Thursday, March 31, 2011

The Circle of (Anti)Trust

It seems like just the other day, Microsoft was a darling of Schumpeterian competition, being chased by incompetent rivals who were better at choosing lawyers than figuring out what features consumers wanted on their desktop. Now, Microsoft seems to be prepared to come full circle:
In a European Commission filing this week, Microsoft asked European regulators to investigate the search giant on antitrust grounds, accusing it of pursuing "anti-competive practices." Microsoft accused Google of boxing out competitors by walling off content, signing exclusivity deals, and making it difficult for companies to move Google advertising campaigns to rival search sites.
Sounds familiar!

Wednesday, March 30, 2011

The Curious Task

"I don't understand this," he wrote. And he says about economics in general: "I cannot understand it, and I cannot believe that anyone else understands it, either. People may say they understand it...but I think it is all a fake."
That is Isaac Asimov, according to Julian Simon, being bewildered by Simon himself.

Tuesday, March 29, 2011

History of the Libertarian Movement...

...that I was unaware of. According to Will Wilkinson,
Charles Koch founded the Cato Institute in 1977 with Ed Crane and Murray Rothbard, an iconoclastic "anarcho-capitalist" economist and political theorist.
That's right, folks, Rothbard was a beltway libertarian! I am sure there are some juicy stories--perhaps a great falling out--that I have not yet heard. Feel free to post all the seedy details in the comments.

I should have clicked a few more links before blegging for details.

Monday, March 28, 2011

New TPS phrase

One of my favorite parts of the blog? Juicing the Mitchell. It's a phrase that captures quickly and accurately a wide range of (usually) legislative activities. Effective...efficient...Will Luther! (Insert Bill Raftery voice here.)

Well, I'd like to add another line-- this one from The Simpsons-- to the TPS lexicon. During one episode, Moe become attached to Maggie and becomes a bit of a surrogate father. At Maggie's birthday party, her aunts Patty and Selma buy her a rattle as a gift, to which Moe replies, "Thanks for breaking a five."

It captures the feeling nicely-- an embarrassing modicum of effort usually overstated. I'm going to work it into the proceeds here as best as I can.

Sending two planes to an international conflict in the Middle East? Thanks for breaking a 5, France.

Cutting $100M from a $1.6T budget deficit? Thanks for breaking a 5, (insert politician here).


Wednesday, March 23, 2011

Radiation Chart

Just as understanding millions from billions from trillions is important, so too is understanding radiation and the risks from it. Here's a handy chart that gets at the latter nicely, many thanks to Greg Cooney.

The general lesson for those in America freaking out about radiation from Japan: Take a deep breath and understand the magnitude of things.

Tuesday, March 22, 2011

Sumner on Recessions and Policies to Combat Them

Scott Sumner at TMI hits the nail on the head:
We need to stop thinking about deep slumps as a sort of random “problem” that needs to be “fixed.”  They need to be prevented; if they aren’t, they probably won’t be fixed.

Thursday, March 17, 2011

Q: Why Do We Need Pro Athletes?

A: Because politicians make poor role models. Consider Newt Gingrich, via the AP.
The twice-divorced former U.S. House speaker has said he had an affair with Callista, a former congressional aide, while married to his second wife. It happened at the same time he was attacking President Bill Clinton for his relationship with White House intern Monica Lewinsky.
Do as I say, not as I do.

Wednesday, March 16, 2011

TPS Bracket Challenge

March Madness is here! Fill out your bracket and see how you stack up against TPS bloggers. Picks must be submitted by 11AM on March 17. Good luck!

Collected Links

  1. Is it even possible to soak the rich for all the new spending, from an accounting perspective?
  2. The post tax price of a year's supply of "free donuts" is $1,000.
  3. Prostitutes and Porn are not tax deductible medical expenses, and neither are these nine other things.
  4. TSA nude body scanners produce 10x more radiation than they originally thought. And yet, it is only a minor objection I have to the device.
  5. Ohio 13-year old entrepreneur.

Tuesday, March 15, 2011

Broken Window Fallacy?

Recent events in Japan have prompted discussions of the broken window fallacy. The typical chain of events goes something like this:
1. Natural disaster
2. Reporter (or, reporter citing an economist) notes GDP might increase because of disaster.
3. Economist (probably not the one cited by the reporter) yells "BROKEN WINDOW FALLACY!" And, presumably, scores points for being reasonable.
Today, I will venture into the land of heresy by suggesting those who point out that natural disasters might make people better off are not necessarily committing a fallacy.

A fallacy is a chain of reasoning whereby the premises do not support the conclusion. But consider the following chain of reasoning.
1. Individuals may have a bias whereby they do not upgrade appliances when doing so would make them better off by their own assessment.
2. Natural disasters force them to buy new appliances.
3. The net effect of natural disasters is ambiguous (i.e., it might be positive, negative, or zero)
Where's the fallacy? Note: I am not saying that natural disasters make us better off. I am saying they might make us better off if the behavioral problem identified is significant. I think it is unlikely that the benefits from upgrading our refrigerators would be so great that they would offset the buildings destroyed by the natural disaster. (Of course, if the underlying behavioral problem is significant, it might apply to more than just household appliances.) But this is an empirical question.

My suggestion: stop calling such claims a logical fallacy. Point out that an increase in measured GDP does not necessarily imply an increase in welfare and then move on. There is no need to paint those we disagree with as unreasonable, illogical, or stupid.

Saturday, March 12, 2011

How the NFL labor situation will play itself out

As I'm not a lawyer nor a legal scholar, how the NFL labor situation stands to evolve is rather confusing to me. This article lays out the road ahead. Does this make it any less confusing? Maybe a little. But at least it's all in one place.

As with the sentiments of this blog, we can only hope the Congress gets involved.

Friday, March 11, 2011

Splitting the Bill? Impossible.

That is how I interpret this line from Paul Krugman's latest NYT article:
Think of it this way: Congress could, with a stroke of a pen, cut Social Security benefits in half. But it couldn’t do the same with health spending: Medicare can’t suddenly start paying to replace only half a heart valve or mandate that bypass operations stop halfway through.
Really? Because I am pretty sure they could. I've even drafted a short letter which they can use if they decide to make it happen (I'll waive my usual consulting fees).


Dear Medicare and Medicaid Recipients,

Henceforth, the government will only be paying for half of qualified medical expenditures.



Happiest States in America

Nothing says good times like more happiness research!

TPS happiness guru Rob Holub sends along this survey, it ranks all 50 states and the pdf is here. If you follow this blog you already know who's at #50. They break it down further by city and Congressional district.

Finally, a concrete, water-tight ranking of the happiest places in America!

Thursday, March 10, 2011

What if the government were a household?

One of my colleagues, Antony Davies, has created a fun pdf that translates the government down to household size. You can find it here-- enjoy!