we had spent 100 years on advancing the alternative-fuel engine and how geopolitics would be different if crude oil wasn't as important as it is today. We have made substantial strides in the past ten plus years of working hard to improve fuel efficiency and it is difficult to judge just how important such a tax was in making us "path dependent."

However, it is fun to think about.

Government has a long history of involving itself in developing markets. From the Jan 23, 1906 NYT is a story concerning automobile taxes in New Jersey. A bill is to be presented and signed into law by the governor which provides for:

1. A speed rate of 8 miles an hour in cities and towns.
2. A speed rate of 20 miles an hour in open localities
3. A registration of 50 cents per horse power imposed on all vehicles.
4. A registration fee of 25 cents per horse power for all drivers
5. Tourists visiting the State for a short time will be required to pay a registration fee of $1 a day
6. The bill creates a Commissioner of Motor Vehicles who will have "power to appoint as many Inspectors as may be needed, all of whom shall have power of arrest for violations of the law."
7. "All cheaffears will be required to pass a satisfactory examination before receiving a license to drive a car"
8. No drivers under 18 years old will be given a license.

That's one comprehensive bill and offers a lot of potential talking points about how government responds to a new and developing market with knee jerk of two kinds. First, how to contain the market and make it "safe." Second how to control the market and make it provide "revenue" to the state.

To rub salt in the wound, as it were, the story goes on to promise that "[t]he money received through the provisions of the bill will become part of the State road fund, and a portion of this fund may be used by the State Road Commissioner to place suitable signs at road intersections and to provide lights at dangerous points at night."

Do we think the the Road Commissioner job would be coveted? He could hire as many "inspectors" as wanted/needed, and his second cousin could get the "sign" contract.

The median home price in Santa Clara County declined 2.1% in one month to $700,000 in December. Volume was down 6% for the month, and almost 17% on the year. Story here.

Meanwhile, apartment rents were up an average of 3.5% on the year in 2005 and occupancy is now at 95%. Story here. That might not be a lot, but the market seems to be tightening compared to just the previous quarter, according to RealFacts.com:

The third quarter [2005] survey of over 11,300 apartment communities in the RealFacts database revealed that…the annual rent increase for all communities in the database was 2.7% and occupancy increased a mere 1.5%. Over the past four years, rents have decreased 8.3% and occupancy has fallen 2.6%,…Full press release.

More on this to come.

One of the more curious lines of questioning during the Alito hearings was on the "Unitary Executive." Some Democrats seemed to think that this was the equivalent of a secret handshake among conservatives out to destroy the constitution.

Exhibit A of this conspiratorial mindset is an article by Jeffrey Rosen in the New Republic. (Unfortunately, the full piece is subscription only). I single out Rosen because he is generally smart and fair, and the New Republic equally so - making the attacks all the more curious.

Analysis below the fold...

Read More »

I’m currently watching the NFC conference championship. While Joe Buck and Fox Sports gush over Seattle, the Seahawks, the fans, and Paul Allen raising the so-called 12-th man flag over supposedly ultra-loud Qwest Field, allow me to remind the football universe that the original home of the original 12th Man is Texas A&M University.

In 1922 during a football game in Dallas against top-ranked Centre College, the underdog Aggies were decimated by injury to 11 players. Head coach Dana X. Bible was informed that a student named E. King Gill, who formerly practiced with the team as a squadsman, was in the stadium. Coach Bible called Gill from the stands, and he suited up. Though he never entered the game, Gill’s uniformed presence on the sideline came to symbolize the student body’s readiness to support their team, and the reason why students still stand through every game waving their white 12th Man towels. The Aggies beat Centre College 22-14.

In 1983, head coach Jackie Sherrill made the tradition a reality when he debuted the 12th Man Kickoff Team, an all walk on squad. Their first kickoff at Kyle Field came against visiting Cal, which had ended the previous season against Stanford in another famous kickoff (Stanford band spilling onto the field, yada yada yada). Over the next 7-8 years, the Aggie walk ons were the nation’s best in covering kickoffs, and didn't let one go for a TD…..until about 1990, after which the kickoff team would feature just a single walk on player. In 2005, beleaguered head coach Dennis Franchione reinstated the all walk-on crew.

Oh yeah, “the 12th Man” is a Texas A&M registered trademark.
Who knows whether A&M is receiving a licensing fee from the Seahawks?

After joining the DoL gang late last November, I quickly went on a 40+ day hiatus to travel and hang out with my fiancée in Texas. Now that the semester brings me back to reality (and, perhaps mutually exclusively, to California), I will now do a reappearing act. Topics for near future posts: housing prices in Silicon Valley, a series of on public choice, congressional reform, marijuana decrim., and Mozart. Good to be back.

The Jan. 22, 1906 NYT reports that the state of New York spent $41,064,842 on educating 1,797,238 elementary school students. At a per-pupil cost of $22.85, that sounds like a swinging' deal. On the other hand, what exactly was the quality of primary education in 1906?

EH.net puts the 1906 figure in the following 2004 dollars:

In 2004, $22.84 from 1906 is worth:
$477.79 using the Consumer Price Index
$380.54 using the GDP deflator
$2,093.25 using the unskilled wage
$2,769.50 using the GDP per capita
$8,947.96 using the relative share of GDP

If we go with the relative share of GDP, the $8900 per pupil is in the ballpark of the average spending per pupil in the United States ($8,019). However, in the 2002-2003 school year New York state spent approximately $35.9 billion to educate 2,879,228 primary and secondary students (12,140 per pupil).

The direct comparison between 2006 and 1906 is admittedly difficult. The numbers reported for 1906 include only elementary school students. The 1906 story does report that there were "86,736 registered pupils" in secondary schools, and total expenditures for these schools was $7,846,383 ($90.40 per pupil). However, the 2006 data mix elementary and secondary spending at the state level, which suggests that the reported average spending in 2006 might be biased upward, assuming states still spend more educating students in high-school than elementary school.

Furthermore, notwithstanding the easy-to-blame teachers union, spending on education today is likely more expensive because of technology (computers, etc), and additional expenditures that were not required/possible in 1906 (from white-board pens to school lunches to school buses).

Perhaps in light of these numbers the public education system is not such a bad deal? (I know, lots of libertarians just fainted). My point is that the primary and secondary education offered today is arguably better (both in total topics/information taught and in value added) than one hundred years ago and yet today we are spending about the same amount of money as a share of GDP as we did back then.

I wonder whether this would indicate that as a society we have been suckered for the past 100 years, essentially spending the same amount of money to a "failed" system, or that the unions are not as strong or as good at rent extraction as portrayed?

How welcome such a view would be today. From a Jan 22, 1906 NYT editorial concerning New York's stock transfer tax which, evidently, accounted for one fourth of all tax revenues gathered by the state:

We have already said much about the objections to the tax in principle - the taxation of trade instead of property, the taxation of capital in a manner to expel it from the State, the taxation of face values instead of real values, and so on - which would remain objections even were the operation of the law ever so excellent [emphasis added]

The editorial goes on to admit that volume and share values have increased on the New York Stock Exchange but that the increases have been considerably less than on the exchanges in Boston, Chicago, and Philadelphia. Moreover, after the share transfer tax was enacted, the price of NYSE seats appreciated less than on the other exchanges around the country.

Would such an editorial even be penned, much less published, today?

A couple of examples from an article about innumerate reporters:

5. College grades carry the most weight, making up 56% of the final score. Fourteen percent is composed of test scores, recommendations and activities. The final 29% comes from 10 other criteria.

10. Chipper Jones is batting just .176 in 85 at-bats with the Braves. But he has had more success as a pinch hitter, with five hits in 30 at-bats, including one that clinched a playoff spot.

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Stephen Kirchner ridicules “the fever-swamp Austrians, who argue that every tick in the business cycle must be attributable to a fiat money supply error on the part of the Fed.”

They internally contradict themselves, he argues:

These are the same people who argue that money demand is too complex a phenomenon for the Fed to be able to calibrate an appropriate growth rate in the money supply. That is perfectly true, which is why the Fed doesn’t even try. Yet the fever-swamp Austrians are implicitly claiming enough knowledge about money demand to determine whether monetary policy is too loose or too tight, just by observing simple growth rates in money, credit and even asset prices. This is what Hayek would term a ‘fatal conceit’ and is a travesty of Austrian economics.

Yes, for the same author to hold both positions (A: Fed can’t know enough calibrate money growth appropriately month by month, and B: But I do know, by looking at just a few variables) at the same time would be self-contradictory. I only wish Kirchner had told us who exactly has fallen into that mistake. You know: name the author and cite his works where he says A and B. Maybe even provide some quotes. Give us some evidence that the set of FSA’s isn’t the null set.

My own reading of the literature is that non-fevered Hayekians (like me!) do take position A. (Btw, the same problem applies equally to the Fed calibrating an appropriate interest rate target.) The economists who most conspicuously take something like position B are not the Austrians, but those employing the Taylor Rule or the McCallum Rule. Who is in both camps simultaneously?