Division of Labour: November 2012 Archives
November 30, 2012
Virginia Postrel on Copyright Law

Another fine offering from Virginia--read it here.

Posted by E. Frank Stephenson at 10:59 AM

November 29, 2012
Law of Demand: College Tuition Edition

Nice to know that at least one college understands the law of demand, and how it can be used to increase enrollment:

Belmont Abbey College dramatically cuts tuition rate:

Belmont Abbey College announced on Nov. 28 that it is reducing its annual tuition cost to $18,500 beginning in Fall 2013. This represents an almost $10,000 per year reduction in the College’s published tuition price for incoming freshmen and transfer students...

Similar-sized colleges have announced tuition resets over the past two years, largely due to declining enrollment numbers. However, Belmont Abbey’s reduction in tuition “sticker price” comes at a time of growth for the school, which had its highest traditional undergraduate enrollment ever in 2012. This fall also saw considerable capital improvements such as a new dining hall, fitness facility and renovated student center. Two new residence halls will open in Fall 2013 to accommodate the increasing number of resident students.

Posted by Tim Shaughnessy at 03:53 PM in Economics

November 28, 2012
The Welfare Trap

I saw this chart over on Instapundit, though it seems to leave out the Obamaphone subsidy. It reminds me of my first published paper.

People with high incomes respond to incentives too: Two-thirds of millionaires left Britain to avoid 50p tax rate

UPDATE (11/30): A reader points out that the diagram does not seem to account for non-cash compensation such as employer-provided medical insurance. Such compensation would not change the substance of the chart or of this post but it would change the figures a bit. Thanks for the feedback.

welfarecliff-600x449.jpg

Posted by E. Frank Stephenson at 11:11 AM

November 26, 2012
Incentives Matter: Unemployment Insurance Edition

The abstract of a new paper in the Journal of Monetary Economics:

Extensions of unemployment insurance (UI) benefits have been implemented in response to the Great Recession. This paper measures the effect of these extensions on the unemployment rate using a calibrated structural model featuring job search and consumption-saving decisions, skill depreciation, and UI eligibility. The ongoing UI benefit extensions are found to have raised the unemployment rate by 1.4 percentage points, which is about 30% of the observed increase since 2007. Moreover, the contribution of the UI benefit extensions to the elevated unemployment rate increased during 2009–2011; while the number of vacancies recovered, the successive extensions kept search intensity down.

This is a timely bit of research because the current UI extension lapses at the end of this year. Choosing not to renew it should help bring down joblessness.

Posted by E. Frank Stephenson at 11:12 AM

Demand Curves Are Downward Sloping: Rolling Stones Edition

Rolling Stones tickets remain unsold after price hike

Of course if demand is inelastic and there's no good way to price discriminate then having some unsold tickets may be revenue enhancing.

Posted by E. Frank Stephenson at 11:08 AM

More on Sandy as Stimulus

From some folks at Bloomberg--I wonder if they're spinning the disaster in a CYA effort for hizzoner or if they're just foolish enough to believe that disasters are welfare enhancing.

Posted by E. Frank Stephenson at 10:59 AM

New Dorian Electra Vid

From the maker of the "I'm in Love with Friedrich Hayek" video comes this offering on the Fed:

Posted by E. Frank Stephenson at 10:21 AM

New Heights in Polling Absurdity: The "Fiscal Cliff"

Here's an absurd poll: Pew asked respondents who they will blame if Congress and the President fail to reach an accord to avoid the so-called "fiscal cliff" come January. You've got to love how we now attach blame before we've seen the behavior of the participants that would allow us to attach blame.

Lots of possibilities here:
Who will you blame if Alabama loses to Georgia in the SEC Championship on Saturday?
Who will you blame if you go to see "Life of Pi" and don't like it for an as yet unknown reason?
Who will you blame if is the person elected president in 2016 turns out to be a space alien?
Who will you blame if your child grows up to be a jerk?

Oh, by the way: 53 percent of respondents say they will blame Republicans; 29 percent say they will blame President Obama. Gee, that means up to 18 percent are actually withholding judgment until they see who is actually to blame.

Posted by Brad Smith at 09:18 AM in Politics

November 13, 2012
Mike Lester on Free Stuff

Mike Lester's cartoon from Sunday's Rome News-Tribune:

Lester Freedom.jpg

Posted by E. Frank Stephenson at 01:37 PM

November 07, 2012
Libertarian views score well on ballot issues

In addition to candidate races up and down the ballot, there were many ballot issues in the states. Here, libertarian and generally limited government views did well. A big night for same-sex marriage and medical marijuana, and a bad one for Obamacare. A recap, below the fold:

Read More »

Posted by Brad Smith at 10:53 PM in Politics

Why are liberals so angry this morning?

I've been surprised today by how nasty, mean, angry, bitter, and vindictive so many liberals are this Wednesday, the day after a surprisingly easy and triumphant win at the polls. Below are just a few comments from the very first page of my Facebook feed early this morning:

Read More »

Posted by Brad Smith at 03:56 PM in Politics

Tuesday's Results: Executive Offices Down the Ballot

I presume you've heard something about the Presidential results. Here we'll spend a couple sentences on U.S. House and Senate, and then move down the ballot to see what happened in the states.

Here I'll focus on state executive offices and courts; I'll do state legislatures, and then review the fates of ballot issues, later as more info becomes available.

Read More »

Posted by Brad Smith at 02:12 PM in Politics

November 06, 2012
T. Boone Rentseeker Is Alive and Well

Yep, Pickens and some allies pushing natural gas cars are still trying to suckle up to the government subsidy teat. Previous post here.

BTW, what the #$%@ is Ron Paul doing supporting this sort of legislation?

Posted by E. Frank Stephenson at 02:46 PM

Broken Windows--They're Not Just For Hurricanes!

A headline in the Denver (must be dumb as a) Post: Waldo Canyon fire could bring economic benefits

And a snip:

The Waldo Canyon fire, as bad as it was, could give the Colorado Springs economy a significant boost over the next five years as homes are restored, rebuilt and refurnished.

Initial insurance claims for the contents and homes damaged, including 346 structures that were a total loss, are at about $353 million, said economist Tom Zwirlein, director of the Southern Colorado Economic Forum.

Of that amount, about $151 million could work its way into additional dollars spent in the El Paso County economy over the next five years, creating 760 net new jobs, said Zwirlein, who is also a professor of finance at the University of Colorado at Colorado Springs.

The calculations don't account for the lost productivity from the more than 32,000 people displaced in June, not to mention the dollars lost when businesses shuttered and tourists stayed away.

And they can't begin to put a value on the emotional trauma suffered or the two lives lost. But they do highlight how even disasters can generate unexpected opportunities as communities rebuild.

Emotional trauma, people displaced, businesses shuttered ... other than that, how was the play Mrs. Lincoln?

Of course, if the folks in Colorado really do think fires are economic bonanzas I'm sure Don Boudreaux will gladly extend the generous offer he made to our favorite Chinese photocopier pitchman.

Thanks to SR for the pointer.

Posted by E. Frank Stephenson at 02:21 PM

Election Day Ironies

1) We have a supposed separation of church and state, and the location where many people will vote today will be in a church.

2) We are voting to determine who will run our government, and the process of voting is run by government. On our local news last night, they said that an estimated 90 million people will vote today. I imagine that, on a given workday, at least 90 million people buy their lunch from somewhere, and they will not have to wait anywhere near as long in line as people will have to wait today to vote. Perhaps there is a lesson there in the efficiency of the private vs. public sector upon which people could reflect as they decide for whom to vote. They'll have plenty of time to do the reflecting.

Posted by Tim Shaughnessy at 10:54 AM in Politics

November 05, 2012
Election Day

I'll be voting for Gary Johnson. However, if I were the decisive voter (the premise of a recent film, "Swing Vote," that has several good econ/public choice clips) or even had the faintest probability of being the decisive voter, I'd pick Romney. Brad's recent post makes a good case for Romney over Obama as do others such as Richard Epstein. Beyond parts of the record such as job creation (not that presidents really create jobs) or Obamacare, I think Obama's low down campaign (the war on women baloney, the accusation that Bain/Romney caused a woman to die from cancer, etc.) displays a fundamental lack of decency. Politics isn't bean bag, as the saying goes, but the Obama campaign strikes me as particularly sleazy.

Although I prefer Romney over Obama, I predict a narrow Obama win, perhaps somewhere between 270 and 285 electoral votes. I'm playing a hunch more than applying any sort of analysis. Romney seems to have pulled close but just can't seem to get over the hump in certain key states (Ohio, maybe VA and PA too).

Beyond elective offices, I'm interested in how a few ballot measures fare. Michigan has an important vote on collective bargaining rights, California has a tax increase referendum, and here in Georgia we're voting a measure that would allow the state to create charter schools in counties where the local school boards are blocking charters.

Posted by E. Frank Stephenson at 02:30 PM

November 04, 2012
Down Ballot: State Legislatures

This post reviews state legislature makeups and possible changes in 2012. Scroll down the page for prior posts governors and lieutenant governors, attorneys general, secretaries of state, and other mayors and other state offices.

Entering election day 2012, Republicans control 59 state legislative chambers, Democrats 36. Three are tied, and one state, Nebraska has a non-partisan, unicameral legislature (although in fact, it is heavily Republican). Radical changes this year are unlikely, but here is the basic rundown:

Read More »

Posted by Brad Smith at 11:11 PM in Politics

Way down the ballot: Treasurers, Auditors, and other people and offices you never heard of

Earlier entries - scroll down the page- have reviewed Governors, Lt. Governors, Aspiring Governors (aka Attorney Generals) and Secretary of State races for 2012. This post includes a review of miscellaneous state offices up for election in 2012, including Treasurer, Auditor, and similar positions.

Read More »

Posted by Brad Smith at 10:20 AM in Politics

November 03, 2012
Price Gouging Laws in Action

Reason.tv chronicles the consequences of laws against so-called price gouging--aka price controls--in the wake of Hurricane Sandy. It's a shame so many folks have to be victimized first by the storm and then by economically illiterate politicians.

Posted by E. Frank Stephenson at 12:58 PM

November 02, 2012
Downticket: Secretaries of State

This is a third posting on down ticket races this year, for hard-core junkies who want to know what's going on around the country beyond the presidential and U.S. House and Senate races. Today we're focused on Secretaries of State.

Secretary of State is traditionally a boring position dealing with corporate filings and the like, but in the last decade it has become a highly fought over office because, in most states, the Secretary is the state's highest election official.

47 states have such an office: 28 are held by Republicans, 19 by Democrats.

Read More »

Posted by Brad Smith at 11:45 AM in Politics

May the Low Marginal Tax Rate Be With You

From the WSJ's marketwatch blog:

That Lucas struck a deal in 2012 may be no accident either, advisers say. Long-term capital gains tax from the sale of assets held more than one year are taxed at a rate of 15% for investors in the 25% income tax bracket or above (Lucas’s level), and zero for investors in the 10% or 15% bracket. Those rates are set to jump to 20% and 10%, respectively in January. “He probably wanted to take advantage of the lower rate on long-term capital gain while it’s certain,” says Bill Smith, managing director at CBIZ MHM, a national accounting and professional services provider.
Posted by E. Frank Stephenson at 08:18 AM

November 01, 2012
Down Ticket: State Attorney General Races

In this post, I review 2012 races for state Attorney General positions.

State races for Attorney General have gained increased attention in recent years, not only because of the power that state attorneys general wield, but because these high profile positions are excellent stepping stones to higher office (the political joke, of course, is that "AG" is short for "Aspiring Governor.") Unfortunately, AG is increasingly a position where demogogues and abusers of power congregate to build reputations as "crime fighters" and "protectors of consumers."

Currently, each major party holds 25 AG's offices. Republicans lead 22-21 among AGs in elected office - 4 Democrats and 3 Republicans are in states which fill the position through appointment by governors, state legislatures, or the state supreme court. Ten seats are up for election, 6 held by Democrats and 4 by Republicans.

Here's the rundown on these 10 seats, in alphabetical order:

Read More »

Posted by Brad Smith at 11:00 PM in Politics

2012 Elections: Governors

Political focus this time of year is heavily on the presidential race, and less so on U.S. Senate and House, with virtually no attention given to lower races and ballot issues. For political junkies, in the next few days I'll review of a few of those lower profile races. Nothing fancy, just the basics.

We'll start today with governors and lieutenant governors.

Read More »

Posted by Brad Smith at 08:02 PM in Politics

Incentives Matter: Looming Tax Hike Edition

Looming Tax Hike Motivates Owners to Sell

Posted by E. Frank Stephenson at 01:16 PM

Should Voting Be Mandatory?

Posted by E. Frank Stephenson at 12:47 PM

Shifting the Median Voter

Argentina Lowers Voting Age as Fernandez Tries to Regain Footing

And the votes have been bought in advance:

Fernandez has courted young voters since being elected in 2007, naming members of the government-aligned “La Campora” youth group to top positions and tapping funds from the social security agency to provide students with free laptops.

Of course the way Argentina is being misgoverned, the age will probably need to drop to 14 in time for the subsequent election.

Posted by E. Frank Stephenson at 12:45 PM

Crazy Barry's Car Lot

Funny vid but sad reality.

Posted by E. Frank Stephenson at 08:35 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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