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.

Worse, there appear to be so many chefs stirring the pot that an odd concoction is sure to result. Planning Commission, Rome Historic Preservation Commission, Zoning Board of Appeals and Adjustments, City Commission all seem to have some sort of say on the most trivial of appearance matters — and often the ability to “veto” the opinions of the other.

At some point, perhaps already reached, this state of affairs will drive away new enterprises. Is it really impossible to do business in Rome without having a staff of lawyers on retainer to deal with the city?

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.

Read More »

Posted by E. Frank Stephenson at 10:14 PM in Misc.  ·  Comments (1)

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.
Posted by Wilson Mixon at 08:19 PM in Economics

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.

A vote could begin a process resulting in a national cap on cable ownership, with no cable company allowed to have more than 30 percent of all U.S. subscribers, a ceiling that Comcast Communications is near. It could also reduce prices that cable companies could charge smaller or independent programmers to lease access on unused channels.

The FCC has the authority to impose such regulations only if 70 percent of all U.S. households are able to subscribe to a cable service with at least 36 channels and if 70 percent of those households subscribe to such service. The first threshold was crossed years ago; nearly all U.S. homes are now "passed" by cable, to use the industry term.

Here's Gattuso elaborating on Jesse Jackson.

Posted by Edward J. Lopez at 05:49 PM in Economics

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.

Josh contacted Megan through her page on MySpace.com, the social networking Web site, said Megan’s mother, Tina Meier. They flirted for weeks, but only online — Josh said his family had no phone. On Oct. 15, 2006, Josh suddenly turned mean. He called Megan names, and later they traded insults for an hour.

The next day, in his final message, said Megan’s father, Ron Meier, Josh wrote, “The world would be a better place without you.”

Sobbing, Megan ran into her bedroom closet. Her mother found her there, hanging from a belt. She was 13.

Six weeks after Megan’s death, her parents learned that Josh Evans never existed. He was an online character created by Lori Drew, then 47, who lived four houses down the street in this rapidly growing community 35 miles northwest of St. Louis.

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.

[HT: Al]

Posted by Robert Lawson at 08:06 AM in Culture

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?"

At least in this case, art did indeed imitate life. Verizon said it handed over an integration fee to NBC, in addition to some marketing support, for the mini-commercial within one of the network's hottest shows.

The scene in question featured Jack saying, "These Verizon Wireless phones are just so popular. I accidentally grabbed one belonging to an acquaintance." Liz responded, "Well, sure that Verizon Wireless service is just unbeatable. If I saw a phone like that on TV, I would be like, 'Where is my nearest retailer so I can get one?"' She then broke the fourth wall and addressed the camera with the plea for cash.


It's not the first time the irreverent NBC comedy has made a joke of the increasingly common practice of product integration while at the same time plugging a network advertiser. In fall 2006, there was a similar spoof with Snapple in the episode "Jack-Tor," which featured Lemon and the show-within-a-show's other writers protesting a directive from General Electric and Donaghy to write product placement into the show, all while talking about how much they love Snapple. The dialogue included lines like "I only date guys who drink Snapple" and ended with Donaghy saying, "Yes, everyone loves Snapple. Lord knows I do." There was even a guy in a Snapple suit who walked out of the elevator asking for the human resources department.

Emphasis added to avoid confusion over this post header.

Great stuff. Got a favorite dead sitcom? Comments open.

Posted by Edward J. Lopez at 01:43 PM  ·  Comments (1)

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.

Posted by E. Frank Stephenson at 09:23 AM in Economics

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

Posted by Edward J. Lopez at 10:11 AM in Economics

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.

Posted by Craig Depken at 03:51 PM in Science

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.

In the radiograph of a living person the viscera is invisible and the abdominal organs are in constant movement and so leave no trace on the photographic plate. In the radiograph of a dead person, on the contrary, the stomach and intestines are clearly marked - this being the case even when the radiograph is taken only a few minutes after death.

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.


Posted by Craig Depken at 03:46 PM in Science

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."

He says that the torpedo situation is such that 100 of these weapons should be purchased abroad immediately while American manufacturers are completing their present contracts and the Government factory is being put in running order. There is also urgent necessity for going abroad to secure armor-piercing projectiles and range finders, which American manufacturers are unable to produce.

Posted by Craig Depken at 03:26 PM in Economics

On book reviews c. 1907

An interesting question is posed in an article in the Nov. 23, 1907 NYT:

In an article headed "Breakfast Food and Literature," The Saturday Evening Post supplies an excellent reason for reading the New York Times Saturday Review of Books. Thus the Saturday Evening Post:

Suppose you should see several solid pages devoted to advertising some fifty kinds of breakfast food, and the advertisements were all just like this:

15 cents per package

The color is a deep, rich brown - The Critic
Fresh, invigorating, wholesome - New York Sun
Well cooked, appetizing - Chicago Tribune
One of the best breakfast foods of the season - The Nation

15 cents per package

The color is a deep, rich brown - New York Sun
Not only well cooked, but appetizing - The Nation
Wholesome, invigorating, and fresh - Chicago Tribune
One of the best breakfast foods we have eaten this year - The Critic

15 cents per package

Wholesome, appetizing - New York Sun
Well cooked, invigorating - The Critic
We cannot too much admire the rich, brown color - Chicago Tribune
few of this year's breakfast foods please us better - The Nation

Which breakfast food would you buy?

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.

Posted by Craig Depken at 03:01 PM in Culture

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

Posted by Lawrence H. White at 11:23 AM in Economics

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.

Researchers found that men's scores on general knowledge tests drop when they are shown photos of blonde women, the Sunday Times of London reported.

Posted by E. Frank Stephenson at 11:54 AM in Misc.

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.

Posted by E. Frank Stephenson at 11:50 AM in Misc.

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."

HT: EclectEcon

Posted by Wilson Mixon at 02:26 PM in Funny Stuff

November 21, 2007
Energy Independence

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.

It's enchanting to imagine swearing off foreign oil in favor of ethanol . . ., or fuels derived from . . . coal. But even if all the corn grown in this country went toward ethanol, it would cut our gasoline consumption by no more than 12 percent. So why does ethanol get treated like the prettiest girl at the prom? . . . I've got two words for you: Iowa caucuses.

As for coal, schemes to turn it into liquid fuel for cars and planes have been around for half a century — including a dismal failure launched during Jimmy Carter's administration.

It would be good to reduce our consumption of oil, if only because it would reduce emissions of greenhouse gases. But replacing oil with alternatives that also pollute misses the point. And as ethanol demonstrates, a drive for energy independence is likely to veer off into wasteful handouts to powerful interests

A better approach would be a carbon tax, which would simultaneously promote conservation, curb emissions and impartially boost environment-friendly alternatives. But a carbon tax would be a tough sell to the American public.

And why bother? Energy independence is a mirage, but it sells itself..

Posted by Wilson Mixon at 07:37 PM in Politics

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.

Posted by Lawrence H. White at 05:27 PM in Economics

Endowed Chair In Entrepreneurship

Jack Soper informs me that his endowed chair is coming available. The relevant information is below the fold.

Read More »

Posted by Joshua Hall at 04:50 PM in Economics

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.

The argument has two equally dishonest components. The first is to deny that Social Security faces a daunting financing problem .... The second is to mischaracterize the arguments of those who advocate responsible action, accusing them of hyping the system's woes.

One prominent practitioner of this misguided approach is New York Times columnist Paul Krugman. "Inside the Beltway, doomsaying about Social Security -- declaring that the program as we know it can't survive the onslaught of retiring baby boomers -- is regarded as a sort of badge of seriousness, a way of showing how statesmanlike and tough-minded you are," Krugman wrote last week. "In fact, the whole Beltway obsession with the fiscal burden of an aging population is misguided."

Somebody should introduce Paul Krugman to . . . Paul Krugman.

"[A] decade from now the population served by those programs [Social Security and Medicare] will explode. . . . Because of those facts, merely balancing the federal budget would be a deeply irresponsible policy -- because that would leave us unprepared for the demographic deluge, with no alternative once it arrives except to raise taxes and slash benefits." (July 11, 2001)

And so forth.

Posted by Wilson Mixon at 03:19 PM in Politics

Two new books I should read

GMU grads Ben Powell (beware scarily big picture) and Chris Coyne (enjoy rico suave picture) each have a new book out.

Ben Powell, Making Poor Nations Rich: Entrepreneurship and the Process of Economic Development

Chris Coyne, After War: The Political Economy of Exporting Democracy

Both are from Stanford University Press.

Posted by Edward J. Lopez at 11:46 AM in Economics

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.

MacGillis notes:

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.

Read More »

Posted by Lawrence H. White at 04:23 PM in Economics

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?):

  • Pudding maker sells cans at 22, 40, 50, and 75 cents for one, two, three, and four pound cans.
  • Canned plum pudding sauce can be bought at 16 and 30 cents a can, large and small sizes.
  • Mince pies vary in size and price from 75 cents, $1, $1.25, and $1.50. Pumpkin pies are the same price.
  • Sterilized figs are 25 and 50 cents in one and two pound baskets.
  • Baskets of stuffed figs and dates are 55 cents, large jars 90 cents.
  • Assorted glace fruits are 35, 65, $1.75 and $2.50 for half pound, one, two, and five pound boxes.
  • Apricot glaces are 90 cents and $1.60, one and two pounds.
  • Cherry glaces are 65 cents a pound.
  • Prunes stuffed with ginger or walnuts are 50 cents a pound.
  • Chinese cumquats, little Chinese oranges, are 50 cents a pound.
  • Crystallized pineapple is 50 cents a pound.
  • Crystallized strawberries are $2 a pound.
  • Chocolate maraschino cherries are 50 cents and $1 for half-pound and one pound.
  • Chocolate cream peppermints are 40 cents of a half-pound box and 20 cents for a quarter pound.
  • Cream peppermint or wintergreen wafers are 25 cents for a half-pound box.

  • One dollar in 1907 is approximately $22 in consumer price index adjusted 2006 dollars.

    Posted by Craig Depken at 12:10 PM in Culture

    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.

    Here's the nominal and real costs for Thanksgiving dinner since 1986.

    Posted by Craig Depken at 04:17 PM in Economics

    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...

    Several months ago there was a case in the divorce courts which opened the eyes of a good many of the Interborough-Metropolitan Directors who had not previously looked into this phase of the situation. The wife of a New York City Railway conductor was suing for alimony, and in her bill allege that, although her husband's salary from the company was but $18 a week, he ought to pay alimony on $50 a week basis, as he "knocked down" $35 a weak on the side...

    Various statements of what this system of graft was worth to individual men have been made up, but only as estimates. One man high up...said yesterday that a former valet who was put in on the road as a motorman found that his share of the daily graft was from $2 to $3 under normal conditions.

    It is explained...that it is wise for a conductor to have a motorman in his confidence, inasmuch as the latter is in a position to "drag" the car - that is, make it get behind on its schedule sufficiently to fill up very full of passengers. Knocking down fares is a easier matter in a crowded car than it is in a relatively empty one where passengers can see the cash register.

    An interesting principal-agent problem with a potential solution.

    Posted by Craig Depken at 04:04 PM in Economics

    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.

    Posted by Robert Lawson at 07:50 AM in Sports

    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.

    Posted by Lawrence H. White at 06:02 PM in Economics

    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.

    Posted by Edward J. Lopez at 01:03 PM in Economics  ·  Comments (3)

    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.

    Posted by Edward J. Lopez at 09:25 AM in Economics

    Self-Serve Beer

    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.

    "I want one in my house," said Kevin McDonough of Sandy Springs, who was sipping on a pint of Harp that he'd poured himself./

    The meters tick away suds by the ounce, with prices ranging from 25 cents to 37 cents. That amounts to $4 a pint for the least expensive beer.

    When the table hits 180 ounces, the taps stop pouring until a server checks over the table

    Table Tap founder Jeff Libby negotiated the limit with the Georgia Department of Revenue, settling on an amount equal to the largest pitchers in use at other restaurants. It's the same self-serve concept, he figured.

    Still, the pour-your-own approach is much more appealing than scanning cereal through a self-serve checkout lane. Not just for drinkers, but for restaurateurs.

    With meters on many of the taps, including at an upstairs bar, nobody gets a freebie.

    With guests at seven tables and 10 private rooms free to pour their own, labor costs shrink.

    Another news item on employee monitoring is below the fold.

    Read More »

    Posted by E. Frank Stephenson at 08:48 AM in Misc.

    SEAs, etc.

    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.

    And the ads do their dirty work even if you don't click on them.

    [HT: Dave.]

    (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.

    Posted by Robert Lawson at 08:01 AM in Economics ~ in Sports

    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. […]

    Jay-Z's "Blue Magic" video seems to have been an attempt to acknowledge the dollar's decline in an ironic way and to paint the artist as an international superstar who is smarter than those accepting greenbacks.

    Posted by Lawrence H. White at 06:28 PM in Economics

    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:

    I sincerely regret to inform you that about 8:00 this morning a dozen
    FBI and Secret Service agents raided the Liberty Dollar office in

    For approximately six hours they took all the gold, all the silver,
    all the platinum and almost two tons of Ron Paul Dollars that where
    just delivered last Friday. They also took all the files, all the
    computers and froze our bank accounts.

    The complete letter is here. A news account, which basically just summarizes Von NotHaus’ letter and adds “no comments” from the FBI, is here. The Liberty Dollar website is here.

    Posted by Lawrence H. White at 03:40 PM in Economics

    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.

    Hitch was fined twice before in Special Sessions on similar charges. Last December he was fined $75 [$1,659 in 2006] and in April $250 [$5,532 in 2006]...

    Health Inspector Masterson testified that on July 26 he bought 25 cents' worth of cocaine at the Hitch pharmacy. This had been analyzed and found to be 99 per cent. pure...

    When Hitch was sentenced he turned pale and staggered. His defense was that he was out of town when it is charged the drug was sold.

    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

    Posted by Craig Depken at 10:57 AM in Culture

    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.

    The speculators reap a rich harvest on tickets for the Yale-Harvard and Yale-Princeton football games, which they sell for $10 to $12 apiece, buying them for their face value of $2....

    The ordinance which has just gone into effect provides that every ticket to a place of amusement in New Haven shall bear upon its face the price for which it is sold, and it prescribes a fine of from $10 to $100 for selling it at a greater price. It makes the selling of every separate ticket at a price greater than the face value a separate offense.

    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.

    Posted by Craig Depken at 10:45 AM in Economics

    Keynesian Fairy Tales

    Public radio's "Stateplace" lived up to its moniker this morning with a nostalgic bit on New Deal Keynesianism pulling the U.S. out of the Great Depression:

    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.

    President Franklin D. Roosevelt: If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the marketplace.

    The Great Depression had ravaged the American economy, and the White House saw hope in a bold new economic theory.

    Harvard historian Lizabeth Cohen:

    Lizabeth Cohen: FDR, and many who advised him, felt that the best route out of the Depression was putting money in consumers' pockets so they could, in a sense, buy us out of the Great Depression.

    So-called "Keynesian economics" took hold -- a theory that promoted spending, both private and public, as a way to stimulate the economy.

    Newsreel voice-over: Tens of thousands of men on one single payroll have money for themselves and for their families to spend . . .

    As America mobilized for World War II, spending became downright patriotic:

    Newsreel voice-over: Fresh buying power floods into all the stores of every community . . .

    By 1950, Harry Truman proudly told Americans the medicine was working.

    President Harry Truman: In the last 50 years, the income of the average family has increased so greatly that its buying power has doubled.

    Here's some recommended reading for the "Stateplace" folks:
    Couch and Shughart, The Political Economy of the New Deal

    Powell, FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression

    Higgs, Depression, War, and Cold War

    Shlaes, The Forgotten Man: A New History of the Great Depression

    Posted by E. Frank Stephenson at 08:21 AM in Economics

    November 14, 2007
    The Association of Private Enterprise Education, in Co-Operation with the Market-Based Management Institute, announces the second annual:


    First Prize: $10,000, Second Prize: $5,000, Third Prize: $2,500

    The rules are simple: If you believe you are effective at communicating economic concepts we're looking for you! Contestants must submit:
    1. A video clip of your teaching or speaking that is at least 5 minutes but no more than 20 minutes. You can submit a recording of a public lecture or simply a recording you make at home. The topic should be either an original idea incorporating economic concepts, or a great explanation of an existing idea in economics. The clip can be an excerpt of a longer talk.

    2. An accompanying written work (published or unpublished) of 5,000 words or less. This can be an essay, chapter excerpt, or even PowerPoint slides. Anything that conveys your ability to persuasively communicate in written form.

    This contest is open to anyone (e.g., assistant professors, graduate students, high school teachers) who does not have tenure at a college or university. Submissions will be considered by a panel of judges from APEE and the MBM Institute. The top three finalists will be invited to each make a 15-minute presentation during a plenary session at the 2008 APEE annual meeting, scheduled for April 6-8 in Las Vegas, Nevada, where they will be judged by a distinguished panel of communicators. Airfare and hotel accommodations will be provided, and finalists must be in attendance and agree to have their performances broadcast to win the cash prizes.

    Our past winners had exciting ways of describing economic principles. The semi-finalists can be viewed on the MBM Institute’s website (www.mbminstitute.org).

    • All entries must be received by February 1, 2008.
    • Written materials and presentations must be in English.
    • Judges will assign a weight of 25% to the written portion and 75% to the video portion.
    • If possible, please upload video clips to a website such as YouTube.com. If sending video tapes or DVDs, please send three copies of each, which will become the property of APEE. Please do not send videos as e-mail attachments. Computer clips on CDs must be viewable with Windows Media Player or Apple QuickTime and DVDs must be viewable on most DVD players. If contestants upload their clip to a website, please note the precise internet link in the contest entry. Officers and employees of APEE and the MBM Institute are ineligible.

    Contact Ed Stringham, at edward.stringham@sjsu.edu or Tony Woodlief, at tony.woodlief@mbminstitute.org. Entries can be either e-mailed to one of the above addresses (if video is on the web) or mailed to: Market-Based Management Institute: P.O. Box 8250, Wichita, KS 67208

    Posted by Robert Lawson at 03:25 PM in Economics

    "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:

    "When the question of the new coinage came up we looked into the law and found there was no warrant therein for putting "In God We Trust" on the coins. As the custom, although without legal warrant, had grown up, however, I might have felt at liberty to keep the inscription had I approved of its being on the coinage. But as I did not approve of it I did not direct that it should again be put on...

    My own feeling in the matter is due to my very firm conviction that to put such a motto on coins, or to use it in any kindred manner, not only does no good, but does positive harm, and is in effect irreverence, which comes dangerously close to sacrilege.

    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.

    Posted by Craig Depken at 12:16 PM in Politics

    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."

    It is also provided that any woman who marries while in the service of the system shall forfeit her position by her act.

    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.

    Posted by Craig Depken at 12:07 PM in Economics

    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....

    Yost has had a remarkable career on the football field. His unbroken record of victories with Michigan raised him to a place of prominence second to no coach in the country before Michigan fell before Chicago in the memorable game on Marshall Field. that defeat broke a five years' string of successes in which there were two years that Michigan was not scored on. He built up a wonderfully fast scoring machine, and rolled up enormous totals during the season by his ability to instill swift play into the Michigan eleven.

    But that was before the reform movement hit the conference colleges, and in the days of the old style game. When the new style of play was introduced Yost pooh-poohed it, but he found later that the old scheme would not go and his teams had not been taught the new...

    Sounds a lot like the current Michigan coach.

    Posted by Craig Depken at 11:58 AM in Sports

    Costs and Benefits

    My grad school colleague Linda Ghent sent this photo to Mankiw.


    Posted by E. Frank Stephenson at 11:32 AM in Economics

    At long last …

    A courageous town government steps forward to rescue our culture.

    Posted by Lawrence H. White at 10:22 AM in 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.

    But I'm pretty sure that it's unhealthy for a democracy when the majority of citizens don't see government as a service they're reluctantly paying for but as an extortionist that cuts them in for a share of the loot.

    Posted by Wilson Mixon at 05:22 PM in Politics

    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:

    We have considered your paper carefully, and though it appears correct in all its essentials, we cannot accept it for publication. Our reason is that you have produced an upward sloping demand curve while yourself obeying the law of demand. That is, your demand curve for experimentation has a negative slope. Otherwise, why did you choose toothpicks rather than diamonds? So we conclude that the demand curve for refutations is negatively sloped and that your proof is invalidated by your own behavior.

    Managing Editor

    Economics is economics.

    ATSRTWT: Economists as the Subject of Economic Inquiry by Robert D. Tollison
    Southern Economic Journal Vol. 52, No. 4 (Apr., 1986), pp. 909-922.

    Posted by Robert Lawson at 09:19 AM in Economics

    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.

    Miss Vosbaugh was born in France eighty-three years ago. When a young woman she found it difficult to make her way on account of her sex. Adopting men's clothes, she obtained employment as a bookkeeper in Joplin, Mo. this position she held for nine years and then accepted a position in a St. Joseph, Mo. bank.

    While in St. Joseph she married a woman, with whom she lived for thirty years as "Charles" Vosbaugh. The two women came to Trinidad two years ago. After the death of the "wife" Miss Vosbaugh worked in various capacities until she became so feeble that last year she was taken to a hospital. It was then that her sex was discovered. But even after her recovery she refused to change her clothing, and continued to wear her masculine habiliments to the end.

    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.

    Posted by Craig Depken at 04:00 PM in Culture

    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!

    Posted by Edward J. Lopez at 10:57 AM in Economics

    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.

    Indoor factories, by contrast, are largely the province of East Asian entrepreneurs. They prefer to buy houses rather than rent them, to avoid the attention of landlords. ... Like good horticulturalists, they propagate strains of the plant that produce a high proportion of tetrahydrocannabinol (THC, marijuana's active ingredient) and speed their growth by means of heat and artificial light.

    Why the boom? ... The likely explanation is a steady tightening of America's borders after the terrorist attacks of September 11th 2001 and the panic over illegal immigration. California used to import high-grade marijuana from Canada and low-grade weed from Mexico. Both routes are now more risky. As a result, Asian gangs have moved south from British Columbia, where they dominate the hydroponic trade. Mexican distributors, who may handle cocaine and methamphetamine as well as marijuana, have diversified into production.

    Posted by Wilson Mixon at 03:51 PM in Economics

    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
    3 seventh-edition textbooks (with Bob Ekelund)
    210 peer-reviewed articles
    108 articles in books and collected volumes
    43 doctoral dissertations directed
    45 dissertations as reader
    8 masters theses directed or reader.

    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!

    Read More »

    Posted by Edward J. Lopez at 01:43 PM

    Fisking Diana Nyad

    Diana Nyad, the business of sports commentator for "Stateplace," offered some thoughts about MLB's revenue growth on this morning's program.

    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. ...

    And attendance at an all-time high. One of the reasons is that they're starting to build these, you know, urban ballparks -- St. Louis and San Diego are great examples. You know, there are these beautiful retail stores. You go out for the experience, not just the ball game itself.

    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.

    Nyad: You're right. I was actually shocked, I had no idea -- half of the managers out there make less than $1 million a year.

    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."

    Boo hoo.

    [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.

    Posted by E. Frank Stephenson at 08:47 AM in Sports

    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?

    Posted by Lawrence H. White at 12:17 AM in Culture

    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].

    Story here.

    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.

    Read More »

    Posted by Edward J. Lopez at 08:48 AM in Law  ·  Comments (0)

    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.
    "Not every person can accumulate power in his hands like that," Daripova says. People say he murdered half of Russia … but, still, he was a unique personality. There are very few like him in history."

    Imagine how much more unique he would have been if he killed three-fourths!

    Posted by Tim Shaughnessy at 11:39 AM in Politics

    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
    PerCap $126 $301 $931 $2398 $3955 $4866
    Paid $70 $119 $252 $540 $672 $779
    RealPaid $235 $308 $306 $413 $390 $423
    PaidPct 55.2 39.7 27.1 22.5 17.0 16.0

    So, now that we pay 1/6 of the total cost, our out-of-pocket cost is about 80% higher than when we paid 55.2% of the total cost.

    Posted by Wilson Mixon at 07:58 PM in Economics

    Holy Cow!

    News item:

    Charles and Linda Everson were driving back to their hotel when their minivan was struck by a falling object — a 600-pound cow.

    The Eversons were unhurt but the cow, which had fallen off a cliff, had to be euthanized.

    The year-old cow fell about 200 feet from the cliff and landed on the hood of the couple's minivan, causing heavy damage.

    Posted by E. Frank Stephenson at 03:36 PM in Misc.

    November 04, 2007
    New Smith Quote

    Courtesy of Don Boudreaux, we have a new Smith quote in the sidebar. Thanks Don.

    Posted by E. Frank Stephenson at 03:56 PM in Economics

    November 03, 2007
    The Gentle Cynic c. 1907

    From the Nov 3, 1907 NYT :

  • Lots of us won't listen to advice unless we are giving it.
  • True dignity doesn't stop at a frock coat and a high hat.
  • Enthusiasm doesn't accomplish much without a certain amount of hustle.
  • In politics it's the man who sells his vote who is corrupt, not the man who buys it.
  • Many a man secures a place in history as an also-ran.
  • Another list of quips from the same issue:

  • Graft and the world grafts with you.
  • Silence might be golden but you can't always convert it into cash.
  • A man has to have a certain amount of wisdom to realize what a fool he is.
  • Posted by Craig Depken at 10:14 PM in Culture

    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.

    Posted by E. Frank Stephenson at 09:01 PM 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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