Thursday, February 25, 2010

Unions vs. School Districts: Rhode Island edition

Not sure that the teachers themselves are the problem, but it's a bold move to fire every single teacher at a high school. In a world of marginal movement, change rarely comes in large doses so it'll be interesting to see where all this settles. I'd like to think that it would lead to some market based efforts to improve the failing school district, but I can't help but to think that this situation, in the end, will be a net gain for the teacher's union.

The Art of Not Being Governed

"In one sense, the difficulty of moving grain long distances, compared with the relative ease of human pedestrian travel, captures the essential dilemma of Southeast Asian statecraft before the late nineteenth century.


Imagine a map constructed along these lines, designed to represent relative degrees of potential sovereignty and cultural influence. One way of visualizing how the friction of distance might work is to imagine yourself holding a rigid map on which altitudes were represented by the physical relief of the may itself. Further, let's imagine that the location of each rice-growing core is marked by a reservoir of red paint filled to the very brim. The size of the reservoir of paint would be proportional to the size of the wet-rice core and hence the population it might accommodate. Now visualize tilting this map...

The angle at which you had to tilt the map to reach particular areas would represent, very roughly, the degree of difficulty the state would face in trying to extend its control that far."

That's from the terrific The Art of Not Being Governed by James C. Scott, I'm working my way through it.

Tuesday, February 23, 2010

Expiration Dates as Self-Regulation

Expiration Dates are "meaningless," from Slate:
Such disparities are a consequence of the fact that, with the exception of infant formula and some baby foods, package dates are unregulated by the federal government. And while some states do exercise oversight, there's no standardization. A handful of states, including Massachusetts and West Virginia, and Washington, D.C., require dating of some form for perishable foods. Twenty states insist on dating for milk products, but each has distinct regulations. Milk heading for consumers in Connecticut must bear a "Sell by" date not more than 12 days from the day of pasteurization. Dairies serving Pennsylvania must conform to 14 days.

That dates feature so prolifically is almost entirely due to industry practices voluntarily adopted by manufacturers and grocery stores. As America urbanized in the early 20th century, town and city dwellers resorted more and more to processed food. In the 1930s, the magazine Consumer Reports argued that Americans increasingly looked to expiration dates as an indication of freshness and quality. Supermarkets responded and in the 1970s some chains implemented their own dating systems.

So in actuality, the meaning of the date is a very complex phenomenon that is specific to the individual traits of the food and the intended quality level, and yet it is one that we seem to work with very well.

The Slate writer sees this all as a problem that needs to be fixed, while acknowledging that people seem pretty good at deciding when their food is good to eat. She also raises concerns about the next E. coli outbreak, but last I checked those (as seldom as they are) are probably even less likely to originate from you not throwing your milk away sooner.

Saturday, February 20, 2010

Shifting Coalitions?

Political parties are interesting as they often bring together diverse individuals who agree on a core set of issues but disagree over what appear to be less important issues. Since the importance of this or that issue depends on what political cards are currently being played and what cards are anticipated in the future, the core set of issues might change from time to time. If there is wide spread disagreement about those issues outside the core, coalitions are likely to shift through time. Perhaps we are on the verge of such a shift.

To simplify, we can think of the GOP at present as being comprised of three groups: neocons, traditional conservatives, and neoliberals. Neocons are in favor of interventionism, both home and abroad. Traditional conservatives support free markets, but also support "traditional conservative values" and don't mind using the state to enforce said values. Neoliberals are in favor of free markets and, even though some may share the conservative values of their traditional conservative allies, they do not advocate using government power to legislate those values. I do not see the neoliberals and neocons finding common ground. So the question is: will traditional conservatives downplay their state-supported values in order to side with neoliberals or reject their free market stance in order to side with neocons?

The sides have been drawn but it isn't clear how things will end. Consider these two videos from CPAC.

It should be interesting.

Friday, February 19, 2010

Why Didn't Springfield Get Richer?

Because the dome was just like a policy that rhymes with "Shromectionism."

Inspired by Art Carden's excellent Simpson's image heavy presentation for the students of SPEA.

Wednesday, February 17, 2010

Closing State Deficits

The Center on Budget and Policy Priorities offers A Balanced Approach to Closing State Deficits. Since we here at TPS embrace shameless self-promotion, I will note that they favorably cite my TF paper on Movie Production incentives (pp. 4-5).

Monday, February 15, 2010

A Plea for Economic Freedom: Gilmore Girls Edition

Destiny decided that my wife would start watching Gilmore Girls just so that I would get to see this scene (no video as far as I can tell):

LUKE: I look at a thousand apartments, I choose yours. How is that possible?

TAYLOR: Well, count yourself lucky, you. With me as the owner, there is a level of quality control that is sorely lacking in this town. For example, at all my properties, we measure the grass before, during, and after mowing to attain a perfect inch and a half height, which is both pleasing to the eye and good for the grass.

LUKE: All of your properties?

TAYLOR: Ten in all.

LUKE: Ten properties? What are you, buying up the town?

TAYLOR: Not yet, but someday – who knows?

LUKE: But why isn’t anyone stopping you?

TAYLOR: Because, my friend, people are lazy. They don’t wanna think about the proper fabric for an awning or the correct historical color for a building. They just slap any old thing up on a wall and sleep like babies. But soon, hopefully, the city council will put an end to that.

LUKE: Taylor, you cannot tell people what color to paint their buildings!

TAYLOR: Well, someone has to.

LUKE: No, they don’t. We don’t live in a fascist country.

TAYLOR: Oh, this isn’t about the fascists – who, by the way, had their faults but their parks were spotless.

LUKE: I have to get out of here.

It goes on, but you get the idea.

Blockquoting X

X = Mises, Liberalism (27-28).
Nowhere is the difference between the reasoning of the older liberalism and that of neoliberalism clearer and easier to demonstrate than in their treatment of the problem of equality. The liberals of the eighteenth century, guided by the ideas of natural law and of the Enlightenment, demanded for everyone equality of political and civil rights because they assumed that all men are equal. God created all men equal, endowing them with fundamentally the same capabilities and talents, breathing into all of them the breath of His spirit. All distinctions between men are only artificial, the product of social, human—that is to say, transitory—institutions. What is imperishable in man—his spirit—is undoubtedly the same in rich and poor, noble and commoner, white and colored.

Nothing, however, is as ill-founded as the assertion of the alleged equality of all members of the human race. Men are altogether unequal. Even between brothers there exist the most marked differences in physical and mental attributes. Nature
never repeats itself in its creations; it produces nothing by the dozen, nor are its products standardized. Each man who leaves her workshop bears the imprint of the individual, the unique, the never-to-recur. Men are not equal, and the demand for equality under the law can by no means be grounded in the contention that equal treatment is due to equals.

Still Hope for Indiana Polycentricity

Indiana is still trying to figure out what to do with township governments in the state. To simplify massively: the dominant push is towards centralizing government to the county level, and the conventional view for the existence of pushback is that township-elected politicians/bureaucrats are undermining rationality. I agree that there is a problem when revenues are collected at the township and services are provided by the county, but I would go towards the route of decentralizing services from the county back to the townships, rather than centralizing the revenues to the county. A matter of taste, I guess. In the meantime, the absurdly idealistic goals for this process are the primary hurdle:
Still, a lack of direction hasn’t stopped chatter about nixing township government. Legislators have narrowed the number of possible solutions to about three: abolishing township government completely, getting rid of township boards but keeping elected trustees in each township or letting a voter referendum decide on the changes. But perhaps the most intractable problem for state leaders seems to be finding a solution that fits the needs of all 1,008 townships in the state.
Yes, a Pareto-improving state policy for >1K entities probably will be a challenge.

The Market for Fake Job References

CNN has the story here, of, which will provide "the highest quality employment verification services and helping job seekers acquire 'great' references for their resume." In other words, if you don't have good job references and you're looking for a job, you can buy them. From the bit:

Schmidt is the founder of, a Web site that says it will fill any gap on your résumé by acting as your past employer. It will go as far as creating a new company with an accompanying phone number, logo, Web site and LinkedIn profile. He says the site is designed to "help our subscribers meet the needs of the modern day job market."

It's an interesting service-- since signal extraction is increasingly difficult with letters of recommendation, my suspicion is that while it won't tip the scales in anyone's favor it may get someone in the door. Further, the downside risk is virtually nil; if your choice is a bad (or less than stellar) recommendation or purchasing a fake one, the consequences of the latter if found out is likely the same as the former-- you just don't get the job. Hiring is already a costly process and I don't see employers shouldering the effort of generating a network to blacklist fakes.

These would seem to work best for entry to mid-range jobs; high end positions are likely to be had through networking and networking (as far as I know) can't be purchased.

CareerExcuse is balancing an interesting line; vast success may overwhelm their ability to stay away from the public eye.

Sunday, February 14, 2010

Blockquoting X

From Adam Smith in WoN( V.1.164 ):
In England it becomes every day more and more the custom to send young people to travel in foreign countries immediately upon their leaving school, and without sending them to any university. Our young people, it is said, generally return home much improved by their travels. A young man who goes abroad at seventeen or eighteen, and returns home at one and twenty, returns three or four years older than he was when he went abroad; and at that age it is very difficult not to improve a good deal in three or four years. In the course of his travels he generally acquires some knowledge of one or two foreign languages; a knowledge, however, which is seldom sufficient to enable him either to speak or write them with propriety. In other respects he commonly returns home more conceited, more unprincipled, more dissipated, and more incapable of any serious application either to study or to business than he could well have become in so short a time had he lived at home. By travelling so very young, by spending in the most frivolous dissipation the most precious years of his life, at a distance from the inspection and control of his parents and relations, every useful habit which the earlier parts of his education might have had some tendency to form in him, instead of being riveted and confirmed, is almost necessarily either weakened or effaced. Nothing but the discredit into which the universities are allowing themselves to fall could ever have brought into repute so very absurd a practice as that of travelling at this early period of life. By sending his son abroad, a father delivers himself at least for some time, from so disagreeable an object as that of a son unemployed, neglected, and going to ruin before his eyes.

Thursday, February 11, 2010

Robin Hood Tax

A friend of mine wanted my thoughts on the Robin Hood Tax, so I thought I'd pass them along to you:

1. Though the page is vague about the issue, the tax would likely not be instituted by all countries evenly. Therefore, if this campaign has any success, you'll have some countries that incorporate it and some that don't. Financial transactions are *very* mobile-- as mobile as it gets-- and it would be very easy for those who would be taxed to simply move to a locale where the transaction would not be taxed. People want to avoid taxes and this one would be easy to avoid.

2. The tax seems to target "speculative" activity. Depending how you slice it, just about any financial transaction could be classified as speculative-- so there's an issue of exactly what you tax. Further, due to different financial instruments, you can generally replicate one financial transaction through a combination of others. So that could be another way to avoid the tax.

3. As always, there are deadweight loss issues concerning taxation, though some of the effects are described above. Though if you really want to split hairs, those effects described above are technically excess burden, not deadweight loss.

4. As always, the ability of governments to effectively use tax money to generate positive outcomes is dubious at best.

5. As always, there are political problems inherent in taxation in general.

Anything else? 2 would seem to be the short run outcome, 1 would be the long run.

Wednesday, February 10, 2010

My Interview on Pittsburgh Business Radio

Last Friday, as the storm was moving in, I had a nice talk with the good folks at Pittsburgh Business Radio. The intended topic was the living wage, though we only touched on that topic for about ten minutes. We talked about Senator Byrd, the stimulus package and a number of other topics. The link is here, it's about forty minutes long.

North Korea Documentary

From CNN, choice excerpts:
But this guy with our group who was from the L.A. Times told us, "Everyone in here besides us is secret police. If you don't act excited then you're not going to get your visa." So we got drunk and sang songs with the girls. The next day we got our visas. A lot of people we had gone with didn't get theirs.


Perhaps the weirdest thing about North Koreans is that they genuinely don't seem to know that the rest of the planet hates and fears them. They believe (or maybe they really convincingly lie about believing) that the whole world admires and envies them and that they're the true light of socialism and Juche, which is their leader's philosophy of Communist self-reliance.
By the way, my new favorite oxymoron is "communist self-reliance."

Tuesday, February 09, 2010

The Mileage Tax and the Efficient Allocation of Outrage

AT at MR has a pointed post on the "illogic" of a mileage tax, comparing it to a tax on breathing to punish smoking.

I agree that if your target is the reduction of environmental externalities (pollution and congestion), the fuel tax is sensible and the mileage tax is generally not. However, the history of the fuel tax (Hoover, Revenue Act of 1932; see this rather bizarre report from the US DOT) was a means of raising revenue to finance the expansion of public infrastructure.

To this day, it is a common example in public finance as a program that imperfectly follows the benefit principle of taxation. Those who drove on highways also tended to use gasoline, and hence those who benefited from the infrastructure were the ones financing it. The externality argument, as far as I can tell, came long after the 1932 act establishing the gas tax.

Conditional on the government both producing infrastructure and raising taxes to finance it, shouldn't the preference be for benefit principle taxation? So my basic suggestion is that, on the margin, libertarian outrage is better directed at other subjects, or at least at different angles of the mileage tax (privacy concerns, e.g.).

Return to Barter?

A fellow Northern VA snowpocalypse survivor came across this interesting ad while searching for a snow shovel online.
I have hundreds of PHISH cassette tapes and a boombox. They are ALL yours if you shovel my car out of the snow. It`s not a driveway. Just a small parking area. All you have to do is shovel out the left side of the car and the back of the car. If you`re interested please get in touch with me. Thanks.
I think this clearly illustrates the coincidence of wants problem. I cannot imagine this transaction was successful.

[HT: Astrid]

Friday, February 05, 2010

I'm guessing CNN...

...didn't see the plain answer to their question.

It's too bad CNN doesn't do headlines on t-shirts anymore; then again, I think I made out pretty well before it was all said and done (mine's in red).

A Degree In Growing Pot

From CNN:

The CNN reporter is pretty absurd in the coverage, at one point asking the Pot Grower about the development of clean energy for economic growth instead of legalizing pot. Nevertheless the story includes some of the interesting contradictions in Michigan law. You just kind of have to see it for yourself.

Air Marshalls

CNN has a report this morning on the air marshall program; not surprisingly, there are bureaucratic issues that distort the intentions of the program. To look more productive, marshalls oftentimes ride on shorter regional routes instead of long haul international flights, like this one. One estimate put the price tag at over $200 million per arrest.

Though the FAMS program is secretive of assignments by design, I'd love to get my hands on the air marshalls data and see what comes of it.

Wednesday, February 03, 2010

Free (Baseball) Data

I stumbled across my old data from my first publication, and have posted it online. It contains the signing salaries of MLB Free Agents between 1991 and 2002. It has player stats, signing team characteristics, signing team's city characteristics, and simulated tax burden with an accompanying instrument.

Of course I will be happy if someone extends the work, but it might also be a convenient dataset for students interested in baseball who are also looking to run a regression and write up the results for their econometrics class.


The Effect of Prayer on God's Attitude Toward Mankind

That's the title of a paper by James Heckman in the new release of Economic Inquiry. Here's an ungated copy.

From the abstract:
This paper uses data available from the National Opinion Research Center's (NORC) survey on religious attitudes and powerful statistical methods to evaluate the effect of prayer on the attitude of God toward human beings.
From the results:
A little prayer does no good and may make things worse. Much prayer helps a lot.
The appendix includes an interesting response from Father Andrew Greeley, a well known Catholic priest and sociologist.

CBA and Bulletproof Clothing

Here is a CNN story on a Colombian tailor who makes his clothing bulletproof, even at point blank range. It opens up an interesting cost-benefit question for a social welfare analyst:

Let's assume that point-blank assassins aim at their targets in a manner that maximizes the probability of death:
p(Death) = p(Hit)*p(Death|Hit).

Where p(Hit) is a function of size of the area on the target (torso is a higher probability shot than the head, for instance), but p(Death|Hit) shrinks with the size of the area on the target (torso shots are less likely to kill than head shots).

Suppose, pre-bulletproof clothing, the dominant strategy for point-blank assassins is a single shot to the torso. It is observed by the population at risk that there is a stochastic random distribution around the area of the heart and torso. This creates the sufficient demand for bulletproof clothing.

If enough of the target population adopt bulletproof clothing, it seems to me the dominant equilibrium strategy shifts to head-shots, which remain unprotected but are harder to hit. On the net, I think we could expect the number of successful assassinations to decrease, but will it be enough collectively to justify the new more expensive tailoring? Could this be an individually rational but collectively irrational product? Things can get really interesting if you assume different levels of risk aversion among assassins.

Tuesday, February 02, 2010

Super Bowl Props: Year 3

It's time for this year's Super Bowl prop-a-thon! TPS stalwart Rob Holub sends along this year's props. Here's last year's post and here's the year before. Rob issued me a sound beating last year, so I need a better performance. Feel free to add in your choices and see how you do!

For the uninitiated, props are bets on certain outcomes within the game. Extremely popular games-- like national championships in college sports and title games/series in professional sport-- tend to have some listing of prop bets, though in the vast majority of games you can usually wager only on the winner and an over/under for total points scored. As always, bets are for recreational purposes only.

One final thing-- to avoid the four-corners effect, it makes a little more sense to pick props that are priced at roughly 50% (or below, if you so choose). You don't quite get the same effect from taking the "no" on the two point conversation (paying a meager -600) as you do from taking the over/under jersey number bet (generally priced at the even -115/-115 spread, and an annual Holub lead-pipe lock).

Onwards! Here are my picks:

- Will the game be tied after 0-0? Yes. (+100)

- Total Number of Different Players to Have a Pass Attempt: 2.5 (2-pt conversions do not count). Over. (+240)

- Saints: Will they convert a 4th down attempt? Yes. (+125)

- Robert Meachem, Total Receiving Yards on 1st reception: 10.5. Over. (-115)

- Peyton Manning, Will Have More Passing Yards in Which Half? Second. (-105)

You got nothing on those, Holub! I also like how four of my five prop bets could conceivably be satisfied on one play.

Again, feel free to play along in the comments.

Monday, February 01, 2010

Celebrity Look-alike

Has anyone else noticed how similar Bryan Caplan and William Stanley Jevons look?