http://divisionoflabour.com/ en-us efstephenson@berry.edu 2012-05-14T14:17:11-05:00 hourly 1 2000-01-01T12:00+00:00 http://divisionoflabour.com/archives/2012_05.php In searching for previous work related to one of my current projects, I came across Mike Maloney and Harold Mulherin's "The complexity of price discovery in an efficient market: the stock market reaction to the Challenger crash" published in the Journal of Corporate Finance. Here's the abstract: We provide evidence on the speed and accuracy of price discovery by studying stock returns and trading volume surrounding the crash of the space shuttle Challenger. While the event was widely observed, it took several months for an esteemed panel to determine which of the mechanical components failed during the launch. By contrast, in the period immediately following the crash, securities trading in the four main shuttle contractors seemingly singled out the firm that manufactured the faulty component. We show that price discovery occurred without large trading profits and that much of the price discovery occurred during a trading halt of the firm responsible for the faulty component. Finally, although we document what are arguably quick and accurate movements of the market, we are unable to detect the actual manner in which particular informed traders induced price discovery.... 7962@http://divisionoflabour.com/ 2012-05-14T14:17:11-05:00 http://divisionoflabour.com/archives/2012_05.php Former Secretary of Education William Bennett claimed that colleges capture aid to students. A new paperby Nicholas Turner supports Bennett's conjecture; the paper's abstract: Federal benefit programs, including federal student aid, are designed to aid targeted populations. Behavioral responses to these programs may alter the incidence of their benefits, a possibility that receives less attention in the literature compared to tax incidence. I demonstrate the importance of benefit incidence analysis by showing that the intended cost reductions of tax-based federal student aid are substantially offset by institutional price increases for a sample of 4-year colleges and universities. Contrary to the goal of policymakers, I find that tax-based aid crowds out institutional aid roughly dollar-for-dollar. Unfortunately, it is not clear how institutions utilize these captured resources, so that the ultimate incidence of the programs is uncertain.... 7961@http://divisionoflabour.com/ 2012-05-14T09:10:22-05:00 http://divisionoflabour.com/archives/2012_05.php An excerpt from the post "Unemployment Rate Without Government Cuts: 7.1%" at the WSJ's Real Time Economics blog: One reason the unemployment rate may have remained persistently high: The sharp cuts in state and local government spending in the wake of the 2008 financial crisis, and the layoffs those cuts wrought. [snip] In April the household survey showed that that there were 442,000 fewer people working in government than in March. The household survey has a much smaller sample size than the establishment survey, and so is prone to volatility, but the magnitude of the drop is striking: It marks the largest decline on both an absolute and a percentage basis on record going back to 1948. Moreover, the household survey has consistently showed bigger drops in government employment than the establishment survey has. The unemployment rate would be far lower if it hadn’t been for those cuts: If there were as many people working in government as there were in December 2008, the unemployment rate in April would have been 7.1%, not 8.1%. This sort of simple arithmetic calculating what the unemployment rate would be if several thousand people were still employed by state and local governments overlooks an important point. The funding for keeping those folks employed would have had to come from higher taxes. Levying those taxes would have cost jobs elsewhere. If people pay more in taxes to fund government employment, they have less income available for private sector purchases thereby reducing private sector employment. It's another instance of faulty reasoning because of that whole seen vs. unseen thingy that seems so vexing for journalists.... 7960@http://divisionoflabour.com/ 2012-05-10T09:10:39-05:00 http://divisionoflabour.com/archives/2012_05.php 7959@http://divisionoflabour.com/ 2012-05-07T14:32:47-05:00 http://divisionoflabour.com/archives/2012_05.php 7958@http://divisionoflabour.com/ 2012-05-07T14:09:53-05:00 http://divisionoflabour.com/archives/2012_05.php Virginia Postrel: Recycling Eyeglasses Is a Feel-Good Waste of Money... 7957@http://divisionoflabour.com/ 2012-05-07T14:08:22-05:00 http://divisionoflabour.com/archives/2012_04.php From the April 28, 1912 NYT:Dr. George E. Howard, Professor of Political Science at the University of Nebraska, speaking before the conference of physical education and hygiene here last night, bitterly denounced organized "rooting," particularly during intercollegiate games. "Partisan cheering," he said," is a singular example of mental perversion, an absurd and immoral custom. From every aspect it is bad. It robs the athlete of his due meed of honest praise. Morally it is on the level with the `jimmy' and the `toe hold,' the stuffed ballot box or the campaign canard. It reaches the limit of perversity when used as a `jimmy' to unlock the emotions of the audience at an intercollegiate debate." Dr. Howard held that as now conducted intercollegiate sports of all kinds were becoming a menace to higher education. He said there was urgent need for the strict enforcement of the "low of competition" and the "law of amateurism." Well, he was on the wrong side of history.... 7955@http://divisionoflabour.com/ Sports 2012-04-30T15:20:56-05:00 http://divisionoflabour.com/archives/2012_04.php From the April 28, 1912 NYT:The self-made man seldom puts on all the finishing touches. It is considered a good thing not to be considered a good thing. The man who breaks himself of a bad habit is never so successful in breaking himself of boasting about it. Some people's idea of economy is to save shoe leather by buying an aero-plane. Im-portunity knocks at the door oftener than his brother "op" The chronic borrower discovers that some people are so close you can't touch them. A man's reason is apt to succumb to a woman's reasons. All men may have equal rights, but it takes a certain amount of hustle to realize them. When fortune knocks at the door, some of us are afraid to open it for fear it may be the wolf.... 7954@http://divisionoflabour.com/ Funny Stuff 2012-04-30T15:15:03-05:00 http://divisionoflabour.com/archives/2012_04.php While making my morning coffee yesterday I happened to have the TV on to hear the news and weather. Because it was the one-year anniversary of the deadly tornado, both the Weather Channel and Fox News Channel had live shots from Tuscaloosa. Both live shots were set at the same construction site and included interviews of Tuscaloosa's mayor (can you say staged media event?). Both interviewers (Jim Cantore and Rick Reichmuth) alluded to Beito and Smith's WSJ article comparing the recoveries in Joplin and Tuscaloosa and asked the mayor to respond. The mayor gave some vague platitudes about planning for the long run "to get it right." Instead of following up with more pressing questions, both interviewers parroted the mayor's line in the remainder of their live shots. Perhaps TWC and FNC will do similar live coverage from Joplin when its one-year anniversary comes in three weeks and maybe that coverage will show Joplin in a favorable light compared to Tuscaloosa, but yesterday's coverage seemed slanted toward Tuscaloosa's statist, top down approach.... 7953@http://divisionoflabour.com/ 2012-04-28T10:52:19-05:00 http://divisionoflabour.com/archives/2012_04.php Lest anyone have any doubts, the remarks of this EPA official should make the coercive nature of government abundantly clear.... 7952@http://divisionoflabour.com/ 2012-04-28T10:22:04-05:00 http://divisionoflabour.com/archives/2012_04.php Woman Kills Man By Squeezing His Testicles... 7951@http://divisionoflabour.com/ 2012-04-27T08:04:43-05:00 http://divisionoflabour.com/archives/2012_04.php Not really, but one might think so given the title of Buckley's soon-to-be-released book: They Eat Puppies, Don't They? In any case, this will be ordered soon--a Buckley satire will be the perfect way to decompress from this semester.... 7950@http://divisionoflabour.com/ 2012-04-26T18:21:01-05:00 http://divisionoflabour.com/archives/2012_04.php That's the title of Dan Klein's piece in the May issue of The Freeman. The issue also features contributions from folks such as Steve Horwitz, John Stossel, and George Leef--see the links to right of Dan's piece.... 7949@http://divisionoflabour.com/ 2012-04-26T17:07:28-05:00 http://divisionoflabour.com/archives/2012_04.php A IHS vid starring Antony Davies.... 7948@http://divisionoflabour.com/ 2012-04-26T17:00:28-05:00 http://divisionoflabour.com/archives/2012_04.php From the April 23, NYT comes a story concerning the engineers of the Titanic who, as witnesses attest, kept the lights burning almost to the very moment the ship finally sank:"It is seldom that an engineer is saved in the wreck of a great vessel," said the Rev. G. McPherson Hunter, Secretary of the American Seamen's Friend Society, who is said to be the only clergyman in the country holding the certificate of a Chief Engineer. "Their conduct calls for the same kind of bravery which is exhibited by the skipper, who stands on the bridge and goes down with the ship. when the call of danger comes their duty is down in the bottom of the vessel instead of up on deck. In the case of the Titanic it is impossible to estimate how many lives were saved by their faithfulness. how many would have perished who are now saved had the lights on that great liner gone out? The engineers kept them burning almost to the last minute. "The engineers were not deceived by false hope. They were in a position to know how badly the vessel was injured. then they worked in an uncertainty which must have been maddening. On deck the crew and passengers could see what was going on. Down in the engine room they could not tell how the work of lowering the boats was progressing. they had no chance and they must have known it. The Rev. Mr. Hunter's theory is that the engineers off duty went to the assistance of those working, and it was the blessing of hard work which kept them from thinking. They did not hear the Captain's last word as the vessel began to sink that, duty done, every man must take care of himself. Even if they had they wold never have been able to climb up steep iron ladders before they could reach the deck. It was ninety feet from the water line to the boat deck, and they were thirty-two feet below that. "They died like men," said Mr. Hunter," and their bravery seems to have been overlooked. It can be said of them that, like the higher officers, they stuck to their posts until death."... 7947@http://divisionoflabour.com/ Culture 2012-04-24T12:16:19-05:00