Thursday, November 27, 2003

The Political Economy of Thanksgiving 

I have heard a lot about FDR's movement of Thanksgiving in 1939 to spur holiday commerce. It is funny, because I had never heard this before. Anyway, George Will has a nice piece on "Franksgiving" this morning.

But in 1939 many of the nation's larger merchants - the National Retail Dry Goods Association, the presidents of Gimbel Brothers and Lord & Taylor - asked FDR for relief from the fact that in 1939 Thanksgiving would arrive so late - Nov. 30 - that it would injure the economy by delaying the start of Christmas shopping.

However, the class struggle erupted, pitting smaller merchants against the larger merchants. The proprietor of Arnold's Men's Shop in Brooklyn wrote to urge FDR to allow the later Thanksgiving: "If the large department stores are overcrowded during the shorter shopping period before Christmas, the overflow will come, naturally, to the neighborhood store. ... We have waited many years for a late Thanksgiving to give us an advantage over the large stores."

FDR felt the pain of the large merchants. But some people felt pained by FDR's tampering with Thanksgiving, including Oregon's attorney general, author of the doggerel printed above. A West Virginian wrote FDR to say, while you are at it, please declare it "strictly against the Will of God to work on Tuesday" and "have Sunday changed to Wednesday." A South Dakota real estate man admonished FDR to "remember we are not running a Russia or communistic government," and he added: "Between your ideas of running for a third term, and your changing dates of century-old holidays, we believe you have practically lost your popularity and the good will of the people of the Northwest." FDR lost South Dakota in 1940.

Not surprisingly, the move failed and in 1941 Congress intervened to create the fixed Thanksgiving we celebrate as an official "National Holiday."


Thomas Friedman Understands the War in Iraq 

Nice piece by Friedman in today's NYT.

Happy Thanksgiving!

Wednesday, November 26, 2003

Dixie Chick Discount? 

As a big fan of country music, I have great respect for the Dixie Chicks. No matter how they dress or act, their music has consistently been far more traditional than almost any mainstream and successful act. In addition, by proving that people will buy well packaged and well-made traditional music, they have had a positive influence on the path of the entire industry.

Though I did not agree with, or appreciate their fundamentally unserious attack on Bush and the Iraq war, I discovered long ago that it makes far more sense to pick music based on music, not politics. I think most, though certainly not all, country music fans were offended, and I believe that the backlash against the Dixie Chicks and the popularity of more pro-war singers and songs was not and is not the result of some tiny right wing cabal, but of real, grass roots sentiment among fans.

Why I mention this is that last week the Dixie Chicks released a new concert DVD which is being sold at a retail price of $15, whereas new concert DVDs from other established country artist like Allison Krauss and Johnny Cash retail for at least $20, as do those from Rock artists like Bruce Springsteen and U2. When the Dixie Chicks themselves released a concert DVD earlier this year, it retailed for $20. Is this unusually low price a way of apologizing, or at very least an admission that their recent political statements have reduced demand for their products?

As for myself, my demand for their music is still very inelastic, and when they release a CD of new material, I will rush out and buy it. As for this new DVD, many places have it discounted to around $10. At that price, it’s very hard to stay bitter, so I think I have to buy.

Ultimately, as I said earlier, if you are a fan of music or art of any kind, you have to mostly ignore the politics and behavior of the artists to get the best work. I am not about to buy, for instance, any Toby Keith CDs, even if he put out an entire album of material arguing for the beauty and efficiency of lump sum taxes, an idea I really like. In such a case, I might consider an illegal download though.


Tuesday, November 25, 2003

More on Zo 

I started thinking some more about Alonzo Mourning, and I think I was too easy on him. My hazy memory caused me to hold back on some things I wanted to say. But then I read this article by former Hornets beat writer Rick Bonnell. Bonnell sums up what I thought I remembered.

The man is so driven, so combustible, on a basketball court that eruptions are inevitable. You'd see it coming, like a bank of storm clouds on the horizon, and you'd bury your head in whatever you were holding. You did not want him to see you snicker, particularly if you were an equipment manager, a trainer or -- the lowest of bottom-feeders -- a reporter.

Zo once lectured me for two minutes because I dared to ask him a question eight hours before game time. Never mind that reporters are invited to morning shoot-arounds or that simply answering the question would have taken 30 seconds. I had invaded his space and reflexively he went into attack mode.

And remember, this is by a reporter who can't say anything bad in print due to the unfortunate circumstance of Zo's departure.

I am also reminded of Dickey V's comment that Mourning was not consumed by his ego or his contract. Umm remember when he demanded a trade from Charlotte because Larry Johnson was the star of the team and made more money than Zo? At that time Larry Johnson was possibly the best power forward in an NBA that included Barkley and Malone. LJ, too, had his career shortened due to an injury that would have caused most power players to leave the game. Instead LJ promply lost a lot of weight and developed a sweet 3-point stroke, and he never complained about his new diminished role. The explosive LJ, who once went to the finals of the slam dunk contest, could not dunk a ball by the end of his career. A lot of the blame of the Zo/LJ feud is on LJ, and I think that is wrong. He looks like a thug, but he was always popular among his teammates in Charlotte and NY. Zo worshiped at the cult of Georgetown and its chief prophet John Thompson. Outside that group it was him against the world. Zo also cared so little about winning that he opened his mouth about a verbal agreement he had made with the Heat that negated Juwan Howard's deal with Miami.

In summary, this is no reason to celebrate this unfortunate retirement of Alonzo Mourning. An athlete with faults is not uncommon. But, it is also not right to celebrate fictitious qualities that never existed in this man.

Monday, November 24, 2003

Vitale on Mourning 

Apparently, Dick Vitale has a very short memory in regard to Alonzo Mourning's on-court behavior in his article Mourning's Intensity, Passion Made Him Special. Sadly, Zo suffers from a serious kidney problem, which forced him to retire today. I am very sorry for his predicament and I wish him the best in his treatment. But, that does not excuse Vitale's amnesia about Mourning. His intensity and passion were his biggest flaws, which prevented him from reaching his potential. Vitale states:

In this day and age, when so many athletes are concerned only about their stats, their egos and their contracts, Mourning was the opposite. He was all about getting the W!...He was always a class act, as demonstrated when he won the NBA's Citizenship Award.

Really, always thinking about the W? Like, when he was ejected for fighting with Luc Longley in a key game down the stretch causing the Hornets to miss the playoffs. Or when threw a punch at Larry Johnson in the playoffs, resulting in his suspension and causing a sub-par Knicks team to bounce the Heat out of the playoffs. I am not writing this to knock Mourning when he is down. I truly and honestly feel bad for him right now, but I cannot let the sympathy police whitewash his record. Just as alcohol abuse haunts Mantle's legacy, so will his uncontrollable temper haunt Zo.


Book Review - Human Accomplishment by Charles Murray 

Who is the most important chemist in world history? Philosopher? Painter? Is it even possible to talk of meaningful answers to such questions? Charles Murray says yes. His new book Human Accomplishment proves yet again that he is among the most original and certainly bravest social scientist in the world. In it, Murray creates an empirical method for measuring greatness and then attempts to explain what he finds.

The book begins by developing an “inventory” of great individuals. Murray does this by measuring the length of each scientist or artist’s entry in relevant reference books covering various fields. The measurements are then averaged across sources, and the individuals with the most coverage, by Murray’s logic, are declared the most important. The result is a list of 4,002 indispensable people. When the list is broken into various specialties, Murray’s list looks pretty much like what one would expect: Darwin tops biology, Aristotle tops philosophy, and Shakespeare tops English language literature.

To say that Murray’s lists looks right is not to say that it will be well received. It is not at all consistent with our modern multicultural ethos, which insist that every nation, race and culture is equally accomplished and therefore equally good. He finds that 81% of all the significant figures were European and 97.8% were men. His highly empirical process succeeds in producing a picture of history that is replete with those very same dead white males that American elites have tried to de-emphasize for the last 30 years.

Murray subjects his inventory of 4,002 individuals to regression analysis to see what sort of conditions produce greatness. He finds basically what one would expect, that more important figures come from areas with high per-capita income or significant financial, political or university centers. Surprisingly he finds that most proxies for war, disorder, or political regime do not matter.

Since the causes of genius that can be considered empirically are limited, Murray turns to more philosophical explanations for the preponderance of Europeans on his list. He argues that the success of Europe began with the Renaissance and was caused by the work of Aquinas and Luther. Aquinas argued that man’s ability to reason was a heavenly gift, and therefore one could be a pious Christian and still attempt to understand the universe scientifically. Martin Luther, in smashing the Catholic monopoly over the Christian faith, eventually led to a more pluralistic and tolerant Europe. Thus, because of Aquinas and Luther, Europe became a culture with a relatively positive attitude towards change and discovery, and also enjoyed an enhanced degree of freedom for scientists and artist to experiment.

Murray ends his book by examining how the number of great men vary through time, and finds that greatness per capita in both the arts and sciences has been declining since at least 1800. He is not worried about the decline in great scientists. He suggests that the number of truly important natural laws is limited, and most are already understood. Art is another matter. Murray argues that our increasingly capitalistic and secular culture has resulted in artist, writers, and musicians that produce mainly for the masses in a quest for profits, not the more traditional motivations of the glory of God or the approbation of the elites with “good” taste.

I think Murray is onto something here. In our capitalistic world most novels, movies and television shows are produce primarily to earn the huge profits that result from appealing to mass taste. The potential profit almost certainly causes people, who could be truly great artist, to under-perform. For instance, William Faulkner, who wrote at least a dozen spectacular novels, spent over a decade of his most creative years in Hollywood, working hard and writing entirely forgettable scripts and adaptations simply to pay his bills. If he had not gone to Hollywood, who is to say that the world would not have two or three more books as good as Light in August? In this opportunity cost sense, Murray is right. The financial pull of mass appeal causes would be Shakespeares to become writers on Friends and potential Beethovens to become Backstreet Boys. If there are 100 writers alive who are as gifted as Herman Melville, 99 of them are trying to become Steven King, and if we are lucky, one is trying to be as great as the original Melville.

In a perfect world, we could find a way to covert all potentially great artists into actually great artists. The best way to get our capitalists economy to do this would be to improve the tastes of the average American. This should be easy enough, and would only require getting typical Americans to give up their pro-wrestling, John Grisham, and Britney Spears in exchange for Nova, William Faulkner, and Bach. On second thought, substantially improving Americans’ tastes is about as likely as it snowing here it Boca Raton.

Murray is probably right that the world 200 years ago was better configured for producing great artists than our world today. Our free, capitalistic economy encourages artists to produce beautiful and entertaining fluff instead of timeless masterpieces. Count this as a cost to living in a free, capitalistic economy. Benefits of living in such an economy include being able to read Moby Dick, while watching the Oklahoma DVD, in my air conditioned house, with indoor plumbing, all while working less hours and living longer than any generation that ever gone before. So, we produce less great art and artists than we could, but I think that to be truly pessimistic about this is wrong. Our modern world is certainly poorer in some artistic sense, but the freedom and wealth it creates are wonderful compensations. Anyway, there are always people who will ignore the lure of fame and fortune to produce enduring works of quality. Charles Murray is a good example of such a person.


Good and Bad News for Sewanee 

It is unfortunate that good news was muted by a tragedy this past weekend. I am extremely proud that Robin Rotman became Sewanee's 24th Rhodes Scholar this weekend. Congratulations! We must not ignore your accomplishment in light of an awful tragedy.

I am deeply saddened by the shooting death of freshman James Phillip Cole in Athens, GA this past weekend. This is the third freak accidental death to occur to a Sewanee student in the past three years. My thoughts and prayers are with the Cole family. Though I did not know him, any loss in the Sewanee family hurts me. Rest in peace young man.

How to Conserve Water: Price it 

Here is an article a former boss, Susan Dudley, on using prices to ration water. This also includes a good example of perverse incentives that often result from regulations.

The Hat is One Month Old 

This site has been up for a month. I am still enjoying blogging, and I hope to keep going. Thanks to all the readers.

On Drug Prices Again 

Chip Taylor has a very nice comment on my earlier post on the stickiness of drug price controls. My general argument was that drug price controls would not last long due to the inelastic demand for healthcare. Like oil price controls, the public would quickly backlash due to the lack of substitutes.

Chip points out that the irreversibility of price controls on drugs may come from the public's difficulty in perceiving the costs. In the vein of Bastiat, consumers cannot see the lost R&D in the development of new drugs, but they will readily observe the low prices on already existing drugs. Oil, on the other hand, needs no R&D. The political problem with price controls on oil is that the consequences are immediate and observable.

I think this certainly makes drugs different from oil, but I still don't think drug price controls would last. The only reason Canadians tolerate their "healthcare" system is existence of their southern neighbor. In writing the last post I relied on my hero Alfred Marshall a bit much without elaborating on it. (Marshall states the greatest faculty of the economist is imagination). What would the world look like with price controls on prescription drugs? First, prices on already developed drugs would plummet and stockholders of drug companies would be royally screwed by this transfer. The non-stockholding consumers of these medicines laugh with glee to drown out the stockholders' groans. But what happens to the drug researchers of the world. The demand for healthcare just does not go away. So the second response will be the off-shore medical industry, or something like it. Life-saving treatments could be developed and sold in tropical resorts. If you need the newest cure for your ailment you take a medical vacation. This of course will also create a black market for life-saving illegal drugs in the US. If the public can tolerate medical marijuana, I suspect the public would have little sympathy for lawmakers when it came time to jail dealers for pushing cancer-cure pills. Now this is just one crack-pot scenario, and I am not sure it would go down exactly like this; but, I do not think the hidden R&D losses would remain hidden for long. There is too much demand for healthcare to let a petty price control get the way of the uncaptured profits.

Another thought, I believe any state could offer to protect drug companies within state borders, and therefore not be subject to federal price controls. All the drug companies move to that state, and we have our drug-haven on US soil.

Friday, November 21, 2003

Wesley Clark’s Army 

On Thursday night’s Letterman show, General turned candidate Wesley Clark explained why he so enjoyed being in the army:

It was a lot more than what people might think an army is, I mean you're really dealing with human beings. You’re dealing with education and healthcare, children’s schools and all the leadership problems and, then it’s all about national security and foreign affairs. It was just really fascinating.

I always thought there was a difference between the Peace Corp and the U.S. Army, but I clearly am out of touch. I also believed that the President and Congress determined foreign policy, but apparently a General of Clark’s stature can make policy. For instance:

When this ethnic cleansing began in Kosovo, I thought I just can’t not alert people. So it was my duty to push for the United States government to recognize it and do something about it. Other people had different ideas and it was a sort of conflict of competing visions and duties you have all the time in the military.

I think the real issue is, look at what I did and look at what it took to stand against the pentagon to save a million and a half Albanians. To me that’s the issue of what character is. I am proud I did it, and I think the United States government should be proud that we saved a million and a half people from ethnic cleansing, and it didn’t cost us a single American casualty in combat.

You wonder why Clark ever retired from the military, because clearly his experience shows Generals have as much control over policy as Presidents. You also wonder why Clark doesn’t focus his criticism of the Iraq war on Generals, who, as his experience sugguests, are the ones who determine which conflicts to fight and how to fight them.

Admittedly, Letterman is no Tim Russert, but could Russert accurately predict whether or not a bag of charcoal brickettes will float or sink? I think not.


Lombardi was Right - Winning is the Only Thing 

An interesting battle has erupted in the last couple days between the former Republican Speaker of the House and the former Majority Leader. Newt Gingrich is no longer an actual politician, but apparently still enjoys thinking like one, as this essay shows:

"Let's face it, a Medicare drug benefit is inevitable. Liberals, some of whom are running for president, would pass it without any of the changes contained in this bill, and have said as much."

"Obstructionist conservatives can always find reasons to vote no, but that path leads right back into the minority and it would be a minority status they would deserve."

Gingrich bases his support for the bill on its expansion of HSAs (Health savings accounts) and potential to promote competition and privatization of Medicare.

Dick Armey is also no longer a practicing politician. He gives his take on the Medicare reform legislationtion in today's WSJ. He too likes the expansion of HSAs, but is against the bill:

"Beyond the HSAs, the bill does not contain the needed reforms to ensure the affordable, quality health care our seniors deserve. The demonstration projects for competition are really simply 'fig leaves'."

"I believe that good policy is good politics. This is a case where bad politics has produced a bad policy proposal. Conservatives would be smart, and right, to reject it."

I am fully aware that most Republican members of Congress are not free-market libertarian types who always vote against tariffs, farm subsidies, highway bills, and the funding of the NEA. But to be useful, calling one self a Republican has to mean something, and since 1980 that has been, at least rhetorically, smaller government . Unless Americans are incredibly stupid or ignorant of this rhetoric, I can't believe that they would signal their desire for a massive new healthcare entitlement and a government takeover of the pharmaceutical industry by giving Republicans control over both houses of congress and the Presidency.


Price Controls, Elasticity, and Policy Reversal 

Tech Central Station posts an open letter to Congress opposing price controls on pharmaceuticals, which is signed by many economists (including Milton Friedman). The letter states:

We are deeply concerned about proposed legislation to remove pharmaceutical companies' ability to control the importation of their products. The goal of this legislation will be to reduce prices in the American market by imposing other nations' price controls on us. If this attempt succeeds, American consumers would get the short-term windfall of lower prices, but they would end up unnecessarily suffering and living shorter lives -- because promising new therapies would be delayed or not even developed. Even the threat of price controls reduces the incentive to develop new drugs.

I very much agree with this statement, but a statement that follows is a bit out of place for such a letter.

Drug-price controls are more difficult to remove than other price controls. Controls on oil and other products often tend to be limited or short-lived, as voters eventually object to the resulting shortages and distortions. The effects of drug price controls, however, are far more difficult to observe because they mainly affect medicines that haven't been invented yet.

Even if people were to realize that price controls are preventing new drugs from being developed, undoing the effects of those controls would be a difficult task. Customers would have to pay higher prices for years before they saw benefits. Firms would have to be convinced that controls would not be reimposed as soon as their new drugs are released.

I don't follow. Why would drugs be so different from other products? Wouldn't the logic in the last paragraph apply for all other goods? In fact, I think I believe the opposite is likely. When the price controls fail and drug companies shut down or move to other countries people will scream much louder than they would over some other products. Price controls on inelastic goods seem very likely to be reversed. Price controls like rent control persist precisely because many substitutes exist for housing. The 1970s oil price controls were very painful and brief, due to the inelasticity of the demand for oil. Therefore, I think oil is a better price control comparison than the other goods, with which it is lumped in the letter.

I agree that the price controls would be bad, but I think there is no reason to think they would be harder to reverse than any other price control.

Scalpers, If You Can't Beat 'em, Join 'em 

Primer links to a story on how the Cubs have solved the ticket scalping problem. That is they figured out how to earn the consumer surplus typically captured by scalpers...Join the business.

Rock & Roll Hall of Fame Sets the Bar Low 

The newest inductees into the Rock & Roll Hall of Fame are Prince, Bob Segar, George Harrison (as a solo artist), Jackson Browne, Traffic, the Dells, and ZZ Top....That's right, ZZ-f'n-Top. Why even pay attention to this "honor?" ZZ-Top is just embarrassing, but I think Seger and Browne are pretty weak as well. Prince is definitely a good pick. The bands that did not make the cut this year that should have are Sex Pistols and Black Sabbath. Both groups were innovators. In a few years it is just going to be a joke when the announcement is made.

Time to Fire Men Some Overpaid Men 

The General Accounting Office of the U.S. Congress has completed a study of the gender gap. An AP summary of the report can be found here. The study is not one of those that simply compares the average salaries of all men and women and declares America a sexist country. It does a fairly comprehensive job of accounting for various differences in the education and work habits of men and women. For instance, some of the raw gap in wages can be accounted for by the following facts:

1) Women have fewer years of work experience
2) Women work fewer hours per year
3) Women are less likely to work a full-time schedule
4) Women leave the labor force for longer periods of time

All of these factors cause women to earn less then men. After controlling for these variables, the GAO still finds that women earn 20% less than men.

That seems like a huge pay difference to attribute do discrimination or sexism. If the study is right, and you can hire an equally productive woman for 20% less a man, some progressive CEO should fire all his male employees, replace them with females, and increase profits by 20%. Such a move would be a win for shareholders, a win for the CEO who does it, and a win for women’s rights. If such a profit opportunity actually exists, it’s unlikely that GAO researchers or academic economists would be the first or only ones to know about it.

One explanation of the 20% earnings gap the GAO finds is that the study does not control what sorts of degrees women earn in college, and what sort of industries they choose to work in. Obviously some degrees result in higher incomes than others, as do careers in different industries, and there is no good reason to assume that women and men make the same sorts of choices. In this more balanced essay on the gender gap, Claudia Goldin, a Harvard economist, points out that the gender gap has been closing throughout the century and that differences in the choice of education and career could explain as much as one third of the gender gap.

What explains the rest of the gap? Regressions, since they are but estimates will always have residuals, and studies that rely on the inadequacies of their own models to prove their point are always suspect to me. Ultimately, it’s hard for me to believe that any economically significant discrimination exits in our current diversity obsessed culture, especially if qualified women can be hired at a 20% discount.


Enlightened and Thoughtful Debate 

Except for NFL football, I don’t pay much attention to sports. That being said, my favorite television show, hands down, has to be PTI on ESPN with Tony Kornheiser and Mike Wilbon. Everyday this show deals with important issues in an entertaining way. For instance, just today they settled these important issues once and for all:

1) Who has had the more disastrous life, Michael Jackson or Mike Tyson?
2) Which is better, the musical Oklahoma or the Oklahoma football team?
3) Which state is better, Michigan or Ohio?

To give you an idea of intellectual firepower on display, consider the debate over the last question:

Kornheiser - “Michigan is better, they got the UP, Motown records and Mitch Albom.”
Wilbon - “Ohio is better, they got the Rock and Roll Hall of Fame, and they are the state that invented both the airplane and the automobile.”

Wilbon closed his case for Ohio by suggesting “Without Ohio, we would have no means of modern transportation”. Kornheiser closed with “Sure, but you can’t light the rivers on fire in Michigan.” I think Kornheiser won, as usual, but you hate to give a victory to an argument that partially relies on Mitch Albom.


The Softer Side of Snipers 

From this AP story:

Jurors deciding the fate of sniper John Allen Muhammad saw a softer side of the convicted murderer Thursday, watching a home movie in which he plays with his children and encourages them to take their first steps.

In the home movie, Mohammad said to his daughter:

"You can walk. Now go ahead and walk to daddy," he says on the tape as one of his daughters takes her first steps. In another clip, Muhammad says to the girl, "Let me see the teeth" and the girl flashes two baby teeth and a big smile.

The jurors only saw five minutes of video. I can only guess why that is, but it’s probably because soon after he finished teaching his daughter to walk, he had to rush back to work shooting at innocent people while hiding in the bushes.


Thursday, November 20, 2003

Worst Effigy Ever 

I am very disappointed in the effigy-making skills of protestors. This is just awful. Most junior high art projects look more real than this. It looks like Mel Brooks to me.

Swedes Likea IKEA  

How much do you like IKEA? I always thought it was kind of crappy (though I can't say I have been to an IKEA in the past 5 years), which makes me think very poorly of the Swedish Parliament. According to a recent survey, 66% of Swedes trust IKEA "a lot" or "quite a lot" Compare this with Swedish Parliament's 47% and you can see that this is not a good thing. However, I have to say I trust many private companies more than I trust my government.

On another note this story alludes the creation of the IKEA index to measure purchasing power parity across countries, similar to the Big Mac Index. I did not realize that IKEA had such a world-wide presence.

Thanks to my wife for the pointer.

How a Kennedy Creates Jobs 

Robert Kennedy Jr. of the National Resources Defense Council (NRDC) appeared on the Wednesday night O'Reilly Factor. He argued that increased environmental regulation would create jobs, not destroy them. For instance, the way we mine coal:

Two weeks ago I was flying over West Virginia where they are cutting down the mountain tops to get at the coal. We say look, don't let them do that. Bring in some environmental regulations were you have to actually go into the ground to get the coal. That's more jobs.

By employing machines that make it cheaper to mine coal:

The corporation makes money for a few hot shots at the top. They are making themselves rich by making everybody else poor.

Maybe I could get a job at the NRDC, because I have a better plan than Kennedy. I would hire miners but I would make them dig with spoons and keep one arm behind their backs. That plan would surely create more jobs than Kennedy's.

Perhaps growing up as a Kennedy has led Robert Kennedy Jr. to believe the world is full of free lunches, but he is mistaken. Regulating coal mining would not be a free lunch. Such regulations would raise the price of coal, and then raise the price that millions of Americans pay for electricity, making them worse off.

There would be at least two huge benefits of the Kennedy plan. One is that this revitalization of coal mining would probably result in a surge in the creation hillbilly songs about coal mining, like "Sixteen Tons" or "Dark as a Dungeon", which are currently quite rare and unpopular. Second, in the future when Robert Kennedy Jr. flies over West Virginia in a jet, he would not have his delicate senses offended by seeing less than perfectly natural vistas out the window.


Free Trade NGOs 

Here is an article on a group of NGOs that believes free trade, and the growth that comes with it, is a solution to poverty and its problems.

Andres Mejía Vergnaud, director of Colombia's Instituto Desarollo y Libertad, echoes these words: "The best way to help people escape from corrupt, oppressive governments, and the onerous regulations they impose is to encourage open, rules-based trading systems. We call on leaders at the FTAA meeting and everywhere to eliminate subsidies, quotas, tariffs and restrictive regulations, so that the masses can escape from poverty."

Also, Andre Andrade of Brazil's Instituto Liberal:

Economic growth is key to addressing environmental concerns. "Wealthier makes healthier -- economic growth will lead to improved environmental, sanitary and health stewardship. It's no coincidence that the richest countries are also the cleanest and healthiest."


More on Media Bias 

Virginia Postrel links to an article by Tyler Cowen on media bias that I had not seen. I want to examine Tyler's idea in reference to my thoughts on the issue, which I have posted on this site.

Tyler believes that media bias exists, but he attributes the bias to market forces for bias. For example, Bill O'Reilly and Phil Donohue are partisan jerks, but they serve a particular audience that prefers biased news to straight news. Tyler states:

We look to the media for entertainment, drama, and titillation before objectivity. Journalists, to get ahead, must produce marketable stories with some kind of emotional slant, which typically will have broader political implications. The result: it looks like media bias when in fact journalists, operating in a highly competitive environment, are simply doing their best to attract an audience.

While I agree that the success of partisan news is certainly on object of consumption for many followers of Mother Jones and National Review, I think there exists an inherent liberal bias among the mainstream media that most of the public could do without. This results from two things: 1) the selection of liberal types for the media as a profession, and 2) the inability of humans to be impartial. The first issue is one easily identified in many polls of the media. Generally, the personality types that become journalists are also likely to be more liberal. Since this is the case, the media will always have a general slant if my second assumption holds. Unlike many critics of bias, I do not believe this slant is a conspiracy or even an intentional act of pushing liberal politics. Liberals AND conservatives attempting to report the news in an unbiased manner will fail.

Now, if you read my earlier post on the subject you will also know that I think there is no negative consequence to bias. I argue that the public rationally identifies and discounts media bias. But, my explanation also involves market forces. Though the public would prefer that more conservatives would report the news in places other than Fox News and The Washington Times, they would rather discount the bias than pay for it. If the desire to be a journalist is correlated with liberal ideology, then hiring conservative reporters would require an additional wage premium that conservatives might find more expensive than discounting "cheap" liberal journalists. Therefore, in the end I agree with Tyler that we get the media we desire, but I just get there a little differently.

Also, Bernard Goldberg has a new book on the subject of media bias called Arrogance. I will probably pick it up at some point. I liked his last book, Bias, which I read only because I found it for $5 at a lost luggage store.

One Advantage of Being Southern 

Voice recognition technology doesn't seem to work on Southern drawls. That's funny, I never have any trouble identifying Jim Neighbors's (Gomer Pyle) voice. Surprise, surprise.

Erin Chocosnitch 

Alex Taborrok at MR led me to this article on Erin Brockovich's past and present "accomplishments" the The New Republic. It seems her "Hollywood-true-story" is more Hollywood and story than true.

FYI -- The title of this post is not a typo, and should be familiar to Simpsons fans.

Wednesday, November 19, 2003

Guest Blogger Bill Russell 

Welcome to guest blogger Bill Russell. You have already gotten to enjoy Bill's sarcastic wit in reference to steel tariffs. I expect more to come. Thanks Bill!

The New Economics of Steel Tariffs 

Bill Russell

The Monday, November 17th Wall Street Journal had an interesting article on the impact of steel tariffs on unemployment (page A2). It pointed out that the dispersed nature of industries that use steel and the shifting economy make estimation difficult and imprecise. Estimates of job losses range from 60,000 to only 3,000.

Peter Morici, an economist at the University of Maryland generated the estimate of 3,000. He believes that the tariffs on steel had a net positive impact on employment and the economy. How, you ask, could someone who is a professor at a major university and holds a PhD in economics believe that tariffs benefit the economy? His explanation:

“Steel prices go up and down. People don’t relocate plants because prices go up and down”

Somebody call Alfred Marshall, Frank Knight and Milton Friedman because economics as they knew it is dead. People don’t actually buy less when the price rises or go out of business when they make loses. In this new version of economics, prices “go up and down” people buy more or less and some firms succeed and others fail, but in no way are these events inter-related. The micro and macro economy are apparently random, except that government can play a positive role by reducing trade.

By the way, the WSJ points out that Morici is a consultant to the Nucor Corporation, a U.S. company that produces steel. I am sure though that Morici is an honest and disinterred academic and that his results and theory are utterly unrelated to this fact.


Fishinghat Rumor 

There is a chance that a guest blogger may be visiting soon. I expect some interesting comments and book/music reviews from someone other than me to appear on the site shortly. Keep your eyes on the site.

MLB's Drug-Testing Paradox 

This article from Bob Ryan (don't wretch, this one is not as bad as his usual stuff) includes some quotes by Gene Orza, the Associate General Counsel for the Players Association of MLB. I am a bit shocked that he is so opposed to the testing.

These ballplayers are not salary numbers or a set of statistics to me," he says. "They are people. People I know. I know their wives and their families. I have their phone numbers and their cell phone numbers. My job is to represent their interests. The Association is not opposed to finding guilty players. The issue to us is how you find them. We take the position that people are innocent until proven guilty."

Simply put, Orza does not believe in full-fledged, 365-days-a-year random testing, or anything of the sort. No other segment of society has to be subjected to this, so why, in his view, should ballplayers be any different? There have to be proper guidelines.

And then Red Sox CEO Larry Lucchino states,

"Artificial stimulants that artificially stimulate performances artificially stimulate salaries."

The general feeling among commentators on this issue is that owners want drug tests, but players do not. And both sides seem to mirror this feeling. But this is odd!

Steroid use by one player gives him an advantage over non-steroid users. This converts scrubs to starters, and starters into stars. Naturally talented starters and scrubs want to prevent the lower tier of players from competing with them for salaries, thereby inducing all players to take the drugs. Everyone ends up taking the drugs and no one is any better than anyone else, so no salary bump. An individual player may go from 20 to 30 home runs, but that is no big deal if the stars are now hitting 40 dingers. Players don't gain anything in terms of relative performance, and the player face long run health effects. If anything, owners may gain from an overall increase in the quality of the game without having to increase salaries. It seems to me the two sides ought to be reversed. What am I missing?

Check on the discussion on Primer.


Assault Weapons 

John Thomas points me to this article by John Lott.

The 1994 assault weapons ban expires next year, so it is time to review what we have learned from this. First, two studies have been done on the effect of the ban on crime. One done by the Clinton administration, and the other by Mr. Lott. Neither study finds a link between the ban and reductions in crime. Second, the difference between an "assault weapon" and non-assault firearms is almost meaningless. Basically, if it looks like an M-16 it is banned. Other guns with the same firepower are exempt from the ban. The law is a political cosmetic.

Mr. Lott is famous, or infamous, for his work on concealed weapons and crime. Most certainly, he is a controversial figure. But, his work has stood up to most criticisms, and I would say the general consensus on the guns and crime debate among economists is that there appears to be no positive relationship between guns and crime AND there is some evidence that concealed weapons reduces crime. Check out this link on Volokh for a discussion of the controversy over Lott.

On a side note, John Lott was and is a good economist inside and outside the realm of gun research. I met him once, and he was very nice to me. He is certainly no silent swimmer in the academic waters, but he is not a partisan hack. John's record in not sqeaky clean, but I still hold respect for him and his research on guns.

Classroom Change Today 

Senior Research Seminar will meet in the Summit Room today. Bring your Stata questions.

Tuesday, November 18, 2003

Taxi Corruption in Maryland 

I thought my Intro students would like this excerpt from this Washington Post article on the corruption of the Montgomery County taxi regulators. I was led to this by David Bernstein's post on Volokh.

This ties in nicely with what we have read about the NYC taxi market, in which the supply of taxis is limited. The end result is higher prices and lower output. But, also interesting is the relation to some of the corruption problems we discussed with price controls. For example, rent control laws are likely to result in a black market bribes for apartments, and full of the underworld problems that go along with this type of activity. (The Godfather will always cash in his favor.) When something other than markets determines the price of a product, the forgone profits are bound to lead to corruption somewhere in the food chain. In this instance the corruption is taking place in politics. You don't think the county executive appoints a taxi company owner to the regulatory board out of the kindness of his heart do you? Notice the article refers to the owner as a "friend and campaign contributor." This is a perfect example of what economists call regulatory capture. That is, the regulated industry gains control of the regulatory authority, and uses its powers to further its own interests.

Monday, November 17, 2003

The Terror Market is Back 

After ending in a public relations disaster this past summer, the Policy Analysis Market (PAM) is on again. Operated by a private firm, the "terrorism futures" market will open in March 2004. The president of the San Diego-based company Net Exchange, which will run the market, states:

"It is potentially an interesting alternative to Gallup polls or to specialists reporting from the region," Polk said. "It's a way of going directly to individuals in the region or outside who have knowledge or interest in the political and economic events in the area."

Polk said Net Exchange would initially limit the amount of money traders could invest in the market, so that people won't be profiting from violence or upheaval in the region.

What's more, the futures contracts would be based on general questions, such as the likelihood that the King of Jordan will be overthrown at some point during the second quarter of 2004, for example, rather than on specific acts or events, which could lend themselves to manipulation by terrorists.

"There are no financial incentives for nefarious activities," Polk said.

I believe this is a great idea to gather very dispersed yet interesting information. The idea was first developed by GMU professor Robin Hanson, who discussed his idea markets quite a bit while I was at Mason. I am not certain he is directly involved with this market, but I suspect he is.

Unfortunately, I have a feeling this market will be shut down too, if it is to be run in the US. The government still has to grant a gambling exemption to the market, and I suspect political pressures will prevent this exemption. I wonder what PAM futures are selling for right now?...

Addendum: Well, this is pretty freaky. I guess I can see I am really Tyler's student. I promise I posted this before I read it on MR. I think Tyler is very smart, so that makes me feel good. Of course, Tyler has more to offer, but I have a much smaller "audience" to please.


More on Problems with HOPE 

Here is an interesting piece on the problems with HOPE in today's Chronicle of Higher Education. Password required, but if you are a Sewanee affiliate you can view it by entering the password listed on the library password page.

Wofford Up to Number 2 in the Latest Poll 

Wofford is now the second ranked Division I-AA team in the country. Go T-Dogs.

Sunday, November 16, 2003

Generosity Index 

Tennessee finishes 3rd in philanthropic giving as a percent of income behind Wyoming and Utah, and finishes 6th in the overall Generosity Index. Several other bloggers have discussed this as well (MR and Andrew Sullivan). But the most interesting discussion revolves around the relationship between political ideology and giving. It seems that Republican states dominate the rankings. According to this site, the top 20 most generous states voted for Bush in the 2000 election. This makes me wonder, why?
Do citizens who give more to charity prefer lower taxes? Or maybe, states that have higher church attendance (which results in tithing) are more likely to be conservative. I do not have the church attendance data in front of me, but I would suspect it is part, but not all, of the explanation.

The Future of HOPE 

This article in today's Atlanta Journal-Constitution is supposed to be the first in a series that discusses the future of Georgia's HOPE Scholarship. This series discusses some of the research by David Mustard, who recently visited Sewanee to discuss his work on the subject.

Congratulations Wofford Terriers, Southern Conference Champions 

The Wofford Terriers beat Furman yesterday to finish the season unbeaten in the Southern Conference and won the conference championship. It was coach Mike Ayers's 100th victory, and an end to a spectacular 10-1 season. The only loss came to Division I-A Air Force, coached by Wofford alum Fisher Deberry. Good luck to the fourth ranked Terriers in the I-AA playoffs. Luckily, I was able to watch the game on TV, thanks to Fox Sports South. Go T-dogs!

Friday, November 14, 2003

A faster way to lose money 

An ingenious entrepreneur in Las Vegas has found a way to get impatient gamblers to their favorite casinos: the Pedicab.

Part bicycle, part open-air carriage, pedicabs usually carry two passengers pedaled by a strong-legged driver.

But sadly, the government wants to shut it down. Not surprisingly, the state agency that represents...I mean regulates limos is behind this.

Steroids in MLB 

I am surprised to learn of the use of steroids in Major League Baseball. Random drug tests last year revealed between 5-7% of players tested had steroids in their systems. This is surprising to me, because the players union has not been adamant in its demands for drug testing of players. Players, not owners, are the real losers if steroids are a problem. I just assumed that players had better information than I did about the use of drugs in the game. However, the 5% number is important, because it triggers mandatory testing under the latest collective bargaining agreement. So maybe the players were concerned about it. But, the drug-testing provision was proposed by the owners. I think the steroid concerns were a ruse for owners to check for recreational drugs that hurt performance. Players ought to be all for allowing other players to use drugs. The druggies can do their thing, while the clean players can perform better and reap higher salaries.

I also do not think steroids are the cause of the recent surge in home runs. Steroids lead to benefits on offense and defense. I would think these would negate each other.

Thursday, November 13, 2003

Dropping the SAT 

Sarah Lawrence College has decided to drop the SAT score from its entrance requirement. From the NYT

the dean of admissions at Sarah Lawrence, Thyra Briggs, said the college wanted to take a stand against an "unhealthy obsession" with test results.

Test prep courses and tutors, Ms. Briggs said, are "adding stress to an already stressful process" and giving an "unfair advantage" to students who can afford extra help. Adding what is, in effect, a third test to the current SAT could make a bad situation worse, she said.

My guess is that this is going to backfire, bigtime. First, SLC will be swamped with applications from those with poor SATs. Second, the admissions committee, which I assume is mostly faculty, will spend many more hours reviewing applications instead of teaching students.

The SAT is a cheap filter that does pretty good job of measuring student quality. I do not see why any college with limited resources would choose to reject such a useful tool. As to the "unhealthy" and "unfair" aspects of this testing procedure... it is called life Ms. Briggs. If your students cannot handle this type of pressure in this environment then I am sorry for the education you offer to your students. Is college a four-year escape from or preparation for reality?


CD stands for Creative Destruction 

I am simply amazed at the speed of technological innovation. This article states that the compact disk may be obsolete in 5 years. This is why I do not worry about monopolies as a drag on the economy. Anytime you gain a competitive edge over the competition, even when protected with a patent, you cannot expect to keep that edge for long. I think that this is one thing that makes the Microsoft story so interesting. Microsoft is not the result of one great invention, but a collection of inventions that keeps MS in front of the competition.

Wednesday, November 12, 2003

Brian Knight' Visit 

I really enjoyed Brian Knight's visit on Monday. His basic conclusion is that Pro-Bush firms stock prices were positively correlated with Bush's chances of winning the election. That seems intuitive enough if you believe in efficient markets. But, this also means that the political market (via the Median Voter Theorem) is not efficient. Political platforms are different and do not converge. Otherwise, there should be no effect on stock prices. Hmmm.

Tuesday, November 11, 2003

Out of the Office 

I will be out of the office today due to illness. If you need to reach me, you can call me at home. If you need your registration signed, please see another economics professor.

Saturday, November 08, 2003

Nerd Alert: Clone Wars Cartoon Out 

I enjoyed watching the new Clone Wars cartoon last night on Cartoon Network. Though the episode was short (3 minutes) I like how it was done. Though the animation was a bit too campy for some Star Wars fans, I liked that it had the same feel as the prequel movies. The scene in Palpatine's office from Attack of the Clones was especially nice. I loved the manipulation of Anakin by Palpatine, which leads not only to tension between Anakin and Obi-wan, but also tension between the Chancellor and the Jedi. Some other cool mentions: Mace Windu is on Dantooine, Obi-Wan references Qui-Gon Jinn, and Obi-Wan has his own army (General Kanobi!). This is the first of ten episodes that air at 7pm CST on week nights for the next two weeks. I will be sure to catch them. You can download the cartoons as they appear on the Cartoon Network website, but I could not the picture to work.

Friday, November 07, 2003

Problems with Punctuality 

In reading this post on MR, I learned that I am not the only person frustrated by tardiness. My mother used to tell me that being on time was one of the most important things in life. I skoffed at this until I noticed that arriving on time consistantly is not as common as you would think.

I was especially delighted to see that several US businesses had tried my idea of fining late arrivals.

A popular solution is charging $1 to $5 a minute to anyone who arrives late. The money can be donated to charity, or saved toward an office party.

I used to charge a fixed fee of $5 for late entry into my class. The reason my fee was fixed was that the cost of the interruption to myself and the class is the same during any hour of the class. I then passed out the money via lottery or dividing the spoils among the students. I was also subject to the fines, and I did pay a few times. But, I decided to give up the strategy like many other businesses.

They work for a while, but enforcement usually falls by the wayside after a couple of months...

It was a real pain to extract funds. Making change, requesting loans (which I did), and the occational protest made the system burdensome. I may try it again some time, but I did not want to do put forth the effort this semester. Students seemed to like the idea, especially on lottery day. Another interesting observation. Students in my Intro classes would gladly pay the entrance fee. My upper-level class would choose to skip class instead of paying the fee. I guess the seniors knew the true value of my class. ;-)


Thursday, November 06, 2003

Postrel on Milton Friedman 

Virginia Postrel has a nice piece on Milton Friedman in the NYT today. You can also see her comments about the article on her blog.

In 200 years will Milton Friedman be what Adam Smith is to us now? No. But, no one else will come closer than Friedman.

Wednesday, November 05, 2003

So, You Think the Deer in Sewanee are Pretty... 

Thanks to my wife for pointing me to this story.

Some 150 people die each year in more than 1.5 million traffic accidents involving collisions with deer, according to an insurance industry-funded report released Tuesday that puts the economic damage at $1.1 billion.


A Bounty on Virus Writers 

It looks as though Bill Gates is tired of letting the feds track down hackers who design viruses that cripple Microsoft software. Today Microsoft announced a $5 million bounty program for information that leads to the capture of virus authors. I have to say that I think this is a great idea. Most hackers do what they do for anonymous infamy in the field of computer destruction. The law enforcement resources are not very good for tracking these crooks who may be anywhere in the world. The chance of getting caught is small; therefore, hackers may be willing write viruses just for the glee of sticking it "the man." But now, Microsoft just "employed" a group of fringe hackers, who themselves may be on the verge of virus-writing, to use their skills in a more productive manner. I am surprised that Microsoft did not think of this earlier. Bounty hunters have been quite effective in catching bond jumpers, which is their main function in the US. See a discussion of Alex Tabarrok's work on the economics of bounty hunting. While public law enforcers may not have the correct incentives or tools to fight cyber-crime, Microsoft does. I suspect this will put a serious dent in virus production.

Stata is Up  

You can now access Stata in the ATC Lab of the library. It is on all of the PCs and Macs.

On the PC you can find Stata by going to My Computer; Local Disk (C-drive); Program Files; Stata; wstata.

This should open the program.

On the Mac....I just do not know. You may have to do a search for it.

Tuesday, November 04, 2003

Caplan Article on Government Failure 

On a day where Thomas Sowell disappoints me with policy on immigration, Bryan Caplan (author of "Why I am not an Austrian Economist") writes on government failure based on the work of Ludwig von Mises, one of the Austrian schools most worshiped (I intentionally used this word) figures. Since I know Bryan as my former professor, I have heard this argument before, and I think it is a good one, though I wish it was not so.

Government fails to govern well, not because politicians ignore the wishes of the polity, but because politicians properly represent misinformed wishes of the polity. Politicians do not support tariffs and otherwise restrict trade to appease special interests, they do it because constituents are misinformed about the benefits and costs of trade; thereby, electing dutiful agents of the people who enact bad policies. In sum, we get the government we deserve....How disappointing.


Sowell on Immigration 

Bill Russell sends me an interesting piece by the normally dead-on social commentator and economist Thomas Sowell. What is interesting is that I disagree with him. Dr. Sowell is bothered by the number of Latin American immigrants working illegally in the US. He has two main arguments.

1.) He thinks the depression of American wages by immigrants is a bad thing. Personally, I love it when immigrants want to sell things cheaper than other sellers, but I hate it when they want to teach economics lessons for less. But, I understand as a whole GDP goes up when immigrants provide cheap services, which is why I largely support liberal immigration laws.

2.) Sowell states, "In the past, people came here to become Americans, not remain foreigners. But between the multicultural craze and the proximity of Mexico, Americanization has an uphill fight and may never become the norm." I am confused. In the past did not we have many tight immigrant communities of Italians, Poles, Jews, Germans, etc.? And did not the children of these immigrants become assimilated by the Borg of America? I have never, ever met an immigrant who dislikes America. I mean, why do you think they come here? Also, I very much appreciate the positives immigrants bring from their wonderful cultures (especially the food).

Do I worry about terrorism from abroad? Yes. But the cost of keeping out every potential terrorist is banning a potential Einstein.


Review of Moneyball by Thaler and Sunstein 

I am a big fan of Michael Lewis's new book, Moneyball. It is the story of a washed-up major leaguer Billy Beane who turned into the best GM in Major League Baseball (This Beane is not to be confused with the other washed-up Bill Bean, who is famous for another reason.). Beane's philosophy challenged the old ballplayer mentality of the MLB in building a baseball team. Beane, with the help of a stats geek with an Economics degree from Harvard, used the ideas of Bill James to build a winning ball club for much less than the typical team. Statistics such as RBIs, batting average, saves, and steals were overvalued by teams, while walks where underrated. The result is that Beane was able to buy wins better than other teams. While the average MLB team paid $28,000 per win in 2002, the Oakland A's only spent $17,000. Both the Yankees and the A's won 103 games that year, but NY paid almost $50,000 per win.

To an economist Billy Beane is an entrepreneur, a man who figures out how to produce more output from fewer inputs. This is why economists find Beane's story so interesting. Thaler and Sunstein are both well known University of Chicago professors who reviewed the book for
The New Republic . Like me, they are fascinated that so few baseball GMs took the advice of Bill James who had discovered the winning strategy in baseball before Beane was even a hot prospect. It is not surprising that Thaler, known for his work in behavioral economics, finds this as a useful case study of irrational behavior in the market. Seemingly wise men ignored dollar bills as they lay on the sidewalk. Thaler and Sunstein provide several examples of behavioral anomalies that explain the missed profit opportunities. I, however, find this unsatisfying. Some baseball insiders have known for years that walks were valuable, stolen bases have costs, and slugging and on base percentage are important statistics. There is no doubt that much of this knowledge has been passed on to owners and GMs. But, why was it ignored? I have one other explanation. Owners ignored the profit opportunity because owners do not care that much about money. The marginal value of a dollar to Ted Turner is nothing. What do owners want? They want attention. Signing high priced free agents or popular players, regardless of wins gets fans. It is not the dollars from the fans that they crave, but the adoration and praise of being famous. And even if your team does not win, you cannot be faulted that Albert Belle or Bobby Bonilla fail to perform. For owners who sign the Scott Hatteberg's (a major character in Lewis's story) of the league, there is no such attention. In this sense, Beane is important for doing something else. Beane proved that putting winners on the field, no matter who they are, will bring happiness and attention desired by owners.

Addendum: Thanks to Doug Drinen for recommending the book to me. I refused to read it when it first came out because of the boring title.


Monday, November 03, 2003

More Info on Brian Knight 

Here are Brian's Homepage and CV. For more about his talk see the earlier post.

Sunday, November 02, 2003

Double Your Cable Bill for No Commercials 

Recently, I have been wondering, "why do we still have commercials on television?" Initially, commercials funded a provision of a non-excludable product (TV waves), but that is no longer needed. Though TV waves are still broadcast, 100-percent excludable television broadcasts are feasible. Even with cable and satellite provision of TV, those channels still show commercials.

Well, I think I just got my answer from Tyler. Ads certainly defray the costs of providing a product. Manufacturers of goods will gladly subsidize my entertainment if I agree to watch their advertisements. Apparently, to receive the same amount of television without ads would require an additional payment of 32 cents per hour of television watched by viewers. This sounds like a small amount. The average television consumer watches 4 hours of television a day (according to unreliable net sources...but that sounds about right). That roughly translates to an additional $470 a year in individual payments for television. The average yearly cable bill is also around $480 (close to $40 a month). Therefore, commercial-free TV would be twice as expensive as commercial-subsidized TV. That is a difference of spending $1000 a year on TV versus $500. That is not a trivial amount of forgone income. Since I watch television when my time is least valuable, I doubt I would choose non-commercial option. It appears the average American would choose the same.

I wonder how new digital recording devices will affect the price of television. Services such as Tivo provide manual commercial-skipping options, and I would guess only legislation is preventing automatic commercial-skipping from being available. But, it will not be long before it is here. Maybe, Tivo will offer a pay-to-skip option. I think I would like that.


Less Diversity=More Booze...Really?  

The Harvard study discussed here, Less Diversity, More Booze? , finds "that 'binge' drinking by college students was significantly lower on campuses with more female and more black, Asian and other minority underclassmen." This leads the authors to a very shaky conclusion.

Binge drinking has been a continuous problem on college campuses, said the study's principal researcher, Henry Wechsler, director of college alcohol studies at the Harvard School of Public Health. "It's the number one public health problem that college students face," he said. "Many colleges are trying a variety of actions respond to this problem. Our research suggests this possible approach to correcting the problem" -- meaning greater diversity -- "has not been discussed."

This is why I hate academic studies released to the media. I can think of several reasons why this study may be picking up some non-causal correlation, but I have no way of knowing if the researchers controlled for the potential biases. For example, I bet urban commuter campuses are more diverse and have less binge drinking, but the diversity and drinking are not causally related. However, given the following quote, I suspect the authors did not control for this.

Wechsler said the study included freshman and fraternity drinkers in its samples, but did not look at them separately.

If the authors are not even controlling for fraternities, I suspect they are missing the boat in other areas, as well.


Saturday, November 01, 2003

Virginia Postrel has more on the Gender Genie 

And she tells me a little more than I wanted to know about herself. See here.

Debt Relief for Iraq, or I Agree with Joe Stiglitz 

Joe Stiglitz is right. It is important to let Iraq's current deficit go. In my opinion, the promises of dictators, such as Saddam Hussein, are worth nothing once they are gone. Why do the Iraqi people owe other countries money for loans that purchased luxury items and torture devises?

Iraq needs a fresh start, and the only real way to give it one would be to free the country from what some call its "odious debts" – debts incurred by a regime without political legitimacy, from creditors who should have known better, with the monies often spent to oppress the very people who are then asked to repay the debts. Most of Iraq's current debt was incurred by a ruthless and corrupt government long recognized as such...[Insert Stiglitz'sunnecessaryy insult of Reagan].

This is one of the few cases where Nobel Laureates Joe Stiglitz and James Buchanan agree on policy. I believe that most debt relief is a bad idea, because it encourages bad behavior by corrupt governments. However, the corrupt government is gone, so there is little benefit to punishing the new government of Iraq. Tyler at Volokh directed me to the article.
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