From CNNMoney.com:

Michael O'Leary, Chief Executive of Ireland's Ryanair (Research), Europe's most profitable airline, wants to make air travel free. Not free as in free from regulation, but free as in zero cost. By the end of the decade, he promises, "more than half of our passengers will fly free."

The story suggests that the airlines might eventually charge for everything except the ticket. An interesting departure from the standard air-travel bundle we generally purchase here in the states.

It sounds like it might be hard to implement with unionization.

State Tax Notes provides a (2004) discussion of the OTHER things that have happened on April 15. This seemed interesting to me because I am sitting down this weekend to "do" my taxes.

This was news to me - tax day was March 15th until 1955.

On being elected to the presidency of the Public Choice Society for 2006-08.

Chris Coyne of Hampden-Sydney College presented Chapter 1 of his forthcoming book After War: The Political Economy of Exporting Democracy at WVU last week. (A copy of Chapter 1 can be found here). After hearing his presentation, I cannot wait for his book to come out. Chris has has applied some basic microeconomics to the problem of exporting democracy and makes a strong case that the best way to export democracy is through trade. While his work demonstrates a remarkable ability to synthesize literature across many disciplines, Chris is clearly an economist in his perspective and his important work in this area is a testament to the type of training that students can receive at George Mason.

I was clearing things off my hard drive while getting ready for APEE and I came across this essay I wrote some time ago on suicide. I wrote it for an essay contest and so was severly limited on space and what exactly I could say (hence the random book mention). I am not sure how much I am persuaded by the arguments I put forth, but I thought I'd share it regardless. I've put the essay below the fold.

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One of the modern greats, Sri Lankan batting star Sanath Jayasuriya, has announced his retirement from test matches. He will continue to play one-day internationals, where his aggressive batting style is more valuable, and hopes to play in the 2007 World Cup in the West Indies.

Test cricket, where matches last five days, is notoriously dull. A batsman need be in no hurry to score runs. I once saw England’s Nasser Hussain score only one run from the first 30 deliveries he faced. The one-day game is more exciting, and Jayasuriya has helped make it so.

Jayasuriya’s lasting contribution was to be one of the first batsmen to recognize that in the one-day game, with the batting team limited to 50 overs (at 6 deliveries per over, that’s 300 deliveries from the other team’s bowlers), it pays to score rapidly. More teams lose by scoring too few runs from their 50 overs than by using up all their outs, so go for a high number of runs per over, even at a greater risk of making an out. In a 1996 match against Pakistan, Jayasuriya scored 76 runs off of just 28 balls, an astounding run rate. The most common result from a batted ball is one run; hitting it beyond the boundary scores four (or six if it clears the boundary on the fly). Jayasuriya's performance that day was like a baseball player hitting five home runs in a game.

The DoL crew will be well-represented at the upcoming APEE meeting in Las Vegas. Josh, Frank, Larry, Ed and I will be there. Our loyal readers can find us in the bar (which bar I don't know but definitely some bar.)

A good number of Liberty and Power bloggers will be there too.

In addition to the academic fun, I'm planning to hike LaMadre Mountain near Las Vegas on Saturday and do a rim-river-rim dayhike (South Kaibab Trail down and Bright Angel Trail up) in the Grand Canyon on Wednesday. All work and no play and all that...

Last night I gave a brief after dinner talk to the National Summit of Chief Executive Boards International, a group of small/medium sized business CEOs. It went really well and they were a very good audience. The title of my talk was "The Outlook for American Businesses in an Age of Customization and Globalization."

My (draft) remarks are below the fold.

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Pet banned from barber shop

CANAL FULTON - When the clippers begin buzzing and anxious children start fidgeting before a hair cut at Matt’s Barber Shop, that’s Franklin’s cue. The 3-year-old, 65-pound basset hound is at Matt Schwendiman’s Walnut Street barber shop to put children at ease. Ohio law bars pets from barber or beauty shops. An inspector from the Ohio State Barber Board spotted Franklin in the shop on Feb. 7. Schwendiman was given a violation notice and told to remove the dog, which he did. Another violation would bring a fine. A third would mean the longtime barber could lose his barber’s license.

Sheesh. $#$%&@^* nanny-state do-good pansy uh grrrrrrrrr. (I must take my libertarian blood pressure medication soon.)

We were treated to a nice statement on the rule of law from the state inspector:

Warner said the state board’s job isn’t to change laws but to enforce them. With more than 9,000 licensed barbers and 3,200 shops, Warner said the board can’t make exceptions.

“In a perfect world, you let this guy have his dog in his shop, but we’re required to go by the book,” Warner said.

When people go off about the importance of the rule of law, I like to remind them that the rule of law is nice, but it's even better if the law itself is good. Bad laws that are strictly and evenly enforced are still bad laws. Heck half the world would starve to death if they had rule of law and enforced all the stupid laws they have. This isn't to say I think having the rule of law is unimportant, but we should spend at least as much time thinking about the wisdom of the laws themselves too.

BTW, my grandfather Art Lowry was the town barber in Canal Fulton, Oh for over 40 years and sold his shop to Matt Schwendiman upon retirement. I have many fond memories of grandpa's barbershop. So that explains why I'm so peeved for Matt and his dog.

Hoo-boy! First the Maryland General Assembly directs Wal-Mart to follow its wishes as to employee health benefits, now it's getting into the business of merger "review." Yesterday the Legislature passed a bill designed to derail the proposed merger of Constellation Energy and FPL Group. Constellation is, among other things, the parent of Baltimore Gas & Electric (BGE). According to the Washington Times, the merger "does not figure in BGE's 72 percent rate increase, which is expected to jolt the utility's 1.1 million customers beginning July 1.

But lawmakers, most of whom are seeking re-election, have threatened to delay the merger to persuade utility executives to lower the increase. The bill would establish a special counsel who would review utility mergers and report to lawmakers, thereby delaying the merger by at least a year."

The governor is considering whether to veto the bill.

The combined Constellation-FPL, according to the firms' press release, would have annual revenues of $27 billion, $57 billion in total assets, and a market cap (based on current market values) of $28 billion -- "the nation's largest competitive energy supplier and its second-largest electric utility portfolio." The reach of the new company would extend well beyond Maryland and Florida customers. Specifically:

"Its competitive wholesale and retail businesses will serve thousands of commercial, industrial and utility customers, including 72 of the FORTUNE 100 companies. Its generation portfolio will be the nation's largest, exceeding 45,000 megawatts of capacity. It will be the third-largest nuclear plant operator in the United States, owning and operating seven nuclear power stations with eleven units, including FPL Group's pending acquisition of the Duane Arnold nuclear station."

So what we have here is a state legislature attempting to sink a merger that would have a clearly significant national impact. Whether you call it extortion or simply hardball is up to you, but I don't think you can deny that it is state parochialism in either case.

From Ad Age Daily

Nicole Miller-designed robes. Concierges. In-room computers with high-speed Internet access. Manicures.

The latest hotel amenities? Try the newest marketing ploys at your local hospital.

The story insists that affluent patients pay for these amenities, but how long until what is a luxury transforms into a Constitutional right?

Jack Shafer, writing on Slate, about recent high profile plagiarism.

I'm as delighted as the next press critic or blogger to catch journalists making things up, plagiarizing, taking bribes or giving them, deliberately libeling people, blackmailing people, lying to sources, or forging documents. I approve when newspapers and broadcasters assign internal reports or external investigations to get to the root cause of the perfidy. But I think the profession needlessly exhausts itself trying to figure out why journalists misbehave. You might as well as ask why people cheat and steal.

Bad journalism, I fear, is a necessary byproduct of good journalism. Unlike the legal and medical professions, no guild or licensing board exists to prevent people from penning opinion columns or articles. This free entry means that nobody need present a credential if they want to spout off or report a piece or pursue a journalism career. The more authoritarian a society, the more likely it is to license journalists.

So let me see if I got this right. We can't regulate morality, but instead must let people make their own mistakes, while we rely on competition, reputational capital, and consumer discretion to monitor quality of public discourse. Sounds pretty good. So a humble question: is what's good for journalism good for the rest of private society?

FSU alumni mourn the loss of an institution.

Hoist a beer in a farewell toast: Mike's Beer Barn has closed.

A Tallahassee landmark for 50 years at Tennessee and Copeland streets across from Florida State, the Beer Barn was closed March 19 by founder and owner Mike Norman.

For you gamers out there comes this article from Wired,

Economics is loosely defined as choice under scarcity. After all, in the real world, there's only so much to go around. You can't always get what you want, and unfulfilled desires give rise to markets. But in a game world, there's no inherent reason for scarcity. Game designers have given us plenty of utopias where we can have all the mithril we want, to buy whatever we want whenever we want it. Problem is, those worlds turn out to be dull.

HT: Dave Reed

The Cato Institute is looking for "economists (or political scientists and lawyers with economic training) to fill two policy staff positions."

"The ideal candidates would be trained in applied microeconomics with specialization in industrial organization, finance, labor, health, transportation, housing, urban, insurance, law and economics, public finance, or public choice. The ideal candidate would have a proven record of publication that demonstrates policy interests as well as economic skills, but newly minted Ph.Ds with the same skills and interests will be considered.

"Successful candidates would be expected to conduct their own research and publication program with papers and perhaps books as products. They would also write opinion pieces on policy controversies in their area of expertise. Successful candidates also would commission authors outside Cato to write papers and books on topics outside the candidates’ specific expertise but within the candidates’ general field of interest. Finally, successful candidates would assist non-economists within Cato with technical economic questions as they arise."

The contact person is Peter Van Doren; the deadline is April 10.

Today's Star-Telegram points to one of the most bizarre naming-rights issues I have seen in quite a while:

Under a proposal, Dallas-based Methodist Health System would pay $150,000 a year for two years and then $25,000 a year for eight years to name the facility Methodist Mansfield Stadium. The $21.7 million, 11,000-seat facility on Texas 360 and East Broad St. would be open in time for the 2006-07 school year.

Trustee Nancy Ryals, who expressed her concern about the name, said it could give the wrong impression that the district is affiliated with a religious group and could open the district up to other religious advertising. She said she would rather name it for someone who has given a great deal to the district but understands that it is a financial benefit.

Most evidence I have seen suggests that, outside of NASCAR, naming rights do little for the purchaser. Perhaps if Ms. Ryals knew that naming rights don't provide the big boost that everyone expects she would be less concerned?

Google Maps + Census data = pretty neat website.

There have been lots of failed common property bike experiments (e.g., here, here, and here), so what's a frustrated utopian to do? Try common property cars of course. From the April issue of Fast Company (p. 39; sub req):

The idea is to situate rows of cars at subway or bus stops or other high-volume spots. You would remove the first car from the stack and drive it to your destination. You could keep it as long as you wanted, then return it to another stack elsewhere in the city to recharge for the next commuter.

A photo of the stackable cars is here.

Note that this stackable car program is fundamentally different from existing car share programs (e.g., this one) because those programs register users. Registration of users creates a responsibility on the part of users to exercise care while driving and to return the cars. This linkage would be missing in the stackable car program.

HT: John G

Some people will be aghast by this information, others will be envious, others comforted. I don't spend a lot of time worrying about Bill Gates, his money, his consumption, but when I came across this information, it did make my eyebrows go up.

Here is an accumulation of Bill Gates's stock sales since April 2004. I haven't converted things into real dollars - would it really matter?

I haven't spent too much time thinking about this, however a few thoughts come to mind. First, Bill sells shares (primarily Microsoft) on a regular time table, basically every quarter (blind trust? tax purposes? legislation?). Why not cash in when the price of Microsoft hits a peak? Hmmm, interesting principal-agent problems there. However, there is a second, and (to me) important question: would such an accumulation of stock sales be possible by a private citizen in any other country?

STATA data file

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A scandal has erupted in the UK over revelations that Tony Blair’s Labour party has been selling lordships and knighthoods in exchange for 'loans' to the party. The Sunday Times reports (in an article that doesn't appear to be available online) that “of the 40 donors who have handed more than £50,000 to Labour since 2001 … 23 received honours made up of four peerages, 10 knighthoods, four OBEs and five CBEs."

Here’s the average price list, as reported in The Sunday Times:

Barony £2,651,250
Knighthood £747,638
CBE £611,00
OBE £552,500

I’m in Belfast, Northern Ireland, UK for my spring break week, teaching a course to MA finance students at Queen’s University. It’s something I’ve done every year for twelve years, but it almost didn’t happen this year. The UK’s National Health Service almost kept me out.

As I’ve mentioned here before, I'm awaiting a kidney transplant. I started hemodialysis (mechanical blood filtering) three weeks ago, on the standard schedule of three sessions of a week, three-plus hours per session. To travel within the US now (e.g. to Las Vegas for the APEE meetings in April), I first have to reserve a session at a local dialysis clinic in the destination city. Not really a problem: the US is filled with for-profit clinics that are happy to accommodate extra clients. My health insurer has a handy web engine for locating, near any destination, the closest clinics that it certifies and will pay for “in-network”. There’s also a handy clinic finder at www.dialysisfinder.com.

The UK’s National Health Service, however, isn’t for-profit. It has waiting lists for many of its services to UK citizens, possibly including dialysis. So what incentive does it have to take on foreign travelers as clients? My initial inquiries were coldly received. I’m not sure why the dialysis clinic at Belfast City Hospital did finally find me a space in their late shift (7-11pm), but presumably the inquiries from my contacts at Queen’s didn’t hurt. (By the way, the NHS is charging me handsomely.) Why aren’t there also for-profit clinics here that would serve travelers, you ask? They’re illegal in the UK.

CORRECTION: That last sentence was in error; private dialysis clinics (and private hospitals more generally -- thanks to reader Andrew McGuinness for the correction) are not illegal in the UK, merely rare (private dialysis made up about 5% of the market in the UK, versus 77% in the US, according to Fig. 1 of this study). Since the NHS charges less, the private clinics' clients appear to be mostly people who switch to NHS service once they get off the NHS waiting list. There are two private dialysis clinics in London, according to this list, dated 2000; at that time there apparently weren't any others in the UK.

On the NHS rationing front, the front page of The Sunday Times yesterday carried the following headline: “Doctors call premature babies ‘bed blockers’”. Reads the text of the article:

As the NHS faces an increasing financial crisis, with beds being closed and jobs axed, it says these very premature babies are ‘blocking’ much-needed intensive care cots, sometimes forcing healthier infants to be transported by ambulance to other hospitals. ...

The statement reflects a growing view among child specialists that babies born under 25 weeks should be denied intensive care and allowed to die.

Why not let parents spend their own funds (including private insurance) to build additional facilities for saving premature babies? The possibility is not even mentioned in the article. That would be illegal in the UK. CORRECTION: Not illegal; private insurance is merely rare.

-----
Addendum: Pete Boettke's analysis from a week ago, after GMU had advanced to the sweet 16, is very informative and has several well reasoned clues for the rise of parity in men's hoops......and law and economics....
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Writing for ESPN.com, Andy Katz has this to say about the Patriots of George Mason:

But even if George Mason was a single-digit seed instead of a No. 11, that probably wouldn't matter for historical purposes. This was the greatest run ever to the Final Four. End of discussion.

...

The Patriots were one of the last five at-large teams to make the field, and all they did was knock off three of the last six national champs: Michigan State (2000) in round one (without suspended second-leading scorer Tony Skinn), North Carolina (2005) in round two and Connecticut (2004) at the Verizon Center in overtime in the Elite Eight. Wedged in there was Missouri Valley champ Wichita State in the Sweet 16.

Let's go over this again: The Patriots took out Tom Izzo, Roy Williams and Jim Calhoun, the latter a Hall of Fame member and the first two likely to be enshrined some day.

I wasn't lucky enough to be there in person like Pete Boettke, who reported by email to have sat 10 rows behind the GMU bench, and Alex Tabarrok, who was ecstatic on MR. But I was lucky to have watched with Ed Stringham, Ben Powell, and an ecstatic contingent of eight crowding around the t.v. in Ben's living room. As a fan of the Spurs, Cowboys and Aggies, I never thought it would be GMU that would amaze me the most in sports. All five starters were players of the game. Best of luck to Coach Larranaga and his epitome of a team. I hope they win it all!

The most recent issue of Public Choice has some interesting work in it.

A paper by Gary Wagner and Russell Sobel underscores the importance of details with institutional design. From campaign finance to public finance, there's more to a reform than whatever catchy name they dream up for it, and there's usually a pig somewhere beneath the lipstick and wig it's dressed up in. In this case, many states began adopting rainy day funds in the early 1980s, ostensibly to stabilize revenue and spending during economic cycles. From the paper's introduction:

What has traditionally been overlooked, however, is that the rash of stabilization
fund adoptions during the 1980s also coincided with the “tax revolt”
era of increased fiscal constraints such as tax and expenditure limit
laws (hereafter, “TELs”). While TELs are typically thought of as constraints
aimed at limiting the growth in expenditures and/or tax revenue, some TELs
have the potential to be tremendously influential as to the manner in which
states save. Several expenditure limit laws and some tax limit laws, such as
California’s expenditure limit law (Proposition 13) for instance, require some
or all of a general fund surplus to be returned to citizens. In cases such as
this, the adoption of a budget stabilization fund into which the general fund
surplus may be placed effectively circumvents the constraint imposed by the
TEL.

And from a few pages later:

...the rash of stabilization fund adoptions in the 1980s was preceded by the adoption of numerous spending limit laws and a handful of tax limit laws. Only Hawaii, Montana, and Oregon currently have a TEL in place and are without a stabilization fund. Of the 23 states that have both a stabilization fund and an expenditure and/or tax limit law, 19 of these states had an expenditure and/or tax limit law in place before adopting a stabilization fund...

Gary and Russ categorize the states based on how stringently policymakers are constrained (by TEL or other) regarding budget surpluses. In a 1945-1996 panel, they estimate states' adoption decisions. Results show that stricter restraints increase the likelihood of adoption. Recession variables matter, too, but less so. Interestingly, the stricter restraints are best at explaining adoption by statute (i.e. by policymakers). The evidence suggests that rainy day funds were more about policymaker discretion than macro smoothing. At the very least, the paper undermines the standard wisdom that rainy day funds were public interest responses to the 1980-82 business cycle.

On a side note, Russ was out here to SJSU a couple of weeks ago. He presented a very cool paper (with Brian Osoba) on youth gangs as pseudo governments that are caused by, rather than causing, violence.

Craig and his UTA colleague Courtney Lafountain have an article in the same issue that is noteworthy in that it examines corruption at the U.S. state level. More corrupt state, lower bond rating, higher interest rate for taxpayer debt. No bueno.

On a dubious note, an article appears as such:

Rudiger Ahrend and Carlos Winograd, "The political economy of mass privatisation and imperfect taxation: Winners and loosers"

(open URL here) And no, it's not studying those who cut loose but those who lose out.

News item:

ATLANTA -- Members of the Latino community plan to protest against new state legislation aimed at illegal immigrants in Georgia.

Protesters say they will neither spend money nor report to work Friday. An estimated 800,000 Hispanics are expected to take part in Georgia's "Day For Latino Dignity."

Just by coincidence, my latest dispatch from the awesome folks at Netflix is "A Day Without a Mexican." Bryan Caplan discusses the film here; Tyler Cowen here.

This summer, I'm hoping to hike Mt. Whitney (14,505'), the tallest peak in the lower 48 states. The U.S. Forest Service rations the number of people allowed onto the main Whitney trail during the summer to 60 overnighters and 100 dayhikers per day. This I don't mind. Part of the value of hiking is the solitude and without rationing Whitney would be overrun with hikers some of whom probably shouldn't be trying a serious hike like this anyway. Similarly I don't mind that concert organizers limit the number of people into the concert to the number of seats available.

What I object to is the rationing method the forest service uses.

Starting on February 15 they conduct a lottery. Here's what they say on their website right now.

As of March 10, processing of the more than 4,500 Mt Whitney applications received for the 2006 lottery is about half done! Every application in the lottery will be pulled out and we will attempt to make a reservation based on the remaining space available for the entry dates you requested. Letters are being mailed out daily, so people should be receiving their letter in the next few weeks.Please note we cannot search for, change, intercept or report on the status of your individual application at this time. All applications will be answered by mail. As soon as the last lottery application is pulled out and processed, this page will be updated to show what dates still have space left after the lottery. We appreciate people not interrupting so we can complete the work as quickly as possible.

My hiking partner writes "I bet we have a higher willingness to pay than most of the freakin' hippies winning the lottery! And I'm not surprized that our Govt is slow at even this simple task."

From the abstract of a new paper:

This paper considers the effects of union-bargained minimum wages on transitions into and out of employment in the hotels and catering industry over the period 1979–99. This industry is characterised by a high fraction of unskilled labour input, high worker turnover and binding minimum wages. The empirical approach identifies workers affected by real minimum wage increases and decreases, respectively. Job separations and accessions for the treatment groups are then contrasted to the outcomes for control groups, ... According to the results, job separations tend to increase with rising minimum wages ...

Today's Chronicle of Higher Education links to a study of undergraduate classes in the College of Arts and Sciences at Penn. The results suggest that only 40% of all undergraduate classes are taught by tenured/tenure track professors. I agree with the dean that the numbers might be a little skewed by the English classes, but I wouldn't be surprised if this number was similar across any number of high quality institutions.

With more press like this, we will all be on four-four teaching loads sooner than later.

A news item:

NEW YORK (Reuters) - It seemed like the perfect gimmick: a celebrity porn star would launch her own wine, with her alluring picture on the label.

Savanna Samson did just that, ...

"I never wanted to just do gimmick. That would just happen with me being a porn star, me having a photographer shoot the label, how risque could I get on the label -- all those things," Samson, the stage name for 31-year-old Natalie Oliveros, said in an interview.

The seriousness of the idea was lining up a respected wine maker. So she convinced Italy's Robert Cipresso ....

Samson went to Tuscany and tasted dozens of Cipresso's Italian-grown varieties, then she selected a mix of 70 percent Cesanese, 20 percent Sangiovese and 10 percent Montepulciano. She ordered over 400 cases.

Hints of blackberry and licorice, aftertaste of ... Kidding aside, wine guru Robert Parker gave the wine a score of 90.

HT to MR for the markets in everything concept.

One of my students is currently studying for a semester in England. He sent me an e-mail the other day and I quote here with permission.

I've found that "liberal" can be a dirty word in Europe. The students here from Europe surely love their welfare states. I am trying to point out that the French and German versions are crumbling, but I'm not making much headway. Everything in general seems to be more politicized in general as well. Fair trade merchandise is everywhere; global warming talk (that takes global warming to be a presupposed bad) is a constant hum in the background, and I shouldn't dare to buy eggs from caged chickens in public lest I risk communal shame.

It seems to me that there is a very simple way to test whether Prof. Gregory Price is correct in his view that “the near total absence of blacks on the economics faculty at our nation's leading universities ‘reflects deliberate racial exclusion’,” rather than reflecting a dearth of candidates. Likewise it would test whether Prof. William A. Darity, Jr., is correct in his view that economics hiring committees presume that black candidates are relatively deficient. (Hat tip: co-blogger Craig, below.)

Here's the test: are black economists paid more or less than non-black economists, holding publication record constant? One way to approximate holding publication record constant would be to look only at salaries of newly minted assistant professors coming from similarly ranked Ph.D. programs. Casual empiricism tells me that in the market for econ assistant professors, the few black candidates each year get more interviews and more fly-outs on average. The reason is simple: many economics departments hiring committees are given incentives by their deans to hire black faculty. (I have been on hiring committees so incentivized.) So I would expect that black candidates are getting higher salary offers, the reverse of being discriminated against. Is there evidence to the contrary?

Three female runners finished third, fourth, and fifth in the Dubai marathon in the United Arab Emirates even after faulty directions forced them to run an extra 2.5 miles on the 26.2-mile course. The mistake cost the runners about 15 minutes—about what they lost by. [Story.]

This isn't as strange as you would imagine. Elite runners often find themselves running alone. And small races often have fewer volunteers, signs and fans on the course. It's not hard to zig when you should have zagged.

In fact, closer to home, a large group of runners at last weekend's Cherry Blossom Marathon in Macon, GA ran an extra 1.3 miles or so.

This came to me from a friend running his first marathon,

My overall time was just under 3:41. *BUT*, and I'm sure nobody but you will believe me when I tell them this, a bunch of us added on an extra ten minutes or so of running. We were supposed to go down this little side road and turn at the aid station. Unfortunately, there was nobody manning the station telling us to turn, so we all went all the way to the end of the road. When we came back, a ton of slow people were in front of us. And, then I saw what I didn't want to see: mile marker 7 and a 1:04 time o n my watch! I should've been on pace for a 54 time at mile 7!!!

I marked my time at the 25 mile mark to get an idea of where I would've been without the extra distance, and it was 3:29 and change.

This from another person I know, who besides being a great runner, is also a race organizer himself,

The organization for the Cherry Blossom Marathon has gone downhill. I was running seventh during the mishap, but rallied to fourth. The lead car did not know the course, and blew by the turnaround in this neighborhood. Runners coming back out of the neighborhood were telling people to turn around at a stop sign. When I got to the stop sign --- there wasn't any markings so I guessed there may be a problem. I hit the seven mile marker and knew there was a problem as that mile I was around 15:30. I calculated that it cost me an extra 8:45 --- which given my pace at the time 6:45 per mile --- would mean we ran an extra 1.3 miles. I calculated I should have run a 2:55 if we had run the course right. Oh well. They did correct it at some point. I had friends who ran 3:55 --- and they said --- a police car zipped ahead, and turned around runners at the correct point. Only the leaders (at least the first 50 in the race) had to run the extra distance.

Google Finance - it's pretty slick. I especially like the "events" - now everybody can perform "event studies" on single stocks!!

In hiking mountains it's not always the highest mountain that is best. Many of the Colorado 14ers are fairly unimpressive peaks simply because they rise only a couple thousand feet from the nearby ridge (or saddle) leading to the next peak.

So mountains end up being defined in terms of something called prominence more than height. There's quite an elaborate science behind determining a mountain's prominence.

Prominence is a term that represents the elevation of a summit relative to the surrounding terrain. It is defined as the elevation of a summit relative to the highest point to which one must descend before reascending to a higher summit.

Here's a list and map of the 57 "ultra" prominent peaks in the 48 states of the U.S. with prominences greater than 5000 feet.

I've hiked up one, 56 to go.

This article describes the lack of black economists at the nation's top colleges.

It seems that the author of the article has little clue about the academic job market for economists:

The dearth of black economists teaching at the nation's highest-ranked colleges and universities may not be explained by the fact that there are no qualified African Americans. About 20 blacks each year win a Ph.D. in economics.

I thought Ph.D's were "earned" not "won," but I digress. The May 2005 AER reports that there were 505 degrees awarded from July 2003-June 2004 (p. 524). Therefore 20 black PhDs per year would represent approximately 4% of all degrees awarded. The article admits to undercounting the number of black economists at the top schools (how convenient) and also admits that many black economists head to the government and private sector. The same issue of the AER (p. 503) reports that there were 1,472 new academic jobs advertised in the Job Openings for Economists. There is no indication how many of these jobs were for junior faculty, but let's assume all jobs were for junior faculty, all PhDs are treated equally, and jobs are equally distributed across all schools. If ten to fifteen black economists entered the academic labor pool, they would account for between .6%-1.02% of all potential jobs. If 1.6% or so faculty slots at the top 30 schools are filled by black economists, is this evidence of statistical discrimination?

However, the whole discussion avoids the nature of the academic economics market. Not all Ph.D.s are created equal. Period. Paragraph. Let's face it, there are no University of Georgia Ph.D.s teaching at Harvard - none, zip, nada. Is this evidence of regionalism or the fact that my alma mater doesn't train economists as well as, say, Cal-Berkely? The question is not how many black economists there are, but how many graduated from the top ten programs, from which the top thirty schools select their junior faculty.

After the admission of the rather thin supply of black economists, we are then presented with what has become the sine qua non of any debate that includes race:

Professor Gregory Price of Jackson State University says that in his view the near total absence of blacks on the economics faculty at our nation's leading universities "reflects deliberate racial exclusion." Professor Price told JBHE that the exclusion of blacks from academic economics "is absurd given that most institutions in our society have at least given some lip service to the ideals of affirmative action."

That's constructive.

Therefore any quality-quantity tradeoff is per se evidence of racism? This bad logic is, unfortunately, offered support:

Professor William A. Darity Jr., a highly published economist at the University of North Carolina at Chapel Hill, says there are two main reasons for the small numbers of black faculty in economics departments. "First, the presumption remains stronger among economists than other social scientists that blacks are genetically or culturally deficient..."

I cannot speak for the entire field, although Prof. Darity, et al., evidently feel obligated and capable of doing so (Darity and colleagues recently posited that any statistical analysis that fails to find evidence of discrimination is de facto racist.). However, after ten years in my department I haven't heard the first word about "genetic" or "cultural" deficiency. I have heard the term "poorly trained" attributed to job applicants, but by definition we don't know (and cannot inquire) about the race of job applicants. I am not at a top thirty program, so maybe there is a cabal at those schools. However, here at the middle of the mountain I don't see a cabal at work.

Russ Roberts recently blogged on Nestor Kirchner's call for Argentines to slow their beef consumption to curb inflation.

There are also some folks closer to home who are having difficulty remembering Milton Friedman's lesson. Here's an exchange from NPR's "Morning Edition" (3/16):

[Renee ] MONTAGNE [host]: So what, David, could cause inflation to take off?

Mr. [David] WESSEL [WSJ writer]: Well, any number of things could go wrong. We could have another spike in energy prices, unemployment rates could fall to the level where workers could finally begin to get some significant raises.
There could be strong demand for goods and services that would make it easier for businesses that have been eager to raise prices, but haven't been able to do so, to finally raise prices. If any or all of these things happen, it could push the inflation rate up, and maybe even push it up higher than what the Fed considers price stability.

MONTAGNE: And what would determine, though, the point which inflation would become a problem?

Mr. WESSEL: Right now, inflation's running at roughly, by the official measure, at 2.5 percent a year, and that's in the manageable range. What would determine if it got worse would be worker productivity--the amount of output we make for every hour we work on the job--might not rise as much as it has been. That would mean that wage increases would be more likely to translate into price increases.

Another thing might be some declines in competition among businesses, perhaps because of trade barriers, perhaps because of mergers, any number of things. And finally, it really matters what people expect in terms of inflation. Price stability can become a self-fulfilling prophecy if everybody believes that prices are going to be stable.

All together now--inflation is always and everywhere a monetary phenomenon.

HT: Wilson Mixon

From a slate.com article on Whole Foods:

In the produce section of Whole Foods' flagship New York City store, shoppers browse under a big banner that lists "Reasons To Buy Organic." On the banner, the first heading is "Save Energy." The accompanying text explains how organic farmers, who use natural fertilizers like manure and compost, avoid the energy waste involved in the manufacture of synthetic fertilizers. It's a technical point that probably barely registers with most shoppers but contributes to a vague sense of virtue.

Fair enough. But here's another technical point that Whole Foods fails to mention and that highlights what has gone wrong with the organic-food movement in the last couple of decades. Let's say you live in New York City and want to buy a pound of tomatoes in season. Say you can choose between conventionally grown New Jersey tomatoes or organic ones grown in Chile. Of course, the New Jersey tomatoes will be cheaper. They will also almost certainly be fresher, having traveled a fraction of the distance. But which is the more eco-conscious choice? In terms of energy savings, there's no contest: Just think of the fossil fuels expended getting those organic tomatoes from Chile.

With a few more letters to the editor like this, us economists might be out of a job. From the March 20, 1906 NYT:

I have read with interest letters of two "Interested Observers" on the subject of the increase in living expenses. True it is that the cost of necessities is less now than in the '80s, but on the other hand luxuries introduced since have become necessities to most people.

If those who are worried about the increase in living expenses would only put on their thinking caps and get down to the necessaries they would find that the cost of living would decrease wonderfully in a very short time. We can live as cheaply as our fathers, but we don't, simply because we do not want to. There is no extravagant intent upon the part of most of us, but we have simply fallen into line in the use of luxuries. The fault lies not in prices, but in ourselves.

This is essentially the gist of Cox and Alm's "The Myth of Rich and Poor."

Consider the price of basic automobile transportation. A plain vanilla car might cost $14,000 today, which would be the equivalent of $4,800 in 1978. In 1978, a Ford Mustang II (my first car, and trust me it was a heap, but it was cheap) cost about $3,500 brand new. For that, the 'stang had no power windows, no remote entry, no airbags, a 4 speed transmission, a four cylinder engine with 88 horse power, and an "air conditioner" that never (ever) worked. Compare that with today's $14,000 special - say a Chevy HHR or some such. Even as the nominal price has increased, it is easy to argue that the real price for a plain-vanilla car has dropped considerably as the same number of real dollars will purchase a heck of a lot more car today. If more people buy $30,000-$50,000 cars, does that represent an increase in the cost of living?

In the same NYT, there is a display ad for the Pope-Hartfield Model F. The car had a drop top, a 25 horsepower four cylinder engine, and claimed to carry 5 people up to 50 miles per hour. Price? $2,500 in 1906 or $53,000 in CPI adjusted 2004 dollars!

This was the title of a conference at AEI this morning. The video of the event is already online, here. (Since I've just begun watching it, I can't give away the ending.)

Update: You'll probably want to skip the first two speakers. Just not much there. The third speaker, Susan Dynarski, is a Harvard economist and is actually addressing the topic.

As a piece of rhetoric, No Child Left Behind might be effective. As policy, however, I have my (many) doubts. For one thing it is not clear to me that failure, by itself, is a bad thing. As Thomas Sowell pointed out once, we all drop out of school at some point. The efficient level of output of bads is generally not zero and some failure is optimal.

An interesting paper on No Child Left Behind is "Can No Child Left Behind Close the Gaps in Pass Rates on Standardized Tests?" in the January 2006 issue of Contemporary Economic Policy. The authors, Claus Hoerandner (an undergraduate!) and Robert Lemke, decompse the effects of student achievement into controllable (manipulable through policy) and uncontrollable factors. They find that most of the gap in passage rates between schools is due to uncontrollable factors and thus NCLB should not be expected to close achievement gaps. The really cool thing about the paper is that they calculate elasticities for each of the variables with respect to pass rates. For example, they find that the elasticity of pass rates with respect to local tax revenue is inelastic (0.597).

So hypothesizes The Economist. I prefer three blades to one, but I am not sure I need a 5(+1) blade razor. You hear little about the price of replacement blades for these new-fangled razors, but if this article is correct, that might change.

Raghuram Rajan is the chief economist for the IMF. Like his former U Chicago colleague and co-author Randy Kroszner, Rajan is in his early 40s and a professed classical liberal. Rajan recently gave a speech criticizing US moves to block foreign direct investment in the US, while defending the IMF as a liberalizing force. Kroszner chaired the session but did not comment.

Here’s an interesting interview with Rajan on how to reform economic policy in India. Money quote:

What the Left is against is monopoly capital. That is also what the liberals — people like me — are against. We are against monopoly. But we argue the statist economy almost invariably creates monopoly capital. The licence raj creates privileged industrialists, who occupy the commanding heights of the economy along with the public sector. It creates privileged workers who occupy privileged positions while the real work is done by the unorganised labour. So the point is, privilege is created by restrictions on competition. What we are striving for is a far more competitive structure which creates opportunity. So what you want is to strive for equality of access — to the market, education, capital.

ADDENDUM: Rajan certaintly seems prone to wishful thinking about the results of dirigiste policies than, say, the young Stanley Fischer. But will having a free-marketeer as the IMF's chief economist actually turn the IMF from a negative to a positive force for economic freedom? I'm skeptical.

Earlier this week, Tyler Cowen quoted Rajan and Zingales on the question of why poor institutions persist when we know that they are an impediment to growth. The answer, according to R&Z, is that there might be pervese political equilibria favoring existing lousy institutions over reforms that would enhance economic growth.

Yesterday's WSJ has an article ("In India, the Path to Growth Hits Roadblock: Slums," p. A1; no link) illustrating the point. Some excerpts:

They [millions of poor Indians] have the power to derail the best-laid plans of investors and government with votes, protests and the courts. India desperately needs to fix its archaic infrastructure--potholed roads, rundown airports, and decrepit power plants--if it wants to seriously compete with China for investment. Yet getting it done often runs counter to the interests of those just beginning to share in the new prosperity....

In Mumbai ... the paupers have real political clout. Slum-dwellers constitute half of Mumbai's 12 million citizens, and they are faithful voters....

The Mumbai airport ... needs t