Russ Roberts and I Now Have This In Common

Accusations of socialism in the online comments of his "speech":
We could start a club.

All Time Box Office Adjusted for Ticket Inflation

Interesting series of data on box office grosses from BoxOfficeMojo:
The list continues to 100 at the link.

The Economy is Like Teen Sex

This column by Judith Warner about the "Myth of Lost Innocence" in many ways sounds like a metaphor for the U.S. economy. A nugget:

In each of these examples, real problems – that some girls are engaging in too-young, risky and degrading sex, that some children are being stressed excessively and stifled by nonstop structure, that some boys (poor and minority boys) are doing badly in school, that some children are getting really reckless mental health services – are grossly simplified and, via the magical thinking of dogma and ideology, are elevated to the level of myth. Real complexities and nuances – details concerning exactly which children are suffering, flailing or failing, and in what numbers, and how and why, and what we can do about it – are lost.

Worth reading for the metaphors and some of the interesting statistics and trends.

The Least Disappointing News I Read Yesterday

With respect to the expansion of government intervention in the economy:

In response to the publishing world's troubles, historian and best-selling author Douglas Brinkley has floated what may be the most improbable bailout yet: a federal subsidy for book reviews. Brinkley told the Times, "Like public television, I think book review sections almost need to get subsidized to keep the intellectual life in America alive. … So if we can do that for radio and we could do it for television, why can't we do it for the book industry, which is suffering terribly right now?"

Since this seems only "improbable," it makes it the least disappointing thing I read yesterday. Yesterday was a very bad day, even small measures of consolation are disappearing.

Not to mention this, this, and this: Image is everything, actual results are nothing.

Good summary of economic situation

It's a challenge to find a concise summary of what's going on; this isn't a bad one. Ignore the (insert adjective here) quote at the end and add in that it was the federal government crowding out private banks from the non-subprime market, not the general "eagerness" of "some banks."

Ceteris paribus, is anyone "eager" in any industry to deal with customers that are credit risks?

What I'm listening to today...

Nothing but Soundgarden, in chronological order of major release. All three are very complete and deceptively wide-ranging; Badmotorfinger is underrated and Down on the Upside gets too much attention. Of the bands most people have heard of from the early-to-mid 1990s, is there a more under-appreciated group? Nirvana, Pearl Jam, Alice in Chains and the Smashing Pumpkins all get more respect; from top to bottom, all inclusive, I'd say only Alice in Chains (and perhaps Nirvana) could rival Soundgarden's ability to put out LPs full of solid songs. (Album-making, as separate from albums full of good songs, was never a strength of alternative music.)

If you're on iTunes, pick up the pair of "Songs from the Superunknown," and don't forget "Birth Ritual" from the Singles soundtrack either.

Dana, where does Soundgarden fit in your musical hierarchy?

Addendum: From Badmotorfinger, enjoy especially the second half of the album; the rolling "Searching with My Good Eye Closed," the saxophone (in grunge music?!) highlighted "Room A Thousand Years Wide" and the calculated "Mind Riot". "Holy Water" is a look ahead to Superunknown.

From Superunknown, focus also on the rear half of the album-- "The Day I Tried To Live," "Fresh Tendrils," "4th of July" and "Like Suicide" are all top notch songs that trend away from the mid-90s radio friendly.

Down on the Upside is my least favorite, personally, but still shines in areas. I do think the radio-friendly tracks from this one are the best, especially "Blow Up The Outside World," though Thayil's at his best in "Tighter & Tighter" and "Overfloater" is subtle enough to enjoy three or four times in a row.

Feldstein: The $800 Billion Mistake

In the Washington Post:

As a conservative economist, I might be expected to oppose a stimulus plan. In fact, on this page in October, I declared my support for a stimulus. But the fiscal package now before Congress needs to be thoroughly revised. In its current form, it does too little to raise national spending and employment. It would be better for the Senate to delay legislation for a month, or even two, if that's what it takes to produce a much better bill. We cannot afford an $800 billion mistake.

For tax cuts, he goes on to point out that the currently proposed lump sum and temporary payments to households and businesses have little effect on economic output. However, his most pointed critiques are on the spending side:

On the spending side, the stimulus package is full of well-intended items that, unfortunately, are not likely to do much for employment. Computerizing the medical records of every American over the next five years is desirable, but it is not a cost-effective way to create jobs. Has anyone gone through the (long) list of proposed appropriations and asked how many jobs each would create per dollar of increased national debt?

The largest proposed outlays amount to just writing unrestricted checks to state governments. [...] Will these vast sums actually lead to additional spending, or will they merely finance state transfer payments or relieve state governments of the need for temporary tax hikes or bond issues?

The plan to finance health insurance premiums for the unemployed would actually increase unemployment by giving employers an incentive to lay off workers rather than pay health premiums during a time of weak demand. And this supposedly two-year program would create a precedent that could be hard to reverse.

A large fraction of the stimulus proposal is devoted to infrastructure projects that will spend out very slowly, not with the speed needed to help the economy in 2009 and 2010. The Congressional Budget Office estimates that less than one-fifth of the $50 billion of proposed spending on energy and water would occur by the end of 2010.

If rapid spending on things that need to be done is a criterion of choice, the plan should include higher defense outlays, including replacing and repairing supplies and equipment, needed after five years of fighting. The military can increase its level of procurement very rapidly. Yet the proposed spending plan includes less than $5 billion for defense, only about one-half of 1 percent of the total package.

[...]

All new spending and tax changes should have explicit time limits that prevent ever-increasing additions to the national debt. Similarly, spending programs should not create political dynamics that will make them hard to end.

The problem with the current stimulus plan is not that it is too big but that it delivers too little extra employment and income for such a large fiscal deficit. It is worth taking the time to get it right.

Does anyone else find it bizarre that critics of those wanting to at least delay the stimulus package often retort that "if we wait, the recession will be over by the time it passes." I hardly see this as a reason to pass a gigantic stimulus plan with difficult long-run ramifications when the end is already in sight without the stimulus plan. It sounds more like a political opportunist argument, using the recession to justify big spending plans that otherwise would not succeed on their own merit.

Can We Get A Little Grade Inflation Here?

Some Fairfax, VA parents want their kids cut a little slack:

To the grade-grubbers go the spoils. And the grade-grubbers in this case are rabble-rousing parents in Virginia's Fairfax County. Residents of the high-powered Washington suburb have been battling the district's tough grading practices; chief among their complaints is that scoring a 93 gets recorded as a lowly B+. After forming an official protest group last year called Fairgrade and goading the school board into voting on whether to ease the standards, parents marshaled 10,000 signatures online and nearly 500 in-person supporters to help plead their case on Jan. 22. After two hours of debate, the resolution passed, a move critics consider a defeat in the war on grade inflation.

What amazes me here is the pointlessness of this debate. Wherever you determine the numerical cut-offs from one grade to the next, the teachers doing the grading and writing the questions are well aware of it and accommodate. The culture of academic standards at the school is far more important than the printed numbers on the syllabus.

FWIW, here is Landsburg on fighting grade inflation.

Adding to the Public Knowledge Stock

My doctoral public finance course is pretty standard in design, but has a small tweak I think should become more commonplace in a doctoral level field course:

Opinion Letter/Media Communication: It is important that we, as academics specializing in complicated and technical material, find a way to convey our knowledge to the public. At some point before this class ends, you must write a opinion piece based on class discussion that is relevant to the course topic. This essay should be between 300 and 500 words single-spaced, and written at the high school level. You should submit it to me with a suggestion of an appropriate media outlet for publication (ex: Forbes Magazine, Indianapolis Star, Indiana Business Journal, etc.).

I think the syllabus sharing that has occurred this semester is another way in which blogs have improved the discipline. Much more interesting syllabi can be found here, here, and here.

Heavy Hitters

OpenSecrets.org provides us with the top 101 All-Time Donors in American Politics from 1989 to 2008:


The most interesting ones to me are the NAR at #3 and AT&T at #1, as nobody else is particularly surprising. Notice that both split between the two parties pretty evenly. I can't help but wonder how NAR's lobbying efforts relates to the housing bubble (Freddie Mac weighs in at #75 on the party fence). I assume AT&T was still recoiling from the Bell System Break up in 1984.

Hat-Tip: Jason Oberle, who passes along the data in a spreadsheet.

The Bee Watcher Watchers

Find them here.

Hat Tip: Russ Roberts

If you don't get the title, you can find the text here. Alternative title was "The Keynesian Multiplier."

What to do with failing banks?

Stiglitz chimes in on CNN; he's says nationalize them, restructure the incentives, and look to Sweden as an example. I can't find it right now, but I read recently (I think it was via Marginal Revolution) that Sweden barely did anything with regards to their banking system and nationalization in the early 1990s. And with regards to government involvement improving incentives...well, that's a tough one to buy.

Education Round-Up

Interesting tidbits from the Indianapolis Star that I think are relevant to state education policy in general.

First, on cursive handwriting:

Learning to write in script is a time-honored tradition. But in today's time-starved classrooms, some around the country are questioning whether, given everything else vying for space in the curriculum and the increasing use of technology, teaching these children cursive is even necessary.
...
Lisa Jones, who teaches third grade at Edgelea Elementary, said she's noticed that consequence of the de-emphasis, not just by schools but by society: "The most difficult part for me is that now they can't read it, because they don't see it anywhere."

The article is pretty neutral in its coverage, but I see little reason for concern. Why do we have cursive writing in the first place? My guess (and is only a guess) is that cursive was more efficient in a handwriting heavy society because it required fewer lifts of the pen from the paper. Cursive writing is more difficult to read because many people develop different styles. Since most communication takes place in type print on the margin our time is better left to learning technology, science, and reading. Rather than being concerned that some people might not be able to read cursive, we should probably just expect others to drop cursive and leave their notes in print.

Next, on noncriminal teacher discipline:

Trina Moore lost her Greenfield teaching job in 2007 after she forged such a close friendship with one middle-schooler that they talked on the phone for 11 hours one day in June, even though the girl's mother had asked them to stop.

By all accounts, the relationship wasn't sexual, but e-mails and instant messages show that the 39-year-old and the seventh-grader had a cozy relationship. The girl's mother told the school they talked about being drunk and gossiped about students' sex lives, according to the principal's report on the conversation.

[...]

If Indiana's laws mirrored those elsewhere, the state would have known the district warned Moore in 1992 and again in 2002 against close friendships with students outside school. Her principal wrote that Moore lied to him about one relationship. Two parents sought restraining orders against Moore.

Even after Moore was fired, no one was required to tell the Indiana Department of Education about her case, and no one did. No action has been taken on her license, and she remains free to seek teaching jobs, although the state does not have a current teaching assignment on record for her.

In Indiana, school districts are required to report such information to the state only if a teacher is convicted of a serious crime. Some districts fear they could open themselves to lawsuits by sharing any other information about problem teachers, and others simply wish to keep embarrassing cases quiet.

The issue of personal privacy versus disclosure of information is certainly a interesting topic for discussion. Reputation is something that makes a lot of markets function well that otherwise would not. I don't have a suggestion here, but as a devil's advocate I would ask: If a teacher were to get a DUI, should parents of their students be informed? Should they be fired? Why teachers and not, say, safety inspectors, building architects, or mayors?

Normally the consumer would ultimately decide how these questions get answered, but the question is much more difficult in the public sector. Voters demand Angels because it is free for them to do so.

Super Bowl Props

TPS sportsbook consultant Rob Holub sends along this year's Super Bowl Props - 16 pages of them. During particularly large sporting events, props emerge that allow you to bet on just about any aspect of the game. I believe these happen in the Final Four and World Series as well, but none to the extent of the Super Bowl. We posted about this last year. Feel free to add in your five guesses and out-do me. All wagers are for recreational purposes, of course.

For what it's worth, I went 2-2 on the over/unders and was right about the interception/TD/Manning wager, so I'd have been slightly up.

Here's what I like:

- Steelers total points: 27, under
- Longest made FG of game: 44.5, over
- Total Interceptions thrown by both teams: 2.5, over
- Kurt Warner, longest completion: 39.5, over
- Larry Fitzgerald, total receptions: 6.5, over

Buena suerte!

Sentences I found humorous...

From CNN's bit on Tokyo's companies encouraging their employees to have more kids:

In addition, Japan's population is aging at a faster pace than any other country in the world.

Yes, they're (likely) talking about the average age for the population as a whole, and that's a function of the fact that, as the article pointed out, no one's having kids. Still, I got a kick out of the fact that the line could be construed as to say that one year in America is worth 2 or 3 in Japan. If it said "aging faster," I don't think it'd have been as funny-- something about "faster pace," like years go by faster in the Orient.

Fittest and Fattest Cities

Men's Fitness clocks in on the 25 fittest and fattest cities; here's the article and here's the map. You can mouse over most of the stars on the map. Colorado Springs takes the cake for the fittest; at the other end of the spectrum, Las Vegas takes it for the second year in a row. 6 of the 10 fattest are from Texas. 7 of the 10 fittest are in the Mountain time zone or westward.

My Definition of Creepiness in One Picture

I took this picture at Krogers, but later I saw the same book in the childrens section of Barnes-n-Noble. I'd expect to see this kind of sycophantic hero worship of the nation's political leader in some authoritarian country, but not here. I haven't been this disturbed since the passage of the Patriot Act, politicians are not meant to be worshiped this way.

What I've been reading

Here's what's on the nightstand:

- The Road to Serfdom, by Friedrich von Hayek. The well known book, we're doing this in our reading group here and this is actually my first read. We're only the introduction and three chapters in, but thus far, I was a bit taken aback by the warning of heading down the same (economic freedom) path as Germany and Russia...yet he calls for certain government interventions that support competition. Odd. Emily replied a little while back about the aims of RtoS, and I'm hoping the discussion goes towards the political and economic freedom realm.

- The Origins of Virtue, by Matt Ridley. I'm almost done with this one; it was recommended to me by an undergraduate here at WVU. Surprising to me that the Folk Theorem was never mentioned by name throughout, though that's basically what's described. It's a view of biology and anthropology through economics glasses; we're nice to people when (strict self-interested economics says) we shouldn't be because we're hard-wired to be nice, since that wins out in the cooperative long run. I found the biology examples most interesting, vampire bats, sticklebacks and the like. Recommended.

- The Baseball Economist, by J.C. Bradbury. The title on the cover says "The next step in the Bill James Revolution"; James' writing always hit me a little bit better than this did. (Part of that could be because even though James is a stat-hound, he's a deceptively good writer.) I enjoyed the attempts to isolate and rank baseball eras and the effectiveness of Leo Mazzone; less so the big market vs. small market teams and evolution of baseball talent (as separate from the ranking of eras). The steriods chapter seems out of place. It's baseball and economics, so I'm going to like it, but maybe also expect too much at the same time?

I just cracked Baseball and Philosophy, so not too much to say about that yet. I've decided as a New Year's resolution that I need to read decidedly more. I also like baseball, so I'm going to read more about that as it pertains to other areas. (Thus the previous two books.) The White Man's Burden just came in the mail; that should be a quick read and (hopefully) chock full of the same types of examples that made The Elusive Quest for Growth so great to cite. I'm curious to see how his take on development has evolved between the two. The Theory of Moral Sentiments just came as well; it was mentioned in the Origins of Virtue at a number of points and I've never taken a gander at that either. A little while back, Tom and Dana let me borrow Slash; I should get into that as well.

Questions Answered

Dubner writes:

But still, I smell a case for the American Humanist Association or some atheists’ rights group. The A.H.A. and others recently tried — and failed — to have the phrase “So help me God” removed from the presidential oath of office. Maybe it’s time for them to tackle the N.F.L. Why is it O.K. to praise the Lord but not, say, make a snow angel? If the atheists can’t gain any traction in the N.F.L., maybe they can take on Tim Tebow with his “John 3:16″ eyeblack patches.

Because the NFL players are part of a private enterprise, while government officials are not, that is why.

Now if they were posting the 10 commandments on a taxpayer subsidized stadium, then I'd be willing to hear the arguments.

If It Keeps Them Occupied: Part 2

I presume Matt is happy, as am I for the same reasons, that ESPN is reporting the following:

WASHINGTON -- A handful of lawmakers used a resolution commending the University of Florida's national football championship Thursday to protest college football's much-maligned BCS system.

A dozen House members voted "no" or "present" on the resolution, the latest signal from the nation's capital that many people aren't happy about the way the NCAA chooses its football champion. Many of the dissenters were from Utah and Texas, both of which have schools that made a case to play for this year's national championship but were passed over.

Perhaps the Gus Rankings are in order?

Hockey Players' Demand Slopes Down for Brawls

Jim Kelley at SI writes:

No sport can legislate all infractions out of its game. Even the NFL, a violent league that doesn't allow fighting, will see the occasional fist flying in the so-called "heat of the battle." But that's a far cry from the NHL's current approach to fighting, and Campbell, as well as several forward-thinking GMs, want the league to at least address some of their concerns
...
"The biggest thing with our sport is you look at the other major sports -- football, basketball, baseball -- you're ejected from the game for fighting. We've had a different culture, history and tradition . . . I think we should revisit it, because of what happened with that young player in Ontario."
...
It has proved to all who care to take notice that the rule of law can prevail in a hockey game, a notion proven time and time again by an absence of fighting in the playoffs and in seemingly every game where the importance of winning trumps the short-lived advantage that sometimes comes about when two players "mix it up."

Incentives matter.

Residency Requirements are Political Protectionism

In the funniest blog post of the day, Munger announces his withdraw from consideration for the New York senate seat, and along the way says the following:

Finally, there have been some allegations (and that's ALL they are) that it was at long last explained to me that, in order to be a Senator from NY, I would actually have to LIVE in NY. For those allegators, I have some names: Bobby Kennedy. Hillary Rodham Clinton. Not exactly New Yorkers. Please, the residency requirement is obviously a joke. The good people of the great state of New York are gracious enough to pimp their seats (if you will) to pretty much any Democratic hack who shows up at the door, and smart enough to realize that no one actually born in NY is bright enough to be senator. So those allegators can just shut up.

Correct, so should states have residency requirements in the first place? Are they not a barrier to trade? Should voters not be permitted to search for candidates whose views might better fit their own preferences, even if they not happen to be residents of the state? Should West Virginians be denied access to policy makers outside the state? And why should Ohio voters in Cincinnati be denied the chance to vote for governor, a resident of Newport, Kentucky who might "feel their pain" better than a resident of Cleveland?

I am just being a pain in the ass here for the fun of it.

AIG pulls sponsorship of Manchester United

The news story is here. Of note: Sponsorship of Manchester United accounts for nearly a third of its revenues. That surprised me; with long-term television deals that have to factor into revenues at least an amount comparable to sponsorship, the majority of Manchester United's revenue stream is guaranteed (as far as contracts can be fulfilled, but assume they are) moving forward into upcoming seasons. Renegotiations over these deals can happen, but this current round of talks over the sponsorship is the only one that comes to mind in which the amount of money to the sports franchise will be (likely) revised downwards.

That blows my mind; am I that out of touch with how business is done, or is this unique to sports? I know businesses expect to sell a certain amount of goods and services, and have confidence intervals and estimates in good and bad times...but that's a large portion of contracted, certain money as a percentage of total revenues, isn't it? Tom, tell me how it is.

What Would I Do For the Economy?

Russ Roberts inspires...

So what would I do to stimulate the economy out of the recession? I would look for things that would have both an immediate positive impact that are also good for the long-run:

1. Legalize drugs and prostitution: Bring the enormous amount of economic activity lost in space back into the legal sector, including all those off-shore bank accounts that would be injected into the banking system.
2. Cut every labor regulation I could, including the minimum wage. The unintended consequences of these acts are too well understood for anyone with a good conscience to overlook. Enough is enough, these laws were written for the purpose of racist eugenics and sexism.
3. More free trade, especially in agriculture: We should be buying much, much, more food from places like Africa and Asia. We should not be taxing households to pay American farmers not to grow food. Cheaper food and lower taxes mean more income for households.
4. Eliminate taxes on businesses, tax household income more broadly at a flat (and preferably low) rate. Businesses either pay out their earnings to households as income or invest it in expanding their business. Taxing household income twice makes no sense. The later part is good for expansion, as is a simpler tax code without a bunch of exemptions. I would settle for a negative income tax at low levels of income, if you must.
5. Cut the payroll tax.

Here is what I would NOT do:

1. Pick an arbitrarily large number (say, $880 billion) and decide to spend it, with the projects to be determined later. No, No, No. If you are looking for spending stimuli (and plenty believe that can work, even if I don't), you look for projects that are worthy in their own right. Otherwise you are destroying valuable resources.
   
2. Talk about depression and catastrophe every 5 minutes. Former President Bush, I'm looking at you when I say this. It's not great national defense policy, and it is terrible economic policy.
3. Nationalize or bailout any firms.
   

Australian Professor Jailed in Thailand for Innuendo

From the CHE:

A Thai court today sentenced an Australian lecturer, whose fictional novel depicted a member of the royal family in an unflattering light, to a three-year jail term for insulting the monarchy, the Associated Press reported.

Harry Nicolaides, who taught English and social science at Mae Fah Luang University, in northern Thailand, was found guilty of “lèse-majesté,” the notion that offending the dignity of a ruler constitutes a crime. A passage in his self-published book, Verisimilitude, which reportedly sold fewer than 20 copies, suggested that the crown prince had abused his mistresses.

FWIW, more books will probably be sold now. Do read the comments at the bottom, as Commentator #1 on the link provides the passage in question.

Also amazing is, as always, how quickly the commentators at CHE become batshit crazy.

Here is comment #2 on this story:

Irredeemably racist Americans have nothing to say about this Thai law. They must be tolerant, respectful, and sensitive to diverse cultures—except THE perniciously evil one of the U.S. Indeed, the U.S. should be celebrating the diversity of Thai freedom of speech laws, far different from U.S. laws that sadly fail to criminalize hate speech. CELEBRATE DIVERSITY!

And #4:

Yes, and let this be a lesson to any MLA-type who wishes to insult and bring disgrace upon royalty of any kind. We should all hope to fill American jails with insulting English profs. I can give evidence for quite a few of them. Better, Off With Their Heads!

Jumping JC, people! You would think a website primarily read by academics would be better than this, but I frequently find that it is the worst.

Glenn Beck Channels Mark Perry

Here is Glenn Beck:

If you look at socialist nations, communist nations, et cetera, et cetera, all they try to do is tread water. They just, "Let's give everybody a standard of living, let's just have..." and then so you tread water. Well, I don't want to tread water. The American dream is that tomorrow can be better than today was. The American dream is not about a house and a car. The American dream is I can live a better life than my parents did.
...
In 1949 a toaster, a toaster was $16.95. It doesn't seem like a lot now. I mean, toasters now are $19.99. But a toaster in 1949 being almost $17 took you 13 hours of work because your wage, the average hourly manufacturing wage was $1.26. So it took you 13.5 hours to buy a toaster. Today because of capitalism the toaster, the average toaster is $19.99 and it takes the average manufacturer an hour to buy one.

I was thrilled to see the influence of Mark Perry's recent blog posts on the Sears catalogs. In addition to the toaster, Glenn Beck goes on to mention the microwave, refrigerator, washing machine, VCR, and television.

Hat Tip: Dave Esposito for the pointer to Beck's article.

The Inauguration's "Prostitution Free Zone"

WUSA9 reports:

WASHINGTON, DC (WUSA) -- District police have placed signs along 5th and I Streets. They read, "Warning, Prostitution Free Zone." Those who disobey could be fined 300 dollars, and even jailed.

This is interesting because in the distinction between law and legislation, prostitution seems to remain in some sort of gray area between the two. The legislation reads that is illegal (except in Rhode Island and Nevada) but the law is clearly something else. After all, CNN is able to report on a national auction for a San Diego woman's virginity without any her demonstrating any apparent legal concern.

If the law truly were against prostitution in D.C. there would be no reason for the sign indicating a "Prostitution free zone." That is not the case, outside the zone the law is something else. Prostitution is illegal but not necessarily against the law.

My personal belief is that this is a part of an enforcement strategy for other laws, that the legislation serves as a credible threat. A police officer can solicit information about the criminal world (one in which the women are forced into by the legislation) because they have the legislation behind them. Of course this also allows police to solicit other services as well. James Bovard at FEE has claimed that the D.C. police occasionally use this law to seize cars from potential Johns.

Whatever prostitution legislation is about, I do not believe it is about the sex between consenting adults.

Evolution of Sexism: From Voting to Hot Tubs

In having breakfast with family over the weekend, I enjoyed the following paraphrased discussion of the amenities provided by the gym they were all members of:

Anonymous Relative 1 (AR1): I think it is terrible that the mens locker room has a hot tub, while the womens does not.

Male members of the club react by describing the nuisance of the hot tub, as it is usually in disrepair and takes up space that could be used for more lockers, which they believe are in greater need.

Anonymous Relative 2 (AR2): Well, it is not just the hot tub, but the mens locker room is always closer to the pool, volleyball court, or whatever so that the women always have to walk further.

AR1: That's right, and I just think it is terrible that such sexism still exists in society today.

It used to be movements to vote, or legally permitted to own property or even work. Now it is arguing over a hot tub in the locker room and minimized distance to the pool. In the broader context of world history, we live in a truly marvelous age and country.

Professor Samuelson, You Probably Shouldn't Go There

In writing about Hayek's Road to Serfdom, he says:

Two-thirds of a century after the book got written, hindsight confirms how inaccurate its innuendo about the future turned out to be.

If we are feeling smug today, then maybe we should talk about this:

"The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive."

Paul A. Samuelson and William D. Nordhaus, Economics, 13th ed. (New York: McGraw-Hill, 1989), p. 837.

Two years.

You'll find great discussion in the comments at TAE.

Small Observation on College Football Bowls

As a part of a paper I am working on, I found this interesting: Looking at bowl games played in the 2002-2007 season (n=96)...

1. The team with the higher AP ranking going into the bowl game won 59.5% of the time.
2. The team with the higher USA Today ranking going into the bowl game won 62.5% of the time.
3. The correlation coefficient (Excel function CORREL) between these two polls giving the higher ranking to the team that ultimately won the bowl game is 0.542

The observation that the team with a higher ranking in the poll going into the game will win most of the time implies rationality in the polling. However, I expected the correlation between them to be much closer to one (i.e. they would error on the same games), and I am surprised at how close it is to .5. The inference of being less than one (but still positive) is that they agree most of the time on the ordinal ranking but that upsets occur for different games.

Data here.

Should I have expected this magnitude of disagreement? What would you have expected?

Who is the Helpless One?

Tim Hartford reminds us:

There is an anti-consumer movement with a ready answer: We're helpless, enthralled by advertisers and hooked on shopping.

This reminds me of an undergraduate professor I had who was particularly enthralled with J.K. Galbraith, and would often have us watch videos like "Affluenza."

Even though I had a much greater predisposition to this idea at that time, I saw the hole in the argument that we were somehow under the mind control of advertisers and that Nike might be colonizing our brains with commercials.

The clearest flaw in the argument is that the propensity to advertise is directly dependent on the availability of choice to the consumer. That is, the more choices you have at your disposal, the more advertising you get. It is the simple fact that I can choose among any variety of shoe companies to buy my sneakers that causes abundant advertising from Nike. The local electric company has considerably fewer ads because I have no choice of provider.

The anti-consumer groups that cry about our "helplessness" have it exactly backwards: Firms at the mercy of our whims and fancies are compelled to advertise so extensively.

If it keeps them occupied...

In anticipation of this weekend's AFC Championship game between the Pittsburgh Steelers and the Baltimore Ravens, Pittsburgh's mayor has changed his last name from "Ravenstahl" to "Steelerstahl." All in good fun, of course. Though if, God forbid, he passed away tomorrow, what would his tombstone say?

Anyway, it brought my mind back to an idea I've had for a while now. Clearly, this action doesn't have any direct consequences on the economy of Pittsburgh. But if we believe that public officials tend to get things wrong more than they get them right, then focusing their attention on the mundane and unimportant would lead to better outcomes, right? Maybe Pittsburgh isn't the right venue to view this in; what about Congress? When Roger Clemens sat in front of a committee, people complained that Congress was wasting its time and should have better things to do. Well, if the "better" things to do are to levy taxes, impose regulation and logroll to their heart's content, then I say have as many Clemens hearings as possible! Let's have him back a few more times! Same can be said for the Lewinsky scandal. As long as Congress is paying attention to that, they can leave the economy alone.

This would be difficult to test; since the effect is multi-stage (more diversion --> less lawmaking --> better economic outcomes) and intertemporal, it's not the easiest case to prove with numbers. I'd love to see a paper on that, though.

My Starbucks Card

I can attest that I had no trouble getting Starbucks to give me a pro-capitalism slogan:

Others have apparently been successful in obtaining "lassiez faire" cards as well.

Laws Regulating Sex and Power

The lawmaker in this CNN video argues that teachers have exceptional power and influence over their students. Therefore, a teacher having sex with a student should be illegal even if they are over the age of consent.

I like this logic and want to take it further. Lawmakers, politicians, and bureaucrats have exceptional power and influence over people. Therefore it should be illegal for lawmakers, politicians, and bureaucrats to have sex with people, even if they are over the age of consent.

Because They Love Us and Want To Make Sure We Have Food

Or is it incentives? The virtues of self-interest:

FITCHBURG, Wis. -- While the wind chills that are expected in the coming days might keep many indoors, others have no choice but to be out in the elements.

Livestock farmers will be challenged this week by the frigid conditions not only to keep themselves and their workers safe, but also their animals, WISC-TV reported.

Farmer Pat O'Brien said that there are three kinds of workers people will find doing their job no matter the weather.

"You got snow plow drivers, you got postmen and farmers, of course," he said.

As an aside, I am pretty sure the weather should matter as to whether or not snow plow drivers are doing their job. I vote that they only do it when it is snowing.

Higher Education Protectionism

Where else but Michigan?

The State Board of Education has licensing authority for nondegree vocational-technical and proprietary institutions within the state. Such institutions outside Michigan who wish to recruit Michigan students must have their recruiters licensed in a similar manner. The Board also approves the charters for private degree-granting institutions.

It should be noted that the academics who study higher education governance systems and typologies tend to consider Michigan to be "decentralized" or engage in "voluntary coordination."

Neither Rational, Nor Adaptive Expectations

GW, defending the "quick" response to Hurricane Katrina (and ironically points to the Coast Guard) says the following to Larry King:

King: Do you think those mistakes, that we learned from them?

George Bush: No question. That's a good thing about government.

The government learns, does it? WWMFS?

“Governments never learn. Only people learn.”

This week in the Economist

- This week's Economist has a brief bit on California's impending budget implosion. California's never been a great place for politicos to hone their craft-- direct democracy, for better or worse, prevented property taxation as being an annual source of revenue, and the political divide between the two parties has grown along with the fiscal problems. Yet spending continues as if someone is going to eventually figure it all out. The article notes that the state will likely need to begin issuing IOUs next month. A fiscal crisis shocked Ireland towards a vastly reduced public sector, and in the end it was for the best. Will we be saying the same thing about California in 20 years?

- I hadn't heard this, but Sanjay Gupta is rumored to be the next surgeon general. Which begs the question-- if we were to rank surgeons general on the basis of general popularity (in the objective sense), how much more well-known would Gupta be than #2? 10x? 400x? 5,000x? Koop comes to mind, but how well known was he prior to holding the position? I know it's basically a figurehead post, but honestly-- without clicking here, could you name more than 3 previous surgeons general? Do you know who the surgeon general is right now?

The bit also notes that Gupta went after Michael Moore's "Sicko," in Paul Krugman's estimation. Excellent! He's my favorite surgeon general yet and he doesn't even hold the position.

- Business jets are sybols of corporate greed (and evidently corporate greed is a bad thing), so the number for sale have jumped significantly. The magazine notes that prices rose, though, leading some to believe that companies are simply putting their jets up for prices well above any takers. The number of used planes sold could solve that problem; the number of planes available for sale rose dramatically at the end of November compared to a year earlier, but that could signal a supply response to increased demand as much as excess inventory. They note that firms are cancelling orders for new planes; maybe used models are being substituted in for new? Probalby not, but the numbers aren't conclusive.

- There's a longer piece on the resurgence of Rolls-Royce, via the production of jet engines. Skim it for what you find interesting-- I didn't know that jet engines were worth their weight in silver, nor that their interior can reach nearly 3000 degrees Farenheit, nor that lightning hits a commercial plane a couple of times an hour-- though I will add that if you ever have the opportunity to pick up a book on the history of the evolution of the jet engine, you won't be disappointed. I can't remember the few books I've read on the topic, but they were both superb, but for their story value but also the technology involved in furthering the device throughout the years.

Google Search Result of the Day

From the search phrase: IRS Tax Refund

Markets In Everything: Japan Rent-A-Companion

From the BBC, Rent-A-Pet:

It costs about £8 ($10) an hour to spend time in a Cat Cafe.

If felines do not appeal, other establishments will rent you a rabbit, a ferret or even a beetle. There are more than 150 companies in Tokyo which are licensed to hire out animals of various kinds and although beetles may be cheap, dogs much more popular.

Rent-A-Friend (the signs of a maturing Geisha market I suppose):

Very popular at the moment is the Campus Cafe, where men go to socialise with female university students. It is cheaper than the upscale hostess clubs in which businessmen and politicians drink whisky with women in kimonos, although that is a business which is in crisis because of the recession.

Rent-A-Family Member:

Actors are despatched to play the part of distant relations at weddings and funerals. For an extra fee, they will even give a speech.

But the firm's services do not stop there. It can also provide temporary husbands to single mothers who want them.

The website says the "dad" will help the children with their homework. He will sort out problems with the neighbours.

He will take the kids to a barbeque or to a park. He could also appear at the daunting interview with a nursery school head teacher which parents are required to endure in order to persuade the principal to give their child a good start in life.

I wish the writer of the Japanese story had included more price data. Also in the news, a San Diego woman auctions off her virginity, with current bids at $3.7 mill. She recognizes it is a positive sum game, so the college education she is paying off with the money was well used:

"I think me and the person I do it with will both profit greatly from the deal," Dylan told the paper.

Hall of Fame Results

I posted a little while back on the Baseball Hall of Fame voting process; the results were just announced this afternoon. Rickey Henderson, as expected, made it easily, and Jim Rice made it in with a sympathy bump in his last year of eligibility. The latter surprised me but I'm not bothered; it bothers me more that some sportswriters hold a vote and feel that Rickey Henderson does not deserve Hall of Fame distinction.

Jay Bell got more votes than Jesse Orosco, I found that humorous, and Mo Vaughn more votes than both of them, even moreso.

Art Imitates Life? Or...

...producers cater to consumer demand? I guess we will find out when the ratings return for the seventh season of '24.'

But now US conservatives are up in arms that the election of President-Elect Barack Obama has led the show's producers to pander to the liberal consensus in Hollywood, which they claim has led to the blacklisting of those who disagree with their anti-war views.

When the series returns for its seventh season on Sunday night, Bauer will mouth the views of Mr Obama, who has vowed to end "enhanced interrogation", also known as torture, and close the Guantanamo Bay detention camp.

And in an apparent bid to get in tune with the new president, the new season opens with Bauer facing a congressional investigation probing his use of torture and summary executions in previous series. "It's better that everything comes out in the open," Bauer says, echoing Democrat demands for greater transparency over US counter-terrorist tactics.

Al Sharpton on Supporting Charter Schools and Education

The good Reverend has much to agree with in the WSJ:

We, too, believe that true education reform can only be brought about by a bipartisan coalition that challenges the entrenched education establishment. And we second your belief that school reformers must demonstrate an unflagging commitment to "what works" to dramatically boost academic achievement -- rather than clinging to reforms that we "wish would work."

I disagree with some of the diagnosis that stems from his idea that we have had a "race to the bottom" in state standards, and as a result need federal standards. I think the federal guidelines of the NCLB Act have created a lot of poor incentives for states, and rather than adding more federal standards we should start by first repealing these ones. Unfortunately he uses the equality language, which can be accomplished in undesirable ways. Since his true message is to improve the chances for those who are doing currently poorly, I wish the framing of this message was as such. He insists it can only be accomplished through bipartisan mandates, which to me is clinging to an idea that we "wish would work." Nonetheless, much of it focuses on changing incentives. Especially:

Finally, our coalition also promotes the development and placement of effective teachers in underserved schools and supports paying them higher salaries. By contrast, we oppose rigid union-tenure protections, burdensome work rules, and antiquated pay structures that shield a small minority of incompetent teachers from scrutiny yet stop good teachers from earning substantial, performance-based pay raises.

Despite my reservations, as far as these institutions go his Education Equality Project looks promising.

Public Pie Choice

From the IndyStar:

State Sen. Allen Paul, R-Richmond, wants his fellow lawmakers to bestow the title of "Official State Pie" on this distinctly Hoosier delicacy, which is similar to custard pie, minus the eggs.

Paul's resolution also seeks to designate the city of Winchester in Randolph County the "Sugar Cream Pie Capital."

"The sugar cream pie is a regional thing that is fairly unique to Indiana," said Paul, whose district includes Winchester.

...

Regional foods, such as sugar cream pie and the pork tenderloin sandwich, are an important part of our culture and help explain the state's heritage, said Susan Haller, executive director of the Indiana Foodways Alliance, a nonprofit group that works to identify, promote and preserve the state's traditional food culture.

The alliance worked with Ball State University to research the pie's role in Hoosier history and lobbied Paul to introduce his resolution.

Name Calling

Brad DeLong has my name in a list following the phrase "...ethics-free Republican hacks...".

Now there is something I never thought I'd be called..."Republican."

"Ethics-Free?" Yes. "Hack?" Yes. We are warned of those when we choose economics as a profession. But "Republican?"

Jeez, what a meanie. And for all things, expressing skepticism at a proposal that was, at that time, $1 trillion of only spending.

It is early in the year, it is only a matter of time before I am accused of being a Democrat. After all, I was called a socialist last year ;)

Update: Don Boudreaux rides to our rescue, I could not ask for anyone better.

Thoughts on the Conservative Stimulus Alternative Plan

As a result of my noted federal-spending-for-stimulus skepticism, I received an e-mail this weekend outlining the conservative alternative stimulus plan to be announced by the Republicans on Wednesday. I can't seem to find a version online, but the e-mail stated that the basics were derived from HR 5109. FWIW, here is my reaction to some of the proposals, which is qualified by a lack of details in the outline:

What I generally liked in the proposal for generating stimulus:

1. Cuts in the income tax rate for all brackets, the corporate income tax rate, and alternate capital gains tax rate. These have a better track record for stimulus than federal spending, and are good for long term economic growth.
2. The 1% cut in non-defense discretionary spending.
3. Indexing capital gains to inflation.
   

What I’m concerned about in the plan:

1. The repeal of the AMT: I like the principle of the AMT, which is that it taxes a broader base of income at a lower rate. The problem is the added complexity to the existing tax code, but that is better solved, in my opinion, by simplifying the regular income tax code. Repealing the AMT would act as a tax hike for many individuals, which is not what we are looking for in a stimulus plan.
   
   
2. The increased deductions and increased income limits for higher education student loans and expenses: I do not see much opportunity here for stimulus, even in the long term. The marginal benefit would seem to accumulate to income groups that are already attending college, so long term gains are probably very small in terms of greater higher education participation. The greater deduction is not likely to generate much of a work incentive in the form of encouraging firms to hire the labor or for more workers to participate. I can also see it having the effect of crowding out lower income groups due to higher demand.
   

The proposal will basically serve as political fodder, as the next economic stimulus bill will surely be some version of Obama's current proposal. My current feeling is that Obama's proposal has improved with each major announced revision, but is still not as good as a commitment to doing nothing at all.

Check Out Champion Economics

Champion Economics is a new blog from a former student of mine, Travis Wiseman, and Jesse Gastelle. I particularly enjoyed their post on cell phone contract trading. You may also recognize Wiseman's name from the Heroes of Capitalism blog. I look forward to many more good posts.

What Might Milton Friedman Have in Common with Michael Moore?

Both have been accused of misleading interviews in documentaries:

Milton Friedman interviewed me for an hour. It took me about 10 minutes to realize he wasn’t interviewing me. He was trying to get me to say what he wanted me to say. I was willing to be the poster girl, but not to be ventriloquist’s dummy. He wanted me to say that, had I gone to a state school, I would not have been as motivated to learn. That wasn’t true and I wouldn’t say it. MF wasn’t a happy bunny; it was easy to read his displeasure.

Sometimes it takes 30 years or so to get around to disputing these things. I, at least, can't possibly see how Milton Friedman would have valued a data point hypothesizing on motivation differentials that would have arose in alternate realities, but I believe her that she feels this way. The video showing the Free to Choose scene in question can be found here.

I found more interesting, however, this video of a "debate" between Milton Friedman and Naomi Klein. Please enjoy:

Is this Recession Deeper than Others?

David Brooks writes an interesting op-ed in the New York Times on the opinion of economists:

The Romers’ essay exemplifies the economic doctrine that reigned up until a few months ago: fiscal stimulus plans that try to time a recession are dangerous, unproven and unnecessary.

That doctrine has suddenly vanished. But not because we suddenly know how to create effective stimulus plans. Last year, the Congress passed a $165 billion plan that seems to have done almost nothing for the economy. The doctrine has vanished because this recession is deeper than the others and we’ve run out of other stuff to do.

I agree that this recession is unique, just like every other one. But deeper than others? I challenge that statement with the following three graphs, first the monthly percentage change in total nonfarm employment:
Next, the percentage change in real quarterly GDP:


And finally the unemployment rate:


It would appear to me that so far, the data appears to suggest that the recession itself is not yet bad enough to claim it to be the deepest. It is one of the worst in history for the finance industry, just as the 2001 recession was the worst recession for the history of the information technology industry. But in the bigger picture of the whole economy, this recession still seems very modest to me.

The Gus Rankings

I don't believe I've posted about this before, so let me explain. On an annual basis, college football has a serious issue on its hands-- how to select the two teams that play for the national championship. As you know, the Bowl Championship Series generates a calculation that determines who will play. It's not perfect; I'm not going to talk about that.

Well, my uncle had an idea for an alternative way of ranking teams a few years back, and it's fun to see how they line up with what the BCS generates at the end of the year. (I don't know if it was originally his or not, but I haven't seen it elsewhere.) We assign points to every team in the following manner: For every win a team has, they get a number of points equal to wins of the team they beat. So, if Texas Tech beats Oklahoma State, they get 9 points since Oklahoma State won 9 games this year. For every loss a team has, they lose points equal to the number of losses of the team that beat them. So, if Oklahoma State loses to Texas Tech, they lose 1 point, since Texas Tech lost one game. You do this for every team on the schedule for the entire season. Since more games means more points (for the successful teams), dividing by the number of games played needs to be done and, viola, you have the Gus Rankings.

Some thoughts on the Gus Rankings:

- Clearly, the rankings are completely objective, which has its positives and negatives, but on net I think it's a positive. Margins of victory don't count, nor does playing at home or on the road, nor does the timing of your losses, nor does the conference you play in.

- It's tough to figure how to manage games against I-AA teams (I believe they are called FCS teams now). The general idea behind the Gus Rankings is to give more points for beating teams with better records. Better teams have better records (see next comment for more on this), but if you shift divisions, this isn't true any more. You clearly shouldn't get as many points for beating a 11-1 I-AA team as for a 11-1 I-A team. For the time being, I excluded those games against I-AA competition from team's schedules.

- Here is what I consider to be the best aspect of the Gus Rankings. As it sits now, teams in BCS conferences have no incentive to play teams from outside of BCS conferences. They are perceived as weaker competition, so even a win against one of these teams is taken with a grain of salt, and a team could get snake-bitten by a team that turned out to be pretty good. Take the argument made by the BCS conferences as to why they shouldn't make it into the title games-- they run up gaudy records against poorer schedules, and therefore aren't actually that good themselves. If they believe that to be the case, then those are exactly the types of teams that you want to schedule if the Gus Rankings were used. You'd love nothing more than to play a 11-1 that has supposedly run up its record against bad competition; after all, you get a lot of points from a poor team. As the years go on, teams that persistently run up good records against poor compeition will end up on the schedule of better teams, and their true value will be ascertained on the field. This is a very good thing.

- There is a huge upside and a small downside to playing a very good team. Let's say you anticipate that USC is going to be good, so you schedule them, and they end up going 11-1. If you lost to them, you only lose a point, and if you were the team that beat them, you get 11 points. Conversely, it's not good to play a bad team-- you don't get a lot for winning and you could lose a lot if you lost the game. Insofar that good teams playing other good teams is an attractive proposition, the Gus Rankings are a big plus in this regard.

- The rankings really only make a lot of sense at the end of the year. Of course, with the BCS, the final one is the only one that ends up mattering, but it is fun to follow along through the season.

- Conferences with a title game will give a bump to the winner; it adds a game against good competition to the overall score. Thus, conferences with title games should produce champions with a better score. (Remember, it's an average, so as long as the points gained were more than the average points gained in a game throughout the season, the ranking goes up.)

- Good conferences end up with a bump for all their teams. Consider within conference games; they're a wash since teams will play a range of good to poor teams within the conference schedule. But consider now a conference that has performed well outside of its league games-- there is a bump up for points to be had from wins and a bump down for points to be taken away from losses. Unbalanced conference schedules mitigate this a little bit, but the overall idea is still the same-- better conferences get more points, but not by subjectivity. Their good teams get more points by beating teams that themselves have performed well. Rewarding strong conferences in an objective way is also a very good thing.

The BCS rankings are as follows:

1. Oklahoma
2. Florida
3. Texas
4. Alabama
5. USC
6. Utah
7. Texas Tech
8. Penn State
9. Boise State
10. Ohio State

The Gus Rankings are as follows, pre-bowl game results:

1. Oklahoma 6.417
2. Florida 6.250
3. Texas 6.167
4. Utah 5.727
4. Boise State 5.727
6. Texas Tech 5.500
7. Alabama 5.000
8. Ohio State 4.909
9. Penn State 4.818
10. USC 4.750

This is only the top 10 from above re-calculated-- it takes a decent amount of time to do this, since you have to find every team they played and then adjust THEIR record for bowl game results too. I realize now that I ignored the secondary I-AA games-- that is, I ignored them for those teams above, but if these teams played other teams that beat I-AA teams, then they got a bump up for that they shouldn't have received. Conferences that beat up on I-AA teams would be biased upwards here; take from that what you want. I really should write up an Excel sheet to do this for next season to take everything into consideration.

Indiana Jones and the Russian Communist Party

Honest to God, I love the Russian Communist Party for these gems, like demanding the kidnapping of James Bond and asking McCain to kill himself. This one is a bit dated, but I found it in searching for reasons that might explain the plot of the most recent Indiana Jones movie (like Lucas coming down from meth addiction or what have you). Here is Reuters on the RCP reaction to the movie:

"Harrison Ford and Cate Blanchett (are) second-rate actors, serving as the running dogs of the CIA. We need to deprive these people of the right of entering the country," said another party member, Andrei Gindos.

...

"Our movie-goers are teenagers who are completely unaware of what happened in 1957," St Peterburg Communist Party chief Sergei Malinkovich told Reuters.

"They will go to the cinema and will be sure that in 1957 we made trouble for the United States and almost started a nuclear war."

"It's rubbish ... In 1957 the communists did not run with crystal skulls throughout the U.S. Why should we agree to that sort of lie and let the West trick our youth?"

So, when did they run with crystal skulls throughout the U.S.? 1956? 1958?

I tend to think that some movies are so bad that they should be seen, perhaps more so than ok movies. The new Indiana Jones movie is bad enough to be worth watching, and do rent the DVD for the extra features where Spielberg and Lucas explain their creative process. My favorite 2 Lucas proposed titles: "Indiana Jones and the Aliens" and "Indiana Jones and the Son of Indiana Jones."

My Day at the DMV

I thought I would share my experience with trying to get my NC license. I have put it off for the past several months because I knew it would be a hassle. However, I didn't realize just how big of a hassle it was going to be.

I woke up yesterday around 9am and started reading the NC driver's handbook. Even though I have been driving for the past 10 years, in order to get my NC license, I have to take an eye exam, a road sign test, AND a written exam. I was given some warning that the written exam was actually hard and asked several questions about NC laws and penalties, so I started studying. Two hours later, I finish up.

Next, I gather up all my necessary documents (proof of residency, proof of NC car insurance, my SS card, and my WV license) and attempt to locate the DMV. I enter the address into my garmin and off I go. About 45 minutes later, I am driving on a dirt road in the middle of the country. So I call the DMV and immediately I am placed on hold. Then an employee comes back on the phone to give me the address, which I already had. After several minutes of explaining where I was, he finally gave me directions.

Another 45 minutes pass and I finally arrive at the DMV located in a very obscure, unmarked office building. I walk into a waiting room area but I do not see any employees. So I venture down a hallway and I find someone who tells me to go back to the waiting room and take a number off of the wooden block. So I do. Another hour passes and finally my number is called. I go back and there are only two people working. I give them all my documents, info, etc, and proceed to take my eye exam and road sign exam. The road sign exam is where you have to identify the road signs by shape and color. I am not sure why I would be able to see color but not the rest of the picture or words. I pass so I move on to take the written exam. I also pass the written exam consisting of 25 questions that were somewhat difficult. I take my picture and wait.

The next part of business I need to take care of is my title, plates, and tags. That is at another government office located 2o minutes away. It is already 3:45pm so I was worried the office would be closed, but I make it in time. I get my plate and new registration after I pay $218, of which $150 was an out of state highway tax. It is now 4:30 and I have a NC license, plate, and registration, but I am still not finished. I have to get my car inspected but that will have to wait for another day.

After a full day is wasted on trying to switch my license from WV to NC, I am left wondering how does this do anything productive? How does this insure that I am a safe driver? I can now tell you that a pentagon shape sign that is yellow and black represents a school crossing, but I am pretty sure I understood that sign before (the woman and child gave it away). I lost a whole day of work to government inefficiency and bureaucracy. And I am still not done.

Stimulus Skeptics Announced

Yours truly is quoted in the press release of Representative John Boehner's list of economists expressing skepticism over large increases in government spending for the purpose of stimulating the economy. He also provides a larger sampling of skeptics here. Some of my favorites for those who just want a taste:

“It is time for voters to wake up to the fact that government cannot create jobs. It can only shift jobs from one part of the economy to the other. It is entrepreneurs who create jobs, and it is consumers who judge whether those jobs are the best jobs to be created. The government contributes best by establishing a rule of law and protection of property rights that allows entrepreneurs and consumers to act in their best interests.”
Antony Davies
Associate Professor of Economics, Duquesne University

“The stimulus plan will most probably turn quickly into pork spending. Marginal rate tax cuts would be a much more effective way to stimulate demand along with cuts in the capital gains and corporate tax rates. Evidence shows that marginal tax cut multipliers are much higher than spending multipliers. In addition the Fed is still not out of ammunition.”
Joseph Zoric
Associate Professor of Economics, Franciscan University of Steubenville

“Fiscal stimulus may have symbolic value and certainly does provide an expedient for distributive politics, but there is NO evidence that it contributes to GDP or economic growth more broadly.”
Edward Lopez
Associate Professor of Law and Economics, San Jose State University

“The stimulus plans assume consumption is the source of economic growth. It is not. It is the consequence of said growth. The ‘stimulus’ is a redistribution of spending, at best, and will do little to help. The next Administration should avoid large scale programs and experimentation and allow the marketplace to correct the errors made by the last 8 years of misguided intervention.”
Steven Horwitz
Charles A. Dana Professor of Economics, St. Lawrence University

“Want to grow the economy without inflation? Cut marginal tax rates, slash the corporate rate, expense investment in the first year (instead of depreciation), keep tax rates low on dividends and capital gains, and repeal the death tax. Have the Federal Reserve focus on price stability and a sound dollar, and on not generating a monetary roller coaster. (That, in part, is what caused the housing and commodities bubbles.) Rein in government spending to pay for the tax cuts, and trim senseless regulation.”
Stephen Entin
President & Executive Director, Institute for Research on the Economics of Taxation

“Government intervention and ‘stimulus’ in the housing market is largely responsible for the current economic crisis. History has shown that the Obama team’s proposed ‘stimulus’ is not only going to have little to no effect in the short run, but will create a larger bureaucratic structure, lead to tremendous investments in unproductive political lobbying among ‘stimulus project’ wannabes, and dissuade/delay private investment, recovery and growth.”
Michael Sykuta
Associate Professor, University of Missouri – Columbia

“Government spending programs like these are political grab-bags whose successes are predicated on satisfying political interest groups, not on creating value and growth in a market economy; these government spending programs then often become embedded ‘entitlements,’ crowding out the flow of funds to private investments in a free marketplace.”
Douglas Houston
Professor, School of Business, University of Kansas

Porn Industry Seeks Federal Bailout

Yes, that's the verbatim title from CNN. Article of the still-young year, thus far.

Best and Worst Jobs

The Wall Street Journal had an article yesterday concerning CareerCast.com's ranking of 200 jobs. The full list is here. Mathematician tops the chart; if I could change my undergraduate major, I'd have majored in math. (Maybe math and economics.) Lumberjack is last; I've actually spoken to a few lumberjacks and they seem to enjoy what they do. Dangerous, yes, but they get to play with some pretty fun toys. By comparison, I know more accountants and I don't know anyone that particularly enjoys doing that-- yet they are #10, right ahead of economists at #11.

Also, EMT comes in #196, near the bottom, we've blogged about them before.

At a glance, the list seems to take a heavy stance on potential workplace danger.

"Free" Money

This ad was to the side of this unrelated story:

Moral of the story: You don't need earmarks to get rent-seeking.

Should Airline Employees' Wages Reflect Weight?

TPS friend professor Pavel Yakovlev sends along this little ditty:

India's state-owned airline Air India has terminated the services of nine hostesses for being "overweight", a spokesman says.

The air hostesses were taken off flying duty two to three years ago and put on ground duty.

They say they have now been told by the airline that it no longer has positions for them in ground jobs.

Dr. Y adds the following commentary:

In the presence of flexible wages, I would argue that a better solution would be to pay the overweight flight attendants a wage inversely related to body weight. If consumers pay extra fees for baggage, why not apply the same principle to flight attendants?

The article says the airline claims there was an issue of safety in the event of an emergency (i.e. their marginal product was nonpositive OR wages are not flexible at Air India), but Pavel's point reminds me of this post that is similar in thought from Daniel Hamermesh, which is to charge heavier customers more (or equivalently thinner people less):

...the heavier people cost more to ship; and at a time when fuel prices are so high, this seems especially important and a good way of letting price reflect marginal cost. Also, heavier people spill over onto their neighbors’ seats, generating negative externalities for the other passengers.

What If Voting For President Was Like Voting For Best Podcast?

I think the 2008 Best WeBlog Award voting rules are very interesting (vote for EconTalk here): One vote per day per IP Address.

So today, I was able to vote at work, and on both my home computers (3 votes total).

I suspect this rule is simply due to a technological limitation, but it also captures to some extent how much more the fans enjoy their favorite podcast than the runner-up. In other words, we get an idea of a cardinal ranking instead of just an ordinal one.

I'm not advocating it, but since we have blogged about alternative voting systems before, I think it is worth some discussion. (I also can't help but think it is a different form of the electorate college.) Suppose the polls would be open for 10-days, and you could vote once-per day, how would people's behavior change? My guesses:

1. If people vote based on the probability they cast the decisive vote, those who are close to the indifference point won't vote at all. As a result, the total number of voters fall.
   
2. A new class of voters would emerge, no longer just the "I voted today" but perhaps "I'm a 10-voter." Also for particular voters of candidates: "Don't blame me, I voted for X 10 Times!"
   
3. There will be less "buyer remorse." I recall a friend who told me "I went in planning to vote for Nader, but panicked and voted Libertarian." Now she could return and cancel her vote out to some extent, assuming she would not just panic another 9 times in the same manner.

Any other guesses?

Very Good Sentences On Secure Property Rights

KipEsquire conveys the importance of private property rights in lieu of regulations in a very fine way:

If I go out and murder someone, does that suggest that the penal code “failed” or that the police “failed”? If I go out and rob a bank, does that mean that the Federal Reserve “failed” or that the FDIC “failed”? Of course not.

All the government can do is establish consequences for malfeasance, then make sure I know the consequences of that malfeasance. If I accept those consequences and commit the crime anyway, then what more is the state supposed to do exactly, except assign a prosecutor and impanel a jury?

It cannot possibly be the responsibility of regulatory bureaucracies such as the SEC to prevent criminal conduct a priori. The government can only provide the framework to help people avoid being victims, and to punish malefactors afterwards.

The entire post is worth the read.

The Bailout: Coming This January

Be sure to click on the photo and read the smaller text.
Hat Tip: Philippe Legrain

Football thoughts

Let's talk football.

- If you said a player was 7-8 in the postseason-- and after removing one outlier season, 3-8-- would you be surprised if he lost a playoff game? No. So please stop implying that Peyton Manning is some playoff godsend. He's never been good in games that matter at any point in is career. Ever.

Regular season: 333 TD, 165 INT (2.02:1), Pass Rating 94.7
Playoffs: 21 TD, 17 INT (1.24:1), Pass Rating 84.4

- For most colleges, holding onto a football coach seems a daunting task. I've witnessed the evolution of their attempts as follows.

College: Give them more money.
Result: Coach leaves for even more money elsewhere.

...then...

College: Give them longer contracts.
Result: Coaches get longer contracts, or more money to compensate the short timeframe, elsewhere.

...then...

College: Write buy-out clauses into contracts. That is, if the coach leaves before the end of the contract, $X million dollars must be paid to the school.
Result: Coaches get their new employers to cover the bill, either directly or indirectly through a sufficiently high salary.

So what's the next step? Boston College is trying a new approach-- interview elsewhere and you're fired. What's going to be the result? Well, in this particular case, there seems to be a lot of bad blood between the two sides, so it doesn't look like he'll be coaching there for long as it is. But I'd expect that, should schools go to this policy, interviews will be less in person and more over the phone so as to disguise the actions of the coach. I'm always curious how much face-to-face interviews for coaches really matter-- you've seen the coach's body of work, and that's what matters, yes? Maybe it could matter a bit more in college, as you have to deal with an institution, recruiting, donors, alumni and the like.

And not to toot my own horn, but I was one of the few saying at the time that signing Weis to a long contract after the 2005 season was a *horrible* move, even if he stayed for the entire 10 year duration of the contract.

- There's been some discussion recently about home underdogs, as all four home playoff teams from this last weekend were underdogs. Saturday's pair both won, and Sunday's both lost.

While this seems odd in a playoff system to see road teams favored, it's actually more uncommon to see home teams favored in the Wild Card round. Since division winners get automatic home games, the worst of the division winners (#4 seed) always hosts the best of the wild card teams (#5 seed), and the second worst division winner (#3 seed) always hosts the second best wild card team (#6 seed). The first pairing nearly always sees better teams in the #5 slot, and #6 teams can be better than #3 teams too. So, road victories in the playoffs are certainly more frequent than they used to be. Things usually fall back into line in the second round, where the best of the best teams get the additional advantage of a home field and crowd.

For this coming week? The lines are here; unsurprisingly, none of the road teams are favored. Levitt mentions that football lines rarely move more than one point in either direction; I'd be surprised if the Baltimore line stayed within that range. Baltimore looks very appealing at the moment at -3. I don't feel too confident in the rest, though if I had to pick one more...Pittsburgh at -6. San Diego's been playing well, but Pittsburgh should stop the San Diego run game sans a healthy Tomlinson (though Sproles was very effective on Saturday night), and I wouldn't want Phil Rivers on the road in the playoffs trying to lead my team to victory.