In all the hub-bub about millions of dollars for stadiums and star players coupled with Bode Miller revealing all that is bad about U.S. amateur sports, the story about the Rochester highschool basketball team manager scoring 20 points in four minutes was refreshing. Most people point to the fact that the young man is autistic, and I don't take away from that however I have no experience with autism. To me the real story was a) the coach letting the tireless and loyal team manager get a chance to play and b) said manager actually experiencing being a hero.

[Update: Of course, this entry makes a lot more sense if there is a link to the video itself. An odd typo made it invisible. Here it is]

My older son has not been reading enough lately. He is 16, just started driving, plays quite a bit of video games, and thinks that young women are very quickly becoming worth looking at.

Idle hands....The devil's workshop, and all that.

So I bought a copy of Hazlitt's Economics in One Lesson, gave it to him.

He read it in an afternoon (which isn't hard; it is ONE LESSON, after all).

He comes up to me the next day, and that, "That book really seemed simple."

I was a bit miffed; "Those are complicated ideas...."

He interrupts: "I didn't say simple-minded. I meant simple like...inarguably true."

Happy sigh for ol' Dad. I'll die someday. But good ideas, the really good ideas, are immortal.

The apoplexy I expected to hear from the economic left over Randy Kroszner’s free-market views never really surfaced between his nomination to the Federal Reserve System Board of Governors and his confirmation. But now, after his confirmation, the Financial Market Center vents its spleen, in its report yesterday on “Bush’s Board” (pdf file). Choice excerpts are below the fold.

Read More »

Recently spotted on the left-hand side of a car’s bumper: “Billionaires for Bush. Because tax cuts do create jobs, honest.” Okay, it’s class envy, but kind of cute. On the right-hand side of the same bumper: “Small government. Big wars.” Excuse me? If you think the Bush administration represents an ideology or trend toward small government, you’re just not paying attention. See this report on their profligacy.

From a recent NYT article on Canada's socialist medical system:

"This is a country in which dogs can get a hip replacement in under a week and in which humans can wait two to three years."

But there is some good news for Canadians needing medical services:

The country's publicly financed health insurance system — frequently described as the third rail of its political system and a core value of its national identity — is gradually breaking down. Private clinics are opening around the country by an estimated one a week, and private insurance companies are about to find a gold mine.

About a year ago I expressed skepticism about a study finding that half of bankruptcies are related to medical expenses. A new study in Health Affairs confirms my skepticism; its abstract:

David Himmelstein and colleagues recently contended that medical problems contribute to 54.5 percent of personal bankruptcies and threaten the solvency of solidly middle-class Americans. They propose comprehensive national health insurance as a solution. A reexamination of their data suggests that medical bills are a contributing factor in just 17 percent of personal bankruptcies and that those affected tend to have incomes closer to poverty level than to middle class. Moreover, for national health insurance to have an impact, it would have to define "medical" expenses in a much broader way than is now typical of either private or government-funded plans.

HT: The Locker Room

From today's NYTimes:

"Why pull $7 an hour cutting hair when you can make $19 an hour driving an 18-wheeler?" Ms. Cromer said, handing the men a pamphlet in Spanish explaining the requirements for a federal commercial driver's license. "Seriously guys, don't you want to get a job with a future and get out of this neighborhood to see the country?"

Faced with what trucking experts describe as the worst labor shortage in the industry's history, recruiters like Ms. Cromer are canvassing cities and holding job fairs.

Fueled mostly by retirements, the driver shortage grew dire, industry economists say, starting in 2000 when average wages in construction and other blue-collar jobs surpassed those of long-haul drivers.

"Guys figured, why be out on the road for three weeks when they could swing a hammer during the day, make more money and sleep in their own bed each night?" said Bob Costello, chief economist for the American Trucking Association.

With predictions from the association that the current shortage of 20,000 drivers will grow nearly fivefold within a decade, trucking companies are offering generous 401(k), stock option and health care packages to new recruits and cash bonuses and prizes to drivers who refer viable candidates.

In hope of stealing drivers from competitors, companies have begun outfitting more of their cabs with satellite radio and television and introducing policies to allow drivers to bring pets and spouses on the road.

Yahoo News reports that China now has specially designed treadmills for overweight dogs. Perhaps Morgan Spurlock (of Supersize Me) could eat Chow Chow chow for a month and see what happens to his weight.

A friend's comment on the ports kerfuffle:

"Dick Cheney's behind this. The UAE company will be booted out, and Halliburton will take over."

Some claim that sports management is such characterized. Sometimes you do wonder. Consider this this blast from AB News:

The AP reports that Allen, the co-founder of Microsoft Corp., has lost more than $12 billion in bad investments over the past decade -- including $600 million he has poured into the Blazers and their arena since 1988 without realizing a dime of profit.

Now, I find it impossible to believe that the Blazers are not returning a dime of profit, but I haven't seen their (real) books. In the end, if Allen isn't good at running an NBA team, perhaps he should divest himself of his millstone.

Unfortunately, such is not the case, at least for the moment:

Executives with the Portland Trail Blazers say the NBA team will lose $100 million over the next three years and desperately needs some kind of "public-private partnership."

DANGER, DANGER, DANGER, WILL ROBINSON!! As soon as I see the words "public-private partnership" mentioned in the context of professional sports I wince. There is absolutely no reason for the citizens of Portland to be involuntarily forced to bear the risk involved with running/managing a professional sports franchise. If the team wishes to sell shares of its corporation to the public, then so be it. However, that is not what is implied in this statement.

Lance Conn (manager of Allen's investment company) claims that the Blazers receive no revenue for suites, clubs, courtside seats, game concessions or parking at the Rose Garden Arena." If true, and I do not closely follow the financial arrangements of NBA teams, this is testimony to myopic behavior by the city of Portland and/or to the ineptitude of Allen and company.

I have stated for quite some time that cities that build arenas/venues with public dollars should enjoy a greater share of the revenues generated by said arenas/venues. Unfortunately, cities seem reluctant to push back against franchise owners in negotiating revenue-sharing with the team. I do not necessarily envision the city becoming a for-profit partner with the team, rather the city should secure as much revenue as feasible to retire any debt incurred for stadium construction as quickly as possible (the opportunity cost of stadium debt is staggering).

I have no theoretical model (yet) to predict the optimal revenue sharing, however I am fairly certain that it is greater than the current norm. On the other hand, the city can't take all revenue generated by the arena/venue because if the team goes belly up the arena is essentially worthless.

I hope the folks in Portland keep their politicians from being swayed by threats to relocate the team, etc., to foolishly involve the local government/taxpayers in the business of a professional franchise. I know that it has "sort of worked out" in Green Bay, but that situation is likely the exception that proves the rule.

I use my 40G iPod quite a bit. It came in handy when I was commuting back and forth from Pittsburgh to Morgantown last year and it is nice on those days when I make the 30 minute walk into campus.

So I was sad when my iPod stopped working a couple of months ago. I took it to the "Genius Bar" at the Apple store and they told me it was likely a hard drive problem which would cost about $250 to fix - if they could fix mine, which they couldn't because I bought it through "a partner." Ok...

Naturally, I turned to the web and found several iPod repair services but unfortunately few good reviews. So I thought I'd share my experience for anyone else looking for a solution to a damaged iPod.

After checking out the various online companies, I decided to give iPodMods.com a try. First thing you do is place a service order on their website. They charge your credit card a penny to verify that it is valid and they send you an email with information on where to mail the iPod. I packed mine off and mailed it on a Monday. By Thursday I had received an email saying they had recieved it and a technician was looking at it. Late on Thursday I received another email saying that the diagnostics was done and I could call for a quote.

It seems that the problem was not the hard drive but the "memory board." I agreed to the repairs and also bought an after-market battery with a longer life than the usual iPod battery. They made the changes and shipped it out the following Monday. I received the package on Wednesday and the iPod has been working great. In my opinion, iPodMods.com did a great job and is a reasonable alternative to buying a new one, since the diagnostic only costs you shipping.

In the Feb. 26, 1906 NYT is an article concerning lunacy in the state of New York. Now, I am no expert in the area of mental health and wouldn't claim to be. Nor am I making light of the obviously complicated problems of the human mind. However, the article points out that the State Commission in Lunacy (perhaps what we should be calling most state legislatures these days) had been carefully following the trends in lunacy and had found "there was a constant increase in the ratio of the insane to the general population."

Unfortunately, the commission data confuse supply and demand side influences. The Commission reported that in 1892 there were 17,275 "insane" people in all of the state institutions and the state population was 6.51 million (for a ratio of 1 in 377). By June of 1905, the Commission reported there were 27,300 "insane" people in state institutions and the state population was 8.06 million (fora ratio of 1 in 299). The commission went on to estimate that there were an additional 6,000 insane persons "being maintained in their own homes."

Of course, in 1892 there were considerably fewer state institutions in operation, and therefore it is impossible to determine whether the increase in per-capita lunacy is from the supply side (more people were crazy) or the demand side (the state needed more "lunatics" to justify the expenditures). Moreover, as science evolved over the 13 years between studies, it is entirely possible that a deeper understanding of the human mentality would naturally lead to more people being categorized in lunacy.

Perhaps there was a moral hazard problem in that public institutions, ultimately run by individuals (regardless of their intentions), were funded by the state. There was an average daily population of 25,280 patients in 1905 and total spending was $4.593 million. The article reports that $4.95 million would be requested in the coming year (a 7.7% increase!).

Yet another excellent quote from the article:

A similar increase [in lunacy] is reported by the Commissioners in Lunacy of Great Britain

Beautiful wording...

From a letter to the editor in the Feb. 26, 1906 NYT:

"Push American goods," says G.L. Hergert in your issue of the 17th inst., which is very good providing the pushing is not done the way he proposes - by asking the Government to furnish the means. He should remember that the Government is not in the manufacturing or mercantile business, and that it has no means except what it raises by taxation. Surely he would not have the people taxed for the benefit of our much-babied and much-protected industries.

Alas, today's government feels obligated and justified in intervening in the manufacturing and mercantile businesses.

So, I am interested in this.

A serious market failure problem.

On home networks, it is very common for the router to hang up. If you call the tech folks, the first thing they will tell you to do to restore a connection is always the same:

"You'll need to power cycle the router, and cable modem."

Now, that's fine.

Except that there is no power switch.

Which means that you have to unplug the thing, wait there all hunched over for ten seconds, and then plug it back in.

Why not:

1. An on-off switch? The answer that the tech people give is that the manufacturers say you shouldn't have to "toggle" the power, so they don't include a switch.

2. A "power-cycle" button, which in effect just powers down and restarts the router, like a "restart" function on your computer? The answer is...you tell me.

The tech people, remember, WORK for the manufacturer. But they talk about the router as if it were made by robots not capable of learning a new configuration.

Maybe it WOULD cost more to put in an on-off switch, or restart feature. But I would pay more than it costs....

How can this be? I have enabled comments on this post, just to see if someone has an answer....

(There is a more general problem actually, for the computer generation. My son, who has been driving for a couple of months, is convinced that if you have car trouble all you have to do is turn the car off, wait ten cycles, and then "reboot", meaning turn the car back on again. Well, no...)

UPDATE: A loyal reader suggested that a power strip might be the answer. To which, I reply:

now, Karl: that would require that i have a power strip with ONLY the router plugged into it. since my computer, printer, and light is ALSO plugged into the power strip, that on-off switch doesn't help me as much as you apparently think!

cheaper to install a switch on the cord between the router and its own plug.

but that takes me back to the question: WHY NOT HAVE A SWITCH ON THE ROUTER!

The Federal Election Commission will take up proposed new rules to regulate political activity over the internet on March 16. This is an issue in which I have some interest. Typically, campaign finance "reformers" are dissembling - this post at Red State has links to the basic background you need if you want to understand what is at stake in this effort.

I hate to seem to be picking on Kansas City for the moment, but that's where a good amount of stadium activity is taking place.

The good folks of Kansas City are being asked to tax themselves $1 billion to provide roofs for Arrowhead and Kaufman stadiums, and to provide "upgrades" for the stadiums over the next 25 years. The main impetus for a roof over Arrowhead is so that KC can host a Super Bowl (once).

The mayor of Kansas City provides even worse justification:

Kansas City Mayor Kay Barnes highlighted the potential of hosting Super Bowl games, All-Star baseball games, college championship tournaments and extreme sport competitions at a roofed and renovated Truman Sports Complex.

"What if the Jayhawks - or maybe the Tigers - could make it to the Final Four, and that Final Four was held right here in Kansas City?" Barnes said.

KC is already paying more than $220 million for an arena, but alas that is likely to be too small to host a final four. Ok.

Yet, just how valid is the Final Four argument?

There are various ways to skin a cat, but I grabbed the information on the Final Four from 1939-2005. Since 1939, Kansas, Missouri, and (I threw in) Kansas State, have been represented in the final four 15 times. Since 1970, the three schools have made it to the Final Four 8 times.

During the entire sample period, the city of Kansas City hosted the Final Four 10 times, by far the most of any city over the history of the Final Four [mainly because the NCAA was based in Kansas for so long]. However, since 1970, Kansas City has only hosted one Final Four. Both New Orleans and Indianapolis have hosted four Final Fours since 1970, the most in the country.

Assume the allocation of Final Fours amongst cities and the quality of basketball teams is independent (this might not be true, but so be it). Assume further that Kansas City replaced Indianapolis or New Orleans and hosted four randomly allocated Final Fours over the next thirty five years. Finally, assume the quality of MissKansas basketball was the same over the next 35 years as it has been in the previous 35 years, i.e., one or more of the three teams will be represented in eight (randomly selected) Final Fours.

With these assumptions in place, it is possible to calculate the odds that Kansas City will host a Final Four when one of the three MissKansas teams makes it to the Final Four as 0.228x0.114 = 0.026 or a 2.6% chance. How did I come up with that number? Take 8/35 and multiply by 4/35 to obtain 32/1225 which is approximately 2.6% (with rounding).

What proportion of the $1 billion in taxes would the folks of Kansas City consider worthy of "gambling" on the chance of seeing one of the three teams in a KC Final Four? This is impossible to objectively measure, of course. However, the mayor puts forth the Final Four as one of five general "mega events." So, perhaps we could use 20% of $1 billion. However, this number is just too high for a reasonable argument (as we will see).

I am going to take an extremely small percentage of the $1 billion to prove my point. Let's use 1%, or $10 million, for giggles. For the $10 million to be an "even gamble," the benefits to the entire population of Kansas City of seeing one or more of the MissKansas teams in the Final Four in Kansas City would have to be $285 million ($10 million/0.026)!!! Any claim that the folks of KC would value seeing any particular team in a Final Four at this level is simply not credible.

Granted, I have assumed that all of the value of hosting the Final Four in KC rests on the probability that one or more of three MissKansas teams play in the Final Four. This is a strong assumption, but in the end it likely doesn't make much of a difference. For example, let's assume hosting a Final Four (regardless of what teams are involved) yields a $3 value for each of 1 million people in the KC tax jurisdiction. Then, hosting the Final Four would have a value of $3 million, which would reduce the break-even value of the three-team possibility to $270 million. This number is still not credible.

Therefore, while the mayor's rhetoric seems reasonable on the surface, and who wouldn't want the chance to see their favorite college team play in the Final Four in their home town, a little bit of reflection makes it seem completely ridiculous. The Mayor of KC is not unique in this instance. Just about every politician appeals to the local constituency's hopes, dreams, and aspirations. Unfortunately, if the local citizenry were asked for their objective value of the politician's appeal, it is likely to be considerably lower than what the price of the stadium/arena/venue entails.

In fact, this might be one of the worst reasons I have seen proffered for spending considerable tax money to build/renovate a stadium.

[STATA Data File]

From the Minneapolis Star-Tribune:

Midwest Oil fined for selling gas too cheaply

Kevin Murphy, deputy commissioner of the [Minnesota Commerce] department, called the violations "willful, continuing, and egregious and warrant a substantial penalty."

Midwest Oil is being fined $140,000 for selling gasoline below the legal minimum price for 293 days during 2005. The minimum price legislation is packaged as a means to protect the small gas station that cannot "cushion below-cost gasoline with sales of other merchandise." How do such irrational market interventions survive?

The answer to this question has eluded us for so long that, perhaps, we have stopped trying to find an answer. Now, however, we know the cost of "world class," at least for Kansas City!!

From AB News:

The cost of the Sprint Center in Kansas City, Mo., has risen 10% to $276 million because of upgrades to make the downtown arena a "world-class facility," officials said.

The cost of "class," in this case, is a mere $26 million!! What does KC get for the additional cost? What is it exactly that distinguishes the world class venues from the hunks-of-junk that mere wannabe cities build?

The increased costs include $3.5 million to enable the arena's exterior to be completely covered with glass and $2.5 million for terrazzo floors inside

Glass!?!? Terrazzo?!?! This is only an additional $6 milllion - what about the other $20 million? Response: crickets.

A better example of "if you're buying, I'll have top sirloin" is harder to come across.

From a Boston Globe opinion piece concerning Larry Summers:

Summers could do no right in the eyes of his radical critics, who could never forgive him for his perceived original sins and who saw an opportunity to build wider coalitions every time Summers took actions that alienated other groups, as a president -- especially an activist and sometimes abrasive president -- will inevitably do. Some less ideological critics of Summers's leadership style then joined the radicals in a cacophony of strange bedfellows, but the core of the opposition always remained the hard left.

It was arrogant in the extreme for a plurality of a single faculty to purport to speak for the entire university, especially when that plurality is out of synch with the mainstream of Harvard. It was dangerous for the corporation to listen primarily to that faculty, without widely consulting other professors, students, and alumni who supported Summers. Now that this plurality of one faculty has succeeded in ousting the president, the most radical elements of Harvard will be emboldened to seek to mold all of Harvard in its image. If they succeed, Harvard will become a less diverse and less interesting institution of learning governed by political-correctness cops of the hard left. This is what happened in many European universities after the violent student protests of the late 1960s. It should not be allowed to happen at Harvard in the wake of the coup d'etat engineered by some in the Faculty of Arts and Sciences.

Last year the NBA instituted a dress code for its players. There was a lot of howling that the league had no right to do this, but then it was pointed out that the current collective bargaining agreement indeed gives the league the right to institute a dress code. For those who didn't read the CBA before signing on, they have no one to blame but themselves.

An immediate outcome of the dress code was that several players received new endorsement contracts with men's fashion companies, many of which did not have endorsement contracts with basketball players before. While some players likely lost contracts with other companies, at least some players seemed to be made better off after the dress code. Why the players did not/could not obtain such endorsement contracts without the dress code is not clear.

However, the NBA as a league is a fairly well organized cartel and seems to be doing exactly what a cartel is expected to do - enhance and protect the profitability of its member firms. The dress code has evidently allowed the NBA the cover to launch an upscale men's fashion line:

The collection will be available later this spring. Initial product offerings include wool and leather blazers at $348 and $648, respectively, that feature NBA and team logo embroidery on the inside lining. Dress shirts will go for $87.50 to $89.50, and woven silk ties will retail for $39.50.

Now, I am not sure if there is a fashion foul if you work on Wall Street and wear an NBA team logo blazer. However, I am willing to bet that without the dress code the $650 leather blazer with NBA logo on the inside wouldn't be a big hit. How clever of the NBA to create a market for high end men's fashion. Just what cartels are supposed to do - find joint profit maximizing solutions that are not possible when all cartel members act individually.

While the NBA faces challenges, at least in certain areas the NBA qua cartel seems to be doing just fine, thank you very much.

Or, perhaps, the end of the cashier? I speculated that within the next decade big-box stores such as Walmart will do away with cashiers as they move to RFIDs and the ability to simultaneously scan all the goods in my cart. I also predict that when this happens, Walmart will be accused of letting go the very people that critics today complain are being exploited.

Standing in the American Airlines terminal at Atlanta Hartsfield-Jackson International Airport, I noticed that the Burger King had automatic ordering stations, much like ATMs. Touchscreen order, pay with your credit card, and your order spit out onto a chute, no muss and no fuss.

Evidently, these things are being tested elsewhere, like in Morrisville, NC for example, but not here in Arlington that I know of.

When KFC, Taco Bell, and the other fast food joints no longer hire as many teenagers and lower skilled workers, what complaints will we hear then?

There’s a lot of noise in the month-over-month inflation rate, but the year-over-year numbers released today should persuade Bernanke and company that monetary policy has been too loose:

Compared with a year earlier, the consumer price index was up 4 percent in January; excluding food and energy it was up 2.1 percent.

From espn.com:

The team without a home or owner might also not have a name.

According to a report in The New York Times on Tuesday, the United States Patent and Trademark Office granted a request for federal trademark registration on the name Washington Nationals to Bygone Sports last week. The Cincinnati-based company, which specializes in historic trademarks and sports apparel, applied for the trademark in September 2002.

According to the Times, Major League Baseball, aware of Bygone Sports' claim to the Washington Nationals name, thought it had reached an agreement with the company for the name's rights when the franchise was moved from Montreal in 2004.

Should the Nats become nameless once again, we here at DOL will gladly renew our offer of assistance in naming the team. More than ever, the name Porkers would seem appropriate for a team playing so close to the "Bridges to Nowhere" Congress and soon to be playing in a new stadium funded by the fleecing of DC taxpayers.

From espn.com:

LOS ANGELES -- As a UCLA linebacker in the late 1990s, Ramogi Huma left college after four years with $6,000 in credit card debt. His scholarship paid for tuition, room, board and required books but not incidentals such as phone bills and travel expenses. Coming from a lower-income family, he lacked the funds to cover the difference.

"That's where MBNA came in and cleaned house," Huma said of his high-interest credit card.

After graduation, Huma lobbied for a bona fide full ride for NCAA athletes, whose standard scholarship package, called a grant-in-aid, is equal to an amount about $2,500 a year less than the official cost of attendance. The NCAA wouldn't budge, despite supportive statements made by association president Myles Brand about raising the cap.

Now it has come to this: A federal antitrust lawsuit filed late Friday in Los Angeles seeks to prohibit the NCAA from telling member colleges they cannot offer athletic scholarships up to the full cost of attendance -- and could expose the NCAA to hundreds of millions of dollars in damages for past wrongs.

The class-action claim was brought on behalf of Division I-A football players and major-college basketball players, whose programs generate the overwhelming amount of revenue that flows into college athletic departments. Under antitrust law, any current scholarship athlete, as well as any player in the past four years, qualifies as a plaintiff. ...

On college campuses, athletes are the only students subject to aid restrictions imposed by an agreement among universities. Talented students in music, chemistry or any other area can be bid upon by individual colleges, without limits on the total value of their scholarship packages. Some, often graduate students, receive the full cost of attendance plus cash payments.

Huma, though, said that the lawsuit does not ask that athletes be treated in the manner of professional athletes with free-agent rights. Instead, it asks for the restoration of funds for incidental expenses, which the NCAA eliminated in 1973 in a cost-cutting move.

I'm beaming like a proud pappa tonight--not one, but two of my former students, Dan Alban and John Coleman, are finalists in the IHS Felix Morley Journalism Competition. Coleman was an honorable mention in last year's contest.

Good work gents!

In a 2002 Public Choice paper, Russ Sobel and Tom Garrett tested theories of rent-seeking by comparing the composition of economic output in counties containing state capitals to similar counties that did not host a state government. They found, among other things, that capital counties had more eating and drinking establishments per capita than did non-capital counties. Events in Florida are consistent with their findings:

TALLAHASSEE - It's happy hour in Florida's capital city, but you wouldn't know it. The outdoor bar near the Capitol that used to be crowded with lobbyists and legislators is virtually empty on a Tuesday evening.

"Boy, this crowd is awfully thin," says House Speaker Allan Bense, R-Panama City, walking past the watering hole known as Clyde's & Costello's. "Where is everybody?"

Those deserted tables are a consequence of a new state law that bans lobbyists from buying drinks, meals and gifts for legislators and staff members. Lawmakers passed the sweeping ban at the end of a four-day special session in December, in the wake of a controversial trip to Canada by four legislators at a gambling firm's expense and an unfolding lobbying scandal in Washington.

The ban took effect Jan. 1, and brought an immediate lifestyle change for lawmakers long accustomed to having lobbyists pick up their tabs. Simply put, the law says: Dutch treat or don't eat.

Story here; working paper version of Sobel and Garrett here.

The Times Online reports:

Strong demand for the €500 note led the European Central Bank almost to double the value of the bills that it printed to €95 billion last year, from €51.8 billion in 2004. … After the addition of 294 million new €500 notes in the past two years, the denomination now accounts for the most value in circulation of any euro note. …

Drug-traffickers and other criminals — as well as legitimate users — are thought to be conducting business increasingly in euros rather than dollars because it has bigger bills …: a briefcase filled with €500 notes is about six times as valuable as one filled with the highest-denomination American note, the $100 bill. The highest-value British note, the £50, is worth even less.

Technical correction: While the Bank of England’s largest note is £50, two Scottish banks and two Northern Irish banks issue £100 notes.

The value of Federal Reserve dollar notes in circulation ($788 billion, an estimated 50-60% of which is held outside the United States) still exceeds the value of ECB euro notes in circulation (€565 billion), but:

The euro is catching up fast, with supplies growing at about 20 per cent a year, three times as fast as the American currency.

What a shame:

HARVARD UNIVERSITY'S EMBATTLED PRESIDENT, Lawrence H. Summers, resigned this afternoon and will be replaced, on an interim basis, by Derek C. Bok, who was president of Harvard from 1970 to 1990. Mr. Bok would be expected to "clean up the mess and make conditions right for the next president," according to a senior professor with knowledge of the tumultuous events of today in Cambridge, Mass.

The lesson to be learned? There are certain things that simply cannot be hypothesized.

More here

Below is an excerpt of an email from a former student describing his interview for medical school at a highly-regarded East Coast university:

Not a particularly friendly interview overall. The discussion transitioned to health care funding. I [the student] noted some severe inefficiencies of the current billing model and that changes must be made for the system to be sustainable. He [the interviewer--a physician] said that nationalized health care solved all those issues nicely, didn't I agree? I (probably winced a bit and) responded that though NHS did solve some funding issues it introduced many other problems and inefficiencies, as demostrated by various studies and also personal anecdotes from my recent 5 months work in London. He responded that Canada's system worked much better, with which I also differed. Trying to conclude, I said that the kind of federal intervention that was needed was standardization of electronic record formats, codes, security procedures, and so forth, and that in fact there is a presidential appointee (David Brailer) and commission working on those things at the moment.

His response: "So do you think George Bush thinks?"
He'd been pushy, I was tired of if, and that's a pretty ludicrous question.

Me: "Well, I think he's a rational individual, based on his principles and presuppositions, just like everybody else. And while I disagree with many of his decisions, I do agree that freedom and democracy are good."

Him: "Maybe, but you can't force them on people. That will never work"

Me: "Worked out pretty well with Japan, didn't it?"

Him: "Good luck with your application, that will be all."

I cannot understand what a question about whether George Bush thinks has to do with a student's fitness for medical school.

I don’t know about you, but after their nail-biting win over Scotland (er, the UK) to qualify for the medal round, I’m psyched about the USA men’s Olympic curling team. Yeah, it’s like shuffleboard on ice – TO THE MAX. The Minnesotan (er, US) team: Unflappable captain Pete Fenson, hotheaded John Shuster (the mike caught him muttering “fricking” the other night after a bad shot), power slider Joe Polo, and the hero so far, the super-precise Shawn Rojeski. The semi-final game against Canada is tomorrow at 8pm EST on CNBC; the final game is Friday at the same time, same station.

CORRECTION: The USA-Canada semifinal will be be shown at 5pm EST, 4pm central, on CNBC.

Several of us were sitting around City Hall - er, I mean Brew's Pub - in our little town of Granville the other night, when the conversation turned from the usual topic - local politics - and it was noted that the TV ratings for the Winter Olympics have been lagging behind those for Reality TV. We decided that the Olympics needed more exciting events. So we were thinking of new events to improve the Olympics. Admittedly, we were mildly under the influence of legal beverages at the time, which can influence one's judgment (fortunately, in Granville everyone can walk home), but some of the ideas still seem worth a chuckle, so I thought I'd post a few here:

Short Track Ice Dancing: Couples race around the rink at speeds up to 35 mph, while performing the Ravensburg Waltz.

Luge Moguls: Admit it - wouldn't luge be more exciting if they put a few of those big bumps at the end of the sled run?

Bob Sled Slalom: We're tired of hearing about how the drivers steer with all these little twitches on the steering mechanism that no one can even see. C'mon, put a big sled in an icy downhill tube, who couldn't get to the bottom? But let's find out if these drivers can negotiate a real course.

Biathalon: Sure, the Winter Games already have something called the Biathalon. The problem is that the current event mixes the wrong sports: Cross country skiing and riflery. We think the Biathalon should consists of Curling and Riflery. Just don't grap the gun when you mean to reach for the brush!

Skeleton Half Pipe: Skeleton racers plunge headfirst into the half pipe, shoot up the other side and attempt a backside 360 with flip. Watch the huckers bonk, pack and bail. Who wouldn't want to watch that?

Downhill Figure Skating (inspired by Bode Miller): Imagine the excitement as skaters roar down the slope at speeds approaching 70 mph. "Here comes the triple toe-loop... OH, I don't like the looks of this. Tell us what went wrong, here's Dick Button!"

500 meter speed skating free style: Judged on time and points for style.

Nordic 4 x 10km: In this event, which lasts over an hour, relay teams of 4 cross country skiers do several laps around a track, covering a total of 40 kilometers. We think it would be more exciting if several hungry polar bears were released in the area before hand.

We have no idea if any of these sports will catch on. We're not even sure they're funny ideas. But surely if a bunch of yahoo nimrods in a bar in Granville can come up with such things, the brainiacs at the IOC could come up with a few new twists on the Winter Games.

Steve Hoersting, Executive Director of the Center for Competitive Politics, and I have this piece up on National Review Online. We note that as part of "lobbying reform," Congress appears poised to place restrictions on "grassroots lobbying," i.e. "call your congressman" type stuff aimed at stimulating voter to legislator contact. We think this is exactly the wrong way to go. The op-ed is adopted from this longer primer released by the Center. By the way, the Center is a new 501(c)(3) organization; you'll see the website substantially upgraded soon.

I've been a busy boy of late, also writing these three posts on campaign finance reform for the popular political blog Redstate. My basic argument: Republicans are stupid, and in their myopic desire to regulate George Soros funded "527" organizations they are a) shooting themselves in the foot, and b) squandering an opportunity to repeal at least portions of McCain-Feingold.

In my neck of the woods (Santa Clara County), the median home price stayed about steady from last month (up to $705k from $700k). Regional sales volume is down to a five year low for January. From the local paper:

In January, 6,004 properties changed hands in the nine-county region, 20 percent fewer than the same month in 2005. Though sales slowed, median prices moved higher compared with a year earlier, according to a report Thursday from DataQuick Information Systems. In Santa Clara County, the median price hit $705,000, up from $700,000 in December, and $615,000 in January 2005.

Article here.

On the low end, recent sales on new 1BR condos (~875 sq. ft.) range from $340 in a not great downtown (San Jose) location to $440 in a nice downtown location. Same location 2BRs range from about $440 to $625.

Beyond Silicon Valley, there are interesting things of late on the housing bubble blogs, including: MLS listings up everywhere (e.g., this chart); the so-called "reset" problem in which rising interest rates threaten to tip sub-prime ARM borrowers into default; shaky stock prices and accounting fundamentals among high-end housing builders; layoffs and facility closings among mortgage lenders.

The least interesting but most salient feature in the bubble sphere continues to be the hair-pulling cries of "collapse" (or worse), in many cases based on month-to-month changes during seasonal downturns. Still, while I haven't seen any serious claims that housing prices are falling (other than seasonally), the facts on net seem to be catching up to the bearish bubble folk.

Some of the blogs where I've been reading this stuff (quality not guaranteed...):
http://marinrealestatebubble.blogspot.com//
http://thehousingbubbleblog.com/
http://bighousingbubble.blogspot.com/
http://bubblemeter.blogspot.com/
http://therealestatebloggers.com/

The College Republicans at Capital University have released the results of their Party Identification Project:

An extensive study conducted by the Capital University College Republicans has revealed a large crevasse between the number of registered Democrats and Republicans within the university faculty. The organization found 72 percent of Capital University faculty and deans are Democrats and only 28 percent are Republicans.

The lopsided numbers expand further in the College of Arts and Sciences and the School of Education, Professional Studies and Social Work, where Republicans are outnumbered 4 to 1.

Eight departments have no registered Republicans, including the Political Science department. Only one of the university’s 15 departments has more registered Republicans than Democrats.

Link to Dan Klein's work on this issue.

In an example of some of what is wrong about the public subsidy game in professional sports, the Charlotte Business Journal reports that attendance is up 13% for the NBA Charlotte Bobcats, who moved into a new $265 million publicly funded arena this year. The increase in attendance moves the Bobcats to 20th out of 30 teams for the season. Hooray!!

Such attendance boosts are not uncommon in new facilities, although evidence suggests that the so-called "honeymoon" or "novelty" effect lasts for less than ten years (this has been shown by a number of researchers, including Brad Humphreys and Dennis Coates in a recent Contemporary Economic Policy paper [I'll try to dig up a link]).

However, the article also states:

While the team has shown gains in tickets sold, franchise executives won't discuss the overall financial performance and have declined to disclose the number of season tickets sold in the new building.

I understand that the Bobcats are privately owned, and revealing such information to the public also reveals the information to their competitors. However, if the cities won't negotiate for access to this information, then why pay the money in the first place? Perhaps it doesn't matter to the local taxpayer - after all, there is an arena and that's what was purchased. However, in the spirit of full information, how about letting the good folks of Charlotte know a little more about what impact the arena had on the Bobcats's bottom line? I know, owners as a group don't want the information revealed because the paying public might suddenly wake up to the massive income boost the owners get from a new arena. And that, right there, is the problem.

If revealing team financial information is a deal buster, then I say "so be it." I am an advocate for getting all public dollars out of the venue business. Short of that occurring, cities should demand a peek behind the curtain after paying a few hundred million dollars. Otherwise, infer what you will from the lack of forthcoming information.

I ran the Tallahasse Marathon yesterday in 3:13:47 besting my previous PR by 5 minutes. Most importantly, I finally qualified for the Boston Marathon! (I'm planning to go to Boston in 2007.)

I'm not sure how many people ran because the results aren't posted yet, but it wasn't a large field (maybe 130 runners). As a result, I placed quite high: 8th overall and 3rd in my age group (I got a trophy!). UPDATE: The results are now online; there were just 79 runners in the marathon event.

Photo: Randall Holcombe

For you techies, here are my splits:

Read More »

I am not exactly sure where I come down on this one, but my first impression is that if you participate in this effort you are not violating any libertarian principles (although I could be wrong):

The New Orleans Public Library is asking for any and all hardcover and paperback books for people of all ages in an effort to restock the shelves after Katrina.

Or an interesting video for a principles class showing the tradeoff and complementarity between labor and capital - The building of an Airbus A340 in fast motion (Windows Media file). Personally, I find it impressive how few people are involved in the final assembly of the plane.

Why you don't loan your Corvette to your teenager. (Some ads may not be suitable for work?)

Including DOL's own Robert Lawson and local colleague Courtney LaFountain, from the Feb. 19, 1906 NYT:

Having completed 47,888 miles of the 60,000 which he is attempting to walk in seven years, and having already worn out thirty-seven pairs of boots on his journey, a septuagenarian engineer named Mark All arrived at Leicester Feb. 3.

Wow. That's a testimony to 1906 manufacturing: 1294 miles per pair of boots! I wonder what mileage distance runners get from today's running shoes?

From the Feb. 19, 1906 (not 2006!!) NYT:

One week from today the American Olympic Games Committee will select the athletes who will represent the United States in the Olympic Games at Athens, Greece...It was originally attended to send sixty athletes providing the sum of $25,000 could be raised. Up to the present but $8,000 of this sum has been secured, with but one week before the subscription list coses. Secretary James E. Sullivan of the Amateur Athletic Union has been in correspondence with Andrew Carnegie, who is taking a deal of interest in the big athletic event, and it is probable that the philanthropist will make up the difference between the total sum collected and the $25,000 needed to give the United States proper representation.

Today, the USOG admits to a little more then $500 million per year for total operations. I haven't found a price tag for the Torino games, but if someone knows of one, I'd be interested in comparing the figures.

Having been out of town for the past few days, my blogging has been slow. However, catching up on my NYT from 100 years ago, I came across this interesting tidbit in the Feb. 19, 1906 NYT:

E.F. Swinney, President of the First National Bank and Director of the Chicago and Alton Railway Company, tonight announced that six railroads entering Kansas City would build a magnificent passenger station on the territory bounded by Grand Avenue, Broadway, Twenty-first and Twenty-third Streets, the building and ground to represent a total cost of more than $20,000,000.

The article goes on to explain that 36 acres of land had been purchased for $65,000 per acre and that the "proposed new station...will serve only to relieve the serious congestion which exists at the old Union Station in Union Avenue." Finally, the article suggests that "the roads which will continue to enter the old station will in time construct another new passenger station."

How refreshing such sentiment would be in today's world, that is, companies building their own infrastructure and places of business without a hint of tax abatements or public funding. Of course, in 1906 there weren't that many taxes and definitely not that much tax money to dole out, but is that an excuse?

Today, for example, the economic impact of a professional sports team (and other companies like Cabelas and Bass Pro Shops) is an excuse to dedicate hundreds of millions of public dollars towards sports venues, and franchise owners insist that they shouldn't have to shoulder the entire burden of construction because of these external benefits. However, BEFORE tax dollars were available to build the cathedrals of industry, firms (gasp!) spent their own money to build their venues, regardless of any external economic benefits they were generating.

But wait, you say, surely $20m in 1906 wasn't all that much. The folks over at EH.net offer the following conversions:

In 2004, $20,000,000 from 1906 is worth:

$418,377,777 using the Consumer Price Index
$332,133,520 using the GDP deflator
$1,832,969,696 using the unskilled wage
$2,220,946,836 using the GDP per capita
$7,810,435,522 using the relative share of GDP

The first three numbers aren't that different from recent stadium agreements/proposals. In Arlington, TX, the new Cowboys stadium will cost 650 million, and the mayor insists the city will not spend more than $350 million, which of course means the city will likely spend more than $350 million. In Kansas City, there is a proposal to spend approximately $400 million in public money on a roof for Arrowhead Stadium so that KC can have a Super Bowl (plus some renovations of Kaufman Stadium). In DC, the current plan suggests that spending on the new stadium will be no more than $611 million, which (again) suggests that the city will likely spend more than $611 million on the new stadium.

Tax abatements, direct taxation, and other gimmicks to provide corporations with a place to do business, are justified today on the grounds of economic benefits and development. Without any fancy econometric analysis or a consultant report, I would be willing to bet that the impact of a second railroad station to 1906 Kansas City would likely be greater than the stadium proposal 100 years later.

Perhaps in 1906 the great cabal of government and big business hadn't evolved to the level of intrigue it has reached today. However, it is interesting that all railroads were evidently expressing a willingness to spend their own money to build stations (although I understand that the railroads had already been heavily subsidized in various ways for the past forty years).

Reuters reports today:

The U.S. Senate on Friday approved the nominations of University of Chicago economist Randall Kroszner and White House aide Kevin Warsh to be members of the Federal Reserve Board.

The Senate confirmed the nominees without debate.

I have a new op-ed out for the Independent Institute. The full thing can be read here:

Kreft and Sobel’s research finds that the degree of economic freedom within a state is positively related to the entrepreneurial activity in that state. In other words, policymakers should follow the example of states like North Carolina and Nevada and focus on lowering taxes, securing property rights, minimizing regulatory barriers and other public policies consistent with individual freedom. By doing so, it will increase the rate of new business start-ups, and the venture capital necessary to help fund these new ventures will flow into the state automatically. Capital is more mobile than labor, so the focus of state economic development policy should be on how to make it easier for individuals to pursue their dreams.

There's been a pretty big hubbub on my campus about grade inflation after it was revealed in the student newspaper that about 45% of the grades in the College of Arts & Sciences were A or A-. B's (including B+ and B-) were about 30%. C's were only about 14%. D's less than 5%. And F's less than 5%.

As usual, the economics department, like William F. Buckley, is "standing athwart history, yelling stop".

Even this is too many A's imo. We're going to have to work on that.

Wu Hui-lin, a research fellow at the Chung-Hua Institute of Economic Research, thinks the government should set gas prices.

Step 1: Create a government-owned monopolistic company to sell petroleum.

Step 2: Watch as service declines and prices rise.

Step 3: Call for government price contols to "fix" the problem.

Back to work guys, we got some learnin' to do.

Here's yet another attempt by a Marxist to co-opt Adam Smith.

To refute the laissez-faire capitalism often ascribed to Adam Smith, it is only necessary to quote . . . Adam Smith

This should have read "To refute the laissez-faire capitalism often ascribed to Adam Smith, it is only necessary to selectively quote . . . Adam Smith"

It would be nearly impossible to quantify the number of times that pro-corporate, laissez-faire activists have used the phrase “invisible hand” to justify all manner of unjust and brutal economic policies and their outcomes.

Ok let's get this straight once and for all: laissez-faire activitists are PRO-FREEDOM not pro-corporate. (Apologies for the scream.) Corporations (which in Smith's day, unlike today, were all government granted monopolies) are very often against laissez-faire. I defy you to find me a bona fide laissez-faire activitst defending ADM's ethanol subsidy or the car quotas on Japanese