Division of Labour: January 2008 Archives
January 31, 2008
Had too much stimulus? Not super psyched about football? Then grab your Manolos and give New York's fall fashion week a try beginning Friday through Feb. 8. New York's is the oldest, but dozens of cities globally now have fashion weeks. Wikipedia's list of cities with fashion weeks is good but incomplete. From the official website:
The international coverage of Mercedes-Benz Fashion Week shines the spotlight on New York City and the many talented designers presenting on the runways in Bryant Park. Over 100,000 guests are expected to attend, including some 3,000 members of the press and fashion industry from around the world. The journalists, photographers, broadcasters and bloggers convening in the iconic tents, designed this season as a Greco Roman "Temple of Fashion," will bring the Fall 2008 Collections to fashion-lovers worldwide.
Emphasis added... Why should DOL readers care about fashion? I'll take a stab at that with a series of posts in the week to come.
John McCain? Say it ain't so!
I just took this reasonably (but not perfectly) crafted quiz that selects the presidential candidate closest to your views. It spit out John McCain! Not Ron Paul?! Huh?!
It could the be quiz itself I guess. It had no questions on campaign finance and I LOATHE John McCain's views there. Plus I have a deep fear that McCain is a hot head, but that character issue wasn't on the quiz. Plus Paul's views (e.g., abortion is a state issue) don't lend themselves to the quiz format very well.
But I can't deny the fact that except for Iraq and Immigration. issues on which I disagree with all of the Republicans (except for Paul on Iraq), I seem close to McCain.
Here were the results:
Agree with McCain:
Disagree with McCain:
January 30, 2008
Stimulus and Tax Withholding
I'm in the stimulus doubters club; I love the metaphor about moving water from the deep end of the pool to the shallow end and expecting the water level to rise.
But set aside such thoughts for a moment. Even if the Senate passed and the president signed the stimulus legislation tomorrow, there are apparently doubts that the government could cut the checks before summer because the check-writing machines will be busy with tax refunds. So here's my question--why not distribute the rebates via temporary reductions in withholding? For example, employers could be instructed to reduce withholding by $300 per month for two months (similar adjustments could be made for people paid weekly, every two weeks, etc.).
Note that I'm not suggesting some sort of trick of reducing withholding but not reducing tax liability. Instead, next year's tax forms could add one more line (hey what's one more!) for filers to net out their rebated tax liability after figuring their liability from the tax tables.
I can think of some legit reasons not to distribute the rebates via withholding adjustments. For example, such a scheme would be a pain for employers and their payroll software. But I wonder if there's something else--adjusting withholding might make some sheeple aware of how baaaadly (sorry, it's late) their paychecks are being fleeced (sorry again). Or maybe the pols think mailing checks is a more effective way of buying votes than a temporary bump in take home pay.
Just a thought ...
Many Thanks to Bruce Yandle ...
... for his talk "Looking for Heroes in Adam Smith's World" before a standing room crowd at Berry yesterday. Thanks, too, to my colleague Melissa Yeoh for arranging Bruce's visit.
Clinton vs. Prosperity
Now blogging from NW Ohio
Having gotten a post-transplant doctor’s OK to drive, I am now in Bowling Green, Ohio, spending the rest of the spring semester at the Social Philosophy and Policy Center of Bowling Green State University. My email address remains the same. If my writing begins to seem a bit flat, blame it on the influence of the local terrain – I swear that the only elevated ground in town is the overpass ramp where Wooster St. crosses the interstate.
From the drive up, I have a question to the management of the I-75-adjacent Wendy’s in Troy, OH: did it ever occur to you that, men being the way they are, putting hot air blowers rather than paper towel dispensers in the men’s room really won’t save you any money when there are stacks of free napkins on the counter just outside the door?
Marijuana Vending Machines
Today's New York Times carries the AP story.
LOS ANGELES (AP) -- The city that popularized the fast food drive-thru has a new innovation: 24-hour medical marijuana vending machines.
Here is MPP describing marijuana laws in the 50 states.
Competing Currencies Revival
If you wear skinny ties long enough, you may eventually be hip again.
Peter Brimelow has reprinted his 1988 Forbes article on competing currencies, my first real press notice. In a new one-paragraph preface he comments that “Ron Paul seems to have single-handedly revived the issue.”
If you choose not to decide, you still have made a choice.*
I sent this letter to the Capital University student newspaper this week:
*From the song Freewill by Rush.
January 28, 2008
Security vs. Privacy
Markets in Unclaimed Baggage
Ever wonder what happens to the stuff airlines lose or people don't pick up? You can buy it at the Unclaimed Baggage Center in Scottsboro, Alabama.
Unclaimed Baggage is a one-of-a-kind store snuggled in the foothills of the Appalachian Mountains and bordered by the 70,000 acre Lake Guntersville. Founded in 1970 by Doyle and Sue Owens as a part-time business, it soon became a full-time venture. In 1978, the Owens incorporated the company and watched it prosper as one of the great 'hidden' bargain centers for savvy shoppers.
They've found some cool stuff over the years.
In the long run we're all carbon
Today's Washington Post casts an enticing angle on the carbon offset futility, "Value of U.S. House's Carbon Offsets Is Murky".
In November, the Democratic-led House spent about $89,000 on so-called carbon offsets. This purchase was supposed to cancel out greenhouse-gas emissions from House buildings -- including half of the U.S. Capitol -- by triggering an equal reduction in emissions elsewhere.
The article explains that little of the funds went to "additionality," or reductions that would not have occurred absent the offset purchase. Here's a puzzling quote by the head of the 5-year old Chicago Climate Exchange, through which the House purchased its offsets.
"It basically rewards people for having done things that had environmental good in the past and incentivizes people to do things that have environmental good in the future," said Richard Sandor, the exchange's chairman and chief executive.
That a very strange statement from a finance person. Hypothetical market instruments are traded every second--to reduce risk, for example, as with options, futures, and other derivatives. The value of carbon reductions may be fanatical, but it isn't hypothetical. There are willing buyers and sellers, both of whom value carbon emission reductions (hopefully production-nuetral ones). The problem would seem to be that the green exchanges haven't yet matched these values. Five years seems a long time not to equilibrate.
By the way, $89,000 is 0.000000031 of the federal budget.
January 26, 2008
The End: How Near?
This year is the 40th anniversary of Paul Ehrlich's influential The Population Bomb, a book that predicted an apocalyptic overpopulation crisis in the 1970s and '80s.
I thought this account contained a factual error. Ferguson correctly said (in 1990), "Now, Dr. Ehrlich was an entomologist by training, and some immediately recognized that after many years of rigorous study he had lost the capacity to distinguish between an army of hideous little arthropods swarming over his desk in a Stanford laboratory and an upwardly mobile population of Homo sapiens building tract houses in Palo Alto." (Dixie Lee Ray used to routinely refer to Ehrlich as the bug man.) But, according to Wikipedia, he is now the Bing Professor of Population Studies. Apparently, he's not the only one at Stanford who can't tell the difference.
2. Good news or bad? Depends on what global warming is all about.
Natural gas reservoirs in Michigan’s Antrim Shale are providing new information about global warming and the Earth’s climate history, according to a recent study by Steven Petsch, a geoscientist at the University of Massachusetts Amherst. The study is also good news for energy companies hoping to make natural gas a renewable resource.
January 25, 2008
Legal tender versus forced tender
On Wednesay during the UK House of Commons question time, Malcolm Bruce (Lib. Dem. – Gordon, Scotland) called on the UK governmentto “change the law and reclassify Scottish notes, which are currently not officially legal tender anywhere in the United Kingdom” so that English sellers are no longer free to refuse Scottish notes.
The Scotsman quotes Bruce’s exchange with the Scottish Secretary Des Browne:
[Bruce:] “It is high time that Scottish banknotes were legally acceptable throughout the UK. … If dollars and euros are acceptable to traders, surely Scottish notes should be. “
Bruce is misrepresenting the case. In fact, it is fully legal to accept Scottish banknotes throughout the UK. It is, however, rightly not compulsory. Scottish banknotes are thus on a par with dollars and euros, not to mention debit cards: neither legal tender nor forced tender. The term “legal tender” is a bit misleading here in that it actually means that a creditor must accept it for a debt denominated in the relevant unit of account. Spot-transaction sellers are usually free to refuse even legal tender, e.g. cabdrivers may legally refuse large-denomination legal tender notes. A note that is not “legal tender” in the debt-clearing sense can still be fully legal to use, and can in fact still be universally accepted in practice, as Scottish banknotes are in Scotland despite not being legal tender even there. (Nor, remarkably, are Bank of England notes legal tender in Scotland. Only coins are legal tender in Scotland.)
Secretary Browne is also slightly misrepresenting the case, in that Scottish notes don’t enjoy exactly the same status as Bank of England notes, which are legal tender in England and Wales.
The Scotsman article goes on the clear up the confusion, but makes one slip when it says:
ALL Scottish banks have the right to print their own notes, but these notes are not officially legal tender in Scotland or England.
In fact, only three Scottish banks retain the right to print their own notes: the Bank of Scotland, the Royal Bank of Scotland, and the Clydesdale Bank. Banks formed after 1844 are denied the right.
The rate cut and Poole’s dissent
Having cited the Wall St. Journal blog’s prediction that there would be no dissenting votes in the Federal Open Market Committee on the next expected-to-be-large Fed Funds target rate cut, I should note that there was in fact one dissenting vote in the “emergency” meeting earlier this week, by the about-to-retire St. Louis Fed President William Poole. Regrettably Poole didn’t object to the size of the cut, which reduced the Fed Funds target by a whopping 75 basis points to 3.5% from 4.25%, only to its being made before next week’s regularly scheduled FOMC meeting. The market is forecasting a further cut next week.
Using standard analysis (the Taylor Rule), what Fed Funds target would be appropriate? It depends on the relative weights one puts on inflation (the core CPE inflation rate is currently above the supposed 2% ceiling to the Fed’s “comfort zone”) versus the “output gap” (actual real GDP is below its potential level as estimated by the Congressional Budget Office). According to the Taylor Rule chart in the St. Louis Fed’s Monetary Trends, assuming 50-50 weights, as of Q3 2007 a target of 2% PCE inflation was calling for a Fed Funds rate of around 4% (the actual rate was then 5%). By very standard analysis, then, the Fed has already overdone the rate-cutting. (Personally, I'd prefer a lower inflation target and a lower weight on the output gap, but that's beside the point here.)
Why did the Fed over-react? Apparently Bernanke was anxious to bolster stock prices. As the headline to Jay Hancock’s Baltimore Sun column put it, “Fed caves to Wall Street in moment of panic”. Or as the headline to Caroline Baum’s Bloomberg.com column put it: “The Greenspan Put Is Dead. Long Live the Greenspan Put.”
January 24, 2008
Snail mail, literally
From Reuters Oddly Enough series:
It's official: mail is slow as snails Thu Jan 24, 2008 11:06am EST
All those bad incentives!
Yesterday, Frank pointed to the "learn & earn" experiment coming soon to two Atlanta elementary schools.
With all the hubbub about incentives these days, it's easy to forget that many incentives don't just plop out of nature but are instead the product of human design. (The most powerful and enduring incentives are a product of human action, undesigned, but that's another conversation.) Incentives are always embedded in institutions, and some institutions are very good at producing very bad incentives. Paying kids to study is a bad substitute for the non-pecuniary incentives (many undesigned) to study, and doing so might also plant the seeds for later false expectations as to scope of remunerable activities. More generally, whenever social planners get ahold of the idea that incentives matter, I see red flags all over.
In yesterday's European Wall Street Journal, Eduardo Nolla hones the point in a beautifully satirical op-ed, "The Points of Life." (HT: Emilio Pacheco). I wanted to quote the whole article, but a few highlights instead.
Life is turning into an awards program.... British Foreign Secretary David Miliband, in his previous role as environment minister, proposed a personal carbon dioxide allowance card. Points would be deducted, for instance, when one bought appliances, gas or electricity, or took a flight. The poor would be able to sell their points to the rich and jet-set crowd.
Of course, that's the cap and trade idea run amok. More:
This is only a starting...point. Once a reward/punishment scheme is put in motion, its own logic will extend it until the totality of human behavior comes under its purview. New York pedestrians could be "pointed" under proposed legislation to ban the use of iPods and cellphones while crossing streets. In the future, a prohibition could also be called for other dangerous activities that diminish your concentration and put your life at risk, such as talking, holding hands, carrying cups of scalding coffee or jogging.
Then there are the enforcment implications.
To run this kind of program efficiently and avoid tax cheaters, we must expect random health checks. If any of a number of clinically researched and expertly chosen health indicators is askew, we will be read our rights before being taken to the hospital: "You have the right to remain silent. Anything your body tells us can and will be held against you. You have the right to a doctor. If you cannot afford a doctor, one will be provided for you."
Okay, you get the gist (although you should read the whole thing for Nolla's political theory context). Overall, Nolla's essay seems like a subtle review Tim Harford's excellent new book, The Logic of Life. If so, when pointing to the dark side of incentives, Nolla and all of us should heed attention to the types of institutions and overt designs lurking behind all those bad incentives.
Don Boudreaux on So-Called Stimulus
Combine keen economics with fantastic writing and get ... another must read from Don Boudreaux.
De gustibus non est disputandum c. 1908
From the Jan. 24, 1908 NYT:
A burglar...had gathered together silverware and jewelry, and was about to depart when he saw a photograph of Miss Margaret McDade, the eighteen year old daughter of Mrs. McDade. The picture showed Miss McDade in a bathing costume. It appealed to him more than did the gold, so he took the picture and left everything else behind. He also left a note, in which he said:This is ready made for a principles of economics class discussion.
Posted by Craig Depken at 11:33 AM
Opportunity for Students
In today's inbox came a request to pass along the following information on their 2008-09 Koch Associates Program. I am delighted to do so.
The Koch Associate Program is a year-long, paid program designed to develop promising leaders and entrepreneurs interested in liberty and a career in the non-profit arena. Associates range in experience level from recent graduates to those with up to a decade of work experience, and come from many diverse fields and academic majors.
The non-profit assignments cover fascinating fields such as:
· Policy Research and Analysis
· Marketing and Communications
· Development and Donor Relations
· Non-Profit Operations and Project Management
Posted by Joshua Hall at 10:55 AM
"A Freer World is a Better World" by John Stossel
John Stossel's recent column cites the EFW index:
This week's newspapers are full of predictions of an impending recession, and maybe they're right. But the great untold story is the good news: the worldwide boom in economic growth.
January 23, 2008
Another excellent offering from Mike Lester of the Rome News-Tribune:
Incentives Might Matter: Atlanta School Experiment Edition
Forty students from Creekside High and Bear Creek Middle schools in Fairburn will be the first to try the "Learn & Earn" program, where students will get paid to attend after-school tutoring programs.
The last paragraph suggests the experiment may not be a random trial. Here's a story about Roland Fryer's pay for grades study in New York.
On lost chances c. 1908
From the Jan. 23, 1905 NYT:
REFLECTIONS OF A TIMID INVESTOR
On political dynasties c. 1908
A fascinating editorial in the Jan. 23, 1908 NYT discusses how the Democratic party might want to get rid of a candidate that has been hanging around for too long:
Why should [William Jennings] Bryan get out unless he is forced out? From the point of view of the Democrat, the patriot, the wise party leader, innumerable reasons may be advanced why he should abandon his pretensions to the candidacy; from the personal point of view of Mr. Bryan, not one. Mr. Bryan is a very successful man. In seeking a third nomination he is pursuing the path of success that has led him to fame and fortune. He is a rich man. He has said that he has money enough to make him comfortable the rest of his life. He has made his fortune by being the candidate, by refusing to relinquish his grasp upon the leadership of the Democratic Party. Because of the position he holds men buy his Commoner, and lecture committees pay him large fees. Mr. Bryan, in the language of the street, has a "good thing." He would be a fool to let go of it.Might this apply to a certain "third term" seeker today?
On school shooting c. 1908
Okay - I admit to a misleading title. The Jan. 23, 1908 NYT reports:
RIFLES FOR SCHOOLBOYS
It is clear that any attempt to pass a similar bill today would flame out in about two seconds. However, here is an interesting thought experiment: Would state sponsored marksmanship increase, reduce, or have no effect on school shootings in which students and teachers are the victims rather than paper targets?
[Update: A helpful reader points out that up until 1996 this program existed as the Department of Civilian Marksmanship of the U.S. Army. In 1996, the program was privatized and renamed the Civilian Marksmanship Program.]
State of the Union BINGO
January 22, 2008
Anti-smoking ordinances c. 1908
From the Jan. 22, 1908 NYT:
The thousands of women in New York who have never thought of smoking in public places are now prohibited from doing so by law. The Board of Aldermen yesterday passed the Sullivan anti-smoke ordinance by a vote of 73 to 0. Here is the new law:The only way to make an anti-smoking law more discriminatory is to make it apply only to one gender.
In 1995 and 2003, New York City made the anti-smoking law gender neutral.
"At last - a column from TIM that makes sense"
I've been light on the blogging since most of my marginally interesting ideas have been funneled to our local newspaper. I managed to get myself a weekly column on Saturdays, which are mostly fun to read for the reader comments.
This weekend's was about the British health care system. You may have to read quickly because they archive after only a few days and it may be hard to find.
If you're so inclined, check the "Conversations and Editorials" links every weekend to find them.
UPDATE: Well, I guess I've been freed up to contribute again to DoL. The Editorial page editor just called and said I'm being "rotated out." Oh well, it was a good eight-month run. So, from now on, watch for my marginally interesting ideas right here at DoL!
I just read a lecture by Milton Friedman from 1991 and found this quote:
The United States today is more than 50% socialist in terms of the fraction of our resources that are controlled by the govern ment. Fortunately, socialism is so inefficient that it does not control 50% of our lives. Fortunately, most of that is wasted. People worry about government waste; I don't. I just shudder at what would happen to freedom in this country if the govern ment were efficient in spending our money. The really fascinating thing is that our private sector has been so effective, so efficient, that it has been able to produce a standard of life that is the envy of the rest of the world on the basis of less than half the resources available to all of us.
This reminded my of this quote from Adam Smith:
This frugality and good conduct, however, is upon most occasions, it appears from experience, sufficient to compensate, not only the private prodigality and misconduct of individuals, but the public extravagance of government. The uniform, constant, and uninterrupted effort of every man to better his condition, the principle from which public and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progress of things towards improvement, in spite both of the extravagance of government and of the greatest errors of administration. Like the unknown principle of animal life, it frequently restores health and vigour to the constitution, in spite, not only of the disease, but of the absurd prescriptions of the doctor.
And this classic quote from Will Rogers:
Be thankful we're not getting all the government we're paying for.
Our future is like a horse race between three "S"s. The first two are Smithian gains from trade and Schumpeterian innovation. Government Stupidity would be the third "S" in this race. And so long as Smith and Schumpeter stay ahead of Stupidity then 'tomorrow's troughs will be higher than today's peaks.'
January 21, 2008
Consequences, Unintended or Otherwise
Take 1. Thanks to Dubner and Levitt, NYTimes readers have a chance to learn about the unintended consequences associated with the Endangered Species Act:
Dean Lueck and Jeffrey Michael wanted to gauge the E.S.A.’s effect on the red-cockaded woodpecker, a protected bird that nests in old-growth pine trees in eastern North Carolina. By examining the timber harvest activity of more than 1,000 privately owned forest plots, Lueck and Michael found a clear pattern: when a landowner felt that his property was turning into the sort of habitat that might attract a nesting pair of woodpeckers, he rushed in to cut down the trees.
Take 2: Account of journalist Ezra Levant who is supposed to divulge his motivation for publishing a cartoon:
What a strange place Canada is in 2008, where the police care more about human rights than the human rights commissions do, where fundamentalist Muslims use hate-speech laws drafted by secular Jews, and where a government bureaucrat can interrogate a publisher for 90 minutes, and be shocked when he won't shake her hand in greeting.
Take 3: Fellow blogger Mike Munger's take on McCain-Feingold (posted a year ago, but pertinent given recent results in SC and elsewhere):
BCRA (McCain-Feingold) is bad politics, bad regulation, and bad democracy. The law as it now stands makes narrowly focused interests more powerful than they have been at any time in U.S. history, because of the power of money and television. Where political organizations at one time had to work mostly on mobilizing partisans, in the 21st century electronic means of communication have reduced the transactions costs of politics to the point where organized interests can focus on single issues.
Of course, one needn't be very cynical to suspect that the unintended consequences of BCRA were not unintended by all who supported it.
Sawing on the anchor rope
Federal Reserve Chairman Ben Bernanke said on Thursday inflation expectations are "reasonably well anchored," but the U.S. central bank was determined to uphold its credibility in maintaining price stability. "Our anticipation is that both headline and core inflation will moderate over the next year or two to a level which we view as consistent with price stability," Bernanke told the U.S. House of Representatives Budget Committee.
Translation: Even though the Fed’s preferred measure of inflation, the Personal Consumption Expenditure deflator, is currently running at 2.2% year-over-year, above the Fed’s “comfort zone” (in which 2% inflation = price stability), TRUST US, the inflation rate will come down in 2008 even though we will be accelerating money growth with a big Fed Funds target rate cut at our next meeting, the opposite of pursuing an anti-inflation policy. After all, the market doesn’t yet show signs of rising inflation-rate expectations in survey data or longer-term interest rates. Sharply rising prices of gold and other metals? Sharply falling US dollar exchange value? Mere froth.
But what are inflation expectations “anchored” to? If anything, to a belief that the Fed will tighten when inflation rises above the “comfort zone”. Let’s see how long the Fed can contradict that belief before expectations change. Let's see how long inflation expectations remain anchored while the Fed saws on the anchor rope.
My rain man, Russ Roberts, on stimulating.
The fact that this commentary was read on NPR....well, it's an irony.
The other side doesn't need equal time: RUSS IS EQUAL TIME. Or, all the equal time we are going to get.
Posted by Michael Munger at 10:54 AM
"an opus of avalanche activity"
Run, Lance, Run!
Lance Armstrong is running the Boston Marathon this year, and unlike most people running for charity, he actually qualified the old fashioned way.
BOSTON - Seven-time Tour de France winner Lance Armstrong plans to run the Boston Marathon in April to raise money for his foundation.
January 20, 2008
Local Rent Seeking
From the local fish wrapper,
With corporate and private donors stretched thin, taxpayers might be the best hope for solving the immediate financial problems of the Columbus Symphony.
Sigh. At least they're not selling it as an "economic stimulus package".
January 19, 2008
Where have the inflation hawks gone?
CPI inflation for the calendar year just ended (December 2007 over December 2006) was 4.1%, the highest annual figure since 1990. And yet the FOMC is expected to lower the Fed Funds target by 50 or even 75 basis points at its next meeting. Will there even be any dissent? The Wall St. Journal economics blog, reading the tea leaves of public statements by each of the FOMC members, says no. Even the most “hawkish” of the regional Reserve Bank presidents (Jeffrey Lacker of Richmond and Charles Plosser of Philadelphia) are “falling in line behind Bernanke”. Meanwhile “None of the governors has a history of dissent” (sadly, this includes Randy Kroszner); “nor does New York Fed President Timothy Geithner”.
Meanwhile, over at Vox Baby, Andrew Samwick asks the right question about the supposed desirability of easy money:
Over the past few years, cheap credit and imprudent lending policies by some bad actors generated excessive consumption and investment in the real estate sector. This boosted economic activity beyond the level that would have prevailed with policies that we now wish, with hindsight, had been in place. ... If we acknowledge that bad loans fueled the activity, why is it now a widely shared policy objective to maintain that level of activity?
"We Need Economic Stimulus" is an emperor without any clothes.
Football as king c. 1908
From the Jan. 19, 1908 NYT we learn that football was king in Michigan even back then:
At the annual Michigan Athletic Association today it was shown that the total receipts of the last fiscal year were $33,894 [$776,000 in 2006 dollars]. Of this ammount, football brought in $25,894 [$580,000 in 2006 dollars and 76% of total revenue]. The baseball games lost $800 and track athletics $2,666. The management put $18,000 into the Ferry Field improvement fund and has a balance of $7,816. Last year the balance carried over was $10,545.In 2006, football at the University of Michigan generated $50.982 million in revenues, approximately 83% of all athletics related revenue (Equity in Athletics data here).
We know that Michigan football is worth more today than one hundred years ago, but it is interesting to see that Michigan football is worth more today relative to the other sports on campus.
On holding parents accountable c. 1908
Contemporary threats to punish parents for childhood obesity sound novel and to many a bit of an over-reach by government schools. Yet, perhaps the idea isn't as new as we think.
The Jan. 19, 1908 NYT contains is a story concerning hygiene in the public schools:
This plan calls for the establishment of a Department of School Hygiene under the control of the Board of Education. This department would consist of a corps of physicians and nurses, under the direction of a medical expert skilled in the diseases of children. It would be clothed with the power, according to Dr. Maxwell [City Superintendent], not only to make physical examinations, but to prosecute parents who fail to put their children in proper physical condition to profit by the work of the school.Prosecute parents? Wow.
Education economists today discuss the "education production function" for which the inputs are the student, her teachers, her peers, and the infrastructure. This is the same intuition being offered in the 1908 plan, that undernourished and otherwise physically unfit children are not efficient inputs to the education production function.
The good Dr. Maxwell (of 1908) offers some reasons for why city kids are not physically fit:
Lack of exercise, city children seldom having to walk more than two or three blocks to school, and having little work to perform about the home that would develop muscles and breathing capacity; crowding in poorly lighted and poorly ventilated apartments, which results in various forms of tuberculosis; lack of space for free play; lack of interesting occupation outside of school hours; excessive noise; lack of sufficient sleep; insufficient or unwise feeding; uncleanly habits of person...Many of these reasons are now applicable to the suburban dweller as well, except, perhaps, the crowding in poorly lighted and ventilated apartments. After substituting asthma and other respiratory problems for tuberculosis, the list is almost exactly the same as we hear directed towards both city and suburban dweller. How many kids are washing dishes and cutting firewood in the suburbs today?
Dr. Maxwell then points out the effects of these maladies:
These conditions tend to produce various forms of nervousness, lowered vitality, defective eyesight, defective teeth, and probably growths in the nose and throat which restrict respiration and drive the child into reckless mischief and defiance of authority.Is the nervousness of yesterday the ADHD of today? (Note: Although my two kids are 3.5 and 1.5 yrs old, I have no experience with ADHD) Is the "lowered vitality" of 1908 the "couch potato" or "video game fatigue" of today? Is there evidence that the maladies of today lead to poor eyesight and teeth? If so, then it would seem that after dedicating untold billions of dollars (and the efforts those dollars represent) to these problems, we haven't come all that far.
If half a dozen parents were fined or imprisoned for failures, after repeated warnings to provide their children with necessary eyeglasses or to have adenoid growths removed, the example thus set would do more lasting good than any preaching on the subject.At least he didn't suggest throwing one or both of the parents up against the wall.
I would suggest that Dr. Maxwell's plan was just about 100 years ahead of his time, although perhaps his plan will be implemented for a radically different reason.
The Gentle Cynic c. 1908
From the Jan. 19, 1908 NYT:
Hillary Clinton is unveiling an aggressive $70 billion stimulus package today that would boost the U.S. economy and help families who have been hit hardest by the economic downturn across America.
Amid growing worries about a worsening of the U.S. economy, Democratic presidential candidate Barack Obama proposed a $75 billion economic stimulus plan on Sunday that includes worker tax credits, a one-time pension supplement and help to homeowners facing foreclosure.
The bit about giving Social Security folks--remember seniors have higher voter turnout--is yet another sign that Obama is above average for the politician species.
Last week, I laid out my blueprint for stimulus of up to $110 billion, including $70 billion in immediate measures and $40 billion in contingent tax rebates.
As President Bush laid out his vision for an economic stimulus that could reach $150 billion, ...
UPDATE (1/19 9PM): Well that didn't take long--Romney has now upped the ante:
Coupled with a $32 billion program Romney has already proposed to eliminate taxes on all savings for those making under $200,000 annually, the package costs $233 billion — or about 1.7 percent of the gross domestic product.
Romney's proposal is significantly different from the previous plans--it has little in the way of rebates and focuses more on improving incentives. His proposal to reduce the corporate income tax rate is especially noteworthy, albeit not so much for any short run stimulus it would provide.
Romney's plan is more economically literate than the AP reporter who wrote the article on Romney's proposal. The reporter, Glen Johnson, needs to brush up on tax incidence:
[Romney's plan also calls for] an elimination of Social Security payroll taxes for workers over 65 that would cost $20 billion and equally benefit businesses and individuals.
January 18, 2008
Two versions: The (correct) Russ Roberts version and the (not correct but delightfully snarky) photo version:
Photo via JC Bradbury's Sabernomics blog.
January 17, 2008
Water "treatment" c. 1908
In a reversal from the current discussion about the appropriate use of water:
For having doused his wife with cold water while she lay in a bed Edward J. Donnelly of 140 Hobart Avenue, Bayonne, was yesterday sentenced to ninety days by Recorder Lazarus. Donnelly said he tried the water cure on his wife to stop her from talking, and said she talked so incessantly that he could not sleep. He slept after he threw the water over her.
Volunteer Fire Fighers c. 1908
An interesting example of cooperation is reported in the Jan 17, 1908 NYT:
Probably the most remarkable manner of extinguishing a fire occurred to-day at Boswell, a mining town near here [Johnstown, Penn], when hundreds of men, women, boys, and girls saved the town from destruction by throwing snowballs.
Atlas Shurgged (a little) c. 1908
Throughout 1906, 1907 and into 1908, many states and cities passed price ceilings on train travel. However, while the marginal cost of an additional passenger on a railroad car is likely close to zero, much like the marginal cost of an additional passenger on an airplane is close to zero, the average variable cost of an additional passenger is not zero. This is important because policy makers (and the public at large) seem to believe that if marginal cost is zero then price should be close to zero and somehow the firm will still make a positive profit.
However, while price equals marginal cost in perfectly competitive (or perfectly elastic demand) markets, in markets with downward sloping demand curves, price and marginal cost are rarely equal to each other. Indeed, if a firm finds that price is less than average variable cost, they might temporarily shut down in the short-term. Consider baseball teams that shutdown during the winter months, not because no single person would attend a baseball game in January but because there are not enough people willing to attend such that price is greater than or equal to average variable cost.
Further, a firm will permanently shut-down or move out of a market (whether geographic or product) if they think demand will not recover so that price will eventually exceed average variable cost. In the case of legislated price ceilings, price cannot respond to demand changes and therefore price might not exceed average variable cost.
This situation is succinctly reported in the Jan. 17, 1908 NYT:
Announcement was made to-day by the Michigan Central Railroad Company that on Jan. 19 seven passenger trains on four divisions of the road will be discontinued. While the Michigan Central always makes a Winter readjustment to its passenger train schedule and discontinues some service, it is state that the falling off of receipts under the two-cents fare law is responsible for the order being more sweeping and wider than is generally the case.As a big fan of Atlas Shrugged I find this story interesting because the Michigan Central did the unthinkable, at least from the point of view of the legislature: they chose not to run trains. The loss of revenue to the Michigan Central and consumer surplus of those who would have ridden the seven trains would seem to be pure dead-weight loss due to the intervention.
How long until the Michigan Central was accused of a) discriminating against certain consumers; b) putting profits over people; c) violating some law requiring them to run trains at a loss; d) all of the above?
I will keep an eye open for more on this story.
Catching up via quick hits
Some quick hits I've meant to blog about more extensively, but lately I've been very short on time.
1. Of light and carbon: From www.spiked.com, here is the best article I've seen summarizing the incandescent vs. flourescent craze. To reduce my carbon footprint, I henceforth resolve to boycott "carbon copy" and "blind carbon copy" emails.
2. Dani Rodrik recently posted a short paper, "Second Best Institutions," that is highly worthwhile but raises many puzzles.
3. Bob Lawson is visiting Liberty Fund today to give a talk on why we don't see countries with both high political freedoms and low economic freedoms.
4. Harvey Mansfield says economic thinking lacks virtue.
5. Alex Tabarrok says don't sweat the recession talk and reminds us (ahem!) that the real impact of economics lies less in clever applications of welfare analytics to Christmas, but more in enlightened understanding of growth and prosperity.
Amazingly, there are only about 6 million scientists and engineers in the entire world, nearly a quarter of whom are in the U.S. Poverty means that millions of potentially world-class scientists today spend their lives trying to eke out a subsistence living, rather than leading mankind’s charge into the future. But if the world as a whole were as wealthy as the U.S. and were devoting the same share of population to research and development, there would be more than five times as many scientists and engineers worldwide.
6. Finally, the January issue of W highlights the fascinating artist Thomas Nozkowski. There are some insights into originality and genius. I like the rich descriptions of his quirky, creatively-destructive methods and their beautiful results.
From "Europe’s Philosophy of Failure" by Stefan Theil:
In France and Germany, students are being forced to undergo a dangerous indoctrination. Taught that economic principles such as capitalism, free markets, and entrepreneurship are savage, unhealthy, and immoral, these children are raised on a diet of prejudice and bias. Rooting it out may determine whether Europe’s economies prosper or continue to be left behind.
My reading of civics and U. S. history textbooks that are used in American schools suggests that the phenomenon attributed to European schooling is not uniquely European.
One can take heart from the fact that the author is a Newsweek editor.
Posted by Wilson Mixon at 10:22 AM
Steven Landsburg on the appropriateness of compensating for displacements due to free trade:
For many decades, schoolyard bullying has been a profitable occupation. All across America, bullies have built up skills so they can take advantage of that opportunity. If we toughen the rules to make bullying unprofitable, must we compensate the bullies?
January 16, 2008
Iceland’s government balks at free choice in currency
Iceland currently has its own currency, the kronur. The government has no plans to join the EU, let alone officially adopt the euro. Nonetheless, Iceland Review reports,
Last fall Kaupthing Bank announced that it planned to adopt the euro as its operational currency at the beginning of 2008, which would include the bank settling its accounts and submit financial statements in euros. Other companies have already made that move, including investment bank Straumur-Burdarás.
Kaupthing wants to switch to the single currency to make its accounts easier to compare with other banks.
Kaupthing is Iceland’s largest commercial bank. It recently acquired a Dutch bank, and is active in wider European markets.
The Icelandic government has blocked the bank’s adoption of the euro, however, ruling that the bank may not adopt the euro in 2008. A decision about 2009 will come later. Kaupthing Bank is appealing the decision to Minister of Finance, with a final ruling expected in a few weeks.
The Icelandic government apparently fears a “creeping euroization” of the economy. Reuters again:
The central bank said in a statement on its website that it objects to domestic financial companies fully adopting foreign currencies in their accounts.
The main consequences for the central bank, of course, are reductions in the central bank’s macroeconomic control and seigniorage income from being sole issuer of reserve currency. For the users of currency, the option to adopt a foreign currency as unit of account or medium of exchange can only have a positive value. So what it boils down to is: Will the Icelandic government place its own interests above those of its citizens?
HT: Kurt Schuler
Spot the macroeconomic fallacy
Accompanying an inflation-rate chartlet on the front page of today’s St. Louis Post-Dispatch is the following bit of text: “The more prices rise, the more people tighten their wallets.”
Class assignment (choose one):
1) Explain why, if “the more prices rise” means “the higher the inflation rate”, the above statement is inconsistent with the standard theory according to which an individual’s demand to hold money falls as the opportunity cost of holding money rises.
2) Explain why, if “the more prices rise” means “at a higher price price level, ceteris paribus”, the above statement is inconsistent with the aggregate supply / aggregate demand model of the price level as derived from the equation of exchange. That is, if we consider two points on the AD curve, explain why it makes no sense to suggest at the point to the NW (at a higher price level), nominal spending is smaller. For extra credit, explain why it makes no sense to treat the price level as a parameter that shifts the AD curve rather than as an endogenous variable.
January 15, 2008
Oink, Oink--Sports Pork
From an AJC article on Atlanta's AAA baseball team moving from Richmond to a $38m taxpayer funded stadium in Gwinnett County GA:
Last July, a consultant reported building a stadium with 5,500 permanent seats and grass seating for another 1,500 would cost $25 million to $30 million. Such a stadium also would include 16 private suites, 300 club seats and 2,300 parking spaces within walking distance of the stadium.
See also Skip Sauer's post at The Sports Economist; be sure to read Rod Fort's comment on the post.
From John J. DiIulio Jr.'s analysis ("The Wacko-Vet Myth: Now echoed by the New York Times") of the Times's drive-by shooting ("Across America, Deadly Echoes of Foreign Battles"):
The Veterans of Foreign Wars (VFW) and other veterans' advocacy groups are absolutely correct that not merely "many" but the vast majority of veterans not only remain completely law-abiding but go on to lead stable and productive personal, professional, and civic lives. Assuming 121 homicide cases in relation to 749,932 total discharges through 2007, 99.98 percent of all discharged Iraq and Afghanistan veterans have not committed or been charged with homicide.
I fall victim to the drug war
As I've mentioned, I had transplant surgery on Tuesday. After removing my IV lines, the doctors put me on the controlled substance Percocet for pain relief, to be taken as needed up to 4x daily. (Note: the stuff works.) Under federal rules, I had to request each dose, and the nurse had to watch me take it upon delivery. (I might hoard and resell them?) The hospital could not give me any Percocet to take home with me when I was discharged on Saturday. But they could write me a prescription, to be filled at my pharmacy. Problem: I was discharged at 7pm, and my pharmacy had closed at 6pm. The hospital pharmacy was also closed. So, thanks to federal anti-narcotic hysteria, I would be without pain relief until my pharmacy opened on Sunday at 10am. The hospital said that they had faxed all my new prescriptions there, so my agent went to pick them up. But no Percocet was among the pills she returned with – under federal rules, prescriptions for narcotic pain relievers can’t be faxed or phoned in; only presented in person in hard copy. She had to make a second trip, carrying the written script they’d given me.
I think it's time to return to a free market in narcotics.
Ode to the Constitution c. 1908
From the Jan. 15, 1908 NYT:
Perhaps Mr. Wilson was a bit optimistic?
If It's So Rotten, Why Are You Running for It?
Perhaps it has something to do with her soaring narcissism and lust for power.
APEE/MBMI Contest: New Deadline!
The deadline for the APEE/MBMI Economic Communicators Contest has been extended to February 22.
Come on people, let's get those videos rolling! We're talking about a first prize of $10,000 here.
Caught My Eye
1. From the ok for me but not for thee department: NY Mayor Bloomberg is photographed nibbling on some Cheez-Its (0.5g of trans fats per serving) after leading NY's ban on trans fats.
Our best estimate is that physicians provide negative uncompensated care to the uninsured, earning more on uninsured patients than on insured patients with comparable treatments. Even our most conservative estimates suggest that uncompensated care amounts to only 0.8% of revenues, or at most $3.2 billion nationally.
Not that it'll stop the socialized medicine crowd but this paper is very important because it rebuts one of the alleged failings of the current system.
4. Mark Steyn's column on capitalism as the real agent of change is a must read. See especially the paragraphs on John Edwards.
6. MR is hosting a book forum on Tim Harford's The Logic of LIfe. I got an advance copy and read it over Christmas break. I thought it was superb; I am pleased to see someone pushing back against the behavioral economics tide of the past few years.
7. I also read and liked John Lott's Freedomnomics. I would have liked it better if it had less emphasis on rebutting of Freakonomics. I don't think Freakonomics is flawless (I hated the chapter on baby names), but I thought Lott's constant harping on it was tiresome. Moreover, like Russ Roberts comments on Lojack and concealed handguns, I don't think of Lott's and Levitt's work as opposites.
I think both books miss a plausible explanation for the reason realtors take longer to sell their houses and get higher sales prices. Many people who put houses on the market do so because they are moving out of town. They have higher monitoring costs to make sure the house isn't burglarized. They also have higher transactions costs to consummate a sale from out of town. These factors push someone moving out of town (or across a large city like Chicago) to sell faster and at a lower price. Realtors, on the other hand, probably are not moving out of town and therefore have lower costs to hold out a bit longer for a higher price. I also suspect that it is somewhat common for realtors to deliberately own two (or more) houses at once. They then put both on the market and sell the one that draws the more attractive bids. People who are not planning to simultaneously market two homes may face liquidity constraints that nudge them to sell their first home sooner (and at a lower price) before taking on their next home.
January 13, 2008
Papers please! Papiere bitte! Papeles, por favor!
Homeland Security Secretary Michael Chertoff says,
Only three categories of people need be "disappointed" by the forthcoming identification cards, the Homeland Security chief told attendees at a midday press conference here: terrorists, illegal immigrants, and con-men.
I'm not a terrorist, illegal immigrant or con man, but I'm not happy about this. So make that four categories, you nazi wannabe.
January 12, 2008
My kidney transplant surgery on Tuesday was successful. Recovery proceded at what is apparently the normal pace: I slept for the next 20 hours, sat up a little on Wednesday, began walking a little on Thursday, got my IVs disconnected and meds adjusted on Friday, and waited around all day Saturday to be discharged. I'm now home resting. Thanks to all those who sent good wishes.
On the status of the University of North Carolina in the late 19th century:
University of North Carolina
Paul Krugman's take on European vs. American economic growth:
Since 2000, employment has actually grown a bit faster in Europe than in the United States — and since Europe has a lower rate of population growth, this has translated into a substantial rise in the percentage of working-age Europeans with jobs, even as America’s employment-population ratio has declined.
I suspect that the rise in the percentage of working-age Europeans with jobs relates to Europe's relatively belated increase in female labor force participation. Also, American labor force participation was at its historic high when the most recent recession set in.
In any event, this article calls into question Krugman's thesis:
From 2000 to 2004 (the last years for which data are provided), the real GDP of OECD countries grew 8% and the US's grew 10%. Those years include the 9/11 attacks and a short recession in the US. ... However, some countries within the OECD did have growth exceeding 10% over those years. Can we spot any patterns? ...
Harvard c. 1908
From the Dec. 11, 1908 NYT:
The total enrollment of students at Harvard University this year is 5,763. The total is a decrease of 26 from last year.
But it's capitalism that's the real "agent of change." Politicians, on the whole, prefer stasis, at least on everything for which they already have responsibility. That's the lesson King Canute was trying to teach his courtiers when he took them down to the beach and let the tide roll in: Government has its limits. In most of the Western world, the tide is rolling in on demographically and economically unsustainable entitlements, but that doesn't stop politicians getting out their beach chairs and promising to create even more. That's government "change."
January 11, 2008
Maybe They're Onto Something
In the Indiana voter ID case that was argued before the Supreme Court earlier this week, the attorneys challenging the law argued that it should be overturned even if imposes only a minimal inconvenience for a small percentage of voters. (Transcript here in pdf; see pp. 65-66.)
I happen to think that requiring ID for voting is a reasonable precaution against fraud. Yet, just think how much nuisance could be eliminated if we applied the same principle of not causing even minimal inconvenience to other government policies. Start with the tax system--anything other than a radical simplification of the current behemoth would run afoul of the minimal inconvenience criterion. (Indeed, a strict interpretation might allow for nothing more than a head tax.) Draft registration--gone. Invasive banking rules--gone. Oh the fun we could have if the Supreme Court buys into the minimal inconvenience doctrine!
A Gathering of the Rent-Seekers?
The Wall Street Journal is sponsoring an executive conference called ECO:nomics--Creating Environmental Capital. A glance at the list of featured participants reveals several folks notable for advocating "creating capital" the good old fashioned way--suckling at the government teat. There's the CEO of Archer Daniels Midland (think ethanol subsidies), Vinod Khosla (a player in California's failed proposal to subidize alternative energy), and the CEOs of a couple of companies hoping to use cap and trade systems to their advantage (e.g., GE). In fairness, I should note that the speaker list also includes at least one counterweight--Fred Smith of the CEI.
Economics Communicator's Contest: Deadline Feb 1
Top prize is a cool ten grand! Last year's event was a huge success. Congrats to winners Dirk Mateer, Howie Baetjer, and Ken Schoolland. [results]
Read More »
The Market-Based Management Institute, in cooperation with the Association of Private Enterprise Education, announces the: ECONOMIC COMMUNICATORS CONTEST
« Close It
January 09, 2008
Marketplace on Public Radio
I'm supposed to have some sound bites on the
[UPDATE: I made it on at the 2:55 mark for about a 30 second bit. Listen here.]
Thousands show up for shot at Wal-Mart job
From today's AJC:
They came in droves — high school students, retirees, young moms, the unemployed — all for a shot at a job at a new Wal-Mart on Memorial Drive in central DeKalb County.
Hmmm... maybe those Wal-Mart wages aren't so bad after all.
For the fourth consecutive day, people waited in long lines Thursday for a shot at a job at a new Wal-Mart in DeKalb County, pushing the total number of applicants beyond 10,000.
APEE's 2008 conference will be held in Las Vegas in April. Submit a paper here (or email me directly if you have a public econ/public choice paper). Graduate students and junior faculty can apply for financial support via the young scholars program. Classroom wizards should enter the the economic communicators contest.
January 08, 2008
Bryan's cross c. 1908
From the Jan. 8, 1908 NYT:
"I know that some people are giving much thought to the money question, but that is not worrying me much. The people of this country have made it possible for me to acquire an independent income for all time to come, so I have no worry on that score."
Thank you, thank you very much
Pour a little out for The King. Today is Elvis's 73rd birthday.
I cannot draw the line so starkly as Dell (Gary Busey) from the underrated 1983 comedy, "D.C. Cab," in which Dell proclaims in victory, "Okay but I don't work on January the 8th, cause that's Elvis's birthday." Alas, I am at work. (Can't you tell?)
Here is some mindless Elvis birthday trivia.
Weird Al Yankovic's tribute to Elvis velvets.
My, what you can find on the Internet in five minutes!
January 07, 2008
Marty, Marty, Marty
That madcap Marty Feldstein is at it again....taking his comedic stylings on the road.
Read More »
"It's not just clear that lower interest rates and monetary policy more generally will have enough traction because of conditions in the credit market," he said when asked if the Fed could hold off a recession. "We should have some fiscal stimulus to back that up...."
"The precise mix is not as important as a decision that what the economy needs is an additional amount of fiscal stimulus on top of the lower interest rate. That can be a cut in personal taxes, it can be a business investment credit of the sort we had in 2003 or some combination of the two," he said.
Or....we could admit we have no idea what effect a monetary growth / tax cut "stimulus package" might have, in an election year no less. Particularly in the face of unbelievable deficits?
Good lord, does no one LISTEN to my good friend Dr. White?
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Posted by Michael Munger at 07:50 PM
EconoBlogging at Ohio University
One of the neat things at Ohio University (my undergrad alma mater) is that the winners of the university's teaching awards get to teach a class on anything they want. This term, Don Lacombe (congrats Don!) is doing a course called Econoblogging.
Today was the first day of my new EconoBlogging course here at Ohio University. A little background to get everyone up to speed...
Bosses Don't Wear Bunny Slippers
A new essay, coming out today, on EconLib.
Not public until noon or so today.
But, as a special service to DoL readers....you can get it NOW!
Don't you feel special?
January 06, 2008
I watched about 2 minutes of last night's commiecrat debate. It just so happened to be the 2 minutes that Bill Richardson was airing his economic ignorance for all the world to see. To wit, in response to a question about using a carbon tax to reduce global warming, Richardson stated:
The better way to do it is through a cap-and-trade system, which is a mandate. Furthermore, a carbon tax, that's passed on to consumers. That's passed on to the average person. That's money you take out of the economy. So it's a bad idea.
Crikey--he's so clueless he can't figure out that cap-and-trade costs might get passed along to consumers in the form of higher prices.
Fortunately I turned the channel before Hillary Clinton responded to the carbon tax question but Mankiw describes her answer as "vacuous blather" and "magic-wand economics." I suspect those terms could describe most of both parties debates.
Mike Lester, Sports Economist
Background: Rome has been selected to host the 2008 and 2009 NAIA national championship football games. Local officials estimate a $1-1.5 million local economic impact.
January 05, 2008
The War on Smoking c. 1908
The Jan 5, 1908, NYT reports on a pending battle in the war on smoking, this time from Germany:
War has been declared by the German medical authorities against the familiar apparatus in use in cigar stores all over the world for cutting off the ends of cigars. It is said to be a prolific source of disease, especially tuberculosis and other infectious maladies whose germs are transmissible.It would seem that the personal cigar cutter would be a practical market solution, perhaps they weren't available at the time? Moreover, why weren't customers more demanding of their local tobacconists? I suppose there could be lack of information on the part of consumers, but are we supposed to believe that men (and women?) were generally okay with the status quo?
Real estate bubbles c. 1908
The Jan. 5, 1908 NYT reports on the real estate market in New York City for 1907:
The year's developments, it is true, have not been uniformly of an encouraging character. There have been foreclosures and there probably will be more. There have been readjustments between borrowers and lenders by direct transfer, without the formality of foreclosure, and there have been a few failures, but when one stops to consider what might have been expected as the results of two years of most remarkable building activity, speculation and inflation, followed by a period of intense money stringency - when one reflects upon the possibilities of such a chain of events and then looks over the actual results the real estate community has every reason to face the future with confidence, if not with elation.The story goes on to describe the building activity in 1907 compared to 1906 and 1905 - it was considerably lower. The then suggests that the slowdown in construction should not be viewed as a negative pre se as the demand for new housing in New York has been slowing down over the same time period. The story then suggests that the construction of housing units will likely pick up again after the completion of a number of skyscrapers currently (in 1908) under construction; the paper suggests that once the new office buildings are completed, more firms will want to locate in New York City, which will, in turn, encourage more people to relocate in the city, at which time the construction of new residential housing will commence.
It is not exactly the same as the national housing issues of 2007, but it seems darn close. In other words, the apocryphal predictions of a worse-than-1929-depression being just one or two quarters away would seem to overstate things. Markets are very resilient, as long as government doesn't screw things up too much, and the 2007 housing market might simply be a historical footnote in one years much as the 1907 housing crisis is today.
The Gentle Cynic c. 1908
From the Jan. 5, 1908 NYT:
Yale c. 1908
The January 5, 1908 NYT reports on the status at Yale:
Official registration figures at Yale show that the university has 3,306 students this year, against 3,247 last year.
In 2006, Yale had 11,415 in total enrollment with 5,332 undergraduates.
January 03, 2008
Externalities of work stoppages c. 1908
The Jan. 3, 1908 NYT reports an interesting negative exteranality arising from a work stoppage of the Bakers' Union in Chicago:
Four men, said to be members of the Bakers' Union, have been arrested on the charge of putting acid on hundreds of loaves of bread distributed among the Jewish residents on the west side. A strike is in progress at a local bakery, and it is alleged that strike sympathizers threw acid as wel as iodoform on wagon loads of bread and rolls after they had left the bakery.
January 02, 2008
Good luck to all readers on the economics job market this year. I hope your trip to New Orleans is a rewarding one.
Me, I'll be presenting a paper in the economic education poster session and having the barbecued shrimp at Mr. B's. My poster session paper (and website) with Bob Lawson and Dirk Mateer was recently mentioned in the Wall Street Journal's Econ Blog under the title "Black-Scholes? Meet Black Sabbath."
January 01, 2008
Wherein John Tierney represents Al Gore as an "availability entrepreneur." Seems like a charitable term.
[A]vailability entrepreneurs: the activists, journalists and publicity-savvy scientists who selectively monitor the globe looking for newsworthy evidence of a new form of sinfulness, burning fossil fuels.
How bad a year was it?
[S]hares and house prices have ended this year considerably higher than they began, despite all the horror stories.
As of the end of the 3rd quarter, US house prices were up 1.79 percent from a year earlier. (Source: Office of Federal Housing Enterprise Oversight (who knew such a thing existed?)), News Release, 11/29/07.
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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