One night in jail was enough for Edwald Siebert. Rather than pay a fine of $10 and costs, assessed on a charge of being disorderly, Siebert, who is 60 years old and reputed to be worth $60,000, declared he would work it out in the county workhouse.

After spending last night in a cell, Siebert sent for his secretary and had him go to Justice Wangelin's court and pay $18.50, the fine and costs.

Actually, they want to entice newcomers and backsliders to their May crusade and they're using ever-rising gas pump prices as a clever draw. And one blessed teenager will drive away with a 2000 Ford Explorer.

From Sunday morning through Wednesday night, each time regulars or religious freshman stroll through the doors to attend a revival, they'll get another chance to win one of two $500 gas cards.

Teenagers will qualify for a drawing Tuesday night for one of 10 car keys. Then, one-by-one those fortunate few will take turns starting the SUV's engine to learn who gets to keep it.

"A lot of folks have gotten excited about this opportunity," head pastor Rusty Newman said.

For decades, churches have tried to entice wayward residents through their doors through spaghetti supers, revivals and summer camps. This a new twist was thought up by James Lee, the church's pastor for senior adults.

Source.

The upshot: If you really don't want to do something with your kid, think twice about doing it. If you're going to be a grump about it, he'd probably prefer not to do it either. It might sound like a convenient rationalization, but it's true.

A very useful insight, since Jacob Henry Carden is about three months in the offing.

2. We discussed the case for and against the gold standard, though I didn't give the case for the gold standard the attention it deserves. Lawrence H. White (my co-blogger here at DOL) has a very good Briefing Paper for the Cato Institute in which he deals with common objections to the gold standard. For a more detailed debate about banking in theory and practice, here are articles by J.G. Hulsmann and Professor White on fractional-reserve banking. Here's James Hamilton's aforementioned post on the gold standard and how it might have worked today. Hamilton makes the important point that any country which can go on the gold standard can also go off of it. I remain in Professor White's camp in my support of free-market money. If you want to write contracts payable in gold, silver, euros, yen, or potatoes, go right ahead. Given the weak dollar. I might argue that the best-performing asset in my portfolio is the extra euro-denominated airport shuttle pass I accidentally bought in Amsterdam last year. But I digress.

3. We also talked about Robert Higgs and his contributions to the theory of "wartime prosperity," and we concluded that the conventional "World War II ended the Great Depression" explanation is at best wanting, at worst false. Here is his re-assessment of "wartime prosperity." His discussion of "regime uncertainty" and the institutional conditions that created the microeconomic disaster that was the New Deal and prolonged the Depression is available here.

4. Finally, we discussed the Clinton/McCain gas tax controversy and why that makes me pessimistic about the ability of the political system to produce constructive policy. Here's Bryan Caplan's defense of the Clinton proposal and N. Gregory Mankiw's evaluation of why economists should be concerned. Finally, here's the Colbert Report on the proposed gas tax holiday (courtesy of Greg Mankiw).

5. In addition to what we talked about last night, the internet is filled with resources exploring the Great Depression and economic policy more broadly. The Ludwig von Mises Institute maintains an excellent online audio and video archive; here are several lectures on the Great Depression. Auburn University economist Roger W. Garrison is perhaps the leading exponent of what is called "capital-based macroeconomics" or "Austrian Business Cycle Theory." His website contains numerous resources (including several entertaining Powerpoint presentations) in which he shows how credit expansion leads to economic instability.

[W]ithin a year of the first edition of The New Industrial State, Intel was founded out of Fairchild Semiconductor. The 1970s saw the appearance of firms such as FedEx, Microsoft, Apple, and Home Depot, and the expansion of companies such as Target and Wal-Mart, all of which became fast-growing parts of an entrepreneurial economy.

[...]

Schumpeter's economic vision is now propagating around the world. While America is the primal site of entrepreneurial capitalism, as he knew it would be, the world has in many places absorbed Schumpeter's lessons better than we have. [...] While the State Department continues to propagate Galbraith's model of capitalism, prescribing the copying of our institutions (as if growth happens because we have a means of regulating security markets), those who want to import the secret of American capitalism alongside its fruits, quickly understand that the key to our economy is the culture of entrepreneurship.

[...]

As mandarins, Galbraith and Keynes shared a belief in the ability of enlightened administrators to manage economic affairs. Galbraith, as we have seen, took this faith to the doorstep of a planned economy. Keynes carried the belief with more insouciance, maintaining that once government increased its spending to stimulate demand, it would (and should) hold itself in check and pull back. Schumpeter skewered the shallowness of this belief in his review of The General Theory, pointing out with biting sarcasm that the link between the expanded government spending of the French ancien régime and the ensuing revolutionary misery and terror must have been only "a chance coincidence."

[...]

Perhaps the eradication of poverty -- underway for the first time in history, and when only two countries on earth are formally committed to socialism -- will serve to confirm his theory that growth happens at the hands of individual, risk-taking entrepreneurs, unmolested and lightly taxed by government, and that the more of them we have the better off everyone will be.

NB--One of the commenters on Matt's post points out that the time people were willing to stand in line for a cheap pizza indicates they value their time at $3-4 per hour. Something to keep in mind next time someone whines that raising the minimum wage is necessary to avoid exploiting workers. Maybe minimum wage advocates should advocate price floors for pizzas.

Howard Gendron stopped driving his 28-foot cabin cruiser on Rhode Island's Narragansett Bay two years ago because gas prices were up and his waterborne gas hog sent his fuel costs "out of sight," he says.

But the mechanic had to satisfy his love of water, he says, so he bought a 21-foot Sea Ray with better mileage. "We downsized," says Gendron, 44, of Warwick, R.I.

Even so, the smaller boat was no match for recent gas prices. "We're not even putting it in this year because of the cost of fuel," he says.

Boaters and jet-ski owners are feeling the pinch of rising gas prices. Some are trying to sell their boats. Others are changing their habits. Instead of gunning their engines at high speeds, they're slowing down or drifting.

They're shortening trips or just hanging out in marinas, says Scott Croft, spokesman for the 650,000-member Boat Owners Association of the United States. He calls himself the "poster child" for boaters' reaction to gas prices.

MarineMax, which calls itself the country's largest recreational boat retailer, saw same-store sales fall 28% in the quarter ending in March compared with the same quarter last year. Glenn Sandridge, vice president for marketing, says gas prices don't affect consumer decisions as much as concerns about the overall economy.

Gendron, who has been trying unsuccessfully to sell his cabin cruiser, says both of his boats will sit in his backyard this year. "You cannot give a boat away up here."

"We know...the general conditions in which what we call, somewhat misleadingly, an equilibrium will establish itself: but we never know what the particular prices or wages are which would exist if the market were to bring about such an equilibrium. We can merely say what the conditions are in which we can expect the market to establish prices and wages at which demand will equal supply. But we can never produce statistical information which would show how much the prevailing prices and wages deviate from those which would secure a continuous sale of the current supply of labour."

Here's Dilbert on a similar issue.

Wal-Mart got the word from city officials last month that Mayor Richard Daley doesn't want to risk a messy showdown with unions over Wal-Mart—like the big-box store battle of 2006—while Chicago is still in the running as a host city for the 2016 Olympics, according to people familiar with the matter. The International Olympic Committee is slated to make that decision in October 2009.

The curious taxsk of economics is to demonstrate to men how little they really know about what they imagine they can design.--The Fatal Conceit, p. 76

Steve offers further comments. I'm giving a talk this evening entitled "Lessons from the Great Depression," and I think I'll make use of Steve's favorite quote.

2. I took another step toward getting in touch with my inner Tyler Cowen today. Mike and I went to A-Tan's for lunch. I'm certainly no food expert, but we enjoyed it and will probably be back. The wonton soup was especially good, and Mike reported that the hot & sour soup was also excellent. Mike got right to the heart of the my failure to recognize the relevant conditional probabilities in our end-of-meal exchange over fortune cookies:

Me: (reading Mike's fortune) "A shooting star tonight brings good luck tomorrow." So does this mean that a shooting star will certainly appear tonight and then bring you good luck tomorrow, or is it conditional, saying that you will have good luck tomorrow if there's a shooting star tonight?

Mike: It's conditional. It's also conditional on fortune cookies not being a load of crap.

Here's the key idea--Indiana has an open primary but NC does not permit Republicans to vote in the Democrat primary (unaffiliated voters can). Moreover, NC had a contested primary for the GOP nomination for governor that would serve to keep NC Republicans in their own election.

So I estimated a regression model for the percent of the vote received by Hillary in NC and IN counties. RHS variables include the black percent of the population, the percent of the population between ages 16 & 24, the percent of the population over 65, the percent of the population that is male, and per capita income. The model also includes a dummy variable taking a value of 1 for IN counties--this variable should pick up any support for Hillary that is not explained by the other variables thereby making it a crude measure of the Rush effect.

So what do the results find? The Indiana dummy has a coefficient of 0.53 meaning that on average Hillary got a about one-half percentage point larger share in Indiana than would be explained by the control variables. The point estimate is not statistically significant (t = 0.43). The regressors perform as one would expect, except the percent male has no effect (either in magnitude or significance).

My student worker Katie compiled data for me and is compiling more as I type. Look for updates later.

BTW, Limbaugh has just come on. He is claiming credit for tilting IN to Hillary and playing audio to that effect from John Kerry. My results suggest otherwise.

Lets say you believe the weighted average of gas prices over the next 36,000 miles of 3 years to remain at $3.61 and you get that $355 in savings for each of the next 3 years. At a 5% discount rate, that is $967 in net present value. We can safely assume then that demand will push the price of a Chrysler buy or lease up around $1,000. However, applying the Winner's Curse from game theory, those who most overestimate the price of future gas prices will be the ones making the actual purchases by out-bidding all others, meaning they will likely pay more up-front than those who would just pay the market gas prices over the next 3 years.