Division of Labour: April 2008 Archives
April 30, 2008
The Falling Relative Price of Knowledge (UPDATED)
I've been revising a paper today, and in the process I came across a quote from Tyler Cowen's In Praise of Commerical Culture:
“Books were prohibitively expensive in the so-called ‘good old days.’ In colonial America, in 1760, a cheap schoolbook cost twice as much as a good pair of leather shoes; Smollett’s Complete History of England cost as much as eighty pairs of shoes, six head of cattle, or thirty hogs. An ordinary laborer had to work two days to earn enough money to buy the cheap schoolbook, or 144 days to buy the Smollett. The modern innovations of mass production and marketing have brought down the cost of a paperback to only slightly more than the American minimum wage.”
--Tyler Cowen, In Praise of Commercial Culture, p. 52
Read More »
First, Greg Mankiw is spot-on: if textbooks are grotesquely over-priced, this suggests a profitable opportunity for people and organizations (like the New York Times) to make a pile of money by undercutting the textbook companies. In the NYT editorial discussed by Mankiw, the Times ironically (?) calls for government legislation while pointing out ways that the market is correcting itself (ASTRTWT).
Second, the quote from Cowen made me wonder whether textbooks are really that expensive relative to the alternatives he mentions (good shoes, cows, hogs). The Seventh Edition of Steven Landsburg’s Price Theory and Applications is listed at $103.29 at Amazon.com with a close substitute (the sixth edition, which has the same outline) listed at $35.00. The brand-new Landsburg 7 does in fact cost about as much as two pairs of cheap shoes (like the New Balance sneakers I’m wearing now). I wondered how much a “good pair of leather shoes” would cost, so after a bit of searching I came across a price for the “Loake Royal Brogue” at www.petersshoes.com. The price: 98.95 pounds. At the exchange rate of about $2 per pound on April 30, that would come to around $200 for the pair of shoes. The price has almost inverted: today, a “good pair of leather shoes” costs approximately two brand-new copies of Landsburg 7.
According to a USDA website, the average price in Tennessee for a slaughter cow with an average weight of 1079 pounds was $53.05 (if I'm not reading the price correctly, please let me know). So a copy of Landsburg 7 is worth about two slaughter cows. According to Glenn Grimes and Ron Plain of the University of Missouri, the price of pork product (per cwt of carcass) was $72.21, so each Landsburg 7 was worth about 1.33 pig carcasses. Again, if I'm not reading these prices right, please let me know.
NB: this also shows us something important about the market economy and the social division of knowledge. I don't know much about cattle and hog farming (what does "cwt" mean?) and yet in our highly specialized world I don't have to worry about running out of beef or bacon.
5/1 UPDATE: I knew I was wrong. I thought there was no way a cow would cost $50. Reader Nathan Wagner writes that he's "pretty sure (my) price quote for a slaughter cattle is off by a factor of about ten" because "'cwt' is an abbreviation for hundredweight." Readers Tim Worstall, Nate Maxwell, and Sam Liddicott tell me that the "short hundredweight" (the US measure) is 100 lbs, the "long hundredweight" (the British measure) is 112 lbs. Thus, my relative price calculations were wrong: the cattle prices were over $500 each, so a copy of Landsburg 7 only cost about 1/5 of a slaughter cow or 130-150 lbs of pig carcass. Now I'll know that next time I'm at a cattle auction.
5/1 UPDATE 2: I forgot to mention that I downloaded Smollett's Complete History of England last night from www.books.google.com for a price of $0.00.
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Spring Haiku--Duke Version
Buildings vomit kids.
Beloit in Springtime
Final day of class
A Haiku for my city?
Columbus sails away
Is the GDP glass half empty or half full?
I kept warning my students that, despite what they hear, we don't officially know if we're in a recession until the BEA tells us GDP is shrinking. Of course, all that they have heard since January was how horrible the economy is, that we're definitely in a recession, if not poised on the brink of another Depression, that today's generation will live worse than the previous one, etc.
But, ta-da! much like my waistline, the economy isn't shrinking. The 0.6% growth matched Q4's 0.6% growth. The eternal optimist in me remembers that, typically, Q4s are seasonally high while Q1s are usually low, so the fact that 08's Q1 is the same as 07's Q4 implies we're doing better than we thought.
But, leave it to the media to be the eternal pessimist. "Economy still sputtering," says the CNN.com headline. We grew 0.6%, when "Economists surveyed by Briefing.com had forecast a 0.5% gain for the first quarter." So we did 0.1% better than expected, huzzah! I guess doing better than expected is still a bad thing for CNN.
April 29, 2008
Froma Harrop on smoking in casinos:
Loath to tax the citizenry based on income, many states have increasingly turned to cigarette smokers and gamblers for revenues. Gamblers are often smokers, and both groups tend to be of modest or low income.
Who's Your City?* A Haiku for the Mid-South
It's chilly today.
Posted by Art Carden at 08:49 AM
April 28, 2008
xkcd - A webcomic of romance, sarcasm, math, and language.
A great time sink! Visit the site and hit random to sample the comics.
America the Prisoner
From Lew Rockwell's Prisoner Nation:
There are 2.3 million people behind bars. China, with four times as many people, has 1.6 million in prison.
Business as per Hollywood
In truth, movie plots operate according to a self-contained value system that has only an occasional relationship with the real. In movie-think, media figures, at least lately, tend to be much worse than they really are. (One hopes.) Think of Meryl Streep as the nightmare magazine editor in “The Devil Wears Prada,” or Katie Holmes as the skunky reporter in “Thank You for Smoking.”
Incentives of the Untenured
Last night, Mike Hammock and I served pancakes at the semesterly pre-exams Pancake Study Break here at Rhodes. As one might expect when output isn't priced, there were periodic long lines and mismatches between quantity supplied and quantity demanded (particularly for the chocolate chip pancakes). I asked a student as he was coming through the line about the important economic lesson we were learning from this. His response was unexpected:
"You're working for free, so it looks like incentives don't matter."
April 27, 2008
I am happy to announce that Unleashing Capitalism (edited by Russ Sobel with help from Matt Ryan and yours truly), has won a 2008 Sir Antony Fisher International Memorial Award.
From the announcement:
Covering a broad range of issues – revamping the tax code, judicial selection, strategy for economic growth, education, property rights, eliminating government waste and burdensome regulatory system – author Russell Sobel demonstrates that free market solutions can make West Virginia more
A Fisher Award judge remarked, “This book outlines the theoretical basis for a free market economy and to an unusually high degree succeeds in showing how these principles can be employed to explain the West Virginian predicament, as well as pointing to the concrete reform proposals in the book.”
My one complaint is they make it seem like it was not an edited volume. Thanks to Bill Shughart, Justin Ross, Ed Lopez, and all the other contributors for their excellent work.
Food for Thought
[F]ood rioting is a planetwide phenomenon, from Indonesia to Pakistan to Ivory Coast to the tortilla rampages in Mexico and even pasta protests in Italy.
So what happened?
Well, Western governments listened to the ecowarriors and introduced some of the "wartime measures" they've been urging. The EU decreed that 5.75 percent of petrol and diesel must come from "biofuels" by 2010, rising to 10 percent by 2020. The United States added to its 51 cent-per-gallon ethanol subsidy by mandating a fivefold increase in "biofuels" production by 2022.
The result is that big government accomplished at a stroke what the free market could never have done: They turned the food supply into a subsidiary of the energy industry.
Posted by Wilson Mixon at 11:12 AM
Greed is Effective
Joseph Stalin is said to have screened the 1940 movie "The Grapes of Wrath" in the Soviet Union to showcase the depredations of life under capitalism. Russian audiences watched the final scenes of the Okies' westward trek aboard overladen, broken-down jalopies -- and marveled that in the United States, even poor people had cars. "Dallas" functioned similarly.
April 25, 2008
Repealing economic laws
Some musings from today's crop of stories on CNN.com...
A new justification for our "stimulus checks" is to "offset the high prices we're seeing at the gas pump and at the grocery store," so says W. Funny, but I teach my class that when consumers have more income they buy more, increasing demand, which pushes prices up. I'd be curious to see how increasing demand will offset or solve high prices.
This link to a story on high gas prices and their effect on college student provides some head-scratchers. 1) Count of how many trucks you see in the video. Count how many hybrids you see in the video. Compare. 2) At 0:22 of the story, check out the guy studying in his car. Who studies in their car? I'm sure there is a library nearby or, I don't know, an air-conditioned building with a chair inside. 3) The students complain that they are on "limited budgets" and can't afford gas. I'm betting 95% of them have cell phones. 4) Students can now use the "expensive gas" excuse to cut class. At least that sounds somewhat legitimate compared to other excuses I've heard ("Didn't your aunt already die, on the day of the previous test? Oh, this is ANOTHER aunt").
On early warning systems c. 1908
I lived 11 years in Tornado Alley, and having moved away from that part of the country last year I must admit that I do not miss the severe weather that is mangling Texas at this time. However, one thing that was very impressive was the extent to which weather technology, especially in the context of tornadoes, has advanced. During out time in Texas we were never directly hit by a tornado, but we did have one bounce over our house, literally hitting the small town of Hadley, Texas about two+ miles from our house and then hitting in south Arlington about three miles on the other side. The nervousness that accompanied that tornado, augmented by the radio broadcast of the local weatherman reporting block by block where the storm was by the second, is not something I would want to relive.
The April 25, 1908 NYT reports on what life was like before the early warning systems we have today:
NEW ORLEANS - A wind of cyclonic proportions swept over portions of Louisiana, Mississippi, and Alabama late [yesterday], leaving a trail of dead and injured. To-night the number of killed is estimated at close to a hundred and the number of injured at over a hundred, with many portions of the afflicted districts to hear from...
How many lives are saved today given our advanced weather warning systems? There have been some amazing tornadoes in recent years, including Jarell, Texas in 1997, but nothing of this magnitude (outside of Katrina and other hurricanes). Thank you Christian Doppler.
Dog mangles child c. 1908
The dog attack, shark attack, mountain lion attack, or, in general, the "fill in the blank" attack story is a prime example of how the media can generate a crisis even in the face of overall declines in such attacks. The lowly pit bull has been through a rocky patch for the past ten to fifteen years, although I understand that there is some inherent danger with those and other particular breeds.
The old adage "if it bleeds, it leads" is a common criticism of today's media, but the adage simply represents the form of competition in which local news outlets, especially, find themselves engaged. My guess is that the two, three, or four local news outlets find themselves in a prisoner's dilemma where all of them run with the "worst" of local incidents because the perceived (or actual) benefit of leading with the "good news" isn't as great.
Nevertheless, the "dog bites child" story is evidently not new (go figure), as the April 25, 1908 NYT reports:
ELIZABETH, N.J. - While playing with a pet bulldog near her home, 310 Morris Avenue, here to-night, Bessie Berglund, 8 years old, daughter of Mr. and Mrs. Gustave Berglund, was bitten so severely on the right thigh that she will probably have to have her leg amputated to save her life. It was necessary for Frank Scheer, a neighbor, to shoot the dog before he would release his grip.The story itself is sad, but on brief reflection I wonder how many law suits derived from this incident in 1908 relative the number that would accompany a similar incident today.
There’s no such thing as a half-price gyro
The best $4 sandwich in Bowling Green, OH is the gyro from a take-out place called South Side Six. On Thursdays the price is $2. This is public information, so it was clearly a lapse in my thinking that led me there yesterday evening expecting a bargain. The little place was packed, and the excess demand for $2 gyros was predictably rationed by waiting. A hungry student can eat two gyros for dinner, so that’s a $4 saving. Guess how long the marginal BGSU student (hourly after-tax wage $8) will wait to save $4 and you have a fairly accurate estimate of how long I had to wait.
BTW, today at 4pm in Student Union 316 on the BGSU campus I'll be giving the annual Stranahan Lecture. Topic: The Intellectual Origins of the New Deal, chapter 4 of a book I'm writing on the history of economics as told through the great policy debates of the 20th century. Come one, come all. Refreshments will be served!
Crack baby steps: update
The U.S. Sentencing Commission released its quarterly report providing "data concerning recent court decisions considering motions to reduce the length of imprisonment for certain offenders convicted prior to November 1, 2007 of offenses involving crack cocaine."
New guidelines cut sentences for 3,000 crack offenders By LARA JAKES JORDAN, Associated Press WriterThu Apr 24, 5:00 PM ET
Here is the full report.
A bit of perspective here. According to the 2007 World Prison Population List, published by Britain's Home Office:
The United States has the highest prison population rate in the world, some 714 per 100,000 of the national population, followed by Belarus, Bermuda and Russia (all 532), Palau (523), U.S. Virgin Islands (490), Turkmenistan (489), Cuba (487), Suriname (437), Cayman Islands (429), Belize (420), Ukraine (417), Maldive Islands (416), St Kitts and Nevis (415), South Africa (413) and Bahamas (410).
Why Are Food Prices Increasing So Rapidly?
Here's a hint from Mike Lester of the Rome News-Tribune:
April 24, 2008
Congratulations to Master Sergeant Brendan O’Connor, who on Wednesday, April 30th will receive the Distinguished Service Cross for his valor as a medic with the Green Berets in Afghanistan. (This will be only the second DSC for Afghanistan duty.) CBS’s 60 Minutes told the remarkable story of his battlefield heroics on Sunday. Brendan and I grew up in the same town (Moorestown, NJ). One summer I was his boss at a local go-cart track owned by my classmate Mark Molz (I was the hired manager, paid in greasy $1 bills). Discipline, teamwork, and courage under fire – that’s what the go-cart track was all about, so I'm sure I can take some tiny credit for having had a formative influence on the young Brendan. Well, maybe.
HT: Mark Molz
Medical Insurance Crowd Out
Ten years ago, Cutler and Gruber [Cutler, D., Gruber, J., 1996. Does public health insurance crowdout private insurance? Quarterly Journal of Economics 111, 391–430] suggested that crowd-out might be quite large, but much subsequent research has questioned this conclusion. Our results using improved data and methods clearly show that crowd-out is still significant in the 1996–2002 period. This finding emerges most strongly when we consider family level measures of public insurance eligibility. We also find that recent anti-crowd-out provisions in public expansions may have had the opposite effect, lowering take-up by the uninsured faster than they lower crowd-out of private insurance.
Something to keep in mind when candidates prattle on about universal coverage--what they really mean is universal government coverage.
April 23, 2008
Violence in Chicago
Today's Memphis Commercial-Appeal has an article about the recent explosion of violence in Chicago. The purported reason--a breakdown in gang discipline--called to mind Sudhir Venkatesh's work on the dynamics of a poor Chicago neighborhood. My review of Venkatesh's excellent Off the Books: The Underground Economy of the Urban Poor is forthcoming in the Journal of Economics. Due to copyright restrictions, I can't post the review online, but I can quote the last paragraph:
A wise man once said: “Don’t hate the player. Hate the game.” While all social problems are no doubt shot through with moral culpability, perhaps the apparent moral failings of the urban poor are less important than the rules of the game that have created America’s urban nightmare. Perhaps the time has come to reexamine some of the policies that were implemented with good intentions but that appear to have produced disastrous consequences.
I think we all use co-blogger Frank's example about the "free bikes" at Berry College in our classroom discussions on private property. An interesting project would be for students to compare the predicted results of a Berry Bike experiment with this:
"TH!NK about is a separately franchised car sharing entity and a sustainable alternative to personal car ownership. TH!NK about will provide a fleet of TH!NK citys, centrally placed at a number of unmanned stations around the city. The vehicles will be available for rental on an hourly basis. Customers book online, via their mobile phones or simply pick up a TH!NK city at the nearest station. A personal membership card, equipped with cordless technology (RFID) will provide access to the vehicles. Drivers return their TH!NK citys at the agreed time and receive a bill at the end of the month."
I've been on the lookout for itty-bitty cars since seeing the smart fortwo in Germany last year. Of course, the TH!NK about campaign does try to infuse property rights, since the cars won't be free. Still, it will be interesting to see the results.
Out with the university, in with the distillery
Until recently I spent a week each spring lecturing at Queen’s University in Belfast. Northern Ireland, charmingly, is one of the last jursidictions (Scotland and Hong Kong are the others) that still allow private commercial banks to issue notes. Even more charmingly, the Lanyon building at QUB where I lectured (among other things, on the benefits of private note issue) was pictured on the back of the local notes of the Bank of Ireland.
Not for long, today’s news reveals:
On the 400th anniversary of the original licence to distil whiskey granted to the Bushmills area in 1608, the Bank of Ireland today marked the moment with the launch of new banknotes that honour the brand's heritage by featuring the famous Old Bushmills Distillery in Co Antrim. …
On one of my trips I visited the Old Bushmills Distillery -- and participated in a whisky taste-test. It was an educational experience. (Good thing someone else was driving that day.) If the Lanyon building has to disappear from BOI notes, I can’t think of a more suitable replacement.
The New Economics of Mass Collaboration
Here's Yochai Benkler discussing mass collaboration on the web. One thing I find interesting is that the gains from mass collaboration appear to be primarily gains accruing to leisure. Comments are open.
April 22, 2008
McCain on Clinton-Obama
Have you seen ANY challenge to the notion that McCain is benefitting from the protracted Clinton-Obama primary? Some things to consider.
1. As a general rule, doesn't head-to-head competition make for better competitors? Sammy Sosa and Mark McGuire a decade ago. Or even hopped-up Ben Johnson made Carl Lewis a better sprinter two decades ago. Athletes are one thing. Would the same hold for politicians?
2. The standard story for why the primary benefits McCain is somethign like this. The two Ds have to go hard left in the primary, and the harder left Obama and Clinton have to go to beat each other, the harder it'll be for them to come back to center in the general. A counter argument is that the primary and general election dimensions are sufficiently different (there are D issues and then there are R issues) that it doesn't much matter. An additional counter argument is that by beating each other up, Clinton and Obama work out all the kinks and hone their messages and leave very little for McCain to go negative with.
3. Generic ballot tests. When pollsters pit a generic Democrat with an unnamed Republica, the Democrat easily wins. Does the attention and exposure of the Democratic primary strengthen or weaken that?
4. The lack of a known opponent has to be hurting McCain's campaign finance. According to the FEC, he's raised just over $80 million so far this election cycle. He'll need to raise another $300 million in the next 9 months to match W's total for the 2004 cycle. So far Obama's raised $240 mil.
It just seems to me that to say this benefits McCain is to say that political competition is ruinous. Maybe so. But maybe not, too.
Wise Words ...
"If John McCain, Hillary Clinton and Barack Obama were on a bridge and it collapsed, America would be saved."
Mike may be a bit optimistic here--he'd also need Edwards, Huckabee, and large chunk of Congress to be on the bridge.
ADDENDUM: Save the emails, it's only a methaphorical bridge. I don't advocate harming these folks and I'm sure Mike doesn't either.
April 21, 2008
Thanks to FEE and GMU Econ Society
This past weekend I gave 2 talks at George Mason University at the invitation of FEE and the GMU Econ Society. I had a great time talking about my papers "Freedom, Entrepreneurship, and Growth" (with Russ Sobel) and "Good for the Goose, Bad for the Gander: International Labor Standards and Comparative Development" (with Pete Leeson). Many thanks to Geoffrey Lea of FEE and Astrid Leigh of GMU for inviting me and for the 50 plus students who came out on a Saturday afternoon to hear six hours of lectures.
My colleague Emily Chamlee-Wright recently was awarded the Hayek prize from The Fund for the Study of Spontaneous Orders. From the press release:
The Fund for the Study of Spontaneous Orders at the Atlas Economic Research Foundation announces that Professor Emily Chamlee-Wright, the Elbert H. Neese Professor of Economics at Beloit College and an Affiliated Senior Scholar at the Mercatus Center, George Mason University is the recipient of its fourteenth Hayek Prize. These $10,000 prizes are awarded on an occasional basis to scholars whose work, informed by the Austrian perspective of methodological individualism, has pursued in significant ways areas outside the normal fields of academic economics. In Chamlee-Wright’s case the Fund cites in particular her work at the intersection of studies of entrepreneurship, philanthropy, the civil society, and market activities through her work on female entrepreneurs in local markets in Zimbabwe and Ghana and on voluntary disaster relief and reconstruction efforts after the devastation of hurricanes Katrina and Rita. This latter project she is currently pursuing as principal investigator at the Katrina project of The Mercatus Center.
Chamlee-Wright did both her undergraduate and graduate studies at George Mason University where she worked closely with the late Don Lavoie, professor of economics and friend of liberty. Chamlee-Wright credits Lavoie with inspiring in her the central question that guides her scholarship: How do societies achieve a level of complexity, coordination, and social intelligence that far surpasses the capacity of individual human intelligence? She has been a Claude Lambe Fellow, an Earhart Fellow, and a Kellogg National Leadership Fellow. She is the author of two books and is working on a third, The Learning Society: Social Coordination in Post-Katrina New Orleans. Among her many articles (some available for study on her web home page), and ones of particular interest to the Fund that convey the general approach of her work, include: “Local Knowledge and the Philanthropic Process: Comment on Boettke and Prychitko (Conversations on Philanthropy, 2004), “Indigenous African Institutions and Economic Development” (Cato Journal, 1993), “Savings and Accumulation Strategies in Urban Market Women in Harare Zimbabwe” (Economic Development and Cultural Change, 2002), “Church Provision of Club Goods and Community Development in New Orleans East” (a Mercatus Center Working Paper), and “Signaling Effects of Commercial and Civil Society in Post Katrina Reconstruction.” (forthcoming, International Journal of Social Economics, 2008).
In this last article she writes, “Though most post-Katrina redevelopment plans assume that a large scale government response is the only way to overcome the collective action problem, qualitative analysis presented here suggests that the resources found within and signals emanating from commercial and civil society represent an alternative paradigm for how communities can rebound in the wake of disaster.” From her work we can see that a similar argument can be made about economic development in non western cultures and in the effectiveness of private philanthropy.
Home Ownership c. 1908
An interesting letter to the editor in the April 21, 1908 NYT offers advice that would have been useful for many people, say, about five years ago:
This craze of home owning is widespread, and is especially rampant among naturalized Americans. It is one of the first impulses that they get after reaching this country. The reason is clear. The possibilities of home owning on the Continent are remote, with the result that the ownership of a home is a cherished longing....the children of many a family have grown up in want owing to the insatiable longing of the parents to own the home that they live in. They save nothing by it, but on the other hand run the risk of incumbering themselves with unsalable property. They have the delusion that they are not paying rent; but they are paying rent and probably more than they can afford.
The last statement I would not agree with, but the "advice" paragraph is spot on.
Boston Marathon c. 1908
The April 21, 1908 NYT reports:
T.P. Morrissey of the Mercury Athletic Club, New York City, [yesterday] won the twelfth annual renewal of the Boston Athletic Association marathon road race, covering the twenty five mile from Ashland to the finish mark in 2:25:43 1-5...
The 2007 winner, Robert Cheboror, Kenya finished in 2:06:23. That's a 13.3% reduction in the finishing time over the past 100 years. This, despite the fact that the race in 1908 was 4.8% shorter than this year's race. This reflects an improvement in training and equipment but also, perhaps, incentives.
This year's Boston Marathon has 25,000 entrants and the potential pay off to winning would seem greater today than 100 years ago. The Gould hypothesis would suggest that over time runners are getting better and the long-tail approach would predict the right tail of 25,000 entrants to be faster than the right tail of 120 entrants.
I wonder about sample selection, however. My immediate thought is that sample selection was a bigger issue in the past, but that is probably debatable.
April 18, 2008
The Flower Police and the Fight to Preserve Economic Liberty
An anthropologist looks at APEE
Faithful readers of DoL know that most of the folks who post here also attend the annual meeting of the Association of Private Enterprise Education ("APEE"). Also in attendance this year was Peter Wood, the anthropologist who is also the Executive Director of the National Association of Scholars. Earlier this week he posted his impressions of this year's meeting on NAS's recently redesigned website. (For additional info on APEE, click here.)
Private protection of brand names
A Swiss watch maker has hired a modern banknote designer and a passport printer to engineer anti-counterfeiting features for its luxury watches. Features for the watch dials will include engraving only visible under UV light, micro-text only visible under magnification, and security films.
The Swiss watch industry federation “estimates that about 40 million counterfeit Swiss watches are produced around the world annually, almost twice as much as the number of orignals produced in Switzerland.”
"Please, spare us the weight of more change"
Enthusiasts for forcing the replacement of our US dollar bill with a dollar coin should consider Montreal Gazette columnist Jay Bryan’s plea to the Canadian government, which already issues C$1 and C$2 coins (nicknamed the “loonie” and the “toonie”) and is currently considering a C$5 coin.
What's really important is for the government of Canada to keep in mind - as it so obviously forgot with the introduction of the $1 and $2 coins - that a change like this should only come about when it's clear that it will be beneficial to most Canadians. Governments exist to make life better for citizens, not vice versa.
As I’ve said before, if we would leave the issue of both coins and notes to the private marketplace, as Scotland and Northern Ireland today do for notes, we could have a genuine market test as to whether the convenience benefits of $1 notes (lesser pocket weight) justify their higher production costs as compared with more durable but bulkier coins. As long as we leave the note-coin decision to government, the best we can hope for are dubious cost-benefit studies.
Kondracke on Obama, Lester Brown on Ethanol, & Solar Power in SD
Three items from yesterday's Brit Hume program on FNC; quotes are from the program transcript on Lex/Nex.
First, here's an exchange between Hume and Mort Kondracke--no friend to free markets--on Obama:
HUME: What about Obama on the question of taxes and the capital gains tax? The premise of the question from Charlie Gibson was every time we lower the capital gains tax rate, we get a larger gusher of revenue from capital gains taxes. Would you want to raise it anyway?
Next, here's radical environmentalist Lester Brown on ethanol:
LESTER BROWN, PRESIDENT, EARTH POLICY INSTITUTE: In our efforts to reduce our oil insecurity, we have created unprecedented world food insecurity.
If even someone as green as Brown understands ethanol to be a boondoggle, you'd think .... Oh, never mind, it's all about politics.
Last, here's a bit on solar power program in SD schools:
And the movement to convert San Diego's schools to solar power has stalled because it has led to a huge increase in energy costs. "The San Diego Tribune" reports electric bills went up $20,000 a year after solar energy systems were installed in 28 schools.
April 17, 2008
Check Out The Perfect Substitute
Although the blog The Perfect Substitute has been mentioned on DOL before, I wanted to draw your attention to it again. Good friend and co-author Justin Ross * has recently joined the blog, resulting in a flurry of interesting posts by all members of the blog. See, for example, the posts on "Which Economic Theory is the Most Underappreciated?", "What is the Optimal Level of Gold-Digging?," and "Campus Shootings and Corner Solutions."
* A January 2008 WVU economics Ph.D., Justin starts as an Assistant Professor of Public Finance in the School of Public and Environmental Affairs at Indiana University-Bloomington - a top 3 Public Affairs program according to U.S. News and World Report. I mention this not only to congratulate Justin, but to point out the types of jobs one can get with a WVU Ph.D. and an active research program. Students, take note!
Speaking of happiness research...
I just can't shake my distaste for this entire "how happy are you?" literature. It just seems so metaphysical to me. Some of this stems from my economist bias in favor of revealed preference instead of survey responses, but it goes deeper than that. (After all I use survey data a lot in the EFW index.)
I think one of the basic problems in this literature is that it treats happiness as some kind of stock of wealth that once created can be stored for the future. But I think of happiness as a flow not a stock, and I think of it being a flow like electricity in that it can be created but (for all intents and purposes) not stored. Seriously, how much electricity does America have? This is a silly question at a fundamental level. We can talk about how much electricity we can generate over time t, but how much we have? Well it just doesn't make any sense to ask that question. Electricity is a flow not a stock.
I think happiness, whatever that is, is like this. I create happiness in my live in a myriad of ways, but like electricity, the feeling goes away very soon after I create it. I don't know how to save the feeling for later. So I have to create more happiness all the time. I do think that if I'm rich I can create many more such moments than if I'm poor. But at any point in time, such as when I'm filling out a silly survey asking my how happy I am, there is no reason why I should be happier as a rich person than as a poor person.
Btw, the same might be said of hunger. In the U.S. at least, I'm sure poor people would report to being hungry no more often than rich people. We all get hungry, and we all satisfy that hunger by eating food. Then darn it, we get hungry again, and have to eat again, and so on. Poor people may satisfy their hunger at McDonalds and rich people may do so at the local bistro. But they both satisfy the hunger, but most poor people would prefer the bistro over McDonalds.
I'm rambling now, but something about the whole happiness business just doesn't sit right with me.
Are you happy?
Maybe Easterlin is correct (and I don't necessarily think he is) that relative income determines happiness more than absolute income. But in earlier decades when people were all so much more parochial in their outlook, people tended to compare themselves to people in their own country. Rich Japanese or Americans in the 1960s didn’t feel unusually happy because they compared themselves against other mostly similarly rich Japanese or Americans. But in recent decades our frame of comparison has shifted to a more cosmopolitan outlook. More and more people compare their status against people around the world and here Japanese and Americans look great relatively speaking. Conversely, poor Africans might not have been too unhappy in the old days because they didn’t know or think much about the rich west. But now they see satellite images of us and feel relatively poorer even though they are absolutely richer…oh and less happy. So basically, the changing evidence on the Easterlin paradox is picking up the impact of globalization on people’s frame of reference.
Just a thought...comments are open.
Repeat After Uncle Miltie ...
... inflation is always and everywhere a monetary phenomenon. Michael Pettis, writing in the WSJ Asia, explains why it is wrong to attribute inflation to rising prices for a specific good such as food or gas. My principles classes will be seeing this article next semester. Perhaps someone should forward a copy to Ben Bernanke.
April 16, 2008
Those $100 bills
In this month's Atlantic, Lisa Margonelli writes:
The U.S. economy wastes 55 percent of the energy it consumes, and while American companies have ruthlessly wrung out other forms of inefficiency, that figure hasn’t changed much in recent decades. The amount lost by electric utilities alone could power all of Japan.
When I hear about $100 bills left on the ground, I think "regulation." Bingo:
The Clean Air Act has succeeded spectacularly in reducing some forms of air pollution, but perversely, it has chilled efforts to reuse energy: because many of these efforts involve tinkering with industrial exhaust systems, they can trigger a federal or local review of the plant, opening a can of worms some plant managers would rather keep closed.
Stevenson and Wolfers on Happiness on CNBC
The Stevenson-Wolfers study on growth and happiness has been discussed by a lot of economics blogs. Wolfers himself will be blogging about it at Freakonomics for the next few days.
Here are Stevenson and Wolfers on CNBC. Their segment begins at about 1:22.
HT: Justin Wolfers
Bad incentives in the legal system
This week the Supreme Court agreed to hear the case of Thomas Goldstein. At issue is whether Goldstein can sue former prosecutors in California for his wrongful murder conviction in 1979. The prosecution's case appears to have been based on little more than false testimony by a jailhouse informant, who struck a secret deal with prosecutors for reduced jail time. The Reuters story explains more.
Goldstein's attorney, Ronald Owen Kaye, said this happened even though the U.S. Supreme Court had ruled in 1972 that informant deals should be disclosed. Van de Kamp later became California attorney general. He still practices law in Los Angeles and is chairman of the California Commission on the Fair Administration of Justice, set up by state lawmakers to look at ways of preventing wrongful convictions. Van de Kamp and Livesay appealed to the Supreme Court after a trial judge and the 9th U.S. Circuit Court of Appeals said Goldstein's lawsuit could proceed. The case will be argued in the fall.
The jailhouse informant problem is not isolated to Thomas Goldstein or to murder cases or to California. The May 2008 issue of Reason chronicles the remarkable meltdown of what looked to be locktight drug trafficking case in Louisiana. The accused were convicted and spent four months in jail awaiting sentencing. From the article (HT: Josh Hall):
But in the ensuing months, the government’s case unraveled, exposing some unsettling truths about the way jailhouse informants are used in America’s courtrooms. In December 2006, all charges against the family were dismissed. The federal judge who presided over the trial was so upset about what happened in his courtroom that he has since taken the rare step of speaking out about it publicly.
The contributions to my forthcoming book, Law withtout Romance, discuss a variety of incentive problems in the legal system. See an earlier DOL post for discussion of prosecutor incentives in the chapter by Russ Sobel, Josh Hall, and Matt Ryan. Another chapter by Roger Koppl shows how the industrial organization of forensic science institutionalizes systematic biases to convict the innocent. For the flavor, see Roger's sidebar and related Reason story from the November 2007 issue. And for much more, this by email from Roger:
The Innocence Project has found that the snitch system is an important contributor to false convictions. Thus, we have some good evidence that the case of Thomas Goldstein is not an “isolated incident.”
For the rest of Roger's excellent critique, and positive suggestions, please see beneath the fold.
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...The snitch system has rather obvious epistemic infirmities, as the Goldstein case illustrates. The monopoly in forensics is another illustration. In most criminal cases, the state has the preponderance of resources. Thus, the process typically lacks the fundamental fairness most Americans probably take for granted. We do not adequately respect an important principle of international law, namely, the principle that there should be an “equality of arms” between the parties contesting in court. Public defenders cannot enter the jailhouse and offer cash payments or reduced sentences to contra-snitches who might exonerate defendants. We have, in other words, monopsony in the market for snitching. I suppose that means the prosecution can get its snitching services on the cheap. More importantly, however, it means that snitches have an incentive to tell the prosecution, their clients, what they want to hear and there is no countervailing force in the market.
The criminal justice system needs to be examined from the perspective of Alvin Goldman’s “social epistemology” and, of course, economics. With Goldman and others in his group, social epistemology uses economic logic and tools. One of Goldman’s followers, Leslie March, has argued that our own Hayek was the father of social epistemology. Thus, Austrian economists are in a good position to enter this under-explored area and add value. Besides all the interesting analysis they might provide, they have lots of important activism to do in this field. The criminal justice system is the place where the state-power rubber hits the civil-liberties road. We have studied commodities markets and political markets. It’s time to start looking to truth markets, too.
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Building Brand Equity: Questions on Tax Incidence, Externalities, and Consumer Choice
One of the first headlines on my iGoogle page inspired a small set of review questions for econ 101. They're posted below the fold; if you you have any comments or suggestions, please let me know. Otherwise, feel free to use and abuse them as you see fit.
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The Federal Government charges 18.4 cents per gallon in tax on gasoline. Presumptive Republican Presidential nominee John McCain has suggested that the tax be suspended between Memorial Day and Labor Day, according to an April 16, 2008 article in the San Jose Mercury News. The following questions ask you to analyze this policy in light of what we have learned in class.
1. A relatively elastic demand curve:
2. A relatively elastic supply curve:
3. Externalities: Suppose that the marginal external cost of every gallon of gas consumed is precisely 18.4 cents per gallon.
4. The Theory of Consumer Choice: Stewie spends his income on two goods: gallons of gasoline and “all other goods.”
5. The Theory of Consumer Choice, Again: Assume that the tax is in place. In light of your answers to the questions above, which policy would be more advantageous: reducing the gasoline tax, or giving a general lump-sum tax rebate? Use the theory of externalities and the theory of consumer choice to support your answer.
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Munger on tour
Erstwhile DOL-er Mike Munger led an interesting seminar yesterday in Fred Miller’s graduate philosophy class here at Bowling Green State University (where I’m hanging out this semester). Discussion centered on the perplexing question raised by Mike’s must-read essay “They Clapped”: Why do so many people support laws banning trades between informed consenting adults, specifically, laws against “price gouging”, prostitution, and human organ sales? Munger’s hypothesis: objections to the trades are actually displaced objections to the distribution of pre-trade endowments. As if banning the trades would somehow make life fairer.
Biofuels, food, and the environment
Does this Guardian article offer a portent of things to come for the US?
Farewell the age of reason, welcome the idiocracy. Only George Orwell could have invented - and named - the [UK] government's Renewable Transport Fuel Obligation (RTFO) that came into operation yesterday. It is the latest in a long line of measures intended to ease the conscience of the rich while keeping the poor miserable, in this case spectacularly so.
DL + NWA = DL
As a very frequent Delta flyer I've followed with interest the merger talks with Northwest that were just finalized. The gubmint is probably going to raise all sorts of red flags. And there are union worries on NWA's side.
The thing is these airlines have both been in bankruptcy once. If they don't merge (heck even if they do) it is likely that one or both will file again and this time it won't be clear that either will even survive as a company. The bottom line is that contraction is going to occur, either in the form of an orderly merger or a disorderly liquidation. If the gubmint stops the merger, you all can blame them some years (months?) down the line when you get stranded after one or both suddenly stops operations.
As for the NWA pilots union, the issue as I understand it, is that they're on average less experienced than DL's pilots. They're worried that when the two groups of pilots are merged, they'll lose relative position on the all-important seniority lists that determine who gets the best assignments. (Btw, doesn't it make you feel good that the pilot up there got that flight, not because he was the best for the job, but because that was the best flight he could get given his seniority status?)
Fuel prices may be the catalyst but this deal makes sense anyway as I've been saying for years. DL has great Atlantic routes and NWA has great Pacific routes. DL specializes in the south and NWA in the north domestically. But on both margins they compete head to head for certain routes in the middle of the country and also on Atlantic routes thanks to NWA's extensive code sharing with KLM/AirFrance. (I also think a DL/NWA/KLM/AF deal makes sense as that would add an extensive intra-European market.)
The airlines are naturally trying to reassure employees and various affected municipalities. My prediciton: DL's hub at Cincinnati and NWA's hub in Memphis are goners. (Memphis's Interstate BBQ is the best airport joint in America btw. It's near gate B14--look for the long line of NWA pilots!)
Boston Marathon Post
I'm off to Boston this weekend to run Monday's 112th Boston Marathon. This will be my second Boston and I'm hoping for a much better run than last year's disappointing 3:29. Also running this year is Beloit College's Scott Beaulier* who qualified to run Boston last year in Gainesville FL with an impressive 3:11.
Are there any other economists running?
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The elite men and first wave of qualifiers, including Scott and myself, begin at 10 ET. (The elite women start at 9:35 and the second wave starts at 10:30.)
You can follow your favorite runners during the race by going to the Boston Marathon website where 5k splits will be shown. You can search for a runner by name or bib number. My number is 6693 and Scott's is 5678. The numbers are sequential based on qualifying times. The field should include about 25,000 runners this year.
Television coverage, which focuses on the elite runners mainly, is available on the cable channel, VERSUS starting at 9:30.
UPDATE: I was negligent in not mentioning that the U.S. Women's Olympic Marathon Trials are scheduled for Sunday in Boston. I'm looking forward very much to seeing the U.S. elite women run the course through Boston and Cambridge. The top three go to Beijing. It would be a major upset if Deena Kastor were not to win.
*Scott is moving to Mercer University in GA next year.
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April 15, 2008
Building Brand Equity: Book Review Grab Bag
I am grateful for my wonderful co-bloggers for keeping up the pace in my absence. A new job, new preps, and publishing commitments are keeping my blogging to a minimum for now.
Some of my recent book reviews you might find interesting.
A review of The Law Growth Nexus: The Rule of Law and Economics Development by Kenneth Dam for Law and Politics Book Review.
A review of Thomas F. Walsh: Progressive Businessman and Colorado Mining Tycoon by John C. Stewart for EH.net.
Templeton Essay Contest Reminder
The 2008 Sir John M. Templeton Fellowships Essay Contest
Top Essays to Be Awarded $2,500 (Students) or $10,000 (Untenured Faculty)
The Independent Institute is pleased to announce the 2008 Sir John M. Templeton Fellowships Essay Contest. Cash prizes will be awarded to outstanding college studentsand untenured “junior” facultyfrom around the world through a competitive essay contest. The essay topics change annually. This year’s topic pertains to property rights and human rights:
UCLA economics professor Armen Alchian once wrote, “For decades social critics in the United States and throughout the Western world have complained that ‘property’ rights too often take precedence over ‘human’ rights, with the result that people are treated unequally and have unequal opportunities. Inequality exists in any society. But the purported conflict between property rights and human rights is a mirageproperty rights are human rights.” (Source: “Property Rights,” in The Concise Encyclopedia of Economics.
Are property rights human rights? How are they related? What are their similarities and differences? If property rights are human rights, why have they enjoyed fewer legal protections and intellectual champions than other human rights?
A panel of three judges will look for the best essays related to the topicoriginal essays distinguished by their clarity, rigor, and eloquence. The essays need not be technical or demonstrate hyper-specialized scholarship, but they should be serious in content, tone, and style. Held annually, the Sir John M. Templeton Fellowships Essay Contest (a continuation of the Olive W. Garvey Fellowship Competition) was created to encourage and reward scholarship pertaining to the meaning and significance of economic and personal liberties.
College students up to the age of 35
Junior faculty members up to the age of 35 and not yet tenured:
ELIGIBILITY: 1) Student Division: Any student 35 years or younger enrolled at a recognized college or university anywhere in the world. 2) Junior Faculty Division: Untenured college or university teachers, Assistant Professor or higher, 35 years or younger.
LENGTH: Student essays must be 1,500 to 5,000 words long. Teacher essays must be 5,000 to 8,000 words long.
DEADLINE: May 1, 2008
MORE INFORMATION, including complete eligibility requirements, a suggested reading list and examples of past winning essays can be found here.
Caplan and Krugman: City Dwellers
Paul Krugman makes an interesting point: it's "political poison" to criticize small-town values, but for some reason it is perfectly acceptable to criticize "big-city" values or suggest that somehow the values of urban Americans are "out of touch" with the "real America." Curious. And I'm definitely going to visit the Tenement Museum the next time I'm in New York. Meanwhile, here's Bryan Caplan on the amenities of urban living; in particular, the people.
Connect the Dots
Here are some findings from Laurence Kotlikoff and David Rapson:
--For 30-year-old couples earning $20,000 the marginal tax rate on an additional dollar earned is 42.5 percent ....
In fairness, I should point out that Kotlikoff and Rapson's findings have stronger implications for hours worked than for the decision to enter the labor force. For some combinations of age, children, and marital status (see their figures I, II, V, VII, and VIII) Kotlikoff and Rapson find low or even negative (presumably because of the EITC) MTRs at the $10,000 level of earnings. By contrast, the high MTRs at the $20,000 of income level and above do provide a strong disincentive against more hours of work.
BTW, Larry Kotlikoff will be speaking at Berry next fall. Alumni, friends, and retired colleagues might find it a good occasion to visit campus. Stay tuned for details.
April 14, 2008
Handy tax tips
... from Dave Barry:
For example, according to IRS Rev. Proc. 2006-50, certain individuals recognized by the Alaska Eskimo Whaling Commission may deduct up to $10,000 for whaling expenses. Could this deduction apply to you? Think about it! I, personally, have done many things that I later could not remember; being a recognized Eskimo whaler would not be the weirdest of these. So go ahead! Find an empty box on your 1040 form and write ''Harpoons -- $9,990.'' (Don't claim the full $10,000, because that might arouse IRS suspicion.)
Read the whole thing here.
I've been to DC twice in the past three weeks. Last week I was there for a reading discussion at the Koch Foundation. I thoroughly enjoyed the time with the Koch Associates--thanks for the invitation and the warm welcome.
Also on last week's trip, I caught a
My earlier DC trip was about 3 weeks ago--I took Pee Wee for Spring Break. It was a pretty standard trip with a 6 year old--monuments and museums. Our visit to the Air and Space Museum was marred by the tight crowd. It'd be much more pleasant if tickets were somehow rationed--by reservations or, heaven forbid, by price.
NRO's Uncommon Knowledge has an interesting set of short discussions with T.J. Rodgers on green energy. All are interesting.
Health Care Mafia
This article makes some good points about the prospects for universal health insurance, as opposed to health care.
The first is that such a distinction needs to be made. After all, what we call health insurance is no such thing; it is prepaid medical care. But, as Kellerman says, "The assumption seems to be that insurance – rather than the service delivered by doctor to patient – is the important commodity."
As for implications:
[A]ny middleman interposed between seller and buyer raises the price of a given service or product. Some intermediaries justify this by providing benefits, such as salesmanship, advertising or transport. Others offer physical facilities, such as warehouses. A third group, organized crime, utilizes fear and intimidation to muscle its way into the provider-consumer chain, raking in hefty profits and bloating cost, without providing any benefit at all.
April 11, 2008
The Use and Abuse of Powerpoint
I've gone to a lot of conferences and given a lot of talks this semester, and this has given me the opportunity to reflect on what goes into good and bad presentations (I've given many of both). On Ben Parizek's suggestion, I recently read Seth Godin's e-booklet Really Bad Powerpoint. It reminds me a bit of The Gettysburg Powerpoint Presentation. Together, they offer a pretty clear guide to very good and very bad presentations and are definitely worth the time and effort. The Gettysburg Powerpoint Presentation makes the point beautifully.
This has got to be an Instrument for Something
Visions of Paradise
Paul Koontz goes to North Korea:
April 10, 2008
A classical liberal student of mine with an interest in enviornmental issues and a love for comedy has started a blog called "Polar Bears and Astronauts."
He recently had an interesting post responding to the question of ""If you could change one thing about the 'environmental movement,' what would it be?"
His "one-liner" responses are below the fold:
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-Environmentalists should work to save the earth for humans not polar bears, though polar bears are nice too. "Ecocentrism" proposed by Aldo Leopold, "Sentienism" proposed by Richard Ryder and Peter Singer, or "Deep Ecology" proposed by Arne Næss, might work as a philosophical brain children but when it all boils down humans come first. Anthropocentricism is all we got: but come on, you knew this all along, after all you are a human!
-Growth is good, and we can't have environmental protection without it.
-Growth is good, and we can't have welfare with out it.
-Growth is good, and we can't have technological innovation with out it.
-Growth is good, and we can't have jobs with out it.
-Growth is good, and we can't have jobs that give us technological innovation that gives us welfare that protects the environment without it. Deal!
-Profit is good, so is money.
-Quit complaining about too many jobs going overseas and the lack of developmental humanitarian AID at the same time. Its paradoxical.
-And finally, think through the actual repercussions of whatever you demand. We call it holistic cost benefit analysis, if we are going to "save" the planet (there's that Jesus-affect again) its going to be because we thought it through.
-and for Pete's sake take a shower! Even monkeys groom
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April 09, 2008
Internet and Freedom
I’m on the way back from the APEE meetings, where a lot of DOLers have been for the past few days. There were a ton of really good papers on the program, and the plenary talks were outstanding. My favorite was yesterday when David Henderson gave a talk, “Is the ‘Net, on net, good for freedom?” In short, David’s answer is ‘yes,’ although he acknowledges that governments use advanced technologies to track individuals and censors uses of these same technologies. I think it's very difficult to say whether the Internet itself is good for freedom, because it depends on how limited government is in the first place, and that varies across societies. Clearly in closed societies, socialist governments have a strong interest in limiting communication of any sort. Alvaro Vargas Llosa writes about the dramatic story of the failed attempt by Raul Castro's government to censor the Cuban blogger Yoani Sanchez, who writes about daily life in under the degenerate regime. The film, Lives of Others, highlights various forms of information being banned under East Germany, from books and newspapers to even government statistics on suicide rates. Before Vietnam's doi moi reforms in the late 1980's people there had virtually no contact with the outside world but now there are something like 15 million Internet users. As societies become more open in general, their peoples become less tolerant of government controlling anything, including the Internet. Even private organizations, such as Google, are scrutinized for storing data on individuals [story on EU here]. I am largely ignorant of the details of this debate but I do think David is right. Still, I think it's important to say that the Internet's benefit to freedom isn't certain; it depends on people's vigilance against censorship and privacy invasion in general.
Flawed experimental design c. 1908
From the April 9, 1908 NYT (if true):
ST. PAUL, Minn - Knute Ohnstead died here to-day from starvation, after an attempt to fast for forty days in order to demonstrate his theory that the mind controls the body and that the mind is mightier than matter.
Top economists call on city chiefs to save Adam Smith's house
LEADING economists from around the world have called for Edinburgh City Council to save Adam Smith's former home for the nation.
April 06, 2008
This article contains reasonable responses to these five "myths" about NAFTA:
1 NAFTA has transformed the U.S. economy.
April 04, 2008
Today's Mike Lester Cartoon
The RNT cartoonist's offering on the mortgage mess.
April 03, 2008
"Freedom for Zimbabwe" By MORGAN TSVANGIRAI
Today, Zimbabwe ranks last out of the 141 countries surveyed by the Fraser Institute's Economic Freedom in the World report. According to 2007 World Bank estimates, it takes 96 days to start a business in Zimbabwe. It takes only two days in Australia. Waiting for necessary licenses takes 952 days in Zimbabwe, but only 34 days in South Korea. Registering property in Zimbabwe costs an astonishing 25% of the property's value. In the United States, it costs only 0.5%.
APEE in Vegas.
It's probably going to be light blogging on DoL early next week as most of us will be in Vegas attending the Association of Private Enterprise Education meeting including Larry White*, Josh Hall, Ed Lopez, Frank Stephenson, Mike DeBow, Art Carden, Tim Shaughnessy, and myself. (Mike, Brad, Craig, and Wilson: you guys will have to hold down the fort.)
Besides the outstanding sessions, highlights of the meeting will include awards for for Arnold Harberger, John A. Allison, John Stossel, and Larry White. Stossel (along with Walter Williams) is judging the second installment of APEE's Economic Communicators Contest which offers a $10,000 first prize!
I'm also looking forward to seeing former Capital students Lauren Raymer (3Y grad student at UNC) and Ann Zerkle (3Y at Clemson), both of whom have papers on the program. In addition two Capital students who are starting the Ph.D. program at GMU next year will be there: Will Luther and Jayme Lemke (who graduated last year).
APEE is my favorite conference of the year. It's the only conference I attend in which it's hard to decide what session to attend. I think this year marks the 15th meeting in a row that I've attended. And Las Vegas is my favorite conference city; I'll be climbing Bridge Mountain on Saturday.
*Larry is giving a speech tonight at Capital on "Should we abolish the Fed?"
Woman Bites Dog
Amy Rice feared for her dog's life when a pit bull jumped over a fence into her yard and attacked her pooch. So she took matters into her own mouth.
I think it's close enough to consider man bites dog. Source.
PETA moment c. 1908
The April 3, 1908 NYT has a report that you would NEVER see today:
President Roosevelt has been the recipient of gifts of almost every conceivable description...Yesterday a monster sea turtle weighing 350 pounds, a product of Nicaraguan waters, was presented to the President...Nice.
Jarts: The Missile Game
After my previous post about the CPSC banning of lawn jarts in 1988, a friend offered to give me the set he still owned. (Thanks David!!!) It's in near perfect condition (the pic below is from the 'net but it looks like this). I am so excited! If spring ever comes to Ohio this year, I'm thinking of taking my students out for a little field trip to the campus green to have a little dangerous and illegal* fun.
*UPDATE: I was under the impression that the CPSC merely banned the sale of the product but not necessarily the act of playing the game. But according to this media source quoting a CPSC spokesman, even playing the game is illegal. So maybe I'll have to rethink inviting the class out to play. :-(
UPDATE to the UPDATE: I just received an email reply to an inquiry with the CPSC that said, "Hello, Thank you for contacting the U.S. Consumer Product Safety Commission (CPSC). The ban applies only to the sale of lawn darts. jg"
Fans of CBS' "Moonlight" are so passionate about the vampire drama that they're willing to sacrifice their own blood to keep the series on the air.
I hope they succeed--my sister works on the show. Source.
April 02, 2008
The beginning of the end? c. 1908
From the April 2, 1908 NYT:
NEW HAVEN, Conn - Yale has yielded to the current demand for university courses in commerce and business. It has been decided to give twenty-seven electives in the graduate school next year under a common head, which shall embrace a department of business methods. The group of studies will include banking, insurance, railroads, and commerce.
It's good to be the king c. 1908
From the April 2, 1908 NYT:
BERLIN - An authentic report is in circulation here that a bill will soon be introduced in the Prussian Diet raising the civil list of the Emperor. This list now amounts to $3,900,000 a year, which is paid the Emperor as King of Prussia and not as German Emperor; the latter position carries no salary.So many kids!! Good grief.
Elections matter c. 1908
From the April 2, 1908 NYT:
MILWAUKEE, Wis. -- Fear of a Social Democrat victory at the election next Tuesday is said to be the reason that there was not a single bid received from any banking house for the $325,000 bond issue, which was to have been allotted today. The Social Democrats have been gaining in strength here for several years past, and polled 12,000 votes out of a total of about 60,000.
April 01, 2008
A great April Fool's joke
Even though most of you will probably read this after the 1st. It includes these goodies:
"But Partridge’s ordeal was only beginning. It’s reported that he woke up the morning of his death to the sound of the church bell announcing his passing...
Partridge would frequently be stopped on the street for inquiries into how his widow was coping..."
The story could be used for a discussion on marketing, adaptive expectations, finite vs. infinite time horizons, etc.
Trust me, you'll definitely want to read to the end to find out who the prankster was.
HT: Mark Shea's blog.
Procrastination is Blogging
HT: Michael Dolan.
Building Brand Equity: Environmentalists and Economists
Mike Hammock and I recently had an article on agreements and disagreements between environmentalists and economists published in the Contra Costa Times. The article was distributed by the Independent Institute.
Posted by Art Carden at 09:24 AM
(1) NCPA has a nice article out on the "Freedom and the Trade-Off between Inequality and Growth" by Gerald Scully.
* Freer economies enjoy higher rates of economic growth than less free ones. * Freer economies are more equal economies; economic freedom reduces inequality by increasing the share of market income going to the poor and lowering the share going to the rich. * Economic growth increases income inequality, but the effect is small. * Overall, the increase in inequality from economic growth is outweighed by the reduction in inequality caused by greater economic freedom -- creating a net benefit to lower income groups.
This work was based on Scully's excellent 2002 article in Public Choice (which is currently available for free).
(2) Ajay Shah has an interesting post that suggests the views of people in the US and UK are less market liberal than in the Ivory Coast and Kenya!
This does not fit well with the stereotype of liberal Anglo-Saxon economics being prevalent in the US and the UK and nowhere else. If anything, poor countries have even more liberal values when compared with rich countries.
Actually, I'd interpret his findings differently. I think his results show that people in poor countries are more cosmopolitan and globally oriented than people in rich countries. It certainly wouldn't be hard to believe that the people of Kenya are more connected to global culture and the economy and than we are in the US.
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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