This important reminder from Shawn Regan, via Frank's phone: "Today is Coase's 100th b-day."

Shawn provides this link to Terry Anderson's blog post in honor of the occasion.

Terry's conclusion:

A Coasean view of the environment focuses on who owns the environment. When property rights are well defined and enforced, markets can work their magic. When property rights are not so clear, environmental entrepreneurs who clarify them do good for the environment while doing well for themselves.'

In honor of Coase’s 100th birthday, let’s replace externalities with entrepreneurship. The more we do so, the more we will see conflict replaced with cooperation and environmental rhetoric replaced with environmental improvement.

My son Kevin gives us the scoop on hipness: it's costly signals. Makes sense, though, 'cause EVERYTHING is about costly signals.

Check it out. Article starts on p. 110.

From the Dec. 25, 1910 NYT:

- Hustle is the yeast that causes a man to rise in the world.
- The man who marries a widow must expect her to be on to all the old excuses.
- Never trust a man who deceives himself.
- A dollar looks mighty small when you borrow it, but it looks ten times as big when you have to pay it back.

From the Dec. 25, 1910 NYT:

- The man who borrows trouble never gets out of debt.
- It is difficult to build up credit on counterfeit prosperity.
- Some people get out of tune with the world because they constantly harp on one string.

An amazing story from the Dec. 25, 1910 NYT:

St. Louis - Enraged because a steak he had ordered in a restaurant was not served promptly, John Bennett, aged 18 years, a newsboy, this afternoon drew a revolver and killed James Costas, an employe of the restaurant.

Bennett then excused himself to the other diners for the disturbance and walked out. He was arrested two blocks from the restaurant.

From the Dec. 25, 1910 NYT:

The project of a third major baseball league club for Chicago would be seriously affected by an ordinance passed by the City Council last Monday, designed to insure the safety of baseball crowds.

The ordinance passed almost unnoticed, but was brought into prominence by the stock yards fire Thursday, in which Fire Marshall Horan and twenty-three others were killed.

The amended section of the building ordinance forbids the erection within the fire limits of any wooden grandstand or bleachers with a seating capacity of more than 5,000. Wooden grand stands already in existence or under construction may be repaired or enlarged providing no part of the structure shall be within sixty feet of any other structure. [emphasis mine]

All wooden grandstands must be treated once each year with fire retarding paint or solution. Before a permit can be issued for the building of a new grandstand written consent must be obtained from the owners of a majority of the frontage on both sides of the street or streets bounding the structure.

Promoters of a third club in Chicago would, under the ordinance, be compelled to build a fireproof plant at large expense before playing could begin. [emphasis mine]

Actually, the last paragraph is not correct, I believe. Couldn't the third team play, but just in a park smaller than 5,000 people - or in a park with no grandstand. Of course, a team playing in such an environment would likely have a hard time competing and surviving.

Here's Ohio State Athletic Director Gene Smith's lame excuse for the OSU players who have been suspended for selling memorabilia to pay for tattoos:

"The time this occurred with these young men was a very tough time in our society," he said. "It's one of the toughest economic environments in our history."

Translation: the recession made it hard for players to afford tattoos. Nice.

The big fat cartel known as the NCAA also deserves a raspberry for its lame rationale for allowing the players to play in their upcoming bowl game instead of having the suspensions start immediately:

The NCAA did not suspend the players for the Sugar Bowl because the "student-athletes did not receive adequate rules education during the time period the violations occurred."

Of course, if the players really didn't receive adequate rules education then maybe they should not be suspended at all. Call me cynical, but this smells like a Sugar Bowl protection scheme.

From yesterday's WSJ:

Members of the Screen Actors Guild recently read in their health plan's newsletter that, beginning in January, almost 12,000 of its participants will lose access to treatment for mental-health and substance-abuse issues.

The guild's health plan represents one of a small number of unions, employers and insurers that are scrapping such benefits for their enrollees because of a 2008 law that requires that mental-health and substance-abuse benefits, if offered, be as robust as medical or surgical benefits. By dropping such coverage, providers can circumvent the requirements.

Others that have made the same move include the Plumbers Welfare Fund, representing about 3,500 members in the Chicago area, and Woodman's Food Market, a chain in Wisconsin with 13 stores and about 2,200 employees.

According to the Kaiser Family Foundation's 2010 Employer Health Benefits survey, about one-third of firms with more than 50 workers said they made changes in the benefits they offer in response to the law, and 5% of those said they dropped mental-health coverage.

Something that is often overlooked is that the optimal mix of products in the marketplace might include some lower quality options. Parity laws such as this one and occupational licensing laws that get rid of low quality providers limit consumer choices to high quality (or parity) or parity options or no coverage whatsoever.

Courtesy of Richard Winger's Ballot Access News, we now have the final national vote totals for the U.S. House of Representatives in the fall election. Here we go:

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A letter to the editor in the Dec. 21, 1910 NYT reminds us that the "Buy Nothing Day" folks are nothing new:

It is astonishing to see what lengths some people will go to in giving presents at Christmas. I am told they will borrow, go in debt, or even steal to gratify their desires. The ladies get the worst of it, of course. It requires great skill to manage the whole business successfully and economically. I was told by a lady friend not long ago that in her exchanges last Christmas one of her friends returned, through a mistake, the gift she had sent to her the year before.

File this in the "things never change drawer:" Complaints about over-indulgence in materialism during Christmas and the horrors of re-gifting are nothing new.

From the Dec. 21, 1910 NYT:

NORTH ADAMS, Mass. - After many years in the license column, this city, at the annual election to-day, swung over into the no-license ranks by a majority of 1 vote. The result was a general surprise for the city has so long had a "yes" majority that it was looked upon as "safe," and there had been little work done to get out the voters on either side.

The vote to-day was "yes" 1,478, "no" 1479. Last year there was a majority of 258 for license, the vote being yes 1,654 and no 1,396. Charles L. Frink, Republican, was elected Mayor. The City Government remains Republican.

Just to clarify, the city voted to go "dry," I am sure to the utter shock and amazement to the good folks who were in the bar while the polls were open.

And 90 years later the Simpsons will parody this:

Kent Brockman: "The controversial bill passed by only a single vote."

Marge: "You really should have voted, Homer."

Homer: "Oh, it wouldn't have made a difference."

More on Votes Decided by One

More on rational ignorance and non-voting

As we lawyers say, "res ipsa loquitur."

We take you to Minnesota, home of the snowed in Metrodome:

Backed by dump trucks and loaders, dozens of workers hoisting shovels and blowers attacked the snowdrifts covering the University of Minnesota's stadium Wednesday in a determined push to have it ready to replace the snow-damaged Metrodome for Monday night's game between the Vikings and Bears.

Wonder how long it will take the Krugster and the rest of the Keynesian crowd to start praising the job creating effects of the roof collapse or, better yet, to suggest creating more jobs by paying the folks to return the snow to the stadium after the game is played. Maybe Minnesotans should routinely damage the Metrodome roof every winter in order create dozens of jobs.

I tell my students that I think the single most misleading economic statistic is the bilateral trade balance between any two countries. An article in yesterday's WSJ makes (at least part of) my point:

Trade statistics in both countries consider the iPhone a Chinese export to the U.S., even though it is entirely designed and owned by a U.S. company, and is made largely of parts produced in several Asian and European countries. China's contribution is the last step—assembling and shipping the phones.

So the entire $178.96 estimated wholesale cost of the shipped phone is credited to China, even though the value of the work performed by the Chinese workers at Hon Hai Precision Industry Co. accounts for just 3.6%, or $6.50, of the total, the researchers calculated in a report published this month.

[snip]

"What we call 'Made in China' is indeed assembled in China, but what makes up the commercial value of the product comes from the numerous countries," Pascal Lamy, the director-general of the World Trade Organization, said in a speech in October. "The concept of country of origin for manufactured goods has gradually become obsolete."

Mr. Lamy said if trade statistics were adjusted to reflect the actual value contributed to a product by different countries, the size of the U.S. trade deficit with China—$226.88 billion, according to U.S. figures—would be cut in half.

ANNOUNCING THE 2011 YOUNG SCHOLARS PROGRAM

APEE has received a grant to help young faculty and graduate students attend our annual meeting April 10-12, 2011 in Nassau, Bahamas . These funds are designed to encourage younger scholars to consider the advantages of APEE membership. Funds are limited and a strong preference will be given to first time attendees, though second time attendees will remain eligible. People who have received multiple awards in the past should not expect to receive funding.

Successful applicants will have their registration fees reduced to $75 (normally $411) and be eligible for a stipend to help offset travel expenses. To apply applicants must supply us with the following: (1) a short essay (250-300 words) explaining why the applicant wishes to attend the meeting; (2) a short letter of reference, preferably from an APEE member or someone known to APEE indicating why support should be provided to the nominee, and (3) a brief letter from the applicant's department chair or graduate director indicating the level of departmental support that the applicant can expect for this trip. Some of the applicants may be on the program and preference will be given to these applications. The deadline for applying is January 21, 2011. Those selected will be notified within two weeks of that date. Successful applicants will be required to register for the conference (at the reduced rate of $75) by February 19, 2011.

Please send applications to Dr. Frank Stephenson at efstephenson@berry.edu . If you have questions, you may email him or call him at (706) 238-7878.

Lyrics and audio here. A nice tribute to one of the world's most underappreciated people.

From Bill Bryson's Shakespeare (p. 139):

Spectators [at The Blackfriars Theater] could, for an additional fee, sit on the stage--something not permitted at the Globe. With stage seating, audience members could show off their finery to maximum effect, and the practice was lucrative ...

I wonder if Elizabethan theaters also sold personal seat licenses.

From Bill Bryson's Shakespeare (p. 48):

The [London] authorities repeatedly issued edicts that new housing was not to be erected within three miles of City walls, under pain of demolition, but the fact that the edicts had so often to be renewed shows how little they were regarded. The one effect the laws did have was to discourage the erecting of buildings of quality outside City walls, since they might at any moment be condemned. Instead London became increasingly ringed with slums.

Sounds a bit like a certain Argentine property rights study, no?

Reading the paper from 100 years ago often makes me feel like I have run down a rabbit hole where sixes are sevens and some things are backwards but almost everything is sadly familiar. Take this op-ed from the Dec. 13, 1910 NYT:

As is well known, the Republicans think that the happiness and prosperity of the Nation are due to high tariff taxes, and the expenditure of an enormous surplus thus produced. The election gave signs that others than Republicans, and even many Republicans, have had enough of that kind of happiness, but the information has not yet extended to all those still exercising authority. The President's message appreciated the situation, and he sounded a note of warning against extravagance. When commenting upon this counsel of perfection we remarked that it would do well to await the action of Congress before taking it for granted that the President's counsel would be heeded. The clerks off the appropriation committees have completed their tabulations, and the figures indicate such an excess over last year's expenditures that there is talk of raising more money by new taxes.

Really? This is how far we have come in 100 years?

The Dec. 13, 1910 NYT reports that the Pennsylvania Railroad "is beginning to equip its 6,000 locomotives with an automatic stoker, which saves much of the work of firemen and practically disposes of the smoke problem." Sounds great, no? Innovation (perhaps pushed by local regulation concerning smoke) looks to kill a number of birds with one stone, but alas, the story goes on:

The automatic stoker feeds the coal from under the fire, thus causing a great saving of fuel. It is estimated that it saves 90 per cent. of the work of firemen, but this will not throw firemen out of work, because of the laws requiring two men in the cabs of locomotives.

At least the firemen had less work to do while they sat in the cab of the locomotive, with fewer distractions I trust there was a substantial reduction in railroad accidents.

[Updated: December 14 - see below the fold]

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Pete Calcagno's and my paper, "Divided We Vote," is now forthcoming at Public Choice.

Abstract: Divided government is known to correlate with limited government, but less is understood about the empirical conditions that lead to divided government. This paper estimates the determinants of continuous and categorical measures of divided government in an empirical macro political economy model using 30 years of data from the American states. Voters support more divided government after increased government spending per dollar of tax revenues, but more unified government after worsening incomes and unemployment rates. Only conditional support is found for the strategic-moderating theory (Alesina and Rosenthal 1996) that focuses purely on midterm cycles and split-ticket voting absent economic conditions.

You can download a freshly revised copy at SSRN.

Two articles... Op-ed about "end the DAFT!" in the south Florida Sun-Sentinel today.

Second, my friend Bill Lumaye acted all hinky when I called him a "Keynesian" on air on WPTF Monday for supporting temporary extensions of the Bush tax cuts. Bill, if you won't believe me, maybe you'll believe that lefty Charles Krauthammer. Short-term, uncertain duration "tax cuts" are not tax cuts at all, but deficit-financed spending.

It's just a crackpot Keynesian stimulus policy! Don't be fooled that it's the "Republican Way." To have an effect on economic activity, tax cuts have to be credibly permanent.

As I say in the Sun-Sentinel article: If you hate taxes, cut spending.

From this blog

Some interesting and some terrifying comments over at Reddit

A report in the Dec. 9, 1910 NYT provides an interesting contrast to today's campaign financing:

That the race is not always to the rich nor the battle to the well-heeled appears in the statements filed to-day with the clerk of the House of Representatives by the Republican and Democratic Congressional Committees, showing the expenses of each during the recent campaign. It cost the Democratic committee $27,771 to gain the next House, and the Republicans $74,373 to lose it. As Camp Clark observes, the Republicans seem, comparatively speaking, not to have "got their seed back."

The Democratic Committee started out in the campaign with $13,258 on hand; the Republicans had $47,030. Under the law the committees are allowed to show contributions of sums over $100 separately from those of lesser amount. The Republicans had fifty-two contributors who gave sums larger than $100, and Congressman McKinley, Chairman of the committee, himself gave $5,000. The Democrats had thirteen contributors who gave more than $100.

The folks over at eh.net provide the following conversions to 2009 dollars:

$27,771 = $647,000
$74,373 = $1,730,000
$13,258 = $309,000
$47,030 = $1,100,000
$100 = $2,330
$5,000 = $116,000

A letter to the editor in the Dec. 9, 1910 NYT provides something to think about:

In a recent editorial article you state: "Just now the Government at Washington, in seeking to direct too many affairs in widely scattered portions of the confederation of States, has permitted its own affairs to be managed extravagantly. It is to-day in as bad a condition as any of the States - in worse condition, even."

I agree with you that the Federal Government is seeking to direct too many affairs in all sections of the country, but cannot understand how, in the face of this fact, you favor the enactment of legislation creating a new Cabinet department, to be called the Department of Public Health, which, according to its advocates, would involve the employment of thousands of officials and the expenditure of millions of dollars.

If the Health Departments of the various States are inefficient, the remedy would seem to be to make them efficient, and not to make conditions more complicated by dividing authority between them and a National Department of Health.

Does THE TIMES believe that the remedy for too much Federal interference with State affairs is more paternalism on the part of the National Government?

Indeed.

My latest Forbes piece offers a Rothbardian take on a holiday classic.

I gave a ten-minute talk on Capitol Hill yesterday, at an event sponsored by FreedomWorks and the Atlas Economic Research Foundation, on "How the Fed Has Failed". Co-panelists included Judy Shelton, Rep. Mike Pence (R-IN), and Rep. Paul Ryan (R-WI). Nobody warned me in advance, but C-SPAN was there to cover it. Their video is here. I go on around the 46:00 mark. I was mostly summarizing, without nuance, my current working paper "Has the Fed Been a Failure?" with George Selgin and William Lastrapes. The paper is available here in the Cato Working Papers series .

An article in the Dec. 8, 1910 NYT reports that the Atchison, Topeka and Santa Fe Railroad was planning on ending the employment of smokers - and without any pressure from the government or insurance programs:

The managers of the great railway systems have long insisted that their employes abstain from the use of intoxicating liquors. Now it is announced that the Atchison, Topeka & Santa Fe Railroad is discharging those of its men whose "yellow fingers" betray their addiction to the habit of smoking cigarettes. Beginning with this month, no more cigarette smokers will be employed.

The report, just published by the Commissioner of Internal Revenue shows that tobacco use in all forms is largely increasing in this country, and that 7,000,000,000 cigarettes were smoked in the year ended last June, a billion more than in 1909. The Sante Fe Railroad does not prohibit the use of cigars or of pipes by its men. The company believes these are not so injurious as cigarettes. But we doubt whether it has any scientific confirmation of this belief...

The incredibly vivid presenter, Hans Rosling, does it again. Here he tells the story of global growth and stagnation (since 1800) in an entirely new way that incorporates his many past innovations. In my view, this 5 minute video would be useful to show in any economics class, undergraduate or grad, micro or macro, Austrian or neoclassical, whatever. Not to mention history, politics, law, philosophy, etc. Kudos to Dr. Rosling! HT Amy Willis, Steve Pejovich, Russ Roberts.

An elderly Manhattan woman living on Social Security was slapped with a $100 ticket -- just for throwing away a newspaper in a city trash can.

Delia Gluckin, 80, tossed the paper in a bin right outside her Inwood apartment building Sunday morning, only to be ambushed by an overzealous Department of Sanitation agent wielding a citation book.

"I was walking to take the subway downtown and dropped it in a trash can, and this lady in a blue uniform ran up to me," Gluckin told The Post.

"I thought she was going to ask for directions. She said, 'You just dropped garbage in there,' " according to Gluckin.

Source.

From an article in the Dec. 7, 1910 NYT:

MEMBERS OF BATHTUB TRUST ARE INDICTED

The trust was essentially 16 firms that controlled 85% of the market for bathtubs, sinks, and the sort. The cartel controlled about $10,000,000 in output per year. So, as far as anti-trust cases go, this one doesn't sound nearly as sexy as AT&T, IBM, or Microsoft.

Moreover, these are just indictments so it is not clear that anything will come of them anyway. However, it is interesting that there is a much more regular mention of anti-trust activity in the paper of old when compared to today. I wonder if that is a supply-side or demand-side issue.

From a letter to the editor in the Dec. 7, 1910 NYT:

A year or more ago there developed in this "Greatest City of a Great Country" a violent agitation looking to the prohibition by law of speculation in theatre tickets, but our city fathers were evidently unable to find a way out of the difficulty. I am informed that the City of Chicago has recently passed an ordinance compelling all theatre tickets to have the price printed on them, and making it a punishable offense to sell any tickets above this figure. This would seem to be an effectual remedy for the evil.

Wow - either the writer was extremely naive or us economists missed the boat on this one. I am fairly confident that printing the price of admission on tickets has done nothing to slow down the speculation on tickets.

I like the jab at the end - buying low and selling high is "evil"?

From an e-mail sent by the library on campus:

No more general collections fines! Beginning in the Spring semester students will no longer be charged late fees for general collections items checked out from Atkins Library. We will still enforce/collect fines for lost items, late Inter-Library Loan books, Course Reserves materials, recalled books and laptops.

I wonder if that means that there are very few books turned in late, or there are fewer books checked out of the library? I wonder how incentives will change and the implications. This sounds like a quasi-natural experiment of some sort, but I haven't the time at the moment to figure out how to take advantage of it - I'm thinking along the lines of moral hazard in the absence or reduction in penalties.

Anyone else experience something like this on their campus?

My co-author George Selgin talks to Russ Roberts about the Federal Reserve's historical record, based our paper "Has the Fed Been a Failure?"

Wow! I have never heard of eminent domain being exercised on transportable capital! Furthermore, thank goodness those Taunton (MA) city-council members know so much more about how capital can best be used than do markets! Wait a minute.... didn't we try this basic framework in Tito's Yugoslavia? Let's see how well that worked ou... never mind.

Is anyone surprised that Mr. Bernanke has announced the $600B of QE2 probably won't be enough, and more cash will be needed? My fave: while announcing further destabilization of the dollar, Mr. Ben jabs at China for defending its fixed exchange rate.

Tyler finds Deirdre McCloskey's latest convincing. I've read several versions of this in draft form and am about halfway through the published version. McCloskey's "Bourgeois Era" series is the kind of game-changing work we get into this business to do. As I read it, Bourgeois Dignity is basically her 1981/1996 piece on the development of Britain expanded to over several more millennia, the entire world, and some 500 pages. And she comes to what I think is a pretty convincing answer.

From the Dec. 3, 1910 NYT:

The football that was kicked and carried about Yale field by the Harvard and Yale players on Nov. 19 and which failed to cross the goal post bar at either end of the field is practically an outcast or a "dead ball" as far as the two universities are concerned, as neither team desires it as a trophy of the scoreless game.

The ball still reposes with Referee W. S. Langford of Trinity, although it has been a subject of a pleasing interchange of letters between Capt. Withington of Harvard and Capt. Daly of Yale. Capt. Withington wrote his Blue-legged opponent that in consideration of "your splendid and unexpected stand against us we feel that Yale ought to have the ball," and Capt. Daly replied that Yale could not accept the ball as a gift.

What would it be worth today?

From a short bit in the December 3, 1910 NYT:

JACKSON, La: A decided novelty in the way of newspaper publication is soon to be introduced at Jackson. It will be issued by inmates of the State Insane Asylum here. The paper will be called the Bulletin, and will be published "Every Once in a While."

From the NYT:

For the first time in 44 years, FIFA has created the bonanza of awarding two World Cups to eager countries in one day, with today’s announcement of the 2018 and 2022 hosts not only holding the hopes of nine nations in thrall today in Zurich, but also further complicating a process already snarled by tales of corruption.

Ladies and gents this means the FIFA honchos now have the opportunity for a bit of good old fashioned logrolling. Continues the NYT:

The United States is competing against bids from Qatar, Australia, Japan and South Korea. The 2018 event will go to England, Russia or joint bids by Portugal and Spain and the Netherlands and Belgium. The voters will be members of the 24-member FIFA executive committee, because two of those members have been barred from voting because of the latest corruption scandal.

[snip]

The Sunday Times of London also reported that it secretly filmed a former general secretary of FIFA, Michel Zen-Ruffinen, giving the names of officials who could be bribed. The paper reported that he also said the Portugal-Spain bid for 2018 and the Qatar bid for 2022 were colluding on a vote-exchange scheme to enhance their chances.

Just another illustration of the fact that the R-square value of public choice is high.

UPDATE: Apparently Russia and Qatar are the winners.

From the AJC:

Fewer than half of Americans have had an AIDS test since guidelines were expanded to include routine screening, according to a government report released Tuesday.

Last year, an estimated 45 percent of Americans ages 18 to 64 reported they've had an HIV test at least once in their lives, up from 40 percent in 2006. That's an increase of 11 million people to 83 million people who have ever been screened, the Centers for Disease Control and Prevention reported in Atlanta.

CDC director Dr. Thomas Frieden said the increase was significant and encouraging, while one outside expert called it disappointing.

"The numbers show that progress is possible. They also show how much more progress is needed," Frieden said during a teleconference.

In 2006, the CDC urged routine testing for everyone ages 13 to 64, even if they're not in high-risk groups. For those at high risk, including gay men and intravenous drug users, annual testing is recommended.

Routine testing incurs costs. For, say, a 44 year old who has been in a monogamous releationship for nearly two decades and has never had any relevant symptoms, there is simply no reason to use scarce resources on HIV tests.

Glenn Reynolds points to this item:

A new report from a trade association representing family-owned businesses fighting against the estate tax says a giant life insurance lobby is a key force pushing against repeal of the estate tax as the tax creates demand for their insurance.

The life insurance industry’s lobbying presence in D.C. is huge – larger than almost any other industry sector. According to the report, life insurers spent $10 million per month on lobbying in the first half of 2010. Only the pharmaceutical, electric utilities and oil and gas sectors, the heaviest of heavy hitters, spent more.

[snip]

One of the most outspoken voices urging a higher estate tax, Warren Buffet, owns six life insurance companies, the report says.

From the local fishwrapper:

A Silver Creek man was arrested Monday on a charge of tampering with evidence after he allegedly tried to hide a car involved in a wreck by covering it with dirt, reports stated.

According to the Floyd County Jail:

Thomas Raymond Vautour, 47, of 3113 Wax Road, left the scene of a wreck after he tried to force another car off the road at the intersection of Wax Road and Old Wax Road on Oct. 29.

He tried to hide the car by covering it in dirt behind his home.