Division of Labour: July 2006 Archives
July 31, 2006
A cop with a sense of humor?!

This morning, I'm dropping the critter off at her day camp which is located inside one of the state office buildings downtown. As we walk in the lobby we see an Ohio State Highway Patrolman (the OSHP has jursidiction on state property in Ohio) who looks at me wearing a Florida State University t-shirt.

Cop: "Sir, I'm sorry but you can't come in here with that shirt on. Only OSU shirts are allowed."

Me: "Ha, ha. I can't win. Just last week the guy at Will Call at the Detroit Tigers game told me when I showed him my ID that he couldn't give me a ticket because I was from Columbus."

Cop: [Smiling now.] "That's funny. I've given tickets to lots of people from Michigan."

Posted by Robert Lawson at 06:52 PM in Funny Stuff

Goggins dies in SF marathon

The former editor of Wired magazine, Bill Goggins, just died while running a marathon. He was at mile 24 and on a very respectable 7:24/mile pace (the exact pace of my last marathon) when he collapsed.

Also I just read about a young man who died of heatstroke during a run.

I'm sure Art de Vany will mention this when I see him next.

I guess I'll wait until about 8:00 before running tonight. It'll be down to 85 by then.

HT: Dave Reed

Posted by Robert Lawson at 06:42 PM in Sports

ESPN moment c. 1906

From the July 31, 1906 NYT:

The fifth game of the roller skating basketball championship played at Madison Square Garden rink last night resulted in a tie, the Colonial and Calvary teams each scoring 8(?) goals. The contest was close throughout and the teams were evenly matched. The game will be played over next week.

Posted by Craig Depken at 05:51 PM in Sports

Sunday baseball c. 1906

As a follow up on my previous mention of the test case pertaining to Sunday Baseball in 1906, the July 31, 1906 NYT reports:

Sunday baseball advocates got a black eye yesterday when Justice Blanchard handed down a decision in the Supreme Court denying their application for a writ of certiorari to review the adverse ruling of Magistrate Walsh against them...This is regarded as the death knell of Sunday baseball supported by the contribution box in lieu of an admission charge.

Posted by Craig Depken at 05:38 PM in Sports

Socialism debated c. 1906

In an editorial from the July 31, 1906 NYT:

[D]elegate Reid made this contribution to the debate:
The Socialists have never done anything but talk. Socialism has existed as long as Christianity, and it has done nothing. Every time a man is dissatisfied or has a dispute with his wife he becomes a Socialist. The Socialists are abusing everybody except themselves, and according to them every man is a crook or a faker who is not a Socialist.

Little(?) did Mr. Reid realize that within twenty years Socialism and Socialists would act decisively and would most assuredly abuse themselves along with everyone who stood in their way.

The writer goes on to define a Socialist in the following way:

Mr. Reid might have added that every man who loathes work and wants the State to support him has the primary qualification of a Socialist; that all who covet their neighbor's property are on the high road that leads to the temple of Socialism' that whoso is destitute of a backbone and so lacks the self-reliance which that important articulation imparts to its possessors is by predisposition a Socialist; that all who are envious of the accumulations of industry and capacity and are forever railing at capital would find themselves quite at home in a Socialistic meeting place.

Amen, brother.

Posted by Craig Depken at 05:33 PM in Politics

Bad economic reasoning of the day?

I'll open up the comments section for this one. From a Money Week.com story concerning five major trends in the world, number two concerns the "experimental money system" in which the following two paragraphs appear:

Worldwide, oil is calibrated in dollars. But what is the dollar calibrated in? More and more oil producers are beginning to ask. And the answer is that the dollar floats in the air like a willow leaf. If the winds are favorable, it stays up. If it gets caught in a downdraft, it falls.

We say that this is an`experimental' financial system, because nothing like it has ever existed. Not that this is the first experiment with lighter than air money. No, the U.S. Treasury did not invent pure-paper money. In the modern era, it has been tried many times – but never with happy results. And never, ever on such a grand scale. Now, practically every currency in the world is backed by dollars. And the dollar itself is backed by nothing. In fact, the whole world’s financial system rests on the shoulders of a single currency – which everyone knows is a shirker.

Posted by Craig Depken at 04:16 PM in Economics  ·  Comments (1)

Quote of the day
In democracy it's your vote that counts; In feudalism it's your count that votes.

Mogens Jallberg

Posted by Craig Depken at 02:43 PM in Law

Reading for the day?

From the Annals of Improbable Research:

Hair Soy Sauce: A Revolting Alternative to the Conventional by Alexander Tse-Yan Lee

The study is available here


"Cannibal Crickets On A Forced March for Protein and Salt," Stephen J. Simpson, Gregory A. Sword, Patrick D. Lorch and Iain D. Couzin, Proceedings of the National Academy of Sciences, vol. 103, no. 11, March 14, 2006, pp. 4152-6.

This study is available here

Posted by Craig Depken at 02:38 PM in Science

Berry Econ Major at Cannes

Kudos to my advisee Ryan Simmons for winning an award for his short film "Cannes Food."

Posted by E. Frank Stephenson at 10:05 AM in Economics

July 30, 2006
Palestine c. 1906

I am slowly wrapping my brain around the Middle East situation and its long history. Most people are familiar with the Biblical history of the Jewish people in the region, but what is less familiar (at least to me) is what has been going on over the past two-hundred years or so.

A lot of talk show hosts insist that there was nothing called "Palestine" before the 1940s. Perhaps that is true in some sense. However, from the July 30, 1906 NYT comes this interesting one-paragraph story lifted from The British Weekly:

Some twenty years ago Palestine meant little to the majority of Jews. Now all is changing. Nearly every year fresh colonies have been established till now they number of thirty, and time is adding to their number and extent. One-third of Palestine proper is once again Jewish soil. So anxious are the Jews to again get possession that they endeavor to purchase all that comes into the market.
The last sentence is so very important. If it were true, it would suggest that the beginnings of the Jewish state had its roots in the free market. If Jewish settlers properly and legally purchased the land on which they were forming their settlements/colonies in the early 1900s, it is entirely possible that the two groups (Palestinians and Jews) could have peacefully co-existed even as the Jewish settlements/colonies grew.

On the other hand, much like there is concern in this country about foreigners "buying up" too much land, there could have been confrontations over time. One wonders if the first and second world wars hadn't occurred, along with the ever expanding pogroms and massacres of Jews around Europe (and European Russia) during the first half of the twentieth century, whether there would be a completely different situation in the Middle East today.

Posted by Craig Depken at 11:10 AM in Culture

Weather forecasts c. 1906

It is interesting to read the weather forecasts from the early 1900s. They are almost too general, they come with very little specifics. I am no meteorologist, but I wonder if it is because a) the science of forecasting the weather was not fully developed, and/or b) there was little reason for most people (beyond farmers, perhaps?) to be terribly concerned about the detailed specifics of the weather.

Here's an example, from the July 30, 1906 NYT:

The Weather Bureau forecast for Monday and Tuesday in the cotton States is as follows:

North Carolina - Showers Monday; Tuesday, partly cloudy; fresh west to northwest winds.

South Carolina - Occasional showers Monday and probably Tuesday; light to fresh southwesterly winds.

Georgia - Showers Monday; warmer in northwest portion; Tuesday, fair; warmer in northern, showers in souther, portion.

Eastern Florida - Showers Monday and probably Tuesday; variable winds.

Western Florida and Alabama - Showers Monday; Tuesday partly cloudy and warmer.

Mississippi - Partly cloudy Monday; warmer in southeast portion.

Louisiana - Generally fair Monday and Tuesday; warmer Monday in southeast portion.

Eastern Texas - Fair Monday and Tuesday.

Western Texas - Fair Monday and Tuesday.

Now, July/August in Texas is usually anything but "fair." What with temps in high 90s and low 100s for days on end, to term that "fair" is either northeastern bias or testament to the hardiness of the folks who lived in the south without air conditioning.

In a separate article, there is a table of temperatures in New York City - one of the first I have come across. The notes to the table suggest the following:

The average temperature yesterday was 76; for the corresponding date last year it was 74; average on the corresponding date for the last twenty-five years, 73.

Posted by Craig Depken at 11:00 AM in Science

July 28, 2006
Private health care c. 1906

From the July 28, 1906 NYT:

Chicago - Dr. Frank Billing's bill for attending Marshall Field during his last illness is $25,000. It was presented as a claim against the estate on Wednesday, and Probate Judge Cutting, sitting in chambers, allowed it.

The bill includes charges for day and night attendance and the time consumed in travel between Jan. 6 and Feb. 17. The claim was not contested.

In 2005 dollars, the bill is approximately $540,740 for (I think) 43 days worth of work or $12,575 per day or $209 per hour, assuming 24 hour care. Given that it seems the doc didn't work 24 hours a day, the per-hour charge would be a bit higher.

Not being a health economist, I have no basis of comparison. But would it seem unreasonable that today the last month-plus of life, given full attention, would cost much more or less than $550,000 dollars? Perhaps Mr. Field could have been saved given today's technology - I can't remember now what was exactly the cause of death - for which Mr. Field might have been willing to pay more.

If the end result is the same, $500,000 today or in 1906 makes no difference. On the other hand, if the result is different, the same nominal cost would imply a dramatically different real cost of health care.

Posted by Craig Depken at 05:58 PM in Economics

Misleading Headline c. 1906?

The headline of an article in the July 28, 1906 NYT:

Leaves $1,000,000 for Humanity

Well, it isn't really for all of humanity, but only the humanity that would go to Presbyterian Hospital of Philadelphia and would be served by the American and New England Antivivisection Societies.

Posted by Craig Depken at 05:48 PM in Misc.

Sunday Baseball c. 1906

Hard to believe, but in the early 1900s there were "Sabbath enactments" in various states which precluded all sorts of activity on Sundays. One that has proved thorny during the 1906 baseball season was the ability to play ball on Sunday.

The July 28, 1906 NYT discusses a test case concerning Sunday Baseball that was to be decided in New York Supreme Court.

To date, there have been at least five different weekends on which Sunday baseball was played and one or more players or managers were arrested for violating the Sabbath enactments. The wording of the laws differed from state to state, but they had in common the ban of "public sport," a term that had a hazy definition.

It seems pretty clear that all involved agreed that charging admission for a baseball game on Sunday would be an example of public sport - and to date that had not been attempted. The alternative, as it has been tried multiple times in 1906, was to have a baseball game in which there was no admission charged but "where the onlookers choose to deposit voluntary contributions in boxes placed in the vicinity of the entrance to the ground."

From the article:

Lawyer Lewis Stuyvesant Chanler, representing the clubs, said the case was brought in order to have a decision from the Supreme Court as to what the Penal Code meant by public sport, which were the words used in the section against Sabbath violation, and maintained that, as the games on the Bronx Oval were not for admission fees, they did not come within the wording of the statute...

Where do the police weigh in?

Deputy Police Commissioner Mathot said a definite ruling was wanted as to what was a violation of the Sabbath and what was not. The police made arrests and the prisoners were almost invariably discharged by the Magistrates the next morning. He explained that failure to interfere on the part of the police led to complaints from religious societies. He conceded that there were no complaints in this particular case and added:

"We are thoroughly indifferent in the matter, but want to get a ruling which will place the police in the position of knowing what action we are to take."

Now, I admit to not being a legal scholar, but it does seem a bit odd that religious societies would want the police to interfere with Sunday baseball. In fact, all such Blue Laws have always interested me. Are they passed to suppress temptation of the flock or the temptation of all? If it is to suppress temptation to the flock, what does this say about the power of the religion/religious leaders to dissuade those from breaking the Sabbath? If it is to reduce temptation to the non-converted, what's up with that? By what right do the religious stop the non-religious from doing what they want?

It is also interesting that the courts are being asked to determine what "breaking the Sabbath" means. Although there are still Blue Laws of various types on the books in different states/cities, it seems that the church-state differences have become less blurred over time. Why should the state determine what can and cannot be done on a Sunday, as a more special day than Tuesday or Thursday?

In the purely economic area, it would be fascinating to obtain revenue figures from these Sunday games. At the time, attendance to a baseball game would range from $0.25 to $0.75, depending on where the seat was located. The free-rider equilibrium would suggest that the donated gate would be less than the required gate, ceteris paribus on the number of people in the stadium. However, if the free gate encouraged more people to show up, the donated gate might actually have been greater than the revenue generated by positive ticket prices.

Posted by Craig Depken at 05:45 PM in Sports

Linguistic Gymnastics

Rome has recently gotten its own NPR station; we now have clear reception compared to the static-laden broadcasts from Atlanta and Chattanooga. I don't consider it a big gain (no surprise there, eh?), but I do occasionally listen while I'm in my car.

I just happened to be listening last weekend and caught a few minutes of "Fresh Air." Host Terry Gross was interviewing Geoff Nunberg about his book Talking Right. His thesis is that Republicans have twisted the meaning of words like values and colorblind. Ho-hum, hardly a novel thesis; perhaps even correct (though no more so than lefty language distortions like calling Social Security taxes "contributions"). Then Nunberg let loose a big groaner:

"... and, most notably, it is what the right has done with freedom in expanding the word in the hope that people would see in the right not to have to pay a minimum wage or the right not to have to provide healthcare would be seen as the same kind of freedom that Washington's soldiers struggled for at Valley Forge."

Yeah, right--the American Revolution was all about a "living wage" and single-payer health care. And the colonists probably didn't think the taxes imposed by George III were high enough. What foolishness.

Listen to the program here; my transcribed quote of Nunberg begins at about 3:45.

Posted by E. Frank Stephenson at 02:41 PM in Misc.

July 27, 2006
Is that whiplash?

The BBC reports that Metallica will make their songs available for download on iTunes and other music sites. This is a 180 degree turnaround from the six or more years that the band has refused to do this for fears that the pirates would make it impossible to ever sell a digital song again.

I suppose 40 million iPods might indicate that the whole music biz is changing - for the better? - and a band like Metallica, which will likely have less new music relative to their old music, might be smart to allow folks to buy their music one song at a time.

From the BBC story:

A statement on the band's website said: "Over the last year or so, we have seen an ever-growing number of Metallica fans using online sites like iTunes to get their music.

"So, in continuing with the tradition of offering our albums for sale online as well as making our live concerts available for download in their entirety we are now offering fans the opportunity to obtain our songs individually."

Posted by Craig Depken at 07:29 PM in Culture

An Economic Approach to Conservation

A piece of economic fiction that I wrote some time ago for abetterearth.org essay contest (2nd place) has just been published in a slightly revised form in Laissez-Faire. The essay is called "An Economic Approach to Conservation: The Rhino Conservation Act of 2005." The The essay was inspired by 1) a wonderful presentation by David Schmidtz at the 2004 IHS Social Change Workshop on his research into elephant conservation; and 2) reading Jonathan Wight's delightful book Saving Adam Smith.

Posted by Joshua Hall at 11:03 AM in Economics

Reverse Causation?

From the NYT:

Older people who keep driving are more likely to stay out of nursing homes or assisted living centers than those who give it up or who have never driven, researchers report.

Their study, in the current American Journal of Public Health, found that nondrivers were four times as likely as drivers to end up in long-term care.

I haven't read the entire NYT article, much less the JPH article, so I might be wrong. Nonetheless, I suspect this finding might be an example of reverse causation--people who are more likely to avoid nursing homes (because of good health) are more likely to have the good health to continue driving.

Posted by E. Frank Stephenson at 09:49 AM in Economics

Incentives Matter: Taliban Soldier Edition

From the Financial Times (via Tyler Cowen of MR):

The Taliban has found a way to recruit fighters that is less about winning hearts and minds and more about the enduring appeal of cold hard cash.

They are paying fighters up to $12 (£6.50) a day to fight the fledgling Afghan National Army, which pays only $4 a day to its soldiers in the field, according to military officials.

Posted by E. Frank Stephenson at 09:25 AM in Economics

Oh, What a Tangled Web Morons Weave....

...when first they practice to recycle. (Apologies, not least because this line is so often misattributed)

Check this:

The Liquor Control Board of Ontario has introduced 35 Tetra Pak wines into 600 Ontario stores since last year, citing environmental friendliness as its rationale. But some environmentalists say the packages just add to the huge volumes of landfill in the province.

Wait...the LCBO has introduced new wines into stores? I thought entrepreneurs did that sort of thing.

But it gets better, yes it does. Consider this passage, later in the article:

There is currently no recycling facility in Ontario for Tetra Paks. The only paper mill that handles the province's Tetra Pak recycling is in Michigan.

...According to LCBO spokesperson Chris Layton, "It was the most successful wine launch ever, and consumers really embraced it."

...A Tetra Pak is made up of three materials — thin plastic outside (20 per cent), aluminum inside (5 per cent) and a fibrous middle layer (75 per cent).

Perks says no technology exists to economically separate the layers on a mass scale.

Not so, says Christina Seidel, executive director of the Recycling Council of Alberta. She says such technology does exist but only if it's supported by a market to make the recycling economically feasible.

In Alberta, unlike Ontario, the cost of recycling Tetra Pak products is built into the purchase price, she says. "You pay what it costs to have your container recycled."

And, because there's a deposit return system for Tetra Paks, about 60 per cent of such packaging sold is recycled, says Seidel. However, although there are future plans for it, wine is currently not sold in Tetra Paks in Alberta.

Some points:
1. If someone could make money recycling, there would be a plant for it in Alberta. But there is no recycling plant in Alberta.
2. The problem is not the lack of a market to support the recycling. The lack of a market means that the recycling process is wasteful, in terms of the yield, after accounting for energy use.
3. All Tetra Paks sold in Alberta have the recycling costs built into their price.
4. No Tetra Paks are sold in Alberta (though there are "future plans for it.")

Reading #1 through #4 above make me start a "Gumby Theatre" bit: "Brain hurts!" "Sorry!"


(Nod to RL, who needs to be careful, lest he get his butt whipped by the recyclozombies in Ontario. Their favorite joke: "That's not funny.")

Posted by Michael Munger at 09:01 AM in Economics

July 26, 2006
A good excuse for light blogging

I wanted to warn of light blogging from me - although I will try to keep up with the New York Times from 1906 - as the newest member of the Depken clan arrived this morning (7/26/2006) at 10:39am CDT.

requisite baby image here

Catherine (Cate) Allison Depken (for the moment?) weighed in at 7lbs 5 oz and 21 inches. Everyone is healthy and happy - although going from one child to two (Campbell is 2yrs 2mos) seems more daunting by the hour.

Posted by Craig Depken at 06:13 PM in Misc.

Score one for the good guys.

The Norwood, Ohio takings case is in.

In the absence of other public benefit, the fact that an appropriation of property will provide an economic benefit to the community does not satisfy the public-use requirement of Section 19, Article I of the Ohio Constitution — The void-for-vagueness doctrine applies to statutes that regulate the use of eminent-domain powers — Courts shall apply heightened scrutiny when reviewing statutes that regulate the use of eminent-domain powers — The term “deteriorating area” as a standard for an appropriation of property is unconstitutional — R.C. 163.19 is unconstitutional in part.

SOURCE: Ohio Supreme Court

Posted by Robert Lawson at 12:14 PM in Economics

Non-Price Rationing

The family and I were at an ice cream store at Myrtle Beach. It was night time at the mall, and the whole place was packed.

We were in line quite a while. As the line moved (it moved fairly quickly, but was long), I noticed that the line stayed almost EXACTLY the same length. The probability of line length remaining constant for that long is basically zero...unless something else is going on.

There was another ice cream store, about 1/4 mile walk around the lake. It was much less crowded. People came in, looked at the line, looked at the other store....and either walked around the lake or not, depending on the length of the line.

I watched for 20 minutes. The length of the line did not vary by more than 3 feet (about two person body-widths) that whole time. Yet at least 50 people came in, and made an independent marginal decision.

No guidance, no sign that said "Maximum line length: 50 feet" or "IF the line is longer than THIS, you are better off walking around the lake."

When you can look at around you, and see the beauty of spontaneous order, the whole world is magical. And, you don't mind standing in line, because it gives you something to do.

Of course, all this may explain why my wife has a "standing rule" (that's a waiting in line pun): I don't get to point these things out to her. She is not all that interested in my epiphanies, for some reason.

Thank goodness for blogs.

Posted by Michael Munger at 11:28 AM in Economics

Division of Labour Cafepress Store!

By popular demand, DoL is proud to offer this line of quality merchandize courtesy of the good folks at Cafepress. I have purchased the short sleeve t-shirt and it came out great, but I haven't checked out the rest of the options. So the rule is Caveat Emptor folks.

The products use one of two images. The first one is the DoL logo with the pins and the second is a facsimile of page one from the Wealth of Nations. The shirts have the logo on the front and the WN image on the back.

Both images can be found below the fold:

Read More »

Posted by Robert Lawson at 09:10 AM in Economics

July 25, 2006
r u a nerd?

Tyler Cowen asks 4 nerdy questions. Ok, I'll play along.

1. What do you maximize?

In a world of limited resources and curved utility functions, it doesn't make sense to maximize only one thing. I get warm fuzzies from doing lots of things. These things include: sex, being a husband, running, being a dad, hiking, traveling, having a successful career, good food and drink. Some things that are not high in my utility function but apparently are in others': electronics, music, jewelry, the beach, more than one kid, more than one woman, fancy cars/houses/clothes.

2. Can you offer a simple model of yourself, using one a few equations or a paragraph or less?

I would offer up this system of equations.


Xi = f(MONEY)


I work hard to get money so I can get/have/keep the things I like.

3. What is it you hate?

Um. I don't really care enough about most things to actually hate.

Increasingly I hate nationalism and all its manifestations: World Cup, Olympics, immigration debates, etc.

Still I fly an American flag at home and I was pumped about Floyd Landis winning the Tour. Go figure.

4. What is your most absurd view?

I think that in a world without government people would just "get along" with each other. Really. I think that. Ample evidence notwithstanding.

Posted by Robert Lawson at 03:38 PM

Thirsty Thursdays

Bob's post noted that the ballgame we caught in Asheville featured $1 beer night. It turns out that Asheville is the official birthplace of Thirsty Thursdays. From The Oregonian (6/3/04; no link--excerpt via Lex/Nex):

It [Thirsty Thursday] is part of the fabric of the Class A South Atlantic League franchise in Asheville, N.C., the official birthplace of Thirsty Thursday. Hanging on a wall of the office of Ron McKee, general manager of the Asheville Tourists and a friend of Cain's, is a plaque of the registered "Thirsty Thursday" trademark.

"We've had Thirsty Thursdays for 24 years," McKee said. "It's really popular here."

The [Portland OR] Beavers are one of about 20 teams that have McKee's permission to use the trademarked slogan. Nashville; Tucson, Ariz.; and New Orleans are other Pacific Coast League teams that have followed McKee's promotional lead.

McKee said he has witnessed some of the beer-related behavioral problems that Cain has seen at PGE Park, but he isn't about to end the promotion.

"I'm not saying we haven't had a little of that," McKee said. "If there are problems, we're just as likely to have them on a Monday or a Tuesday than on a Thirsty Thursday.

"We have a thousand people on the concourse who never see a pitch. They just stand there and socialize. But we keep our lines pretty long -- they can't just come in here and guzzle."

The Rome Braves were not allowed to sell beer on Sundays during their first two seasons ('03&'04) in Rome but were allowed to sell on Sundays beginning with the '05 season. It doesn't seem to have made much difference; after controlling for other factors related to attendance, two co-authors and I find that Sunday attendance in 2005 didn't differ from Sunday attendance over the previous two seasons. Apparently it is CHEAP beer that spurs attendance.

Posted by E. Frank Stephenson at 02:33 PM in Sports

Lies, D@#$ Lies, and Statistics

Charles Murray takes on NCLB.

Posted by E. Frank Stephenson at 11:48 AM in Politics

(Unsolicited) Advice for New Runners

Every so often someone will ask my advice about how to start running. Having a few minutes to kill today, I thought I'd write down a few pieces of advice (below the fold).

Read More »

Posted by Robert Lawson at 11:00 AM in Sports

More Quick Hits

1. Here's a how-to for having an Al Gore approved birthday. (HT: Wilson Mixon)

2. Sex in outer space apparently comes with lots of complications--almost enough to kill the mood.

3. Debra Saunders examines allegations of Chinese killing Falun Gong practicioners to sell their organs for transplant. If true, this sort of underground organ market is much more morally repugnant than any sort of incentives for donation being proposed for the U.S.

4. US News has a nifty article on UPS's use of technology. (I owe someone a HT on this one, but I don't recall where I saw it. My apologies.)

5. The Washington Post has been running a superb series on the follies of the farm subsidy program. Here's an excerpt from one article:

Then, on Feb. 1, 2003, the shuttle exploded. To ensure recovery of the debris and pay for emergency costs, President Bush issued a federal disaster declaration. As an unintended result, most of East Texas was then eligible for livestock funds. Denton County's livestock owners collected $433,000, records show.

"Speaking personally, I didn't think it was necessary at that point in time," said Calvin Peterson, an 81-year-old rancher who heads the local farm committee. "It might have been more political than anything."

In Henderson County, about 100 miles southeast of Dallas, Nico de Boer felt the same way. When he arrived from the Netherlands 17 years ago, de Boer had 90 acres, a house, one barn and fewer than 200 cows. Today, he has 1,000 acres, multiple cow barns and sheds, 650 cows that produce 3 million pounds of milk monthly, a BMW in the driveway, a swimming pool, and two more farms in neighboring counties.

The rolling hills surrounding his sprawling farm receive a generous average of 40 inches of rain annually. When the shuttle exploded, pastures were full and there hadn't been a drought or any other type of weather disaster in years, records show. But after the presidential disaster declaration, John Reeves of the local USDA office informed livestock owners in Henderson County they were eligible. They eventually collected $751,083 despite no shuttle damage.

(HT: Wilson Mixon)

Posted by E. Frank Stephenson at 10:36 AM in Misc.

July 24, 2006
WSJ Letter to the Editor

I submitted this letter to the WSJ last week, but assume they didn't run it. For what it's worth:

Dear Editor:

Rudolph Penner of the Urban Institute says ("As Bigger Piece of Economic Pie Shifts to Wealthiest, U.S. Deficit Heads Downward", 7/17/06, A2) the Bush tax cuts "should have led to more income than expected for all wage earners, not just those at the top, since the majority of wage earners got a tax cut." Mr. Penner fails to realize that across-the-board cuts in marginal tax rates will have different incentive effects up and down the income distribution. Suppose that a government with progressive income tax rates ranging from a low of 15 percent to a high of 75 percent reduced tax rates across the board by one-third. The top tax rate would then fall from 75 to 50 percent. After the tax cut, taxpayers in the highest tax bracket who earn an additional $100 would get to keep $50 rather than only $25, a 100 percent increase in their after-tax wage. Predictably, these taxpayers will have a strong incentive to earn more taxable income after the rate reduction. Meanwhile, the same rate reduction will cut the bottom tax rate only from 15 to 10 percent. In this range, the tax cut means that an additional $100 in gross pay increases take-home pay to $90 from $85, just a 5.9 percent increase. Because cutting the tax rate exerts only a small effect on the after-tax wage among lower income taxpayers, the incentive to earn additional income will be largely unchanged. The bottom line is that when all rates are cut by approximately the same percentage as was the case with the Bush tax cuts, the increase in the incentive to earn will be greatest in the upper income tax brackets.


Robert A. Lawson
Social Philosophy and Policy Center, Bowling Green State University
School of Management, Capital University

Posted by Robert Lawson at 02:45 PM in Economics

My Grab Bag

As Bob noted, I've been away for a few days for some Mount Mitchell hiking and a ballgame in Asheville. It was particularly good to have my former colleague Wilson Mixon join us for dinner and the ballgame.

No four mile run for me yesterday, but I hitched Pee Wee's trailer-bike to mine and we spent a few hours on the Silver Comet Trail. The Pumpkinvine Creek Trestle (a 750 foot long, 126 foot high bridge) and the 800 foot Brushy Mountain tunnel are Pee Wee's favorite parts of the trail.

Thanks to co-blogger Craig for carrying the load while Bob and I were away. Some things that caught my attention over the past few days:

1. Public radio's "Marketplace" program ran a story on the black market for handicapped parking hang tags in Austin, Texas. "They're being sold at flea markets. We've even heard of purchases on eBay," says a police officer on the selling of the hang tags. Markets in everything, I suppose.

2. Also on the topic of parking, here's Tim Harford on a study about incentives vs. appeals to morality in an effort to reduce parking violations. Once again we see--repeat after Steve Landsberg--people respond to incentives.

3. Also from the incentives matter department--Craig Newmark points us to a Mahalanobis post suggesting that Britain's high rate of teen pregnancy is attributable to its high subsidies for teenage parenting.

4. My former student Dan Alban was pictured on Bow Tie Bill's blog. Bill has some fine ties but his line won't be complete until he offers a bow version of the Adam Smith tie.

5. Friday's WSJ (sub req; no link) had an article on recent American success in the Tour de France. If the article is correct, Americans' more entrepreneurial approach is a key factor. The article claims that European riders are "put through regimented training programs" and "tend to train the way cyclists have always trained and ride exactly the way they have ridden for decades." By contrast, American cyclists have innovated (or, perhaps more accurately, more readily adopted innovations)--from Greg LeMond's going with clipless pedals and special handlebars for time trials to Lance Armstrong's using a lower gear in the mountains. (Please, no email on entrepreneurship and doping. I'm aware of, but have no opinion on, the allegations about Armstrong.)

6. Eric Crampton blogs on television shows with public choice themes.

ADDENDUM: Two more items.

7. USA Today had a piece on governments paying people for undertaking various water conservation measures such as installing low-flow toilets. I can't help but think these efforts have at least as much to do with feel-good nanny-statism as saving water. If reducing water use is the true goal, why not just raise the price of water? People will respond to the incentive to save water in many ways, including but not limited to installing low-flow toilets.

8. Regarding my recent post on silly terror targets, a reader wrote to suggest that many of the potential targets that seem silly as targets for radical Islamic terrorism (e.g., the kangaroo farm or popcorn factory) might not be so silly when thinking about targets for radical environmental terrorists. A superb point--many thanks for the comment.

Posted by E. Frank Stephenson at 10:47 AM in Misc.

Grab bag

Been away for a while where among other things I bagged Mt. Mitchell (6684'), the tallest peak in the eastern U.S., with co-blogger Frank. I also ran a 4 mile race (24:22); caught a low-A baseball game in Asheville, NC ($1 beer night!); and a saw an enjoyable and decidely higher quality baseball game yesterday in Detroit (beers were $8!).

So catching up on a couple things:

Dan Klein (and co-authors) has a couple articles in Critical Review about bias in the academy. In one article he used some data from a College Republican survey at Capital University.

And if you have $1 million to invest, Sanderson and Stocker, Inc. offers the Economic Freedom Select fund. Marshall Stocker wrote a nice article for the Cato Journal on "Equity Returns and Economic Freedom."

Posted by Robert Lawson at 08:47 AM in Economics

July 23, 2006
Nigerian email c. 1906?

Printed on page 6 of the July 23, 1906 NYT:

Sir: As an old experimentalist I have discovered a way to increase the speed of marine vessels indefinitely, making them the fastest means of transport in the world. I cannot afford to get wide patent rights, nor can I exhibit a model, without divulging my secrets. Do you think that any of your readers would be able to tell me how to get the matter taken up?

Posted by Craig Depken at 12:57 PM in Culture

Immigration Reform c. 1906

From a letter to the editor in the July 23, 1906 NYT:

[t]here seems to be no occasion whatever for the enactment of any additional restrictive immigration laws. The existing law is restrictive enough. It very properly prohibits the landing of criminals, dependents, habitual paupers, women of bad character, those afflicted with contagious or other incurable diseases, and other undesirable classes of immigrants. It does all in the way of selection that should be done, and is even more restrictive than it should be. It seems, if any legislation is needed, it would be a modification of existing law rather than its amplification.

That sounds familiar.

Posted by Craig Depken at 12:51 PM in Politics

Public Choice c. 1906

From the July 23, 1906 NYT:

In the course of a speech before the "Business Men" of his vicinity, ex-Senator George E. Greene of Binghamton, speaking of the recent action of the President and Congress relating to the packers, asked with a show of indignation:
Why the necessity of putting Federal employes and appointees over lifelong, experienced business men, whose money, talents, and reputations are all at stake to guarantee business integrity?

Is it safe to assume that a Government employe, usually underpaid, and of possibly questionable or no experience, selected perhaps because of political influences, can affix the stamp of genuineness, of reliability, to the everlasting pacification of an satisfaction to the American or foreign public when its sense of humor or intelligence is aroused? Should not the guarantee of the integrity and the honor and business capacity and good sense of business men afford at least equal security?

The paper editorializes that Mr. Greene's questions are similar to the arguments used in defense in defense of slavery:
How, it used to be asked, can it be credible that the slave owners whose property and prosperity are directly involved, would really stick to the system of slave labor if free labor would actually be better for them? And how can any one suppose that a master would maltreat or injure a slave whose efficient and cheerful labor is indispensable to the raising of his household?

Finally, the paper editorializes about the qualifications of the government meat inspectors:

They are not underpaid. They are not selected because of political influence. They are chosen after a searching competitive examination, and the law requires that the use of any political influence in their behalf shall be regarded as prejudicing them. Their examination is framed to bring out their experience, and it counts substantially in the rank they attain.

The paper points out "undoubtedly honesty of the highest grade does in the long run pay, but there are `business men' in considerable numbers who are such fools that they cannot see it."

Posted by Craig Depken at 12:26 PM in Economics

July 22, 2006
Potentially interesting history book?

Occasional tidbits in the paper from 100 years ago are suggestive of what might prove interesting history books (or dissertations? gasp!). How about this one from the July 22, 1906 NYT:

RICHMOND, Va - Frederick Smith, colored, one of the panel of twenty-four jurors summoned to try Jefferson Davis for high treason against the United States died in the city home here to-day. He was nearly 90 years old.

I wonder about the stories of the 24 jurors. They would prove more interesting (to me at least) than a book about the O.J. Simpson jury.

Posted by Craig Depken at 05:05 PM in Culture

Musings of the gentle cynic c. 1906

From the July 22, 1906 NYT:

  • Too many nightcaps are apt to go to a fellow's head.
  • Nothing trains a man's memory like lending money.
  • The people who tell their troubles are never gifted with a sense of humor.
  • In spite of the bookbinders, most books are bound by precedent.
  • Dyspepsia is a handy thing on which to blame a naturally bad disposition.
  • The average man hates to play poker with a bad loser almost as much as with a good winner.
  • There are men who labor under the delusion that if they should hide their light under a bushel the whole world would be dark.
  • Posted by Craig Depken at 05:02 PM in Culture

    July 21, 2006
    New York real estate c. 1906

    From the July 21, 1906 NYT:

    New Fifth Avenue Houses.

    Plans have been filed with the Building Department for two residences at 1,014 and 1,015 Fifth Avenue for William Hall's Sons. They are to cost $85,000 each. The architects are Welch, Smith & Provot.

    $85,000 in 1906 is about $1.8 million in 2005 CPI adjusted dollars.

    I don't know much about New York City, but the current address of 1014/5 Fifth Avenue is right near the Metropolitan Museum of Art. I googled the address and found the Goethe-Institut, a German Cultural outreach effort.

    As for the architects, they built elsewhere in the city and the region, including the Duke (as in Duke University) House at 1009 Fifth Avenue, right across from the museum and one of the few remaining mansions on Fifth Avenue.*

    * According to Wikipedia

    Posted by Craig Depken at 01:04 PM in Economics

    Interesting business ideas

    Uncommon Businesses is an interesting blog describing odd but successful business ideas.

    I think of it as "Markets in Everything" meets creativity and motivation.

    Posted by Craig Depken at 12:21 PM in Economics

    July 20, 2006
    Global warming c. 1906?

    This isn't really a science issue, but I notice that the heat wave of 2006 is very similar to reports of the heat (and shortages of ice, with subsequent price increases/investigations/indictments/outrage) in 1906.

    From the July 20, 1906 NYT:

    The Fifteenth Regiment of United States Cavalry from Fort Ethan Allen, Burlington, Vt., arrived early this afternoon at Hoosick, four mile south of this place [Hoosick Falls, N.Y.], after a fifteen-mile march from Shaftsbury, Vt., where they spent the previous afternoon and night.

    The heat, which made the march unbearable during the first four days, was the source of much trouble to-day, many horses having become exhausted and dropped in their tracks. Most of the animals were able to continue the journey after their loads had been removed, but several died. Just before the camp at Hoosick was reached two horses dropped dead.

    The heat has prostrated more than fifty men since the march commenced, last Saturday. At to-night's company review twelve in line fainted, and nearly all the men showed signs of great fatigue. Evening parade was dispensed with owing to the condition of the men and horses.

    Alas, there is no report of exactly what the temperature was, but it must have been fairly hot for the Army to call off the parade.

    What is obviously missing is the warnings that we receive today.

    Posted by Craig Depken at 02:08 PM in Science

    Phone company overcharges c. 1906

    Think your phone bill is sometimes suspiciously high (usually because of odd taxes that might add up to 30% of the total bill)?

    Consider this level of overcharge, from the July 20, 1906 NYT:

    CHICAGO - Under terms of a concession obtained by Mayor Dunne, the Chicago Telephone Company will refund the excess charges collected from its subscribers during the last four years. The total amount is $400,000, and approximately 1,000 subcribers have claims.

    If each claimaint received the average over the four years, the settlement would offset an average of $100 per year in overcharges, or $2,203.77 2005 CPI adjusted dollars. This sounds awfully high. Wouldn't we think someone would notice $2,000 dollars in extra cost per year?

    Perhaps only the truly wealthy had telephones at the time. Perhaps these folks were so wealthy that they had inelastic demand for phone services?

    Posted by Craig Depken at 01:55 PM in Economics

    July 19, 2006
    Too busy to care? c. 1906

    From the July 19, 1906 NYT:

    The Statue of Liberty on Bedloe's Island is to be painted. The goddess is to receive a coat within as well as without. In the eighteen years during which she has borne aloft her torch, she as been exposed to the salt winds of the Atlantic, and their action has begun to affect her bronze plates. A coating of verdigris has spread over them, and it is feared that unless something is done quickly they will be seriously weakened and the statue itself endangered....

    Signs of dilapidation are also seen about the island. In many places the walls are crumbling and the electric lighting plant has long been lacking the proper care. Capt. George C. Burnell, who has charge of the statue and the signal station on the island, denies the report that the stairway inside the statue is unsafe. He said it probably would become unsafe if neglected a few years longer. The work of rejuvenating the statue will be begun immediately...

    To a considerable extend the statue has been allowed to remain incomplete since it was erected. The foundations need to be finished off to match the pedestal, and the openings in the latter, which have been simply boarded up, will be supplied with iron doors. We will also put in an iron approach instead of the present wooden stairs, fix up the walls of the fort, which are tumbling down in places, and build a waiting station for visitors at the pier. Last but not least, we will paint the statue inside and out.

    Congress appropriated $62,800 for the project (about $1.3 million in 2005 CPI adjusted dollars).

    I wonder if the lack of concern about the Statue of Liberty was because the U.S. was not yet the superpower it was to become. While Roosevelt is doing his part to extend the influence of the United States, not until WWI and, perhaps especially, WWII will the Statue of Liberty come to mean something different?

    It is interesting to read about the rather blase attitude taken concerning what today would be considered by many one of the best symbols of the United States. However, it should be noted that the statue didn't become a national monument until 1924.

    Interesting tidbits:

  • Liberty Island used as hospital for Confederate Prisoners.
  • Congress authorizes New York Harbor for the Statue of Liberty and appoints Gen. W.T. Sherman to select site. He chooses Bedloe's Island. [Like it or lump it, W.T. Sherman was all over the place - from LSU to Total War to Reconstruction to Liberty Island.]

    Here's information on Bedloe's Island and a picture c. 1905

    Another time-line of Bedloe's Island a.k.a. Liberty Island

    Posted by Craig Depken at 05:08 PM in Culture

    How to be Web Smart

    As part of my eternal fight to reduce transactions costs to everyone, everywhere, through decentralized spontaneous orders.....

    I am pleased to point out a new web site that has so much cool stuff you will spend an hour looking at stuff you need you didn't even know you didn't have.

    How to be Web Smart

    There is a BUNCH of cool stuff out there, sites that you will love. An excellent waste of a hot summer afternoon.

    And this is no government database. It is a bunch of GREEDY, GRASPING entrepreneurs. They are doing this to try to make money.

    It all makes me so happy.

    Posted by Michael Munger at 02:32 PM in Economics

    July 18, 2006
    Define Unhappy

    Nomar Garciaparra tells Seth Mnookin about his sitdown with Red Sox Management shortly before he was traded:

    "The meeting was, 'We want to know why you are unhappy,'" says Garciaparra, who has never before publicly [talked about] what happened that day. "And I go, 'Et tu, Brute?' Because that is all I've been hearing for the last couple of years: I'm unhappy, I'm unhappy. I go, 'Where are you getting this? What am I unhappy about?"

    Yet according to Mnookin:

    At one point during the 2003 season, Garciaparra had confided to friends that he thought management was instructing the team's grounds crew to rough up the dirt in front of his shortstop position so he would have a harder time fielding balls. Garciaparra believed this was done so he would make more errors, lessening his value before he was signed a new deal. He also told at least one person he thought the team was bugging his phone.

    If the above story is true, it's hard to believe that you could be that paranoid about your relationship with your employer and be perceived as happy by those around you.

    Posted by Joshua Hall at 01:22 PM

    Intervention Begets More Intervention

    From the Boston Herald:

    Memo to Boston Globe gay and lesbian Guild employees: Get married or lose your domestic partner benefits.

    Globe staffers have been told that health and dental benefits for gay employees; domestic partners are being discontinued. Gay couples who want to keep their benefits must marry by Jan. 1.

    A memo sent to the Globe's Boston Newspaper Guild members, and obtained by the Herald, states that Massachusetts gay Guild employees can extend their benefits to their partners only if they marry.

    An employee who currently covers a same-sex domestic partner as a dependent will have to marry his or her partner by Jan. 1 for the employee benefits coverage to continue at the employee rates, the memo states.

    The policy change at the Globe, which devotes extensive coverage to gay issues, opens a new can of worms in the Bay State as employers rethink their domestic partner benefits in the wake of the legalization of gay marriage in 2004.

    Benefits for domestic partners were originally offered to gay employees because they couldn't legally marry, said Ilene Robinson Sunshine, a lawyer at Sullivan & Worcester.

    Now that gay marriage is legal in Massachusetts companies that offer benefits to gay employees; partners risk hearing cries of discrimination from unmarried straight couples.

    Let's get government out of the marriage game altogether. That is the way to be fair to everyone be they gay or straight (but probably not this guy).

    Posted by Joshua Hall at 01:13 PM in Misc.

    Some Advice for Aspiring Economists

    Trudie (Tyler) says:

    Two core groups of people are well-suited to be economists:

    1. You math GRE score is over 800, you are totally focused, you love working long hours on your own, and you have good enough letters of recommendation to get into a Top Six or perhaps Top Ten graduate school. Note that white Americans from this category have been partially preempted by competition from foreigners.

    2. You could be happy as an academic without much of a research career. Working at a teaching school is a rewarding life, albeit a poor one relative to your investment in human capital.

    I think Trudie overestimates the human capital investment necessary to go to a teaching school or a mid-level state school. Sure, if you go to Harvard and you end up teaching at a branch of the Penn-State system you probably over-invested in human capital because you could have had the same job by going to West Virginia.

    If, however, you want to teach economics and do a little research, the job market for economists is such that you can go to a lower-level program and get a tenure-track job at a fairly decent school. For example, look at the placements for WVU. Now I'm sure that many of the readers of MR would look down on teaching at a Gustavus Adolphus or a Penn State-Erie. But for someone who wants to teach economics and do a little research, those are good outcomes, especially relative to the investment in human capital. Note that Morgantown has a low cost of living and most of our students graduate in four years.

    And if you are good enough to land a JPE, you can end up with a really good job for the Fed.

    So for students interested in going to grad school because they want to teach economics and do a little research, know that you don't have to go to a top-ten program.

    Posted by Joshua Hall at 12:06 PM

    July 16, 2006
    Inflation targeting and asset price bubbles

    In the current issue of Newsweek, Stephen S. Roach of Morgan Stanley offers a critique of inflation targeting. He gets off to a weak start by attacking a straw man, the view that under inflation targeting “Presto – the economy is cured of any and all ailments.” Actually, the objective of CPI inflation targeting is much more modest: to cure the economy of one ailment, a CPI inflation rate higher than desired.

    Does it work? Cross-country evidence indicates that inflation fell by more percentage points in the 1990s in the countries that targeted inflation. But (as Ball and Sheridan found) since those were the countries that began with higher inflation, it isn’t clear what caused what: the desire to bring about a larger drop in inflation may have caused the adoption of inflation targeting, rather than inflation targeting causing a larger drop in inflation.

    Roach suggests that Greenspan’s inflation targeting was responsible for asset-bubble problems in the US economy. This is odd because (1) Greenspan had no explicit inflation target, and (2), as Roach recognizes, “Central banks, who have ultimate control over the flow from the liquidity spigot, are responsible for this dangerous state of affairs.” Under Greenspan, the Fed “slashed the federal funds rate to 1 percent and spurred the mother of all liquidity cycles.” In so doing, Greenspan was exercising his discretion, not following a rule. So it’s hard to see how any asset-bubble problems on Greenspan’s watch can be attributed to his (implicit) rule-following rather than to his discretion.

    Roach does make a valid point: “A CPI-type price rule could compound the negligence of bubble-prone central banks.” Hayek and Robbins made a similar argument about Fed policy in the 1920s: despite CPI stability, credit expansion pumped up the asset price bubble that burst in 1929.

    The remedy for this problem isn’t discretion; it’s a better rule (assuming we're stuck with having a central bank). In particular, a better rule would incorporate asset prices, directly or indirectly, rather than only consumer prices. An example of "directly" would be a gold standard, or a rule targeting an Alchian-Klein-type index, or a rule targeting an index of input prices. An example of “indirectly” would be a rule targeting a broad measure of per capita nominal expenditure (MV), as proposed by George Selgin, rather than only the CPI price level (P).

    Posted by Lawrence H. White at 12:55 PM in Economics

    July 15, 2006
    The Gentle Cynic c. 1906

    From the July 15, 1906 NYT:

    • Making a mountain out of a molehill appeals to the real estate speculator.
    • The people who write articles on how to succeed are not always able to sell them.
    • A fellow never knows he is in love till the girl tells him.
    • It is true that a woman promises to love, honor, and obey, but a man promises to endow her with all his earthly goods, so it's an even break.
    • A man never hears the best things that are said about him, because he is dead then.
    • Only a few of us can have our faces on banknotes. Most of us would prefer to have our hands on them anyway.
    • There are no return tickets issues from the frying pan into the fire.
    • The fellow who is looking for trouble frequently overestimates his capacity.

    Posted by Craig Depken at 02:18 PM in Culture

    Protect the fan makers c. 1906

    From the July 16, 1906 NYT:

    The fanmakers of Valencia, Spain, have petitioned the Government in Madrid, begging for no reduction of the tax on imported Japanese fans, for should such reduction be made it would bring ruin and desolation to Valencia, where thousands of families exist on the fanmaking industry.

    Posted by Craig Depken at 12:52 PM in Economics

    July 14, 2006
    The Font Wars

    I know almost nothing about typography, so I found this article from Sunday's International Herald Tribune, "Quirky serifs aside, Georgia fonts win on Web," to be very interesting and informative. From the opening:

    Log on to The New York Times's Web site, and you'll see it there. Just as you'll spot it on the Web sites of London's Frieze Art Fair, the architecture magazine Metropolis, the artist Damien Hirst, and on blog, after blog, after blog.

    All of these Web sites use the same typeface - Georgia. Typefaces slip in and out of fashion like every other area of design, but right now Georgia is the most fashionable one on the Internet. "A few designers have mentioned that there seems to be a 'Georgia revival' going on," says Matthew Carter, the British-born, Boston-based designer who developed Georgia for Microsoft in 1996. "It seems a bit young to have died and been revived already."

    Of course, I immediately logged onto the NYT website and found the font recognizable but pretty so-so IMHO. (I also discovered that Bruce Arena had been fired.)

    Clicking back to the Tribune article, I finished reading it with zest. How often we take for granted all the talent and resources that go into producing things just so we can take them for granted. And how crucial spontaneous capitalist order is to supporting the innovation of things we value without even realizing it. It made me wonder in which font "I, Pencil" was originally published.

    When designing my website I chose, with Kirznerian ignorance, to use Verdana. It just looked the cleanest. So I was pleased to read the story of this font in the Tribune article. The passage is also revealing of the many issues with electronic typography that readers can essentially take for granted.

    By the mid-1990s, as more and more people were using Internet and e-mail, we were spending so long reading information on screen that legibility became a critical issue. Concerned that none of the existing digital fonts were easily readable, Microsoft commissioned a collection of screen-friendly typefaces to be given away free with its Windows software. [Matthew] Carter [who developed Georgia for Microsoft in 1996] was asked to produce two, a serif and sans serif.

    As the most popular digital fonts at the time were sans serifs, he began with that. He started by analyzing why existing typefaces were so hard to read on screen, and worked out how to rectify the problem by focusing on the characters that are most easily confused - i, j, l and the number 1. Stylistically he made each one as clear as possible, by designing them in simple shapes with no superfluous details. He paid particular attention to the spacing between characters, having realized that this often caused confusion in other computer fonts.

    The result was Verdana, which was launched by Microsoft in 1996 and given away free to millions of people with Windows.

    I would shout two cheers for Microsoft except I'm posting this on IE7 Beta 3 and it is terribly buggy. So just one cheer for now.

    Another curiosity. Recently while drumming up some faux letterhead to use in soft copy, I was drawn to Sylfaen. I searched it and found that it is popular in Latin, Greek, Armenian, Georgian, and the Cyrillic, among others. Perhaps that's because Slyfaen supports many of these languages' characters.

    I perceive something bigger than style, fashion and legibility in the font wars. Each font is a collection of a particular set of ideas--a claim with which the talented and hard-working Matthew Carter and most typographers would probably agree. How widely a font is used represents a measure of success for the ideas embodied in it. Social critics (especially economists) like to say "ideas have consequences," but too few economists pay attention to how ideas propagate. Often, I think, idea propagation relies heavily on the subtle. I regularly read stuff from the New York Times, but only today did I bother to recognize and appreciate the font. How many dead fonts are there, lying as heaps of rejected, forgotten ideas?

    On a final note, two questions.
    1. Is there intellectual property in font design?
    2. What font does Division of Labour use?
    Comments open for awhile.

    Posted by Edward J. Lopez at 02:38 PM in Culture  ·  Comments (1)

    More Ridiculous "Terror Targets"

    Apparently the North Georgia kangaroo farm is not the only silly entry on the government's list of terror targets. The list also also includes Amish Country popcorn in Indiana (maybe a dark side to Orville Redenbacher or a fear of suicide buggy bombers), the Sweetwater Flea Market near Knoxville (anthrax laden Velvet Elvis paintings?), and the Mule Day Parade in Tennessee. Here's a safe prediction--we have more to fear from the asses in Washington than anything that could happen at the Mule Day Parade. Rant complete.

    Posted by E. Frank Stephenson at 10:41 AM in Misc.

    July 13, 2006
    Big Oil c. 1906

    From the July 13, 1906 NYT:

    WASHINGTON - The Inter-State Commerce Commission to-day heard further testimony in its investigation of the oil industry and practices of alleged monopoly.

    Posted by Craig Depken at 03:52 PM in Economics

    Advertising restrictions c. 1906

    From the July 13, 1906 NYT:

    The National Billposters' Association to-day decided to stop advertising Satan. Devils in all forms, whether with hoofs, horns, and tails or the more refined creations in evening dress are to be eliminated from advertising matter distributed by the association.

    The members did not specify their objection to pictorial representations of the evil one, but will not post bills on which he figures.

    Posted by Craig Depken at 03:50 PM in Culture

    Sad days a century apart

    There are so many similarities between the news of today and the news of a century ago. Perhaps it would be the same if I were reading the paper from 76 years ago or 123 years ago. Consider these two stories of horrible tragedy:

    From July 11, 2006:

    BALLWIN, MO. - Five children -- four of them siblings -- drowned during a church outing when they were caught in a river's current, apparently while trying to help a sixth child who was rescued, authorities and the victims' relatives said Monday....Witnesses said the children -- ages 10 to 17 -- were swept away in the Meramec River on Sunday evening.

    From the July 13, 1906 NYT:

    CEDAR RAPIDS, Iowa - Seven girls were drowned to-day in Cedar River, only three blocks from home, while wading. The smallest child slipped into a deep hole and in trying to rescue her six others were drowned. Ruth Klersey was the only one of the party to escape. The dead...ranged in age from 7 to 16 years.

    Posted by Craig Depken at 03:44 PM in Culture

    "Age of the Empirical"

    I expect that this article by John McGinnis (Northwestern U. law school) in the current Policy Review will warm the hearts of most, if not all, loyal readers of this blog. Here's the abstract:

    "This brief essay argues that that the trend to empiricism in the social sciences is a long run force for consensus in a democratic society. Because of the continuing computer revolution, this trend will become only more powerful in the future. Thus, although many pundits suggest we live in an intensely partisan age, the essay suggests that powerful forces will restrain partisanship and constrain even interest groups to focus on what works to achieve broadly shared objectives, like economic prosperity and improved education. The essay offers some examples of how empiricism has helped foster consensus in the past. The essay discusses how the rise of blogs and information markets help reinforce a culture of empiricism. It ends with suggestions about how public policy can support empiricism and thus itself promote consensus."

    Posted by Mike DeBow at 12:40 PM in Politics

    Kangaroo Terror Target/Dumb & Unlucky Criminals

    From the AJC:

    DAWSONVILLE — Two hundred and fifty kangaroos hopping around in this rural, hilly outback of North Georgia are a prime, if movable, target for terrorists.

    Or so claims a Department of Homeland Security database that identifies nationwide facilities that it considers ripe for attack.

    Also from the AJC we have a crook who is both dumb and unlucky:

    So three people go to the drive-up window at a bank and — the way police tell it — try to cash a personal check they stole in a burglary.

    The name on the check is Joyce Powell. The problem is, Joyce Powell is not in the car. In fact, she's in the bank; she works at the Sylvester Banking Company and the teller at the drive-up window knows her.

    The teller stalls the folks in the car by asking for identification. Meanwhile, Powell checks with the cops and learns someone has broken into her house in rural Worth County.

    By now, the three in the car are getting jittery, so they leave Sylvester and go to Albany, where police find them quickly.

    Calvin Barfield, 27, Shannon Parrish, 26, and Stacey Ellis, 19, are in the Worth County Jail charged with burglary and forgery.

    Yep, Barfield left his driver's license and Social Security card with the teller.

    Posted by E. Frank Stephenson at 09:34 AM in Misc.

    July 12, 2006
    What Zidane was dealing with

    It seems hard to justify Zidane's actions during the WC finals. However, there are usually two sides to each confrontation. Short of Zidane having some serious personal problems, it is likely that he was provoked in some way. That said, the point of a team is to sacrifice your personal needs to that of the team - admittedly not the most libertarian ideal, but one that seems to work.

    I haven't had a chance to go back and rewatch the match, but others suggest that Zidane had to deal with Materazzi pulling on his shirt, literally tweaking his breasts and other such antics. Whether Materazzi said what Zidane claims, perhaps we will never know.

    However, colleague Dennis Wilson points out this YouTube clip of five Materazzi plays that might suggest that Materazzi has a worse reputation than casual fans in the States might suspect.

    Warning: There is some relatively graphic contact depicted.

    Posted by Craig Depken at 04:07 PM in Sports

    Carnival of Wal-Mart

    Starling Hunter, proprietor of the most interesting blog, "The Business of America is Business," has kicked off his "Carnival of Wal-Mart," feature and indicated it would appear on a weekly basis. I hope that's so. Check it out. Also, some background here.

    Posted by Mike DeBow at 11:25 AM in Economics

    July 11, 2006
    BBQ List

    Delta's Sky magazine asked readers for a list of the best BBQ joints in their states. Here's the list.

    Looking at the four submissions for Ohio, I can't complain about City Barbecue being on the list. It's become a small chain now but they've maintained high quality and a certain shabbiness that is a necessary part of the BBQ experience. On the other hand Montgomery Inn in Cincinnati is AWESOME, but doesn't really qualify in my book as BBQ. I seriously love the place but it's apples and oranges to compare Montgomery Inn with a real BBQ joint.

    Now if you're ever in Bowling Green, Ohio. (I know. Why would you be?) Go to Ebony's on Wooster Ave. This guy's got the best NC style 'cue outside of well NC.

    Posted by Robert Lawson at 07:28 PM in Culture

    Soccer Thoughts

    I'll add to the minor discussion begun by Bob and Frank about the World Cup. Since I've played soccer for 25 years and been an economist for only about 10, I feel more qualified to speak here than in most of my previous posts.

    First, I agree with Frank that the "flopping" is getting out of hand. Soccer is kind of the opposite of public policy, where an action's (intending to harm another player) initial effect (the foul) is usually much harder to spot than the secondary effect of that action (falling). Thus, most refs assume the cause occurred when they see the effect (including me when I was ref), even if the effect is staged. Of course, flopping is stupid too because the perceived benefit (possibility of a free kick) is almost always low compared to the cost (your teammate on the ground, unable to do anything for a few seconds).

    Second, I congratulate Bob for granting the game some respect, one which most people do not do even if they've never played or even seen a game. I was thinking of which sport, soccer or the Golden Calf of football, engenders in its participants a sympathy for libertarian ideas:
    --Football: coach tells me what to do in next play, I do it, return to coach and repeat. The only players that seem to exercise any creativity is the QB and the two or three guys who run with the ball.
    --Soccer: coach gives me an outline what he wants me to do before the game, but rarely tells me what to do during it. I have to make my own decisions.
    Football seems more a top-down autocratic system of government, while soccer seems more a dispersed-knowledge society of individiual decision-makers. The best teams, obviously, are those who can create a spontaneous order out of 11 players.

    Third, even though Italy played a better team game during its run up to the final, I was rooting for France because of the amazing creativity demonstrated by Zidane in the two games prior to the final. Zidane's penalty kick during the final was even better; I thought the foul was weak, and that Zidane may have chipped his shot as a way of recognizing the weak call. Buffon just guessed the wrong way. Zidane's head-butt, though, was just completely inexplicable. My mom, brother, and I just sat there stunned for a few minutes. A decent comparison might be if you saw Milton Friedman on TV praising the current system of public education in the US: the polar opposite of your expectation. It's unfortunate that this is what he will be remembered for rather than his creativity throughout the later stages of the tournament.

    Posted by Tim Shaughnessy at 04:26 PM in Sports

    The Ultimate in Pork

    From my eastern NC stomping grounds:

    An old postcard proclaims Rocky Mount as the "Bar-b-cue capital of the world."

    Now, the city wants to promote that view with BBQ Park, which will honor Bob Melton's Barbeque, the state's first sit-down restaurant devoted to the pork delicacy that is sold around the state.

    "Whenever the money becomes available, we see it as more of a tourism thing," said Pete Armstrong, Parks and Recreation director. "Eventually we want to capitalize on the barbecue thing."

    Yup, tax money for pork park. Source here; HT Reason.

    Posted by E. Frank Stephenson at 02:01 PM in Misc.

    Politicians + Ignorance = Bad Policy

    Perhaps the Ignorance term is superfluous?

    This has been floating around for a few days, but no one else on DOL has mentioned it. Last week Ted Stephens, senator from Alaska, gave a speech explaining why he was voting against the then-pending net neutrality legislation. In that speech he gave what is likely to become a legendary explanation of what the Internet is - can someone cross check with Al Gore?:

    I just the other day got, an Internet was sent by my staff at 10 o'clock in the morning on Friday and I just got it yesterday. Why?

    Because it got tangled up with all these things going on the Internet commercially...

    They want to deliver vast amounts of information over the Internet. And again, the Internet is not something you just dump something on. It's not a truck.

    It's a series of tubes.

    And if you don't understand those tubes can be filled and if they are filled, when you put your message in, it gets in line and its going to be delayed by anyone that puts into that tube enormous amounts of material, enormous amounts of material.

    A longer version of this blather is available at wired.com. Perhaps Sen. Stephens is technically correct in that the Internet backbone is comprised of fiber-optic cables, and so forth. However, the rambling suggests that he has only a faint idea of what is going on with the Internet - it's not a truck?

    Now, I am not sure where I come down on the net neutrality issue, and I am not even sure I understand it all. It sounds like there is a conflict between the "common carrier" notion of the Internet service provider and the ISPs desire/ability to price discriminate across end-users or intermediate good providers such as Google Gmail, etc.

    Perhaps the issue is more complicated. And while it is not difficult to understand the government wanting/itching to get its hands on the net even more than it has thus far - even while the net is a grand example of how things can work with limited government intervention - with folks like Ted Stephens (with such deep understanding of the issue) writing/passing legislation, perhaps it is best to leave well enough alone.

    Moreover, perhaps we should seriously reconsider the capabilities of our elected officials.

    Here are some humorous comments about Sen. Stephens comments.

    Posted by Craig Depken at 11:37 AM in Politics

    Snarky Soccer Comment

    Watching the World Cup makes me wonder: Does FIFA stand for International Federation of Flopping Athletes? Seeing some of the best conditioned athletes in the world fall down in agonizing pain after the slightest of jostling and then, moments later, make a miraculous recovery after having a medic douse them with a water bottle sure gives that impression.

    I think Cannes or the ESPYs should include a category for best acting in a flopping role.

    Posted by E. Frank Stephenson at 09:30 AM in Sports

    July 10, 2006
    Rock, Paper, Scissors or Penalty kicks?

    I watched the big game on Sunday (that's the World Cup final for all you American readers) with co-blogger Frank and Ben Powell. We were in Cancun and the atmosphere among the locals was pretty exciting. I admit to having turned from being a big soccer hater to someone with a gruding respect for the game. But still wouldn't it be just as effective to use Roshambot to determine the winner instead of penalty kicks?

    Also some stuff from God's sport (that's baseball for you goshderned feriners):

    Brandon Dutcher points to a Moses bobblehead promotion that reminded me of the "Opening Day Genesis" and the hilarious "First Baseball Game" (I can find two bits of it here and here).

    [I just received a worthy comment from Wilson Mixon: "Very interesting, but historically dubious. It would appear that baseball got lost somewhere along the way. Otherwise, why would Jesus have had to ask, "Where are the nine?" (Luke 17:17)"]

    Posted by Robert Lawson at 05:53 PM in Sports

    The WP's One-Bladed Scissors

    Today's Washington Post runs this story on the widening pay gap between low-skilled and skilled labor. Using BLS survey data, this accompanying graphic shows that, from lowest to highest, wage growth by wage quintile in the DC region between 2003 and 2005 was: 5.4, 6.9, 10.5, 12.4, and 8.5. The lengthy article explains:

    Businesspeople cite shifts in the world economy that give educated workers leverage to negotiate for higher wages but make low-paid workers replaceable -- a disparity that is especially pronounced in a service economy like Washington's.

    The region's economy is strong and businesses are expanding, hiring more software engineers, financial analysts, salespeople and other skilled workers, thus bidding up their pay. But companies are simultaneously finding ways to automate clerical tasks, move call centers to cheaper places and handle business online, weakening demand for less-skilled workers.

    I have to applaud the Post for attempting an in-depth analysis of the market forces that explain the data. But it's a poor attempt. Their analysis is almost entirely demand focused. For example,

    Many new technologies and ways of operating -- often aimed at cutting labor costs -- were in their infancy in the late 1990s. Now they are maturing, tamping demand for low-skilled workers.

    Using Alfred Marshall's analogy, I teach my students that studying markets is like cutting paper with a pair of scissors. One blade is demand and one blade is supply. You can't cut paper very well with a one-bladed scissor, and today's Post analysis demonstrates this well. It neglects important dynamics in labor supply that affect wage-skill relationships.

    First, there is no controlling for tenure in the labor force, or in the particular job surveyed. Tenure increases compensation.

    Second, there is no controlling for human capital, either cross-sectionally within the survey's snapshot, or dynamically as many currently low paid individuals will accumulate greater skills and education, increasing their compensation over time.

    Third, and a corrolary to the second point, there is no controlling for labor market mobility to higher paying jobs. Many of the individuals currently in the upper quintiles spent time in the bottom quintile earlier in their labor force years. The Post implicitly recognizes this, in the article's final paragraph:

    [Kamal] Quarles, [a] shipping clerk frustrated by puny raises, isn't waiting for the economics to change. Foreseeing that package handling would grow only more automated, he enrolled in college. He just graduated and plans to look for a job with more promise. "This," he said, "isn't a career for me."

    Ultimately the Post's analysis is limited by the cross sectional orientation of the data. Labor economists (which I am not) have for years turned to longitudinal studies to get a clearer understanding of labor markets. But that doesn't stop the Post from making quite a big deal out of itself.

    The Post's analysis does not give a full picture of how income is distributed in the region, but it does offer a rough idea of how the benefits of the region's economic expansion are being distributed...

    Because the analysis doesn't include labor supply factors that help determine wage profiles, this claim is almost completely false.

    Posted by Edward J. Lopez at 09:47 AM in Economics  ·  TrackBack (0)

    July 09, 2006
    Historical preservation c. 1906

    From the July 9, 1906 NYT:

    WASHINGTON, Penn - The destruction with dynamite of the famous "Indian Altar Stone" on the farm of Joseph Horner, near Millsborough,has created intense indignation among scientists. Horner admits having blown the famous rock to pieces, and says he did it because parties were continually tramping over his farm to look at it.

    The altar, as it was called, stood on top of a high hill on the Horner farm. It was covered with figures of men, animals, snakes, and strangest of all, a figure of a kangaroo, all chiseled in the rock. It was discovered a few years ago, and ever since the Horner farm has been a mecca for archaeologists, all of whom were puzzled over the kangaroo carving on the big rock.

    Horner does not think he owes any apology to science for his act, but simply says it was on his own ground and he could do as he pleased with it. He objected to its being there, because people who came to see it trampled down his wheat.

    This is an interesting property rights issue. Farmer Horner was, perhaps, strictly correct. The stone was on his property and he removed the incentive for people to violate his property rights. On the other hand, perhaps society would have been justified in protecting the "public" property rights to the stone, given its potential historical significance?

    Two immediate alternatives come to mind. First, perhaps the rock could have been removed from the farm and relocated to a library or university, a la the Rosetta Stone. Second, farmer Horner could have charged admission to the rock and turned a bit of a profit from the "luck" of having the rock on his property, a la Rock City on top of childhood home Lookout Mountain.

    This instance sounds like a lack of imagination on the part of the farmer and a lack of courtesy on the part of the scientists qua society. This seems similar to property rights issues today.

    Posted by Craig Depken at 07:15 PM in Economics

    Selling off Texas c. 1906

    From the July 9, 1906 NYT:

    AUSTIN, Texas - J. J. Terrell [for whom Terrell, Texas is named?], State Land Commissioner, reports that he has sold 3,500,000 acres of public lands of the State in the last eight months. The prices ranged from $2 to $5 an acre. Between now and Jan. 1 1,500,000 more acres will come on the market.

    In real terms, the state sold off land for between $43 and $108 per acre. Almost regardless of where the land was in the state of Texas, what a steal.

    The 3.5 million acres is 5,468 square miles. To put this in perspective, Delaware is 2489 square miles. However, the entire state of Texas is 268,581 square miles. Thus, the state land sale was approximately 2% of the state of Texas.

    Posted by Craig Depken at 06:20 PM in Economics

    The Mexican corn paradox

    Greg Grandin writes in the New York Times:

    Every year, nearly three million tons of harvested Mexican corn is left to rot because it is too expensive to sell.

    How on earth could this be true? Does it mean that the mere cost of transporting the corn from farm to market exceeds the market value of the corn? (Seems impossible, given that Mexico pays prices that cover the cost of importing corn from the US.) If so, why did anyone bother to harvest the corn, and before that to grow it in the first place?

    Comments are open in case anyone has a suggestion.

    Posted by Lawrence H. White at 11:23 AM in Economics  ·  Comments (1)

    Congressional Politics roundup

    1. Former House Speaker Tom DeLay is still the GOP candidate on the November ballot for his old district in Texas. DeLay established residence in Virginia in an attempt to disqualify himself for the ballot. (Article I Section 2: "No person shall be a Representative ... who shall not, when elected, be an Inhabitant of the State in which he shall be chosen.") Texas Democrats sued, and a federal district judge ruled last Thursday that DeLay remains the on the ballot. Texas GOP is appealing the ruling to the 5th Circuit. The Democratic candidate is Nick Lampson, a former pol whose district was partially swallowed by DeLay's infamous 2003 gerrymander, which was recently upheld by SCOTUS. Saturday's Houston Chronicle ran a front page story in which DeLay hinted he might just run.

    2. Meanwhile, the GOP's party infighting continues, largely over the Abramoff thing. Seems Dem's should be getting more traction out of this, but the current outlook for a change in party control isn't great. From the American-Statesman story.

    Nathan Gonzales, a political analyst for The Rothenberg Political Report, said Democrats are in position to gain eight to 12 of the 15 seats they need to win back control of the House, in states such as Pennsylvania, Ohio and Connecticut.

    3. An old friend, Eric Schansberg, is running as the Libertarian candidate in a close race in southern Indiana. The incumbent is a freshman GOPer, and the DEM is the 2004 loser trying to get his old seat back. Eric is a full professor at Indiana-Southeast where he's won several teaching awards, an adjunct scholar at the Acton Institute, and the author of several books including, Legislate Justice Not Morality, and Poor Policy: How Government Harms the Poor (sort of a newer Losing Ground and a great supplement for an applied public finance course). Eric was getting his Ph.D. from Texas A&M at the time I was an undergrad there. Along with Edgar Browning, Eric was my main mentor in undergraduate. I took two classes from him, and we spent many an hour gulping IHOP coffee while debating politics, economics, religion, sports, you name it. Eric is one of the persons of highest integrity that I personally know, despite the fact that he's running for Congress! :-). Beneath the fold is an email from Eric announcing his bid. I wish him all the best.

    Read More »

    Posted by Edward J. Lopez at 11:19 AM in Politics

    July 08, 2006
    Gambling and utility

    The normally careful Greg Mankiw shoots from the hip on the (in)justice of gambling:

    In a comment on my previous post on gambling, Jacqueline Passey says:

    "gambling is distributive justice, moving money from stupid people to smart people."

    The utilitarian in me points out that Jacqueline gets things exactly backwards: distributive justice demands moving money from smart people to stupid people. Smart people have the potential to make a lot of money and thus have lower marginal utility per dollar, while stupid people have less money-making potential and higher marginal utility.

    Several commenters have correctly noted that economic theory provides no basis for interpersonal utility comparisons (as Lionel Robbins explained back in the 1930s). But Mankiw doesn’t say “the economist in me,” he says “the utilitarian in me”. If he’s referring to “utility” in the Benthamite sense (net pleasure) rather than the choice-theoretic sense (preference-ranking), then Mankiw is really saying: A smart person gets less pleasure from his marginal dollar than a stupid person gets from his. Which is an assertion that has zero basis in economic theory, but at least it’s not as meaningless as saying that a smart person has less preference-ranking for his marginal dollar.

    The really curious lapse in Mankiw’s argument is that “distributive justice” is not a utilitarian concept. (Rawls talks about “distributive justice,” but firmly rejects utilitarianism. ) So I’m a little puzzled. Perhaps when Mankiw writes “distributive justice demands …” he really means “the maximization of aggregate pleasure demands …”. But if he's taking aggregate pleasure maximization as his goal, then Mankiw's argument is subject to all the criticisms (nonoperationality, obliteration of moral side constraints) that Benthamism has rightly attracted over the years.

    Posted by Lawrence H. White at 08:04 PM in Economics

    The power of (free) trade

    Start here:

    End up here:

    One year after starting out to trade one red paper clip for a house, our hero has been successful.

    Here's the official One Red Paperclip site.

    Here are my thoughts over at Heavy Lifting

    Posted by Craig Depken at 02:39 PM in Economics

    July 07, 2006
    On immigration c. 1906

    From the July 6, 1906 NYT:

    Last year 850,000 [immigrants] landed here, the previous greatest number having been 788,289 in 1905. It was in that year that Hungarians displaced Italians as the greatest contributors to the dilution of the Anglo-Saxon race....The arrival of Austro-Hungarians at the head of the list is unwelcome for several reasons. Their illiteracy and disregard of law are high, and they are among the races which settle in the East, only one-fourth going West. They are not skilled workers, contributing hardly anything but crude muscle to the country of their adoption. And worse yet, they do not assimilate any more than the Chinese. Part of this is due to their alienage being in higher degree than that of the arrivals from Western Europe, but more of it is due to a settled policy encouraged from home...There is but cool welcome here for those who emphasize their differences from us, and hold themselves aloof from our assimilating influences.

    Wow. In general, there was a definite lack of "political correctness" in the writing of 1906, but it is amazing to me how similar the language concerning the Hungarians in 1906 is to contemporaneous language describing immigrants.

    Perhaps the NYT of 1906 reflected the thoughts of its readership, just as the NYT of 2006 likely reflects the thoughts of its readership. Regardless, the article points out that fear of `them furners,' depicted so well in Gangs of New York (set during the 1850s-1860s), is not new.

    Posted by Craig Depken at 12:46 PM in Culture

    Historians take on money

    Common Place, an online history journal, had a special issue in April 2006 concerning money. Full disclosure - I haven't read a single article yet.

    Here is the table of contents:

    • Joyce Appleby "Money, Money, Money"
    • Jennifer J. Baker "Paper Money Gets Personal"
    • Rudi Colloredo "Mansfeld Money of Moderate Size"
    • Christine Desan "Money Talks"
    • R. G. Doty "When Money Was Different"
    • Eric Helleiner "North American Monetary Union?"
    • Benjamin H. Irvin Benjamin Franklin’s "Enriching Virtues"
    • Wim Klooster "Have You Heard the News About the Silver Fleet?"
    • Michael O’Malley "Free Silver and the Constitution of Man"
    • Mark Peterson "Big Money Comes to Boston"
    • Malcolm Rohrbough "The California Gold Discoveries"
    • Jeffrey Sklansky "A Bank on Parnassus"
    • Mark Valeri "The Rise of Usury in Early New England"
    • Robert E. Wright "Currency Unions Past and Present"
    • Michael Zakim "Bookkeeping as Ideology"
    Posted by Craig Depken at 12:11 PM in Economics

    Eulogy for an exemplary economist

    Hugh Macaulay, a near-legendary member of Clemson's economics faculty for many years, passed away last fall. Yesterday I saw Bruce Yandle's eulogy for his friend and colleague for the first time. If you're a teacher, you owe it to yourself and your students to go read Bruce's words about a life so well-lived in the academy. (I'll resist the temptation to quote extensively from it, in the hope that you'll read the whole thing.)

    Posted by Mike DeBow at 10:02 AM in Economics

    July 06, 2006
    July 4 5k Result

    A new PR: 19:03 (16/320 overall; 16/203 men; 2/28 men age 35-39)

    Posted by Robert Lawson at 08:42 AM in Sports

    July 05, 2006
    Hit and Run

    I've been away from the office and computer for most of the past week and will be away for most of the next two weeks. A few items that caught my attention:

    1. Tournament incentives are tricky things. NASCAR is tinkering with its championship points system. Maybe it'll become an annual affair like the BCS.

    2. The national media have finally caught wind of a particularly sordid murder two years ago in Rome. I knew this was coming; I'm just surprised it's taken so long. (HT: Kara)

    3. A Times (UK) article predicts that a new airfare tax to combat global warming (insert laugh here?) will cause airfares to double. I doubt it; I suspect that the demand for air travel is sufficiently elastic that European airlines will not be able to pass much of the tax along to consumers.

    4. For an example of rent seeking behavior described by co-blogger Mike Munger, here's a bit on flex fuel fuzzy math courtesy of the ethanol lobby. (HT: Wilson)

    5. As a refuge from all the idiocy about losing manufacturing jobs, The Economist reports the U.S. manufacturing sector is doing quite well. (HT: Wilson again)

    6. From the wacky minor league baseball promo department (previous entry here), we have the California team that gave out bobble couches and had a silent innning in honor of Tom Cruise.

    Posted by E. Frank Stephenson at 04:17 PM in Misc.

    Economists for open borders

    Greg Ransom asks in exasperation: “What explains the open borders view of many economists?” I think the answer is straightforward: the same beliefs that explain their free trade view. Like goods, people should be free to move to where they produce the greatest value (consistent with respecting property rights).

    Ransom quotes at length a blog entry by Steve Sailer that rails against the recent “open letter” on immigration written by Alex Tabarrok (and signed by your truly, among hundreds of other economists).

    Sailer tries to infer that well-known economists who didn’t sign the letter must reject its contents. That’s just silly. There are many other possible reasons for not signing, like simply not having seen the letter, or having no firm opinion on the issue. [ADDENDUM: A correspondent suggests that some economists may have refused to sign the letter because they found its policy recommendations too vague, or because they didn't like the way it mixed positive and normative claims.]

    Sailer opposes letting low-IQ people into the country, because high IQ is reportedly correlated with high GDP per capita. He claims:

    Libertarian economists are particularly reluctant to allow any mention of differences in IQ—because if we all just assume that everybody is equal, well, that sweeps a lot of unpleasant problems under the rug.

    But that’s just not true. Note that Charles Murray, the most prominent discusser of differences in IQ in recent years, is a libertarian. Bryan Caplan, to cite a prominent libertarian economist, has discussed the importance of IQ differences quite a bit on his blog, e.g. here. Caplan has importantly pointed out here that the benefits of free immigration, like the benefits of free trade, are greatest to the extent that immigrants (or trading partners) have different comparative advantages from us. Brain-workers gain especially from the immigration of muscle-workers.

    Based on Greg Mankiw and Paul Krugman mentioning that their grandparents were immigrants, Sailier charges that “family nostalgia and ethnocentrism are probably the biggest drivers of many economists' pro-immigrationism.” For the record, my own ancestors immigrated to North America before there was a United States. As the old joke has it, they were lucky that the immigration rules weren't so strict back then.

    Sailer urges economists to recognize that "Families matter." He doesn’t seem to recognize himself that the importance of families strengthens the case for making immigration more free. When immigration is illegal, it is young single males who make the risky and strenuous journey across the border from Mexico. Only when immigration is legal can entire families come. Sailer rips economists for supposedly “citing data on legal immigrants to argue for amnesty for illegal immigrants.” He himself commits the error of citing the problems created by illegal immigrants to argue against legal immigration.

    Posted by Lawrence H. White at 01:54 PM in Economics

    July 4th envy from around the world

    Independence Day-inspired articles from:


    Americans have never lost the vital understanding that freedom has to be indivisible in order that man may lead a virtuous life. Democracy and freedom of expression represent only the political and moral-cultural fields of life. There is a third important field of social life: economics. In this field the Americans have adopted a system that allows citizens the greatest possible economic freedom and severely restricts the power of the government. It is called capitalism, which to most Americans is something positive, while to most Europeans it appears deeply repulsive.

    and Venezuela:

    The US has its independence day today and Venezuela has its dependence day tomorrow. With its $11,000 billion economy at $40,000 per capita and with only 10% of its families affected by poverty and with as much economic freedom as exists on earth, the US should celebrate its independence today. With its $100 billion economy at $5,000 per capita and with almost 75% of its families affected by poverty and with a decline in economic freedom more rapid than almost anywhere on earth, Venezuela should not celebrate its independence tomorrow.

    Posted by Robert Lawson at 09:54 AM in Economics

    July 04, 2006
    Track Le Tour

    This is neat. Track the tour via a Google Maps extension.

    Posted by Craig Depken at 04:54 PM in Sports

    Happy 230th birthday U.S.A.

    Many insist that the U.S. is "too young" to understand how the world works. Perhaps, if the way the world works is to rely on various forms of authoritarianism. The system comprised by the Founding Fathers - ensuring, to the greatest extent ever tried, life, liberty, and the pursuit of happiness - has had an amazing track record in its short history. Sure, there are several demerits on the tally sheet of the U.S., but compared to the rest of the history of the world, it really isn't a stretch to suggest that no other system is its equal.

    I argue that it is our liberty which, in part, explains why many of the problems of the past are also the problems of the present. The moment we see many of the problems of yesterday solved by the government programs of today, take the pulse of liberty.

    More here

    Posted by Craig Depken at 03:33 PM in Politics

    Mishkin's appointment

    Unlike the earlier appointments of Randy Kroszner and Kevin [not: David] Warsh, last week’s appointment of Frederic Mishkin to the Federal Reserve Board of Governors is completely unsurprising. Unlike Kroszner before his appointment, Mishkin's writings about monetary institutions have stayed within the forty yard lines of the debate. As I noted in my Econ Journal Watch article about the Fed’s impact on research in monetary economics, 31 of 32 articles in the 1997 edition of the supplemental reader to Mishkin’s market-leading money and banking textbook were drawn from Federal Reserve publications. From 1994 to 1997 Mishkin was Executive Vice President and Director of Research at the Federal Reserve Bank of New York. In 1999 Mishkin co-authored a book with current Fed chairman Ben Bernanke (and two others from the NY Fed, Thomas Laubach and Adam Posen) in favor of inflation targeting, which they characterized not as a strictly binding rule but as “constrained discretion”. As a member of the Board, we can expect Mishkin to vote consistently with Bernanke.

    Posted by Lawrence H. White at 02:19 PM in Economics

    Back from Zürich

    I'm back from Zürich, where I crammed a semester's worth of material from The Theory of Monetary Institutions into fifteen hours of lectures (3 hrs a day x 5 days) at the Swiss National Bank. It was somewhat remarkable to find that I could fit 90% of the message into 33% of the usual time. How much any audience can absorb at such a pace is another question. But I did get some good questions.

    Though it has offices for hundreds of banks’ Swiss affiliates, Zürich has no skyscrapers. It’s a charming old city with pedestrian cobblestone streets, trolleys running everywhere, a popular lakefront, and a river flowing through.

    The real price of food in Zürich is high, and not only for American tourists with weak dollars. The people are notably trim and fit. Based on the law of demand, I think there may be a connection.

    I was supposed to leave my hotel key at the front desk when I went out, and ask for it when I came back. I had room 512. In German, fünfhundert zwölf is possibly the most difficult three-digit number for an American to pronounce. Try saying it one time fast. Fortunately the hotel staff spoke flawless English.

    I memorized and used phonetic phrasebook German when the occasion arose, like buying a train ticket to Luzern. Problem was, if I was asked a question in German, I was hopeless. The most useful phrase then turned out to be: “Sprechen sie English?”

    One of the easiest questions I got at the central bank: “So, as a “free banker,” do you get many invitations to speak at central banks?”

    Posted by Lawrence H. White at 01:26 PM

    July 03, 2006
    Political rhetoric c. 1906

    File this in the "things don't change" drawer? From the July 3, 1906 NYT:

    In a statement made for the Democratic minority makes a comparison of the expenditures provided for by this Congress of $880,183,301, with the expenditures of 1898, the first year of President McKinley's Administration, when the figures were $528,735,079, a difference of $351,448,22. Commenting on this showing, he says:

    "This growth in appropriations sustains the contention that the Republican Party stands for extravagance in public expenditures in order to us that extravagance as a cloak for their more objectionable purpose of maintaining a high protectionist tariff to favor the trust combinations of manufacturers of the country.

    "A reduction of expenditures, they well know, wold compel a commensurate reduction in taxation, and to that extent a lowering of the Chinese wall of protection that now surrounds the great body of consumers, who constitute the larger portion of our population and compel tribute from them to the favored classes.

    "Much of this extravagance grows out of the practice prevailing with the present Administration of appointing commissions to do what Congress ought to do and what Congressmen are elected for and paid for, thus delegating the powers constitutionally belonging to Congress to others who have no particular relations with or responsibilities to the public, and not render an accounting to the taxpayers of this country.

    The level reported Federal expenditures reported in this story differs from numbers reported on previous days. Nevertheless, except for the words "protective tariff" and "trust combinations" this statement could easily have come from Sen. Reid or Boxer. What does this suggest? Perhaps the relative nature of the parties hasn't changed over the past 100 years. Perhaps government is always spending more and the party in charge spends it differently than the party not in charge. Therefore, the party not in charge has formulaic rhetoric to suggest that the spending by one is less effective than the spending that would have been determined by the other.

    Perhaps the majority of people have rather low opinions of Congress because the rhetoric hasn't changed in 100 years?

    Posted by Craig Depken at 11:05 AM in Politics

    July 02, 2006
    Rent-seek and you will find

    A sneak preview, for those interested, of my EconLib essay on rent-seeking.

    And, as always, an acknowledgement to Russ Roberts. He is a completely heartless editor, but what a terrific soul.

    Here is the essay.

    Read More »

    Posted by Michael Munger at 07:44 PM in Economics

    Rent Seeking c. 1906

    From the July 1, 1906 NYT:

    Under the law compelling corporations and individuals to file their legislative expenses, several important statements wer filed to-day with the Secretary of State.

    The Allied Real Estate Interests of the State of New York certified that it expended $24,722.94 in connection with legislation. Of this amount, the statement says, $18,722.30 went for salaries of temporary and permanent employees and $5000 was paid to Lawrence Viller of New York, its Second Vice President, who represented the association before the legislature and the Governor.

    The City Club of New York certified that it paid Lawrence Veiller, its Secretary, $102.82 for legislative services.

    The Brooklyn Heights Railroad certified that it expended $166.65 for services before the legislature.

    Such quaint numbers (in real terms the expenditures range from $2,223 to $108,148 in 2005 dollars) remind one that there was a time when government, while still for sale, was a whole lot cheaper.

    The 59th Congress ended having allocated approximately $2 billion. This is the first time such money has been allocated, and the NYT editorial comments recognize the large nominal spendnsuggests that while for the first time. EH.net puts U.S. nominal GDP at $30 billion. Therefore, without the income tax and with society not yet fully vested in progressive government, the federal government spending is about 6.6% of nominal GDP. The 2005 Economic Report of the President suggests 2005 nominal GDP was $12.5 trillion and federal outlays totalled $2.77 billion or approximately 22% of GDP.

    Posted by Craig Depken at 05:23 PM in Economics

    July 01, 2006
    Sunk Cost Reasoning?

    My university has made the first wave of personnel and program cuts to deal with its budget woes. The headline cut was the elimination of the 18 month old New Center, a downtown professional development center that also housed the MBA program. The New Center had lost $800k and $500k in its first two years of operation and thus contributed in a small but not insignificant way to the $4.8m and $5.4m(p) operating deficits of those years.

    The business school dean (full disclosure: she is also my boss but I have no connection to the New Center or the MBA program) claims the Center is on track to make a significant amount of net revenue in the third year of operation. Of course, now they cut the program.

    Question for discussion: Is the university guilty of sunk cost reasoning?

    Posted by Robert Lawson at 09:09 AM in Economics

  • The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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