President Obama: "If you like your health care plan, you can keep your health care plan."

Today's WSJ: McDonald's May Drop Health Plan

What makes a good university teacher? I don't necessarily agree with all of what Stigler has to say in this brief passage, but I do find it provocative.

The good teacher is a mysterious person, and yet we must know his character before we can prescribe his training. In my view, the good teacher is not distinguished by the breadth of his knowledge, by the lucidity of his exposition, or by the immediate reactions of his students. His fundamental task is not to dispense information, for in this role he is incomparably inferior to the written word. His task is to fan the spark of genuine intellectual curiosity and to instill the conscience of a scholar--to communicate the enormous adventure and the knightly conduct in the quest for knowledge... To this end, the fundamental requirements of the good teacher are competence (How can the incompetent be other than slovenly?) and intellectual vitality (How can the sedentary excite us to bold adventure?). These traits may be acquired by wide reading and deep reflection, without engaging in research and becoming a specialist. But it is an improbable event. It is improbable psychologically: it asks a man to have the energy to read widely and the intellectual power to think freshly, and yet to do no research. He is to acquire knowledge and construct ideas--and keep them a secret. It is improbable scientifically: it asks a man to be competent in his understanding of work that he has had no part in constructing. At lease in economics, this is almost impossible. There is no book that states the consensus of the profession on the ideas that are changing--and these are naturally the most interesting ideas. Only the man who has tried to improve the ideas will know their strengths and weaknesses. Scholarship is not a spectator sport.

The quotation is from Stigler's collection of essays on academia and society, The Intellectual and the Marketplace. Originally published in 1963, it was reprinted by Harvard U. Press in 1984, presumably due to heightened interest after he won the 1982 Nobel. As various product descriptions note, these largely normative and tongue-in-cheek essays are relatively rare in Stigler's body of work, which makes them more interesting to me. I wonder if the collection was reviewed by other luminaries when it originally came out? If you know of one, please let me know.

The sheriff arrived at the factory here to shut it down, part of a national enforcement drive against clothing manufacturers who violate the minimum wage. But women working on the factory floor — the supposed beneficiaries of the crackdown — clambered atop cutting tables and ironing boards to raise anguished cries against it.

“Why? Why?” shouted Nokuthula Masango, 25, after the authorities carted away bolts of gaily colored fabric.

She made just $36 a week, $21 less than the minimum wage, but needed the meager pay to help support a large extended family that includes her five unemployed siblings and their children.

Source.

So says a Massachusetts convenience store owner about New York's cigarette tax.

Related--A five-part series on Canada's black market cigarette economy.

Tip o' the cap to Angus over at Kids Prefer Cheese.

One way to pump up your GDP is to glaze a window, then break the windowpane in order to install another windowpane. Go, go, output! However, as Hazlitt and Bastiat told us long ago, breaking a window is destruction and not economic growth.

Keeping Hazlitt & Bastiat in mind, check out this link and follow the links in the story. It explains so much about China.

An AJC columnist favorably points to a CBO study claiming that making the Bush tax cuts permanent would harm GDP growth because large deficits would crowd out investment. CBO apparently acknowledges that maintaining the tax cuts would have some favorable supply side effects, but thinks that the crowding out problem would be larger.

Suppose, for the moment, that CBO is correct. It seems then that permanent spending increases would be even worse. They would have the crowding out effect, but they would not have the favorable supply side effects. Indeed, spending such as unemployment benefits has adverse supply side effects. However, Doug Elmendorf's blog post makes no mention of any adverse crowding out effects arsing from unemployment benefits or other so-called stimulus. I might need to dig deeper--I've only read the post not the linked documents--but I wonder if we have a bit of a double standard here. It reads as if CBO worries about deficits caused by tax cuts but not deficits caused by spending increases.

According to one John Duffield, and he has published his proof in the Real-World Economics Review here.

The opening salvo:

The doctrine of “comparative advantage” attributed to David Ricardo remains a staple in the apologetics of corporate globalization: If international trade only benefits rich and poor countries alike, its opponents are summarily indicted for plain misanthropy. In the nearly two centuries since its appearance, the Ricardian doctrine has been criticized by both Right and Left of the politico-economic spectrum, but critical consensus still awaits a definitive refutation of Comparative Advantage on its own terms. This essay presents just such a refutation.

A representative sample:

The unconvinced partisan of the modern textbook presentation of Comparative Advantage may protest that the elenchus above offered cannot be cogent since it posits an infinity of derived measures of intrasystemic productivity/skill differentials, each a function of the productivity/skill differential of the other system given as template or reference frame. Surely there must be but one true productivity/skill differential, accessible to direct observation, for any given economic system! --The naiveté of Cartesian univocity is historically compelling, but demanding a direct and univocal reading of a system’s productivity/skill/real income is as futile as demanding a universal “now” in protest against Einstein’s theory of the relativity of simultaneity, which declares that the question, Are these two events simultaneous or not? has no univocal answer.

DoL should start a new category called "WTF?"

Please do NOT read the whole thing.

One third of national income?

The annual cost of federal regulations in the United States increased to more than $1.75 trillion in 2008, a 3% real increase over five years, to about 14% of U.S. national income. This cost is in addition to the federal tax burden of 21%, for a combined cost of 35% of national income. One out of every three dollars earned in the U.S. goes to pay for or comply with federal laws and regulations, and new policies enacted in 2010 for health care and financial services will increase this burden.

For any of my Principles Micro students reading this for their blog assignment, consider the effect on the different cost curves of this increased regulation/compliance costs; how it would affect budget constraints/consumption decisions.

HT: Boortz

An article from Weekly Standard on our silly airline "regulation."

The BEST explanation, as I claim on the second page of the story, is that this might be explained by the idea of "costly signals": If we are doing all this idiotic sh*t, just think of all the smart stuff that we did first. That is, we have pushed the margin way out into diminishing returns.

That's not true, of course. In fact, any guy who wants to set his shoes or underwear on fire can just walk on the plane, even if his dad calls the authorities and says don't let him on. Our solution has been to "interview after the flight."

I'm afraid the reason that TSA makes us so miserable is simply because it can

While consuming Daniel Leonhard Purdy's nice anthology of 18th and 19th century writings on fashion, The Rise of Fashion (2004), I stumbled upon this passage by Herbert Spencer, highlighting one of the many intersections between fashion and politics.

As now existing, Fashion is a form of social regulation analogous to constitutional government as a form of political regulation: displaying, as it does, a compromise between governmental coercion and individual freedom. Just as, along with the transition from compulsory co-operation to voluntary co-operation in public action, there has been a growth of the representative agency serving to express the average volition; so has there been a growth of this indefinite aggregate of wealthy and cultured people, whose consensus of habits rules the private life of society at large. And it is observable in the one case as in the other, that this ever-changing compromise between restraint and freedom, tends towards increase of freedom. For while, on the average, governmental control of individual action decreases, there is a decrease in the rigidity of Fashion; as is shown by the greater latitude of private judgment exercised within certain vaguely marked limits.

Imitative, then, from the beginning, first of a superior's defects, and then, little by little, of other traits peculiar to him, Fashion has ever tended towards equalization. Serving to obscure, and eventually to obliterate, the marks of class distinction, it has favored the growth of individuality; and by so doing has aided in weakening Ceremonial, which implies subordination of the individual.

From "Fashion" by Herbert Spencer in The Principles of Sociology (1902).

Nudists and swingers at war in France's 'Naked City'

Previous post on Sarkozy's desire for a happiness adjusted GDP.

Bono's anti-poverty foundation ONE is under pressure to explain its lavish salaries after it was revealed that only a small percentage of money it raises reaches the needy. The non-profit organisation set up by the U2 frontman received almost £9.6m in donations in 2008 but handed out only £118,000 to good causes (1.2 per cent).

The figures published by the New York Post also show that £5.1m went towards paying salaries.

Source.

Blockbuster Files for Chapter 11 Protection

Quite a while ago, I prognosti-pontificated that the first member of the Obama Brain Trust to go would be "Little Timmy" Geithner. Looks like I was wrong, and it'll be Larry Summers. I guess I underestimated Summers' opportunity cost.

It'll be curious to see whether Summers' academic reputation takes a hit for his very close association with, permit me to use the phrase, the current economic fiasco. I wonder what would happen if I said that government unemployment insurance is a main contributor to long-term unemployment, and then became a chief architect of Obamanomics.

Courtesy of the Georgia state government:

UPDATE: Former student MH points me to another case of gubmint spelling. While we're at it, don't forget this example from the DOL archives.

A satirical video by some GMU students (including one who I taught at a seminar last summer) advocates just such a policy. Of course, it's not much of a stretch to imagine Geithner and Bernanke sending a bit of inflation our way to reduce the rapidly increasing real value of the federal debt.

From a WSJ piece on the DC bag tax (emphasis added):

"I am somewhat surprised by the extent to which people changed their behavior," said Christophe A.G. Tulou, acting director of the city Department of the Environment. "What we've done is created a market mechanism that gives people an incentive" not to use disposable bags.

Dude, a tax is not a market mechanism! This may be the greatest policy since sliced bread, but it is a government directive not a market mechanism. Wonder if he things the income tax is also a "market mechanism"?

KFC to pay coeds $500 to advertise bunless sandwich on buns

On the right set of buns, this could be a brilliant marketing strategy. On the other hand ...

Very funny clip--thanks to DR for sending it my way.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
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Larry Summers To Return to Harvard at Year's End

I don't know, but I expect we'll hear it from Krugman, DeLong, et al.:

Dutch Cabinet cuts spending in 2011; more to come

To think one could actually cut government spending. Those Dutch cabinet members must be smoking something.

From NPR:

Black-market cigarettes are costing many states hundreds of millions of dollars a year in lost tax revenue. And the lucrative, illicit trade is attracting violent criminal gangs that can be lethally ruthless.

The black market and the accompanying violence is caused entirely by the greedy hand of taxation.

Frank and I have a short "Primer on the Gross Receipts Tax" out with the Georgia Public Policy Foundation which was printed in the Gwinnett Gazette.

As taste:

So should Georgia’s tax study commission urge the state to adopt a gross receipts tax? At first, a gross receipts tax seems appealing from a base-broadening perspective. But it comes with a lack of transparency and with much arbitrariness in the tax burden across industries because of the tax pyramiding caused by business-to-business transactions. Hence, focusing on broadening the base of the traditional retail sales tax would be a superior option.

"How has the crisis changed the teaching of economics?"

The Economist asks and many working economics educators give short answers. It is difficult to find much to quibble with here because most of the answers are too broadly stated (must have been a word cap for answers). But I like the comments about economic history and Alesina's comment about "how" versus "what." Personally I think the last three years have made economics more intersting to teach, especially macro principles. Also, I think it's worth asking what the crisis has taught working economists about economics. I have learned a lot about bubbles. On the other hand, I think I know less about macro than before, perhaps only because I know what more of the tough questions are.

Medical marijuana growers in California have joined the Teamsters. Maybe some union goons will get the munchies instead of engaging in political beatings (example here).

I have a new edited book out on higher education called Doing More With Less: Making Colleges Work Better. It is available from the publisher and Amazon. Note that it is priced for the academic library market.

Table of contents below the fold.

Read More »

By James Gwartney, Joshua Hall, and Robert Lawson and contributions from Christopher J. Coyne, John W. Dawson, Horst Feldmann, John Levendis, Russell L. Stobel, and Edward Peter Stringham.

This year’s report shows that economic freedom experienced its first global downturn in a quarter century, with the average score falling to 6.67 in 2008 (the most recent year for which data is available) from 6.74 in 2007. Of the 123 countries with economic freedom rankings dating back to 1980, 88 (71.5 per cent) saw theirrankings decrease while only 35 (28.5 per cent) recorded increases.

Press release and full report available here.

It is with sadness that I belatedly report the passing of Peter Kennedy. While I did not know him personally, I will forever be in his debt as a consumer of his excellent A Guide to Econometrics. In addition, I found him to be an excellent and fair editor at the Journal of Economic Education.

Full announcement here.

UK Proposes All Paychecks Go to the State First (HT: Drudge)

I'm sure there are pols in the U.S., including the teleprompter reader in chief, who would like to do the same.

Hillsdale College requires all its students to take a course on the U.S. Constitution. "The Constitution Reader" for the course emphasizes source documents and an historical view. It has recently been put online and can be accessed by clicking here.

George Mason law school requires a course on The Founding as a prerequisite to the more traditional Con Law course. This wonderful innovation requires students "to read a large number of important original legal sources familiar to the founding generation, ranging from Magna Carta and the English Bill of Rights to the Federalist (and Anti-Federalist) Papers, along with constitutional debates at the Philadelphia Convention and in the First Congress. While a few law schools offer narrowly-focused elective classes dealing with constitutional history, none has a comprehensive, required course comparable to Constitutional Law: The Founding." For the syllabus, "online readings," and other course materials, click here.

(BTW, the new look on the GMU LEC website is pretty nifty!)

Rhodes College was ranked #1 among "Most Service-Minded Schools" by Newsweek. In my experience with Rhodes students, this isn't surprising. Many of the students I'm around on a daily basis exemplify a strong service ethic, and the institution has put a lot of resources into developing service programs. Our students' service to the broader community isn't always obvious as we send a lot of students into commercial sector occupations (like investment banking) that don't fit traditional definitions of "community service" but that nonetheless do a lot to make the world a much better place.

Congratulations to everyone in the Rhodes community. It's an honor to serve with you.

Report: Octo-Mom headed for welfare

Yesterday I received a copy of the latest issue of "The Law School Magazine," a publication of the NYU School of Law. I am not a graduate of that school. I assume I'm on their mailing list on the slim chance that I might be canvassed by US News & World Report in its annual law school ranking. At any rate, the NYU magazine is consistently among the most elaborate and expensive-looking of the many such publications I see. It is printed on expensive stock and is chock full of color photos; perfume advertising inserts would not look out of place.

All law schools engage in windy self-congratulation, and NYU is no exception. As I flipped through the mag yesterday, I saw story after story about faculty and alumni and current students of NYU and their many noble and important accomplishments. In the midst of all this hot air, the headline "The Libertarian Among Us" came as, well, a shock. Not only does the headline not laud its subject -- the indispensable Richard Epstein -- it can be read as evidence of a certain paranoia about having such a creature anywhere near the NYU law school. I mean, it sounds like the title of a '50s horror movie, doesn't it?

On the other hand, maybe I'm reading too much into this. Maybe the author of the profile wrote with his tongue (at least partly) in cheek. And, to give the author credit, both the title and the body of the article are nothing if not honest. Libertarians are exotic creatures in American law schools, alas. More's the pity.

A Mr. Donald Charles Unsworth of Rome died last week; here's part of his obituary:

The family respectfully asked in lieu of flowers that memorial contributions be made to the American Cancer Society or to the campaign of whoever is running against President Barack Obama in 2012.

Here's one contributor:

[Kennesaw State University] president Daniel Papp says a key component [of establishing a football team] will have to include a special student fee:

“We’re pretty sure it’s going to be large, but it needs to be very large. Tough time to ask, but I think our kids are going to be looking at it, recognizing that football is going to enhance the value of their degrees.”

I'm not aware of any evidence documenting that having college football enhances the value of degrees that students receive from an institution.

George Leef points to another, more pervasive, source of college price inflation.

UPDATE: Here's another hefty expense on something other than classrooms. The Medical College of Georgia is spending $2.9 million (with the largest share on signage) to change its name to Georgia Health Sciences University.

After Virginia Tech's loss to James Madison, there is no way Boise State will play for a national championship. There are a couple of bowl teams on their schedule, but with the exception of Oregon State, pretty much everyone left (Wyoming, New Mexico State, Toledo, San Jose State, LA Tech, Hawaii, Idaho, Fresno State, Nevada, and Utah State) is in the "teams the BCS elites schedule as glorified warm-ups" (and yes, Louisiana Tech beat Alabama not once but twice while I was an undergraduate, in 1997 and 1999). Is Boise State legit? Are the "a smurfed-out version of Ole Miss," as I heard or read a few weeks ago? Would they be a contender, or would they struggle to win six or seven games a year playing in a BCS conference?

There's no way to know right now, but there are a few ways to find out. First, Boise bashers should recognize that their scheduling woes aren't entirely their fault. It isn't as if they've turned down invitations to the Pac-10 or Big 12 so they can stay in the WAC (or move to the MWC, as they will do next year, I think). The BCS elites could silence them by agreeing to play them and beating them regularly.

At the same time, Boise should recognize that there's no way they are going to get a one-for-one home-and-home with an Alabama or a Texas. They're going to need to be flexible, and I've wondered if the best use of some of their BCS money might not be to offer to subsidize their own trips to play Alabama, Texas, USC, Nebraska, or Ohio State. Offer a three-for-one series with one or two of these schools: agree to play at Alabama three times in exchange for one return visit. Fair? Possibly not. Realistic? Also possibly not--even with a sweetheart deal, the Alabamas and Texases of the world stand to gain next to nothing by playing Boise State and stand to lose quite a lot. It's something that might be worth exploring, though.

The journal is published by Berry's business school and edited by one of my top students. The call for papers and other information is here.

The National Institute of Mental Health (NIMH), a division of the National Institutes of Health (NIH), spent $823,200 of economic stimulus funds in 2009 on a study by a UCLA research team to teach uncircumcised African men how to wash their genitals after having sex.

Source.

Chick-fil-a is usually our fast food restaurant of choice because we've never run into this problem. Or this one. I went to a Chick-fil-a on Saturday, and they forgot to give us straws and napkins, but the food was very fresh, it's one of the few times we've ever had trouble there, and it could be that I drove off before they could give us straws & napkins. To pick up on Levitt's question about the lousy service at KFC, why is it that Chick-fil-a does so well what so many other restaurants do so poorly?

Expect DeLong, Krugman, Reich, et al. to rail against this one:

Cuba to cut 500,000 from state payroll

ADDENDUM: George Will's latest column takes on Hoover and cash for clunkers.

It's not the case that my life is awful and that makes me a pessimist. No! I'm a pessimist, and that leads my life to be awful! ...or something like that. Here's gated link to an NBER abstract.

Dispositional optimism is a personality trait associated with individuals who believe, either rightly or wrongly, that in general good things tend to happen to them more often than bad things. Using a novel longitudinal data set that tracks the job search performance of MBA students, we show that dispositional optimists experience significantly better job search outcomes than pessimists with similar skills. During the job search process, they spend less effort searching and are offered jobs more quickly. They are choosier and are more likely to be promoted than others. Although we find optimists are more charismatic and are perceived by others to be more likely to succeed, these factors alone do not explain away the findings. Most of the effect of optimism on economic outcomes stems from the part that is not readily observed by one's peers.

So I didn't get the job at U Chicago because I'm a pessimist and not because I'm a moron. What a relief!

From the abstract of a new NBER WP by Atif Mian and Amir Sufi:

We examine the ability of the government to increase consumption by evaluating the impact of the 2009 “Cash for Clunkers” program on short and medium run auto purchases. Our empirical strategy exploits variation across U.S. cities in ex-ante exposure to the program as measured by the number of “clunkers” in the city as of the summer of 2008. We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.

French survey reports sex misery for most couples (HT: Instapundit)

Related post here.

1. My new column/blog "The Economic Imagination" has started at Forbes.com. My first entry: what can selling ponchos at the Alabama-Penn State game tell us about entrepreneurs and markets?

2. Bryan Caplan argues against some incrementalist-libertarian measures to improve policy, like the Social Security privatization attempt that took place under G.W. Bush. RTWT, but I think the financial crisis lends some support to his thesis. The narrative that has emerged is that the market got us into this mess, and the government has to get us out, to paraphrase Barney Frank. If you've ever heard of the Gramm-Leach-Bliley Act, it's probably because someone is holding it up as an example of how deregulation doesn't work.

I almost ran off the road this morning when I heard Marxist Place's Nancy Marshall Ginzer utter that "non-defense spending has already been pared down."

It's been pared down about as much as a morbidly obese person making a fifth pass at the buffet line. CBO data (here, p. 7) indicate that non-defense discretionary spending increased to $655.9B in 2009 from $306.1B in 2001. For the mathematically challenged, that's more than a doubling in less than a decade.

Nor has spending been "pared down" in 2010. CBO data (here, p. 2) indicate that non-defense and non-entitlement spending (labeled "Other Activities" in the table) is up 9.1% so far this year.

HT to Mike Hammock for "Marxist Place"

UPDATE: See also Chris Westley's take on "Marx's Place."

Via Drudge:

41 Obama White House aides owe the IRS $831,000 in back taxes

Today's WSJ:

White House Warns Insurers Against Rate Hikes

The Administration's ire was caused by the health insurers making plain what everyone knew already--that the whole bit about health reform "bending the cost curve downward" is pure baloney. From Tuesday's WSJ:

Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators.

Earlier this summer Governor David Paterson signed into law a $4.35-per-pack excise tax on cigarettes, making New York the highest-taxing state on cigarette purchases.

[snip]

But what they didn’t forecast was what has happened since the new tax went into effect at the beginning of July. Despite the hopes of law enforcement officials that smokers remain law abiding citizens, we have seen a rather dramatic increase in crimes related to the theft of individual packs and entire cartons of smokes.

A quick scan last week of police reports published by various weekly and daily newspapers throughout the state found a number of stories with headlines featuring phrases related to the theft of cigarettes. In fact, further investigation found dozens and dozens of cigarette-related crimes that began shortly after July 1, which by no coincidence is when the new tax went into effect.

Source

The President says that his critics "talk about me like a dog." I just want to be clear that I never talk about the President like I talk about my dog.

You know something I really hate? Those nagging, threatening, lying government commercials. The worst all seem to come from the National Highway Safety and Transit Authority, a division of the U.S. Department of Transportation. You know the ones, like these for drunk driving: "There is no where to hide. We will find you. Cops all across the country are cracking down like never before."

Or especially these for seat belt usage: "From coast to coast, cops are cracking down on seat belt violations. Buckley up day and night, or expect a ticket. It doesn't matter who you are or where you live..."

Obviously, I don't support drunk driving, and I always, as a matter of choice and comfort, wear a seat belt. But these ads, to me, summarize everything wrong with government. Leaving aside the basic nanny state issue of the government requiring us to wear seat belts (older folks will recall how we were assured over and over that failure to wear a seat belt would never become a primary offense), these are just nagging and irritating. I'm not sure why I should pay taxes so that my government can threaten me. And they're lying too - cops are not "cracking down" everywhere, and most drunk drivers and seat belt non-users don't get caught.

I just find something really distasteful in having the government use my tax dollars to run these lying, bullying, threatening ads about what a wonderful police state they have, so I'd better buckle my damn seatbelt.

In 2008 I wrote this piece on Transantiago, in Chile.

Just did this update.

English version of update.

(Oh, and I'm afraid I have to recognize: Cards suck, Reds rule. It's killin' me, Bob)

... is PERC's new blog. Look for posts from PERC scholars like Bobby McCormick and Wally Thurman and posts from my former student Shawn Regan. I'll add it to the DOL blogroll at some point.

Krugman writes, "And there’s a pretty good argument to be made that we are, in fact, starved for public goods in this country ...." He adds that "anyone who tells you that basic economics settles the question, that is says that devoting more resources to production of private goods is better, doesn’t understand Econ 101."

In the same post, Krugman writes that President Obama's $50 billion plan for more infrastructure spending is not enough. Two responses come to mind: (1) Krugman seems to have at least as much difficulty with Econ 101 as the next person. Most, if not all, infrastructure spending does not meet the standard definition of public goods (that is, being non-rival and non-excludable). Interstate highways, for example, are both rival and excludable. (2) Even if we cut Krugman some slack on public goods, he wants the same institution that squanders trillions while still managing to "starve" public goods provision to be in charge of more resources. Thanks, Paul, but I'll pass.

That's the finding of a study by Angus Deaton and Daniel Kahneman. I'm still skeptical of the entire enterprise of studying happiness--it reeks of interpersonal utility comparisons.

But, hey, maybe I should be more open minded. One bloke who makes $400,000 per year is bellyaching that people talk about him like a dog and another well paid chap writes that he wants to cry.

Ancient Nubians Made Antibiotic Beer

HT: Instapundit

Cool story about what the Fed actually owns as a result of buying up assets in its various bailouts.

I particularly like this story because, as a child, we always shopped at this mall on our way to Will Rogers World Airport before we left the United States for home abroad after spending summer vacation with family in the United States.

By the way, if you think the end of Maiden Lane was the end of the Fed acquiring assets like a shopping mall.... well, you must be much more optimistic than I am.

No doubt many of you say this link on Drudge. I felt compelled to link it anyway, just in case we needed more evidence that all things previously discredited have come back into fashion again. I mean, ration cards? Really? The best part, IMHO, is the Orwellian double-speak that these tangible pieces of evidence for the impossibility of socialist planning are called "Good Life Cards."

From Lawrence Reed:

Any good economist will tell you that as complementary factors of production, labor and capital are not only indispensable but hugely dependent upon each other as well.

Capital without labor means machines with no operators, or financial resources without the manpower to invest in. Labor without capital looks like Haiti or North Korea: plenty of people working but doing it with sticks instead of bulldozers, or starting a small enterprise with pocket change instead of a bank loan.

There may be no place in the world where there’s a shortage of labor but every inch of the planet is short of capital. There is no worker who couldn’t become more productive and better himself and society in the process if he had a more powerful labor-saving machine or a little more venture capital behind him. Capital can refer to either the tools of production or the funds that finance them. It ought to be abundantly clear that the vast improvement in standards of living over the past century is not explained by physical labor (we actually do less of that), but rather to the application of capital.

This is not class warfare. I’m not “taking sides” between labor and capital. I don’t see them as natural antagonists in spite of some people’s attempts to make them so. Don’t think of capital as something possessed and deployed only by bankers, the college-educated, the rich, or the elite. We workers of all income levels are “capital-ists” too—every time we save and invest, buy a share of stock, fix a machine, or start a business.

And yet, we have a “Labor Day” in America but not a “Capital Day.”

Like most Americans, I’ve traditionally celebrated labor on Labor Day weekend—not organized labor or compulsory labor unions, mind you, but the noble act of physical labor to produce the things we want and need. Nothing at all wrong about that! But I’m starting a new tradition this year that may never catch on and it doesn’t matter to me if it doesn’t. I’m doing it anyway: In odd-numbered years, I will celebrate Labor Day on the first Monday of September. In even-numbered years, I will celebrate what I’ll call Capital Day. This makes Monday, September 6, 2010 my first official Capital Day.

This weekend, I’ll be thinking about the remarkable achievements of inventors of labor-saving devices, the risk-taking venture capitalists who put their own money (not your tax money) on the line and the fact that nobody in America has to dig a ditch with a spoon or cut his lawn with a knife.

Happy Capital Day, America!

Related post here.

A short and impressionistic post over at LTW...

You always hear talking heads saying business hates uncertainty. But why don't we hear that politicians love it?

My favorit account: Amity Shlaes' book FORGOTTEN MAN. That Roosevelt, he knew from uncertainty.

My good friend Bruce Caldwell has some interesting comments on the place of "history of thought" in Econ.

Story here. So how is the California Senate spending its time? Debating (and ultimately rejecting) a ban on plastic bags. Of course the CA Senate might be more likely to make matters worse than better.

Last night President Obama took to the tube to congratulate himself for keeping his campaign promise to end combat in Iraq (never mind that 50,000 troops remain there and that they still carry firearms and wear body armor).

The president's crowing about keeping this promise is akin to a baseball player bragging about getting his batting average above the Mendoza line. There are lots of Obama campaign promises that have not been kept--closing Gitmo, not hiking taxes on people earning below $250k, posting bills on the internet for a few days before signing them--but I suppose he hopes we won't remember those.

One of the many supposed evils of the health care marketplace is the ambulatory surgery center (ASC), a facility which supposedly drains patients from traditional hospitals and constrains cross-subsidization of medical services. However, a new paper by Charles Courtemanche and Michael Plotzke in the Journal of Health Economics finds only very modest overlap between ASCs and surgery performed at traditional hospitals. The paper's abstract:

This paper estimates the effect of ambulatory surgical centers (ASCs) on hospital surgical volume using hospital and year fixed effects models with several robustness checks. We show that ASC entry only appears to influence a hospital's outpatient surgical volume if the facilities are within a few miles of each other. Even then, the average reduction in hospital volume is only 2–4%, which is not nearly large enough to offset the new procedures performed by an entering ASC. The effect is, however, stronger for large ASCs and the first ASCs to enter a market. Additionally, we find no evidence that entering ASCs reduce a hospital's inpatient surgical volume.

This finding is something to keep in mind when folks who restrain ASCs bleat about how their reforms expand access to health care.