I would never have believed it.

But, in a just-completed working paper with my long-time coauthor and pal, Kevin Grier, we find some pretty interesting things:

1. Democracies grow faster. (Yeah, you might think so, but this result is controversial)

2. New dictatorships grow very slowly, and very old dictatorships grow very slowly. But durable dictatorships in the middle years actually grow nearly as fast as democracies. A nonlinear specification fits almost exactly.

3. And this is consistent with a clear prediction from Mancur Olson. Interesting that he got it so right:
A rational autocrat with a long time horizon will not confiscate his subjects’ assets, because this will reduce investment and future income and, thus, his own long-run tax receipts.
Now, suppose the autocratic ruler is uncertain about whether he will be in charge much longer. He may be uncertain about this because he fears invasion from a yet-more-powerful domain, a coup d’etat, a revolution, or an assassination. When uncertainty gives him a short-term view, he has an incentive, no matter how gigantic his empire or how exalted his lineage might be, to seize any asset whose total value exceeds the discounted present value of its tax yield over his short-term horizon. With a sufficiently short planning horizon, it pays any autocrat not only to confiscate all readily seizable assets but also to repudiate his debts and to generate inflation by printing money for his own use, no matter how great the long-run cost….
Any autocracy must sooner or later have a short time horizon. In addition to the external and internal enemies and accidents that can end any autocracy, there is the fundamental problem of succession. If an autocrat were to create a body with the power to guarantee an orderly succession, that body would have to have more power than anyone else in the society. But it could only have this power if it had more power than the autocrat—and thus the capacity to overrule the autocrat—in which case the society by definition would not be an autocracy. (pp. 47-8, Olson, Mancur. (1997). The New Institutional Economics: The Collective Choice Approach to Economic Development. In C. Clague (ed), Institutions and Economic Development: Growth and Governance in Less-Developed and Post-Socialist Countries.)

If you want to see the paper, it is here... We would love to have comments.

KB Grier
MC Munger

A communique from reader Thomas Edwards, posted here with permission:

The most important issue is the elimination of Diet Vanilla Coke, which I have noticed has also led to a parallel reduction in the distribution of Diet Vanilla Pepsi. DVP is basically only available in large grocery stores now in the Washington, DC, metro area. Before DVC was eliminated, DVP was available in most convenience stores as well.

Diet Black Cherry & Black Cherry Vanilla Coke tastes pretty bad to me.
I know there are others in my camp because of the number of online
petitions for the return of Diet Vanilla Coke.

Unfortunately, we lovers of the pure diet vanilla colas appear to be
in the minority, as lots of people do seem to like the Black Cherry
varieties.

Here is a BBC story on the discontinuation of Vanilla Coke, Diet Vanilla Coke, and Diet Coke with Lemon. Wikipedia is all over the history of Diet Vanilla Coke here.

Btw, Co-blogger Craig wondered whether I'd noticed Coca-Cola Blak. Yes, I mentioned it here in December.

J-Walk blog has an interesting link to a data-to-visual site looking at the State of the Union speeches over time.

Teddy Roosevelt and Calvin Coolidge used the words "should" and "ought" a lot, while Pres. Bush's SOTU speeches include a lot of instances of the word "applause"?

New public choice society president Randy Holcombe announces by email:

The 2007 annual meeting of the Public Choice Society will be held jointly with the European Public Choice Society in Amsterdam. The meeting will offer a great opportunity for interaction with the worldwide public choice community, and I want to encourage everyone to attend.

The meeting will begin with an evening reception on March 29 and will run through April 1.

That is a Thursday-Sunday schedule. I imagine the meetings will be conducted on the European model. That means an academic/university locale and included snacks, coffee breaks, and meals, usually in an attractive setting (museum/castle/etc). Also, you'll need to send in an actual paper (work in progress) in order to get on the program.

This will be a useful conference for anyone doing applied political economy. Also, I hope it will prove to be an important event in revitalizing the public choice as a research program. For now, I encourage everyone to look up this conference and consider attending, presenting a paper, organizing as session, and enjoying everything that Amsterdam, one of Europe's most interesting cities, has to offer.

Here is my earlier post on this past April's European public choice meetings. The 2007 call for papers will soon appear on the Public Choice Society web page. The 2008 world public choice meetings will most likely be in San Antonio (my home town...Thanks, Randy!).

Richard K. Vedder has a lot to say about higher education, and he hasn’t exactly had a problem getting heard: He writes regularly for The Wall Street Journal, has published a book about college costs and prices, and has testified before Congress on several occasions. Last fall, Vedder got a major bump in visibility when Education Secretary Margaret Spellings included him among 19 members of a federal commission to study the future of higher education, and he has taken full advantage, becoming (arguably) the panel’s most outspoken and (inarguably) most entertaining member. [Full Story.]

John J. Miller at NRO gives us the 50 greatest conservative rock songs.

[HT: Dave Reed]

Put my money on Six Flags. Price discrimination works.

The most talked-about change at Cedar Point amusement park in Ohio isn't the new supersized swing that catapults thrill seekers 125 feet into the air.

It's the drop in prices -- from a $5 cut in admission for adults, to cotton candy that now sells for a quarter. Just about every food item is cheaper or the same price as last year.

Cedar Point hopes the moves will increase attendance after a down year in 2005. Knott's Berry Farm, owned by the same company, has made similar price reductions at the theme park in Southern California after a disappointing year.

Six Flags, meanwhile, has increased the gate price at most of its parks. Adult admission at Six Flags Great Adventure in New Jersey is $59.99 -- that's up $11 -- but the price does not include a number of discounts the park is offering.

[HT: Ann Zerkle]

[Link to Walter Oi's classic article on the Disneyland Dilemma.]

Campaigns and Elections Magazine has just named Capital University College Republicans as one of the TOP 5 Republicans Clubs in the nation. The magazine ran an article that featured the best Republican and Democrat clubs in America, and the Capital CRs made the top 5 list! (Click here to see the article.)

The Energy Information Agency has weekly average retail price of premium gasoline for six European countries and the United States from 1996 through 2006. I threw the data in STATA and just took a time plot without controlling for inflation or exchange rates:

While many people here in the states insist there is a grand conspiracy to keep gasoline prices high in the United States, the conspiracy would have to be world wide because the good folks in the Netherlands are taking it hard as well.

So, how do we know the price increases are likely demand driven (rather than supply driven)? This picture from the EIA tells a lot:

As crude oil becomes more valuable out of the ground relative to being in the ground, we expect the quantity of crude oil extracted in the world to increase. There are a lot of twists and turns between the well head and the gasoline pump, and crude oil doesn't have to be turned into gasoline, but if the price of gasoline is increasing around the world even while the quantity supplied of crude oil is increasing this is consistent with world-wide demand shocks.

[STATA data file]

If you’re visiting Davenport, Iowa, don’t miss the huge “layer cake” that goes on display today at the Enchanted Inn on the western side of town. Local resident R.T. Schroeder and friends made the “cake” from 481 one-dollar bills and some Styrofoam. The Quad-City Times notes: “The layers of the cake plainly show the face of George Washington.”

The Times Online reports that a 63-year-old British man has been convicted of harassment for anonymously sending a woman letters containing more than £3000 in cash.

Following up on Larry's post below, living here in the heart of DP country we have had the Berries and Cream DP for a few months.

My suspicion is that the Berries and Cream Dr. Pepper is likely to be a short-run production. Why? Because it's not good, at least for this Diet Dr. Pepper fan. Of course, there's no accounting for taste, so my prediction may be wrong.

As for increased competition for shelf space, Larry failed to mention Coca-Cola Black [I think] coffee laced soda, and all the new "low calorie energy drinks" that somehow defy the first law of thermodynamics.

Here in Arlington, the soda "aisle" is now augmented by pallets of 12 packs of Coke or Pepsi products positioned in the prime real estate at the end of the aisles. One of the two is "on sale" for $2.50 a 12 pack every week, but never both. That is an interesting equilibrium.

Dr. Pepper has recently introduced a Berries and Cream flavor, to go along with its regular and Cherry Vanilla versions. Pepsi has announced that this fall it will bring out Dole Sparklers, “an entirely new line of sparkling juice drinks,” and Sierra Mist Cranberry Splash.

Another great libertarian-conservative has landed a spot in the professoriate. Allison Hayward, aka the Skeptic, will be joining the faculty at George Mason University School of Law as an Assistant Professor in the fall. I don't know much else about her, but according to the school's press release, she used to be Chief of Staff to a former FEC Chairman.

From the May 26, 1906 NYT:

Today, a case of soda costs about $5 on sale, whereas the $2.50 per case in 1906 is $52.30 in 2004 CPI adjusted dollars (EH.net). Ouch.

The link between media violence and youth violence is tenable, yet it is intuitively appealing, and evidently has been for some time.

From the May 26, NYT:

No more are German youths to read of the adventures of Jack Harkaway among the Indians; no longer will they be able to spend their pfennings on translations of "Texas Jack" and "Nick Carter." Even if international complications come, the Prussian officials are determine that these pernicious influences shall be removed. A decree has just been issued by which the police forbid the street sale of American dime novels. The declare that the case of Wilhelm Klein was only the latest of a long series of similar cases, and they have made up their minds that the influence of the dime novel is responsible for a deplorable outbreak of juvenile crime.

Considering the Illinois governor's plan to “privatize” the state lottery by selling off the monopoly right to run the lottery, business columnist David Nicklaus of the St. Louis Post-Dispatch asks precisely the right questions:

Why is the state in the gambling business in the first place?

For that matter, why should each state's lottery be a monopoly? Wouldn't the state's lottery players, at least, be better off if several companies were allowed to compete for their business?

And he notes:

The state doesn't run its own casinos; a scheme of licensing, regulation and taxation works fine. Similarly, Illinois regulates and taxes cigarettes and liquor but doesn't sell them directly. Ultimately, states run lotteries for the same reason Willie Sutton robbed banks: It's where the money is.

The money will still be there to be taxed, Nicklaus is pointing out, if there are competing private lotteries. What he should also have noted is that the goal of making Illinois lottery players better off (i.e. increasing the payback percentage above its current 56 percent) is antithetical to the goal of deriving revenue from taxing the lotteries. Let's suppose that an untaxed, competitive, and efficiently run lottery would pay back 95 percent (that's about what casino slot machines pay). The state's tax revenue can only come from reducing the payback percentage below 95 percent.

Suppose Illinois would agree to move to competing private lotteries only if the tax on those lotteries would yield the state as much as its current monopoly lottery operation. With a tax wedge that large, competing lotteries can give lottery players better returns (above 56 percent payback) only to the extent that the current state administration of the lottery consumes more resources than competing private firms would, plus the extent that private firms would sell more lottery tickets than the state monopoly does (at any given payback rate). There are probably gains to be made in both places, but I’d expect them to be relatively modest.

A news item (via WSJ's "Best of the Web Today"):

Kirk Alvers has done the math: He's being charged $3 for a gallon of gas but $18 for 36 ounces of ketchup.

Alvers and other Basha High students are seeing red over a school policy that charges them 25 cents for two half-ounce packets of ketchup at lunch. The policy was enacted recently to limit waste and messiness in the school's lunch area.

Actually his math is wrong--the price works out to $9 for 36 ounces of ketchup. Maybe he needs The Diff.

John Allen Paulos explains, in English rather than equations, a recent paper from the JPE.

A recent NBER paper finds (the quote is from a summary of the paper hence the use of the third person):

As the number of restaurants per capita increases so does BMI. The average BMI will rise by 0.09 percent if the per capita number of restaurants increases by one percent. The authors note that the rapid increase in obesity in the 1980s is partly an "unintended consequence of the campaign to reduce smoking." On balance, however, they conclude that "the increase in the per capita number of restaurants makes the largest contribution to the BMI outcome, accounting for 54 percent of the growth" in a pooled sample of men and women.

The findings may well be correct, but it seems to me that the reverse could be true--that restaurants tend to locate near fat people. More precisely, fat people might eat out more often and restaurants probably make location decisions based on the propensity of people in an area to eat out.

I'm also a bit suspicious of the results because "The authors can account for 79 percent of the change in BMI for males and one percent of the change in BMI for females."

The May 25, 1906 NYT is full of interesting stories. The headline "Battleship Building Race: Private Firm Beats Government Both in Time and Cost" caught my eye. Evidently, there was an "experiment" in which two battleships were to be constructed at the same time, one by the Newport News Shipbuilding Company and the other by the government at the Brooklyn Navy Yard.

The keel of the Louisiana was laid on Feb. 7, 1903, at Newport News, and the keel of the Connecticut, which was to be built in competition, was laid down at the Brooklyn Navy Yard March 7 of the same year. The Louisiana was launched Aug. 27, 1904, and the Connecticut followed her into the water a month later, Sept. 29. So far the race had been close, but soon the private workmen forged ahead, and the result was that the Louisiana was delivered ready for service probably some months in advance of the Connecticut.

The last sentence is a doozie:

The Louisiana cost $3,992,000, while the Connecticut has already cost all of the total appropriation of $4,212,000, and the department has asked Congress for $380,000 more.

From the May 25, 1906 NYT:

Frederick Vrooman, an assistant trainmaster, told the commission that he had received gifts of money in amounts from $5 to $20 from various coal companies, which he named.

"Why did they give you this money?" questioned Mr. Glasgow.

"I suppose they expected some favors."

"Were the favors granted?"

"Not that I recall."

"Then why did you take the money?"

"Well, if there was money to be given out I was there to take it."

"Is that your position now?"

"It always has been."

In the May 25, 1906 NYT is a bizarre story:

OSHKOSH, Wis. - Complaint has been made against a farmer living about five miles southwest of Neenah that he has been hitching four of his seven children to a corn plow or cultivator which he compelled them to drag through a ten-acre truck garden while he guided it....The farmer, it is alleged, was rearing them [the children] in ignorance.

Co-blogger Mike DeBow requested info on Wal-Mart's effect on productivity growth. It'd be out of character for me to forego an opportunity to blog on Wal-Mart.

Here's a NYT article by Virginia Postrel that cites (and links to) a McKinsey study finding large productivity effects arising from Wal-Mart.

Now to a different Wal-Mart topic. From ABC News:

Tuesday night, during a sometimes raucous meeting, the city council voted unanimously to take Wal-Mart's land by power of eminent domain. It's a power the Supreme Court affirmed for municipalities in a controversial New London, Conn., ruling, in which the city wanted to take private property for a commercial development.

Instead, city planners have looked for a more historic-looking development, with buildings that include apartments on the second floor and shops and restaurants on the ground floor.

Sigh--more fallout from the awful Kelo decision. On the other hand, if Wal-Mart has ever benefitted from an eminent domain land grab there might a bit of rough justice here. Hopefully being on the losing side of an eminent domain issue will deter Wal-Mart from future development via eminent domain.

In teaching Money and Banking, I explain the government’s revenue (and the public’s burden) from expanding the money supply by comparing it to how a counterfeiter enriches himself at everyone else’s expense. Steve Hanke in today’s Wall Street Journal (subscription required) recounts how the enrichment part wasn’t lost on Serbia’s rulers:

... in 1990, the Serbian parliament, which was controlled by Slobodan Milosevic, had secretly ordered the Serbian National Bank (a regional central bank) to issue $1.4 billion in credits to Slobo's friends. That illegal plunder equaled more than half of all the new money the National Bank of Yugoslavia had planned to create in 1991.

Federal Reserve Governor Randy Krosner on why the Fed looks at a wide variety of indicators:

We are not quite sure where the economy is going, or even where we are," Kroszner said.

I have a question: Can anyone steer me to a source that supports the following assertion, made by Harvard economist Kenneth Rogoff in a recent op-ed?

Consider the following stunning fact: together with a few sister “big box” stores (Target, Best Buy, and Home Depot), Wal-Mart accounts for roughly 50% of America’s much vaunted productivity growth edge over Europe during the last decade. Fifty percent! Similar advances in wholesaling supply chains account for another 25%! The notion that Americans have gotten better at everything while other rich countries have stood still is thus wildly misleading. The US productivity miracle and the emergence of Wal-Mart-style retailing are virtually synonymous.

It's not that I disbelieve it, I just have never seen such a claim made (or defended) before this. Anyone who can shed some light here is invited to either leave a comment or email me -- medebow at samford dot edu

Thanks!

BTW, Rogoff briefly discusses the research of the U. of Minnesota's Thomas Holmes on the reasons for Wal-Mart's success, which includes a pretty cool animation of the firm's growth over time.

You might find the following interesting/enlightening:

* Mark Steyn considers inter alia the Senate vote conferring Social Security coverage on illegal immigrants.

* The Opinionator makes some demographic predictions for the next hundred years.

* Roger Scruton has some thoughts on John Stuart Mill, on the bicentennial of his birth.

* Kevin Hassett reports on the current troubles of certain high-profile plaintiffs’ lawyers.

* The 2006 edition of the Pacific Research Institute’s ranking of the states as to tort law is now available online.

(cross posted at Southern Appeal)

THE COLUMBUS DISPATCH: Capital University President Ted Fredrickson canceled his European vacation and rushed home yesterday to deal with an operating deficit three times as large as the one expected this year at the liberal-arts college in Bexley.

The estimated deficit is $5.4 million rather than the $1.8 million discussed in early May, according to a May 16 memo from Fredrickson to the faculty and staff. The amount grew after "new information came to light" on May 15, the memo says. [Story.]

Ken Blackwell, the Republican candidate for Ohio governor, appears to be abandoning his constitutional Tax and Expenditure Limit (TEL) Amendment in favor of a legislative TEL.

COLUMBUS - The Ohio General Assembly today enacted a key component of Republican gubernatorial nominee Ken Blackwell's economic recovery agenda state government spending controls. The Ohio House and Senate passed provisions limiting state government spending increases to 3.5 percent over the previous state budget. In addition, the new law requires a supermajority vote of the legislature to increase spending beyond the 3.5 percent ceiling.

I have written favorably about TELs here, but we argue that legislative TELs have been ineffective in the states that have tried them.

I came across The Migration Information Source which has loads of immigration data for the U.S. and the rest of the world. One telling graph is one which compares net migration levels between the U.S. and other "select" countries.

Not surprising, the U.S. strongly dominates other countries. I think the reasons for this are fairly obvious - both demand-side and supply-side influences combine to make the U.S. the choice destination of the world.

The site also includes data on the percentage change in foreign born population from 1990 to 2000 by state. I threw those numbers into STATA and gathered the the economic freedom scores for the various states from The Fraser Institute (thanks Robert Larson of DOL).

I calculated the average economic freedom score amongst the states from 1989 through 2000 and plotted percentage change in foreign-born population from 1990-2000 against the average economic freedom:

What's going on? Perhaps, just as the U.S. likely attracts more immigrants because it is relatively more free compared to other countries, states attract foreign-born immigrants, in part, by differences in economic freedom.

To formalize the relationship depicted above, I regressed percentage change in foreign born population on the average economic freedom of the state, average economic freedom squared, a BORDER variable that takes a value of one if the state shares a Mexican border, and a SOUTH variable that takes a value of one if the state was a member of the Confederacy.

. reg perchange efiaveb efiaveb2 south border,r

Regression with robust standard errors                 Number of obs =      50

                                                       F(  4,    45) =    6.01

                                                       Prob > F      =  0.0006

                                                       R-squared     =  0.3053

                                                       Root MSE      =  52.611

                             Robust

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

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

      efiave |   349.9555   173.7281     2.01   0.050     .0491525    699.8619

     efiave2 |  -23.46284   12.54747    -1.87   0.068    -48.73474    1.809065

       south |   56.80823   23.40067     2.43   0.019     9.676869    103.9396

      border |  -6.236955   22.77956    -0.27   0.785    -52.11735    39.64344

       _cons |  -1215.791    594.182    -2.05   0.047    -2412.534   -19.04658

Perhaps economic freedom is positively correlated with economic opportunity, which would attract domestic and foreign immigrants alike. Perhaps economic freedom is negatively correlated with state and federal law enforcement which might correlate with illegal immigration - yet the data reflect legal immigration. Therefore, there are likely two positive influences of improved econoimc freedom on immigration rates. On the other hand, less economic freedom tends to correlate with less opportunity but with more government (welfare and enforcement). The reduced form results suggest that the attractiveness from more economic freedom/less government outweighs the attractiveness of less economic freedom/bigger government (although the relative magnitudes of enforcement and opporunity are not identified).

My point is not to suggest making any particular state less free in order to dissuade immigrants from locating there. Rather that immigrants seem to be attracted more to opportunity states than welfare state(s). Whether increased foreign-born population correlates with reductions in economic freedom over time is actually an interesting question (anyone know of evidence testing this? My initial take below the fold).

[STATA Data File]

. reg diffefi perchange,r


Regression with robust standard errors                 Number of obs =      50

                                                       F(  1,    48) =    1.85

                                                       Prob > F      =  0.1799

                                                       R-squared     =  0.0426

                                                       Root MSE      =  .33136

                             Robust

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

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

   perchange |    .001144   .0008405     1.36   0.180     -.000546     .002834

       _cons |   .0085029   .0913761     0.09   0.926     -.175221    .1922268

Last Friday, the Minnesota legislature announced it had reached a "deal" to tax Minneapolis residents (and tourists) by 0.015 pennies per dollar of taxable sales to build a new stadium for the Minnesota Twins. The new stadium is anticipated to cost somewhere in the neighborhood of $500 million (give or take 10%).

One of my studies was the focus of a story on the ABC affiliate in Minneapolis last Friday. The study focused on the impact of new stadiums on team finances. Not surprisingly, team owners stand to gain considerably when the public finances a new stadium. Video here. I still have a face for radio and I need to learn not to interject so many cynical chuckles during a telephone interview, but I commend Brad Sattin for finding me on the Internet and being willing to run with the story.

There was no announcement about the anticipated size of the Twins stadium, but given recent trends it will likely be between 40,000 and 50,000 seats. Let's take the higher number, which would imply the new Twins stadium will cost approximately $10,000 per seat.

Today the Minnesota state legislature also approved a new stadium for the Minnesota Gophers (see a trend here? Next the Vikings will get a new stadium). The interesting thing is that the Gophers stadium is anticipated to be 50,000 seats and cost only $248 million or $5,000 per seat. (announcement here).

Why the big difference in stadium costs? There are likely additional land costs in downtown Minneapolis incurred for the Twins stadium that the Gophers won't have to pay. However, I doubt the land costs are roughly half the cost of the stadium. Here in Arlington, the city is anticipating the land to cost a little more than one fourth of the total stadium cost.

What else is different? Perhaps there are different costs in building a football stadium compared to a baseball stadium. Yet, previous construction figures do not suggest the differences are that dramatic. More likely the difference is that the hopes and dreams of the Twins ownership include more numerous and more luxurious luxury suites - subsidized by the public dollars.

While it is not immediately clear that university administrations are immune to the principal-agent problem more clearly at work in the professional venue racket, I bet university administrations make stadium size and expenditure decisions closer to the social equilibrium. [I have no solid empirical evidence for this, just a hunch]

While the math in Minnesota doesn't seem to add up, this example is not unique. There are other college campuses (Stanford comes to mind) building stadiums with (ostensibly) public dollars, union labor, and with the same characteristics and regulatory constraints as professional venues but at half the cost.

Perhaps the Vikings can play in Gopher stadium instead of the Gophers playing in the Vikings's stadium?

My former student Ann Zerkle, now a Ph.D. student at Clemson, and I have a paper in the Journal of Economics and Finance Education. Here's the abstract:

This paper looks empirically at the financial aid award practices at a small, Midwestern, private university. By awarding more financial aid, colleges and universities effectively price discriminate; that is, they charge some students more than others. The results indicate that students with better high school records and test scores and with more financial need are given more aid. Nonwhite students also receive considerably higher aid. While these results can not be generalized, this analysis should be easy to replicate at other colleges.

Perhaps I need to spend more time away from northwest Georgia, but I never would have guessed that such an entity existed. I suppose it is a trade group or lobbying association.

How did I learn of the organization's existence? In this article about China's imposing a tax on chopsticks to combat deforestation.

HT: Tax Foundation blog.

From The Weekly Standard (with a HT to Mitch Kokai of the Locker Room):

This is the life of Lisa Cunningham, a 40-year-old mother and former social worker who lives outside of Boston. Her kidney failure was caused by Type 1 diabetes that she's had for years. Her only hope for better health and the semblance of a normal life is a kidney transplant. Until then she must continue to wait on the national list--which pairs deceased (cadaver) donors with potential transplant recipients--for at least five more years, because the demand for organs far outstrips supply. Lisa tells me her doctor says she might not live five years.

The real story here is the sorry state of the waiting list, maintained by the nonprofit United Network for Organ Sharing (UNOS) under a monopoly contract with the Department of Health and Human Services. About 92,000 Americans are on the list, most waiting for kidneys, yet only one-fourth will receive transplants within the next year. Eighteen people die every day because they have not found a donor in time.

So says Olympic Gold medalist Joey Cheek in this past Sunday's Parade magazine (no link yet; available here after 5/24). Cheek will be majoring in economics at Duke, Yale, Princeton, Georgetown, or Stanford.

Hat tip to my better two-thirds. Sunday, the day she called my attention to the Parade piece, just happened to be our anniversary.

From the AJC:

RALEIGH, N.C. — It had the makings of quite the endorsement: former North Carolina basketball coach Dean Smith cheering lawyer Rachel Lea Hunter on to victory in her race for a seat on the state Supreme Court.

"As a loyal Democrat to another loyal Democrat. Win Rachel! Win!'" read the quote from Smith on Hunter's Web site, posted above a picture of the pair at last week's North Carolina Sports Hall of Fame banquet.

But there's a problem: Smith doesn't remember saying it. "I never really met her," he said Monday. "They just took our picture."

Ms. Hunter does, however, appear quite skilled at legalistic hair-splitting:

In a statement, she pointed out the Web site didn't specifically say Smith endorsed her.

"The statement said that I had met Dean Smith. I did. ... I did not say that he endorsed me," she said.

From NPR:

First Fuel Banks has six gas stations in the St. Cloud, Minn., area, where customers can buy as much gasoline as they like, whenever the price seems right. First Fuel then stores the gasoline in its oversized tanks, or buys futures contracts for really long-term purchases.

Thousands of First Fuel customers are able to fill their tanks for less than $2 a gallon. CEO Jim Feneis says that a few hundred of his customers actually locked their prices in at less than $1 a gallon.

Gulf Oil is rolling out a similar program in 11 northeastern states.

Alas, this poor bloke didn't think to sue Big Tobacco. From the May 21, 1906 NYT:

AMSTERDAM, N.Y. - Louis Allis, a young man of this city who has been smoking sixty Turkish cigarettes a day, is to be taken to the Utica Insane Asylum. Last night he became violent and it was necessary to summon two policemen to take him to the station house.

He continually calls for cigarettes. The doctors say that his nervous system is entirely broken down and he may not recover.

Wow, Turkish smokes can be strong, and sixty a day would be 5 per hour in a twelve hour day? That's a lot of chain smoking and I imagine one's nervous system might be effected. Nevertheless, the Insane Asylum?

In the bizarro world that is the current culture surrounding cigarettes, private individuals sue Big Tobacco, governments sue Big Tobacco, and governments depend on said individuals purchasing cigarettes for tax revenue to fund their projects.

Thus, we find ourselves in the strange predicament that the state and cigarette companies want us to purchase cigarettes - and three packs a day (60 smokes) would do wonders for the tax revenue of a state and profit for a cigarette company - but not smoke them (at least not in the workplace, not in a restaurant, not in a bar, not within 50 feet of an entrance, not in your car, not around kids less than 10, not within 100 feet of a school).

Just last week, the great leaders in Austin, TX, passed a $1 per pack tax to fund primary and secondary schools here in Texas (bold prediction: actual tax revenue will be less than projected, and promised property-tax reductions will be short-lived if they are not stillborn).

The IMF has acknowledged that it lost money last year, reportedly “its first annual loss in decades”.

How is that possible? Evidently the IMF’s interest income from loans to needy national governments failed to exceed its substantial outlays on staff salaries. The Associated Press says that “net income recently came in far below expectations.”

The IMF is apparently having a tough time keep its loan volume up. Argentina and Brazil have repaid their loans early. Meanwhile, “Asian countries that were hit by financial crises in the 1990s have built up huge reserves so they would not have to resort to the IMF for bailouts should they encounter financial difficulties.” Result: “Funds available for lending are at an all-time high of about $200 billion”.

What to do? Return the money to the donor nations and shrink the IMF staff? Don’t be silly. Convene a committee of experts!

Managing Director Rodrigo Rato named a panel of advisers, including former Federal Reserve Chairman Alan Greenspan and European Central Bank President Jean-Claude Trichet, to evaluate how to finance IMF operations.

Rato has charged the committee with finding a “new financing model for the IMF”. In other words, find a way to convince the governments of wealthy nations to give the IMF an annual appropriation, instead of expecting it to self-finance with loan interest.

In other IMF news, the retiring Anne Krueger’s slot as first deputy managing director of the Fund will be filled by John Lipsky. As is to confirm the suspicions of ruling-class conspiracy buffs everywhere, Lipsky is Vice Chairman of JP Morgan Investment Bank. Do you even need to ask whether he’s a member of the Council on Foreign Relations?

From the May 19, 1906 NYT:

BOSTON - The Chelsea Ferry Company, said to be the oldest business enterprise in the country, celebrated today its two hundred and seventy-fifth anniversary...The company was founded in 1631 by Thomas Williams and originally ran from Boston to Winnesimmet Village, now Chelsea.

From the May 19, 1906 NYT:

Prof. Hans Molisch of Prague, according to the London Mail, has been able to read a newspaper by the mircobic glow emanating from a sausage.

All meat - beef as often as in 52 cases out of 100 and veal in 50 out of 100 - contains the microbe, which projects a greenish-white light. With sausages it is not so frequent, but is, when present, much stronger....

Prof. Molisch asserts that the presence of these microbes in meat is no sign of decay, but rather the contrary, as in no case have they been found in meat unfit for human consumption.

One recurring theme in the historical NYT is the relative lack of appeal to the federal government for policy changes and, more importantly, federal dollars. Whether this is because the income tax had yet to be passed is an interesting thought question.

Here is an example of what I mean. From the May 19, 1906 NYT:

There is room for doubt about the system of kindergarten instruction for young children in families where proper home care and influence prevail, but there can be no question about the benefit of taking the children of the poor from their wretched surroundings a few hours each day and subjecting them to the mild teaching and the wholesome association afforded by the "mission" kindergartens...

There is no way in which such of our philanthropic millionaires as consider it disgraceful to die rich can better bestow one or more of their superfluous millions than in helping the society to establish, endow, and make perpetual enough kindergartens to meet the crying need for their regenerating influence upon the swarming population that is so apt to breed vagrancy and crime.

I occasionally find myself wanting to defend my Christianity and/or Catholicism to other libertarians who seem to believe that faith and reason are mutually exclusive. Indeed, one of John Paul 2's later encyclicals is entitled Faith and Reason, where he argues the two are compatible and reinforcing, since both faith and reason are ordered to the truth.

However, there are always fellow believers who succeed in making the rest of us look like buffoons to the rest of the world. (This is still one of my favorite posts.) There is a group called PrayLive that has decided to pray for world peace...no, wait, for an end to poverty...no, wait again. They are praying "for the lowering of gas prices." Official site here, news report about a DC rally here, news report about a Hollywood rally (big surprise) here. I would blog more about this, but I have to go to the cathedral to pray that God will reduce my mortgage payment to $100 a month.

During the flare ups over gasoline prices, it seems that many people are a little too flippant about gasoline producers and their profits. Statements like "Exxon-Mobil could halve their profits and still do okay", or implicit hints that making gasoline isn't that hard and therefore doesn't deserve a profit, seem common place. Yet, how many of us know exactly how to make a gallon of gasoline, much less produce, quality control, and deliver 100 million gallons of gasoline a month?

The logistics required to pull this feat off, not once but every month, are mind numbing (and that is why I run regressions).

In the May 18, 1906 NYT is the following article:

1,000,000 TONS OF RAILS

...an aggregate of 1,000,000 tons of steel rails for delivery in 1907.

This is an unprecedented amount of business for this time of year in the history of the steel trade. It is estimated that the tonnage booked by the various companies is more than 700,000 tons above the actual production of the United States in 1905.

There is a common buzz about tuition increases on public campuses around the country. Students and parents are outraged that college is "so expensive" and there are activists that decry that college is becoming unaffordable for all but the elite.

Whenever tuition increases say by 10% in a given year, there are doomsday predictions that the price of a public university college education in 2030 will be $200,000 or more. Yet, the claim is simply not credible because, assuming relative prices stayed constant, the nominal price for Harvard would be about $1.2-$1.5 million for four years.

The little-mentioned fact is that tuition increases are not correlating with an equal increase in spending per student. In other words, if tuition increases by 10% the university's budget is not increasing by 10%.

What's going on? Here in Texas (and I wager in the rest of the country as well), the state contribution to per-student expenditure has been decreasing over time. In the mid 1990s the burden was 60-40 in "favor" of the student. Now the burden has flipped so that it is 60-40 in "favor" of the state. Tuition might increase, but not the per-student spending (alas).

Perhaps my intuition is supported by this "report" concerning the price of college in the U.S. While I have some reservations about certain conclusions, the report gets most things correct and they include this graphic:

Without the actual data (I'm looking) it is hard to do any more than "eye-ball metrics" using the ocular estimator. However, there seem to be two regimes in the data. One is when tuition and appropriations trend together (1980-1982, 1986-1988, 1996-2000) and another when tuition and appropriations head in opposite directions (1982-1985, 1988-1994, 2000-2005). Appropriations seem to head south right around recessions - go figure.

However, the trend lines do not suggest an indefinite rise in real tuition rates.

From an interesting article on European labor markets:

The proportion of part-time workers in the United States has held steady at about 13 percent for more than a decade, according to the Organization for Economic Cooperation and Development, based in Paris. The number of Europe's temporary workers - people who may work a full week but move from company to company - is soaring. In the decade from 1990 to 2000, Manpower tripled its business, Lemonnier said.

In France, Germany and Italy, more than 12 percent of people working have temporary contracts. In Spain, the figure is more than 30 percent, and in the Netherlands it is 15 percent. Indeed, the percentage of Spanish workers in temporary and part-time jobs is so high that the government in Madrid proposed this week a bill to cut the number of employees on temporary contracts.

But weren't France and Germany, unlike America's Cowboy Capitalism, supposed to be models of employment stability etc.?

An extra class combined with my usual extracurricular writing schedule has made this an extra busy semester for me. The good thing is that I now have several working papers making the rounds and several other papers to clean up once field comps are finished.

A paper I wrote with Pete Leeson, "Good for the Goose, Bad for the Gander: International Labor Standards and Comparative Development" was recently accepted for publication in the the Journal of Labor Research. Pete and I look at the issue of international labor standards, especially those pushed by the International Labour Organization (ILO). The ILO argues that certain labor standards (such as collective bargaining) are so universal as to be "core" labor standards akin to human rights.

As Pete summarized the paper on The Austrian Economists:

We investigate this claim by examining the timing of labor standard adoption in highly developed countries. These nations were all once as poor as today's developing countries and made the tradeoff between labor standards and income in the past. Their experience therefore suggests a safe income threshold for adopting similar labor standards in the developing world.

Using current GDP per capita levels and growth rates in Sub-Saharan Africa, we determine how far these developing countries are from achieving the development threshold the highly developed world reached before it created various labor standards. We find that every ILO-proposed labor standard is highly premature for Sub-Saharan Africa. These countries are between 100 and 300 years from reaching this threshold. ILO-proposed policy is exactly backward. A substantial relaxation of labor standards is the appropriate labor policy for this part of the developing world.

Click on the title of the paper above or here for an Adobe copy of the paper.