Division of Labour: November 2009 Archives
November 30, 2009
President Garfield on monetary theory

From Jack Beatty, Age of Betrayal: The Triumph of Money in America, 1865-1900 (an interesting but uneven book), at page 338 of the paperback:

"The details of the nineteenth-century specie controversy repel curiosity; only obsession could make them interesting. And on that score, one does well to take James Garfield's warning to heart. 'He devoted himself almost exclusively to the study of the currency,' Garfield said of a colleague, 'became fully entangled with the theories of the subject and became insane.'"

No source is cited for this, although the book is generally well-sourced. I hope it's true.

Posted by Mike DeBow at 08:32 PM in Funny Stuff

Podcast: The the Rule of Law and the Fed

While at the Cato Institute for their annual monetary conference, I chatted with Caleb Brown about the contrast between the "rule of law" principle and the recent actions of our central banking authorities. Our 12-minute conversation is now available as today's Cato daily podcast.

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

Cavalcade of Miscellany: A Deep Breath on Monday Morning

1. I'm finishing a paper co-authored with Bob Lawson. If I don't send it to him by the end of the day, I will mail a check for $50 to the Auburn University Athletics Department.

2. An oxymoron: "trade war."

3. As this semester winds down, I'm reflecting on what I've learned in 2009. I've taught econ 101, writing-intensive econ 101, Classical and Marxian Political Economy, and a rebuilt Economic History course. Over the summer, I taught at an IHS "Liberty and Society" seminar and at Mises University. In the process, I've developed a firm conviction that Mises and Hayek are the most important thinkers you've never read; in particular, Mises's "Economic Calculation in the Socialist Commonwealth" and Hayek's "The Use of Knowledge in Society" might be the most important contributions to our understanding of societies that I've ever read. I made this point (to some extent) a few months ago, and in these articles Mises and Hayek confront the fundamental human problem head-on: in a world of infinite possibilities and in which we are confronted with almost infinite ways to use our time and energy, how do we decide what to do? Further, how do we evaluate our actions? Most public discourse advocating interventionism assumes that these problems are either trivial or secondary, and this has come to the forefront in public debates about health care.

4. Along these lines, here's Peter Boettke on EconTalk discussing the work of Elinor and Vincent Ostrom.

5. Back to work.

6. 10/10 AM Update: I forget who recommended it, but Alexander Gray's The Socialist Tradition: Moses to Lenin just arrived in the mail. I look forward to reading it for the next incarnation of Classical & Marxian Political Economy (probably Fall 2010 or Spring 2011).

Posted by Art Carden at 10:38 AM in Economics

On scientific fraud c. 1909

It will prove interesting whether the email dump from the Climate Research Center in England gains any traction. I have spent about five hours of my life (five hours too many?) reading through the emails [Searchable archive here]. I am not familiar with all the science, of course, but it is not too hard to decode some of the lingo - I suppose GHG stands for Green House Gasses.

Anyway, from what I have read - again assuming this is not one giant hoax - things do not look good. It seems that government and science may not mix as well as many might hope.

I have come across two other discussions in this arena in the past few days. One is a book I am rereading by C. P. Snow titled "Government and Science" which discusses the public and private politics of science in Britain during World War II (and sounds very similar to what is going on in the United States at the moment, what with the claims that Obama is the "President of Science" and Bush was the "President scared of fire"). The second is a podcast by Philosopher Diana Hsieh in Session #6 of her Explore Atlas Shrugged series. In this session she discusses the interaction between Dagny Taggart (one of the heroes of Atlas Shrugged) and Dr. Robert Stadler (a scientist who seeks to be allowed to do "research" using public money and is ultimately shocked at what government science produces) [full list of characters here]. In both cases, one from non-fiction and one from fiction, there is a strong warning that it is nearly impossible to keep politics from corrupting science, especially when the politicians control the money. Otherwise honorable scientists find themselves currying favor with the politicians and sacrificing standards, ethics, and truth in the process.

As an empirical economist the climate story (if true) is troubling on many levels but a very personal issue is whether the bad behavior of other "empirical scientists" will have a negative impact on my research and the way that non-economists view empirical economics. The actual impact might be hard to measure and may indeed be very tiny. On the other hand, what if every empirical study suffers a level of unwarranted skepticism (every empirical study deserves some level of warranted skepticism).

I would hope that if it came about that a handful of empirical economists were busy doctoring the data used to test the impact of "variable X" on "variable Y," that we as a field would call those individuals out - especially if national or international policy was being drafted based on these empirical "findings." Perhaps these climate scientists did not fundamentally alter the general findings perhaps they did. That is the role of the rest of the climate scientists to determine - but what if the foxes are guarding the hen house?

[Update: Evidently there will be no pointing of fingers. The head of the UN IPCC suggests that no-one would be swayed on the IPCC by the bias of one or a few scientists, that all peer-reviewed publications are on the table when it comes to inclusion in the IPCC report (never mind that the scientists seem to hint that they wanted to keep certain papers out of the peer reviewed literature), and that, after all, President Obama committed to cutting US GHG emissions five days after the emails came to light. With impeccable circular logic like that, I am sure that there is nothing to worry about.]

If one or more scientists knew about possibly bad behavior and wanted to come clean, how exactly could they do so without simultaneously risking their own careers? How do you call someone a cheat and a liar? Before last week I never really thought about the question and I don't think there is an easy answer.

However, the November 30, 1909 NYT contains a lengthy example of how to do just that:

Prof. Herschel C. Parker of Columbia University, in an interview given during a brief visit here [Lewiston, Maine], declared that there was no longer any doubt of the falsity of Dr. Cook's claim that he climbed Mount McKinley.
I am not going to review the entire, and lengthy, explanation of why Cook's claims of making it to the summit of Mt. McKinley were incorrect, but here are a few choice words:
"It is with profound regret," he [Parker] said, "that I feel obliged to impeach the manhood and honor of a personal friend. Nothing but stern necessity would prompt me to do this, but this is a case where truth and justice, as well as science and civilization, compel this step. Dr. Cook never made the ascent of Mount McKinley, as he has claimed."

"My experience with Cook had demonstrated that he knew nothing about mountain climbing and had no scientific training. All measurements and the care of the two hypsometers fell to me. In fact, I was in full charge of the expedition, as Cook seemed to realize his total incompetence for such work.

It was the middle of August when we parted. His last words to me were that he simply wanted to hunt a little and look over some of the near-by glaciers. I came home, and you may judge of my surprise when, one month later, he telegraphed that he had reached the summit of Mount McKinley.

Posted by Craig Depken at 10:19 AM in Science

He said what when?

Guess when this quote was spoken:

"While our country has natural advantages greater than those of any other, its normal growth and development have been greatly retarded by this periodical destruction of credit and confidence.

I believe that no one can carefully study the experience of the other great commercial nations without being profoundly impressed with the belief that disastrous results of recurring financial crises have been successfully prevented by a proper organization of capital and the adoption of wise methods of banking and of currency.

Of course, until human nature is changed, it will not be possible to prevent, by legislation or otherwise, periods of over-speculation, with undue inflation of values and over-extension of credit. When we consider the characteristics of the American people, whose unrivaled energy and enterprise are not always confined by the limits of prudence, it is certain that we in the United States shall always have periods of speculative inflation, with the evil results which are sure to follow."

Those are a few paragraphs from a speech given by Senator Nelson W. Adlrich, chair of the National Monetary Commission, to the Economic Club of New York, as reported in the November 30, 1909 New York Times.

In the same speech he refers to the buildup to the crisis of 1907:

"The crisis of 1907 was one of a series I remember very well - although probably very few of you do - the financial crash of 1873. I am sure you all remember that of 1893, from the effects of which the country did not recover for many years.

Between 1900 and 1907 we had recurring periods of depression, of dangerous perturbations in the money market, when the Secretary of the Treasury was frantically called upon for assistance, and felt obliged to adopt the very questionable policy of making large deposits of public money in banks to relieve threatening situations.

Evidently the basic policy prescription hasn't changed very much in 100 years?

Posted by Craig Depken at 10:04 AM in Economics

November 29, 2009
Cavalcade of Miscellany: Sunday Morning!

1. Wireless internet + incredibly sleepy/grumpy kid = attending church via teh interwebs.

2. Here's Ian Ayres on why tuition hikes at California's state colleges and universities are a good thing. Cheap state colleges and universities redistribute wealth upward. In the opening section The Bourgeois Virtues, Deirdre McCloskey notes that the average family income for a California college student is higher than the average family income for a California taxpayer. Ayres makes the important point that the problem is not that tuition is too high but that financial aid is too low and too poorly targeted.

3. When Bryan Caplan and Robin Hanson's discussions end up spilling into the blogosphere, you can be virtually certain that you're going to learn something interesting. Here's Bryan's most recent post on cryonics. I don't think Bryan has commented on this yet, but here's Robin Hanson expressing gratitiude for The Unknown Explorer. Here he argues that people should look to maximize more than their GPAs. Here's the takeaway: "Most of the interesting academics I know spent lots of time when young structuring their own 'unstructured' activities; GPA fanatics usually have few interesting thoughts of their own."

Posted by Art Carden at 12:39 PM in Economics

November 28, 2009
The Funniest Thing I've Heard Over Thanksgiving Break

At breakfast this morning, I mentioned to my Dad that George W. Bush is going to start a free-market think tank. His response: "what are they going to call it? The Richard M. Nixon Economic Freedom Initiative?"

Posted by Art Carden at 11:32 AM in Economics

November 27, 2009
Black Friday Price Discrimination

Is it separating consumers by marginal value/willingness to pay or by risk preference? Here's an article from this morning's Memphis Commercial Appeal. A choice quote:

"My face was on fire the half hour I had to wait in line for the electronics counter, and there were several other customers who had been in line that had been pepper sprayed."
Posted by Art Carden at 01:08 PM in Economics

November 25, 2009
A Penalty Flag for Bad Analysis

Yesterday's WSJ ran an article listing 10 teams that supposed achieved the "least with the most," as determined by having the lowest winning percentage over the past decade among teams averaging at least two players per year drafted by the NFL. The list includes PAC 10 teams Arizona (21 drafted players, .402 win pct), Stanford (30, .409), and UCLA (25, .525) and SEC clubs South Carolina (28, .508) and Ole Miss (22, .517).

But here's the problem--basing this list on teams with at least two NFL draftees per year says nothing about the talent level of these teams' opponents. I haven't looked up all SEC or PAC 10 clubs, but Alabama had 35 drafted players over the past decade, LSU had 49, and USC had a whopping 61 (15 of whom were first-rounders). So instead of being teams with "a demonstrable history of wasting NFL talent," the teams in the chart may well have been outgunned by teams with even more pro talent.

UPDATE: Pro-football-reference.com has a nifty tool that allows one to find all players drafted out of each college conference. Over the 2000-2009 drafts, there were 304 PAC 10 players drafted, an average of 30.4 per team. Hence Arizona, Stanford, and UCLA were all below the conference average of drafted players. As for the SEC, its 12 teams had 401 players drafted for an average of 33.4 per team. South Carolina and Ole Miss are both well below this average.

Posted by E. Frank Stephenson at 10:32 PM in Sports

The Minimum Wage: An Open Plea to My Friends on the Left

A few weeks ago, a friend posted a link to a story about how the NAACP is pressuring President Obama about African-American unemployment. Sadly and tragically, "repeal the minimum wage" is not one of their proposals even though the evidence suggests that it reduces employment and increases poverty. Here's an excellent post by Steve Horwitz on how "the science president" is ignoring the economics of the minimum wage. Here's my case for repeal. Here's a piece in which Steve and I join forces to rebut criticism of free-market economists. Here's my review of Donald Stabile's book on the living wage. Here's a piece on how the minimum wage affects the disadvantaged. Here's a piece on the hidden costs of the minimum wage. Here's Neumark and Wascher's comprehensive survey of the empirical research on the minimum wage; if you're at Rhodes, you have access to this paper because we have a subscription to NBER Working Papers.

At the SEA meetings, Jagdish Bhagwati dismantled the rhetoric of "fair trade" and said something that will stick with me for a long time. I paraphrase here: movements advocating what is grossly and misleadingly called "fair trade" and movements advocating higher minimum wages are filled with people who imagine themselves fine human beings but who are actually busy (unwittingly) doing horrible things to the people they claim to love so much.

With unemployment in double digits and with a lot of people struggling to make ends meet, I offer an appeal to my friends on the left who think that higher minimum wages do not reduce employment or who think that higher minimum wages are good for the poor: I beseech you, in the bowels of Christ, to consider the possibility that you may be wrong. Please. For the sake of the poor.

Addendum: I neglected to add Steve's "An Open Letter to My Friends on the Left", which is also well worth reading.

Posted by Art Carden at 08:34 PM in Economics

Questions on The Price of Everything

My econ 101 students have to write a review of Russ Roberts's The Price of Everything this semester. Some questions corresponding to each chapter are below the fold. Comments are open for a few days if you have any suggestions; if you like any of these questions, please feel free to use them.

Read More »

Posted by Art Carden at 04:48 PM in Economics  ·  Comments (3)

On Geithner's Tenure

Per Noel's post on whether there could be a market in which he could short Geithner's tenure as Secretary of the Treasury, lucky for him (Noel) the good folks at Intrade have already set up such a market.

See the trend here - it looks like the worst for him (Geithner), odds wise, was back in April. That could change however.

One wonders if Geithner would buy/sell in this market and, if he did, would that be considered insider trading?

Posted by Craig Depken at 02:12 PM in Economics

On the price of Thanksgiving c. 1909

The Nov. 25, 1909 NYT reports on the cost of a generic Thanksgiving day dinner and points out that the price of said meal had increased from a price of $1.95 in 1899 to the price of $4.25 in 1909 ($103 in 2008 dollars), an annualized rate of inflation of 7.8%.

{sarcasm} This was clearly an unsustainable rate of inflation in the Thanksgiving Dinner sector because annualized overall inflation during this decade was 0.93% (according to the good folks at eh.net). One wonders why there was no legislative emergency declared that required a 2,000+ page bill from Congress to remedy - oh wait, I know why. {\sarcasm}

I digress, on to the Thanksgiving dinner of 1909:

The price of Thanksgiving turkey in Chicago has again advanced. In 1907 it could be bought for 25 cents a pound, in 1908 it climbed a little higher, selling at 26 and 27 cents. This year it will cost from 28 to 30 cents a pound.

Ten years ago a Chicago department store advertised the following bill of fare for $1.95:

Nine-pound turkey.
Enough plum pudding for four.
Mincemeat enough for three pies.
Bunch of celery.
Turkey seasoning.
Pound of parsley.
Quart of cranberries.
Pound mixed nuts.
Three pounds of sweet potatoes

The same bill of fare this year will cost $4.25.

Vegetables, however, are much cheaper than they have been in past years. This year cranberries can be had for $7 a barrel. Last year people who wanted a barrel of them paid $12.

I went to my local Harris-Teeter's online shopping site and put together the following cart:

3 14 oz cans of Ocean Spray Cranberry Sauce - Full Berry

1 McCormick Poultry Seasoning

9 lb Harris Teeter Turkey Breast (fresh)

4 12 oz North Carolina grown Sweet Potato Yams

2 bunches of fresh Italian Parsley

2 bunches of fresh celery

2 9.75 oz cans of Planters Mixed Nuts

The bill was $54.68 before tax.

Granted, I didn't add the plum pudding or the mincemeat (ugh) for three pies, but surely those wouldn't cost $50?

Posted by Craig Depken at 12:50 PM in Economics

On feeding the poor c. 1909

There are some problems that seem to persist no matter how much money, time, or other resources are thrown at them. This suggests that either the problems are systemic and cannot be resolved or we haven't thrown enough money, time, and other resources at the problem. However, I find the latter to be less credible than the former because for far too long we have, as a society, tried to help the poor in various ways.

The Nov. 25, 1909 NYT reports on private charity efforts to provide Thanksgiving dinners to those who could not afford to purchase the items necessary (another story in the NYT reports that the ingredients for a generic meal was around $4.25 or around $103 in 2008 dollars, which is perhaps not far from the mark for today's meal):

There was much bustle at the Little Missionaries' Day Nursery...last night for between 900 and 1,000 baskets containing Thanksgiving dinners for families averaging five to eight members each, were sent out, or were called on by those for whom they were intended. Last year nearly 700 dinners were given away, but last night saw the biggest free distribution of dinners which the nursery has managed since its organization in 1896 by Miss. Sara Curry.

Each basket contained potatoes, turnips, cabbage, onions, rice, coffee, tea, milk, sugar, pies, canned soups and vegetables of other kinds, as well as a whole chicken, the size of the latter depending upon the number of persons in the family for whom the basket was intended.

One wonders how many, in today's world of processed and prepared foods, would turn down such a basket today - not so much because they didn't "like" what was in the basket but because they wouldn't know what to do with the items in the basket.

Another article describes other private efforts in the city:

  • The Salvation Army has not done much this year in preparing Thanksgiving Day baskets of food, as it is keeping its energies in reserve for Christmas. The Volunteers of America, however, will distribute a large number of dinners, which it has provided out of its regular funds without recourse to outside contributions.

  • William J. Wollman of the firm of J. S. Bache & Co. has provided 1,000 baskets for the poor and is sending them out through nine charitable agencies.

  • The Rescue Society will deliver its annual message to-night at the Doyer Street Mission to the drifters and other frequenters of Chinatown and the Bowery. A thousand will be gathered into the mission house and there furnished a meal consisting of roast turkey and cranberry sauce, mince pie, vegetables, fruit, and tea or coffee.

  • At the expense of the estate of the late Mrs. William Astor about 500 newsboys will have a feast at the Newsboys' Home.

  • Posted by Craig Depken at 11:55 AM in Culture

    The Ghastly Specter of Monty Hall!

    Andrew McG responds to my Random Observations . He was heading not entirely down my path, but he makes a good point that’s worth repeating. Andrew references the Monty Hall problem .

    Your paper will include a calculation of significance. This is essentially an estimate of the probability that a correlation as strong as the one you found would exist purely as a result of randomness in the data, even if your theory is false.

    This calculation assumes the "proper" sequence of events. You have a theory, and you test the data for a correlation. Since you in fact poked around for correlations, then came up with a theory, the significance calculation is not valid. The true significance depends on the probability that, having found a randomly-caused correlation somewhere, you can then invent a theory to explain it. That probability is very difficult to estimate, but is probably much greater - meaning that the significance of the correlation is much smaller.

    As you say, theories aren't formed in a vacuum, and so there is not such a clear division between the "right" way of doing it and the "wrong" way of doing it. Nobody is completely ignorant of the data when they start to theorize. That is a real problem with nearly all statistics-based results that are published today. They are all presented with significance calculations based on the assumption that the forming of the theory was independent of the data - an assumption that is very unlikely to be completely true. Therefore nearly every significance estimate published is an overestimate.

    I believe the issue Andrew mentions to be very nearly universal. In order to publish, I must read and reference the related literature. That action, alone, nearly guarantees that I am NOT ignorant of the data.

    In light of this fact, I am occasionally dismayed when reviewers demand a particular type of “purity” in the scientific process, which, I suppose, was the point of my original post.

    I also find it blackly amusing when we bring such arguments to bear against research that contradicts our preferences, but tend not to use such arguments against research the conforms to out preferences. Yes, I’m guilty, too.

    Posted by Noel Campbell at 10:38 AM

    "Uber-Bad Signal"

    (Sorry-no umlaut)

    A friend and colleague pointed this out to me:

    Basis in futures =futures price-spot price....normally for the stock index contracts (S&P 500, DJIA, etc.) this is positive because people are expecting price increases. [Monday] and [Tuesday] if you look at the price quotes on the CME group website for the S&P 500 (http://www.cmegroup.com/trading/equity-index/us-index/sandp-500.html ) this is a negative number and it is increasingly negative the further in the future the contract expires. This would indicate that traders in the futures market (at least) are expecting price declines between now and all the way through March 2011 based on the current contract settlement prices. The same situation holds for the Dow and Nasdaq. This would be a very negative signal for the “recovery” if you buy into the stock market being a good leading indicator of economic activity.

    Now, Ah'm jus' a simple country economist, not no fancy finanseer. And sometimes I try to be fair. So, I asked her and some of my other finance colleagues if there was any way to put a positive spin on this info nugget.

    The unanimous answer--with which I agree--is that this is an "uber-bad signal for an economic recovery," if you believe that stock prices have anything to do with real conditions of an economy.

    On a related note, I want to start a market in "Geithner as Treasury Boss" stock. Then I'll short him. Sometime soon, someone from Economic Team Obama may need to go under the bus for political reasons, and he's my pick.

    Posted by Noel Campbell at 10:01 AM

    November 24, 2009
    This Time It Is the University of Richmond ...

    ... that is creating "organ donor bikes":

    The Green Bikes have survived their first semester, but not without repairs that have caused sponsors to question whether the program will be continued in the future.

    Karen DeBonis, a member of GreenUR, said the success of the program depended on the students.

    “Obviously we hope that students will respect the bikes as if they were their own,” DeBonis wrote in an e-mail. “I think that based on the number of damages we are seeing, students are not currently doing that to their best effort.”

    Daniel Kinka, a University of Richmond graduate student and Weinstein Center for Recreation and Wellness employee, is responsible for repairing the Green Bikes.

    “There was a little intentional abuse at first,” Kinka said. “It makes my life harder, but it’s almost to be expected. But the good news is we see less and less of that. Now the repairs are regular wear and tear.”

    Doug Goad, the manager of equipment and facilities at the Weinstein Center, said he was trying to be optimistic about the program, but approximately 18 out of the original 35 bikes had been severly damaged.

    “I wouldn’t say any of the bikes are ‘damaged beyond repair,’” Kinka said. “There are a couple off the road because we removed them. We use them as organ donor bikes, and rather than repair them we use them for parts.”

    Kinka fixes four or five bikes a week on average. Out of the original 35 bikes, about nine are waiting for replacements of certain parts.

    Source. HT Shawn Regan who has been watching the UR program expecting just this sort of news report.

    UPDATE: The post on the UR program reminded me that a few months ago I received an email about a program in Annapolis, MD that apparently works reasonably well. Note that it operates like a library book checkout and requires both a photo ID and a credit card. (Thanks to the reader for the tip and sorry for the delay in posting it.)

    Posted by E. Frank Stephenson at 09:02 PM in Economics

    Selgin's "Less Than Zero" in pdf

    The most interesting session I attended at the Southern Economic Assn. meetings over the (weekend + Monday) was on nominal income targeting as the least-bad monetary policy rule for a fiat money regime.

    Now comes word that a short monograph on the topic, one I've been recommending to people for years, is available for download at a zero price from the Institute of Economic Affairs. (Insert economist joke here about how a price less than zero isn't feasible.) It is of course George Selgin's Less Than Zero: The Case for Falling Prices in a Growing Economy, first published 1997. Here's the page from which you can download the pdf. Selgin updates Hayek's argument for the central bank to stabilize nominal income, such that when productivity gains reduce the prices of particular goods, the central bank doesn't inject money to try to offset the resulting decline in average prices. Less stress on the price system, no disturbance of the loanable funds market.

    Posted by Lawrence H. White at 06:31 PM in Economics

    The Gentle Cynic c. 1909

    From the Nov. 21, 1909 NYT (I know, this is a couple of days old):

  • Pot luck is too often potted luck.
  • The only people who really seem to enjoy living close to nature are those who don't have to.
  • If all the luxuries should be taxed, why not a tax on bachelors?
  • The trouble about hitching your wagon to a star is that you have got to get up before the sun rises.
  • Posted by Craig Depken at 01:46 PM in Funny Stuff

    November 23, 2009
    Random Observations

    1. Suppose I run a regression out of curiosity, just to see what I find. 2. The results puzzle me mightily. 3. I get an idea, and tinker some more, pretty much confirming the idea. 4. Now I write it up. Here's where it gets interesting.

    A. I write up my explanation as if I was never confused and as if I expected to find what I found. Reviewers consider this to be good theorizing and the paper is accepted.

    B. I write up my explanation totally honestly, and in chronological order, as above. Reviewers dismiss my work as ad hoc theorizing and the paper is rejected.

    Agreed, if I behave as outlined in the opening comments, I would not conform to the ideal scientific method. Then again, scientific theorizing does not occur in a vacuum. I must know there's a research question out there before I try to answer it. If I consider the scientific method to begin when I formulate my research question, then I start at #2, and my behavior is ethical and consistent with the ideal scientific method.

    Does the problem lie with me or the review process?

    Posted by Noel Campbell at 10:58 AM

    November 22, 2009
    Gary Johnson for president?

    The two term governor of New Mexico (1995-2002) appears to be taking the early steps in a long-shot presidential bid.

    As governor, Johnson set a record for most bills vetoed, and earned a reputation as the most libertarian governor in the country. A Johnson campaign would focus on runaway government spending and taxes. Could Johnson win the GOP nomination, or even become a player in the primaries?

    - Compelling life story (started as a handyman, eventually built New Mexico's largest construction business, which he sold in 1999; has climbed Mt. Everest, completing the hike with a broken leg)
    - Never part of Washington scene; executive experience; out of politics since 2002 means no Bush taint, and no controversial votes over last decade.
    - Twice won landslide victories in New Mexico, a state with a Democratic tilt. Beat the incumbent Democrat by 10 points the first time out.
    - My theory - after the stress of impeachment, the 2000 election, and a pair of crusading presidencies (Bush abroad, Obama at home), people will want a common sense, libertarian approach to government - effective government, no great new initiatives, getting the fiscal house back in order.

    - No name recognition
    - Unproven as a fundraiser. Johnson self-funded his first run for office and much of his second. But he's not a Mitt Romney, capable of dropping $100 million into a presidential race.
    - The big killer - during his second term, Johnson came out against the war on drugs and in favor of legalization and decriminalization.

    Johnson offers libertarian voters a new, improved version of Ron Paul. He's got executive experience with proven accomplishments, not a bunch of protest votes; though an "aw shucks" type of speaker, he is better spoken than Dr. Paul; he is better focused, not as likely to drift off into obscure theory or second tier issues; the political climate will be better for an anti-war Republican.

    There is already a grassroots rumbling starting to build for Johnson, coming from many of the same folks who had such enthusiasm for Paul. The question is whether Johnson can do what Congressman Paul could not - build on that enthusiastic base to appeal to a broader section of the GOP electorate. That will require not scaring the middle class on the drug issue.

    A few links - all of these sites are unofficial, as Johnson has not announced his candidacy:

    Johnson for America
    Gary Johnson 2012
    Johnson for President Facebook Group
    "America's Most Dangerous Politician" - a Reason Magazine profile from 2001.

    Posted by Brad Smith at 09:13 AM in Politics

    November 21, 2009
    Bread and circuses

    A short list of the headlines on CNN.com that appear (11:24pm central time, 11/20/09) before stories about the Senate's health care reform bill being voted on tomorrow:

    1) Fans mourn end of 'Oprah' show

    2) Arrests in human fat ring in Peru

    3) Bishops slam Obama bill

    Here's betting there is more mourning for the loss of Oprah's show than for the loss of liberty if the health "reform" passes. In what other private industry can you be arrested for refusing to engage in activities you consider immoral?

    Finally the bishops come out swinging, but where were they for the House bill? Only a few have expressed their disapproval on the grounds of subsidiarity subsidiarity: "a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to coordinate its activity with the activities of the rest of society, always with a view to the common good."

    And why did Butterbean get arrested in Peru?

    Posted by Tim Shaughnessy at 12:47 AM in Politics

    November 20, 2009
    Cavalcade of Miscellany: On the Road Again...

    1. The last week has been consumed by a burst of travel, exam grading, and other stuff (I now have a decent website in progress). On Monday, I debated the merits and demerits of Walmart with Stephan Goetz at Wake Forest. A good time was had by all, the questions were fantastic, and we didn't really disagree on too much of substance. Here's a write-up from the WFU student newspaper.

    2. Here's some true wisdom from Arnold Kling on TARP; it echoes the discussion of the New Deal we had in Economic History yesterday. HT: Don Boudreaux.

    Posted by Art Carden at 02:28 PM in Misc.

    November 19, 2009
    A Ponderable:

    Is reading J. M. Buchanan productivity, fake productivity, consumption, or penance?

    Posted by Noel Campbell at 11:49 AM

    APEE: Your upgrade is confirmed

    Bye-bye Bally's, Ciao Ceasar's. By email from Jeff Clark:

    TO: Members and Friends of APEE

    FROM: J.R. Clark, Secretary/Treasurer

    DATE: November 19, 2009

    RE: 2010 Conference Location Change; Room rate remains $149

    The 2010 Conference has been MOVED from Bally’s Las Vegas to Caesars Palace, Las Vegas, NV. The conference room rate will remain $149.00 (Single/Double). The conference will still be held on April 11-13, 2010.

    Complete conference details here.

    Posted by Edward J. Lopez at 11:24 AM in Economics

    November 18, 2009
    Smoking the Kanesian Regulatory Dialectic

    Arnold Kling writes briefly about Edward Kane's theory of dynamic regulation, which is a useful framework for understanding all sorts of regulatory institutional arrangements. Arnold quotes a great passage from Kane:

    Regulation is best understood as a dynamic game of action and response, in which either regulators or regulatees may make a move at any time. In this game, regulatees tend to make more moves than regulators do. Moreover, regulatee moves tend to be faster and less predictable, and to have less-transparent consequences than those that regulators make.

    Tobacco companies exemplify this well. Today, an AP story about tobacco companies mining loopholes in extremely high excise taxes.

    WASHINGTON – When President Barack Obama signed a law expanding children's health insurance this spring, he slapped tobacco companies with huge tax increases to pay for it.

    It didn't take long for the companies to find a multimillion-dollar loophole.

    As soon as the new law took effect, raising taxes on roll-your-own cigarettes from $1.10 to $24.78 a pound, companies adapted. They all but shut down their roll-your-own brands and reinvented them under a less-restricted, less-taxed category: pipe tobacco. It's still destined to be rolled and smoked, but it's taxed at barely a tenth the rate, $2.83 per pound.

    Posted by Edward J. Lopez at 06:11 PM in Economics

    Doin' it right, across the Big Water

    The economists, that is, not the policies.

    See the article here.

    I could've titled it, "Dept. of Uh-oh!: China"

    A total of 8.92 trillion yuan ($1.3 trillion) in new loans were pumped into the economy in the first 10 months based on a moderately loose monetary policy.... "The real drive behind China's recovery is the accelerating fixed-asset investment and record lending rather than the slow rise in domestic consumption, and this imbalance will be a drag on the country's economic restructuring," he said.

    China's fixed-asset investment surged 33.1 percent year-on-year in the first 10 months to 15.07 trillion yuan as China rebounded strongly from the unprecedented crisis.

    Government data showed the real estate sector accounted for more than 20 percent of urban fixed-asset investment, a key driver of China's economic recovery.

    I could easily have titled this post "Hero of Capitalism:"

    Wu, 79, was one of the first economists to promote the market-oriented economy in China.

    By pushing the Chinese government towards a market economy, Wu was part of the largest, most effective alleviation of poverty and human suffering ever.

    Quite an inspiration to those of us employed by The Leviathan.

    Posted by Noel Campbell at 03:10 PM

    Building Brand Equity: On Profit in Health Care

    For the new issue of The Freeman.

    Posted by Art Carden at 01:59 PM in Economics

    Jeffrey Flier on Health Care

    In effect, while the legislation would enhance access to insurance, the trade-off would be an accelerated crisis of health-care costs and perpetuation of the current dysfunctional system—now with many more participants. This will make an eventual solution even more difficult. Ultimately, our capacity to innovate and develop new therapies would suffer most of all.

    Part of his informed, thoughtful analysis in WSJ from Jeffrey Flier, dean of Harvard medical school and former undergraduate minor in economics and philosophy.

    As I opined two months ago, there is good economics coming out of HMS these days.

    Posted by Edward J. Lopez at 12:50 PM in Economics

    Thinking Globally, Acting...Globally and Locally

    Looking for a way to make a difference? Join Amnesty International's Annual Global Write-a-Thon (HT: Leigh Johnson). I'm going to write to American leaders on behalf of open borders. Here's (another) link to Lant Pritchett's Let Their People Come.

    Posted by Art Carden at 11:52 AM in Misc.

    November 17, 2009

    A little piece on lateness, for the Chronicle of Higher Education.

    Read More »

    Posted by Michael Munger at 08:15 PM in Funny Stuff

    The Silverdome as an "investment"

    PV(1975) = $55.7million. FV(2009) = $583k. Yield = -12.55%

    Posted by Robert Lawson at 04:10 PM in Economics

    Somehow They'll Do Wonders With Health Care When ...

    ... they can't even manage a measly tax credit:

    More than 15 million taxpayers could unexpectedly owe taxes when they file their federal returns next spring because the government was too generous with their new Making Work Pay tax credit.
    Posted by E. Frank Stephenson at 08:17 AM

    November 16, 2009
    Add Georgia to the List ...

    ... of states with bogus stimulus jobs claims. From the AJC:

    Recipients of federal stimulus dollars have overstated the number of jobs created or saved in Georgia by more than 1,500, according to an Atlanta Journal-Constitution analysis of public records.

    The AJC found:
    ● An Augusta agency reported creating 68 jobs even though the work has not started yet.
    ● A private contractor counted the same 10 jobs six times, erroneously reporting 60.
    ● A Head Start organization in LaGrange reported 77 jobs based on raises it gave its employees with the money.

    Meanwhile, jobs have supposedly been created in Arizona congressional districts that don't even exist.

    The Washington Examiner has a nifty interactive map plotting bogus claims of jobs created or saved.

    Repeat after me--Stimulus: The Real Voodoo Economics

    Posted by E. Frank Stephenson at 09:54 PM in Economics

    APEE 2010: Final Call for Papers

    Two weeks till submission deadline!

    Come work hard & play hard at the 2010 annual meetings of the Association of Private Enterprise Education. With yours truly as program chair, this year's conference promises to continue the trend of APEE becoming the conference of record among classical liberal scholars.

    Highlights for the 2010 program include:
    - Plenary speakers Tyler Cowen on the current state of economics, and Loren Lomasky on liberty after Lehman, plus a Rand versus Smith debate featureing Jim Otesson, Yaron Brook, and Peter Boettke.
    - The Association will give its Thomas Jefferson Award to Penn & Teller, who will be giving remaks at a plenary meal.
    - The Association's Adam Smith Award will be given to Peter Boettke.
    - Other highlights: the best papers ever in The Indepenent Review; a panel on the future of money and markets with Jerry Jordan, Amity Shlaes, and Lee Hoskins; a new twist on the economics communicators contest; much more.

    What is so special about the APEEs? Most of all, people at APEE know how to have fun while doing good economics, but the way the conference is oragnized helps. With no formal discussants assigned, sessions are geared toward presentation and floor discussion. The plenary sessions always provide great fodder for later discussions known to go well into the night. And there are three common meals, including an open bar reception on the first night. So it is very easy to meet new people as well as renew old friendships year after year.

    At just under $400, the conference registration fee might seem a bit pricey. But for that, you get 3 full meals (Sunday dinner, Monday & Tuesday lunch) plus 2 mornings of continental breakfast, and an annual subscription to the Journal of Private Enterprise. Young scholars can also apply for partial funding of their trip (details on www.apee.org soon). In addition, journal submission fees are waived for all papers presented at the annual meeting. Combined with the relatively low cost of hotel rooms and flights to Las Vegas from most parts of the country, it is a relatively inexpensive conference to attend.

    Essentials: (visit conference website here)
    Las Vegas, April 11-14 (Sunday evening through Tuesday)
    Bally's Hotel and Casino
    Submit paper or entire session at www.apee.org
    Submission deadline: Dec. 1, 2009 (email me if you a bit more time)

    Posted by Edward J. Lopez at 03:30 PM in Economics

    My bad...

    The relevant link to KPC for my post, "She knew what? When?" is here

    Posted by Noel Campbell at 03:26 PM

    Rent Seeking in Action, or, Onward, California!

    See the article here

    HT: Mrs. Campbell

    Posted by Noel Campbell at 03:19 PM

    November 14, 2009
    Arsonist to Start Firefighting Academy

    The former president said the Bush Institute will keep economic growth and free-market principles as a focal point ...

    Yes, his successor is even worse but Bush was nothing close to a champion of "free-market principles" even before the bailouts he thinks (wrongly I believe) were necessary to avoid calamity.

    Posted by E. Frank Stephenson at 11:38 AM

    November 13, 2009
    Studies in Government FAIL

    Bailout FAIL: Chrysler ends Electronic Vehicle Program (HT: David Zetland).

    Epic FAIL: Pfizer is leaving New London, CT. Susette Kelo's old neighborhood, which was expropriated for the benefit of Pfizer in order to bring in jobs and create tax revenue, is an empty lot (HT: David Zetland and Alex Tabarrok). But here's a question: if we're allowed to take private property for the common good, and if tax revenue and jobs are "the common good," then shouldn't the city of New London be allowed to force Pfizer to stay?

    Also HT to David Zetland for the "Government Fail" meme.

    Posted by Art Carden at 02:15 PM in Economics

    She knew what and when?

    Like many of us here, I followed Angus' link from KPC to Valerie Ramey's NBER paper, "Identifying government spending shocks: It's all in the timing." It was funded by the NSF.

    It's an excellent piece that starts by asking, "Do shocks to government spending raise or lower consumption and real wages?" She answers, "...most components of consumption fall after a positive shock to government spending. The implied government spending multipliers range from 0.6 to 1.1."

    But wait! There's more! "VARs... indicate that temporary rises in government spending do not stimulate the economy." "... the multiplier computed using the integral under the impulse response functions is negative. Thus these shocks lead to rather contractionary effects...." "Thus, none of my results indicate that government spending has multiplier effects beyond its direct effect."

    Now, Chief, the kicker to it is (as my father would say):

    "This paper expands upon my March 2005 discussion at the Federal Reserve Bank of San Francisco conference "Fiscal and Monetray Policy." "

    Ok, high-powered audience; over four years ago....

    "I wish to thank... Christina Romer... for helpful comments."

    Posted by Noel Campbell at 01:41 PM

    Football games c. 1909

    The Nov. 13, 1909 NYT reports the upcoming college football schedule. It is interesting to consider how important (and not) some of the following programs are one hundred years later:

    Fordham vs. Rensselaer Polytechnic
    Princeton vs. Yale
    Dartmouth vs. Harvard
    Michigan vs. Pennsylvania
    Chicago vs. Cornell
    Amherst vs. Williams
    Colgate vs. Syracuse
    NYU vs. Lehigh
    Virginia vs. Georgetown
    Bucknell vs. Dickinson
    Union vs. Hamilton
    Holy Cross vs. Worcester
    Wesleyan vs. Trinity
    Vermont vs. Brown
    Ursinus vs. Swarthmore
    Gettysburg vs. Indians at Carlisle
    Haverford vs. Rutgers
    Bowdoin vs. Maine
    Vanderbilt vs. Ohio State
    William and Jefferson vs. Pittsburg
    Penn State vs. West Virginia
    Minnesota vs. Wisconsin
    Illinois vs. Northwestern
    Denver vs. Haskell
    Drake vs. Missouri
    Idaho vs. Oregon

    Posted by Craig Depken at 09:23 AM in Sports

    Interesting Papers in the QJE

    Titles linked to abstracts:

    The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis

    Are Durable Goods Consumers Forward-Looking? Evidence from College Textbooks

    Posted by E. Frank Stephenson at 08:24 AM in Economics

    November 12, 2009
    Libertarian moments in the movies: "I wanna smoke a Cuban cigar the size of Cincinnati in the non-smoking section."

    Posted by Robert Lawson at 08:36 AM in Culture

    November 11, 2009
    Being rich enough to afford not being greedy

    It strikes me that the film industry is a decent example of a competitive industry. Granted, states like mine (LA) provide tax credits for companies filming here, but there seems to be a highly competitive labor market, no salary caps (though the SGA seems to enforce wage floors), and lots of substitutes available to consumers.

    So why are the most successful employees in this industry typically the most anti-capitalist? To wit, Jim Carrey:

    I was thinking about it this morning, how this story ties into everything we’re going through...Every construct we’ve built in American life is falling apart. Why? Because of personal greed and ambition. Capitalism without regulation can’t protect us against personal greed.

    Way ahead of you Jim; many of my students proudly eschew personal ambition.

    Capitalism is not intended to protect against personal greed, any more than it is intended to protect us against pride, envy, wrath, lust, gluttony, or sloth. Last I checked, capitalism was a way of organizing an economy most efficiently, not a system of morality. Two fallacies: 1) association is not causation ("there are lots of jerks in our capitalist system, so capitalism causes jerks"); and 2) I'd bet you don't have to look too hard to find personal greed in non-capitalist or even highly regulated capitalist economies. The "capitalism=immorality" or "socialism/regulation=morality" argument is seriously lacking logical or empirical support.

    A successful businessman/entertainer who hates capitalism. Almost as hypocritical as a state employee who hates big government.

    Posted by Tim Shaughnessy at 11:24 PM in Culture

    Markets in Everything: Vaccine Line Walkers
    An unemployed Gatineau man has been doing a modest but steady business in the past week by standing in line at flu clinics for people who can’t line up themselves.

    And he says the city’s security measures haven’t slowed him down.

    For $15 an hour, the man who calls himself Johnny Z lines up for hours to get the ticket, or more recently the wristband, that entitles the wearer to a flu shot.

    The person who hires him takes his wristband and comes to the clinic for a shot later in the day.

    Source. Thanks to Linda Ghent for the pointer.

    Posted by E. Frank Stephenson at 10:46 PM in Economics

    Minimum Wage: Testify!

    An interesting article from a prospective economist. This young woman, now a senior in college, had a summer job at a bakery.

    And, she recently listened to the podcast Russ Roberts and I did on vaccines, minimum wages, and shortages. And here's what she had to say. Amazing stuff.

    Read More »

    Posted by Michael Munger at 09:10 PM in Economics

    Science Funding

    Here's an oldie-but-goodie from The Onion. I think a good first question for legislators to ask before they pass an appropriations bill would be "how many projects in this bill have all the wisdom of a monkey collider?"

    Posted by Art Carden at 09:00 PM in Economics

    Adventures in multicultural globalism

    ...from my wife, who drove from Rochester, NY (USA), to Ottawa, ON (Canada), and back. Both directions, here's how the conversation went:

    Customs officer: "Where are you from?"

    Wife: "Conway, Arkansas."

    Customs Officer: "Then how do you have friends in Canada?"

    Wife: "Ummm...."

    Wife (in her head): "Well, shoot. That there's a purty durn good question, seein' as how we only got one map in Arkinsaw an' there ain't nobuddy what kin read it good, so we ain't real sure what state Canada's in, an' all."

    Posted by Noel Campbell at 03:21 PM

    Socialism = Comedy?

    I won't comment on one individual's descent to using wikipedia to support an argument. However, a keen observer from across the water wrote, "Professor Campell, you're the greatest thing since bratwurst and beir! May I have an autographed 8X10 glossy?"

    No, no, he really wrote (with slight editorial liberties of mine):

    Yes, communist Soviet Russia didn't make good comedies, but Europe nowadays (very statist and socialist) does at least try to make them. Most of the comedians in Germany that are seen as "great" have a tendency to be on publicly-owned television or radio. So, there you go, they also make only politically correct jokes (often about bad, bad capitalism and anti-environmentalism). And then we have American comedy shows like Family Guy, the Simpsons and American Dad that very much defend the ideas of state socialism of the Democrats’ flavour while at the same time ridiculing capitalism and perceived "Republican" ideas. And National Socialism (at least in Germany) had the so-called "Heimatfilme" with Heinz Erhard, which really were "funny" for that time. But I think it was mostly because there was not much to laugh about. Seven Years after Hitler took over, there was war. And Stalin hadn't much time for peace, either. On top of that, making fun of presidential matters is a no-go in Russia. They are even worse in that regard than hard-core Neo-Cons defended Bush on every occasion against every tiny bit of humour.

    So, yes, in communist countries you won't find much [comedy], but in socialist ones? I think as long as it is not full-fledged totalitarianism, but only soft-socialism, you will find all kind of comedians that support the ideology and make fun of the states' representatives at the same time."

    Hmmm... so I ought to ask whether France is funnier than North Korea? Interesting.

    Posted by Noel Campbell at 03:09 PM

    Libertarian moments in the movies (in honor of Veterans Day)

    Posted by Robert Lawson at 12:42 PM in Culture

    Considering Socialism

    Robert Higgs was on campus yesterday to discuss his book Depression, War, and Cold War; it was particularly poignant in light of the 20th anniversary of the fall of the Berlin Wall. Bryan Caplan's recent post on the Wall inspires me to consider (briefly) two myths about socialism: it works great in theory (it doesn't) and it was motivated by high-minded idealism that was, unfortunately, corrupted by bad people who couldn't handle power (it wasn't). To my shame, I am not familiar with Eugen Richter or his book Pictures of the Socialistic Future, but I look forward to reading it.

    In Francisco d'Anconia's money speech in Atlas Shrugged, the character refers to the denunciation of money as "the leper's bell of an approaching looter." As we remember the day the Wall came down, it's worth a careful re-reading.

    Posted by Art Carden at 11:34 AM in Economics

    November 10, 2009
    The plural of anecdote is data, Campbell


    Posted by Robert Lawson at 04:14 PM in Culture

    That's ONE, Lawson...

    And, besides, it was made by a subjugated people.

    I wonder what the state-approved subjects for comedy were? Slap-stick only?

    Posted by Noel Campbell at 03:20 PM

    "How can Democrats favor such a tree-cutting, ecologically-destructive bill?"

    That's the question a student sent me after reading this WSJ story about needing 1,900 plus pages of paper to print the health care bill. Here's one possible answer: Many Dems care less about the environment than they do about redistribution and about controlling other people's lives. When environmentalism is a convenient means to that end (e.g., the cap and tax bill) then they are happy to support environmentalist initiatives. When environmentalism conflicts with that end, then authoritarianism wins.

    ADDENDUM: One sometimes hears folks moaning about how little work Congress does (short workweeks, long breaks, etc.). To those folks I say be careful what you wish for. Case in point, the House works on a Saturday and births a freedom-killing behemoth of a health care bill.

    UPDATE: The Democrats' assault on trees continues: Senate Banking Committee Chairman Christopher Dodd has released his 1,136-page reform bill. Somehow I bet that 1,136 pages just isn't enough to prohibit sweetheart mortgages for senators.

    Posted by E. Frank Stephenson at 02:06 PM


    Well, I don't know how common comedies were in the old USSR, but one comedy, Mimino (1977), is famous throughout the old empire. The story tells of a simple Georgian and Armenian who meet up in Moscow to pursue their varied dreams. Antics ensue.

    My Georgian friends will sit around quoting this movie like we quote Airplane or the Blue Brothers.

    For you Russian speakers out there you can see it all here apparently:

    Posted by Robert Lawson at 01:39 PM in Culture

    Why does socialism not make comedies?

    This morning, I spent the hours between midnight and 4 AM watching "Our Man Flint" and "In Like Flint." I know James Coburn won an Oscar for "Affliction," but he deserves a lifetime achievement award for these two films alone. They are spy- and Cold War- and society-spoofs extraordinaire. They've gotten funnier through the years, if only because society has changed so much from the mid-1960s when they were filmed.

    But they got me thinking, where are the great comedies from National Socialism, or the Soviets, or the Cultural Revolution? Heck, where are the great comedies from Putin's Russia or Hu's New China?

    It seems to me that only free societies produce comedies, but I don't understand why. Noel's First Law of Film (I really, really like that phrase, BTW) states that socialist films (National flavor or Communist flavor) will skew heavily toward propaganda. This is because entertaining arts present an irresistable medium for cultural message-making, which the socialists require. A central idea behind socialism is that the members of a "class" will choose to work for the betterment of their "class." In reality, of course, this founders on the free rider problem; a situation Olson discussed in 1965. Hence the propaganda film in statist societies....

    But why not use comedy to make the point? Laughing together is a pwoerful tool for building community and solidarity. This is something the U.S. socialists understood. When the U.S. was engaged in its heavy-petting flirtation with socialism in the 1930s, the comeday of Will Rogers was very valuable at building popular support for the socialists' policies, even as (or especially because) he was poking fun at those very policies! By making fun of the WPA and the CCC, Rogers engendered acceptance of these programs.

    So why didn't the Soviets, et al., get the memo? Perhaps I'm way off base; the Soviets and the Cultural Revolution eras produced boat-loads of comedy gold, but I simply haven't seen the movies. But somehow I doubt it.

    Anyway, can't you just envision a sitcom like "The Honey-Mooners" set in 1950s Leningrad?

    Please send your critical insights to noelecon@gmail.com

    Posted by Noel Campbell at 12:22 PM

    More libertarian movie moments

    "These are my sons. They don't belong to the state."

    Posted by Robert Lawson at 10:47 AM in Politics

    November 09, 2009
    Remember, Remember, the Ninth of November: Democide in Perspective

    R.J. Rummel estimates that approximately 262,000,000 people died at the hands of 20th century governments and notes that if the average height of a victim was five feet, the bodies laid end to end would circle the Earth ten times. Here's another calculation to put it in perspective. If the average democide victim was five feet tall and if you laid the bodies end to end, you would create a chain of dead bodies over 248,106 miles long. The average distance from the Earth to the Moon is 238,857 miles, and the circumference of the moon is 6,790 miles. Laid end to end, the chain of dead bodies would stretch from the surface of the Earth to the surface of the moon and around the moon completely with another 2459 miles worth of bodies left over--which is almost the distance between New York and Los Angeles.

    Imagine you had a rope that was as long as the line of 20th century democide victims laid end to end. With this rope, you could lasso the moon and cut off enough excess rope to stretch from New York to LA.

    Update: Here's Pete Boettke on the Wall coming down. Here's Don Boudreaux's link to Pete's post, which offers the best Beatles-related blog post title ever.

    11/9/09 Addendum: I read earlier that the average adult male body contains 6 quarts of blood. Round that down to five quarts to account for women and children and recall that there are four quarts in a gallon, and you've got approximately 327,500,000 gallons of blood spilled by democidal mortacracies in the twentieth century. By comparison, wikipedia reports that the capacity of the Exxon Valdez was roughly 53 million gallons. The Valdez spilled some 10.8 million gallons of crude oil into Prince William Sound in the one of the biggest environmental disasters on record. Thus, a crude estimate suggests that the blood spilled by democide in the 20th century would fill over six tankers with the capacity of the Exxon Valdez.

    Posted by Art Carden at 12:20 PM in Economics

    "We meddle."

    Libertarian moments in the movies:

    "Why would they fight so hard against us?"

    "We meddle."


    "People don't like to be meddled with. We tell them what to do, what to think. Don't run. Don't walk. We're in their homes, and in their heads, and we haven't the right. We're meddlesome."

    Posted by Robert Lawson at 11:50 AM in Politics

    We're legit!

    From a letter in my mailbox this morning:

    "In addition, the journal [Southern Journal of Entrepreneurship] has been evaluated and accepted for listing in EconLit."

    As M.C. Hammer once said, "Too legit; too legit to quit! Hey! Hey!"

    Posted by Noel Campbell at 11:48 AM

    Back of the envelope calculations for PelosiCare

    OK, the CBO says that the insurance portion ALONE of PelosiCare (much less the unfunded mandates for Medicaid & Medicare, and other spending in the bill) will cost $1.2 trillion. The CBO's methods--good for meeting the CBO's official charge--tend to underestimate the cost of government spending. Inserting a completely ad hoc inflation factor, I put the cost at $1.8 trillion over ten years.

    Some recent, very sophisticated estimates of the government multiplier (Valerie Ramey) go from 0.6 to 1.1; call it 0.85. So, $1 spending by the Federal government results in LESS THAN A DOLLAR of production in the economy! By these figures, PelosiCare will generate $1.53 trillion in output.

    I make the dubious assumption that people are indifferent between consumption bundles; that is, a dollar of output gives equal utility to any other dollar of output. So, the estimated benefit of the insurance portion of PelosiCare is $1.53 trillion.

    What will this cost us? The direct burden of the program is $1.8 trillion. Using Feldstien's estimates that marginal excess burden is roughly equal to marginal direct burden, let's add another $1.8 trillion to the price tag. I estimate (conservatively if you must know--email me for details) that the loss of economic freedom will result in an additional $6 billion in losses.

    Costs minus benefits yields PelosiCare's NETcost of $3.66 trillion over ten years. That's 366 plus 10 zeroes. That's cost net-of-benefit of $12,200 for every individual in the United States (I used 300M as my pop. figure). That's $4880 per family of four, per year, for ten years.

    Oh, and those benefits? Remember, they won't come on line for four years (double-check me on this), so we get only six years of benefits.

    Posted by Noel Campbell at 10:14 AM

    November 08, 2009
    Never Again

    Tomorrow marks the twentieth anniversary of the fall of the Berlin Wall. It should be a day of celebration and a day of somber reflection. Here are some YouTube videos. Here's Bryan Caplan's Museum of Communism. Here's R.J. Rummel's website on democide.

    11/9/09 Addendum: Here's Tyler Cowen.

    11/9/09 Addendum 2: If you've never seen it, watch "The Lives of Others."

    Posted by Art Carden at 03:52 PM in Economics

    Relativism: Lazy and Strong

    My friend and colleague Dr. J writes what is rapidly becoming one of my favorite blogs, Readmorewritemorethinkmorebemore. She recently posted two interesting notes on lazy relativism and strong relativism. Here's my comment on the latter:

    And have you ever wondered if, like, what I see as "red" is what you see as "red?" And are you saying that "like, whatever" isn't a defensible position?

    Seriously, thanks for the detailed explanation. The man or woman on the street--someone like me--probably thinks that all relativism is of the lazy variety.

    Perhaps there's another idea for a SEGA panel: what are the biggest misconceptions non-specialists have about your field? The analogue to lazy relativism in economics is the mistaken view that "economics" means "money" or that "costs and benefits" are necessarily or exclusively financial. I think of "cost" very generally as whatever we give up when we make a choice and "benefit" very generally as whatever we gain when we make a choice. Every action is an attempt to change the world and to make it a better place (however we choose to define "better," and this is the point at which I refer students to the philosophy department) than the world we leave behind. The cost of an action is the action we didn't take.

    The cost of reading this blog post and writing a comment is whatever else I could have done (nap, for example, or grade homework). The benefit was that I now have a better understanding of the difference between lazy relativism and strong relativism. If we really wanted to we could evaluate these in monetary terms. By investing my time in reading the blog post I gave up the opportunity to earn income now by going around the neighborhood offering to rake leaves (like a couple of kids on the sidewalk appear to be doing now) but I gained knowledge that might increase my income in the future. This is one way to think about action, but I think it actually limits our knowledge by throwing out non-pecuniary reasons for action.

    Posted by Art Carden at 02:31 PM in Politics

    November 07, 2009
    Cavalcade of Miscellany: Capitalism, Food, and Health

    1. Shannon is visiting my sister in Houston and Jacob is sick, so the papers I'm within epsilon of finishing will remain between epsilon and delta of being finished until later this week. Fortunately, there are things (like blog posts) I can work on in fits and starts.

    2. Via Arts & Letters Daily, here's a review of David Kessler's The End of Overeating by Jacob Sullum. I share leftist and foodie concerns about American dietary infrastructure, but I don't share their apparent conviction that serving people food they want to eat at prices they are willing to pay is part of an evil conspiracy to manipulate us. Instead of fuming about McDonald's and Oreos, a much more constructive endeavor for health advocates would be to try to identify the subsidies and regulations that have produced the mountains of junk food that masquerade as our daily bread.

    3. That said, I'm going to indulge my inner teenager for lunch (Shannon is on to me). Jacob and I are going to take a walk in a bit, and I plan to swing by Taco Bell. It will be one part culinary experiment (is the Black Jack Taco any good?) and one part economics experiment (will they let me pay with a ripped-up dollar bill?).

    4. I want to thank the kind people at Inter-American Products for making Everyday Living Disinfecting Clean Up Wipes, the people at the store where Shannon bought them (Walmart? Target? Kroger?), and everyone else throughout the production process for their willingness to help us in an hour of need. They don't know who we are. They might not even care. And yet they were willing to provide us with something I've found indispensable in the last few hours. All they wanted in return was a few dollars with which to accomplish their own goals.

    5. While I'm thanking people, I also want to thank everyone involved in the production and distribution of the fancy "memory foam" pillow Shannon bought for me a few days ago. I've been waking up with back and neck pain for a while, and the memory foam pillow has helped a lot. It leads me to question criticisms of capitalism and consumerism. Sure, people buy a lot of junk (see 3, above), but it has also produced a world in which I can buy a pillow that helps me get out of bed without feeling like I've been kicked in the neck. From my perspective, that's hardly trivial.

    6. On the subject of anti-capitalism, here's a back-of-the-envelope modification of the Drake Equation:

    P*S*C*L*[G+T]*[1-(HA+MES)] = B

    P = population, S = fraction of the population living within walking distance of a Starbucks (or any place that sells lattes), C = global supply of Che Guevara t-shirts, L = fraction of the population owning a Laptop, G = fraction of the population with Google Blogger accounts, T = fraction of the population with Twitter accounts, HA = fraction of the population that has read Human Action, MES = fraction of the population that has read Man, Economy, and State, B = non-ironic blog posts or Tweets denouncing capitalism on a given day.

    7. Speaking of capitalism, here's Don Boudreaux's latest letter to the editor, a response to this WSJ piece arguing that we ignore Mises at our peril. Boudreaux points out that Keynes dismissed Mises's Theory of Money and Credit but then later all but admitted that his German wasn't good enough for him to really understand the ideas in the 1912 German edition.

    8. FTC-mandated disclosure: I've received no valuable consideration in exchange for talking about these things.

    Posted by Art Carden at 12:21 PM in Economics

    Tuesday's Democratic losses bode well for freedom

    The more one digs into Tuesday’s election results, the worse they look for Democrats. This is almost certainly a good thing - the battleground this fall was generally over taxes and spending, and GOP gains indicate voter skepticism of the Democrats efforts to nationalize health care, pass cap & trade, and try to spend us out of economic difficulties. Thus the GOP gains should slow the statist Democratic Agenda in Washington. Let's start by reviewing the high-profile gubernatorial and congressional races, and then talk about down ballot races around the country that emphasize the Republican success.

    Read More »

    Posted by Brad Smith at 07:58 AM in Politics

    November 06, 2009
    Boudreaux on Voting

    Here's Don Boudreaux on why he refuses to vote (HT Don Boudreaux). Perhaps non-voting can be an exercise in civic virtue: by abstaining, non-voters reduce congestion at the polls and make life easier for those who derive great satisfaction from voting. I've written on voting several times. Don's essay is well worth reading.

    Posted by Art Carden at 12:52 PM in Misc.

    November 05, 2009
    One reason why I am a fan of the Berkeley Electronic Press

    Each month something like this lands in my inbox:

    Dear Author,

    As a service to our authors, we are pleased to provide you with a monthly
    report tracking readership for any articles you publish with The Berkeley
    Electronic Press:

    "Pass a Law, Any Law, Fast! State Legislative Responses to the Kelo
    8 full-text downloads between 2009-10-05 and 2009-11-05
    129 full-text downloads since date of posting (2009-04-01)

    To encourage readership, simply refer people to the following web address:

    You are now encouraged. :-)

    Posted by Edward J. Lopez at 02:33 PM in Economics

    November 04, 2009
    Roger Garrison at Rhodes Tomorrow Night

    Roger Garrison is speaking at Rhodes tomorrow night on "Business Cycles and the Great Depression." His website contains some amazing resources on the Austrian theory of the trade cycle. He's also visiting my economic history class; for this I assigned his chapter on Austrian/capital-based macroeconomics and his Mises University lecture on the same. If you're teaching a macro course (or any course that discusses business cycles), these are great resources.

    Posted by Art Carden at 09:31 PM in Economics

    Party Like It's 1989: Anniversaries

    Here's Richard Ebeling on what The Berlin Wall represented (HT: Richard Ebeling). Here's Ronald Reagan's 1987 speech at the Brandenburg Gate. Regardless of what you think of Reagan, this is an amazing speech.

    Not all is well, of course. Here's one of the most important (and moving) pictures ever taken. We have a long way to go. At the risk of being maudlin, here's what motivates me.

    Posted by Art Carden at 01:27 PM in Economics

    On the Homebuyers Tax Credit

    My student Shawn Regan has this letter in today's Rome News-Tribune:

    Guest columnist Matt Towery put forth a weak argument in favor of extending the $8,000 tax credit for first-time homebuyers that was set to expire at the end of month, claiming that it and the costly Cash for Clunkers program are “in no way the same” (“A conservative ‘stimulus’ that worked as promised, Rome News-Tribune, Oct. 24).

    Towery claimed that in contrast to the income redistribution of Cash for Clunkers, the homebuyer tax credit “let[s] taxpayers keep some extra dollars in their pockets, instead of having to send them to the government.”

    Yet, according to estimates by the Brookings Institute, taxpayers are actually shelling out $43,000 for each sale generated by the tax credit. This is because more than 85 percent of the 1.9 million homebuyers who received the tax credit would have bought a home without it. Thanks to the program, taxpayers are stuck with a $15 billion bill — twice what Congress intended — for only about 350,000 home sales generated solely by the tax credit.

    In short, Cash for Clunkers and the first-time homebuyer tax credit are both poorly-targeted subsidies towards purchases that would have been made anyway.

    Sen. Johnny Isakson, sponsor of a new proposal to increase and extend the tax credit, would do well to cut taxpayers a break and scrap the proposal.

    I would also add that the program appears to be rife with fraud; here's the WSJ:

    The Treasury tax-oversight office said at least 19,000 filers who hadn't bought homes claimed $139 million in tax credits and were reimbursed ...

    In true government form, it appears that Congress will extend the credit and may even expand it.

    Posted by E. Frank Stephenson at 12:55 PM

    On the value of conservation easements

    A plug for a new working paper of mine with John Chamblee (UGA), Peter Colwell (Illinois) and Carolyn Dehring (UGA) ""The Value of Land Conservation: Evidence from North Carolina " available at SSRN. We appreciate any comments on the paper. Here's the abstract:

    We examine conservation activity in western North Carolina, where state income tax credits from land conservation have been available since 1983. Six land trusts, including the Nature Conservancy, undertake conservations in both fee simple and in conservation easement over a twelve year period. We find that value of conserved land differs by conservation mechanism, with fee conservations occurring in localized value craters. The price effect to adjacent land from conservation also varies by conservation mechanism, with greater benefits resulting from conservation easements. The mountainous landscape allows us to measure a variety of pricing effects from land conservation, including view.
    The innovations in this paper are two-fold. First, we are the first study to investigate the impact of land conservation, which limits the use of the donated land in perpetuity, on proximate property values. That should be of interest to policy makers.

    Second, unlike in a "flat" (sub)urban environment, the focus area is the mountains of Western North Carolina where premiums are placed on views. We show the amenity effects of conservation are not only proximate (as would be expected given the received literature) but also distant. Conservation efforts that protect the "viewshed" of a property contribute to an increase in that property's value. This suggests that land conservation efforts have a potentially larger public benefit than previously understood.

    Posted by Craig Depken at 10:00 AM in Economics

    On ticket distribution c. 1909

    The Nov. 4, 1909 NYT reports on high demand for Yale-Harvard tickets and the "problems" facing school officials in "allocating" tickets (as if the market couldn't do a better job) but the story admits, in the end, that the market is busy re-allocating some tickets to those who value them more but ignores the important question of why the teams aren't taking advantage of willingness to pay:

    Yale and Harvard football officials are staggered at the demand for tickets to their annual football game at Cambridge on Nov. 20. Seats are being distributed under the application system. To-day applications closed, and the managers are at their wits end to devise means to accommodate the alumni of the two institutions, not counting the general public. Long ago it was seen that football lovers outside the Yale and Harvard graduates would have to hustle for seats. Now it is certain that, even if the alumni can be seated, they will have to greatly curtail their family parties....There are 34,500 seats in the Stadium. Yale takes half, and Harvard the remainder, but Yale has for several years gracefully turned back to Harvard from 3,000 to 5,000 of Yale's half in order that Harvard alumni might all be accommodated. To-day's rush for tickets here makes it certain that Yale men have more than applied for Yale's share of the seats in the Stadium, and that, for the first time, Yale cannot help Harvard in filling the demand of the Crimson after the Yale graduates have been satisfied.

    Prices for tickets this year are sure to reach figures before unknown. Already $50 each is offered here by a Westerner for three tickets. There seems no room to doubt that blocks of three tickets will surely bring $100 apiece long before the day of the game.

    $50 in 1909 is approximately $1,220.54 in 2008 dollars according to the good folks at EH.net. Today, prices on StubHub range from $18 to $67 apiece:

    The early 1900s is before big-money sports existed, notwithstanding the increased popularity and demand for spectator sports. Even for-profit sports franchises have uniform pricing (baseball tickets were all $0.50). However, the economics of sports (entertainment) tickets was no different then as it is today, and yet the response by event promoters seems to be the same - allocate the tickets by lottery and then complain that the secondary market pops up with "high" prices.

    Read More »

    Posted by Craig Depken at 09:11 AM in Sports

    November 03, 2009
    A kewl interview with Steve Horwitz

    Steve answers questions on the current crisis, the Great Depression, and reforming the monetary regime, here at the Free Market Mojo blog.

    Posted by Lawrence H. White at 08:36 PM in Economics

    Making more with less c. 2009

    Another interesting story from Nielsen looks into household spending over the past year. The pattern shows a remarkable increase in spending on perishables which is reflective of people eating out less. The story has this graph of trends in online activities:

    The interesting trend is on-line use of recipe and meal preparation sites.

    More here

    Posted by Craig Depken at 03:24 PM in Economics

    On mandates c. 2009

    Here is an interesting graph from Nielsen which shows how U.S. households have adjusted to the conversion from analog to digital television.

    As the story reports:

    SUMMARY: On June 12, 2009, the Federal Communications Commission (FCC) mandated that all U.S. based television signals must be transmitted digitally. The great majority of U.S. households (97.5%) were prepared for the digital transition in the week prior to the power turn-off. Nielsen data shows unprepared homes were more likely to be minorities, younger, lower income, and were less likely to have Internet access. Most homes acquired a digital converter box to make their television ready for the change.

    The power of (mulligan) mandates?

    More here

    Posted by Craig Depken at 03:19 PM in Economics

    Jayson Blair Gives Ethics Talk at W&L

    Former New York Times Reporter Jayson Blair to Address W&L Journalism Ethics Institute

    I understand the argument that having a speaker who committed ethical trangressions might provide valuable ethics lessions for aspiring journalists. Still, as a W&L grad, I think this is an embarrassment to the university.

    Posted by E. Frank Stephenson at 12:31 PM in Culture

    Good News--Well, Not So Fast

    From the Hill:

    Lobbyists are quitting the business at a record pace, according to a study released Monday.

    Over 1,400 lobbyists "deregistered" with Congress in the second quarter of 2009, according to a study conducted jointly by the Center for Responsive Politics (CRP) and OMB Watch.

    Typically, only a few hundred lobbyists quit each quarter.

    The giant spike in resignations came just after the Obama administration instituted strict new rules on lobbyist activity.

    “While we can’t draw a direct link between the president’s executive order and the increased pace of terminations during the second quarter of 2009, we can say that they came at a most controversial time,” said Lee Mason, director of Nonprofit Speech Rights for OMB Watch.

    But the study's authors warn that not all of the deregistered lobbyists may actually be out of business.

    "At the federal level, many people working in the lobbying industry are not registered lobbyists, instead adopting titles such as 'senior adviser' or other executive monikers, thereby avoiding federal disclosure requirements under the Lobbying Disclosure Act," CRP and OMB Watch said in a statement.

    With federal govt spending on an upsurge, I'll bet on the latter effect--lobbyists disguising themselves as advisers--rather than a reduction in lobbying activity.

    Posted by E. Frank Stephenson at 12:04 PM in Politics

    Making Poor People Not So Poor: Capital Market Integration and Wages

    A new NBER WP by Peter Blair Henry and Diego Sasson points to another way in which economic freedom increases prosperity:

    For three years after the typical developing country opens its stock market to inflows of foreign capital, the average annual growth rate of the real wage in the manufacturing sector increases by a factor of seven. No such increase occurs in a control group of developing countries. The temporary increase in the growth rate of the real wage drives up the level of average annual compensation for each worker in the sample by 609 US dollars—an increase equal to 25 percent of their annual pre-liberalization salary. The increase in the growth rate of labor productivity in the aftermath of liberalization exceeds the increase in the growth rate of the real wage so that the increase in workers’ incomes actually coincides with a rise in manufacturing sector profitability. Overall, the results suggest that trade in capital may have a larger impact on wages than trade in goods.
    Posted by E. Frank Stephenson at 11:58 AM in Economics

    Incentives Matter: Learnfare Edition

    Part of the abstract of a new NBER WP from Thomas Dee:

    Wisconsin’s influential Learnfare initiative is a conditional cash penalty program that sanctions a family’s welfare grant when covered teens fail to meet school attendance targets. In the presence of reference-dependent preferences, Learnfare provides uniquely powerful financial incentives for student performance. However, a 10-county random-assignment evaluation suggested that Learnfare had no sustained effects on school enrollment and attendance. This study evaluates the data from this randomized field experiment. In Milwaukee County, the Learnfare procedures were poorly implemented and the random-assignment process failed to produce balanced baseline traits. However, in the nine remaining counties, Learnfare increased school enrollment by 3.7 percent (effect size = 0.08) and attendance by 4.5 percent (effect size = 0.10).
    Posted by E. Frank Stephenson at 11:55 AM in Economics

    On what's important c. 1909

    From the Nov. 3, 1909 NYT:

    Oscar De Rose of Belleville [NJ] is the owner of a chicken that has survived a fast of twenty-five days. The hen, a Plymouth Rock, was placed in the cellar of the De Rose home and was intended for dinner the next day. Its legs were tied. When Mrs. De Rose went to the cellar the next day to get the chicken, it was not to be found. She though it had been stolen.

    Some days afterward while in the cellar Mr. De Rose heard a noise and decided that rats had begun to frequent the cellar. The house cat was kept in the cellar nights thereafter.

    The noises, however, continued from day to day. Yesterday Mr. De Rose had occasion to go into the cellar, and hearing the same noises he searched around with a light until he came to a hole which had at one time been used as a cistern. At the bottom of the hole was the missing chicken. It was still alive and De Rose carried it upstairs. It was so weak that, when its legs were untied, it could not stand on them, and food and water had to be poured down its throat. To-day it was much improved and can walk.

    When placed in the cellar the chicken weighed six pounds, and when it was taken out it weighed just a pound and a half.

    So it won't be eaten just now.

    Posted by Craig Depken at 10:38 AM in Funny Stuff

    On football c. 1909

    I have, from time to time, reported on the goings-on in American Football in the early twentieth century. Needless to say, the game was extremely dangerous and, despite reforms in the 1906-1907 period, in 1909 players were still being maimed and killed. Indeed, the cancellation of the 1909 Army-Navy game was announced on Nov. 3, 1909:

    [F]inal decision having been reached to-day by the athletic authorities of the Naval Academy to grant the request of the Superintendent of the Military Academy to cancel the game owing to the death of Cadet Eugene A. Byrne as a result of injuries received Saturday in the game with Harvard.

    Later in the issue is a letter to the editor on this point:

    We are told that football promotes alertness in the brains of the players, teaches them to make quick decisions, compels them to implicit obedience to authority, and holds them to strict training while the season lasts. The finer the men physically the better for them, it is said, is the moral and spiritual development they gain from playing this particularly perilous game.

    There is another side which many women and a few men see with clear vision. Is this sport or any other worth the death of young men just at the time when they are stepping into maturity? A few days ago it was a midshipman in the navy who died of a fractured vertebrae, and this morning is is a cadet at West Point whose death is reported of a twisted spine. Apart from the heartache to parents, the wound to love and the disappointment to circles of kindred, can the Nation afford thus to sacrifice the flower of its youth? If these boys died as heroes die, in saving lives, as firemen sometimes die, in the rescue of victims from burning buildings; if they died on the battlefield in a good cause, there might be consolation for the bereaved and added glory to the Nation whose sons they are. Simply to die in an athletic contest that is shockingly brutal is a waste to the Nation and a stab to the home that is without excuse.

    And another story discusses ending a program:

    SCRANTON, Penn - Announcement was made to-day by the Faculty of St. Thomas de Aquinas College that the football schedule for the remainder of the season had been canceled, owing to the numerous fatal accidents which have occurred. It was also stated that the college would not be represented by another eleven until the game is modified.

    Posted by Craig Depken at 10:33 AM in Sports

    Hillary Clinton, Tea Partier!
    We (the United States) tax everything that moves and doesn’t move ...

    Source and context.

    Posted by E. Frank Stephenson at 12:09 AM in Politics

    November 02, 2009
    Wouldn't This Be Good News in Zandiland?

    In the news:

    If you're looking for good news on unemployment, Moodys.com chief economist Mark Zandi doesn't have it.

    Zandi told CBS' "The Early Show" Monday that the nation's near 10 percent unemployment rate will "stay there through this time next year."

    However, the economist said, "we're heading in the right direction."

    I can't help but wonder if Zandi considers unemployment approaching 10% to be the "heading in the right direction" since he said of unemployment benefits, "The bang for the buck is very high." By that logic, if we hit 15% unemployment we'll be rich, filthy rich.

    Okay, enough fun. The right direction bit probably refers to news such as this.

    Posted by E. Frank Stephenson at 11:50 PM in Economics

    Dispatches from Chavez's Bolivarian Paradise
    Residents of the Venezuelan capital face cuts in water service for as much as 48 hours per week, after the government imposed rationing to stem a 25 percent shortfall in the city's supply, officials said Monday.


    Others blame the shortage on poor government management of the country's water resources, while President Hugo Chavez faulted the excesses of capitalism.

    "What will the rich fill their swimming pools with?" the country's leftist leader asked recently.

    "With the water that is denied inhabitants in the poor neighborhoods," he said, blaming the lack of sufficient water on "capitalism -- a lack of feeling, a lack of humanity."

    The government recently created a ministry of electricity to help conserve the use of power, which also is in short supply.

    Source. Let's hope he hasn't nationalized the factory that makes deodorant.

    Posted by E. Frank Stephenson at 10:41 PM

    To quote the robot, Bender Bending Rodriguez,

    ... "We're boned."

    (No, not, "Bite my shiny metal *ss!")

    Consider that the CBO estimates the insurance provision component of Obamacare will cost over $1.1 trillion--by itself, without considering the unfunded expansion to Medicare and Medicaid, or considering the changes to the tax code...

    The CBO also estimates that cap & trade will increase federal spending and increase indirect taxes by $1.7 trillion...

    The CBO typically underestimtes the true cost of government programs...

    Consider that the card check bill will likely add a percentage point to the unemployment rate for so long as it is the law...

    Consider that I estimate that the concomitant decrease in economic freedom will cost us an additional $415 per person...

    Now consider Martin feldstein's estimate that the marginal excess burden of one dollar of Federal revenue exceeds one dollar; that is, in order to raise an extra $1 of revenue, the federal government imposes a second $1 of cost on the economy...

    "We're boned."

    Or, as my colleague Roy put it, "We're on the bullet train to Hell. We might as well try and enjoy the scenery."

    Posted by Noel Campbell at 08:49 PM

    Regime Uncertainty?

    Jittery Companies Stash Cash

    Posted by E. Frank Stephenson at 05:35 PM in Economics

    How about cap & trade?

    Oh, yeah... the Congressional Budget Office estimates that cap & trade will cost us about $1.7 TRILLION over the next ten years, if passed. And the CBO is somewhat known for underestimating the cost of government programs....

    Posted by Noel Campbell at 03:47 PM

    On the Employee Free Choice Act

    The Canadian experience with changes in union card-check rules provides an excellent basis for predicting the likely impact in the United States, should the Employee Free Choice Act pass. Prior to 1976, Canada employed a union certification process similar to the one envisioned in the card check act. After 1976, Canada began allowing its provinces to choose between card check procedures and secret ballots, like the current U.S. system. Currently half of Canada’s provinces and the majority of its workers become union-certified under a secret ballot process. Half of Canada’s provinces and a minority of its workers become union-certified under a card check process. Johnson (2004) suggests that roughly 20 percent of the difference between U.S. and Canadian unionization rates is attributable to the difference in union certification processes. In 2007, the difference between the nations’ unionization rate was around 18.2 percent. Twenty percent of that difference is 3.64 percentage points. If card-check certification has a similar impact in the United States as in Canada, the U.S. union density would rise from 12.1 percent to 15.74 percent, solely on the basis of the law and not on the basis of people’s preferences for unionization.

    These figures lead Anna Layne-Farrar, a director at LECG Consulting to estimate that, “passing the [card check act] would likely increase the U. S. unemployment rate and decrease U.S. job creation substantially. [For] every 3 percentage points gained in union membership through card checks… the following year’s unemployment rate is predicted to rise by 1 percentage point and job creation is predicted to fall by around 1.5 million jobs.” (Layne-Farrar: 1)

    She goes on to write that if the card check act were to increase the U.S. unionization rate from 12 percent to 15 percent, then unemployment would rise by an additional 1.5 million within the year. (Layne-Farrar, 2009)

    Posted by Noel Campbell at 03:44 PM

    November 01, 2009
    Drugs: Should They Be Legal or Illegal?

    Last week, I spoke to a class at Idlewild Presbyterian Church on the economics of drug prohibition. My notes are below the fold.

    Read More »

    Posted by Art Carden at 04:04 PM in Economics

    The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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