Division of Labour: September 2006 Archives
September 30, 2006
The Gentle Cynic c. 1906

From the Sept. 30, 1906 NYT:

  • The flatterer is never a bore.
  • Only the rich can afford to be stingy.
  • Good resolutions too often die of malnutrition.
  • At any rate, the loser is never accused of cheating.
  • Only a fool will rock the boat on the sea of matrimony.
  • Faith may move mountains, but it won't remove freckles.
  • Most troubles are not worth the time it takes to tell them.
  • Success is often the result of a one-card draw in the game of life.
  • When a man takes whisky for a cold he doesn't care whether he gets over it or not.
  • The man who makes his money in trade is sneered at by the man who makes his by marrying it.
  • The fellow who is imbued with the idea that the world owes him a living can get it in the penitentiary.
  • Posted by Craig Depken at 11:39 AM in Culture

    September 29, 2006
    Tivo tip

    If you get the AZN channel on cable, set your Tivo to record "Ab Tak Chhappan" tomorrow morning at 9am Eastern, 8 am Central. It's a ruthlessly unsentimental cop/mafia drama, the best Indian movie of 2005. (I'd call it Bollywood, but there are no songs. There will be subtitles.) Nana Patekar plays an "encounter specialist" whose assignment is to shoot gangsters and then make up a story about how he did it in self-defense. I thought the premise was a bit over the top until I read Maximum City, which has a chapter about a real-life Bombay cop whose job is exactly the one depicted in the movie.

    Posted by Lawrence H. White at 08:37 PM in Culture

    Kosovo now has a central bank – in name

    Voice of America has reported:

    The Banking and Payments Authority of Kosovo (BPK) was transformed Friday into a central bank for the region. The move provides more independence and regulatory authority to Kosovo's new banking system.

    As far as I can tell, it’s only a nominal change. Fortunately for Kosovans, the BPK won’t be issuing its own currency. Like Montenegro, Kosovo uses the euro (except for Serbian-dominated areas where the Serbian dinar circulates), though it is not a voting member of the ECB.

    Posted by Lawrence H. White at 05:11 PM in Economics

    The cleverest thing I've read today

    Daniel Davies in The Guardian:

    The phrase "The status quo is no longer an option" is reliably the leper's bell of the modern managerial idiot. It is almost always wrong. Like Status Quo, the status quo is often vastly underrated simply because it is unfashionable. The great thing about the status quo is that it is not any worse than the status quo. Surprisingly few proposals for "radical and far reaching reform" can actually beat this standard.

    In reference to private organizations, I agree. In reference to the government, the bar is lower. (Excercise for the reader: imagine why would that be.) Universities are somewhere in the middle.

    Posted by Lawrence H. White at 04:42 PM in Economics

    Friday Roundup

    1. In Atlanta tonight, Roger Clemens starts what might be his last major league game. I was hoping to make it, but just couldn't pull it off.

    2. The WaPo has an article on wildlife's contribution to water pollution.

    3. I had a bit of deja vu reading that there may be another scandal about Congressmen soliciting pages for inappropriate activities. I was a House page when there was a similar scandal back in 1982. I had no part in nor saw any signs of bad behavior while I was there, but I did get interviewed by a couple of newspapers snooping around for dirt.

    4. From the AJC:

    As the senior official overseeing federal farm programs in Georgia, Duke Lane Jr. helps distribute billions in subsidies while serving farmers and safeguarding taxpayers.

    In 2004, Lane's public actions benefited his private interests, and taxpayers picked up the tab.

    Don't read the whole thing--it'll make you want to throw something at your computer.

    5. (Via Drudge) Al Gore claims smoking significantly contributes to global warming.

    6. The prisoners of Fidel's paradise now have reverted back to horse-drawn transportation. (HT: LR)

    Posted by E. Frank Stephenson at 02:49 PM in Misc.

    Hurricane X c. 1906

    The Sept. 29, 1906 NYT reports on an unnamed hurricane that struck Mobile and Pensacola on Sept. 28, 1906. Let's see if there is anything in the article that sounds familiar:

    Three lives at least have been lost and damage estimated from $8,000,000 to $5,000,000 has resulted from the hurricane that struck Mobile Wednesday night and continued with unabated fury until yesterday morning at 10 o'clock...all telegraphic communication with the outside world is cut off, the river boats are sunk at their wharves, and hundreds of launches and small boats are at the bottom of the river...

    The business section, four blocks wide and running the entire length of the city, is inundated to a depth of from six inches to seven feet...

    a large number of houses, mostly of the poorer class, have been razed and the contents destroyed....

    Several persons, one a woman 94 years old, were injured when some buildings fell, and one [African-American] child was killed. The streets are littered with signs, roofs, and other debris. All electric light wires are down, and last night the city was in utter darkness...

    The city hospital was badly damaged by the storm, the roof of the [African-American] ward hospital was blown off, and the rooms flooded...

    The town of Frederick, three miles away, has been wiped off the map...

    Robertsdale, thirty-four miles away was practically destroyed. Of the ninety-five houses only three stand, and three are tottering. The schoolhouses are destroyed, as is the village store. The total loss, $35,000...

    Summerdale, thirty miles from Bay-Minette, is wholly destroyed...

    Granted the destruction of 1906 Mobile was likely not as "big" of a deal, at least from the pure value of property and magnitude of the destruction, as Hurricane Katrina in 2005. Yet, perhaps because the storm wasn't of the magnitude of Galveston and/or because the storm didn't have name, how many people are aware of a "great storm of 1906?" Likely those in Mobile have heard stories, but the rest of us?

    I wonder how Katrina will be viewed in 100 years viz-a-viz Galveston and (now) Mobile/Pensacola.

    Posted by Craig Depken at 01:06 PM in Economics

    On wealth c. 1906

    From the Sept. 29, 1906 NYT:

    "Wealth has its disadvantages," said the philosopher.

    "Yes," answered the man with sporting inclinations, "it must be very monotonous for a man to be able to bet $5,000 or $10,000 on a horse race without caring whether he loses or not."

    Yet, if you don't care if you win or lose, why place the bet in the first place?

    Posted by Craig Depken at 12:50 PM in Culture

    Microeconomics question of the week

    The Wall Street Journal has a free service in which weekly recaps of interesting stories are emailed on Friday [You can sign up here - look for the Weekly Review]. This week there are three topics in the microeconomics blast:

    1) The lack of stop signs in Belgium and game theoretical implications
    2) The supply and demand of/for flat-screen televisions
    3) Forced enrollment in 401(k) plans.

    I posted the first two (as I regularly do) over at Heavy Lifting although I do not post "my answers" to the questions. I will post the 401(k) summary below the fold.

    However, the third recap did have an excellent question, one that might make for some interesting lunch/class conversations:

    One example of irrational behavior is insuring against small risks and ignoring big ones. Why is it irrational to purchase extended warranties for appliances while not purchasing life insurance?

    Read More »

    Posted by Craig Depken at 12:27 PM in Economics

    September 28, 2006
    What economists do

    William McChesney Martin famously said that the Fed's job is to take the punch away when the party starts getting good. My view is that economists have a similar role: To ask how much the punch costs and who's paying for it. It won't get us invited back to some of the best parties.

    Russell Roberts relates interesting observations by John Baden on the economist's role. I disagree with Baden's statement that economists "are trained to measure the efficiency of alternative choices." We're trained to point them out, but not very good at measuring them. This is a quibble.

    Posted by Wilson Mixon at 09:36 PM in Economics

    Making a Libertarian

    Arnold Kling on the making of a Libertarian:

    I travelled the route from Far Left to libertarian. I think that quite a few libertarians have travelled that route, and yet I cannot think of anyone who has gone the other direction. This leads me to suspect that:

    1. Far Leftists and libertarianism have much in common.
    2. Libertarians know something that Far Leftists do not.

    What I believe that Far Leftists and libertarians have in common includes:

    1. A passion for social and political issues. ...
    2. Frustration with political incumbents. ...
    3. Anti-elitism. ...

    Libertarians have learned is what social psychologists call the Fundamental Attribution Error. The error is to attribute behavior to a person's character when this behavior is in fact based on context. ...

    The Far Left believes that bad policies come from evil motives. In this view, villains ... oppose good policies, and political incumbents lack the strength and courage to overcome the villains.

    Libertarians ... believe that government power is inherently corrupting, regardless of who holds leadership positions or how they are influenced. We believe that the market does a relatively good job of channelling self-interest toward socially desirable ends.

    For those ... still on the Far Left, my advice is to study the consequences of policy, not simply the motives and intentions of those who advocate the policy. Once one understands and corrects for the Fundamental Attribution Error, the passion for better public policy translates into a support for libertarian principles.

    Posted by Wilson Mixon at 09:15 PM in Politics

    Baby, you can drive my card

    Paul McCartney’s daughter Stella, until now a fashion designer, has designed a new account card for the private bank Coutts. Curiously, none of the news accounts includes a picture of the card, but you can see it here.

    Posted by Lawrence H. White at 07:15 PM in Economics

    Couldn't they see the expiration date approaching?

    According to the Moscow Times, Russia’s central bank is now in limbo for lack of a quorum:

    The board of the Central Bank on Thursday lost the quorum it needed for policy decisions after the mandates of half its members expired, while the seat of murdered banking supervisor Andrei Kozlov remained empty.

    The Duma is expected to consider replacements next week.

    Posted by Lawrence H. White at 07:05 PM in Economics

    Quick Hits

    1. I like the Weather Channel because it combines maps and weather, two things that have interested me since childhood. Alas, TWC is introducing a global warming show and the show will take the position that global warming is definitely happening. The show's host Heidi Cullen claims, "Scientists are very much in consensus about the fact that it's real." My reading, admittedly based on quite superficial research, is that scientists are not certain global warming is taking place and that they are much less certain about whether human activity has contributed global warming or whether policy changes could mitigate it.

    2. I was glad to see 7-Eleven dropping Citgo. Although I have no pretense that my choice will have any effect whatsoever on Citgo or Chavez, for the last year or so (i.e., well before the Chavez's rant at the UN) I've been choosing not to patronize Citgo stations. I'm probably guilty of the "better to feel good than to do good" criticism, but I don't want to support a dictator.

    3. Dave Berri posts on Freakonomics vs. Moneyball or, if you prefer, Steve Levitt vs. Skip Sauer.

    Posted by E. Frank Stephenson at 04:35 PM in Misc.

    Request for comment

    I reach out to the DoL community with the following question. The following is an abstract of a working paper which is having a hard time getting past the editors at the journals to which we have submitted. We are not being rejected for being "wrong" but for being "different." This is not an unheard of experience, but one that is frustrating.

    My question is what, if any, journal in which you might imagine such an abstract appearing. Hopefully not the Journal of Failed Research!! Any suggestions can be sent to depken-at-uta-dot-edu.

    Multiproduct Pricing in Major League Baseball: An Empirical Analysis Using Principal Components

    The empirical analysis of multiproduct pricing suffers from a lack of clear theoretical guidance and appropriate data. These limitations often render traditional regression-based analyses impractical. This paper analyzes ticket, parking, and concession pricing in Major League Baseball for the period 1991-2003 using a principal components methodology. This approach allows inferences to be formed about the factors underlying price variation without strong theoretical guidance or abundant information about costs and demand. The most important factor is general demand shifts, which explain about half of overall price variation. Also important are price interactions that derive from demand interrelationships between goods or the desire to maximize the capture of consumer surplus in the presence of heterogeneous demand. The principal components methodology can effectively reveal the economic forces underpinning pricing in a multiproduct context using data on prices alone.

    JEL Classifications: D40, L11, L13

    Keywords: multiproduct pricing, sports, structural model, complements, substitutes, principal components.


    Posted by Craig Depken at 04:03 PM in Economics

    Fixed vs. Variable Costs at the Three Gorges Dam

    Yahoo! News has a story concerning trash and debris building up behind the Three Gorges Dam in China:

    The amount of floating garbage in the reservoir is expected to surpass 200,000 cubic meters (seven million cubic feet), Cao said.

    To make matters worse, a specialized boat to clean up floating debris is inoperable due to a lack of spare parts, he added.


    Oops.

    Posted by Craig Depken at 12:27 PM in Economics

    September 27, 2006
    Funny Moment

    In addition to my job at Berry, I do some forensic economics consulting. Mostly I estimate lost earnings in personal injury or wrongful death cases. (To those who think the legal system has some abuses, I agree. However, I think abuses are mostly in class action cases. I also think people have a right to seek damages for injuries they suffer, and I mostly agree with Alex of MR about the incentives facing contingent fee lawyers.)

    To the point, I had a deposition earlier this afternoon. I entered the lawyer's office at the same time as one of the defense attorneys who was deposing me. We both told the receptionist that we were there for the deposition, we gave her our names, and we sat down. The lawyer then introduced himself to me and I introduced myself to him. He had now heard my name twice, and one would have thought that he would have recognized my name from the damage report I prepared. But no.

    Presumably thinking that I was the other defense attorney coming for the deposition, he proceeded to tell me that he had an economist look over my report and that I had gotten the numbers about right (though in the other economist's opinion, my estimates in one part of the report were too high and my estimates in another part of the report were too low). I was inclined to reintroduce myself, but he blurted out his comments too quickly. About that time, though, the other attorney arrived. He recognized my name as we introduced ourselves and said something like "you're the one we're deposing right?" The look on the first attorney's face was priceless.

    Posted by E. Frank Stephenson at 03:25 PM in Law

    IJ Props

    We have our merry band of bloggers here at DOL. I would guess that most readers are familiar with The Institute for Justice, which has their merry band of litigators defending individual rights and the rule of law. IJ has always done important work, but recently they've landed an impressive string of blows in the proverbial good fight.

    You know about the Kelo case, which was a nominal defeat but fueled a backlash that, by the time it runs its course, may end up strengtheninig property rights. More detail on this below the fold.

    Since Kelo, IJ has won a development takings case before Ohio's Supreme Court, Norwood v. Horney, the first of its kind to reach a state supreme court after Kelo. If you're into the whole Stackelberg leader idea, this is an important signal to courts in other states.

    IJ has also meticulously documented the extent of eminent domain "abuses" (roughly, takings for economic development purposes). Two reports by IJ senior attorney Dana Berliner, one pre-Kelo and one post-Kelo, count the state-by-state filings of eminent domain for economic development, from 1998 through middle of 2006. Good stuff.

    IJ's current splash is their new lawsuit against the city of Riviera Beach, Florida. The scenario is familiar. The mayor and city council expanded the city's redevelopment area, hired a big developer to put in a new fashionable multi-use complex, and threatened eminent domain on lont-time property owners to pave the way. IJ filed suit on behalf of four property owners yesterday.

    Last week, IJ Senior Attorney Scott Bullock was out at San Jose State to give a Kelo lecture. He did a great job fielding questions, everything from Austrian-subjectivist critiques of "just compensation", to 14th Amendment selective incorporation stuff, to how the Roberts Court might have decided Kelo.

    Like Richard Posner, IJ seems to be okay with eminent domain for "traditional public uses" under holdout problems. Others are more hawkish, such as Bruce Benson's article in The Independent Review undermining the holdout justification. Even for right-of-way, holdout-likely, traditional public uses, eminent domain poses serious problems for efficiency and for giving property owners the right incentives. Yesterday in Tehachapi, California, a homeowner had this to say about his struggle with the city over a proposed road (article).

    “We’ve been notified that the road [Pinon Street] goes through our garage and the city has told me there’s nothing I can do about it,” Timothy Dunn said to the council...."If you take my garage, you take my whole property. Someone’s going to pay for the stress,”...

    IJ has a knack for choosing sets of facts that will lead to larger ramifications when brought to court. In general, I think IJ deserves a fresh round of props for doing good work on many fronts, including and especially to stem the tide of development takings.

    Read More »

    Posted by Edward J. Lopez at 03:10 PM in Law

    Whither financial privacy?

    SWIFT, the Society for Worldwide Interbank Financial Telecommunication, is a private institution (an industry-owned co-operative) based in Belgium that provides “secure, standardised messaging services” to thousands of banks and other financial institutions worldwide. Secure, that is, except from snooping by the US government. Payment messages sent via SWIFT include “customer names, account numbers and other identifying information”. After 9/11/2001 the US Treasury went on a fishing expedition, sifting through “millions of confidential financial transactions handled by SWIFT.” The New York Times revealed ("leaked") the secret program’s existence in June.

    Now the European Central Bank and national central banks in Europe may be in trouble for violating data protection laws by looking the other way while the US authorities went through SWIFT’s records. The International Herald Tribune reports:

    The Treasury Department has used broad administrative subpoenas to get access to large volumes of transactions from Swift, often millions at a time. The operation, while highly unusual, appears to fall into a gray area in American law protecting the banking privacy of customers. But legal experts said the program appears to conflict more directly in Europe with banking privacy restrictions, issued by the European Union and others, that impose tighter restrictions on how private banking data can be shared.

    We in the US don't need to wait for the terrorists to restrict our liberty; our own government is doing a pretty good job of that.

    Posted by Lawrence H. White at 03:07 PM in Economics

    Ig Nobel ceremonies coming up

    The 2006 Ig Nobel prizes will be awarded next Thursday, October 5.

    Live webcast is promised starting at 7:20pm Eastern.

    Posted by Craig Depken at 12:46 PM in Funny Stuff

    Finally, Someone Has Captured American Economics

    Finally, someone has captured the essence of the American economy - or at least the essence of the economic thinking of far too many Americans:

    "[T]he Bush/Halliburton team [is] pulling out the stops to get the Republithugs back in office. Once the dirty deed is done we can expect heating oil prices to climb just when we need it the most. This will be followed in the spring by another “market driven” increase in the price of gas just as the summer driving season begins. It is an old game, drive prices higher just at the time when we need it the most and let them decline just when we don’t use it as much. These gyrations are just a way to tamp down our outrage enough to let them get away with it again next time and conveniently keep their profits down when elections are about to occur and our outrage might lead to change.

    "Think I am wrong? When did we invade Iraq to seize their oil? March, just before driving season. Easy cover for jacking up oil prices wasn’t it? When will we invade Iran? Before May, I promise.

    "It is no accident that elections are held in the fall. Long ago the oil companies figured out that the fall was not an especially profitable time for them due to low gasoline usage and relatively tame energy usage for heating and cooling. What better time to manipulate the market for lower energy costs?"

    This is great satire precisely because it rings true - you can read rants that aren't all that different on left wing blog sites every day. Worth reading the whole thing.

    Posted by Brad Smith at 10:41 AM in Funny Stuff

    College football c. 1906

    1905 and 1906 was a period of reform in collegiate football. New rules were instituted, most notably the forward pass. As the first games were played with the new rules, there were interesting contrasts in how the new rules are received.

    From the Sept. 27, 1906 NYT:

    The first real game of football under the new rules was played here [Carlisle, Pa] between the teams of Carlisle Indians and Villa Nova College. The Indians won by a score of 6 to 0, scoring a touchdown and a goal in the first half and failing to score in the second.*

    The game was variously criticised by the largest crowd that ever witnessed a contest here. The side lines were filled with football experts, who received the game rather unfavorably. The spectators, however, appeared to enjoy it more than the old sport and regarded the rules as distinctly desirable.

    As a matter of fact the play was very open and interrupted by almost constant fumbling...Villa Nova tried a forward pass on the first play...and it succeeded in gaining ten yards. After short gains, however, it lost the ball through the ball touching the ground without touching a player on an attempted forward pass.

    The passing was more of the character of that familiar in basket ball than that which has hitherto characterized football. Apparently it is th intention of football coaches to try repeatedly these frequent long and risky passes. Well executed they are undoubtedly highly spectacular, but the risk of dropping the ball is so great as to make the practice extremely hazardous and its desirability doubtful.

    On the other hand, it seemed impossible for either team to gain ten yards consistently without such plays.

    So, the "professionals" didn't like the new rules at first but the fans dialed in immediately? Why is that not surprising?

    * In 1906, a touchdown was worth five points and a point-after-attempt was worth one point.

    Posted by Craig Depken at 10:30 AM in Sports

    Yale's finances c. 1906

    From the Sept. 26, 1906 NYT:

    Yale University is free of floating debt, according to an annual report made public to-day...the university has a credit balance of $62,000 as against an adverse balance existing for several years.

    The gifts for the year approximate $2,000,000. They have already been announced. The total income to the university has increased from $902,000 to $980,000 while the expensese of $918,000 are $1,000 less than the previous year.

    The Treasurer says that the financial situation of the university is better than for several years; and yet, in spite of the credit balance and increased economies, the university is still hampered for the lack of funds.

    In 1906, $980,000 was approximately $19,639,703 in 2005 CPI adjusted dollars.

    The University's operating revenue totaled $1.68 billion in 2003-2004.

    [Update: The Chronicle of Higher Education reports: "Yale’s $18-billion endowment, the second largest of any private university in the nation, rose 22.9 percent" for a $2.8 billion dollar gain. UT Arlington's operating budget is in the area of $300 million.]

    Posted by Craig Depken at 10:10 AM in Economics

    Capital Woes

    The local fishwrapper finally noticed that my university is suing its former VP for Resource Management and Director of Facilities as well as a local construction firm.

    Specifically, the suit says Aungst handled Capital's purchase of two rental properties at 701 and 707 Sheridan Ave. in February, and paid the owners more than $350,000 over the fair market value of the buildings, plus an illegal broker fee of $50,000....Capital's lawsuit also says Aungst and Fares arranged for Gutknecht Construction to remodel a house owned by Capital for Fares to live in rent free. In [a] letter, Gutknecht vice president Jeff Feinman stated that the company would renovate the house, at 2361 E. Mound St., for $105,000. The lawsuit contends that Fares promised Fredrickson he would pay any cost above $80,000. The lawsuit says Gutknecht charged Capital $306,134 for the work, which Gutknecht never completed. The company also attached a $251,841 lien on the property. Fares and Aungst hid the cost of the renovation by charging some costs to Capital accounts for rental property maintenance and for the construction of a new residence hall, the lawsuit says.

    Meanwhile, the former Director of Public Safety is suing us for $4.6 million.

    I should've gone to law school...

    Posted by Robert Lawson at 09:20 AM in Misc.

    September 26, 2006
    Your federal tax dollars at work …

    … fighting efforts to lower your state’s taxes and spending. The PBS show “NOW” on Friday did a hatchet job on donor Howie Rich and the efforts to limit state government spending in Montana and elsewhere through ballot initiatives. Though the show acknowledges that it’s perfectly legal for out-of-staters to donate funds to support initiative campaigns, and that Rich’s donations have been fully disclosed in states that require disclosure, “NOW” gave many minutes to opponents of those initiatives (they also interviewed one pro-initiative Montanan organizer, whom they put on the spot). The opponents – and the “NOW” reporter herself – insinuated that there’s something improper about non-disclosure in states that don’t require disclosure, and more generally something nefarious about a "wealthy New Yorker" funding such initiatives in pursuit of his “extreme” agenda. (The show also reports that some hired gatherers apparently faked a fair number of petition signatures in some states, which is bad, but that’s a guilt-by-association diversion from the funding issue.)

    But don’t take my word for it that “NOW” has an anti-spending-limit slant. View the video (takes about 20 minutes), or read this copy from the PBS website, and judge for yourself:

    The aim is to slash state spending, with the potential for deep cuts in health care, education, and other social services. But are these local initiatives really "home" grown? This week, NOW investigates how organizations associated with one wealthy New Yorker, Howard Rich, are secretly providing major funding for ballot measures. In some states, those contributions have been matched by ones from Americans for Tax Reform, an anti-tax group headed by the politically well-connected Grover Norquist. Since 2001, Norquist visited the White House nearly 100 times, including six meetings with President Bush.

    NOW also takes a look at the questionable tactics used to put these issues on your ballot. Is someone manipulating your state's laws, your vote, and you?

    Posted by Lawrence H. White at 05:51 PM in Politics

    Economic Freedom Debate

    The recent edition of the ever-interesting Econ Journal Watch includes my comment on a recent paper [abstract] by Jakob de Haan et al. that surveyed the literature linking economic freedom and economic growth.

    Abstract: Jakob De Haan, Susanna Lundström, and Jan-Egbert Sturm have written a valuable survey of the literature that uses the Gwartney and Lawson economic freedom (EFW) index. Their discussion of the index’s theoretical underpinnings and methodological ins and outs itself should be useful to scholars interested in the field. While DLS accurately describe the mechanics of the construction of the EFW index and the econometric literature that has found a link between economic freedom and economic growth, I find myself in disagreement with some of their commentary. This reply in part will address these issues.

    They replied in turn.

    Posted by Robert Lawson at 05:03 PM in Economics

    I want my L-TV

    Until now, the only self-identified libertarian among fictional TV characters has been “Penn Jillette” on the Showtime series “Bull$#@!”. But on Sunday’s season opener of Desperate Housewives on ABC, we got this exchange during a bedroom scene between Bree and her new boyfriend Orson:

    "I don't do that," she says. "I'm a Republican."

    “I'm a Libertarian," Orson replies. "I believe in minimizing the role of the state and maximizing individual rights. Trust me, I know what I'm doing."

    Hah! Too bad they made the libertarian character not only a creepy control freak who murdered his wife and put Mike into a coma, but a dentist.

    Posted by Lawrence H. White at 04:32 PM in Culture

    We're paying how much?

    Front page of today's Fort Worth Star-Telegram has the following headline:

    Stadium to look 'like a spaceship'

    Uggh. I'm not sure that's what we wanted to hear.

    More at Heavy Lifting

    Posted by Craig Depken at 03:53 PM in Sports

    Missing Middle

    For at least 25 years, market critics have decried the Missing Middle--the alleged bedrock of our society. As Bruce Bartlett points out, they've been right. Families with household income between $25,000 and $75,000 per year are going missing. The fraction of households falling into this category has been falling, from 52.9% in 1975, to 49.3% in 1985, to 46.7% in 1995, and to 44.6% in 2005.

    Turns out, we also have a Missing Lower as well as a Missing Middle. The fraction of households with income below $25,000 has been in decline: 33.1% in 1975, 30.5% in 1985, 28.9% in 1995, and 27.1% in 2005.

    Of course, arithmetic reveals the whereabouts of these Missing Households. The fraction of households with income above $75,000 has changed as follows: 14% in 1975, 20.2% in 1985, 24.4% in 1995, and 28.3% in 2005.

    Posted by Wilson Mixon at 01:32 PM in Economics

    Incentives matter - 1906 San Fran Earthquake Edition

    From the Sept. 26, 1906 NYT:

    Marines have been deserting the barracks on Mare Island, Cal., at a rate which has made it necessary for Brig. Gen. G. F. Elliott, commanding the Marine Corps, to detail a strong squad to search San Francisco for deserters.

    So great has been the demand for laborers there that representatives of labor agencies have been urging the marines to desert and go to San Francisco, where $5 a day is paid to able-bodied men to help clear the city of debris. The police when called upon refused to arrest the deserting marines.


    The NBER estimates hourly wages in the building industry in 1906 as $0.48 or $3.84 for an eight hour day. I haven't been able to locate the daily wage for a Marine in 1906. Evidently it was considerably less than $5 per day.

    Posted by Craig Depken at 12:40 PM in Economics

    On baseball c. 1906

    From an editorial in the Sept. 26, 1906 NYT:

    Many and violent are the vicissitudes of baseball. Necessarily so, with the prevailing practice of strengthening the local teams by importing mercenaries without any regard for the real residence of the mercenaries, so that the strongest team indicates not at all the superior culture of its putative habitat in baseball. It denotes only the superior judgement or length of purse, or both, of the local management which has secured the services of the team. It is hard to see any rational basis for the local patriotism which can nourish itself on the achievements of "hired men" from anywhere, even though we have proof that local patriotism is roused by the contest to seething enthusiasm.
    In other words, the New York team should be populated by New Yorkers, and the Atlanta team should be populated by Atlantans. This is an interesting perspective on the potential labor market for baseball players. Assuming the distribution of baseball talent was similar across cities, smaller cities would have a hard time fielding a competitive team if they were unable to import "mercenaries" from other locales.

    When baseball (and other sports) players lived in the local area during the off-season, interacted more with the local fans, often through off-season jobs, there might have been a stronger tie with the team. Indeed Psychologist Robert Passikov suggests that one component of fan loyalty is "bonding with players and other fans."

    However, civic pride is only valuable to team owners in as much as it translates into revenues, i.e., people in the stands. To this end, if winning is more important than nativism, the decried "mercenaries" are potentially welfare improving - players are worth more and are paid more, team owners earn more revenue (and potentially profit), if the team wins more fans enjoy an increase in surplus. Evidently the editors of the NYT suffer a decrease in surplus, but I'm willing to bet that the net is positive.

    For an example of local-only talent-based sports, look at high-school sports. Granted the competition is a little lower as the talent has not been completely developed, but in general people are not willing to pay as much nor willing to attend as much as at the "mercenary" based teams - even at the minor league professional levels. Although, I must admit to exceptions, such as certain Texas high school football games which attract more people than some college games.

    Posted by Craig Depken at 12:23 PM in Sports

    Yarn Stealing Granny

    From the AJC:

    A woman prosecutors called a serial yarn thief will spend a year in jail after pleading guilty to shoplifting Monday in DeKalb County.

    Audrey Yandel, a 70-year-old Atlanta grandmother and a retired nurse, has been convicted 12 times in the past two decades, mostly for stealing yarn, according to DeKalb Deputy Chief Assistant District Attorney John Melvin.

    In the DeKalb cases, Yandel was caught stealing yarn at a Decatur shop in January 2005 and knitting needles at a Dunwoody business in May 2006.

    Kidding aside, I doubt spending perhaps $25k to lock up a serial yarn thief is good use of taxpayer funds. This is a crime that seems more appropriate to punish via a stiff fine.

    Posted by E. Frank Stephenson at 09:36 AM in Law

    At Least One Thing Is Right About Harvard

    Harvard has more concentrators in economics than in any other discipline.

    Source here; HT Mankiw.

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

    Tragedy of the Common Potty

    Harvey Mansfield's swipe at economists leads to a discussion on the tragedy of the commons on Volokh. Most comments are not kind to folks in my profession; lawyers get a few smacks.

    My thoughts:
    1. When teaching property rights and the tragedy of the commons to my principles students, public and dormitory restrooms are my ace in the hole. Even skeptical students get that example.

    2. Some of the Volokh commenters seem to have spent way too much time on their hands--the bathroom isn't high on my list of places to linger and people watch.

    HT: MR

    Posted by E. Frank Stephenson at 09:08 AM in Economics

    September 25, 2006
    Man v. Nature c. 1906

    From the Sept. 25, 1906 NYT:

    Mobile, Ala -- A 500-pound octopus was caught yesterday by a fishing party in Mississippi Sound, and killed after a struggle that lasted for eight hours....The octopus towed the boat of the party stern first for a distance of ten miles. It was finally killed with rifles.

    Posted by Craig Depken at 12:48 PM in Misc.

    John Lott Will Love This

    Greenleaf, Idaho -- All Americans have the right to bear arms. Some towns have even gone as far as to require each household to have a gun. Now a small Idaho town is contemplating a similar idea-- it's called the Civil Emergencies Ordinance. And although gun ownership is just one piece of this ordinance, it's the part that's getting the most attention.

    "We've blessed to be a fairly rural area of the state, so we don't have a lot of crime and I think we'd like to keep it that way," said Lee Belt, Greenleaf city clerk.

    Drive about 10 minutes west of Caldwell and you'll run into Greenleaf, Idaho, population 860. If city council member Steve Jett has his way, each head of household that can legally own a gun, will. Along with that they're encouraged to have ammunition and appropriate training.

    Story here. Chuckles aside, the right to own a gun is a good thing but folks should not be required by law to do so.

    Posted by E. Frank Stephenson at 09:41 AM in Law

    September 24, 2006
    Huh?
    Judge Robert G. James of the United States District Court, Western Division of Louisiana, has said that it is criminal trespass for the American boating public to boat, fish, or hunt on the Mississippi River and other navigable waters in the US.

    Judge James ruled that federal law grants exclusive and private control over the waters of the river, outside the main shipping channel, to riparian landowners. The shallows of the navigable waters are no longer open to the public. That, in effect, makes boating illegal across most of the country.

    "Even though this action seems like a horrible pre-April fools joke, it is very serious," said Phil Keeter, MRAA president, in a statement. "Because essentially all the waters and waterways of our country are considered navigable in the US law, this ruling declares recreational boating, water skiing, fishing, waterfowl hunting, and fishing tournaments to be illegal and the public subject to jail sentences for recreating with their families."


    Found here.

    more here

    Posted by Craig Depken at 05:59 PM in Law

    Old frontiers in economic policy

    Repeat after me, class: price control causes a shortage. A government that tries to help consumers get bread by forcing its price down in fact makes it harder for consumers to get bread. In Zimbabwe this week, Voice of America reports:

    Bread has become hard to find since the government ordered bakers last week to roll back prices and sell loaves at the official price of Z$200 dollars. Bakers have had to import their own flour and say the official price doesn’t let them recover costs.
    Posted by Lawrence H. White at 01:28 PM in Economics

    Rumble over central bank independence in Switzerland

    Voters in Switzerland today rejected a ballot initiative that would have directed the Swiss National Bank’s annual profits (last year US$1.2 billion, basically from seigniorage on Swiss francs, gold sales, and foreign exchange gains) specifically to the national pension scheme (AHV, the country’s Social Security system). Currently about 55% of the SNB’s profits go to the federal government, and the other 45% to the various cantonal governments. These governments in turn, of course, subsidize the pension scheme. The Swiss National Bank opposed the initiative as infringing its independence. The Swiss Bankers’ Association likewise rejected treating the SNB as a cash cow, reports the International Herald Tribune:

    "If the SNB could contribute 1 billion francs to the AHV, why not 2 billion or 3 billion given that the AHV will need the money?" the Swiss Bankers Association, an influential association of the country's commercial banks, said in the run-up to the vote.
    Posted by Lawrence H. White at 01:17 PM in Economics

    September 23, 2006
    Free trade argument c. 1906

    File this in the "things never change" drawer. From a letter to the editor in the Sept. 23, 1906 NYT:

    How does the [Republican Dingley] tariff raise the price of building material. By taxing it - some 40, some 60, some 100. Why should there be any duty on lumber? Did man create the great forests, whose owners are Republicans, and demand a tax on Canadian lumber, so as to increase their profits? Why should not the tax on every article in the metal schedule be reduced to 25 per cent.?...Competition with foreign countries, now prohibited by the Dingley bill, would put the managers on alert to improve the quality of their product and would compel a reduction in its [steel's] price. The structural steel, the hardware, the tin roofs of buildings, would all cost less. So would the mason's dinner pail and the tin pans used in his kitchen. And the capitalists would still get a fair return for their investment. In the name of justice, then, in the name of the tenant who has to count every dollar he pays in rent, of the man who has saved a little money and wants to build a small house for his family, and of the farmer who needs a new barn, let us stop paying the bonuses to the great manufacturers and owners of mines and forests that the present tariff compels.
    Wait a second. We have had tariffs on Canadian lumber for over 100 years and we still can't "compete" with the Canadians in lumber!?! Oh, right, that whole comparative advantage thing.

    Posted by Craig Depken at 04:09 PM in Economics

    Bad prediction c. 1906

    From the Sept. 23, 1906 NYT:

    "I do not believe the present experiment in American college football can survive. In my opinion, the whole country will within five years be playing the Rugby game."
    Who dared such a prognostication? None other than Benjamin Ide Wheeler, President of the University of California, who was previously football coach (and professor) at Cornell.

    Oops.

    Posted by Craig Depken at 03:58 PM in Sports

    Important lesson c. 1906

    From the Sept. 23, 1906 NYT:

    From the Louisville Courier-Journal - A health crank who has never smoked, chewed, nor used intoxicants, and who lives upon 10 cents a day, rode 11,761 miles on a bicycle when he was 50 years old. The lesson we learn from this is that strenuous economy does not always result in the ownership of motor cars.

    Posted by Craig Depken at 03:35 PM in Misc.

    Real genius c. 1906

    From the Sept. 23, 1906 NYT:

    The youngest collegian in this section of the country, if not in the United States, is eleven-year-old Norbert Weiner, who has entered the freshman class at Tuft's College. He is the son of Leo Weiner, Assistant Professor of Slavonic Languages at Harvard, and resides with his parents at 11 Bellevue Street, Medford Hillside....He is to make the study of philosophy his specialty.
    He changed his major, as his Wikipedia entry claims he went to study mathematics (although at that time philosophy and other subjects were sometimes rolled together).

    Furthermore, a crater on the dark side of the moon carries his name.

    Posted by Craig Depken at 03:29 PM in Misc.

    September 22, 2006
    Rumble over central bank independence in Poland

    Back in March Poland’s parliament, where a nationalist-populist coalition prevails, was upset over a merger between two foreign-owned Polish banks. Leszek Balcerowicz, architect of Poland’s “shock therapy” free-market reforms in the 1990s and today ironically head of the central bank and of the Banking Supervisory Committee (KNB), refused calls to block the merger. So Parliament moved banking and financial regulatory authority out of the KNB and other agencies to a new agency (which began operation on Tuesday). Free-marketers in Poland have been skeptical about the new agency: "‘It's all about giving their friends a job,’ MP Zbigniew Chlebowski of the opposition [market-]liberal Civic Platform told Poland's Dziennik daily.”

    Parliament also set out to embarass Balcerowicz by establishing a commission to investigate the deregulation and privatization of banking since 1989. Balcerowicz refused to appear before the commission, on the grounds that it would compromise the central bank’s independence. The battle ended up in court. The court has now ruled in favor of the central bank, Forbes reports:

    Poland's constitutional court ruled Friday that a parliamentary commission set up to probe the activities of the country's central bank and its governor Leszek Balcerowicz was unconstitutional.

    Balcerowicz’s term ends in January. I’m guessing that the next central bank head that Poland's ruling politicians appoint won’t be quite so independence-minded.

    Posted by Lawrence H. White at 03:56 PM in Economics

    DDT: Some History

    Steven Malloy offers an insightful history of DDT policy. Among the villains: the Audubon Society, EDF, the Sierra Club, William Ruckelshaus, and (of course) Rachel Carson.

    On the activist groups: "Business are often held liable and forced to pay monetary damages for defective products and false statements. Why shouldn't the National Audubon Society, Environmental Defense, Sierra Club and other anti-DDT activist groups be held liable for the harm caused by their recklessly defective activism?"

    On Ruckelshaus: "The DDT ban solidified Ruckelshaus’ environmental credentials, which he has surfed to great success in business, including stints as CEO of Browning Ferris Industries and as a director of a number of other companies .... Corporate wrongdoers ... were sentenced to prison for crimes against mere property. But what should the punishment be for government wrongdoers like Ruckleshaus who ... abused his power and affirmatively deprived billions of poor, helpless people of the only practical weapon against malaria?"

    On Carson: "She was even honored with a 1981 U.S. postage stamp. Next year will be the 100th anniversary of her birth. Many celebrations are being planned. It’s quite a tribute for someone who was so dead wrong."

    Malloy might be a little hard on Carson, but he's spot-on with the rest. A charitable reading of Carson would include this sentence (Wikipedia entry for DDT): "Practical advice should be 'Spray as little as you possibly can' rather than 'Spray to the limit of your capacity.'" I did say, "A charitable reading."

    Posted by Wilson Mixon at 12:34 PM in Politics

    Government projects c. 1906

    On Sept. 21, 1906, the six ton cornerstone of the lesser known Roosevelt Dam was laid in Roosevelt, Arizona.

    As reported in the September 22, 1906 NYT:

    At 5:15 P.M. yesterday Supervising Architect Hill laid the cornerstone of the Roosevelt storage dam, an immense rock weighing six tons.

    This is the real beginning of construction of the big Government enterprise, all previous work being preliminary. The cornerstone is 32 feet below the normal river bed.

    That's the entire article. Perhaps what was happening in what, at the time, was a U.S. territory didn't warrant a big response in New York? Maybe the general mood was more favorable towards building dams? Perhaps the project was "big" but not "that big"? Note, the paper didn't say it was a "Big Government" enterprise.

    I remember when I first stood at the bottom of Hoover Dam and wondered if it would even be possible to contemplate such a project today. My almost immediate conclusion was 'NO.'

    A Google Maps search reveals the dam still stands (as those in Phoenix likely already know). Official web page at the Bureau of Reclamation.

    This is why I love reading the paper from 100 years ago - you learn something new every day.

    Posted by Craig Depken at 12:04 PM in Economics

    September 21, 2006
    Polar Bears Revisited

    ABC news ran two global-warming stories today. The first was Branson’s giveaway; the second was not news, but a revisit of the dying polar bears story. These are excerpts from an article cited by cei.org that calls this report into question.

    One polar bear population (western Hudson Bay) has declined since the 1980s and the reproductive success of females in that area seems to have decreased. We are not certain why, but it appears that ecological conditions in the mid-1980s were exceptionally good.

    Climate change is having an effect on the west Hudson population of polar bears, but really, there is no need to panic. Of the 13 populations of polar bears in Canada, 11 are stable or increasing in number. They are not going extinct, or even appear to be affected at present.

    It is noteworthy that the neighbouring population of southern Hudson Bay does not appear to have declined, and another southern population (Davis Strait) may actually be over-abundant.

    I understand that people who do not live in the north generally have difficulty grasping the concept of too many polar bears in an area. People who live here have a pretty good grasp of what that is like to have too many polar bears around.

    By the way, Charlie Gibson closes the report by saying that scientists have documented a 20% population decline in Western Canada since the 1980s. Good work: Select your subset of the poplulation, select your endpoints, and fit your trend line. I never knew model estimation was so easy.

    Posted by Wilson Mixon at 09:03 PM in Science

    Incentives Matter: Rational Criminals Edition

    The abstract of a new NBER Working Paper:

    We report results from economic experiments that provide a direct test of the hypothesis that criminal behavior responds rationally to changes in the possible rewards and in the probability and severity of punishment. The experiments involve decisions that are best described as petty larceny, and are done using high school and college students who can anonymously take real money from each other. We find that decisions about whether and how much to steal are, in general, rational and responsive to the variations in tradeoffs, and sometimes, though not always, to the overall availability of criminal opportunities.

    Posted by E. Frank Stephenson at 02:26 PM in Economics

    Incentives (Don't) Matter: Texas Teacher Edition

    From today's Fort Worth Star Telegram:

    That's one of the reasons teachers at Bellaire overwhelmingly rejected a state grant for $90,000 in salary bonuses linked to student achievement. The recent secret ballot vote was 44-2.

    Bellaire's decision was rare. Of the 1,161 schools across Texas that qualified for the grants, only 57 did not accept.

    Prediction: Bellaire will be looking to replace two teachers rather soon.

    HT: Colleague Mike Ward.

    Posted by Craig Depken at 01:17 PM in Economics

    On campaign contributions c. 1906

    Another editorial from the September 21, 1906 NYT:

    We have been invited to send a dollar contribution to the Republican campaign fund that is being raised by popular subscription and to which President Roosevelt recently subscribed. We would like to have our dollar in such select company all right, but we've done all the contributing we intend to this year.

    We recently have completed building a house at a cost of something over $4,000, and for every foot of lumber, every pane of glass, every sack of cement, every pound of nails, and, in fact, for nearly every bit of material that went into it we made a good, liberal contribution through the trusts that control them, and we guess we have done our share. [emphasis added]

    We'll just let the several trusts to which we have had to pay unwilling tribute in the past year pay our dollar for us. We need it and they don't.

    Posted by Craig Depken at 12:42 PM in Politics

    Party advice c. 1906

    From the September 21, 1906 NYT:

    Recent events point to the belief that the Democratic nominee for 1908 must come from that section of the country wherein lies the voting strength of the party...it is well to cast about for an available standard bearer. Alabama has many favorite sons; so, too, have Mississippi, Tennessee, Georgia, North and South Carolina, Louisiana, and even Florida. Virginia has a score or more of very able men...
    So far, so good. Pull a candidate from, at the time, the heavily Democrat south. Yet the editorial closes with advice that is as sound today, suggesting that the South, and therefore the Democrat party,
    ...must now assert its independence, cast out demagogues, blatherskites, wild-eyed visionaries, who would use the organization to advance selfish interests...

    I like the word blatherskites ("A babbling, foolish person"). Clearly, neither of the major parties has fully asserted its independence from such folks.

    Does this mean that parties are, by definition, comprised of blatherskites and demagogues, and there is no reason for parties to change in nature? Or is it that successful parties are those populated with demagogues, and blatherskites (see, I love that word), that serve to lure the median voter? Many insist they want a third party, but of what kind? More of the same, yet different?

    Posted by Craig Depken at 12:36 PM in Politics

    Choose Life Ohio.

    The local fishwrapper reports

    Ohio motorists can keep buying "Choose Life" license plates now that abortion-rights advocates have dropped their lawsuit to block sales of the plates. The move came because the U.S. Supreme Court refused to hear an appeal of a decision upholding a similar program in Tennessee.

    plate_200.jpg

    Given that the state has authorized dozens of other license plates expressing clear viewpoints (Breast Cancer Awareness, Celebrate Kids, Cleveland Browns (ugh!), National Rifle Association...), this seems to make sense to me. Of course, a Choose Death Pro-Choice license plate would also have to be allowable. We'll probably have to wait for a Democratic majority in the legislature for that to happen though.

    Posted by Robert Lawson at 08:51 AM in Politics

    Ohio The Heart of It All

    What does Ohio need to get its economy moving again?

    Tax cuts? Nah.

    Medicaid Reform? Nah.

    Real School Reform? Nah.

    A new tag line? Yeah, that's it!!!

    Come to Ohio: Build Your Business. Love Your Life. The price tag for coming up with this winner? $400,000.

    Posted by Robert Lawson at 08:34 AM in Economics

    September 20, 2006
    Will the Democrats Flip the House?

    Slate's mathematician, Jordan Ellenberg, says the odds of a Democratic victory depend on the degree of correlation among races, but, "it's fair to say that the Democrats' chances of flipping the House are somewhere between 15 percent (the scenario in which the races are independent) and 50 percent (where the races are as correlated as possible)."

    Intrade quotes 56.5 as the price of "Republican Party to retain control," suggesting a probability around 43.5%. The Washington Stock Exchange places the probability that Republicans retain control at 69.0%.

    Posted by Wilson Mixon at 09:17 PM in Politics

    David responds to Goliath

    NORFED, the issuer of the Liberty Dollar, officially reponds here to the US Mint's allegation that its silver pieces are illegal. The kernel of the reply:

    In the sense that money may be used to refer to the coinage of a government the Liberty Dollar never has claimed to be, does not claim to be, is not, and does not purport to be, money. ... the Liberty Dollar, ... in addition to its being a numismatic item, is a means of voluntary barter.
    Posted by Lawrence H. White at 04:13 PM in Economics

    Search and Rescue & the Wisdom of Crowds

    In July 1996, a search and rescue (SAR) operation had begun for missing National Park Ranger Randy Morgenson in the Sequoia and Kings Canyon National Park area.

    Backpacker magazine (June 2006, sorry--no story link) has and article about the SAR. Where do you look for a missing park ranger in such a vast area?

    One of the organizers:

    "inked up" a topographic map on the picnic table dividing it into 16 segments labeled A through P. Each segment was deliniated by obvious geographic features--rivers, ridgelines, trails, meadows, passes or mountains. Together they formed a zone that was roughly 80 square miles, the area that the rangers agreed represented the outer limits of where Randy might have traveled on a 4-day patrol. The sheer size of the operation sank in.

    They decided to organize the search using the Mattson Consensus.

    Each ranger was asked to assign each segment with a number value--high for areas where Randy most probably was, low for least-probable locales. According to Mattson, it was "best to do this privately because it will ensure that even meeker individuals will be able to express their opinion without being intimidated by the more vocal members of the group."

    The percentage points assigned by each ranger for 16 segments plus the ROW [RL: rest of the world] segment had to add up to 100 points. Nobody could assign a zero for any area. That would mean that he or she knew with certainty that Randy was not in a particular zone, which was impossible.

    The information gathering process had consumed hours, but the voting process took only 20 minutes. Not surprisingly, the Lake Basin area (segment F) was the highest-percentage POA [RL: probability of area] at 26.2 percent, while Marion Lake and its surrounding cirque (segment G) was the second-leading selection at 19.2 percent. The ROW option was voted as the lowest POA...

    In the end, despite the "wisdom of crowds" approach, the SAR failed to find Randy Morgenson and gave up after two weeks of searching. Some five years later, his remains were found apparently drowned after a fall while crossing a creek "within an area of high probability of discovery in the original search." A book has been written about Morgenson's life and disappearance.

    Posted by Robert Lawson at 09:20 AM in Economics

    Lessons of DDT Policy

    Thomas Bray's comments on implications of DDT policy:

    Researchers haven't even been able to show conclusively that DDT is the cause of widely-cited declines in populations of eagles and other animals. There appeared to be a strong correlation, but the type of DDT use being recommended by WHO - indoor spraying to reduce the risk of mosquito bites to sleeping humans - is no threat to nature. All this was known more than three decades ago, but so powerful had the environmental lobby become that rational decision-making was all but impossible.

    There is an important lesson here. Policy decisions that aren't based on a cold, hard appreciation of costs and benefits, as well as solid science, cost lives.

    Citing the so-called "precautionary principle," advocates of such controls [to reduce greenhouse emissions] argue that we must act even before all the facts are in. To delay is to risk catastrophe down the road, they assert. But insofar as the precautionary principle is valid, it might offer a strong reason not to act too quickly. The one thing we know about government, after all, is that it often gets things wrong - as it did with DDT.

    Posted by Wilson Mixon at 09:12 AM in Science

    Incentives Matter: New York Poverty Edition

    A news report via Drudge:

    NEW YORK (AP) -- Poor New Yorkers who make healthy choices - such as staying in school and regularly seeing the doctor - should be rewarded with cash to help break the cycle of poverty, Mayor Michael Bloomberg suggested Monday.

    The idea, which has seen success in countries including Brazil and Mexico, developed out of an anti-poverty commission's report released Monday.

    Along the same lines, here's a post from MR about economist Roland Fryer's paying students for academic improvement.

    Posted by E. Frank Stephenson at 08:58 AM in Economics

    September 19, 2006
    On the public sector c. 1906

    In 1906, there is an undercurrent or "movement" concerning municipal/government ownership of the means of production in several industries, most notably the railroads but also utilities, food preparation, and others. Perhaps it was a natural outcome of the political discussions of the times, but that doesn't mean there wasn't opposition to the idea.

    Case in point is an editorial in the Sept. 19, 1906 NYT:

    That [private ownership] might be what the people want, but it is not what the politicians want. The politicians hunger and thirst for the control of the payrolls which would accompany the adoption of municipal ownership. We have just had the report of the Haag commission informing us that in this city there are 60,948 persons on New York's payroll at present, to the tune of $57,068,253. How many times would this be multiplied if the municipal ownership theorist got their way? And what would be the chance of defeating them if ever they got control of perhaps several times 60,000 offices and the expenditure of hundreds of millions of dollars?
    Good question. Let's look at NYC today. The editorial goes on:
    There is a yarn to the effect that in Chicago they mow the parks by man power, because horse mowers don't vote. We cannot vouch for the story, but it illustrates an idea in connection with municipal ownership.

    [Update 2:14PM CDT: Came across this article concerning New Jersey considering taking over operations of Amtrak in the state (State considers Amtrak takeover). Says Gov. Corzine: "Amtrak can never do enough when they want to because of a lack of resources. Not enough money is put into Amtrak."]

    Posted by Craig Depken at 12:35 PM in Economics

    September 18, 2006
    He said what?

    Think Progress reports on a speech by Al Gore at NYU Law School which included the following quotes:

    Well, first of all, we should start by immediately freezing CO2 emissions and then beginning sharp reductions.

    and
    For the last fourteen years, I have advocated the elimination of all payroll taxes — including those for social security and unemployment compensation — and the replacement of that revenue in the form of pollution taxes — principally on CO2. The overall level of taxation would remain exactly the same. It would be, in other words, a revenue neutral tax swap. But, instead of discouraging businesses from hiring more employees, it would discourage business from producing more pollution.
    I have never (to my recollection) heard Al Gore advocate the elimination of payroll taxes. Replacing most of the personal income tax system with a tax system dependent upon CO2 production is a new one to me as well.

    [Re-entered]: It seems that a) the payroll taxes would never be "done away with" but would only be shifted, perhaps to non-monetary taxes, b) a CO2 tax would not tax based on value added, upon which our current system is somewhat loosely based, c) it presumes that the government can and will choose the optimal CO2 tax, which is unlikely.

    Would professors and politicians be taxed for their CO2 production. What about therapists or preachers?

    Posted by Craig Depken at 05:25 PM in Economics

    EFW Map

    The Fraser Institute has produced a seriously cool color 24x36 map using the Economic Freedom of the World index. For information about ordering the map, send an e-mail to sales@fraserinstitute.ca, or call (604) 688-0221 ext. 580.

    EFWposter.JPG

    Posted by Robert Lawson at 04:37 PM in Economics

    Professor v. Cell Phone

    Oh -- I would so love to do this when someone's cell phone goes off in my class.

    [HT: Alex Padilla]

    Posted by Robert Lawson at 04:26 PM in Funny Stuff

    Is the solution the problem?

    This article at the Chronicle of Higher Education describes a proposal in the Senate to provide funds that "would help states collect data on individual students from pre-kindergarten through the baccalaureate level. Officials and researchers could use the information to examine retention and graduation rates of college students..."

    How this will not lead to a single nation-wide database of students, as students and their families move from one state to another, is not discussed. There is substantial opposition to the proposal, but not necessarily from the folks you would expect.

    However, consider the following phrase from the article:

    Meanwhile, momentum has been building in the Senate this year for a bill to help improve the country's global economic competitiveness...
    What "bill" (that has a chance in Hades of passing) will improve our global economic competitiveness?

    Posted by Craig Depken at 12:28 PM in Politics

    Food Safety c. 1906

    Given recent events, this story from the September 18, 1906 NYT was of interest:

    "The Food and Drugs act," he [Dr. H. W. Wiley of the Department of Agriculture] continued, "has two great purposes in view, which stand out clearly throughout all its sections, namely, first, to prevent the introduction of any injurious substances to food and drug products, or the abstraction of any valuable properties therefrom; second, to prevent the misbranding of any package of food or drug products, either as to the nature of the contents of the package or their properties, or as to the place, country, State or Territory where made or produced.

    Later in the article, it is described how hearings in Chicago turned to the topic of coloring of foods:
    D.W. Hutchinson, Vice President of W. H. Hutchinson & Son, soda water makers, of Chicago, Ill., spoke for coal tar coloring. One ounce of coal tar red will color over 2,000 gallons of soda water, he said, while an ounce of coal tar yellow or orange will color over 4,000 gallons.

    "It can be readily seen," he went on, "in what small quantities it is used for - "

    "Is it harmless?" Dr. Wiley interrupted.

    "Quite so."

    "Well, why talk about small quantities at all, then?" Dr. Wiley asked. "What difference do quantities make when the material under consideration is harmless? Does it add anything to the quality of the soda water?"

    "Nothing. It simply appeals to the eye. You couldn't sell strawberry soda water by using the natural colored flavors as they are extracted."


    Posted by Craig Depken at 12:19 PM in Economics

    Malaysia

    I've been quiet because I've been traveling. Just got back from the Economic Freedom Network Asia in Malaysia.

    More later...

    Posted by Robert Lawson at 11:27 AM in Economics

    September 17, 2006
    Better to feel good than to do good

    How environmental activists are "Dooming Woods and Wildlife":

    Unfortunately, legal action has blocked common-sense thinning to restore forests to their natural diversity and resistance to catastrophic wildfire. Already, many California public forests have grown dangerously overcrowded with 10 to 20 times more trees than is natural. The Giant Sequoia National Monument is near the top of the crowded forest list. It already burned once, and it is certain to burn again. ... Rather than protecting forests and wildlife with lawsuits, activists condemn them to destruction. Massive wildfires move so fast that flames can overtake animals like deer, bears and fishers before they escape. Streams boil and fish die. Ash fills burrows and suffocates ground dwellers. Smoke inhalation kills most animals before the flames reach them.
    Posted by Wilson Mixon at 02:56 PM in Economics

    September 16, 2006
    Homeland security c. 1906

    From the September 16, 1906 NYT:

    As a result of an investigation by the School Board of Hellertown [Penn.], a village near here, concerning the robbing of school houses, it has been discovered that Hellertown is the home of half a dozen boys, each about 16 years old, who have organized the "Jesse James boys" and who planned to commit various crimes.

    [T]he boys had planned to burn the hosiery mill at Hellertown, to wreck the "Scranton Flyer" on the Jersey Central Railroad, and blow up Odd Fellows' Hall.

    Posted by Craig Depken at 02:54 PM in Misc.

    The Gentle Cynic c. 1906

    From the September 16, 1906 NYT:

  • Many a girl has lost a good friend by marrying him.
  • Liquor improves with age. The longer you keep it the better it is for you. Figure it out.
  • The minute a man accomplishes anything he is called a crank by those who have failed.
  • If you go about it right, a quarter will make as much noise dropping into the collection plate as a five-dollar gold piece.
  • Posted by Craig Depken at 02:47 PM in Funny Stuff

    350 years of discovery

    The Royal Society announces their archive of 350 years of articles is freely available through the end of the calendar year. From the front page:

    For the first time the Archive provides online access to all journal content, from Volume One, Issue One in March 1665 until the latest modern research published today ahead of print. And until December the archive is freely available to anyone on the Internet to explore.


    Spanning nearly 350 years of continuous publishing, the archive of nearly 60,000 articles includes ground-breaking research and discovery from many renowned scientists including: Bohr, Boyle, Bragg, Cajal, Cavendish, Chandrasekhar, Crick, Dalton, Darwin, Davy, Dirac, Faraday, Fermi, Fleming, Florey, Fox Talbot, Franklin (pictured), Halley, Hawking, Heisenberg, Herschel, Hodgkin, Hooke, Huxley, Joule, Kelvin, Krebs, Liebnitz, Linnaeus, Lister, Mantell, Marconi, Maxwell, Newton, Pauling, Pavlov, Pepys, Priestley, Raman, Rutherford, Schrodinger, Turing, van Leeuwenhoek, Volta, Watt, Wren, and many, many more influential science thinkers up to the present day.

    Here's a link to Crick and Watson (1953) whose innocent sounding abstract is as follows:

    This paper describes a possible structure for the paracrystalline form of the sodium salt of deoxyribonucleic acid. The structure consists of two DNA chains wound helically round a common axis, and held together by hydrogen bonds between specific pairs of bases. The assumptions made in deriving the structure are described, and co-ordinates are given for the principal atoms. The structure of the crystalline form is discussed briefly.
    I wonder if there is an article describing the discovery of dirt. That was tongue-in-cheek, the archive is an amazing browse.

    Posted by Craig Depken at 11:41 AM in Science

    September 15, 2006
    Is private metallic currency legal?

    A few years ago I wrote an article for The Freeman on a private silver-based currency, the Liberty Dollar, at that time known as American Liberty Currency. The issuing organization, NORFED continues to produce both coin-like silver pieces and silver-redeemable paper certificates. I saluted it as a noble experiment, though I doubted it would catch on in any big way while fiat dollar inflation remains in single digits. I called the alternative currency “fully legal”. Now come news reports saying that the US Mint is disputing its legality. (HT: “Common Sense” at HNN.) USA Today reports:

    The government Thursday warned consumers and businesses that it is illegal to use alternative money known as "Liberty Dollar" coins, which organizers promote as a competitor to the almighty dollar.

    Here’s what the US Mint’s own website says:

    Read More »

    Posted by Lawrence H. White at 07:50 PM in Economics

    DDT, Malaria, and the WHO

    A recent Wall Street Journal article suggests that the WHO, unlike much of the UN, has taken temporary leave of its insanity:

    The World Health Organization, in a sign that widely used methods of fighting malaria have failed to bring the catastrophic disease under control, plans to announce today that it will encourage the use of DDT, even though the pesticide is banned or tightly restricted in much of the world.

    The new guidelines from the United Nations public-health agency support the spraying of small amounts of DDT, or dichloro-diphenyl-trichloroethane, on walls and other surfaces inside homes in areas at highest risk of malaria. The mosquito-borne disease infects as many as 500 million people a year and kills about a million. Most victims are in sub-Saharan Africa and under the age of 5.

    HT to Jeff Hoffman, who expresses hope that some bureaucrats are coming to see the importance of marginal analysis. I'm less sanguine.

    Posted by Wilson Mixon at 07:38 PM in Science

    Property rights in the classroom

    The Chronicle of Higher Education reports on an ongoing dispute at NC State concerning a professor selling audio versions of his lectures online. A dean at NC State and the school newspaper have objected to the idea, although for different reasons.

    The upshot is that the professor has stopped selling his lectures until the whole issue is ironed out. If the professor transcribed his lectures and printed them in book form, would he be able to sell the lectures?

    It will be interesting to see how this plays out.

    Posted by Craig Depken at 12:30 PM in Economics

    The Elephant in the Room

    Regular readers of this blog would likely be interested in Ryan Sager's new book, The Elephant in the Room, analyzing what the future holds for the long-standing coalition of libertarians and traditionalist conservatives that have made Republicans the majority party in America. I haven't read it yet, but Ryan, a rising libertarian star, is a bright young guy and an extremely good writer, so at an absolute minimum I'd expect a pithy, fun read. Excerpts suggest to me it will deliver more than that.

    Posted by Brad Smith at 10:15 AM in Politics

    September 14, 2006
    9/11 Crackpots

    Brad and I have both commented on folks who think the government was involved in destroying the WTC or had advance knowledge of the attack. Andrew Samwick has a post on conspiracy theorists and includes links to some sites debunking the bunk. He also has this excerpt from an editon of CNN's "Reliable Sources":

    [Program Host] KURTZ: I want to put up some pretty eye-opening poll figures from a Scripps Howard survey about 9/11 conspiracies. Thirty-six percent of those surveyed suspect the U.S. promoted or acquiesced in the 9/11 attacks; 16 percent believe explosives, not airplanes, toppled the World Trade Center; 12 percent believe it was a cruise missile that hit the Pentagon.]

    Incredible--this is probably another reason to think that too many people vote not too few.

    Posted by E. Frank Stephenson at 11:37 PM in Politics

    College Football Stadiums

    Today's San Jose Mercury News runs a front page feature on Stanford's new football stadium, built in an astounding 43 weeks including demolition of the old 86,000 seat Stanford Stadium in an astounding 2 weeks.

    Less than 10 months after bulldozers razed the old structure, Stanford's 50,000-seat, $100 million stadium will open for business Saturday when the Cardinal plays Navy.

    ...

    The stadium project, long a goal of the athletic department, was publicly unveiled 15 months ago, and work started the moment last season ended in November. Within two weeks, the old stadium was gone, clearing the way for more than 300 workers and roughly 30 subcontractors to meet the ambitious deadline.

    With noted donor and billionaire real-estate mogul John Arrillaga overseeing the daily operation, two crews worked 16 hours a day, six days a week to fulfill a mission Bowlsby called ``nothing short of a miracle.''

    The speed was made possible by a hybrid fast-track and design-build construction method. Move that old PPF outward. Tickets are still available for tomorrow's opener against Navy. Good thing the Cardinal didn't open against the mighty Spartans of San Jose State, who last Saturday overcame two 20-point deficits to beat the Stanford boys from down the street, 35-34.

    While I'm talking college football stadiums, by-a-mile my favorite college football stadium is is Kyle Field at Texas A&M. I've seen probably a hundred games there. Maybe more. I could write a treatise on all the intricacies that make game day at A&M unique (my fiancee says the tradition of kissing your date after A&M scores says it all). But it's all a very tacit affair. Bottom line, you just have to experience it yourself. While the team has been in decline since 2000, the 90's saw a 92.5 win percentage at Kyle, including a 31-game streak from 1990-95 and a 22-game streak from 1996-2000. Kirk Herbstreit has repeatedly called Kyle Field his favorite place to call a game. MSNBC ranks it 4th in the nation.

    Some notable stadiums I've been to that fail to impress. Notre Dame, LSU Tiger Stadium, and K-State's Wagner Field (Louisville's was bad too). The best small stadium is a tie between TCU's Amon Carter and Southern Miss's "the Rock" in Hattiesburg. Man, can those people tailgate.

    I have not been to West Virginia's Mountaineer Field, but that will be corrected on Oct. 14 when I attend their homecoming game against Syracuse. Oh. I'm presenting a paper there too. It's currently half time of the WVU Mountaineers hosting the UMD Terps. WVU just returned a kickoff for a TD to go up 38-10. I hope there's similar fireworks when I visit. Go Mountaineers!

    Well, enough economics for now. I have some more football to watch. :-)

    Posted by Edward J. Lopez at 11:24 PM in Sports

    Rouble rub-out

    From the BBC:

    The first deputy chairman of Russia's central bank has died in hospital after being shot by two unidentified gunmen in the capital, Moscow.

    Andrei Kozlov, 41, was attacked at a city's sports ground late on Wednesday.

    Prosecutors said the motive for the shooting was unclear, but suggested that it looked like a contract killing.

    Kozlov reportedly had plenty of enemies among the bankers whose licenses he suspended for money laundering.

    How did the markets react?

    Russia's financial markets, used to unpleasant surprises, shrugged off the murder. The RTS stock index closed up 0.65 percent and the rouble strengthened slightly.

    From the strenghthening of the rouble I infer that Kozlov was less hawkish on inflation than his expected replacement.

    Hat tip: WEG

    Posted by Lawrence H. White at 05:38 PM in Economics

    Will sunshine help or hurt?

    From TPMMuckraker:

    By next year, the public should have a public, searchable website that in one place tracks the approximately $300 billion in grants that the federal government doles out to roughly 30,000 different organizations each year, in addition to the roughly one million contracts that exceed the $25,000 reporting threshold.
    Making the information public sounds great, but one million contracts?! One wonders if this will prove sufficient to reduce the pork, er, earmarking. The database would be expected to yield some very interesting empirical public choice articles.

    Posted by Craig Depken at 12:53 PM in Economics

    Do Drinkers Earn More?

    Ed Stringham and Bethany Peters have a new study (.pdf) arguing that they do. The study is receiving considerable media attention. Note: this is just an edited version of their recent Journal of Labor Research article.

    Posted by Joshua Hall at 12:41 PM in Economics

    The Punter Did It

    A news item:

    "... the backup punter on the University of Northern Colorado’s football team has been charged with stabbing the first-string punter in the kicking leg as a way of disabling his rival for the starting assignment ...

    The first-string punter, Rafael Mendoza, was treated for the injury on Monday night and released from a local hospital, but he will be out of action indefinitely.

    According to a witness to the alleged assault, Mr. Mendoza’s rival, Mitch Cozad, stabbed him from behind and then fled in his car. The Tribune reported that Mr. Cozad could be identified, even though he was wearing a hood, on account of the personalized license plates on his car, “8-KIKR.”

    Posted by E. Frank Stephenson at 08:31 AM in Sports

    September 13, 2006
    Those who can do, those who can't?

    From a story linked at Drudge concerning the possible demise of Air America:

    Norman Wain, a Cleveland-based former radio executive and investor in Air America, says he hadn't heard about any financial difficulties. "I know nothing about it," he says. "They don't communicate with investors very well. They only come to us when they're looking for more money." The last time that happened, he says, was "three or four months ago."

    Posted by Craig Depken at 06:30 PM in Culture

    One Book Meme

    I've been tagged so here goes:

    1. One book that changed my life: Although it is overly dramatic to say it changed my life, when I read Friedman's Capitalism and Freedom in college I realized that I had left behind my liberal Democrat upbringing (when I was a child my father had a McGovern pin on the visor of his car) and embraced liberty.

    2. One Book I've Read More Than Once: Steve Landsburg's The Armchair Economist. A bit contrarian but a fun read.

    3. One Book I Would Want on a Desert Island: I'm tempted to say The Wealth of Nations so I'd finally have an opportunity to read all of it, but the depressing circumstances of being stuck on an island leads me to choose something humorous. My choice--Parliament of Whores by O'Rourke.

    4. One Book that Made Me Laugh: I've used O'Rourke already and it's tempting to choose an early offering from Tom Wolfe, but let's go with A Walk in the Woods by Bill Bryson. My hiking buddy Chris gave me a copy and it's a stitch. Although Bryson is a bit crunchy for my taste he also ridicules the Forest Service for its ineptitude.

    5. One Book that Made Me Cry: I haven't read any 9/11 books but one of those would almost certainly do the trick. The sheer evil of 9/11 upsets me more than most tragedies; I remember taking my son (then about 4 months old) home that afternoon and wondering what sort of world my wife and I had brought him into. (BTW, like Brad, I am offended by folks--like here and here--who think 9/11 is some sort of government conspiracy. There's a difference between favoring limited government and being just plain nuts.) As for a book I've actually read--All But My Life by Holocaust survivor Gerda Weissmann Klein.

    6. One Book that I Wish Had Been Written: Something by me. I don't mean to sound flippant or narcissistic; I mean it as an indicator of respect for people who have written books.

    7. One Book I Wish Had Not Been Written: Instead of serious answer like The Communist Manifesto, I'll offer a somewhat whimsical one--my father wrote a chitlin cookbook. A truly awful concept; fortunately, I had left home before he started trying these out on the family. My father has also written several local history books, perhaps similar to the one on Granville OH that Brad is reading. I only wish he'd stuck to history and left the stomach churning cooking to someone else.

    8. One Book I'm Currently Reading: The Shackled Continent by Robert Guest. The human misery inflicted by predatory African governments would actually make this book a good candidate for the made me cry category.

    9. One Book I've Been Meaning to Read: I have a draft of JC Bradbury's forthcoming The Baseball Economist that I've been meaning to read. Technically it probably shouldn't be considered a book yet since it hasn't yet been published. Instead, I'll go with Bees in America by Tammy Horn; I hope to have a bout of nostalgia thinking about the fun I had keeping bees as a kid.

    Now to pay the tag forward--I'll tag Aeon Skoble, George Leef, and co-bloggers Tim Shaughnessy, Michael Munger, and Mike DeBow.

    Posted by E. Frank Stephenson at 05:13 PM in Culture

    Tiebout sorting and mortality

    Apparently where you live helps to determine how long you live. If you can help it, move to Bergen County, N.J. and become an Asian-American woman.

    Of course the presumption that people will make is that your alloted number of days on earth is determined by your latitude and longitude (my theory is that it's your attitude, not your latitude, that probably makes a bigger difference). Someday your GPS device will say "Don't turn down that street; it will take 4 minutes off of your life."

    It seems to raise some interesting questions a la Tiebout. If people conclude that location determines age, how will long-living cities cope with large immigration, especially as it relates to public service provision? If the city's budget is already tight, maybe we should contribute less to public health services so that our longevity drops? That will stop some of the free-riding.

    Or, if people conclude that certain types of people statistically tend to live longer, then should we expect to see immigration of short-lived individuals to cities with reputations as lavish welfare providers? If I'm going to die young anyway, might as well get as much from the local gov't as I can.

    Of course, coming in 49th place among state's with the best longevity is my adopted home state of Louisiana. Oops, gotta go. I feel a cough coming on...

    Posted by Tim Shaughnessy at 12:37 PM in Economics

    Coase and Peanut Butter in Schools

    Matt Ryan posts about the banning of peanut butter in schools.

    It seems to me that if transactions costs are low, it shouldn't matter who gets rights to the school environment. Even if rights are given to those with the allergies, they might be willing to give up certain considerations for other concessions. If the value that all other students get from eating peanut butter is greater than the value those with allergies receive from an outright ban, they should be able to bargain to the efficient solution. Thus in terms of efficiency, it would seem not to matter what the rule is on peanuts in school.

    Transactions costs are probably really high, however, since social norms likely prevent any post-rule bargaining. That is likely why we see such fights over the initial assignment of rights.

    At least that's my thinking on the issue. Any others?

    Posted by Joshua Hall at 11:46 AM  ·  Comments (1)

    September 12, 2006
    Incentives Matter: Pot for Homework Edition

    A news item:

    GETTYSBURG, Pa. - A woman facing drug charges admitted in court that she smoked marijuana with her 13-year-old son, often to reward him for doing his homework.

    She admitted she had been smoking marijuana with her son since he was 11 and said she had also smoked with two of his friends, ages 17 and 18.

    For more bizarro criminal activity see:

    Thief on lam with 348 pounds of pork

    79-year-old woman charged with trying to rob Chicago bank with toy gun

    Or see the entire archive here.

    Posted by E. Frank Stephenson at 09:40 PM in Economics

    Rupee ka Kal Ho Naa Ho

    The Indian rupee lacks full convertibility. Matlab (“meaning”): there are binding government restrictions on cross-border capital flows. For instance: an Indian firm cannot borrow more than a certain amount overseas, mutual funds are limited in acquiring foreign assets, and individuals can only remit $25,000 abroad annually. Banks cannot deal freely in foreign currencies.

    Last week the Reserve Bank of India released the Tarapore Commission’s report (also known as “CAC-2”, because it is the second report in recent years on Capital Account Convertibility) on moving toward greater convertibility. The Commission understands the major benefits of liberalization, which this news account parphrases as: “facilitate growth through higher investment, improve efficiency in the financial sector through greater competition, and provide opportunities for residents to diversify investments”. Nonetheless the commission's majority report proposes a five-year plan with three “phases” toward merely partial liberalization – an overly timid approach. The report also recommends “reducing the government's stake in public sector banks to 33 per cent and allowing private corporations to set up banks”, which are good ideas even though they have nothing to do with convertibility.

    The best commentary on the report I’ve found is this Financial Times column by Ila Patnaik. She points out that to improve financial services to consumers, free entry is paramount:

    Entry barriers in banking need to go. At present, it is extremely hard to start a bank in India, and foreign banks face crippling constraints. Both kinds of entry barriers need to be removed in this world of competition. Citibank needs to have as much freedom to operate in India as Nokia and Pepsi. If India persists in trying to hinder foreign banks from operating here, they will reach Indian customers through USD denominated deposits held outside the country.

    The title of this entry, btw, is paraphrased from a Bollywood blockbuster of a couple of years ago and means roughly "The Rupee's Future May or May Not Happen".

    Posted by Lawrence H. White at 07:13 PM in Economics

    Markets for everything c. 1906

    In response to President T. Roosevelt's "executive order" reforming spelling in the Executive Branch the Public Printer announced the following, as reported in the Sept. 12, 1906 NYT:

    He [the Public Printer] has issued a pamphlet directed to the various Government departments explaining the new system to them, and will send this pamphlet to anybody who wants it and will send him 25 cents. With it he will send a wall card containing the 300 words which are to be spelled according to the simplified system, arranged for quick reference.

    Postage stamps or personal checks will not be accepted, and the money must be sent by postal money order, express money order, bank draft, or certified check payable to the "Superintendent of Documents." Currency may be sent at owner's risk. Only one copy can be sent to any one person.


    I haven't had time to search the Internet, but it would be neat to see one of the wall cards (or a likeness of one). Twenty five cents in 1906 is approximately $5.40 in 2005 CPI adjusted dollars.

    Posted by Craig Depken at 12:29 PM in Economics

    Interesting read

    In my email came this:

    The prepared remarks of Edward P. Lazear on "Productivity and Wages" delivered this morning at the annual meeting of the National Association of Business Economics. Dr. Lazear is Chairman of the President's Council of Economic Advisers.

    Posted here

    Council of Economic Advisers
    NABE

    Posted by Craig Depken at 10:17 AM in Economics

    Incentives Matter: Teacher Pay in Florida Edition

    From USNWR via Mitch Kokai of The Locker Room:

    Before she took her current job, Virginia Harper sold law books. The more law books she sold, the bigger her bonus-and at the end of the year, the company would throw in a set of fine Irish Waterford crystal, too. Harper, who likes Waterford crystal, sold a lot of books. Then, six years ago, she left sales to teach reading at South Fort Myers High School. Things were different there: Your salary was your salary-no matter how many books you taught.

    Now, however, the Florida Legislature has put $147.5 million into making book-teaching a little more like book-selling. This year, if Virginia Harper does a better job than 75 percent of her colleagues, she could get a bonus of up to $2,000. It's not Waterford crystal, but state legislators hope their new program called STAR (Special Teachers Are Rewarded) will do the same trick: make teachers perform better.

    Florida is not alone. Texas and the Denver school district also launched "pay for performance" programs this school year. Arizona, Minnesota, and North Carolina have incentive programs in place, and at least nine governors of other states have voiced interest. The federal government is lending a hand, too. The Teacher Incentive Fund, conceived by President Bush and approved by Congress last December, will award $95 million to states and school districts that want to create incentive pay programs.

    Posted by E. Frank Stephenson at 08:15 AM in Economics

    September 11, 2006
    Washington Stock Exchange is Now Active: Check it Out

    Be sure to check out the Washington Stock Exchange, which went live today. In addition to being fun and hopefully leading us to good political forecasting, my guess is that an enterprising professor can find ways to use it as a good teaching tool in politics or economics.

    Posted by Brad Smith at 07:05 PM in Politics

    One book Meme

    I've been tagged in the one book meme game.

    Here are my picks:

    1. One book that has changed your life: Anarchy, State and Utopia, by Robert Nozick. I remember reading this book as a college sophomore with growing excitement: why, the things I felt in my gut actually had intellectual heft and support behind them. People much younger than me will often not realize difficult it was to grow up libertarian in the 1960s and early 1970s.
    (more below the fold)

    Read More »

    Posted by Brad Smith at 06:51 PM in Culture

    Creative Destruction

    Okay, libertarian professors, you claim to support capital formation. Let's see if you implement this in your classroom.

    To entice you to click, of course you'll want a teaser quote:

    "Now if only Apple could do this with girls."

    Posted by Tim Shaughnessy at 04:46 PM in Funny Stuff

    Why Private Gun Ownership is Important

    From CNN.com:

    NEW YORK (AP) -- Margaret Johnson might have looked like an easy target.

    But when a mugger tried to grab a chain off her neck Friday, the 56-year-old Johnson, while riding in her wheelchair, pulled out her licensed .357 pistol and shot him, police said.

    "There's not much to it," she said in a brief interview. "Somebody tried to mug me, and I shot him."

    Deron Johnson was taken to Harlem Hospital with a single bullet wound in the elbow, police said.

    See also this John Derbyshire article.

    Posted by E. Frank Stephenson at 02:59 PM in Law

    Rationing by Age

    We've had several DOL posts on non-price rationing (just enter "rationing" in our search box)--here's an example of age being used as a rationing device:

    Despite evidence that even older patients benefit from timely treatment for stroke and mini-stroke (transient ischemic attack), a researcher has warned in the latest issue of the BMJ that many doctors do not bother treating people over 80 in a timely manner. In other words, the researcher contends that ageism is rampant in health services.

    Professor John Young says that in the case of the English health services, many decades of under funding the health services have seen to it that older patients do not get the quality of treatment reserved for the younger ones suffering strokes.

    Similar scenarios prevail in cancer services, coronary care units, prevention of vascular disease, and in mental health services, he said. He suggested that in order to overcome these obvious shortcomings, specialist and primary care responses to the management of transient ischemic attacks must be integrated in a manner similar to what has happened with coronary heart diseases.

    National Service Framework for Older People since 2001 has made a difference to care received by older people, he added. But unless drastic changes are implemented, it would seriously undermine the health service. "Don't be surprised if older people lose trust in their health service and lobby for protection through anti-discrimination legislation. The result would indeed be a patient led health service."

    A patient led health service--what a concept.

    Posted by E. Frank Stephenson at 02:14 PM in Economics

    Headlines c. 2001

    As a reference, here are some random headlines from the 9/11/2001 NYT:

  • Advertising; Marshall Field's decides it's time for a big branding effort.
  • Arsenic Standard for Water Is Too Lax, Study Concludes
  • Biden Opens Wide Critique Of Bush Plan For a Shield
  • City Voters Have Heard It All As Campaign Din Nears End
  • Crowd Beats Truck Driver for Killing a 4-Year-Old
  • Despite Plan for Talks, Mideast Violence Explodes
  • E.P.A. Finds Some Soot Is Bad, Other Soot Is Worse
  • Federal Agency Says Verizon Broke Law Regarding Union
  • High and Dry in Denver; Giants Are Perfect Guests in the Broncos' New Stadium
  • Man Clinton Pardoned Balks at Testifying
  • Protect Sharks? Attacks Fuel Old Argument
  • Report Cites Vulnerabilities Of Global Navigation System
  • Reports Disagree on Fate of Anti-Taliban Rebel Chief
  • Scientists Urge Bigger Supply Of Stem Cells
  • Suicide Bomb Kills 2 Police Officers in Istanbul
  • The Politics of Panic
  • The last article is about how the administration is beginning to "panic" about the economy and criticizes the proposal to reduce the capital gains tax from 20 percent to 15 percent.

    The Biden article starts out:

    Washington, Sept. 10 - Declaring a profound difference with President Bush, Senator Joseph R. Biden Jr., said today that plans for missile defense sacrifice national security for the sake of a "theological" belief - and that the effort to make such a system work would cost astronomical amounts of money...Mr. Biden said the administration would create greater insecurity than at any time since the 1960s if it went ahead [with the plans to test a limited national defense system]...

    Interesting.

    Posted by Craig Depken at 01:02 PM in Culture

    Regulation and 9/11

    This Mark Steyn piece is mostly about anti-American Americans, but this observation about 9/11 is too good not to pass along.

    It wasn't the box cutter that brought down the tower, but the Islamist fanatic ploughing the jet into it, and the only reason he could get away with seizing a jet with a box cutter is because the ... coercive hyper-regulatory regime of antiquated 1970s hijack procedures had trained an entire generation of air travellers to behave like lobotomized sheep. Had jihadists with box cutters tried to "bring down" a sports bar, they'd have had the crap beaten out of them.

    While I'm at it, his take on Kyoto is pretty much on the target:

    But what's his answer (to problems related to climate change)? A boilerplate defence of the Kyoto Protocol, a quintessential piece of transnational humbug. Canada and Europe signed it and increased their greenhouse-gas emissions; America didn't sign it but decreased its emissions, notwithstanding the toxic Texan's determination to destroy the planet.

    Posted by Wilson Mixon at 12:55 PM in Economics

    9/11 Lunacy

    I've been watching some C-Span this morning. I've watched about an hour of call ins, and at least 8 callers have called to claim that 9/11 was a plot by the U.S. government. Even allowing for the cranks and kooks to call in in disproportionate numbers, I find it incredibly disturbing how many people believe this nonsense.

    Posted by Brad Smith at 10:59 AM in Politics ~ in Politics

    Global Warming Policy

    The issues surrounding global warming are these:
    1. Is it happening?
    2. If so, are human activities the cause (or at least a contributor)?
    3. If it is happening, is it a good thing or a bad thing (or some mix of the two)?
    4. If it is a bad thing, how should we respond?


    By accepting the bad with the good (increased material output).
    By adapting to the reality but not taking large efforts to change it?
    By adopting policies to reduce global warming? If we are to act
    to ameliorate its effects, what sort of actions should we take and when?

    For the sake of argument Don Boudreaux accepts that it is happening, is partly due to human activity, and is harmful. Even so, he concludes that the case for action is far from made.

    I'm prepared to believe even the possibility that global warming will eventually kill millions of people. But I nevertheless insist that science does not unambiguously endorse action against global warming. Put differently – and contrary to today's elite opinion – ignoring global warming is not necessarily a sign of scientific illiteracy or of ideologically induced stupidity.

    Posted by Wilson Mixon at 10:40 AM in Economics

    Don't Get Any Ideas Bob

    From the AJC:

    History's first marathoner famously keeled over and died after finishing the grueling journey, which now measures 26.2 miles. But this summer brought the news that not just one but two men thought it would be "fun" to run 50 marathons in 50 states in 50 consecutive days.

    Never mind that it's hard enough to get to the 50 states in 50 days without a personal jet. These men set out to put excessive force on their joints and ligaments, tear up their muscle tissue, tax their hearts, risk dehydration and kidney failure — and then squish themselves into a car or onto a plane for several more hours — every day for more than two months.

    To many, it's a silly and dangerous waste.

    When I first blogged about their endeavor, reader Dienne Anum asked: "And this is about health because why? It would probably be almost as healthy to strive to be in 50 car accidents in 50 states in 50 days."

    But one of the men, 25-year-old Sam Thompson, recently became what is believed to be the first person to complete the triple 50, and when we talked two days after his last marathon, he said he felt astonishingly good. In fact Thompson, a virtually unknown ultrarunner from Vicksburg, Miss., actually ran 51 marathons in 50 days — he threw in Washington, D.C., for good measure, just hours after running one in Maryland.

    Posted by E. Frank Stephenson at 08:33 AM in Sports

    September 10, 2006
    Finance ministers threaten the independence of the European Central Bank

    European exporters and producers of import-competing goods would like a cheaper euro. EU finance ministers have taken up their cause. The Telegraph reports that

    Jean-Claude Juncker, chief of the euro-zone finance ministers … has been demanding a weekly meeting with the ECB chief to set policy, reminding Mr Trichet that the Maastricht Treaty gives finance ministers a major say over exchange rate policy.

    Juncker is from Luxembourg, Trichet from France. The central banker is naturally resisting the challenge to his sole authority:

    Jean-Claude Trichet, the ECB's president, brushed aside demands yesterday for a power-sharing arrangement with Europe's politicians, seen as a grave threat to the independence of the fledgling bank.

    "If you check the banknote, you will see it is signed by myself," he said.

    He’s right about that. Interestingly, that argument wouldn’t work for Ben Bernanke. Federal Reserve notes are signed by the Secretary of the Treasury and the Treasurer of the United States, not by the Fed chairman.

    Posted by Lawrence H. White at 01:18 PM in Economics

    “Things are not well in Sweden”

    Eric Culp visit Sweden and finds the welfare state fraying at the seams. Money quote:

    … on any given day, one-fifth of the workforce is at home sick. Furthermore, around one-quarter of those under 25 are out of work.
    Posted by Lawrence H. White at 12:42 PM in Economics

    September 09, 2006
    I've been Tagged!

    Yes, tagged. More to come.

    Posted by Brad Smith at 09:05 PM in Culture

    Musings of the Gentle Cynic c. 1906

    From the September 9, 1906 NYT:

  • Fame is sometimes a bubble that comes from blowing our own horn.
  • Never bluntly call a man a liar. Break the news to him gently.
  • Drinking to drown sorrow is merely feeding a fire with alcohol.
  • A snapshot photograph often demonstrates that truth is stranger than fiction.
  • Posted by Craig Depken at 01:11 PM in Culture

    On Government c. 1906

    From the September 9, 1906 NYT:

    As it was in times past most marked in the minds of ignorant but eager savages, so now it is to be found among our contemporaries who unite a modest range of information with considerable mental movement... toward the personification of the...State, or the Government. In reality the Government...is an agency chosen through more or less clumsy or complex methods, by the portion of the residents of a country possessing votes, to attend to the common business which it is not convenient or practicable for private persons to attend to. Being an agency, it is necessarily composed of agents, organized with various duties and powers, intrusted to them for terms usually short, tenure being uncertain and changes frequent. In itself the Government is not at all a person, with the unity and completeness of a person. it is not even an "artificial person," like a corporation, with definite obligations that can be enforced in the courts. It is a fluctuating body of individual agents, with varying abilities, notions, purposes, tendencies, according as the electorate may itself vary.

    The real nature of the Government is not easy to grasp, still less is it easy to discuss with men who have not analyzed it and traced its development in history. To a certain type of mind it readily assumes the form of a separate and independent entity, capable of essential virtues, self-sustained, and potentially profoundly influential on the course of human events. It becomes to men of this type of mind something not unlike the deity of the savage, and is worshiped in a spirit not dissimilar. It is looked to to provide work for the idle, liesure for the overworked, better wages for the industrious, pensions for the aged. And, in these later times, there be those who would have it take over and run all our lines of transportation...

    Through all these attributions it will be noted there runs the notion of supernatural power, the notion of something above all human experience, unattainable by the painful and laborious methods the world has so far known how to employ.

    It was an ancient belief, which still survives...that the dim and unknown will of the deities within whose control lies the determination of human happiness or misery could be touched by systematic prayers...A superstition not wholly unlike this prevails among those who regard the Government as a mysterious entity of unlimited powers, and all over our enlightened land...there have lately been signs of its active application. [emphasis added]

    Posted by Craig Depken at 01:02 PM in Politics

    Vote Buying Pols

    To borrow (with slight modification) a phrase from Tim, I realize that highlighting vote buying politicians is about as revelatory as realizing that the Pope is Catholic, but here goes. Some excerpts from an article in The Hill (with a HT to the Club for Growth):

    The data, culled from The Hill’s analysis of 1,810 projects in the pending Labor-HHS-Education appropriations measure, reveal a system in which earmarks are distributed first to appropriators then to vulnerable incumbents and finally to rank-and-file lawmakers.

    “We’re playing a game of politics over need and that’s why the whole earmark system needs to be blown up. Blown up and rebuilt,” said Keith Ashdown, vice president for policy at the government watchdog group Taxpayers for Common Sense.

    In the Labor-HHS-Education bill for fiscal year 2007, more than $146 million in hometown projects is reserved for appropriators’ districts, placing roughly 30 percent of the earmarked money in the hands of 15 percent of the House members. If passed as written, the average appropriator’s district would get $2.25 million compared with averages of $1.35 million for the districts of 43 politically vulnerable lawmakers who are not appropriators and $663,000 for districts that are neither competitive nor represented by an appropriator.

    The eight endangered appropriators – Northup, Reps. Don Sherwood (R-Pa.), Jim Walsh (R-N.Y.), Charles Taylor (R-N.C.), John Doolittle (R-Calif.), John Sweeney (R-N.Y.), Chet Edwards (D-Texas) and Alan Mollohan (D-W.Va.) – average $2.76 million per district.

    Figures in this story are based on the 1,712 projects representing $472 million that could be tracked to entities, such as colleges or hospitals in one district. It is impossible to know —without benefit of the Appropriations Committee’s publicly financed tracking system exactly who sought which earmarks.

    The Labor-HHS-Education measure is just one of the House’s dozen annual appropriations bills, but it provides a glimpse into how power and electoral strategy influence the expenditure of public money.

    Labor-HHS-Education Appropriations Subcommittee Chairman Ralph Regula, the bill’s chief draftsman, set aside millions for his northeast Ohio’s Canton-based 16th District. Thirty-nine earmarks totaling $10 million dollars are headed to Regula’s district, nearly 30 percent of the $34 million haul for Ohio. Regula also may have been active in securing money for Democratic Rep. Stephanie Tubbs Jones’s 11th District in nearby Cleveland, which houses Case Western Reserve University’s National Center for Regenerative Medicine and other institutions important to the region they share.

    In Cincinnati, where Rep. Steve Chabot is trying to fend off a challenge from Democratic City Councilman John Cranley, the arts community will receive a $1 million boost out of the 1st District’s total of $2.5 million in Labor-HHS-Education earmarks. The rest will go to educational and medical initiatives.

    Republican Reps. Taylor and Patrick McHenry represent neighboring districts in North Carolina. The bill gives McHenry, a freshman who won with nearly two-thirds of the vote in 2004, $650,000. Taylor, an appropriator who is up against local football legend Heath Shuler, landed more than $3 million for his district.

    Posted by E. Frank Stephenson at 04:00 AM in Politics

    Incentives Matter: NASCAR Points System Edition

    Drivers and team officials are still grumbling about NASCAR's points system:

    NASCAR vice-president Jim Hunter said series officials are seriously considering a change that would award more points to race winners.

    "We've talked about that," Hunter said.

    Hunter pointed out that no matter what the rules state, teams will adjust their strategies accordingly.

    And as to the question of whether NASCAR would prefer its champion be a big winner or consistent runner?

    "I think you want your champion to be both," Hunter said.

    For years, NASCAR's season-long points format rewarded consistency. But it was scrapped after the 2003 season, when Matt Kenseth won the championship with a steady, but unspectacular, season-long performance. He won only once, but had 25 top-10 finishes. Ryan Newman led the series with eight victories, but finished sixth in points.

    But even with the Chase format, consistency appears to pay better than winning.

    In 2004, Kurt Busch won the first Chase with three victories, one during the Chase. Jimmie Johnson, who finished second in points, had eight victories, including four in the final 10 races.

    Last year, Tony Stewart won the title with five victories, but all of them came before the start of the 10-race Chase. And Greg Biffle, who finished second in points, beat Stewart by one in the win column.

    Atlanta Motor Speedway president Ed Clark said the best fix is to put a premium on winning.

    ATSRTWT.

    Posted by E. Frank Stephenson at 03:49 AM in Sports

    Markets in Everything: Bridget Jones' Knickers Edition

    From the AJC:

    LONDON — The famously large underpants worn by film character Bridget Jones are to be auctioned off to raise cash for some of London's most famous green spaces, Britain's Royal Parks Foundation announced Friday.

    The large, white underwear was worn by Renee Zellweger in her role in "Bridget Jones's Diary" and prompted the comment, "Hello, mummy!" from Hugh Grant, who played her suitor, Daniel Cleaver.

    I suppose that's better than the auctions for Britney Spears' discarded chewing gum, cigarette butts, and tissues, though tastes may differ.

    HT to MR for the markets in everything concept.

    Posted by E. Frank Stephenson at 03:25 AM in Economics

    September 08, 2006
    If you're happy and you know it, ...

    Does money buy happiness? Maybe a better question is whether a system that allows productive activity to generate wealth generates happiness. Anyway, an article at NewScientist.com answers in the affirmative. Excerpt:

    Large industrialised countries fared well in the new analysis, with the US and UK coming in at 23 and 41, respectively, out of 178 nations. This stands in contrast with the recently released "Happy Planet Index" from the New Economics Foundation think tank, which placed Columbia (sic) and Honduras high up.

    How did the "Happy Planet Index" reach its (to me) unexpected conclusion? The HPI is computed as follows:

  • HPI = (Life satisfaction x Life expectancy)/Ecological footprint.

  • This imposes an elasticity of -1 on income, assuing that "ecological footprint" and income vary more or less proportionately. This way you can conclude that Palestinians (52.6) are happier than either the Swiss (48.3) or the Israelis (39.1). Likewise, Americans (28.8) are less happy than Mexicans (54.4) or Guatemalans (61.7). I guess that explains why the Mexican and Guatemalan governments can't keep out those damned American immigrants. By the way, citizens of Nigeria (31.1), Congo (41.8), Burma (44.6), and Vietnam (an amazing 61.2) are happier than Americans.

    Posted by Wilson Mixon at 05:31 PM in Funny Stuff

    Bootlegging Optometrists

    Ohio's not the only state with rent-extracting optometrists. North Carolina's optometrists, apparently due to the optometrist who is speaker of the NC House, managed to get the NC Legislature to require all children entering kindergarten to have eye exams by optometrists or opthamalogists. A couple of excerpts from the article linked above suggest the public health rationale for the law is pretty weak:

    The N.C. Pediatric Society is part of a coalition of education groups, doctors' lobbies and advocates for children and the poor who have asked legislators to repeal the law before school starts this fall. Most children won't need the eye exam, opponents say....

    Dr. Jeffrey Board, a pediatric ophthalmologist in Raleigh, said children should have a complete eye exam at age 3. If doctors don't find problems then, having another test a year or two later is not necessary, he said. Most kids' vision problems are discovered in those early eye exams or in vision screenings, Board said. And problems not found before kindergarten are soon caught within six months by school nurses, teachers or parents.

    The most common childhood eye problem, nearsightedness, probably won't be picked up by the pre-kindergarten exams because trouble seeing at a distance usually doesn't start until children are 6 to 12 years old, Board said.

    But wait, as they say in the ginsu knife commercials, there's more:

    RALEIGH — After three days investigating the campaign-finance activities of State House Speaker Jim Black and the state's optometrists ...

    The board decided Friday to ask the Wake County District Attorney to investigate the campaign finance activity of optometrist Michael Scott Edwards and former state Rep. Michael Decker, whose 2003 change of parties helped Black become Co-Speaker of the North Carolina House of Representatives.

    But it took no action on Black ...

    The motion to make a criminal referral was made by chairman Larry Leake and unanimously approved after three days of testimony about possible campaign finance violations.

    Michael Scott Edwards handled all the money for the N. C. State Optometric Society’s political action committee. Several optometrists testified that they delivered signed checks to Edwards with the payee line left blank. Some of those checks ended up deposited with the political action committee while others were made out to the campaigns of individual lawmakers. Decker apparently converted some of the checks for personal use.

    Small world ... M. Scott Edwards is from my hometown and his office is only about 3 blocks from my childhood home.

    Posted by E. Frank Stephenson at 03:23 PM in Economics

    In Honor of McCain-Feingold

    I was in class this morning so Brad’s post on McCain-Feingold beat me to the punch. As Brad noted, we are now within 60 days of an election and certain forms of political advertising are now prohibited. I understand and appreciate Brad’s explanation of the logic of the Supreme Court’s finding that McCain-Feingold is constitutional, but it sure seems like piling one lousy decision on top of another. After all the First Amendment says, “Congress shall make no law … abridging the freedom of speech ….” That shouldn't be so difficult to understand.

    So, as my little protest of McCain-Feingold’s infringement of liberty, I am going to criticize my Representative Phil Gingrey. Gingrey voted for the massive Medicare pills expansions, he’s pretty weak on pork (voting for only 8 of the 19 “Flake Amendments” (pdf; scroll down) to cut pork barrel spending projects), and he scores a mediocre 62 on the Club for Growth’s House Scorecard. In short, he's no great friend to the taxpayer and no big fan of small government. In fairness, he has been clearly preferable to any of the candidates who have run against him. His first opponent, Roger Kahn, was especially pathetic.

    For more on the abomination that is McCain-Feingold see this post at the Club for Growth.

    Posted by E. Frank Stephenson at 02:43 PM in Politics

    Bioengineered ethanol

    Earlier, I said ethanol probably won't become an important part of our energy mix, at least not under current conditions. Cheaper ethanol might be just around the corner (the same way shale oil has been for 30 years?), thanks to bioengineering. As the New York Times reports,

    More miles to the bushel. That is the new mission of crop scientists. In an era of $3-a-gallon gasoline and growing concern about global warming from fossil fuels, seed and biotechnology companies see a big new opportunity in developing corn and other crops tailored for use in ethanol and other biofuels. Syngenta, for instance, hopes in 2008 to begin selling a genetically engineered corn designed to help convert itself into ethanol. Each kernel of this self-processing corn contains an enzyme that must otherwise be added separately at the ethanol factory.

    Some of the same groups that don't want nuclear energy to be part of the mix also object to these prospects. From the same article:

    Such prospects are starting to alarm some environmentalists, who worry that altered plants will cross-pollinate in the wild, resulting in forests that practically droop for want of lignin. And some oppose the notion of altering corn to feed the nation’s addiction to automobiles. “I don't think people want extra enzymes in the food supply put there to better fit the crops for energy production,” said Margaret Mellon, director of the food and environment program at the Union of Concerned Scientists.

    Posted by Wilson Mixon at 01:27 PM in Economics

    Vouchers and Segregation

    Milton Friedman's proposal for vouchers surfaced at an unfortunate time. In the 1960s, anything that seemed likely to foster segregation was suspect. Friedman predicted that segregation would be according to parents' interest in education and not racial, but few were persuaded. A recent study suggests that Friedman was right. No surprise. An excerpt:

    "The widespread claims that private schools have high segregation levels and vouchers will lead to greater segregation are empirically unsupportable,” said the study’s author, Friedman Foundation Senior Fellow Greg Forster. “In these two cities voucher students attend schools that are less segregated than the public schools. School vouchers have the potential to break down neighborhood racial barriers in a way public schools can’t match,” added Forster.

    Posted by Wilson Mixon at 11:01 AM in Economics

    Shut Up! - McCain-Feingold Ban Kicks In Today

    Today the McCain-Feingold ban on certain broadcast ads run within 60 days of an election kicks in. From now through election day, it will be illegal for non-profit citizens' groups - from the ACLU to the Chamber of Commerce; from the Sierra Club to the AFL-CIO; from the NRA to Handgun Control, Inc.; from Planned Parenthood to Right to Life - to run most ads that even mention a federal officeholder.

    Read on...

    Read More »

    Posted by Brad Smith at 09:02 AM in Politics

    September 07, 2006
    The MEAL Act
    This Act may be cited as the `Menu Education and Labeling Act' or the `MEAL Act'.

    More here

    You might ask how/why I would know about the MEAL Act. Good question. It is because the Center for Science in the Public Interest is gunning for your lattes.

    Posted by Craig Depken at 10:28 PM in Politics

    Good Nukes, Getting Better

    Consumer Reports has weighed in on E85, one of the most massive boondoggles of our time. Some salient points:

  • E85, which is 85 percent ethanol, emits less smog-causing pollutants than gasoline, but provides fewer miles per gallon, costs more, and is hard to find outside the Midwest.
  • Government support for flexible-fuel vehicles, which can run on E85, is indirectly causing more gasoline consumption rather than less.
  • E85 is unlikely to fill more than a small percentage of U.S. energy needs.
  • On the last point, Consumer Reports is mute on the question of what will fill those needs. One alternative that I suspect is seldom mentioned in the circles in which CR writers move is nuclear energy. A particularly promising alternative is the pebble bed reactor.

    Glenn Harlan Reynolds (aka Instapundit) reports:

    Meanwhile, in Britain, environmental guru James Lovelock has called for the deployment of nuclear power to fight global warming, but other environmentalists are horrified at the thought. At least, however, the subject is being debated after decades of being off the table entirely.

    Further, Reynolds points to a development that might make nuclear power ever safer than it already is:

    The Chinese seem to be on the right track. Pebble-bed technology looks to be both feasible and safe (and it's only one alternative), and it seems unlikely that the world can sustain another 50 years (or even 20) of economic growth on the scale of recent decades while depending on oil and coal -- at least, not without unpleasant side effects.

    For more than you want to know about pebble-bed technology, see Wikipedia. An excerpt:

    The pebble bed reactor (PBR) or pebble bed modular reactor (PBMR) is an advanced nuclear reactor design. This technology claims a dramatically higher level of safety and efficiency. Instead of water, it uses pyrolytic graphite as the neutron moderator, and an inert or semi-inert gas such as helium, nitrogen or carbon dioxide as the coolant, at very high temperature, to drive a turbine directly. This eliminates the complex steam management system from the design and increases the transfer efficiency (ratio of electrical output to thermal output) to about 50%. Also, the gases do not dissolve contaminants or absorb neutrons as water does, so the core has less in the way of radioactive fluids and is more economical than a light water reactor.

    Posted by Wilson Mixon at 04:49 PM in Science

    Take that government monopoly!

    From the Warren Communications News email blast:

    The FCC likely will hand T-Mobile, other wireless carriers and airlines a victory over the Mass. Port Authority (Massport) on a Massport demand that Continental Airline yank a Wi-Fi antenna from its frequent flyer lounge at Boston-Logan International Airport. Sources involved in the fight said Wed. the order has big implications for Wi-Fi's future. Continental wants to offer customers free Wi-Fi service, competing with Massport's $7.95-a-day service.
    What quality difference is necessary to justify spending $8 over $0, and would government "provided" Wi-Fi ever be expected to provide that difference?

    Let's change course! Wait, no, just kidding!

    I realize that highlighting politician hypocrisy is about as revelatory as realizing that the Pope is Catholic, but here goes.

    On NPR this morning, they reported on the attempt yesterday to have a vote of no confidence in Rummy. Apparently, though, he's doin' a heck of a job because the attempt was quashed. One of the lines the Democrats used (sorry, I can't find a link to a direct quote) was that "staying the course [in Iraq] is not a strategy for success." Which got me to thinking of other situations where a change of course was or has been suggested:

    --school choice
    --ending affirmative action
    --ending the "war" on poverty
    --ending the "war" on drugs
    --ending subsidized housing
    --ending subsidized groceries / food stamps
    --privatizing Social Security
    --privatizing airport security
    --lowering taxes on anything
    --lowering or eliminating spending on any government program
    --reducing union monopoly power / promoting right-to-work

    Which political party more likely always wants to "stay the course" and continue these dreadful policies? In fact, I can remember Democrats saying exactly that regarding the Social Security debate a few years back. "We don't need to change, the system is working..." which anyone who has ever tried to balance a Trivial Pursuit pie piece on its tip knows is ridiculous.

    Posted by Tim Shaughnessy at 12:15 PM in Politics

    Things that make a libertarian mad--Part 2,187.

    The other day I headed off to LensVisionDOC to get a new pair of eyeglasses being sure to take along my last prescription. I'm having no trouble with my eyesight; I just need new glasses since I stepped on this pair a couple months ago and one of the lenses keeps popping out.

    I get there, pick out a nice new set of frames, sit down, wait, wait, wait, and finally someone comes by to do the transaction. But nooooooo!!!! My presciption is more than two years old and has "expired." They can't do it they say. I say, "My eyes are fine with this prescription." They say it "doesn't matter--it's the law" Of course, they have an optician right there on sight site who can do an eye exam. I left. GRRR. Libertarian blood pressure rising. Take...deep...breath.

    Ok here's the question for all you students of political economy. Which of the following two statements is most accurate.

    1. It is important for people to get regular eye exams and therefore prescriptions should expire after a time. Without this requirement, people would wear prescriptions too long and would jeopardize public safety and their own health.

    2. The Opticians lobby Optometrists lobby wants more business for its clients and knows that requiring current prescriptions will increase the incomes of opticians.

    If you think (1) is most accurate, can you tell me why eye exams aren't mandatory for all people every two years and why it is not against the law to wear eyeglasses for more than two years? If you think (2) give yourself an A in my class.

    Posted by Robert Lawson at 11:06 AM in Economics

    Economic Freedom of the World: 2006 Annual Report

    The 2006 version of the Economic Freedom of the World report (co-authored with Jim Gwartney) was released today.

    Press Release:

    Economic freedom promotes growth while foreign aid fails developing countries

    For Immediate Release

    TORONTO, ON, 07 SEPTEMBER 2006—Economic freedom has a greater
    impact than foreign aid in helping people in poor nations escape poverty,
    according to the Economic Freedom of the World: 2006 Annual Report,
    released today by The Fraser Institute.

    In new research published in this year’s report economist William Easterly of
    New York University compares the impact of economic freedom and foreign aid
    on economic growth in the poorest nations. “The demand for foreign aid is typically made in the absence of any empirical evidence that it leads to benefits for recipient nations and without asking whether there are better approaches to poverty reduction for the international community to support,” said co-author of the report, James Gwartney, Professor of Economics at Florida State University. “What the research in this edition of Economic Freedom of the World suggests is that economic freedom, rather than foreign aid, does have a powerful positive impact and is a better approach.” Easterly demonstrates that foreign aid has no positive impact on economic growth in the poorest nations. His research shows that economic freedom has a strong and positive impact on prosperity in general and on helping lift nations out of poverty. Once economic freedom is taken into account, poor nations, far from being caught in a perpetual cycle of poverty, grow faster than rich nations.

    “A key component of the success created by economic freedom is the ability to
    experiment, find economically successful areas of production, and prune those
    that do not succeed so that resources may be transferred to where they are most productive,” said Fred McMahon, The Fraser Institute’s director of trade and globalization studies.

    International rankings

    In this year’s index, Hong Kong retains the highest rating for economic freedom,
    8.7 out of 10, closely followed by Singapore at 8.5. New Zealand, Switzerland, and the United States tied for third with ratings of 8.2.

    The United Kingdom and Ireland are tied for the 6th place. Canada receives a score of 8.0 and ranks 8th. Iceland and Luxembourg are tied for 9th place.
    The rankings of other large economies are Germany, 17; Japan, 19; France, 24;
    Italy, 45; Mexico, 60; India, 53; China, 95; Brazil, 88; and Russia, 102. (Continued...)

    Don Boudreaux writes about the index in his TCS column today.

    Posted by Robert Lawson at 09:24 AM in Economics

    Incentives Matter: Front Yard Oil Well Edition

    A news item:

    HOUSTON (Reuters) - Oil prices are so high, that oilman Steve Jordan is drilling a well next to his home near Lake Charles, Louisiana, he said on Wednesday.

    Jordan, 52, said the well will stretch 8,500 feet (2,591 metres) under his house and swimming pool and below the adjacent Calcasieu River.

    He hopes to strike oil in about 10 days on a prospect that wouldn't have been worth drilling when prices were lower, he said.

    Posted by E. Frank Stephenson at 09:16 AM in Economics

    September 06, 2006
    The Problem with Candidate Debates

    There are a zillion reasons to hate candidate debates, not the least of which is that they aren't debates, but joint press conferences with time limited answers, really. Wouldn't it be great to have a real debate? Imagine Joe Lieberman and Ned Lamont having real debates in Connecticut. How would this do? Resolved: The United States should set a time certain for withdrawing its troops from Iraq. Give the guys 60 minutes divided with an opening argument from the pro side, the con, rebuttal, surrebuttal, and a couple minutes closing. I think the public might actually learn something, and frankly, I think most viewers would find it more interesting.

    Another problem with debates is the horse race reporting. I'm looking at the report in the Columbus Dispatch of yesterday's Ken Blackwell/Ted Strickland debate. It is the top headline in the paper, with 2 photos and big headline rading only, "ROUND 1." The accompanying article has over 250 words on the front page before the jump, and not one word on anything substantive that the candidates actually said. I mean literally not a word on substance.

    Outside the article a box did provide a touch of substance, but not much. Under the subhead labeled "Major Themes" it reports that Blackwell said "Strickland would raise taxes," and Strickland "kept linking Blackwell to corruption in GOP-controlled state government." It reports under the subhead "Anything New?" that Blackwell and Strickland took differing positions on the Iraq war, which was, of course, the stupidest question of the day in this gubernatorial debate.

    In other words, the Dispatch, a decent daily paper, does what they all do - it focuses almost entirely on the horse race. When did reporters become incapable of simply reporting an event? "The two candidates squared off in a joint press conference. Mr. Blackwell said he should be governor because... . Mr. Strickland replied that ... " I think maybe all reporters should be forced to do weddings: "The bride wore a open backed cream dress with a veil..." Just the facts. Nothing like, "the groom seemed vaguely distracted, but best man Al Buddyson was quick to spin the issue for his groom, saying 'Joe was just dazed that to have won such a lovely woman.'" Just report.

    Meanwhile, once on the inside pages, the article quickly reports that Blackwell said Strickland would raise taxes, and that Strickland denied this. This exchange gets about 50 words of coverage. Then the article notes that probably few people saw the debate, and quotes an Ohio State communications professor who notes that probably not many people saw the debate.

    But if you're the typical Ohioan, who could not (or rationally would not) watch the whole debate on television in the middle of the workday, or re-run at 11 p.m., the Dispatch didn't make it easy to find out anything from it.

    Of course, then we complain that voters have to rely on 30 second ads - but what do we want them to do, when the press refuses to cover the things the candidates actually say?

    Posted by Brad Smith at 09:04 PM

    Google does it again

    Google News Archive allows you to search 200 years back. I don't think this will put my "c. 1906" series out of business, but it reduces my editorial monopoly.

    Whenever I hear of Google, my mind turns to the following comparison: Google vs. Ethanol. The former is a market-determined winner, continues to innovate, and is consistently reducing "price," which in the case of Google is the cost of accessing information, and the latter is a government-determined winner, fails to innovate for the most part, and seems to drive up the price of gasoline.

    Posted by Craig Depken at 12:56 PM in Misc.

    Something to ponder

    Do you go to your 20th high school reunion when one of your classmates has just become editor of Newsweek? This is what I would face next year.

    Congrats to Jon Meacham.

    More here

    Posted by Craig Depken at 12:33 PM in Misc.

    Soft America, Hard America

    In "How We Dummies Succeed," Robert J. Samuelson offers a slightly different take on Michael Barone's reconciliation of American test scores and American success in real life.

    Barone:

    One of the peculiar features of our country is that we produce incompetent 18-year-olds and remarkably competent 30-year-olds. ... Why? Because from the age of 6 to 18, our kids live mostly in what I call Soft America--the part of our society where there is little competition and accountability. In contrast, most Americans in the 12 years between ages 18 and 30 live mostly in Hard America--the part of American life subject to competition and accountability; the military trains under live fire. Soft America seeks to instill self-esteem. Hard America plays for keeps.

    Barone's focus is on on-the-job skill acquisition. Sameulson focuses more on post-secondary schooling as part of what he calls the American leaning system (as distinct from the U. S. school system).

    Sameulson:

    This fragmented and mostly unplanned learning system is a messy mix of government programs and private business. ... But the American learning system partially explains how a society of certified dummies consistently outperforms the test scores.

    Posted by Wilson Mixon at 11:36 AM in Economics

    PNC Park Threatens To Leave Pittsburgh Unless Better Team Is Built

    An offering from The Onion:

    PITTSBURGH—After five years of serving Pittsburgh as their state-of-the-art sporting facility, PNC Park, the home of the rundown, poorly maintained Pirates, said Tuesday it is threatening to leave Pittsburgh unless a new team can be built within the next three years.
    PNC Park

    "I love the city of Pittsburgh, but the Pirates are an old, dilapidated club built from other teams' spare parts, and its very foundation is rotting away," the stadium said to reporters assembled in its press box. "I had every intention to stay here for the duration of my career as a ballpark, but given that I haven't seen any realistic long-term plans for improving my resident team's ramshackle condition, I would be lying if I said I wasn't thinking about taking my services elsewhere."

    The young stadium, regarded as one of the best of the recent crop of real-estate development projects throughout the league, added that "after this year's All Star Game, I have learned that a ballpark of my caliber deserves to host that kind of play every day."

    ...PNC Park, however, is not convinced.

    "When I came here in 2001, they promised me a championship team," the stadium said. "I was warned by venerable and much-beloved Three Rivers Stadium—which imploded soon afterwards, as you know—that I should look elsewhere, that this team was set in its ways and not focused on rebuilding, that they were simply using me as a means to make money," the stadium said. "I was young and brash and I didn't listen. Now that I am more mature and have settled a bit, I realize I have to do what is best for me and my family."

    HT: KR

    Posted by E. Frank Stephenson at 08:49 AM in Sports

    September 05, 2006
    I have yet another namesake

    This one demonstrates remarkable talent with little physical capital.

    Posted by Lawrence H. White at 06:59 PM in Culture

    Labor Day Once More

    Earlier, I griped about the quality of my local newspaper's analysis of labor's progress and stated relief that most people don't seem interested in being part of any reversal of organized labor's fortunes. I omitted any reference to a source that relates the relevant history in a way that does justice to the role of markets. Once such article is at the Mises site. An excerpt:


    Labor historians and activists would doubtless be at a loss to explain why, at a time when unionism was numerically negligible (...three percent of the American labor force was unionized by 1900) and federal regulation all but nonexistent, real wages in manufacturing climbed ... 50 percent in the United States from 1860-1890, and another 37 percent from 1890-1914.... Most of them seem to cope with these inconvenient facts by neglecting to mention them at all.


    Posted by Wilson Mixon at 05:50 PM

    On "The Plan" c. 1906

    The last of what I found interesting in the Sept. 5, 1906 NYT was an editorial excoriating Democratic Nominee for President William Jennings Bryan's proposal that state and federal governments take over the private rail network in the United States (seems like an Atlas Shrugged type of proposal):

    Mr. Bryan is wasting his time, and wasting the time of the public and of the Democrat Party. His advocacy of an eight-hour day for labor does not interest the country. Everybody knew, or could have guessed, his views upon labor issues. The thoughts he has expressed about international arbitration and universal peace are as old as the hills. But his plan for the transfer of all the railroads in the country to the Federal and State Governments is new, yet he does not explain how the momentous change is to be brought about, presents no plan even in outline, tells us nothing about it, in fact, save that it ought to be done...

    Substitute your favorite government power grab - be it retirement plans, nationalized health care, or whatever - fiddle with a few politician and party names and we have the same criticism (of both parties) today.

    When he [Bryan] accepted the Democratic nomination to the Presidency ten years ago and began to advocate the free, unlimited, and independent coinage of silver at the ratio of 16 to 1, his writings and his speeches abounded in detail and explanation. He told the country precisely what he meant. Everybody understood that under the coinage laws as he would shape them a man having 100 ounces of silver could take the metal to the United States Mint and get it coined into 129 silver dollars. As silver could at the time be bought in the open market for about 67 cents an ounce, every mind could grasp in an instant the meaning and scope of the change proposed by Mr. Bryan in our financial policy and currency laws. His supporters could understand him, his opponents could get at him...
    And this is as it should be. Politicians who want to spend the public's money and want to fundamentally alter the way individuals live their lives, unintended consequences and all, should provide full information. My criterion: if the proposal is too complicated to convey during a thirty minute infomercial, then the proposal should be dropped. Heck, it is possible to show all the benefits of the Ab Crusher 5000 and the Salad Shooter during the same amount of time.
    Mr. Bryan now asks the Democratic Party to accept him upon a platform of Government ownership and operation of railroads, but he does not even in a general way tell us how the Federal and State Governments are to come into possession of the thirteen billions' worth of railroad property now privately owned. Absurdities are not infrequent in politics, and electorates sometimes behave as if they were deprived of reason and without foresight. But there is a limit...
    Are we once again reaching that limit today? I wonder.
    The undertaking he advocates is so gigantic that the unaided imagination cannot supply the missing details. Nobody except Mr. Bryan could present a working plan for carrying this policy into effect that would not be at once destroyed by the fire of criticism...

    The Democratic Party has of late shown disturbing symptoms of senility, but it is not altogether a fool. It has the right to know how its candidate is going to build his bridge to the moon and it will insist on knowing.


    In my opinion, this editorial could be written in ad lib (mad lib?)fashion today and be almost as poignant; just fill in the blank of politician, party, and proposal and the wording would be as germane today.

    The lack of a "plan" is a political convenience that we as an electorate allow politicians to get away with. We should demand clear language and specific plans on whatever it is the politicians propose to do with our tax dollars, let's say (for giggles): Social Security, Medicare, Medicaid, Natural Disaster "Relief," Nationalized Health Care, Immigration "Reform," Education "Reform," and National Security. This list alone would likely make the average voter's head explode - but isn't that in itself an indication of the problem?

    Yet we know that the specific proposals are not forthcoming, because to do so would alienate/disgust voters to the extent that numerous (most?) political careers would crash and burn on "both sides of the aisle."

    Not being a scholar of political science, I wonder if the lack of a plan is "justified," in the minds of politicians, by what happened to Bryan in the 1896 election (assuming the story is true)?

    On the other hand, perhaps there simply is no plan, period. Which possibility is worse?

    Posted by Craig Depken at 04:16 PM in Politics

    Legislative proposals c. 1906

    The September 5, 1906 NYT also includes a tongue-in-cheek checklist for national legislation as offered by the Louisville Courier-Journal, some of which might be a better use of Congressional time even today:

    1. There ought to be a law prohibiting the crushing of mint in the compilation of a julep;
    2. There ought to be a law forbidding the use of the doggerel known as "baby" talk, or "goo-goo" talk to infants, on the ground that it retards the progress of young Americans in the mastery of real English;
    3. It ought to be declared a felony for any one at the theatre to tell his companion "what's coming next";
    4. A law should declare it perfectly proper for a clergyman to say something besides "Fudge!" when he hits at a golf ball and plows up a ton of earth;
    5. It should be illegal for a preacher to reiterate his text more than fifty times in the course of one sermon, or to go higher than the "thirtiethly" in his enumeration of points to be made;
    6. It should be against the law for a group of women to discuss the servant problem more than one hour at a time without a change of subject, unless they first obtain written permission of the President of the United States

    #1 might still find support amongst the temperance groups but would be opposed by the mint farmers on national security reasons and also because without mint juleps they would need federal subsidies. Bourbon distillers might also be concerned but would not be allowed to participate in the debate for fear that they would write the legislation.

    #2 could be opposed by natural language folks and early education types and on first amendment grounds.

    #3 would be opposed by net neutrality folks and those who like to read the end of a fiction novel first.

    #4 and #5 could easily be opposed on church and state grounds but #4 might be supported by the Parent's Television Council.

    #6 is largely immaterial due to technological changes but could be opposed on first amendment grounds and a separation of powers argument.

    Posted by Craig Depken at 03:28 PM in Politics  ·  Comments (0)

    What's in a name c. 1906

    From the September 5, 1906 NYT:

    LITTLE ROCK, Ark - Additional returns from yesterday's State election show that the Democrats will have a thirty-four out of thirty-five members of the State Senate and 95 out of 100 members of the House, assuring the election of Gov. Jeff Davis, Democrat nominee, as United States Senator...
    Chances of a Democrat or Republican named Jefferson "Jeff" Davis being elected to the U.S. Senate in 2006?

    Anyone?

    Posted by Craig Depken at 03:17 PM in Politics

    Blackwell-Strickland Debate

    Watched the first Blackwell-Strickland debate on Ohio News Network.

    Ken Blackwell
    did what he needed to do - he was pleasant, funny, on top of the facts, quick to hit Strickland's weaknesses, and to deflect attention from his own - and did it all without coming across as overbearing or as bullying Strickland. He was clearly the winner on high school debate points - most of Strickland's answers were puff, devoid of serious content. Will it be enough in a race in which he trails by double digits? Well, one debate won't turn it around, but there are 3 more.

    Bob Lawson's old Shawnee State colleague Ted Strickland, for his part, probably did the minimum he needed to do. He said some dumb things - see below -

    Read More »

    Posted by Brad Smith at 03:10 PM in Politics

    Mexican Election

    From CNN:

    MEXICO CITY, Mexico (AP) -- Felipe Calderon became president-elect of Mexico on Tuesday, two months after a disputed election, when the nation's top electoral court voted unanimously to reject allegations of fraud and certify his narrow victory.

    His leftist rival, Andres Manuel Lopez Obrador, had said he would not recognize the ruling.

    How does one say Sore-Loserman in Spanish?

    Posted by E. Frank Stephenson at 02:55 PM in Politics

    The Overselling of Higher Education

    Given our recent posts on higher ed, it's timely that George Leef offers up "The Overselling of Higher Education" (link is pdf). I've only skimmed the paper so I can't offer detailed comments on it, but I think George is on solid ground in argueing that too many kids go to college (my guess is at least one-third of current college students shouldn't attend college or should attend a later time in their lives), that many go for the wrong reason (job grubbing rather than intellectual curiousity), and that government subsidies are a significant contributor to the problems.

    ADDENDUM: Our discussion of higher ed reminds me of Wilson's characterization of education as the one market where customers try to get as little as they can for their money. In light of the heavy subsidies, the statement should probably be slightly modified to say people try to get as little as they can for somone else's money.

    Posted by E. Frank Stephenson at 02:39 PM in Economics

    Incentives Matter: Oral Sex Edition

    So says Tim Harford in this Slate article; ht to Alex of MR for the pointer.

    Posted by E. Frank Stephenson at 10:34 AM in Economics

    Slogging Through Labor Day: Productivity, Income, and Redistribution

    Wilson's local paper wasn't the only one running Labor Day mush; the Rome News Tribune reprinted this article by Harold Meyerson of the Washington Post. Much of Meyerson's column is based on or similar to the much discussed (e.g., here and here) Greenhouse and Leonhardt piece in the NYT.

    However, these two passages caught my eye:

    The median hourly wage for Americans has declined by 2 percent since 2003, though productivity has been rising handsomely.

    Since 1973 productivity gains have outpaced median family income by 3 to 1.

    Although there are many quibbles that can be raised with these passages, I want to focus on productivity and wage growth. Meyerson seems to implicitly that productivity growth should be proportionate for all wages. I know of no reason why this should be the case; I think it is entirely possible that prductivity growth has been greatest among folks with the highest skill levels.

    Here's another Meyerson passage that caught my attention:

    Ours is the age of the Great Upward Redistribution.

    Repeat after me--income is earned, not distributed. Calling a period of rising wages for high skill, hard working people "redistribution" is an abuse of language.

    Posted by E. Frank Stephenson at 10:14 AM in Economics

    What's in a name?

    Advertising Age reports that Taco Bell is having a hard time convincing Hispanics, particularly Mexicans, to eat at their restaurants.

    Taco Bell's fast-food version of Mexican food isn't playing very well with Hispanics, who contributed just a half-percent to the company's same-store-sales gain of 7% in 2005, despite making up 20% of Taco Bell's core 18-to-34-year-old target market.

    If native Mexicans choose not to eat at TB is it because of the advertising or because the food isn't really Mexican food? According to one Carl Kravetz, who handles advertising for El Pollo Loco (The Crazy Chicken?!?), it's the food:
    "If they say they deliver good Mexican food to [Hispanics] they won't be believed. If they say they have good, filling, cheap American food, they may have a chance."
    Ouch.

    Posted by Craig Depken at 09:58 AM in Culture

    William Chace on College Costs

    Chace, the former president of Emory and Wesleyan, offers his thoughts on college costs in today's NYT. Perhaps surprisingly, some of this thoughts (e.g., on colleges spending on lots of amenities like posh residences) are similar to those expressed by Vedder in the Fox special.

    HT: Louis Louis

    Posted by E. Frank Stephenson at 09:15 AM in Economics

    September 04, 2006
    Game Six of the 1986 World Series with Nintendo RBI Baseball

    Ahh... takes me back to middle school. The best part is the use of Vince Scully's play by play.

    Posted by Joshua Hall at 06:55 PM in Misc.

    On negative externalities c. 1906

    From the September 4, 1906 NYT:

    LONDON Sept. 3 - If any one throws a banana skin on a London pavement and is caught at it by the police, he will have to pay a fine of 40s.

    This is according to a law just enacted by the London County Council, and public knowledge of it has come through the announcement to-day by the Coronoer at the inquest on a man who died from the effects of slipping on a banana skin.

    40 shillings (2 Pounds) in 1906 is worth approximately 143 pounds in 2005. At today's exchange rate, the 143 pounds is worth about $272.

    [More at Heavy Lifting]

    Posted by Craig Depken at 01:52 PM in Economics

    Another poor prediction c. 1906

    From the September 4, 1906 NYT:

    Secretary Root and his party, who reached this city [Santiago, Chile], who reached this city on Saturday, breakfasted to-day with Baron de Giskra at the Austrian Legation and spent the afternoon visiting the schools...The Secretary declared that, while the nineteenth century was the century of the United States, the twentieth century would be the century of South America, and that no part of the world had better prospects. The opening of the Panama Canal would revolutionize the world's commerce, and the west coast of South America would be benefited most.
    The per-capita income of Argentina and the per-capita income of the United States was just about equal in the early 1900s. By the early 2000s, this was no longer the case.

    It is interesting that the Secretary of State would predict the relative demise of the United States in 1906. One could hardly imagine such political language being used today by the party in power.

    Posted by Craig Depken at 11:21 AM in Economics

    Labor Day

    In its Labor Day editorial, my local newspaper asserts, "The glory days of the American worker appear to be on the wane." Evidence? The recent New York Times piece and a largely fictional retelling of American labor history with labor unions and the federal government as heroes. Depressing reading.

    This article improved my prospects for a happy Labor Day (that and looking forward to lunch at Pisgah Inn).

    A couple of excerpts:

    When asked, "Would you personally like to be a member of a labor union?" 74 percent said "No."

    The poll also found continuing support among workers for the principle of the "right to work," which gives employees the option of deciding for themselves whether or not to join or financially support a union.

    Posted by Wilson Mixon at 10:09 AM

    September 03, 2006
    Santorum on Social Security Reform

    From this morning’s Meet the Press:

    MR. RUSSERT: There are 40 million people on Social Security and Medicare. There’s going to be 80 million in the next 15 years. Life expectancy is—used to be 65, it’s now approaching 80. We all know it. Senator Santorum, when you ran first for the Senate in ‘94 you said, “You can raise taxes, you can cut benefits, or you can push back the retirement age in the future.” […] Will you push retirement age back because of the huge influx of baby boomers? […]

    SEN. SANTORUM: I’ve had 12 years in the United States Senate and I haven’t introduced or voted for anything like that because I, I think that there’s a better way […] and that’s personal retirement accounts. […] [G]ive younger workers the opportunity to have personal retirement accounts. Those personal retirement accounts will grow faster and produce more than what the government, “investment in Social Security,” thus making up the difference between the two.

    Hurrahs to Santorum for favoring op-out personal retirement accounts, but hisses for claiming that they can solve the underfunding problem.

    I’ve discussed before how opt-out (aka “carve-out”) personal retirement accounts can be fiscally neutral when the worker gives up $(1+r) in future Social Security benefits for each $1 in current Social Security contributions he opts into his own PRA. The Treasury borrows $1 to replace the diverted contribution, and repays it with the $(1+r) future benefit savings. (We set r equal to the Treasury’s borrowing rate.) There is no “transition cost” to the Treasury from replacing an implicit obligation with an explicit obligation; it’s merely a refinancing.

    A fiscally neutral carve-out program makes the worker better off, and nobody else worse off. I'm for it. (Robert Barro says he's against personal accounts, but I think he means add-on accounts. )

    But truth be told, a fiscally neutral carve-out program doesn’t provide any windfall to the Treasury. The only way for the Treasury to gain from PRAs is for the offset rate ("r") to be set above the Treasury's cost of borrowing. I'd be against that -- and so should Santorum, if he's against increasing taxes on saving. With a fiscally neutral carve-out, the underfunding problem – future promised benefits in excess of scheduled tax revenues – remains. Addressing it will require some combination of tax increases, benefit cuts, and retirement age pushbacks, just at Santorum recognized in 1994.

    Posted by Lawrence H. White at 10:25 PM in Economics

    September 02, 2006
    Security searches c. 1906

    From the September 2, 1906 NYT:

    MOSCOW - A huge pumpkin carried by a man garbed as a country-man to-day attracted the attention of the police in the market here by its excessive weight and induced them to make an investigation with the result that it was found to be filled with cartridges.

    The bearer of the pumpkin was subsequently identified as a revolutionist.

    Posted by Craig Depken at 10:57 AM in Politics

    Musings of the Gentle Cynic c. 1906

    From the September 2, 1906 NYT:


  • An affinity is generally a person with money.
  • Too many cozy corners will drive a man to his club.
  • The greatness that is thrust upon a man generally goes to his head.
  • A true friend is one who won't hold you responsible tomorrow for what you say to-day.
  • Peppery remarks should be taken with a grain of salt.
  • It's the things we don't do that often give us the most unhappiness.
  • A man talks louder when he knows he is wrong than when he realizes he is right.
  • No man can hope to shine in society unless he can say nothing and make it sound interesting.
  • Posted by Craig Depken at 10:54 AM in Culture

    September 01, 2006
    Of Shoes, Snow Cones, and Bras

    Mark Steyn says that on September 10, 2001, "The airline cabin was already the most regulated jurisdiction in America, a kind of way-up-there-in-the-blue state, where Ted Kennedy and Al Gore's fondest desires on gun control, smoking and indeed free speech had all been implemented. So on September 11, three out of the four planes followed all the 1970s hijack procedures and everybody died. On the fourth, free-born citizens reclaimed their rights, fought back against the terrorists and provided the only good news of the day. Half a decade on, the regulatory regime is even more coercive."

    Steyn concludes, "The arithmetic is very simple: Can we regulate for all faster than they can adapt for some?"

    How about a security program based on these two premises: the airlines own their airplanes, and individual passengers should pay their own way.

    Allowing individual airlines to determine how to provide security and making them liable for their selections would take away the "one size fits all" aspect of the current approach, making it impossible for troublemakers to plan.

    Regarding the second, suppose that passengers pay for security checks. I might travel with a small mesh bag that could be inspected at a nominal fee. If I carry on a computer and a full makeup case, then I would pay extra for the baggage inspection. I might check much of my materials, where it could presumably be checked more cheaply, or leave most of it home. Most likely, a small industry would evolve, with simple travel kits being sold within the confines of the secure perimeter.


    Posted by Wilson Mixon at 08:04 PM in Economics

    God and Unions

    Cal State Hayward's Chuck Baird successfully sued the California faculty union on grounds that it interfered with his freedom of religion. He won and is no longer represented by the union.

    It looks like the idea is spreading.

    COLUMBUS, Ohio (AP) — State employees should be able to donate their union dues to any charity, not just a church, when they have religious objections to how the money's being spent, federal justice and civil rights officials decreed today.
    Posted by Robert Lawson at 03:40 PM in Economics

    Scrap the Canadian dollar?

    Two years ago Gilles Duceppe, leader of the Quebec secessionist party Bloc Québécois, was calling for North American currency union:

    "Do we really need the Canadian dollar?", Duceppe asked blue chip members of the Economic Club of Toronto. "We must ask ourselves: Are there still economic reasons justifying the existence of the Canadian currency?" Duceppe said "the instability of the Canadian dollar" over the years has been "considerably harmful" to things like trade.

    Good questions. Currency union would make sense for Quebec as an accompaniment to independence, because Quebec would lack credibility issuing its own currency. A currency union would indeed promote cross-border trade and investment.

    Last weekend Duceppe once again called for debate on the issue. He told reporters:

    We've been demanding this debate in Ottawa, but they don't want it because of the symbolism of having the face of Elizabeth II on the Canadian dollar.”

    Of course, Canada could adopt currency union while still retaining Elizabeth II’s face on its currency. Scotland and Northern Ireland have a currency union with England, but their own commercial banks issue the banknotes. If Canadian banks were allowed to, they could similarly issue US-dollar-denominated notes featuring any face their customers want: the Queen, hockey great Rocket Richard, mountie Dudley Do-Right. Plus, the seigniorage would then stay at home.

    Read More »

    Posted by Lawrence H. White at 03:19 PM in Economics

    Sheldon Richman On Income Inequality

    A superb read; click here. Sheldon must write with a stiletto; the NYT doesn't stand a chance.

    Posted by E. Frank Stephenson at 02:11 PM in Economics

    Rationally Irrational Politicians?

    My brother in Savannah informs me that yesterday, the day that Ernesto was predicted to possibly, maybe, hit Savannah with estimated 40mph winds and 4 inches of rain, Savannah closed its schools:

    The threat of Tropical Storm Ernesto downgraded to a tropical depression overnight Wednesday, nevertheless canceled classes today for Savannah-Chatham County Public Schools.

    "The decision is to close the schools," Superintendent Thomas Lockamy said at a news conference Wednesday with officials from the Chatham Emergency Management Agency. "That's based on the fact we're in a tropical storm warning and based on the safety of our children."

    More evidence that in the post-Katrina world the expected marginal-cost to the politicians/buerucrats of not acting in a time of "emergency" has increased?

    [More at Heavy Lifting]

    Posted by Craig Depken at 12:04 PM in Politics

    California dreamin'

    "No man's life, liberty, or property is safe while the legislature is in session."
    -- Mark Twain

    The 2005-06 California legislative session ended yesterday. Among other things, the California solons approved 1) global warming legislation that adopts "the broadest restrictions on carbon dioxide emissions in the nation" and 2) health-care legislation that "would blow up the state's current health insurance structure and create a system where the state provides coverage for all Californians . . . [thus] mimic[ing] systems in Europe." For good measure, the legislators also passed a health benefits statute modeled on the Maryland law designed to harass Wal-Mart, and raised the minimum wage.

    According to the pundits, Gov. Schwarzenegger is expected to sign the global-warming and minimum-wage bills, but veto the socialized-medicine and Wal-Mart bills. (For more on conservatives' disappointment with the Governor's performance, see Shikha Dalmia in the Wall Street Journal and Steven Greenhut in the OC Register.)

    And, if that's not enough economic illiteracy for one post, I will point out that in November Californians will have the opportunity to vote on Proposition 87 -- a measure that would raise taxes on California oil production. The thinking is that it may pass because voters are angry about high gasoline prices. If you're wondering why people would think that increasing taxes on a product would help lower its price, rest assured that (according to the California AG's description of the proposition) it "[p]rohibits producers from passing tax to consumers."

    Posted by Mike DeBow at 11:34 AM in Politics

    "You're Fired" - Who me?

    I quit watching "The Apprentice" a few years ago, but I did find it somewhat intriguing for a while. I especially liked Carolyn. Alas, Carolyn may not be on the show any more as The Don cracks the whip:

    "Being on 'The Apprentice' went to her head. She was no longer focused on business. She was giving speeches for $25,000 and doing endorsements," said a person quoted in the New York Post as an "insider."

    I wonder why Trump didn't incorporate this into the show. Instead of firing one of the apprentice-wanna-bes, he could have fired Carolyn on the show and shocked the world. As it is, it seems like The Don might be concerned that focus stays on the middle chair in the boardroom.

    I wonder if she received the news via email?

    Posted by Craig Depken at 11:24 AM in Culture

    Better and Better

    Thanks for allowing me to join this august body of serious thinkers, this self-styled band of merry bloggers. I begin on a positive note.

    Don Boudreaux asserts, "I suspect that ... the growth in real dollar income between 1967 (or 1973) and today underestimates the improvements to everyday life brought to us by economic growth during the past 30 or 40 years." More precisely, he says we are at least 46326/35379 (1.309) times better off than the NIPA figures suggest. His argument relates mainly to the options that consumers enjoy. He briefly addresses the work that must be done to get our income (about 11 percent shorter workweeks). Add one more item: work is more comfortable and safer. More people work in air-conditioned offices rather than factories, and the fatality rate has fallen to about 1/2 its 1967 level (BLS and DallasFed. The DallasFed entry is a PDF file that shows how the work experience has improved).

    Posted by Wilson Mixon at 11:15 AM in Economics

    Sobel v. FEMA

    I recieved this note today from Russ Sobel:

    I just finished taping my interview with the CBS Evening News on FEMA reform. It is scheduled to be shown during tomorrow night's CBS Evening News that starts at 6:30pm. Of course, some major news story might displace it, but I hope not. I think my interview went well, I certainly did my best to defend our free market system. It will be on during a segment where they tour a new FEMA distribution facility in Atlanta.

    The other update, that some of you already know, is that The Economist magazine, next issue, which is Sept. 2, is running an article on my paper with Pete Leeson on FEMA Corruption.

    If you don't get a chance to see the CBS Evening News tomorrow, I'll be posting it on my web site afterward, so you can check that out if you miss it and want to see it. My FEMA web site is:
    http://www.be.wvu.edu/divecon/econ/sobel/fema/

    Posted by Robert Lawson at 09:00 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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