Division of Labour: November 2011 Archives
November 30, 2011
McDonald's 1, Busybodies 0

A news item:

On Thursday, Dec. 1, the city's de facto ban of the Happy Meal commences. San Francisco has accomplished what the Hamburglar could not. Or has it?

In order to include a toy with a meal, restaurants must now comply with city-generated nutritional standards. Those are standards that even the "healthier" Happy Meals McDonald's introduced earlier this year don't come close to meeting. (As SF Weekly noted in January, the school lunches our children eat aren't healthy enough to qualify, either).

It turns out San Francisco has not entirely vanquished the Happy Meal as we know it. Come Dec. 1, you can still buy the Happy Meal. But it doesn't come with a toy. For that, you'll have to pay an extra 10 cents.

But it actually gets worse from here. Thanks to Supervisor Eric Mar's much-ballyhooed new law, parents browbeaten into supplementing their preteens' Happy Meal toy collections are now mandated to buy the Happy Meals.

Today and tomorrow mark the last days that put-upon parents can satiate their youngsters by simply throwing down $2.18 for a Happy Meal toy. But, thanks to the new law taking effect on Dec. 1, this is no longer permitted. Now, in order to have the privilege of making a 10-cent charitable donation in exchange for the toy, you must buy the Happy Meal. Hilariously, it appears Mar et al., in their desire to keep McDonald's from selling grease and fat to kids with the lure of a toy have now actually incentivized the purchase of that grease and fat -- when, beforehand, a put-upon parent could get out cheaper and healthier with just the damn toy.

The toys must cost McD's more than 10 cents apiece so my guess is that SF's next move will be to enact a predatory toy pricing law.

Posted by E. Frank Stephenson at 12:45 PM

November 16, 2011
Williams on Poverty

This Walter Williams column summarizes some interesting research about income and wealth. Regarding comparisons with the past, this paragraph is striking:


What about the concentration of wealth? In 1918, John D. Rockefeller's fortune accounted for more than half of 1 percent of total private wealth. To compile the same half of 1 percent of the total private wealth in the United States today, you'd have to combine the fortunes of Microsoft's Bill Gates ($59 billion) and New York Mayor Michael Bloomberg ($19 billion), but with 10 other multibillionaires in between.

Posted by Wilson Mixon at 01:00 PM in Economics

Incentives Matter: Piece Rate for Professors Edition

The abstract of a new paper in Economics Letters:

Using panel data, we demonstrate a 50% increase in research productivity following a dramatic increase in the piece rate paid for articles by a major Chinese University. The increased productivity comes exclusively from those who were already research active.
Posted by E. Frank Stephenson at 08:43 AM in Economics

November 15, 2011
Rent Seeking in Action: Pizza as a Vegetable Edition

From NPR:

When it comes to the politics of school lunch programs, the easy part is agreeing that kids should be eating more fruits and vegetables.

The hard part? Determining what counts as a vegetable. Take, for instance, the tomato sauce on pizza. As part of new nutrition standards proposed by the U.S. Department of Agriculture, schools would need to use about one-half cup of tomato paste on pizza in order for the sauce to count as a vegetable serving.

"A slice of pizza would literally be swimming in tomato paste," says Corey Henry of the American Frozen Food Institute. The group has lobbied Congress to change the provision. "No kid at school is going to eat a piece of pizza that's just drenched in tomato paste," he adds.

And lawmakers seem to agree. The House of Representatives' agriculture appropriations bill is out today, and it looks as if the bill will prevent the new rule on tomato paste from taking effect. It's a big score for the industry.

[snip]

It's not just the tomato sauce standard that lawmakers are rewriting. A provision meant to limit starchy vegetables, like french fries, also has had the potato lobbyists hard at work.

The House is expected to approve the measures when it votes on the agriculture appropriations bill later this week.

Posted by E. Frank Stephenson at 07:05 PM

On Organ Sales, Saving Lives, and Reducing Violence

Anthony Gregory's piece in the Atlantic looks to be worth a read.

Posted by E. Frank Stephenson at 11:50 AM

The Louisiana Branch of the Bastiat Family

In a recent post on modern day Bastiats, Don Boudreaux argues for Russ Roberts and Steve Landsburg. Both are fine choices, but Don overlooks another excellent candidate--himself. As good as both Roberts and Landsburg are--and I'm a big fan of both--Don is at least as fitting a choice. For example, Don's offer to stimulate Peter Morici's economy by torching his house and car brings to mind Bastiat's Petition of the Candlemakers.

Posted by E. Frank Stephenson at 11:48 AM

November 12, 2011
Operation Rathole

Today's WaPo looks at the history of failed government energy projects from Nixon forward. As a bonus, it treats the "success" of the government's investment in the transcontinental railroads. It's too much to wish that it could have gone even farther back and examined the checkered history of the canals.

Posted by Wilson Mixon at 02:02 PM in Economics

An Outrage, If Accurate

According to this post, the Michigan SEIU recieves about $6 million per year from caregivers who receive Medicaid. "For the SEIU, this makes them public employees and thus members of the union, which receives $30 out of the family's monthly Medicaid subsidy. The Michigan Quality Community Care Council (MQC3) deducts union dues on behalf of SEIU."

Posted by Wilson Mixon at 01:42 PM in Politics

November 11, 2011
Free Money

Grad students looking for some financial support (who isn't?) should apply for IHS's Humane Studies Fellowship program. Beyond financial assistance, IHS also offers several workshops for graduate students to help with career development. The program has been helpful for some of my former students--like all other IHS programs I recommend it highly. And a special offer for DOL readers: IHS will waive the application fee for applications received by December 1--just enter the code HSF25DoL on the last page of the application.

Posted by E. Frank Stephenson at 09:15 AM

November 09, 2011
A Quick Take on the 2011 Elections: There is no Quick Take

If one theme emerged from Tuesday's off-year mid-terms, it is that there is no obvious theme or narrative.

Let us start with ballot issues. Apparently voters have had enough of Republican efforts to make it harder to vote: Maine voters by a 60-40% margin overturned a law passed earlier this year that would have ended same day voter registration. Or apparently voters remain quite concerned about voter fraud and willing to impose modest restrictions on the ease of voting to address the issue despite protests from Democratic officials: Mississippians voted 62-38% in favor of a law requiring voter ID at the polls.

Also in Mississippi, the right to a thrashing when a pro-life amendment defining personhood as beginning at conception was crushed, 58 percent to 42 percent. But the state's voters also passed a law vastly restricting the use of eminant domain by a ridiculously lopsided 73 percent to 27 percent margin.

Meanwhile, Ohio voters swung back to the Democrats, delivering a crushing 61-39% defeat to a law, passed earlier this year by the Republican dominated legislature, trimming government employees collective bargaining rights. Or maybe they didn't -

Read More »

Posted by Brad Smith at 02:14 AM in Politics  ·  Comments (0)

November 05, 2011
It Wasn’t Government that Fixed Your Clock

This short essay by Larry Reed is worth rereading with tonight's time change.

Speaking of Larry Reed, he'll be speaking at Berry on Monday at 7 p.m. It'd be great to have some nearby alumni and friends join us.

Posted by E. Frank Stephenson at 05:22 PM

Econ 101 Fail

A few days ago, I heard a news report (I think it was of those top of the hour updates that one gets on NPR or on AM stations) say, "stocks [prices] are down on Wall Street as sellers outnumber buyers." This is hardly a startling insight, but it just so happens that every transaction requires both a buyer and a seller.

Posted by E. Frank Stephenson at 01:47 PM

We Are the 53 Percent

A recent offering from Mike Lester of the Rome News-Tribune:

Lester 53 Percent.jpg

Posted by E. Frank Stephenson at 01:33 PM

Moricinomics

Our favorite tv copier salesman is peddling more nonsense. To wit:

Oil and trade with China account for nearly the entire $550 billion trade deficit. This deficit is a tax on domestic demand that erases the benefits of tax cuts and stimulus spending.

This is a common fallacy--and one that Don Boudreaux has been especially vigorous in challenging. Trade deficits--be they for oil or stuff made in China--are merely the accounting flip side of net captal inflows, something that may increase domestic demand.

But suppose Americans didn't buy several hundred billions of dollars worth of oil from abroad (and ignore the resulting decreasing net capital inflow). We'd have to do without a key input for many goods and a commodity that is important for both commercial and personal transportation.

Prof. Morici might well reply that Americans could use the several hundred billion dollars that Americans spend on imported oil to purchase domestically produced energy. True perhaps, but the fact that Americans import the oil suggests that we cannot get a comparable quantity of domestically produced energy for similar prices. So we might well have eliminated Prof. Morici's dreaded "tax on domestic demand" by effectively levying a tax on actual consumption, namely by reducing the amount of energy that Americans actually consume.

It's worth noting, too, that one doesn't just increase domestic energy production by several hundred billion dollars simply by waving a magic wand. The workers and capital necessary for such an increase might well be redirected from other industries thereby reducing their output.

Posted by E. Frank Stephenson at 01:27 PM in Economics

November 03, 2011
"It's a walkout!"

No, not from H&H Bagel, from Greg Mankiw's intro econ class.

From CNN's take on it:

An Occupy Wall Street group at Harvard University staged a walk-out Wednesday afternoon of the introductory economics class of Greg Mankiw... Mankiw is the main professor in the Economics 10 class that has about 750 students... [A]bout 60 students participated in the walk-out.

"When I enter a classroom, I try to leave my politics at a door," Mankiw said. "The class is very conventional economics. Adam Smith is pretty non-controversial among economists. But it can seem pretty conservative the first time you hear it."

An open letter to Mankiw posted online by protest leaders explained that the walk-out was being done "to express our discontent with the bias inherent in this introductory economics course."

It objected to the attention given to the teachings of Adam Smith, the father of free market capitalism, at the expense of other economic theorists.

I wonder if Occupy folks think that introductory political science classes are too political. I've been in undergrad English classes where the political bias was more intense and less concealed than any of my econ classes. For Occupy sympathizers: economists usually dislike the minimum wage not because it is favored by Democrats, but because it is a distortionary price control. Economists also have no influence over whether the platforms of particular political parties are more or less in line with basic economic principles. In brief, it's not that free market economists agree with Republicans, it's that they agree with us (when it suits them).

Posted by Tim Shaughnessy at 11:58 AM in Economics

November 02, 2011
Truck, Barter, and Exchange

From NPR:

But not all candy is created equal, as all children will tell you. And increasingly American kids are getting an early lesson in economics — and business — by finding ways to trade their Halloween candy with friends and siblings.

Within seconds of returning home, the first group at the trading party spilled their pillow cases onto the floor and started making piles.

The decibel level in the candy-trading room rivaled that of Wall Street. The trading peaked about 20 minutes in as cross-room deals had Milk Duds flying overhead while a Jolly Rancher came the other way. Whoppers went for Smarties. Kit Kats went for a Twix. Charleston Chews, the pennies of the lot, didn't seem to move at all.

Posted by E. Frank Stephenson at 08:49 AM

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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