Division of Labour: September 2012 Archives
September 27, 2012
PETA Up to Its Old Tricks?

Elgin man charged after 60 dead cats found in van

Explanation for PETA reference here.

Posted by E. Frank Stephenson at 11:16 AM

September 24, 2012
Is Money Speech?

Posted by E. Frank Stephenson at 04:10 PM

Owner puts house on market 'because the neighbor's an a**hole'

Ummm ... wouldn't it be better to keep the tidbit about the charming neighbor quiet until after selling the house?

Source

Posted by E. Frank Stephenson at 04:06 PM

September 21, 2012
On Shared Sacrifice, We Finally Have a Taker

Nearly a decade ago, one of my students and I wrote an open letter to Charlie Rangel, then chairman of the House Ways and Means committee. At the time Rangel was calling for the reinstatement of the draft based on the notion of shared sacrifice. In our letter, we encouraged him to apply the principle to taxation by calling for everyone to pay at least a nominal income tax and for that income tax to increase for everyone anytime some other tax hike (e.g., Obama's proposal to tax folks making over $200,000) is enacted.

All these years later we now have a taker, though it is not Rep. Rangel. Senate candidate Tim Kaine (Democrat, VA) says, "I Would Be Open to a Proposal to Have Some Minimum Tax Level for Everyone." I doubt such a tax would completely eliminate pols promising goodies for many at the expense of the few (e.g., the top 1%), but it might put a dent in the redistributionist bent of current public policy.

Posted by E. Frank Stephenson at 08:16 AM

September 19, 2012
Free Falling

Jim Gwartney, Josh Hall, and Bob Lawson are out with this year's edition of the Economic Freedom of the World report. It doesn't come as a great surprise, of course, but one of the striking findings is the big drop of the United States over the past decade. Here's a chart showing the U.S. and some other countries--at least we're not Argentina (source):

Econ Freedom Table.jpg

Posted by E. Frank Stephenson at 08:22 AM

Another Dose of Hope and Change

80 million hours needed to tackle Obamacare tax rules

Of course if one puts it in per capita terms the 80 million hours works out to about 15 minutes per person. That makes me wonder of the 80 million is a conservative estimate.

Posted by E. Frank Stephenson at 08:09 AM

September 17, 2012
Coase ... Where Have I Heard That Name Before?

From the WSJ:

Small television stations face a tougher time than most competing with cable and the Web. But some investors are snapping them up, betting on a surge in the value of their airwaves.

Investors including Michael Dell's MSD Capital LP and Fortress Investment Group LLC are buying small, sometimes bankrupt stations in major markets including Los Angeles, New York and Seattle, where the demand for airwaves, or spectrum, is at a particular premium.

The investors are jumping into the market ahead of a so-called incentive auction hosted by the Federal Communications Commission, which plans to reclaim spectrum for use by wireless phone companies and other bidders.

The auction is part of a broader rearrangement of U.S. airwaves by the FCC aimed at addressing consumers' seemingly voracious appetite for wireless broadband services.

While the private-equity funds are buying stations for as little as several million dollars, observers say their value could be many times higher once the FCC auction gets under way.

So if property rights are clearly assigned and transactions costs are low, resources will tend to move to higher valued uses. Who knew?

Posted by E. Frank Stephenson at 08:15 AM

Of Course He Is, It's Election Season

Straight from the playbook of campaign season stunts:

AP sources: Obama launching China trade case

Not that Romney's much better ...

Posted by E. Frank Stephenson at 08:10 AM

September 10, 2012
Should the Government Track Your Political Activity?

That's the important question that Brad Smith poses in this short vid.

Posted by E. Frank Stephenson at 03:10 PM

Bailing Out Greece Is One Thing But This Is Serious ...
Beer brewers in Munich may not be able to supply enough beer for the annual Oktoberfest beer festival, local newspaper Munich TZ reported, but the problem is not a lack of the alcoholic beverage.

Instead, Heiner Müller, manager at the Paulaner and Hacker-Pschorr brewery told TZ, brewers do not have enough bottles to supply the festival. He called on drinkers to return their empties.

Source (pointer from Instapundit).

Posted by E. Frank Stephenson at 11:09 AM

September 08, 2012
David Leonhardt Gets a Minimum Wage Primer ...

... from Tim Worstall. Tim should keep it handy--plenty of other journos and pols could use the primer too.

Posted by E. Frank Stephenson at 11:49 AM

Munger Vid on Majority Rule

First the Keynes/Hayek vids, now this. Hollywood walk of fame here he comes!

Posted by E. Frank Stephenson at 11:38 AM

September 07, 2012
Blame VA or Blame NY?

Peter Galuszka in the WaPo:

Somehow it seems as quaint as a black-and-white crime movie from the 1950s. A van pulls up to a country store in the dark of night. A gang of men led by gravel-voiced Robert Mitchum loads up on cartons of cigarettes and sets off for the big city Up North, where they can sell the bootleg smokes at a huge profit.

That scene describes Virginia today. The state Crime Commission reported this week that Virginia’s ultra-low taxes on cigarettes are making their illegal shipment to high-tax states more lucrative than cocaine, heroin, marijuana or guns, according to a State Police source.

I wonder if maybe, just maybe it's dawned on Galuszka that NY and its ultra high cigarette taxes (~$6 per pack vs. $0.30 in VA) is at least as much responsible for the price differential that makes cigarette smuggling attractive. Arguably NY deserves more blame, after all it is NY that has been changing its cigarette prices in recent years.

Posted by E. Frank Stephenson at 12:17 PM

I Bet He Was Cheerful Before the Tumble Too

A news item:

Bob Rubin, Treasury secretary in the Clinton administration, is safe after a fall into the Ritz-Carlton pool. Rubin, in town for the Democratic National Convention, took the tumble around 8 p.m. Wednesday, shortly after a happy hour party commenced next to the pool. Fellow guests helped the secretary, clad in a suit, out of the pool.

According to reports, Rubin was cheerful after the tumble.

Posted by E. Frank Stephenson at 12:08 PM

September 04, 2012
Some Reading for Monsieur Krugman

Part of the abstract of a new NBER WP:

This paper studies whether fiscal consolidations cause large output losses. We find that it matters crucially how the fiscal correction occurs. Adjustments based upon spending cuts are much less costly in terms of output losses than tax-based ones. Spending-based adjustments have been associated with mild and short-lived recessions, in many cases with no recession at all. Tax-based adjustments have been associated with prolonged and deep recessions. The difference cannot be explained by different monetary policies during the two types of fiscal adjustments, and is mainly due to the different response of private investment.
Posted by E. Frank Stephenson at 08:05 AM

September 03, 2012
Bootleggers & Baptists: Missouri Cigarette Tax Edition

Well, well, well look what we have here--the American Cancer Society and at least one large cigarette maker are in agreement about a cigarette tax hike ballot measure in Missouri. What's the rub? In addition to raising Missouri's cigarette tax by 73 cents per pack, it would also extend the Master Settlement Agreement to small cigarette makers that currently enjoy a pricing advantage over Big Tobacco in Missouri.

Some snips from the article are below the fold.

Read More »

Posted by E. Frank Stephenson at 03:14 PM

A Happiness-Adjusted GDP Recession?

Here's a news headline:

French pessimism nears all-time high

Previous posts on former French President Sarkozy and his advocacy of a measure of happiness adjusted GDP are here.

Posted by E. Frank Stephenson at 02:59 PM

David Henderson to Speak at Berry

We are pleased that David Henderson of the Naval Postgraduate School and Econlog will lead off this fall's economics department speaker series. David will be giving a talk titled "The Role of Economists in Ending the Draft" at 7:30 p.m. on September 11. Nearby friends, former students, etc. are welcome to join us.

Looking ahead, Berry grad and IJ attorney Dan Alban will be here in late October and we have an invitation out to a third speaker. Stay tuned for dates/details.

Posted by E. Frank Stephenson at 02:00 PM

Yuppie 911--Kayaking Movie Star Edition

Actor Crowe gets lift after getting lost kayaking

Back story on Yuppie 911 here.

Posted by E. Frank Stephenson at 01:55 PM

September 01, 2012
Out of Touch

The Wall Street Journal has a lengthy article (subscription required) today about President Obama, his efforts to win a second term, and some of his reflections on term one.

It is an interesting but very disappointing read, because it indicates that if Obama wins a second term, we can expect no change, no greater effort to compromise with Republicans (who will likely control both houses of Congress), nothing but an endless propaganda war.

Although recognizing that the President has done a poor job at such crucial political tasks as thanking those who help him, getting to know and socialize with members of Congress, and nurturing personal relationships and trust with lawmakers (for example, the President never opens up his golf foursome to lawmakers, nor has he ever invited any to Camp David, standard gestures for most Presidents), aides and advisors quoted in the piece make clear in the article that they blame all this on Republicans, and that this is not only their view, but the President's.

Moreover, it is clear that he really does see the major problem of his first term was not "communicating a narrative," and thinks he was "slow" to embrace the role of "national counselor." Aides say that "Obama has pledged to not again get bogged down in legislative sausage making but to emphasize connecting with voters."

This seems positively absurd. One of the biggest problems with the first term Obama administration was his decision to outsource his legislation, taking a hands-off role in the process. Indeed his "hands off approach to key legislation was noted repeatedly in the press:

- June 22, 2009: CBS News notes Obama's "hands off" approach to healthcare and notes that "from the diaries of Daily Kos to the party establishment, Democrats say they want a sharper message from a president who has tried not getting too involved."
- June 28, 2009: USA Today commented on the President's "hands-off approach to accomplishing his legislative goals. He prefers to provide broad policy principles on his priorities, leaving the details to Congress."
- July 9, 2009: Newsweek: "The prime-time event was supposed to mark an end to Obama's hands-off approach to the sausage-making on Capitol Hill, but he is still floating above the fray."
- Sep. 6, 2009: Philadelphia Inquirer: "President Obama's hands-off approach [to health care reform] hasn't worked... "
- Oct. 9, 2009: Scripps (supporting health care reform) editorialized that Obama had been "too hands off."
- Oct 24, 2009: The Hill, "[Rep. Frank] Pallone [D. N.J., Chairman of House Commerce Committee Healthcare subcommittee] suggested that Obama’s hands-off approach to the details of healthcare reform legislation has been the right one."
- Jan. 24, 2010: New York Times: "Obama's hands-off approach in the Senate stalled the climate debate when the President had the most political capital ..."
- Mar. 29, 2012: Politico, discussing Obama's failure to get cap and trade enacted: "Going back to Day One, Obama never turned his campaign proposals into formal legislative text, leaving lawmakers to shoulder the load."

We could go on ( a Google search for "Obama hands off legislation" limited to his first 20 months in office yields over 10,000 stories), but you get the picture.

Meanwhile, few presidents have spent more time jawboning the American public on issues. According to CBS News, in his first 12 months in office, Obama gave public "speeches, comments, or remarks" 411 times (including 178 using a teleprompter, suggesting longer speeches at least every other day), and gave 158 interviews, far more than any of his predecessors. He also did 28 fund raisers and 7 political rallies - in 2009 and the first three weeks of 2010 alone! Add in 13 signing ceremonies, and you see an image of a president who did little but talk in his first year in office.

It's an old but largely accurate canard that second presidential terms are almost never better than the first. It appears that the main thing Obama has learned from his first term is that he needs to be less interested in governing, and more interested in politicking.

It is hard to see any good that can come from a second Obama term.

Posted by Brad Smith at 05:37 PM in Politics

DOLers on Franking

My colleague Melissa Yeoh, our student Tyler Edwards, and I had a paper on congressional franking published in a recent edition of Public Finance Review.

Apparently (feeble? great?) minds think alike because Josh Hall, Todd Nesbit, and Ricky Thorson also have a paper on franking that has been published in the Journal of Applied Economics and Policy.

Posted by E. Frank Stephenson at 10:09 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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