Division of Labour: November 2007 Archives
November 30, 2007
Is the Rome News-Tribune the Country's Most Libertarian Newspaper?
Probably not--it tends to support levying taxes to finance "economic development" and has occasional outbreaks of populism--though the competition is slim. Fortunately, the RNT does offer up healthy doses of libertarianism from time to time. Here's a sample from today's issue:
EVIDENCE MOUNTS that Rome needs a new “Clean It or Lien It” ordinance —one that would be applied to the brains of some in the municipal bureaucracy. The nit-picking mentality of some of the “hired guns” charged with protecting the beauty (in some places) and historical ambiance (in even fewer places) of this fair city is starting to get obviously out of hand. Rules should be guidelines with some flexibility built into them. Those increasingly seem not the sort that Rome has.
I've opened comments for readers to suggest other papers with libertarian leaning editorial pages. I've also put another sample from the RNT below the fold.
UPDATE (12/8): I have added another example below the fold.
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No business is required to do or sell anything it doesn’t want. For example, a well-known fast-food chain does not sell any drive-through meat but chicken. If a customer demands a hamburger, must they be accommodated? Beef, like Plan B, is an entirely legal product. Similarly, if an employee at said fast-food chain believes in sparing the lives of chickens, would he or she have the authority to deny the sale of most of what’s on the menu? Amusing thought? Not really.
UPDATE (12/8): Here's a third example:
There’s also nothing wrong with parents, in the home or outside it, allowing their youngsters to have wine with a meal. It doesn’t matter if you agree with that or not. They are still our kids, aren’t they? If they belong to the state, can we send City Hall the food and clothing bills, too?
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A Marxist defends global capitalism
This article is worth reading just for fun. The last paragraph:
Of course, Marx wanted to destroy capitalism because he thought it didn’t go far enough in remaking the world in man’s image and organising society according to man’s needs and desire. Today’s sorry excuses for Marxists and anti-capitalists think capitalism has gone too far in its development of the forces of production and encouragement of consumerism. I’m with Marx. Let’s replace capitalism with something even more dazzlingly cocky and human-centric. But let’s first deal with the luddites, locavores and eco-feudalists who have given anti-capitalism a bad name.Locovores? Oxford American Dictionary’s word of the year for 2007. Look it up or read the article.
Is there war on your t.v.?
A bureaucratic agency should not be using a 20-year-old-legal clause to implement wholesale policy changes that hurt consumers and hurt minority television programmers.
Sounds like Alan Keyes or Walter Williams or maybe even Lopez. None of the above. Actually, it's Jesse Jackson.
He's reacting to FCC Commissioner Kevin Martin's technicality-driven push "to assert nearly unlimited powers to regulate cable television if more than 70 percent of households subscribe to cable." The last sentence is quoting James Gattuso and Adam Thierer, "TV Train Wreck: Martin, Markets, and the Potential for Regulatory Disaster", which is also where the Jackson quote comes from. Gattuso and Thierer say Martin has proposed a lot of new regulations, a disproportionate number of which
have been aimed at cable television, so much so that press and industry analysts now speak of Chairman Martin’s ongoing “war on cable.”
The WP gives some further context:
The Federal Communications Commission is scheduled to vote today on whether it will consider applying broad regulations to a cable television industry that has been largely unregulated at the federal level for more than 20 years.
Here's Gattuso elaborating on Jesse Jackson.
November 29, 2007
There oughta be a law
My own daughter is twelve, has a myspace page, and this NYT article scared the $hit out of me:
DARDENNE PRAIRIE, Mo., Nov. 21 — Megan Meier died believing that somewhere in this world lived a boy named Josh Evans who hated her. He was 16, owned a pet snake, and she thought he was the cutest boyfriend she ever had.
I don't say this often, but there oughta be a law. Heck forget the law, this calls for an angry mob with torches and pitchforks.
UPDATE: No I am not joking.
November 28, 2007
I only date guys who drink Snapple
Admission: I'm kind of a t.v. head. I even enjoy sitcoms when they innovate or cleverly satirize. Unfortunately, the best at these can meet with premature ratings deaths (remember Flying Blind or Jake in Progress or Stacked?).
One sitcom recently earns marks for innovative advertising. NBC's "30 Rock" has gone beyond product placement to product integration---integrating ads into the story line and, more valuably to me, into the show's satire. Yahoo! news has the story, "30 Rock" rolls ads into story lines.
NEW YORK (Hollywood Reporter) - In the November 15 episode of NBC's "30 Rock," Alec Baldwin and Tina Fey, in their roles as Jack Donaghy and Liz Lemon, sang the praises of Verizon Wireless before Fey looked right into the camera and asked, "Can we have our money now?"
Emphasis added to avoid confusion over this post header.
Great stuff. Got a favorite dead sitcom? Comments open.
November 27, 2007
Political Blame Game--Detroit Housing Edition
Detroit Mayor Kwame Kilpatrick took to the NPR airwaves today to blame Detroit's housing woes on subprime mortgages, predatory lending, etc. Sorry, Mr. Mayor, but crummy policies (details here) are much more responsible for there being some 3,400 houses offered for sale at less than $20,000.
November 26, 2007
Concise Encyclopedia of Economics
David Henderson's famous encyclopedia gets a plug in today's Indianapolis Star:
Gift: Economics 101: If your Christmas gift list includes any money-minded friends or family members, the Liberty Fund can help. The Indianapolis publisher of low-cost scholarly texts on liberty has just come out with "The Concise Encyclopedia of Economics." The 656-page volume is a user-friendly collection of entries by 152 economists. The paperback price: an economical $28. -- Jeff Swiatek
Available on Amazon, but for the genuine shopping experience go here.
HT: Emilio Pacheco
November 25, 2007
Technological miracles c. 1907
From the Nov. 24, 1907 NYT:
With the recent successful demonstration of Prof. Korn's invention, by which photographs may be telegraphed from one part of the world to another, it seems not improbable that some day we may be able to see distant views through the aid of a telephone wire in the same way that we can now hear distant sounds.
Moreover, Marconi is demonstrating wireless transmissions acrsoss the Atlantic, X-rays (see earlier post), the automobile and the airplane are coming on-line, and numerous other exciting technological changes are afoot.
CSI c. 1907
From the Nov. 24, 1907 NYT:
According to a report of Dr. Vaillant of the Lariboisiere Hospital...all danger of burial alive ahs been removed by teh use of X-rays. Dr. Vaillant has discovered that, after numerous experiments with radiographs [X-rays], the living and the dead present numerous differences.So, in 1907 medical science is proceeding to the point where we don't have to bury people with a bell. By 2007, medical science seems close to making adult stem cells out of skin cells (2007 story, Original research A and Original research B ) and eliminating the possibility of transplant rejection.
The U.S. as arms importer c. 1907
An interesting article from the Nov. 24, 1907 NYT:
Naval necessities are such that the domestic manufacturers are unable to supply within a reasonable time ordnance, projectiles, powder, and torpedoes for the fleet, and Admiral M.E. Mason, Chief of the Bureau of Ordnance, in his annual report to the Secretary of the Navy strongly urges legislation that will authorize the department to purchase such material when "it is to the manifest interest of the United States to make purchases in limited quantities abroad, which material shall be admitted free of duty."
On book reviews c. 1907
An interesting question is posed in an article in the Nov. 23, 1907 NYT:
I have often felt the same about movie and music reviews, as well as whatever the so-called news channels report. Interesting that the problem of relatively homogeneous reviews (perhaps a symptom of a principal-agent problem between publishers and reviewers?), doesn't seem to be a new problem.
November 24, 2007
Currency shortage in Zimbabwe
How can Zimbabwe be experiencing what Forbes calls "a shortage of banknotes caused by hyperinflation”, when hyperflation there (as in every known case) has been driven by rapid growth of the money supply?
Two reasons. First, currency is only a subset of the broader money stock, which also includes checkable bank deposits. Particular denominations or currency notes in general can become too small a fraction of the money stock if the currency printing presses don’t keep up with growth in the broader money stock (driven by central bank expansion of bank reserves). Second, there can even arise an excess demand for money in general if prices – anticipating ever-faster shrinkage in the value of the monetary unit – begin to rise even faster than the money stock is growing.
The Zimbabwe dollar began the year at 2,800 to the US dollar. Last week’s market rate is reportedly between 1.0 million and 1.5 million to the US dollar.
What would be Zimbabwe's best exit strategy for ending hyperinflation? Free banking.
Hat tip: Kurt Schuler
November 23, 2007
Blondes Have More Externalities ...
... and apparently they are not all of the positive variety. To wit,
While blondes may have more fun, a new study suggests that fair-haired ladies may be making those around them dumber.
Quick Hits from the Southerns
I spent the first part of this week at the Southern Econ meetings in New Orleans. Besides seeing several DOLers, some grad school pals, and lots of friends, a couple of highlights:
1. My former student Andrew Chupp, now in GA State's Ph.D. program, did a superb job presenting his paper on how emissions policies affect the demand for hybrid cars. Well done!
2. While taking the shuttle from the airport to my hotel, I got in a brief conversation with the driver about how jammed New Orleans will be in January with the AEA meetings and national championship Sugar Bowl back-to-back. The driver indicatd he's a LSU fan but hopes LSU will not be in the Sugar Bowl. Why not? Many LSU fans will be driving to the game and, consequently, there will be less demand for shuttles and other tourist services. This one insight alone makes the driver a better sports economist than many of the folks who cook up fanciful economic impact studies for major sports events and new arenas.
November 22, 2007
That stuffy old Wal-Mart
Debra Jackson said she likes shopping at the Dollar Palace, partly because "I don't have to get all dressed up like I'm going to Wal-Mart or something."
November 21, 2007
Steve Chapman on the beguiling notion of energy independence:
[A]lready I can guarantee two things. First, the next president will be elected on a promise to lead the nation to energy independence. Second, the promise won't be kept.
How did the Liberty Dollar work?
Last week’s FBI’s raid on the private silver-backed currency project, the American Liberty Dollar (ALD), has generated a great deal of discussion on blogs and message boards. In the discussion there has been some confusion about what the project was about.
Confusion is understandable because the ALD set-up is not completely simple or transparent. On the one hand, the ALD marketed one-troy-ounce silver rounds (for legal reasons not called “coins”) and notes redeemable for the one-ounce rounds. On the other hand, it marked the rounds and notes “$20”, meaning “20 US dollars”. How can a round be both “one troy ounce” and “US$20”, when the market price for similar one-ounce silver rounds from other sources is not currently US$20? (The private Northwest Territorial Mint, for example, is currently selling one-ounce silver rounds at $15.28 in bulk, buying at $14.43. These prices include a premium over uncoined silver.) More generally, how can a one-ounce silver round have a fixed price in US$ when the US$ market price of silver varies from day to day? Some commentators think there must be something fishy here. “Silver” on the Mises.org blog supposes the Liberty Dollar project was “designed to trade silver medallions to the ignorant and unwary at premiums that were many multiples of the market norm.”
But there is another explanation for the fixed US$ price on ALD rounds and notes. I take the ALD literature at its word that the Liberty Dollar project was intended to provide an alternative currency to compete with the Federal Reserve note. Its “monetary architect” Bernard von NotHaus decided to denominate the ALD in US$ to make it, like 19th century private banknotes, compatible with the dominant existing unit of account. Dollar denomination was to make it easy for people to use ALD rounds and notes as currency. If ALD medallions or notes had been denominated only in “ounces” then the many potential recipients who think in US dollars, and who have no idea about the current spot price of silver, wouldn’t have known what dollar value to assign to them. The US$ denomination of ALD avoided unit-of-account incompatibility with the dominant US$-denominated payment system.
Denomination in US dollars, however, conflicted with the ALD claim that its paper notes and electronic claims were “100% backed” by silver. A $20 ALD note, backed by a one-ounce silver round in an Idaho vault, is “100% backed” only if we accept that the round is worth $20. Marked to market, the silver round to which it is a claim is in fact currently worth only around $15. On a marked-to-market basis, then a $20 ALD note is not 100% but instead fractionally backed. In the same sense, even ALD one-ounce silver rounds, marked $20, are partially tokens rather than completely full-bodied.
I have no objection to fractional-reserve banknotes. As I have noted elsewhere, fractional backing is necessary for a circulating bearer note to be feasible. A note with 100% reserves (on a marked-to-market basis) could not circulate easily and anonymously because the issuer would have has no way recover storage costs. The ALD notes could waive explicit storage fees because the issuer sold the notes at above the market value of the reserves, using part of the profit to pre-pay the warehouse fees.
The fact that it was denominated in dollars (to provide unit-of-account compatibility) had an ironic implication, as I noted in an article in 2000: it meant that the ALD offered no great advantage in prospective purchasing-power stability over standard US$ (Federal Reserve) notes. Insofar as they passed at their marked $US value, the purchasing power of ALDs varied exactly with that of Federal Reserve notes. The slight advantage of the ALD $20 note is that it does have the one-ounce silver redemption option setting a lower limit to how far its purchasing power could fall—unlike a Federal Reserve note, which has no lower bound.
When I made the above no-great-advantage argument in 2000, I considered it unlikely that the silver-redemption limit would become relevant, given that the futures market price of silver at that time made "silver at US$10 an ounce" unlikely. But as it turned out, silver rose above $10, and the redemption option did come into play. Originally it was the $10 ALD note that was redeemable for the one ounce round. (The spot price of silver was then around $5.) This US$10 “basis” became infeasible (because of the need for a mark-up to pre-pay the warehousing fees) as the market price of silver rounds approached US$10. The ALD switched to a US$20 “basis” when the spot price of silver crossed $7.50, and holders of the one-ounce-redeemable note enjoyed a one-time nominal gain.
Endowed Chair In Entrepreneurship
Jack Soper informs me that his endowed chair is coming available. The relevant information is below the fold.
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John J. Kahl, Sr. Chair in Entrepreneurship
The John M. and Mary Jo Boler School of Business at John Carroll University is seeking to fill the John J. Kahl, Sr. Chair in Entrepreneurship. The holder of the Kahl Chair will have the opportunity to further develop and grow our small but vibrant entrepreneurship program across John Carroll’s campus and in the business community through curriculum development and programmatic efforts.
The Kahl Chair is also the chief academic officer of the Muldoon Center for Entrepreneurship, whose mission is to encourage the growth of its 200 privately held businesses and is supported through a separate $2 million endowment. Working closely with the Director of the Muldoon Center, the Kahl Chair, as chief academic officer, will provide the intellectual force driving the promotion of relationships between the University and the business community of Northeast Ohio.
As the academic cornerstone of John Carroll’s developing program in entrepreneurship, the holder will bring academic credibility to the program through a strong record of research. To establish John Carroll University as a significant contributor to the field, the Kahl Chair will maintain an aggressive research/publication effort in entrepreneurship targeted toward high quality refereed journals and national conference presentations.
As an established scholar in the field, the Kahl Chair is expected to be a leader and mentor for other faculty across disciplines in the Boler School by facilitating research activity and by encouraging the integration of entrepreneurship and innovation concepts in courses across the curriculum.
John Carroll University is dedicated to a true balance between research scholarship and teaching excellence. Research expectations in the Boler School of Business reflect an equal balance between teaching and research. For faculty actively publishing their research, a typical teaching load is 9 hours per semester, usually with 2 preps. The Kahl Chair would have a substantially reduced teaching load to reflect the higher research expectations that accompany the position. The teaching load would include some combination of our current entrepreneurship course offerings and new offerings possibly introduced by the holder of the Chair.
John Carroll University is a Catholic, Jesuit University with approximately 4,000 students. The Boler School of Business is AACSB accredited for our undergraduate and graduate programs and we are separately accredited by AACSB for our Accountancy program. One of the hallmarks of John Carroll University and the Boler School of Business is the sense of community between students and faculty. Moreover, the Boler School of Business’s alumni base in the business community is exceptionally strong and very supportive of John Carroll University.
John Carroll University’s campus is located in a beautiful, residential suburb of Cleveland, 20 minutes from downtown and 20 minutes from scenic countryside. Cleveland is host to a wide variety of industries and has experienced significant growth in the areas of biotechnology, health care and engineering. The city of Cleveland has undergone a series of transformations during recent years such as downtown and lakefront development including the Rock and Roll Hall of Fame, the new Browns Stadium, and the Great Lakes Science Center. The Cleveland Orchestra, the Cleveland Museum of Art and Cleveland Playhouse Square are all nationally acclaimed cultural centers.
In addition to the extensive cultural activities the city offers, outdoor activities are also prominent. The Cleveland Metroparks represents one of the largest interconnected series of parks in the United States and offers hiking trails, golf courses, and a host of other outdoor activities. Approximately 30 minutes from campus is the Cuyahoga Valley National Park, one of the newest U.S. National Parks. An abundance of streams and parks throughout Northeast Ohio provide ample opportunities for just about any type of activity year round. This combination of cultural activities and outdoor activities offers our faculty an excellent quality of life.
Candidates should send a letter of application with their curriculum vita to: Dr. James H. Martin, Associate Dean, John M. and Mary Jo Boler School of Business, John Carroll University, 20700 North Park Boulevard, University Heights, OH, 44118. Telephone: (216) 397-4473; e-mail: firstname.lastname@example.org. JCU is an Affirmative Action, Equal Opportunity employer. Evaluation of applicants will begin after December 31, 2007 and will continue until the position is filled. The University is committed to diversity in the workplace and strongly encourages applications from women and minorities.
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On Social Security: Krugman vs. Krugman
Ruth Marcus takes on Paul Krugman:
In liberal Democratic circles, the debate over Social Security has taken a dangerous "don't worry, be happy" turn.
And so forth.
Two new books I should read
Both are from Stanford University Press.
November 19, 2007
The FBI raid against the Liberty Dollar: new details
I just spoke with reporter Alec MacGillis of the Washington Post, who was seeking background on the Liberty Dollar, the silver-backed private currency whose offices were raided by the FBI last week. (Previous blog entries on the case here and here. I first wrote about the Liberty Dollar project, whose parent organization used to be known as NORFED, National Organization for Repeal of the Federal Reserve Act, in The Freeman in July 2000.)
UPDATE: MacGillis quotes me in his new piece on internet reaction to the raid.
Evidently interest in the story continues to grow. Earlier today Google News counted 126 news articles on the raid. Many stories tie it to the Ron Paul campaign, because the Liberty Dollar organization recently began offering silver $20 and copper $1 pieces featuring Ron Paul’s face. The Washington Post ran reports by MacGillis on Saturday under the headlines “In Ron Paul Coins, Federal Agents Don't Trust” and “In Paul They Trust (The Feds May Differ)”.
A bombshell in the MacGillis articles is that the FBI’s affidavit, filed with a judge to get its search warrants, is now available online. The document (pdf) is available here.
In the affidavit, an FBI special agent states that he is investigating Norfed for federal violations including "uttering coins of gold, silver, or other metal," "making or possessing likeness of coins," mail fraud, wire fraud, money laundering and conspiracy. "The goal of Norfed is to undermine the United States government's financial systems by the issuance of a non-governmental competing currency for the purpose of repealing the Federal Reserve and Internal Revenue Code," he states.
I’m not a legal expert, but since when is promoting the repeal of specific federal statutes a crime?
The affidavit also reveals that the FBI
• conducted an investigation of the legality of NORFED’s operations during which three undercover agents and one cooperating witness signed up as Liberty Dollar Associates (distributors). (p. 6)
• had its lab test the one-ounce silver Liberty piece, and found that it did indeed contain one ounce of .999 silver. (p. 9)
• found that NORFED “uses bank accounts to facilitate the distribution, sale, and circulation of the American Liberty Dollar currency” (p. 11) [?how is that relevant?]
• bases its investigation on the theory that the Liberty Dollar silver and copper pieces violate USC Section 486 (pp. 28 ff.), which is the same statute cited by the US Mint in its website allegations that the Liberty Dollar is illegal. As I have noted before, the statute does appear to outlaw the issuing of any metallic coins intended to circulate as currency. The legal question thus becomes whether round metallic pieces that are not called “coins,” and do not purport to be legal tender or government-issued, count as coins under the statute.
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The affidavit contains the following bizarre paragraph (p. 33):
NORFED uses Federal Reserve Notes (FRN) to conduct business. FRN’s are used to buy Liberty Dollar currency. This reliance upon FRN’s by a group opposed to FRN’s demonstrates that the American Liberty Dollar monetary system is simply a drain on the United States Government’s monetary system for financial profit via fraudulent means.
Huh? All that NORFED’s acceptance of FRNs illustrates is that the FRN is the dominant money in the United States. How could any enterprise in the United States, whatever its founding philosophy, hope to buy inputs if it refused to accept payment for its outputs in FRNs? No “drain” and no “fraud” is demonstrated by NORFED’s acceptance of FRNs. News flash: the Cato Institute opposes the monopoly of first-class mail awarded to the US Postal Service, and yet Cato has been known to mail first-class letters via the USPS.
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More on Thanksgiving prices c. 1907
A follow up on yesterday's discussion of turkey prices, the Nov. 19, 1907 NYT reports the following prices for Thanksgiving staples (perhaps an undergraduate paper lies in these data?):
One dollar in 1907 is approximately $22 in consumer price index adjusted 2006 dollars.
November 18, 2007
Price of a Turkey c. 1907
From the Nov. 17, 1907 NYT:
A turkey at 35 cents a pound is not to be considered by the average housekeepers, and other things one is used to serving at a Thanksgiving dinner being equally expensive, very few persons feel that they can afford to follow the old custom of giving a big family dinner on a National feast day.We bought our turkey today for $0.69 per pound (I could have paid less and I could have paid more).
Thirty-five cents in 1907 was approximately $7.50 in 2006. Ouch...at $150 (equivalent) for a twenty pound bird, I am not sure I would be hosting Thanksgiving dinner either.
The American Farm Bureau at their "Voice of Agriculture" site claims that this year's dinner for 10 will average around $43.
Principal-Agent Problem c. 1907
From the Nov. 17, 1907 NYT:
The Directors of the Interborough-Metropolitan Company have come to recognize that the loss of fares due to dishonesty of conductors and their failure to collect is the most important factor with which they have to deal in reorganizing the surface railways of Manhattan and the Bronx. This realization...is one of the reasons why the...managers...look with particular interest for the coming trials of the Montreal, or pay-as-you-enter car, on the Madison Avenue line, for this car is supposed to make dishonesty on the part of conductors as near an impossibility as anything can be when a mere mechanical device is pitted against human ingenuity...An interesting principal-agent problem with a potential solution.
November 17, 2007
'Rounding third and heading for home'
I am sad today. Joe Nuxhall, The Ol' Lefthander, has died.
Joe Nuxhall, who became the youngest player in modern major league history when he pitched in one game for the 1944 Reds at age 15, then went on to spend more than half a century with Cincinnati as a pitcher and broadcaster, died Thursday in Fairfield, Ohio, outside Cincinnati. He was 79.
I am really sad today.
November 16, 2007
FBI Raids Liberty Dollar, Day II
Bernard von NotHaus of the silver-based Liberty Dollar project has updated his account of the FBI raid on his organization’s offices – complete with links to pdf’s of the search and seizure warrants. An Associated Press account of the raid is here.
Trade and Cultural Progress
This is a Raramuri, or Tarahumara, family (well, part of one). My buddy Steve Dieterichs took the photo when he, Jay Burchfield and I hiked Copper Canyon in 2003 (semi-glory photo). To the right of the camera angle is a shallow cave where the family lives most of the year. To the left is a beautiful view across the Canyon and down into the town of Batopilas. Behind the camera about 200 yards is a small compound with several hovels, a fire pit, and general gathering areas. Steve also took this photo, which is at the "compound":
Our guide, Manuel Gil of Batopilas, told us that visitors like us are rare. We were especially treated when they offered a sample of their tesguino, which was grainy and sour but strong.
The Tarahumara are reclusive. They were among the last indigenous peoples exposed to Hispanic Mexico. Online descriptions usually point out their greatness as long distance runners, their resistance to both Aztec and colonial conqeust, and their unique foot relays where men dribble and pass a hard ball with their feet over long distances (Jay says, "never challenge a Tarahumara to a wooden ball-kicking contest"). Cultural regressionists say they are endangered and need help. Mexican governments want to give them public housing. And the local tour industry hypes them as a curious people selling colorful hand-made textiles.
Now the Raramuri are the subject of a feature film, Cochoci, by two Mexican first-time directors. This is not a documentary. It is a story of two Raramuri boys grappling with a coming-of-age dilemma in their home environs--the ruggedly beautiful Sierra Tarahumara of Copper Canyon. According to the film's description on the Toronto Film Festival site,
Cochochi transcends its simple plot of two children looking for a lost horse. [Co-directors] Cárdenas and Guzmán make highly sophisticated commentaries on the realities facing the Raramuri and their customs. They capture the languidness and tranquility of a life without telephones (where all long-distance communication is by radio), and tackle the question of how to lead a life in both one’s indigenous language and in Spanish.
More broadly, the film is foremost among a "new wave of cinema" emerging from Mexico. Last week NPR ran this story discussing an "explosion of new talent." In contrast to a decade ago when Mexico's film industry was cliche, the new talent is showing aspects of Mexico's culture that have never been portrayed in film. Critics are on board with incredible praise, like the vice-chairman of Columbia Tri-Star pictures:
Times occur when suddenly in one place there's a sudden mushrooming and expansion of talent. You can think of exampels of the Impressionist painters in France 150 years ago, and there are other examples in cultural history, and I think this is one of those moments in Mexico.
I think the NPR story is very well done--it's vivid, current and relevant. But I am struck by a comment toward the end of the story trying to account for the origins of this cultural movement. The reporter notes that this new generation of film makers is
"the first to grow up under post-NAFTA era of globalization, which pried open Mexico's closed economy. That was followed by Mexico's transition to democracy."
Isn't this a fascinating bottom line? NPR compares a movement with French Impressionism and then attributes that movement to free trade and liberalization. Wow!
I will see the film when its available, but I'm leery it will overly victimize the Tarahumara. The Tarahumara I met--ever so briefly--were strong and happy. Thanks to Liz Zechmeister of UC-Davis political science for the pointer. Comments open for feedback, Tarahumara stories, what not.
Ron Paul and Sound Money
To my surprise, a search of Technocrati didn't turn up much on this. So here goes.
Lately Congressman Ron Paul has been aggresively criticizing the Federal Reserve--not just policy decisions, but the system. Youtube has an entertaining example in which Paul pulls no punches in arguing that the Fed is a price fixer who is responsible for the weaker dollar, which constitutes theft of people's savings. Bernanke's responses are relatively weak and, in my opinion, somewhat dismissive. There are some other good videos in the right frame. Ron Paul knows his economics.
Later that day, Larry Kudlow interviewed Paul and got around to asking him what kind of monetary system he would promote. Paul answered:
"The Constitution said only gold and silver should be legal tender. We don't really have clear authority to have a central bank. Jefferson and Jackson got rid of a national bank because they didn't like it. We've only had a central bank for a relatively short period of time. But we can't get rid of the Fed in a day or a week. But we could legalize competing currencies. We compete with currencies around the world all the time. Why can't we have gold and silver competing as a currency, and let people save... So there's a way to develop a competing currency under the current situation. If people don't like the fiat currency, that continually loses its value, they can opt out and start dealing in gold and silver."
Paul and Kudlow then talk about Hayek on competing currencies. Good stuff.
From the AJC comes this example of using technology to save labor and employee monitoring costs:
Stats, a new downtown sports bar, spent $110,000 to install the system. The Table Tap technology lets guests serve themselves once waitresses check identifications and turn on a meter. The taps connect to 16 kegs in a basement cooler, and guests can pick which two they want hooked up at the table.
Another news item on employee monitoring is below the fold.
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ISLIP, N.Y. (AP) - GPS tracking devices installed on government-issue vehicles are helping communities around the country reduce waste and abuse, in part by catching employees shopping, working out at the gym or otherwise loafing while on the clock.
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Like most of the the DoL crew (Josh, Frank, Craig, Tim, Ed, and Mike D.), I'll be at the Southern Economic Association meeting in New Orleans next week (Saturday-Wednesday).
Aside from the conference itself, I'm looking forward to a couple of meals at Mr. B's on Royal Street, my favorite restaurant on earth. You haven't lived until you've eaten the barbecued shrimp there. Of course the butter in the recipe (1.5 sticks per serving) may just kill you!
Anyway, here are a few items from the grab bag.
1. Wired magazine reports on some nasty malware that hackers have embedded in web ads on sites like the Economist,
The worst-case scenario used to be that online ads are pesky, memory-draining distractions. But a new batch of banner ads is much more sinister: They hijack personal computers and bully users until they agree to buy antivirus software.
(2) Looking for a good workout regime? Consider the daily workouts offered up by navyseals.com. Muy loco.
(3) I'll be running the Ole Man River Half Marathon Sunday in New Orleans. I've never run a half before as such. My fastest split time in a full marathon was 1:31 so I'm hoping to run this in around 1:28 (6:43 pace). Last week's Forestry Preserve Trail Run 5k in Auburn, Alabama was a good warmup race as I came in 3rd overall with a time of 20:30 on a pretty tough course.
November 15, 2007
Hey, I thought most rappers preferred gold
AP reporter Lauren Tara LaCapra notices a cultural shift in currency preferences:
As the greenback recently hit historic lows against other major currencies, rap mogul Jay-Z released a new video in which he flashes euros, not dollars. […]
If an alternative currency threatened the powers that be, it would be illegal
In September 2006, as noted here, the US Mint made threatening noises claiming that its competition, the private silver-based “Liberty Dollar”, was illegal. This week it appears that the other shoe has dropped.
An email arrived this morning from Bernard Von NotHaus, “Monetary Architect” of the Liberty Dollar project, with the subject line “FBI Raids Liberty Dollar -- Confiscates All Ron Paul Dollar[s]”. It begins:
Dear Liberty Dollar Supporters:
On drug sentencing c. 1907
From the Nov. 15, 1907 NYT:
Convicted of selling cocaine without a physician's prescription, Charles W. Hitch, who has a pharmacy at Mott and Worth Streets, was sentenced yesterday to serve six months in the penitentiary by the Justices of Special Sessions.How times have changed. In 1907, those caught driving an automobile faster than the posted speed limit were immediately arrested, thrown in the holding tank, arraigned, fined (or released on bail), and given the perp-walk treatment, as I have pointed out here and here
Anti-scalping laws c. 1907
Many cities around the country are reconsidering any anti-scalping legislation they have on the books (largely at the request of the event promoters who now have the technology to create their own "scalping" markets). One hundred plus years ago, the first anti-scalping laws were just being erected, primarily on aesthetic grounds.
From the Nov. 15, 1907 NYT:
NEW HAVEN, Conn. - A clash between the small army of professional ticket speculators who invade this city before the Yale football game in the Fall and the city and university authorities is expected. Mayor Studley has just signed the most drastic anti-ticket speculation ordinance which any city has adopted in New England and the speculators are said to have banded together in a determined effort to test its constitutionality.
In real terms - $2 = $44 in 2006, $10-$12 = $220-264 in 2006, $10-$100 = $220-$4400 in 2006.
The size of the fines relative to the size of the profits from scalping a ticket suggest that the authorities felt it was unlikely that they would actually catch someone scalping a ticket.
In yet another example of how times have changed, this year Harvard charges $15 for a single-game ticket (although Harvard-Yale is sold out)
As for the secondary market for Harvard-Yale, one ticket broker has tickets for $24 each.
Keynesian Fairy Tales
Sarah Gardner: It all started in the 1930's. Franklin Roosevelt might have been the first president to think of Americans as "consumers" as well as citizens.
Here's some recommended reading for the "Stateplace" folks:
November 14, 2007
ECONOMIC COMMUNICATORS CONTEST
The Association of Private Enterprise Education, in Co-Operation with the Market-Based Management Institute, announces the second annual:
"In God We Trust" and TR c. 1907
Imagine something like this, from the Nov. 14, 1907 NYT, being written today:
In answer to one of the numerous protests which have been received at the White House against the new gold coin which have been coined without the words "In God We Trust," President Roosevelt has written a letter:
Needless to say, TR's stance was not popular. For example, a "red-hot debate" took place in the Episcopal Diocesan Convention.:
yesterday, by a vote of 131 to 81, passed resolutions protesting against the elimination of the motto "In God We Trust" from the new ten-dollar gold pieces. The debate on the question lasted an hour and a half, and for a part of that time the convention was in some disorder.
Bad ideas in education c. 1907
A story in the November 14, 1907 NYT reports on the actions of the New York Board of Education's By-Laws Committee, which had met the night of the 13th:
for some time there has been a desire to exclude married women teachers from the system. To encompass this the By-Laws Committee submitted a recommendation that "no married woman shall be appointed to any teaching or supervising position unless her husband by reason of physical or mental disease is incapacitated to earn a livelihood, or has continuously abandoned her for not less than one year prior to date of appointment."The story does not explain the desire to remove married women from the classroom. Perhaps non-married women wanted to restrict the supply of possible teachers?
However bad that idea was (and would be), the next one offered was over the top:
Commissioner Jonas made an added suggestion that Superintendents be required, as part of their duties, to write the text books used in the schools. These books would be published by the Board of Education.The days of the Renaissance man had already passed us by in 1907. Thus, having appointed Superintendents write text books would seem to have been a risky endeavor. On the other hand, the Board of Education would likely not have paid the authors any royalties and to that end would have benefited.
One could imagine the outrage (from right and left) if such a proposal saw the light of today.
Bad ideas in education do not seem to be a solely modern phenomenon.
On Michigan Football Coaches c. 1907
In a weird "history repeating itself" story from the November 14, 1907 NYT:
"Hurry Up" Yost is coaching Michigan football teams for the last season this Fall, and will retire at its end and be succeeded by McGuigan, the former crack Michigan player, who is now with Vanderbilt....Sounds a lot like the current Michigan coach.
Costs and Benefits
My grad school colleague Linda Ghent sent this photo to Mankiw.
At long last …
A courageous town government steps forward to rescue our culture.
November 13, 2007
Taxing the rich
Closing lines of an interesting column by Jonah Goldberg:
I don't know what the best tax rates are, for rich or poor.
Re: Two cheers for Bob Tollison
Unlike Ed, I wasn't lucky enough to have had Bob Tollison as a professor, but I was heavily influenced by his work too. His brand of in-your-face applied micro/public choice was an inspiration to me as a student. Also I think his 1985 Presidential Address to the Southern Economic Association is as fine an essay on the methodology of economics as I've ever read. My favorite part:
Consider a fanciful example. Suppose that an economics journal offers a prize for a documented refutation of the law of demand. A young economist has an ambitious idea - why not produce a refutation in the local market for toothpicks? That is, enter this market, behave in contradiction to the law of demand, observe and write up the results, and submit them for publication. While all this is quite plausible, at least in a short period of time before toothpick producers get wind of the economist's behavior and raise their prices until his demand curve is negatively sloped, the journal editor would not accept the paper. The paper could show a "verified" upward sloping demand curve for toothpicks in Floyd, Virginia, ceteris paribus, but the editor would reject it and with good reason. The rejection letter would read like this.Dear Professor X:
ATSRTWT: Economists as the Subject of Economic Inquiry by Robert D. Tollison
November 12, 2007
"Tootsie" in reverse c. 1907
From the Nov. 12, 1907 NYT:
Trinidad, Colo. - Miss Catherine Vosbaugh, who for nearly sixty years passed as a man, died at a hospital to-day.Somehow I don't think her sex was "discovered" at the hospital.
I don't know what it all means, except that perhaps the movie "Tootsie" wasn't all that original.
November 11, 2007
Interesting investment-as-development paper
Free trade is the most effective way for an LDC economy to grow long term. There are two kinds of impediments: first, political and other constraints on trade barriers; and second, competing ideas such as foreign aid, so-called "fair" trade, and others.
Because of the first impediment, LDCs can fall through the trade agreement cracks. Multilateral agreements are rare. As Brink Lindsay has noted, "since the Kennedy Round ended in 1967, only two other agreements (the Tokyo Round and the Uruguay Round) have been concluded over the subsequent three-and-a-half decades." Bilateral agreements are much more common, as the U.S. Trade Representative shows, but they effectively lock out other partners, including LDCs that could compete on cost, in favor of the preferred partner. For these reasons, there is a strong development argument for the U.S. (and other wealthy westerns) to unilaterally decreasing barriers. That has its own political constraints.
A new paper by Emily Blanchard, University of Virginia, treats barriers as endogenous to foreign investment and concludes differently. Foreign investment has a tariff liberalizing effect: Firms invest in foreign manufacturing of goods for import back to domestic markets; this decreases the domestic political demand for tariffs on the foreign producer. This endogenous effect suggests that opening up capital markets can partially substitute for negotiated reductions in trade barriers. As the introduction reads,
Current preferential tariff agreements, whether an outgrowth of colonial legacy or more recent initiatives for regional integration, may be un- derstood as an endogenous and reenforcing response to international capital flows. Indeed, the model suggests that the recent “offshoring” phenomenon, whereby vertically integrated multinational firms (e.g. Nike, Dell, Apple Computers, etc.) establish overseas manufacturing operations in low wage countries to produce goods for reexport, will afford additional momentum to bilateral trade negotiations between multinationals’ production and headquarters countries.
Through a related mechanism, the foreign exporting interests can lobby the foreign government to reduce barriers in reciprocal kind. I'm not a trade guy, but this seems like a significant step. The paper is currently out under the Berkeley Electronic Journals suite, by subscription here. It might also be available at SSRN.
So go open up your capital markets!
November 10, 2007
Superfine dynamite from California
As we know, resource mobility is a substitute for mobility of goods. The Economist provides a case in point:
To supply outdoor [marijuana] plantations, rivers are dammed and water piped as far as two miles. Plants are nourished with fertilisers and tended by workers brought to America specifically for the purpose. Ageing hippies are responsible for only a few such operations. Kent Shaw, a state narcotics officer, reckons four-fifths of outdoor marijuana plantations are run by Mexican criminal gangs.
November 09, 2007
Two cheers for Bob Tollison
I returned today from a two-day conference at Clemson celebrating Robert D. Tollison on his 65th birthday. The conference, organized by Bobby McCormick and Melissa Yeoh, had a lot of interesting papers, some great conversations and a dinner roast of Bob where Henry Butler, Fred McChesney, Bill Shughart, Jim Miller and Bobby McCormick put on a hilarious show. Public Choice will publish the festschrift in the January 2008 issue.
Bob is a remarkable economist and person. After writing under Jim Buchanan at the University of Virginia in the late 60's, Bob was on faculty at Cornell, advisor to the CEA, and department chair at Texas A&M---all by age 31. Bob is well known for having moved around a lot, holding posts at seven different academic departments and two government agencies (thankfully for me, his longest tenure was at GMU from 1983-1998, where I was his penultimate student). But Bob is even better known as an incredibly prolific scholar who shows no sign of slowing. In addition to his extensive consulting experience, the festschrift program breaks down Bob's vita as follows:
12 general interest economics books
But believe me, it's not a numbers game for Bob. It's about sticking with an idea ("Ed, if we don't defend homo economicus, who will?") and pushing it in as many directions and as far as it will go ("There is no such thing as a a non-economic part of life: Today the Pope, tomorrow the world."). That's what makes doing economics enjoyable for Bob. And that's why he has made important and/or seminal contributions not only in political economy but in sports economics, antitrust/regulation, economic history, and the economics of religion. Let me be clear: Bob Tollison is the scholar who is most singularly responsible for dismantling public interest theories of government (and maybe the Church!). Bob also has painstakingly enforced Virginia School claims to intellectual innovations in areas like rent seeking and constitutional economics ("Old wine comes before new wine."). All that said, his biggest contribution may be to his scores of students. He teaches you to show up early, keep your butt in the chair, enjoy what you do, and not to worry about critics and naysayers. Oh, and speak truth to power. That's a big one.
I'll cut it off there. But I do want to point to a few of Bob's works. If you have an inner economist who wants to be fed, and you haven't read RDT's stuff, I recommend some starting points beneath the fold. "The usual caveat applies."
Thanks, Bob, and happy birthday!
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Posted by Edward J. Lopez at 01:43 PM
Fisking Diana Nyad
Diana Nyad: It is totally surprising. In the last four years, the NFL has grown by about 25 percent a year, which sounds right. Baseball's grown by 50 percent a year. ...
Two franchises out of 28 get new ballparks and that somehow makes's the industry's revenues grow 50% per year for four years. Doubtful. Revenue generated by MLB Advanced Media is more likely (HT to JC Bradbury for the link).
[Nyad:] And what's happened is that that kind of money by the big teams, you know, was forced a few years ago into revenue sharing. And that's why this year, we've seen the intent of that revenue sharing come to life. Just as a . . . you know, I'm not a huge baseball follower, but it was great for me, and I think a lot of people, to see the Diamondbacks, the Cleveland Indians and the Colorado Rockies instead of the perennial big-money teams. So like, the whole country now has some reason to hope that their Pittsburgh Pirates, their Baltimore Orioles, their Seattle Mariners, might make it up to the big show.
It's not at all clear that competitive balance has increased and, if so, that revenue sharing is responsible. See John Palmer on The Sports Economist.
Jagow: [B]aseball's economic health is pretty good right now. Are the managers going to see any of it? Because we hear about Joe Torre signing a big contract with the Dodgers, but I understand that the salaries for other baseball managers are quite low compared to other sports.
I bet managers have relatively low MRP. Few fans probably come to see a specific manager. Although they are frequently fired for team performance, managers probably have small effects on the number of games a team wins. I'm not even sure how much difference there is in strategy across managers. Managers' biggest effects may be in how they manage players' egos and personalities.
[Nyad:] Now, we might say, "Well, that's a lot of money. Good, that's what they should be making, not these $10 million a year, give me a break."
She doesn't use the word players, but I assume that's the $10 million dollar a year reference. Demand for players is a derived demand; player salaries are driven by team revenues (see above).
[Nyad:] But the truth is, the baseball managers, they work like dogs. I mean, from the day the season ends, they're over in Japan recruiting, they're getting ready to bid for those free agents, which'll start next Tuesday.
Really? I've never heard that managers recruit a la college basketball coaches. I think she's confused managers with general managers, though I'm not even sure how much time they spend scouting and recruiting in Japan.
[Nyad:] And you know, Ozzy Guillen of the White Sox says, "We are grossly underpaid."
[Nyad:] I think a huge reason is the college game. There's no Major League manager who's looking to say, "Eh, I think I might go manage Arizona State next year." There's no crossover at all with the college game ...
A reasonable point, at the margin.
Dennis Miller, unfiltered and overexposed
Dennis Miller has a three-hour daily syndicated radio show, which I listen to if I'm driving between 10am and 1pm. On it he’s libertarian some of the time, witty much of the time, but occasionally half-witted when he cheerleads for the Iraq war or Rudy Giuliani.
On Tuesday night, Miller debuted a weekly one-hour sports-themed TV talk show, Sports Unfiltered with Dennis Miller, on the Vs. cable channel. The first show wore me out, with Dennis on camera for the entire 60 minutes, starting with a 15 minute (!) monologue. (See a more detailed critique here.)
Now come reports that Miller will host a new game show on NBC-TV, "Amne$ia". No more than once a week, I imagine. But still, with all this on-air time, how many hours a day will the poor man have left to watch old movies and vintage TV shows? How will he continue to keep his obscure pop-culture references fresh?
November 08, 2007
Sandra Day O'Connor on election of judges
"If I could wave a magic wand ... I would wave it to secure some kind of merit selection of judges across the country," O'Connor said at a conference [yesterday].
The judiciary has been a neglected area in public choice research. Although there are strong signs of a counter trend. Of course, Alex Tabarrok and Eric Helland have some nice work on this, summarized in their book Judge and Jury. Andrew Hanssen has some good papers, too (like this one). In addition, in my forthcoming book, Law without Romance, there is a nice chapter on judicial and prosecutor selection by Russ Sobel, Josh Hall, and Matt Ryan. They find (1) that false murder convictions spike around election of DAs and (2) that surveys of judicial quality are lowest in states with partisan election of judges, better in non-partisan elections, and best in appointment states. Currently I am at Clemson attending a Festschrift for Bob Tollison (more on this tomorrow), where I've learned that a promising graduate student is working on this as well.
I'm beginning to really like Justice O'Connor. However, institutional changes like this warrant a word of caution. See beneath the fold for a flavor why.
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"It is ironical that we seem to go in cycles on many issues of public policy. If we do not like the results in a given area and markets are being used, it is common to hear a recommendation that we turn to government enterprises or regulation. If government is already directly involved, reformers will suggest that markets be tried. If we do not like the performance of our government officials and they have been appointed, someone will suggest that the positions be filled by civil service professionals. And, if they are already civil servants but seem unresponsive to change, we say power is too dispersed and more managers should be selected by elected officials. If we note that the garbage does not get picked up and bus lines are poor, we may advocate that all of the individual political subdivisions be consolidated into a single metropolitan government; if we already have a large centralized government, we may advocate forming neighborhood school boards, giving more power to precinct police captains, and creating mini-city halls to bring government closer to the people.
"With respect to institutional choice, we seem to be acting in ignorance. We go through cycles of reform with great promise of results only to find failure ans some new round of reformers advocating return to where we started. This situation could be the result of a change in the balance of power. Different groups who benefit from different rules may come to power and change the rules to their benefit, and then they are defeated, the rules are changed back. But even those who control choice cannot always find the institution that really serves their interests. They can choose any rule they want, but they are not sure what the result will be. How many times have we watched group spend their political capital, obtain a new rule, and then receive no change in performance?
"Economics and the other social sciences have historically played only a minor role in predicting consequences of institutional change. Trial and error have played a large role."
A. Allan Schmid, "Property, Power, & Public Choice: An Inquiry into Law and Economics," 2 ed., Praeger, 1987. pp.xii-xii.
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November 07, 2007
Happy Bolshevik Day!
90 years ago today saw the Bolshevik Revolution, and NPR dedicated some on-air time this morning to the event. Surprisingly, the first paragraph admits that "The communist revolution ushered in a totalitarian dictatorship that killed and imprisoned tens of millions of people." Since capitalism's demise is supposedly inevitable but has yet to happen, the price tag for the socialist paradise must be in the hundreds of millions then.
The story interviews a Russian born in 1917 who had both his parents killed by the workers' regime, fought for Russia in WWII, was captured and imprisoned by Nazis, and survived only to return home and be imprisoned 10 years by Russians who thought he was a German spy.
So, though the 90 year old who lived through the era recognizes the horrors of Bolshevism, those who didn't live through it do not:
Syleia Daripova, 34, says she believes Stalin was a great man.
Imagine how much more unique he would have been if he killed three-fourths!
November 06, 2007
Health Care Cost
Russ Roberts provides a snapshot of how much third-party payments have grown since 1960.
My computations below are from the table from which he excerpts, with per-capita out-of-pocket expenditures computed and converted to real terms.
Year 1960 1970 1980 1990 2000 2003
Charles and Linda Everson were driving back to their hotel when their minivan was struck by a falling object — a 600-pound cow.
November 04, 2007
New Smith Quote
Courtesy of Don Boudreaux, we have a new Smith quote in the sidebar. Thanks Don.
November 03, 2007
The Gentle Cynic c. 1907
From the Nov 3, 1907 NYT :
Another list of quips from the same issue:
November 02, 2007
Many Thanks to Tyler Cowen ...
... for helping a standing room only crowd of Berry students discover their inner economists yesterday. I hope to post a photo or two next week.
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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