Saturday, November 27, 2010

Why It Is Important to Have a Good Thesis Advisor

General Patraeus suggests you have a good advisor (Hat Tip: Chris Coyne):
A rabbit sits near a cave scribbling in his notebook.

“What are you doing?” asks a fox.

‘I’m writing my thesis, which contends that rabbits are fierce fighters and can easily kill a fox.’

“Do you have hard data to prove this?” asks the fox.

‘Step into my cave,’ says the rabbit.

Minutes later, the rabbit emerges with a fox fur hat.

The process is repeated with a wolf and a grizzly bear until a wise owl flies into the mystery cave and discovers the rabbit seated between a ferocious tiger’s paws.

Here’s the moral: “It doesn’t matter how stupid your thesis is as long as you have the right advisor,” Petraeus ends the anecdote to raucous audience laughter.
For more hilarity, see the ridiculous powerpoint presentation at the link.

Wednesday, November 24, 2010

Press for Austrian Business Cycle Theory

John Carney at CNBC's NetNet suggests the Fed's plan is failing because we are all Austrians now.
It’s no accident that Austrian economics is newly popular. It provides the best explanation for the business cycle we just lived through. But the resurgent popularity of Austrian economics may actually be hampering the ability of the Federal Reserve to reflate the economy with low interest rate policies. Businesses, now aware of the dangers of a low inflation- sparked economic bubble, may simply be refusing to fall for the age-old boom-bust trap.
Why have Austrians become so popular? Perhaps J. D. Hamel at the FrumForum is on to something:
People tell me scary stories about the laissez-faire free market of the George W. Bush years, despite the fact that government grew rapidly during Bush’s tenure. And it seems odd to call the pre-2008 housing market heavily deregulated when government sponsored companies owned trillions of dollars of housing debt. [...] The Austrian school rejected this narrative. Its economists were accessible and spoke to the unease that many conservatives felt. Their criticisms echoed those of mainstream economists. They blamed the Fed’s monetary policy. So did liberal economist Joe Stiglitz. They blamed Fannie Mae and Freddie Mac. So did Keynesian economist Ragu Rajan and Nobel laureate Gary Becker. On this front, the Austrian school was as sensible as it was unremarkable. But the Austrians’ passion and consistency made them excellent spokespersons for the market economy.

2010 Gus Rankings: Week 12

Here are this week's Gus Rankings.

At this point, it's fun to take a look and see how Gus would situate the teams for the BCS bowls. Following as best as I can from the selection procedures, here's how Gus would place the teams (highest ranked conference team assumed conference champion, and highest ranked team picked for each bowl in order of choice):

National Championship Game: Auburn vs. TCU
Rose Bowl: Ohio State vs. Oregon
Fiesta Bowl: Oklahoma State vs. West Virginia
Sugar Bowl: LSU vs. Boise State
Orange Bowl: Virginia Tech vs. Michigan State

As a side note, check the following: "For the games of January 2011 through 2014, the first year the Rose Bowl loses a team to the National Championship Game and a team from the non-AQ group is an automatic qualifier, that non-AQ team will play in the Rose Bowl."

If Oregon were to play TCU (or Boise State) in the National Championship game, does this require that the Rose Bowl pick Boise State (or TCU) for the Rose Bowl? The way I'm reading this is I don't think they are required to do so, but I'm curious what else has been said of the issue. It's not terribly clear on the situation when the non-AQ team ends up in the National Championship Game.

Addendum: I had forgotten the Big East champion-- projections are modified.

Wednesday, November 17, 2010

TPS at the 2010 SEAs

Here are TPS bloggers in action at the SEAs:

Sunday, 8AM: Applied Political Economy
"Property Tax Assessment and Progressivity"

Justin M. Ross, Indiana University
Sunday, 4:15PM: State and Local Political Economy
"Hate Groups and Hate Crime"

Matt E. Ryan, Duquesne University
Peter T. Leeson, George Mason University
Monday, 8AM: Money and Finance
"Positively Valued Fiat Money After the Sovereign Disappears"

William J. Luther, George Mason University
Lawrence H. White, George Mason University
Monday, 3PM: Formal and Informal Sectors of Developing Nations
"The Feud Between Formal Versus Informal Institutions: A Case Study of Medieval Iceland"

Carrie B. Kerekes, Florida Gulf Coast University
Claudia R. Williamson, New York University

Also, Emily Skarbek masquerades as Emily Schaeffer on the schedule as a discussant in the Carl Menger Essay Session.

Tuesday, November 16, 2010

2010 Gus Rankings: Week 11

Here are this week's Gus Rankings.

Of interest is the relationship between the two popular non-BCS teams, TCU and Boise State. TCU holds a healthy 13-point lead over Boise State at the moment yet plays only one more game this season, against 1-win New Mexico. Boise State has three remaining games, against Fresno State (5 wins), Nevada (8 wins) and Utah State (3 wins). While both teams still earn points from teams they have defeated earlier in the season, it's looking like Boise State should outpace TCU at season's end. (Assuming both teams win out, of course; the argument is otherwise moot if one (or both) of them should lose.) Boise State should pass Michigan State and stay ahead of Oregon, too, and have a fair chance to pass both LSU and Oklahoma State-- I'm very curious to see where Boise State ends the season. It's not inconceivable for them to finish the season on top of the Gus Rankings, though they will need some chips to fall their way.

The more things change...

Longtime TPS reader Rob Holub sends along this story:

We’ve noted how the Ricketts Family is all about getting the government to help them out with the Cubs, be it financing their new spring training complex in Arizona or paying for renovations to their ballpark in Illinois.


But I wasn’t aware until this morning — thanks to a post over at Windy City Watch — that Joe Ricketts, the patriarch of the Ricketts family, is the founder and primary funding source for a political outfit with the sole purpose of limiting wasteful government spending.

Rand Paul had a similar message recently.

Monday, November 15, 2010

A quick note on the now infamous 6-day Chinese hotel

Most of us have, by now, seen this story. Matthew Kahn comments here. For me, there are three unaddressed points:
  1. Did it have electricity, plumbing, etc online and working?
  2. How important is it that the materials were constructed off-site, as opposed to being built on-site? That seems important in determining how accurate the 6 day estimate is.
  3. Finally, most critically imo, how does the bureaucratic approval process compare to most municipalities in the United States? How does this process account for local stakeholder interest in the project?
#3 is the point of greatest interest to me. Maybe it is excellent in China. But if this project required 15 years of bureaucratic approval and disregarded local concerns of the residents, then I will find this to be a less impressive process overall. In the U.S., a good portion of local bureaucracy revolves around satisfying local stakeholders (for good or for bad). No trivial portion of this is local interest lies in a customized look, which I suspect undermines the potential for pre-fab products. My preference would be to compare how quickly a property owner can go from starting the paperwork to cutting the ribbon on completion at a ceremony everyone will voluntarily smile at throughout.

The Faculty Flutie Factor

As we're in the midst of college football season, I thought I'd send along this paper, The Faculty Flutie Factor: Does Football Performance Affect a University’s US News and World Report Peer Assessment Score? Here's the abstract:
Analyzing the peer assessment portion of the US News and World Report’s college rankings, we find that administrators and faculty rate more highly universities whose football team receives a greater number of votes in either the final Associated Press or Coaches Poll. Controlling for unobserved heterogeneity, our estimates suggest that a one standard deviation increase in the number of votes received in either the Associated Press or USA Today Coaches’ Football Poll is viewed as positively as a forty point increase in a school’s SAT score at the 75th percentile.
I think there are all sorts of educational side effects that can be teased out by a school's athletic performance-- data can generally be had by the boatload...definitely some low hanging fruit.

Saturday, November 13, 2010

A Modestly Priced Proposal

Here is a bit of satire from Jennifer Dirmeyer:
Wal-Mart is not the only organization that is contributing to this problem. Forget low prices, there are people out there who are actually giving stuff away for free.

The most insidious of these “charities” is the soup kitchen. Lurking, unobtrusively, in strip malls and the basements of churches all over the country, soup kitchens are providing food for free to people who have a hard time affording it.

Has no one considered what this must be doing to the local diner? To the man pushing a hot dog cart? This practice of giving away free food deprives the local diner of some of its most regular customers, those on a fixed income and the homeless.

Friday, November 12, 2010

2010 Gus Rankings: Week 10

My apologies for a very late Week 10 Gus Rankings; you can find them here.

Wednesday, November 10, 2010

Is Obamacare Constitutional?

Here (sorry, I think it is gated) is the latest angle from Steve Willis and Nakku Chung in the debate taking place in Tax Notes Today. Not being a legal scholar, I have trouble understanding how Obamacare differs from any other tax or subsidy in any substantively meaningful way. As such, I find it interesting how the legal scholars are drawing the distinction, and you will find discussion of these points at the above link. Unfortunately, this debate itself seems to just boil down to philosophical difference of opinion on the constitution. As Willis and Chung write in the beginning:
Congress has limited enumerated powers. We view the limitations seriously. We understand that much academic literature disagrees. Kleinbard recognizes few, if any, important limitations on congressional power -- either to tax or to regulate commerce. He joins the academic majority in supporting Congress's role in solving problems, including those it created. While he would limit congressional power to choose our television shows, he provides no reasoning for his limitations other than that they are his. Fundamentally, that is the issue. Do we follow the limitations on congressional power found in the Constitution or do we largely ignore them, opting for a living-document approach that bends (some might say breaks) over time? Neither viewpoint is provable. Both are honest approaches to American law; yet they differ fundamentally, which colors this debate.

Assuming Willis and Chung are correct, and since they are the legal scholars I will assume they are, then I have to wonder if any constitutional challenge of Obamacare will constitute a Supreme Court showdown of the "correct way" to interpret the constitution.

Wednesday, November 03, 2010

2010 Gus Rankings: Week 9

Here are this week's Gus Rankings. Auburn has a healthy lead at the top, followed by TCU, Missouri and Michigan State.

Competitive Government Watch: Washington Income Taxes

The state of Washington put on the ballot a potential increase in income taxes for its high income citizens (5% for those over $200K, 9% for those over $900K). Then this happened:

Texas Gov. Rick Perry has sent letters to around 90 top employers and a few business associations in Washington urging companies worried about taxes to head on over to his state.

"As the State of Washington considers a multibillion-dollar tax increase for citizens and businesses ... I invite you to consider your future in America's new land of opportunity: the State of Texas," Perry wrote.

"If Washington doesn't want your business, Texas does. Texas has no personal income tax and no interest in getting one."

This was after the governor of Idaho had done the same thing.

Outcome: Voters rejected the income tax proposal in Washington. Some accounts put a lot of weight on the appeals from other states in swinging the tide.

Tuesday, November 02, 2010

Celebrating Tullock

It's always nice to hear from Gordon Tullock, especially on election day.

And here is my favorite clip of George Carlin (NSFW--Obviously!) dishing on democracy and explaining why, if you vote, you have no right to complain.

Monday, November 01, 2010


From Pajamas Media (Hat Tip: TaxProf):
According to District of Columbia government records, since 2004 the Democrats’ main political committee and its National Democratic Club — an exclusive restaurant and hideaway on Capitol Hill where prominent Democrats and their guests dine — have been hit with fines and interest penalties in excess of $115,000 for failure to pay their property taxes on time.

Officials at the D.C. Office of Tax and Revenue reviewed tax records with Pajamas Media. Government records here and here paint a picture of two highly visible political establishments that have been tax deadbeats for most of the last seven years. This year, the club fell so far into tax arrears that it was listed as part of a D.C. government “tax sale” in August. The DNC and the club finally paid the property taxes in September to dodge a government seizure and a public auction sale. ...