tag:blogger.com,1999:blog-47461309527592143202024-02-08T00:32:39.427-05:00Big Bang EconomicsIn the beginning, there were institutions...thoughts on institutions, economics and other random topics.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.comBlogger715125tag:blogger.com,1999:blog-4746130952759214320.post-44146735664474003322015-11-17T10:46:00.001-05:002015-11-17T10:46:18.389-05:00Immigrants and RefugeesPeople are scared about letting Syrian refugees into the US. At last count, <a href="http://www.cnn.com/2015/11/16/world/paris-attacks-syrian-refugees-backlash/">26 (27?) US governors</a> have come out and said their stat will not accept refugees. <strike>Most</strike> Every single one of these states is governed by Republican governors seeking to score points on a combined platform of security and economic protectionism against immigration in general. <div>
Then there are the liberals. Oh, for the love of god can you all please stop moralizing everything? (Know how much you liberals love it when conservatives moralize their pet issues? Yeah, think of how open that makes you to their viewpoint.) There are very good <i>logical </i>reasons to support taking in refugees. Yes, it still may be a very noble thing to do and all that. David Bier of the libertarian thinktank the Foundation for Economic Education outlines 6 reasons to welcome refugees, and five of them are non-moralizing reasons: (1) The Paris attackers were not refugees; (2) US refugees don’t become terrorists (some people cite the Tsarnaevs as refugees, but they only got secondary refugee status from their parents being refugees, were 8 and 15 when they arrived, and the "flags" that they had associated with extremists came in 2011 - <i>after </i>they came here); (4) ISIS sees Syrian refugees as traitors; (5) Turning away allies will make us less safe. </div>
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Turning away refugees may actually increase the likelihood that someone coming from Syria is a terrorist. In fact, accepting more of all immigrants makes us more safe. Take, for example, organ donations. Some argue that there should be an open market for organs. People would pay for organs, the supply would increase, and waiting lists would shrink. But, think now about who is most likely to <i>sell </i>an organ if a substantial sum of cash could be made from it. People who need money the most and who least value their own bodies. Drug users, homeless people prostitutes, and other people who are at high risk for diseases like hepatitis, HIV, and other things we don't want infecting organs. Since no test is perfect, a cash market would increase the number of diseased organs transplanted to already-sick recipients. A donor "market" partially resolves this <i>adverse selection problem</i> by pre-screening the most desperate from supplying their organs. The lack of payment becomes a disincentive for participating. </div>
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The immigration-security problem is sort of like this, but in reverse. If we raise the cost of immigrating to the US, we <i>de facto</i> limit the ability of the poor and marginalized to be able to participate. Moreover, we turn the screening process over to smugglers, who are likely to be much less particular about who pays them to get into the US. Cutting off access to immigration for everyone <i>almost guarantees </i>that Syrians who do come to the US will try to do so by subverting the legal process, making it less likely that we will be able to thwart future attacks. </div>
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(A similar argument, by the way, could be made for lowering voting restrictions instead of tightening them.)</div>
James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-71035749554265843232015-06-27T17:31:00.003-04:002015-06-27T17:31:39.015-04:00Cochrane's 4% Growth PlanThe always-grumpy John Cochrane has his plan for economic growth. It's a predictably conservative and somewhat vague plan that consists of the following: <div>
<ol>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">The tax code is thoroughly reformed to do nothing but raise revenue with minimal distortion -- a uniform consumption tax and no income, corporate, estate etc. taxes, or deductions.</span></li>
<li><span style="font-size: 13.1999998092651px; line-height: 18.4799995422363px;"><span style="color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif;"><span style="background-color: white;">A dramatic regulatory reform. For example</span></span><br /><span style="font-size: 13.1999998092651px; line-height: 1.4;"><span style="color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif;">a. Simple equity-financed banking in place of Dodd-Frank. </span><br /><span style="font-size: 13.1999998092651px; line-height: 1.4;"><span style="color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif;">b. Private health-status insurance (with, if needed, on-budget voucher subsidies) in place of Obamacare. </span><br /><span style="font-size: 13.1999998092651px; line-height: 1.4;"><span style="color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif;">c. An end to the mess of energy subsidies and interference. No more fuel economy standards, HOV lanes, Tesla tax credits, windmill subsidies, and so on and so on. (If you want to control carbon, a uniform carbon tax and nothing else.) </span><br /><span style="font-size: 13.1999998092651px; line-height: 1.4;"><span style="color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif;">d. Many agencies cease to exist. <span style="background-color: white;"><br /></span></span></span></span></span></span></span><span style="font-size: 13.1999998092651px; line-height: 1.4;"><span style="color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif;"><span style="background-color: white;">e. </span></span>No more endless waits for regulatory decisions. </span></li>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">No more witch hunts for multibillion dollar settlements.</span></li>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">Thorough overhaul of social programs to remove disincentives. Most help comes via on-budget vouchers.</span></li>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">No more agricultural subsidies.</span></li>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">No more subsidies, period. Fannie and Freddie closed down. </span></li>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">Unilateral free trade. </span></li>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">Essentially open immigration -- anyone can work. </span></li>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">Much labor law rolled back. Uber drivers can be contractors, thank you. Most occupational licenses removed -- anyone can work. </span></li>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">Drug legalization.</span></li>
<li><span style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px;">School vouchers. </span></li>
</ol>
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If you take a step back from the fact that the presentation is heavily conservative in tone, there is actually a lot to agree with here. But, of course the devil is in the details. For instance: </div>
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1. Reforming the tax code is a great idea. There are too many off-budget subsidies (a.k.a. "revenue expenditures") in the tax code. Get rid of those (including the mortgage interest credit, which benefits me). But I don't think that a "uniform consumption tax" works so well. This comes from Cochrane's macro background that shows that consumption taxes distort less (and encourage more savings and investment) than income taxes. I would actually combine tax reform with points 2(c) and 4: <a href="https://en.wikipedia.org/wiki/Negative_income_tax">Negative income tax</a> (think EITC on steroids), and high <a href="https://en.wikipedia.org/wiki/Carbon_tax">carbon taxes </a>to replace the current tax and welfare system. </div>
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2(a) Dodd-Frank isn't a masterpiece, and I have no issue with equity financed banking, but add in Basel III capital requirements, etc, and I'm on board. </div>
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2(b) Many of the regulations in Obamacare are senseless, and distortionary, but broad concept of direct subsidies cum mandate is good. That, or single-payer. </div>
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2(d) and (e) Which agencies? Would Cochrane like shorter waits if it meant more government employees? </div>
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3. Not sure. If we get rid health, environmental, and safety regulations, then you turn many externalities over to the courts. Can't do both. Problem with turning it to the courts is that now you give power over the outcomes to the guy with the best lawyers. Maybe not a great idea, so many of these regulations may need to stay (if they cannot be managed through Pigouvian taxes). </div>
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5. Ag subsidies are a drag. Do it. </div>
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6. Cochrane seems to think all of his "vouchers" aren't just subsidies in disguise. Problem is, they're actually worse than cold hard cash - vouchers are the government's way of telling you how you should spend the money it wants to give you. Is this conservatism? </div>
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7. Free trade. Yes. </div>
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8. There shall be open borders. Yes. </div>
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9. "Much labor law." If by that he means "much occupational licensing" then great. Yea Uber. Yea, <a href="http://www.npr.org/sections/money/2012/06/21/154826233/why-its-illegal-to-braid-hair-without-a-license">competitive hair braiding markets</a>. But maybe my <a href="http://www.salon.com/2010/06/14/rand_2/">ophthalmologist</a> should be formally licensed. Otherwise, see my comments on point #3.<br />10. Drug legalization. Go for it. Hard drugs too? Yes.</div>
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11. School vouchers. (Not "subsidies?") Public schooling ain't so bad. Teaching at a private university, I worry that "competition" for students leads us to make curriculum decisions that may not be in the long run interests of students. Cochrane teaches maybe 1-2 sections per semester at an elite school, so he probably spends less time ruminating on this than we do at smaller schools that capture more marginal students. </div>
James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-9969115111182603322015-06-16T11:32:00.001-04:002015-06-16T11:32:06.750-04:00An Institutional Economic Analysis of the "Consumer Model" of Higher EdNeoclassical economics teaches us that markets are efficient when they are competitive (with an arbitrarily large number of buyers and sellers); when buyers and sellers are "rational" by some technical definition; when the good or service they are allocating is private; when there are no externalities; and when transactions costs (including the cost of obtaining information) are low. When these conditions are met, the market will automatically create contracts (usually a simple posted price) that captures the marginal benefits an the marginal opportunity costs to the buyer and seller. However, the over-application of this model to any situation can be problematic and harmful. <div>
Specifically, applying this model to higher education is fraught with failures with respect to these assumptions. Knowledge is non-rival (but can be excludable in the short run); educating individual students may have spillover benefits (by making others more productive as well); and transactions costs are considerable (the costs and benefits of various types of education are uncertain, and often unverifiable by future employers). Despite these limitations, many presidents and provosts at a large number of colleges and universities (and in particular deans of business colleges) have taken up the view that students are the "customers" to the university's "firm." Other outlets have made <a href="http://chronicle.com/article/Faculty-Members-Are-Not/145363/">compelling </a><a href="https://www.insidehighered.com/views/2014/02/27/essay-critiques-how-student-customer-idea-erodes-key-values-higher-education">arguments</a> <a href="https://www.insidehighered.com/views/2009/02/16/katopes">against</a> this <a href="http://www.aaup.org/article/resisting-student-consumer-metaphor#.VYAzyvlViko">model</a>. I intend to express the economic case for why this view might lead to a general deterioration in the quality of education. </div>
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Who is the customer of a university providing the service of higher education? Surely part of the answer is that the student is, but in what regard? The student attends the classes, does the coursework (usually), and learns the material. As I emphasize to my own students, "no one can learn the material for you." So, surely it is the student who receives the education who solely benefits from it!</div>
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Not really. First of all, students presumably attend college to become <i>more productive</i>. Attending my microeconomics class is different from buying a ticket to see <i>Jurassic World</i>. It is not entertainment or pleasure to be consumed and completed; rather, it is an investment to be accumulated and maintained through no small amount of blood, sweat, and tears. The beneficiaries of this effort are both the <i>future self</i> of the student, and also the firms that eventually employ those students. So our stakeholders in the student's education are now three: current student, future student, and future employer. <br />At this point we have a contracting problem: information. Students are uncertain as to how beneficial their investments will be, and may not know which investments will be most beneficial after they have graduated. Moreover, the skills that will have a value in the future (math, science, economics) may not be the same as those subjects that the current student finds most interesting, entertaining, or even "easy" (art, history, management). Then, when the student has graduated (and is seeking a job), employers are poorly informed about the true abilities of the graduates applying for positions. A college transcript may tell firms something about what and how much you learned, but not everything. Lazy graduates, or graduates who got good grades by "gaming the system" have an incentive to disguise themselves to be hard-working and thus manipulate the information (and therefore the contract) to their strategic advantage. </div>
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On top of that, how well you are able to learn a rigorous topic (like economics) depends somewhat on "peer effects." <a href="http://www.jstor.org/stable/3211619">Zimmerman (1998)</a> shows that average students with below-average roommates fared worse in their academic standing than similarly-capable students with above-average roommates. In other words, associating with smarter people makes you more productive! So, it turns out that my little motivational quip is not entirely true: Being in the company of other good students does in fact help average students learn! Once you have graduated and found work, these peer effects continue. <a href="http://www.motu.org.nz/files/docs/MEL0252.pdf">Glaeser (1994) </a>suggests that workers in cities are about 33% more productive than similarly-educated workers in more rural settings. <a href="http://www.jstor.org/stable/3592947?seq=1#page_scan_tab_contents">Moretti (2004) </a>shows that workers in firms with higher percentages of college graduates are also more productive. At this point the contracting problems are really piling up because now we are having trouble isolating the private beneficiaries, and, therefore, excluding "free-riders". </div>
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Hence, the stakeholders in any student's - even if we focus solely on the economic benefits - could be said to include: (1) the current individual student; (2) the current student's classmates; (3) the individual student's future self; (4) the student's future employer(s); (5) the student's future co-workers. I could also probably include (5) the student's alumni (who benefit from the continued value to their degree); and (6) society at large (to the extent that well-educated students today will be better-informed voters for their lifetimes). Contracting among these various stakeholders involves very high - likely prohibitive - transactions costs. </div>
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But there is one key way in which students are, and have increasingly become, the sole consumer: <i>paying the bills</i>. The increasing burden of cost on the individual student gives the student much more leverage over colleges and universities. Thus, it is a group of 18-22 year old current students' preferences for increasingly high grades for increasingly little work (along with fitness centers, fancy dorm rooms, gourmet cafeteria food, and successfull athletic programs) that dictate the revenue streams (recruitment and retention) for colleges and universities. Direct public funding of colleges and universities is down substantially, and the extent to which this has been offset by redistributing those monies directly to students in the form of grants may not help. So, the likely result is that problems in higher ed will get much worse before they get better. And it is hard to blame administrators for treating students as "the consumer" because they're just following the money. </div>
James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-42746096887670441532015-06-10T18:27:00.000-04:002015-06-10T18:27:28.157-04:00Intellectual Property Rights, Innovation, and Regulatory CaptureThere's quite a bit out there right now about the <a href="http://en.wikipedia.org/wiki/Trans-Pacific_Partnership">Trans-Pacific Partnership</a> (TPP) and its supposed provisions on <a href="http://fee.org/anythingpeaceful/detail/trans-pacific-partnership-is-about-control-not-free-trade?utm_content=16081135&utm_medium=social&utm_source=facebook">Intellectual</a> <a href="http://c4sif.org/2014/01/cato-vs-public-citizen-on-ip-and-the-tpp/">Property</a> <a href="http://c4sif.org/2013/10/longer-copyright-terms-stiffer-copyright-penalties-coming-thanks-to-tpp-and-acta/">Rights </a>(IPR). The nature of the current dispute is that US negotiators (in some cases rightly) claims that IPR laws in many countries are too lax, whereas negotiators in other countries claim that US property rights laws (which the US seeks to embed in a proposed agreement) are too strict.<br />
Who's right? Answer: Both of them, but not necessarily for the reasons we might think.<br />
The claim for the US is pretty straightforward: Without IP laws, innovators cannot profit from their ideas because copycats will steal those ideas with disastrous consequences for the incentive to innovate. This is a true enough claim, and one might think that if some protection is good then a lot of protection is even better, and so the US IPR system should be transplanted - even strengthened and made more strict - worldwide.<br />
The flip side of the argument is that IPR law grants big firms (Pharma, for example) monopolies that increase prices, make technologies (and other innovations) unaffordable in poor countries, and hence make development unachievable. While this is true, it partly misses the point: After all, stricter property rights enforcement would presumably give all countries the opportunity to benefit from the innovations of its work forces.<br />
Instead, the real problem with very strict IPR laws is that it may actually stifle innovation on some margins. In the US, any patent that would improve existing technologies requires the patent applicant to attain permission from each and every patentholder on the technology she wishes to improve. Many technological improvements in the Industrial Revolution were in fact this type of marginal innovation by nameless, faceless workers looking to make their own jobs easier. These innovations are somewhat restricted under current IP law.<br />
Another problem with strict IPR laws is that it changes the nature of innovation. Take pharma for example. A number of the biggest problems facing medicine today are "public health" issues. These issues may disproportionately affect poorer citizens or countries, or they may be relatively randomly distributed. However, the most profitable innovations are the ones that provide <i>private</i> benefits. Thus, the industry is more apt (under current laws) to "innovate" new cholesterol pills and boner pills - medicines that solve private health issues, or problems that may disproportionately affect richer people. How's a firm to profit from creating a vaccine for ebola or HIV?<br />
So, in many ways, the optimal strictness is probably somewhere between the US patent troll system and a Hong Kong free-for-all. In other words, and stealing (but innovating on!) an idea by <a href="http://marginalrevolution.com/marginalrevolution/2012/09/patent-theory-on-the-back-of-a-napkin.html">Alex Tabarrok</a>:<br />
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<br />James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-5186185620242330972015-06-10T16:31:00.000-04:002015-06-10T16:31:00.833-04:00Productivity Growth CAN Reduce Middle Class Incomes!Tyler at Marginal Revolution asks the question "<a href="http://marginalrevolution.com/marginalrevolution/2015/04/how-can-faster-productivity-growth-not-raise-middle-class-incomes.html">How can faster productivity growth NOT raise middle class incomes</a>?"<br />
Am I missing something? Is it a trick question? It seems like there is a simple principle-of-economics answer. Faster productivity growth could lower (real) middle class incomes if the following are all true:<br />
1. Productivity growth only increases productivity for capital and not for labor. Hence, the direct impact of the growth will be to shift demand for capital to the right, and increase the price and quantity of capital.<br />
2. Middle class households mostly earn income from selling labor (and not capital). This seems to hold up empirical given the very high concentration of wealth relative to income.<br />
3. Middle class households' labor is a strong substitute for capital. In other words, the increased productivity of capital leads to a (large) shift in relative factor demand away from labor and towards capital.<br />
3.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-23257475833983565702015-06-10T16:11:00.001-04:002015-06-10T16:11:26.427-04:00Scott Walker's War on Tenure: An Institutional Economics AnalysisScott Walker has declared war on tenure, and it has been reported on nationally (in the <a href="http://www.nytimes.com/2015/06/05/us/politics/unions-subdued-scott-walker-turns-to-tenure-at-wisconsin-colleges.html">NYTimes</a> or <a href="https://www.insidehighered.com/news/2015/06/01/wisconsin-faculty-incensed-motion-eliminate-tenure-state-statute">Inside HigherED</a> and the <a href="http://www.washingtontimes.com/news/2015/jun/9/uw-madison-chancellor-says-removing-tenure-not-dis/">Washington Times</a>) and blogged about by some economists (<a href="http://marginalrevolution.com/marginalrevolution/2015/06/did-the-wisconsin-state-system-just-abolish-tenure.html">Tyler Cowen </a>and <a href="http://econbrowser.com/archives/2015/05/gop-targets-faculty-tenure">Menzie</a> <a href="http://econbrowser.com/archives/2015/06/assessing-the-rational-agent-response-to-elimination-of-tenure">Chinn</a>) But Scott Walker only half-understands tenure, and the half he understands leads him to miss the point of it.<br />
Granting a faculty member indefinite tenure is a mutually-beneficial contracting mechanism that benefits both faculty and colleges. To understand this, we have to understand the different aspects of a faculty member's productivity:<br />
1. Teaching. At most colleges, teaching is the most important service a faculty member provides for her institution. This involves teaching a subject area well, and defending academic standards.<br />
2. Service to the Institution. This might include curriculum/course development, advising, committee work, or generally helping out with administration of academic programs.<br />
3. Research. This mostly includes publications.<br />
4. Service to the Profession. This might include serving as a referee for journals, membership and service in professional organizations, etc.<br />
Aspects (1) and (2) involve "firm-specific human capital investments" and mostly benefit the institution, whereas (3) and (4) involve "general human capital investments," and mostly benefit the individual faculty member (and her ability to find a job elsewhere!). More generally speaking, there are a lot of high-skill jobs that involve similar types of tradeoffs in the allocation of effort for investing in human capital, but this is especially pronounced, I think, in Academia.<br />
This presents an interesting contracting challenge. Institutions would like high levels of effort in all areas, but would especially like high effort in firm-specific areas (teaching and administration). Tenure partially helps achieve this, and this is where the half of tenure Walker doesn't understand comes into play. On the one hand, Walker is correct that tenure has a general tendency to reduce the overall incentives facing a faculty member and thus may reduce total effort (although even this is not fully clear since tenure reduces aggregate uncertainty, and uncertainty can sometimes be a disincentive to work). On the other hand, Walker fails to recognize that tenure also increases the relative incentive for making "firm-specific human capital investments" - investments in teaching and curriculum development. (Side note: tenure is also creates similar substitutions within the allocation of research time away from small "marginal discoveries" and towards bigger projects that may attract acclaim for the institution.)<br />
Hence, university presidents should be wary of abolishing tenure, and not only for altruistic reasons. By increasing uncertainty about continued employment, educational quality suffers. Regular faculty members will invest more time in research (who knows, I may need a job somewhere else?) and retreating on standards (students better like my teaching - and populate my classes - or I won't get to stay).James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-90763009438510103662015-04-09T14:33:00.001-04:002015-04-09T14:34:58.542-04:00Cost Curves: Don't "Let Me Google That for You"It's amusing reading students' responses to take home exams. Some would clearly benefit from a even the most meager level of effort, while others show a clear and sometimes deep understanding of the material. Then, there are the kids who Google shit. <br />
Of course, when they do this, they're rarely clever enough to put information they take from Wikipedia or Quizlet into their own words, and it's not too hard to catch them by selecting the plagiarized text and search for it using the context menu in Chrome (or Firefox). <br />
But, I digress. In my police work, I stumbled across the Wikipedia page for "<a href="http://en.wikipedia.org/wiki/Cost_curve">Cost Curves</a>." Near the bottom there is a heading labeled "<a href="http://en.wikipedia.org/wiki/Cost_curve#Cost_curves_in_reality">Cost Curves in Reality</a>." Under this heading, the entry notes,<br />
<blockquote class="tr_bq">
The U-shaped cost curves have no basis in fact. In a survey by
Wilford J. Eiteman and Glenn E. Guthrie in 1952 managers of 334
companies were shown a number of different cost curves, and asked to
specify which one best represented the company’s cost curve. 95% of
managers responding to the survey reported cost curves with constant or
falling costs.<sup class="reference" id="cite_ref-Eiteman_and_Guthrie_19-0"><a href="http://en.wikipedia.org/wiki/Cost_curve#cite_note-Eiteman_and_Guthrie-19"></a></sup><br />
Alan Blinder, former vice president of the American Economics Association,
conducted the same type of survey in 1998, which involved 200 US firms
in a sample that should be representative of the US economy at large. He
found that about 40% of firms reported falling variable or marginal
cost, and 48.4% reported constant marginal/variable cost.<sup class="reference" id="cite_ref-Blinder_20-0"><a href="http://en.wikipedia.org/wiki/Cost_curve#cite_note-Blinder-20"></a></sup></blockquote>
The question is: Should I be surprised at these findings? It doesn't seem that these <a href="http://www.jstor.org/stable/1812530">empirical</a> <a href="http://books.google.com/books?hl=en&lr=&id=6OOFAwAAQBAJ&oi=fnd&pg=PR11&dq=Asking+about+Prices:+A+New+Approach+to+Understanding+Price+Stickiness&ots=VI_vtCsmSW&sig=wJ6IiJ3phwlCvmYEKIJHpb5DM4w#v=onepage&q=Asking%20about%20Prices%3A%20A%20New%20Approach%20to%20Understanding%20Price%20Stickiness&f=false">findings</a> suggest anything abnormal about the actual costs of production.<br />
Why? First, it would seem to me that managers most likely are familiar with the range of production below and including the current range of output they are producing. If the industry is anything <i>other than</i> perfectly competitive, the current range of output will be on the decreasing side of average costs. Second, technology reduces costs over time, and therefore as firms expand they are also improving technology, and thus reducing their costs. None of this disproves the existence of upward sloping average costs at some level of output way out past the firm's current production horizon.<br />
Now, what would be interesting would be to put this on an upcoming take home exam to see how many students Google it, and hit to this post. Will they have the gall to plagiarize their own professor?James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-59713062113979201372015-02-04T17:14:00.001-05:002015-02-04T17:14:27.434-05:00Grades and Public GoodsI do little experiments in class. Today's topic was "public goods" and I did the following exercise: <div>
<blockquote class="tr_bq">
Each may voluntarily 'contribute' any number of points from 0 to 10.<br />I will increase the amount collected by 20 percent<br />The resulting total will be divided equally among all class members who are present.<br />You may interact before contributions are declared but you will make your contributions anonymously and in private.<br />All contributions will remain anonymous. </blockquote>
</div>
<div>
It's basically a version of a game lifted from <a href="http://www.marietta.edu/~delemeeg/games/">Games Economists Play</a>. Anyway, there were 17 people in class, and there were 107 points contributed so everyone got back about 7.6 points. But, a few people put in 10 points and ended up with negative points. Needless to say, it's not the most popular game we do in class, but the grumbling subsides when I tell them that on average, students win between 15 and 30 points playing these games. </div>
<div>
Anyway. One kid who thought he was particularly clever asked, "let's just make the 107 everybody's score on the exams." </div>
<div>
I took the bait, and asked, "well, is that good for everybody?" </div>
<div>
Naturally, the first response was overwhelmingly positive, until I asked "why do we have grades?" Eventually the answer settled somewhere in the vicinity of the fact that they provide information about what we know or what we learned or how smart we are. Of course, the signal grades send is noisy, but that's a topic for another day (two classes from now, in fact!). </div>
<div>
Getting back to the grades, I asked what would happen if I announced (or if everyone knew from their friends for example) that everyone's going to get an "A" in the class. Someone said "I wouldn't do shit." AAAAND (wait for it) .... If everyone gets an A (or if all of the teachers give A's), then an A becomes a public good, and no one (students especially) has any incentive to work hard and make sure their grades and degrees mean something. AAAND.... ..... BOOM! we're back on public goods! If we make A's public goods (instead of private goods that have to be earned individually) then the whole value of education is degraded.</div>
James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-62500670837042645202014-09-25T10:52:00.000-04:002014-09-25T10:52:44.421-04:00Bill Simmons is RightI'll say it. <i><a href="http://www.businessinsider.com/bill-simmons-rant-about-roger-goodell-2014-9">Roger Goodell is a liar</a></i>. He knew what happened in the elevator between Ray and his now wife Janay Rice. He knew that Ray Rice assaulted his then-fiancee, he saw the video of Rice dragging her out of the elevator unconscious, and I fully believe that he <i>saw the video </i>of Rice brutally beating her in the elevator, although this last bit of information is completely immaterial.<br />
<div>
<br /></div>
<div>
So why is Bill Simmons being suspended by ESPN? (And, as a sidenote to ESPN, pulling a podcast from your website doesn't kill it from the internets.) Did he say something racist, explicit, or indecent? (OK, well he did use some grown-up language, but that was censored and is certainly not a first!) Is he the first journalist to claim this? NO. Here is <a href="http://www.latimes.com/sports/nfl/la-sp-rice-goodell-plaschke-20140911-column.html">Bill Plaschke of the LA Times</a>, who incidentally is a regular on the ESPN fake gameshow "Around the Horn:"</div>
<blockquote class="tr_bq">
It now appears that beyond being clueless, he may also have been lying. There now exists evidence his office actually received the tape five months ago. Goodell now looks like the sort of sleazy player he has long taken great pride in suspending, with a darkly ironic twist. The reckless bum who should be kicked out of the league for disgracing The Shield is him.</blockquote>
<div>
That is far more damning than Simmons. Or how about <a href="http://www.bostonglobe.com/sports/2014/09/09/nfl-gambled-that-ray-rice-video-would-remain-concealed-and-lost/MALPXu3G3DQUA9cfsk3ovN/story.html">Christopher Gasper of the Boston Globe</a>: </div>
<blockquote class="tr_bq">
The NFL bet that what happened between former Baltimore Ravens running back Ray Rice and his then-fiancée/now wife Janay Palmer in the elevator of an Atlantic City casino would never see the light of day. ... There is a willful suspension of disbelief that goes along with the business of the NFL, where the players are indistinguishable from the product. The players, portrayed, packaged and sold as superheroes are in reality flawed human beings, some with deeper flaws than others. The coaches, the general managers, the owners, the commissioner don’t really want to know what malice their players are capable of off the field, as long as they’re producing for them on it.</blockquote>
Or <a href="https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=0CDgQFjAF&url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fprishe%2F2014%2F09%2F08%2Froger-goodell-must-be-held-responsible-if-nfl-lied-about-ray-rice-investigation%2F&ei=niYkVOPlCoOuyATKzoLIDg&usg=AFQjCNFgPyUXSj_zmGVqZVSs6BMQWdVXhA&sig2=lLiEmCzrU8Q6egqXD0MWyg&bvm=bv.76247554,d.aWw">Patrick Rishe of Forbes</a>:<br />
<blockquote class="tr_bq">
The assertion by all parties (the league, the Ravens, Goodell and the NFL) is that they had not previously seen the first portion of the video which actually shows Rice striking his then-fiancé with a left hand to the head, causing her to hit her head on a railing within the elevator which rendered her unconscious before ultimately being dragged out of the elevator.<br />
Unfortunately, it is very hard for me to believe that an organization with as much investigative juice/pull/power as the NFL was not able to get their hands on the entirety of the security video inside that elevator PRIOR to today...</blockquote>
<div>
A little subtler, but the gist is: Roger Goodell lied and only pretended not to know the truth. </div>
<div>
<br /></div>
<div>
So why is it such a big deal that Simmons said similar things? It's not like the notion that Goodell is lying is a wild, fringe accusation with no basis in fact. ESPN is very unlikely to be sued for libel given the fact that the Associated Press has reported that law enforcement and the DA office <a href="http://www.si.com/nfl/2014/09/10/ray-rice-video-nfl-roger-goodell">made the tape available to the NFL in April</a>. </div>
<div>
<br /></div>
<div>
I fully agree that ESPN has the right to enforce restraint by its "journalists" by whatever means it thinks will most benefit its share holders. I also fully support any news organization willing to discipline its reporters when they fail to live up to journalistic standards for truthfulness, and am correspondingly suspicious of <a href="http://www.digitopoly.org/2014/09/06/huffpo-and-the-loss-of-trust/">organizations </a>that <a href="http://www.politico.com/blogs/media/2014/09/fareed-zakaria-plagiarized-195579.html">do not </a>(I searched for an alternate story with the audio of Simmons' rant even though Huffpo was the first link containing the audio). In the end, I hope there will be more backlash against ESPN than Bill Simmons. While news organizations have an obligation to their audience to report truth, they have a reciprocal obligation to their reporters and columnists to give them full liberty in the manner in which they report those facts as well as in the opinions they express.</div>
James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-47800845480901331602014-06-25T10:43:00.000-04:002014-06-25T10:43:47.068-04:00Conflict and GrowthThere is more out there on the subject of war. Economics blogger and libertarian Tyler Cowen seems to think that <a href="http://www.nytimes.com/2014/06/14/upshot/the-lack-of-major-wars-may-be-hurting-economic-growth.html?_r=1">war (or at least the threat of it) is good for growth</a>. There are two problems with this. First of all, across the post-WWII era, much of the evidence seems to support the opposite hypothesis: countries that are less prone to conflict grow faster. Second, growth is likely not the only variable worth exploring.<br />
On the first issue, one might argue that countries that have been prone to conflict over the last 70 years have mostly been those countries that are also prone to slow growth, for institutional reasons, and that would be fair. So, let's not call in the jury yet on that, although the likes of <a href="http://garrido.pe/lecturasydocumentos/RODRIK%20(1999)%20Where%20Did%20All%20the%20Growth%20Go.%20External%20Shocks,%20Social%20Conflict,%20and%20Growth%20Collapses.pdf">Dani Rodrik would likely share my skepticism</a>. <br />
On the second issue, even if we found there to be spurts of growth following conflict, we would be hard pressed to show that those spurts would really leave us better off than the alternative scenario in which countries like those in the OECD had done everything else the same, except that they had fought more. Many countries are bound to have growth spurts after conflict <i>simply because of the destruction of capital wrought by conflict.</i> In other words, sometimes growth speeds up precisely because things have exogenously been made worse. This is merely an application of <a href="http://en.wikipedia.org/wiki/Solow%E2%80%93Swan_model">neoclassical growth theory</a>. <br />
Digging deeper into Dr. Cowen's argument, there is a hint that the threat of war might, historically, provided an incentive for investment in public goods, including infrastructure and technology. The mechanism through which this operates in Cowen's model, it seems, is by increasing competition between the incumbent regime and external and internal contestants. To his credit, this is indeed a hypothesis of that is well-established in the literature on institutions, for example by <a href="http://projects.iq.harvard.edu/gov2126/files/olson_1993.pdf">Mancur Olson (1993)</a>, but also <a href="http://cvns.econ.muni.cz/prenos_souboru/is/projekty/28-letni-skola-cvns/vystupy/143-weingast.pdf">North, Wallis, and Weingast (2006)</a>. <br />
The problem is that in these institutional models, the threat of war as a constraint on power is mostly used in primitive nation-states that rely on fairly closed and autocratic forms of government that are more apt to be extractive. Also, in these models, the main priority of the dictator is to provide security so he can remain in power. This is done in three ways: (1) by buying off former warlords and elites; (2) by eliminating elites those who can't or won't be bought; and (3) by providing public goods.<br />
More open, inclusive, and democratic forms of government can usually achieve the constraints on power necessary to provide public goods effectively through the electoral process, to the extent that the process is not too tainted by asymmetric information and special interest politics. Note that this does not mean that taxes will be lower in a democracy, nor that redistribution will be less. It just means that policies will better reflect the preferences of society at large, and in particular those of the average (median) voter. In fact, a democratic government may have a greater capacity to tax <i>precisely because</i> it uses public funds to provide public goods like infrastructure and technology. <br />
So, it seems myopic at best to think that conflict (or the threat of conflict) should be considered a "good thing." At worst, it is dead wrong and a destructive way of thinking.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-69140702569933137582014-06-23T10:14:00.001-04:002014-06-23T10:14:19.968-04:00Conflict and CapitalismThis week, Pope Francis was <a href="http://www.economist.com/blogs/erasmus/2014/06/francis-capitalism-and-war">quoted by the Economist </a>to have said this in an <a href="http://www.lavanguardia.com/internacional/20140612/54408951579/entrevista-papa-francisco.html">interview </a>with the Spanish newspaper <i>La Vanguardia</i> (translation in the <a href="http://www.ncregister.com/daily-news/full-text-of-pope-francis-interview-with-la-vanguardia/"><i>National Catholic Register</i></a>): <br />
<blockquote class="tr_bq">
We are discarding an entire generation to maintain an economic system that can't hold up any more, a system that to survive, must make war, as all great empires have done. But as a third world war can't be waged, they make regional wars...they produce and sell weapons, and with this, the balance sheets of the idolatrous economies, the great world economies that sacrifice man at the feet of the idol of money, are resolved...</blockquote>
The Economist takes an philosophical approach in expressing its doubt towards the Pope's assertion of a link between capitalism and conflict, citing Shumpeter and Popper as having argued that capitalism can "consolidate peace, by offering non-violent ways to satisfy human needs."<br />
<br />
On the one hand, there is a theoretical basis for the Pope's argument. Early studies of conflict posited that the rapid transition from traditional economic and social institutions to more modern (capitalistic) ones would alienate those who could not assimilate quickly, and thus foment conflict. These reasons include the unequal distribution of benefits, both between elites and non-elites of the same ethnic group, and among different ethnic groups.<br />
<br />
On the other hand, empirical support for such an argument is weak. In particular, <a href="http://www.econ.nyu.edu/user/debraj/Courses/Readings/CollierHoeffler.pdf">Collier and Hoeffler (2004)</a> find little support for the hypothesis that either income or wealth inequality does in fact increase a society's propensity for conflict. These results are affirmed by <a href="http://iis-db.stanford.edu/pubs/21459/fearlait.pdf">Fearon and Laitin (2003)</a>. Moreover, a <a href="https://drive.google.com/file/d/0B7BNSctW1GYZYU1xQ3JaZzZBWDA/edit?usp=sharing">my own working paper with Atin Basu and William Shughart </a>suggests that more open, more prosperous, and more capital-abundant societies are less likely to devolve into civil war. In fact, the positive impact of openness and wealth seem to be the greatest for countries with institutional arrangements that otherwise put them at risk of tipping into the abyss of state failure. <br />
<br />
Yet, there is one last caveat in favor of the Pope's position: Greed does lead to conflict. The same studies cited above that discount the role of inequality and capital accumulation in stoking conflict almost unanimously find some role for competition over resources as a significant determinant of conflict. However, in most societies where greed and competition for resources significantly contribute to conflict it is the state that controls access to such resources, not the market. It is precisely this state control over resource rents that makes violence attractive (or necessary) for insurgent groups. James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-21159040786234786112014-06-20T13:43:00.001-04:002014-06-20T13:47:10.709-04:00Maybe there is such a thing as a free appetizerThis week, <i>Freakonomics</i> <i>Radio</i> broadcast their take on so-called "<a href="http://freakonomics.com/2014/06/19/theres-no-such-thing-as-a-free-appetizer-a-new-freakonomics-radio-podcast/">free appetizers</a>" - bread, chips, etc. that many restaurants supposedly give out for "free" with their meals.<br />
Other supposed freebies include free soft drink refills, free unlimited salad bar with your meal, and even free french fries (and other sides!) at some casual restaurants. A listener contacted Dubner and asked, "Why do restaurants do this?" The program puts forth 6 hypotheses of varying plausibility: <br />
<br />
<ol>
<li>Increase turnover - people who fill up on bread eat their meal and leave, allowing the owner to clear the table and turn it over. People who stay for dessert linger too long. The experts in the podcast don't buy this one, and neither do I. Desserts may be low in menu price, but they typically have higher profit margins than entrees. People who stay longer are often also getting other high-margin items like coffee or alcohol. </li>
<li>Reduce complaints - Hungry people waiting for their order get cranky and may complain or leave. The broadcast also suggests that, for behavioral reasons, "free" is much more effective at this than just "cheap." This probably doesn't explain a <i>lot</i> of it, and I don't really buy the "behavioral" angle on this explanation, but it's a plausible contributor.</li>
<li>Exploit complentarities with higher-margin items - A basket of salty chips or bread makes people buy other things that "go with" that item. The usual suspect here is drinks, which fits with the "loss leader" strategy. I would also point out that at many Mexican restaurants, about half of the <a href="http://losagavesqc.com/menu.html">available appetizers</a> are direct complements to chips: cheese or bean dip, fundito, and guacamole. </li>
<li>Expectations and history - At some point a firm saw it in its strategic advantage to give stuff out for free, or to charge a fixed-price. Other firms followed suit, consumers developed expectations around receiving free stuff to snack on, and the rest is history. </li>
</ol>
<br />
Finally, they propose that the "free" apps are not free at all, but rather that their cost is included in the price. This leads them to the question, "why not let consumers choose (or not choose) the appetizer they want, and price them separately?" This is really the key question, and the one that institutional analysis has a good answer for. Bottom line: <a href="http://en.wikipedia.org/wiki/Transaction_cost">Transactions costs </a>matter.<br />
To answer the first part of the question, then from the firm's perspective there is a value in knowing that all consumers that place an order will be ordering the same thing. If economies of scale matter, then making the same thing 400 times at predictable intervals each night will be cheaper than making 8 different things an average of 50 times each at unpredictable intervals. Consumers also then have to make their choice, which itself takes time, energy, and as Yoram Bauman comically points out, "<a href="https://www.youtube.com/watch?v=VVp8UGjECt4">choices are bad - really bad</a>." In some contexts, and as Dan Ariely points out <a href="http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_of_our_own_decisions">they can be dangerous</a>.<br />
But economies of scale alone don't quite answer the question, because we could always counter that by asking why "bread" or "chips" aren't listed on the menu for a nominal charge, even if they're unlimited. The broadcast hints at the answer by implying that people don't like to be "nickeled and dimed" which is part of it - but believe it or not, restaurants don't benefit from nickeling and diming either!<br />
Market transactions create costs that aren't present when we leave them unpriced, kind of like friction. A common example (which is sometimes also applied to the related topic of property rights) is <a href="http://www.montana.edu/econ/rucker/produce.pdf">how to price fresh produce</a>. In this case, it's quite possible that the restaurant and consumers both benefit from leaving bread or chips unpriced, since pricing them would involve greater mental cost, monitoring, and in the long run make the combined bill somewhat more expensive.<br />
So, if the cost of producing a good is small relative to the transactions costs, then a price of zero is quite efficient. Further, if the side-benefits of supplying the good at a price of zero exceed the production costs, it will be in the firm's private self interest to supply that good at the efficient price of zero, and without such side-benefits (even if they do arise out of a "prisoner's dilemma"), the good may not be supplied at all! In fact, if the transactions costs of exchange exceed the production costs, it's possible that by economizing on transactions costs, free bread really is free.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-556818438391277352014-05-27T14:02:00.000-04:002014-05-27T14:02:33.422-04:00I just bought a new car - a Honda Civic. I think I actually got a really good deal on it. I also think my background in economics helped me negotiate that deal.<br />A <a href="http://www.cnn.com/2008/LIVING/wayoflife/08/20/aa.car.buying.tactics/index.html?_s=PM:LIVING">number</a> of <a href="http://editorial.autos.msn.com/15-tips-to-get-the-best-deal-on-a-new-car#8">websites</a> give <a href="http://auto.howstuffworks.com/5-ways-good-deal-on-car.htm">tips </a>- some good, some bad - on how to negotiate a car deal. Here's my take.<br />
1. Before you step on a lot, get a lot of information on a lot of different cars. Information is extremely valuable to economic transactions. Know the price differences between different makes, trim levels, options, and other things. Here, I would say that adverse information about the cars you are considering (especially your first choice) is at least as valuable as the positive information.<br />
2. Also before stepping on a lot, shop online. If you have access to a car buying service through a bank or credit union you have membership with, use it to get concrete quotes for dealers within an x-mile radius.<br />
3. Get pre-approved for your loan so they can't get you to fill out a credit application before you have a price. This is mostly likely an attempt by the seller to increase the fixed cost of leaving.<br />
4. Have an outside option and be flexible. A couple of fora on buying a car say to really zero in on what you really want before you start. I couldn't imagine worse advice. The only way to get a good deal is to induce competition. If you are too zeroed in on one model then you probably aren't recognizing the positive aspects of comparable cars, or the negative aspects of your first choice. Use these trade-offs in your negotiation, and be willing to walk away. One problem with walking away, though, is that there's a bit of a "secretary problem" here in the sense that if you negotiate hard, then decide to walk away, you may not be able to come back. This gives a dealer considerable monopoly power once negotiation starts: Advantage, seller.<br />
5. Be respectful and honest.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-23824388326601625132014-04-14T10:42:00.002-04:002014-06-20T13:46:56.316-04:005 Flaws of "Cosmos"This post by Hank Campbell at "The Federalist" blog suggests 5 myths in the Neil Degrasse Tyson's remake of the Carl Sagan's "Cosmos". I admit that Mr. Campbell may know more about the scientific validity of the claims put forth in the series (or perhaps not - it does not appear Mr. Campbell has any specialized training in physics or astronomy), but in some ways he comes off a little to harshly in the opposite direction. Here are the flaws Campbell points out:<br />
1. Venus Was Not Caused By Global Warming<br />
Perhaps he is right here. There are probably several factors that make Venus' average temperature consistently around 860 degrees Fahrenheit, but Mr. Campbell doesn't explain what REALLY might make Venus that hot, and it's not simply proximity to the sun: Mercury is about the same temperature as Venus on its sun-facing side, but reaches extremes of about -300 degrees on its dark side. Probably it is a combination of factors, but something has to be at work keeping the dark side of Venus at a temperature as remarkably close to the sunny side as we have observed. Atmospheric gasses play an important role (if it weren't for the green house effect we'd all freeze by the way!).<br />
2. The Multiverse Is Not Science<br />
In a narrow definition of science, this is a true statement. Multiverse theory is not fully testable because seeing beyond the "horizon" of the observable universe (and yes, I know the universe doesn't have a "horizon" per se) is not possible.That doesn't make it non-science. Scientists who "believe" in a multiverse derive their models of the multiverse from models that must follow physical laws we have observed in tests of other hypotheses about the big bang. In fact, the recent discovery of gravitational waves near the universe's origins, which also supported "inflation theory", increased the likelihood that a multiverse is possible.<br />
3. There Is No Sound In Space<br />
Ok. Sure.<br />
4. Giordano Bruno Was Not More Important To Science Than Kepler And Galileo<br />
Yeah, I kinda hated that part, too.<br />
5. The Universe Was Also Not Created In One Year<br />
As Campbell admits, this is mostly a style issue. It's meant to be a device for understanding the vastness of time. Apparently it didn't work on the founder of Science 2.0. But here is my beef with this point. Campbell states:<br />
<blockquote class="tr_bq">
Rather than seeking to take jabs at religion, science should be embracing it. From a science perspective, religious people are involved in the largest ongoing experiment of all time. The major religions all disagree with each other in ways large and small and yet people are turning knobs in their lives and making adjustments to try and solve a grand mystery. What, if anything, comes next?</blockquote>
Whoa. I don't really see religious or areligious people as being any more or less in the struggle to understand the meaning of existence, or what comes after the life we know than the other. Much of this depends more on the individual. An atheist who adamantly believes that death is the end is no less at struggle with that grand mystery than someone who adamantly believes we will all be swept up to heaven or hell depending on our deeds and on our faith. I'm agonstic, and believe you me, Mr. Campbell, I spend much of my time turning knobs trying to figure out what's in store for me when my body's strength is gone.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-26036064334775713222014-04-10T11:58:00.000-04:002014-04-10T11:58:39.719-04:00Framing Effects and Student EvaluationsIt's student evaluation season, which always puts me in a sunny mood. While there are some studies that apparently <a href="http://studentsurveys.cmswiki.wikispaces.net/file/view/WILL_TEACHERS_RECEIVE_HIGHER_STUDENT.pdf">refute </a>the <a href="http://search.ebscohost.com/login.aspx?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=01463934&AN=22468647&h=OJ4hN13L%2F0ZfyP30B4BgiRpwHLtbdzJEX37Mw9k8%2FMFtzbpsmjytaJQU4LqcwlgxPLa65TXOMcJyiggcvwx%2BRg%3D%3D&crl=f&crawlloc=cf:z%2F0128517485&crawllib=RD200609.LIB">hypothesis </a>that leniency buys better evaluations, there are reasons to be suspicious of the validity of these OLS results. For example, in hard departments like science and engineering, someone is going to appear to be better than the others, and it is hard to control for individual characteristics of the students in anonomized surveys that can't be matched up to the observable characteristics about those individuals. But I digress...<br />
One thing that strikes me as an interesting hypothesis is to test what would happen to teaching evaluations by changing the sequencing of the questions. For example, in the forms I will administer next week, (the "<a href="http://www.kean.edu/admin/uploads/SIR%20II.PDF">Student Instructional Report II</a>, or SIRII) the <i>very last questions before the overall evaluation ask students about their effort and the course's difficulty.</i> If behavioral economics teaches us something, it's that framing (or maybe this is anchoring?) matters in survey design. It seems like a neat workaround to test the "leniency hypothesis" would be to change the order of the question so that effort and difficulty are randomly asked their overall evalution either before or after the difficulty and effort questions.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-67200264759189787212014-04-01T15:47:00.000-04:002014-04-01T15:47:46.203-04:00Coming to Econ from EconNoah Smith writes<a href="http://noahpinionblog.blogspot.com/2014/03/coming-into-econ-from-physics-and-other.html"> this post </a>on the advantages and disadvantages of coming to an econ graduate program from a physics undergraduate major. The upshot: It helps a little and it hurts a little. The same can be said for coming to econ from econ.<br />
The big advantage doing econ from undergrad all the way through is that when you get to grad school you already speak the language and know the intuition - at least on the micro side of things.<br />
There are two potential disadvantages to coming to this path. First, if you're like me, your undergraduate focused on policy economics, and you learned about things like IS-LM, fiscal policy, and monetary policy on the macro side; and public goods, externalities, and other market failures on the micro side. This knowledge will not help you survive the core micro or macro sequence in grad school. In fact, it will likely hurt you (especially in the macro side).<br />
The other disadvantage is not enough math. If you're like me you took a few semesters of calculus, some stats, an econometrics course, and maybe even a decent math econ class and thought you were hot shit. What do you win for all that? A rude effing awakening when you get to grad school. If you do econ, pair it with a math and/or stats minor, at least - maybe even a double major.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-22525409385741637772013-09-26T10:35:00.002-04:002013-09-26T10:35:41.387-04:00Reverse CausalityThe headline "<a href="http://freakonomics.com/2013/09/16/how-does-the-value-of-driving-differ-across-states/">Does the value of driving differ across states</a>?" seems to imply that driving more causes higher incomes. Couldn't it very well be the opposite? Higher GDPs per capita lead to higher population densities, higher congestion, higher property values where jobs are, and hence more total miles driven?James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-69927105603631088222013-08-23T10:48:00.000-04:002013-08-23T10:48:16.029-04:00Distortions, Taxes, Absurdity, and What they can Teach Us about Tyler CowenRecently, Professor Cowen made the post, "<a href="http://marginalrevolution.com/marginalrevolution/2013/08/i-am-sorry-but-this-is-absurd.html">I am sorry but this is absurd</a>" in response to<a href="http://www.nber.org/papers/w18204"> an article by Charles Manski</a>, summarized on <a href="http://www.voxeu.org/article/removing-deadweight-loss-economic-discourse-income-taxation-and-public-spending">VOXEU</a>. The crux of the paper, and of the summary, is that too much analysis of taxation focuses on the various distortions they create, and too little of the analysis goes towards what the tax revenues are used for (infrastructure, in the complete version of the research). How I feel about this issue is not the topic of my post. Instead I choose to focus on Professor Cowen's response to it, and what it really teaches us.<br />
1. I do not believe that Professor Cowen is truly sorry for saying Professor Manski's article (and post in VOXEU) is absurd. I think that at best Professor Cowen has what he might call "meta-preference" for feeling sorry, because he thinks that he "should" feel sorry for posting such an unprofessional and unthoughtful headline to his response to Manski, but I don't think he is in fact sorry. The reason is that if you read Cowen's post, it is quite long, and in fact contains some intelligent and well thought-out points, which to me shows that he has carefully thought about how he feels about the issue.<br />2. I think the statement "this is absurd" tells us more about Cowen than it does about the piece by Manski. I do not mean this to be turning the term "absurd" on Cowen's view, because I think the details of his post have some merit. Rather I think his use of "absurd" mostly tells us that Cowen feels very strongly that taxes are distortionary and that this should be a topic of focus when economists discuss them. This view has some merit, but it fails to recognize that the alternative to a market "distorted" by government and taxes is seldom a free and well-functioning market in the neoclassical sense. Focusing on the distortions of taxes and government do a poor job of recognizing the ways in which a well functioning (even if also very large) government can help to make property rights more secure and reduce the transactions costs and risks associated with impersonal market exchange. Higher taxes can introduce some distortions, but they may be better than the distortions introduced under the next-best (institutional) alternative.<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-30570657266902486712013-07-16T10:51:00.001-04:002013-07-16T10:51:42.580-04:00A Property Rights Analysis of Gun Rights, Stand Your Ground Laws, and "The Verdict"I've tried not to comment too directly on the verdict in the George Zimmerman trial. I wanted to take some time to think about the situation more clearly, and whether the verdict itself reveals anything useful that can help us think better about policy. What limited comment I have made about the George Zimmerman verdict is that it should present an opportunity to rethink the wisdom of "Stand Your Ground" and other laws that seem to embolden armed citizens into doing stupid (but perhaps not <i>criminally </i>stupid) things. For one thing, such laws have been<a href="http://www.npr.org/2013/01/02/167984117/-stand-your-ground-linked-to-increase-in-homicide"> linked to increases in the homicide rate</a>.<br />
But I felt the need to ground my thinking with some theoretical foundations. Here's what I came up with: We need more laws to extend full "rights" to gun owners. Before anyone's head explodes, let me clarify what I mean by "rights." In economics, "property rights" can be thought of as a "bundle of sticks." A narrow interpretation of property rights over a good or an asset is your "<i>ability, in expected terms, to consume the good (or the services of the asset)</i> directly or to consume it indirectly through exchange" (<a href="http://www.blogger.com/www.econ.washington.edu/user/yoramb/econ403/Barzel.doc%E2%80%8E">Barzel 1989</a>, emphasis in original). Basically, this means that you have the right to use your property how you want, the right to sell it, and the right to dispose of it in whatever way maximizes your own utility. Barzel also notes:<br />
<blockquote class="tr_bq">
The distinction sometimes made between property rights and human rights is spurious. Human rights are simply part of a person's property rights. Human rights may be difficult to protect or exchange, but so are rights to many other assets. </blockquote>
Thus, we can include civil liberties (such as free speech), other constitutionally-granted rights (such as the right to bear arms), and the right to live to be, in a way, property rights.<br />
But, there's a flip side of the coin. Property rights also entail certain responsibilities. One such responsibility is the responsibility of protecting your property from capture by others. Another is the responsibility for how you use that property <i>should that use infringe upon the property rights of others</i>.<br />
So what does this have to do with the George Zimmerman/Trayvon Martin case? As we all know, the night Trayvon Martin was killed, George Zimmerman was exercising his second amendment right to bear arms, and his right, under Florida law, to carry a concealed weapon. The same night, at the same time, in the same neighborhood, Trayvon Martin was exercising his own right to use the public streets. Mr. Zimmerman felt suspicious that Mr. Martin might have been up to some criminal activities, but that appears not to be the case. Regardless, Mr. Zimmerman felt, for whatever reason, that Mr. Martin <i>did not belong in that neighborhood at that time of night</i>. He felt that Mr. Martin was infringing (or intended to infringe) on his or his neighbors' property.<br />So, Mr. Zimmerman pursued Mr. Martin, first in his car and then on foot. The result was an altercation in which Mr. Zimmerman shot and killed Trayvon Martin. What was said or done between Zimmerman leaving his car and Martin's death is unclear.<br />Before getting into the legal dimension let me first say that I realize that Zimmerman did not invoke the "stand your ground" protections of Florida law during his defense, although it seems he may intend to do so in the event of a civil trial. My concern is not to re-litigate Mr. Zimmerman's case, but rather to focus on how policy could be reshaped to prevent the next tragedy of this kind.<br />
I am no fan of guns. I am no fan of the second amendment. But they are embedded in our constitution, and we need to shape our laws around them. For this reason, I oppose strict regulations and bans on the types of weapons individuals can purchase. I prefer a registration process, as well as taxes and fees with the goal of reducing the overall number of guns, mostly because there are more than 16,000 gun-related <i>suicide</i> deaths that get far too little attention in the gun control debate.<br />
With my views on guns in the open, let's return to Florida law. Broadly speaking, stand your ground statutes broaden the scope of "self defense" and also provide immunity from both criminal charges <i>and civil</i> litigation in the event that one person kills another when there is reasonable belief that her or his life is in danger. In economic terms, it reduces the level of responsibility assigned to an individual who uses deadly force (often with a firearm), and thus it actually <i>weakens gun ownership rights </i>(thinking of rights in <i>economic </i>terms as a vector of rights and responsibilities). Repealing stand your ground laws, and even replacing them with strong laws outlining strict consequences for individuals who behave recklessly while exercising their second amendment rights will help greatly in preventing the sort of tragedy that happened on February 26 2012 in Sanford, Florida from happening elsewhere.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-48364367516239831942013-03-15T21:37:00.001-04:002013-03-15T21:37:32.990-04:00Thoughts on TenureA colleague of mine recently posted the <a href="http://ecatin.wordpress.com/2013/03/15/tenure-a-meandering-path-to-serfdom/">following </a>on tenure:
<blockquote>Consider what tenure does. It is part of a compensation package designed to reduce mobility. It is a barrier to exit in the college professor employment market. Thus it reduces bargaining power for the professoriate effectively by reducing any holdup costs. Professors cannot make a very credible threat to leave if they feel their working conditions are bad or wages are too low.
</blockquote>
I'm not sure this captures everything that tenure does. In fact, many professors seek (and successfully find) better jobs. Continuing,
<blockquote>In other words, removing tenure, like the end of serfdom, should increase the likelihood that the professoriate will innovate to keep themselves competitive and increase their wages. </blockquote>
I'm not as sure about this. Innovation is very risky when one's employment is tenuous and one's continued employment is determined by the noisy signal of student perceptions of teaching quality. I could see a valid transactions costs argument that would predict less innovation, lower overall teaching quality, and poorer administration of higher education as a result of ending tenure.
Tenure exists to encourage professors to make institution-specific investments, including serving on administrative committees, advising students and student organizations, maintaining academic standards, and agreeing to meet help teach courses that match the needs of the students in the department or college. Otherwise, rational faculty members will have a greater incentive to spend their energy focusing on research and gaming their teaching evaluations.
There are many things broken about higher education. I am not sure that tenure is highest on the list of problems.
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-56526091097521460062013-01-10T11:24:00.002-05:002013-01-10T11:24:23.388-05:00Control of Strategic Resources<div style="background-color: black; width: 520px;">
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<iframe frameborder="0" height="288" src="http://media.mtvnservices.com/embed/mgid:cms:video:thedailyshow.com:422742" width="512"></iframe><br />
<div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 12px; margin-bottom: 0px; margin-top: 4px; padding: 4px; text-align: left;">
<b><a href="http://www.thedailyshow.com/watch/wed-january-9-2013/bridge-to-canada">The Daily Show with Jon Stewart</a></b><br />Get More: <a href="http://www.thedailyshow.com/full-episodes/">Daily Show Full Episodes</a>,<a href="http://www.indecisionforever.com/">Political Humor & Satire Blog</a>,<a href="http://www.facebook.com/thedailyshow">The Daily Show on Facebook</a></div>
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James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com1tag:blogger.com,1999:blog-4746130952759214320.post-7962776719250018452012-10-22T10:11:00.002-04:002012-10-22T10:11:55.736-04:00"Inefficient" Redistribution, or "Efficient" Insurance? <a href="http://boss.blogs.nytimes.com/2012/10/18/jon-stewart-proposes-an-entrepreneurial-policy-dont-laugh/">This</a> crossed my mind this morning. I'm wary of lowering downside risk without some mitigation of the rewards, i.e. a mean preserving spread. But the new institutional economics has a lot to say about this. For example, one seeming paradox is that democracy complements markets, yet is more prone to social redistribution. North and his various coauthors have <a href="http://www.amazon.com/The-Rise-Western-World-Economic/dp/0521290996">argued </a>in <a href="http://www.amazon.com/Institutions-Institutional-Performance-Political-Decisions/dp/0521397340">several</a> <a href="http://www.amazon.com/Violence-Social-Orders-Conceptual-Interpreting/dp/0521761735">places</a> that, for one thing, this cannot be explained by simple neoclassical theories, and two, that it may not be such a paradox.<br />
Oddly, the argument made by Jon Stewart (and which they guy with the funny name was hesitant to endorse) is close to what the institutional school has argues for some time.<br />
<table style='font:11px arial; color:#333; background-color:#f5f5f5' cellpadding='0' cellspacing='0' width='512' height='340'><tbody><tr style='background-color:#e5e5e5' valign='middle'><td style='padding:2px 1px 0px 5px;'><a target='_blank' style='color:#333; text-decoration:none; font-weight:bold;' href='http://www.thedailyshow.com'>The Daily Show with Jon Stewart</a></td><td style='padding:2px 5px 0px 5px; text-align:right; font-weight:bold;'>Mon - Thurs 11p / 10c</td></tr><tr style='height:14px;' valign='middle'><td style='padding:2px 1px 0px 5px;' colspan='2'><a target='_blank' style='color:#333; text-decoration:none; font-weight:bold;' href='http://www.thedailyshow.com/watch/thu-september-6-2012/exclusive---austan-goolsbee-extended-interview-pt--3'>Exclusive - Austan Goolsbee Extended Interview Pt. 3</a></td></tr><tr style='height:14px; background-color:#353535' valign='middle'><td colspan='2' style='padding:2px 5px 0px 5px; width:512px; overflow:hidden; text-align:right'><a target='_blank' style='color:#96deff; text-decoration:none; font-weight:bold;' href='http://www.thedailyshow.com/'>www.thedailyshow.com</a></td></tr><tr valign='middle'><td style='padding:0px;' colspan='2'><embed style='display:block' src='http://media.mtvnservices.com/mgid:cms:item:comedycentral.com:418819' width='512' height='288' type='application/x-shockwave-flash' wmode='window' allowFullscreen='true' flashvars='autoPlay=false' allowscriptaccess='always' allownetworking='all' bgcolor='#000000'></embed></td></tr><tr style='height:18px;' valign='middle'><td style='padding:0px;' colspan='2'><table style='margin:0px; text-align:center' cellpadding='0' cellspacing='0' width='100%' height='100%'><tr valign='middle'><td style='padding:3px; width:33%;'><a target='_blank' style='font:10px arial; color:#333; text-decoration:none;' href='http://www.thedailyshow.com/full-episodes/'>Daily Show Full Episodes</a></td><td style='padding:3px; width:33%;'><a target='_blank' style='font:10px arial; color:#333; text-decoration:none;' href='http://www.indecisionforever.com/'>Political Humor & Satire Blog</a></td><td style='padding:3px; width:33%;'><a target='_blank' style='font:10px arial; color:#333; text-decoration:none;' href='http://www.facebook.com/thedailyshow'>The Daily Show on Facebook</a></td></tr></table></td></tr></tbody></table>
<br />
The main roles of the state in promoting social welfare (that is, the overall well being of society) are (1) protecting private property rights (from both internal and external bandits); (2) lowering transactions costs; and (3) mitigating the risks associated with market participation. For example, a feudal system may not have promoted much "efficiency", but it did provide a framework for protecting both elites and non-elites from violence.<br />
Fast forward a bit. Why is it today that the most market-oriented economies are also both democratic <i>and</i> the most prone to "inefficient" redistribution? Is it mere rent-seeking by special interests? Hardly, although this may be partly the case. In fact, it seems that the most well-organized interests influencing the government would be opposed to redistribution in the form of social security, medicare, health care, welfare, etc. The argument that North and others make (and one that liberal politicians should be making more) is that reducing risk is important to a well-functioning market economy because it makes it easier for citizens to participate in the market.<br />
Two things I disagree with from the video: (1) it's not just about lowering risk - for justify this in the context of market mechanisms, there has to be a premium that individuals pay when they realize the "high returns" outcome, i.e. higher average tax rates for the rich and wealthy; (2) it's not about "entrepreneurship", it's about market participation in general.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-83908550885762846882012-10-04T10:14:00.001-04:002012-10-04T22:19:15.709-04:00The Political Economy of the Romney Tax PlanI reeeeeally want to try to give Candidate Romney the benefit of the doubt today. I want to think that he's an honest, sincere man who wants to do the right thing for the country when it comes to tax policy. I want to be part of the <a href="http://politicalticker.blogs.cnn.com/2012/10/03/cnn-poll-romney-wins-debate-by-big-margin/">53 percent of Americans who favors Romney's arguments on taxes</a>. I also want to be able to blow off the <a href="http://www.huffingtonpost.com/2012/10/01/paul-ryan-tax-plan_n_1929142.html">contradictory comments by his VP nominee, </a>saying that under their plan people will pay less in taxes to the federal government, while maintaining that the plan would be revenue neutral ("it would take me too long to go through all of the math" wasn't even the worst part of the interview!). I even want to ignore the fact that Mr. Romney won't give sufficient details about his plan for think tanks like the <a href="http://taxpolicycenter.org/taxtopics/Romney-plan.cfm">Tax Policy Center</a> to score it. Even the conservative <a href="http://www.heritage.org/research/reports/2012/09/tax-policy-centers-skewed-analysis-of-governor-romneys-tax-plan">Heritage Foundation</a> cannot give a definitive analysis of how Romney's plan would achieve budget-neutrality. In fact, all Heritage does do is criticize the TPC's analysis for not having enough information. Touche.<br />
But I want to ignore all of those inconsistencies in the analysis. Let's imagine that there are enough deductions that can be eliminated to compensate for the several hundred billion dollars in rate reductions Mr. Romney proposes. Let's assume that the secret details of Mr. Romney's plan to broaden the base through eliminating deductions will work. What, then, is the political equilibrium of the legislative bargaining process?<br />
What I would suggest is that any political equilibrium would result in all or most of the loophole-closings would get tossed out of the bill through the influence of special interests, ideological gridlock. I would also suggest that, in order to get the bill through, some degree off logrolling will have to occur during the amendment process. (Don't take my word for it, take it from the conservative <a href="http://www.cato.org/pubs/regulation/regv27n3/v27n3-2.pdf">Cato Institute</a>, a Koch-funded far-right think tank.) But, the one (and possibly only) part of Mr. Romney's plan that is likely to come through the process relatively unscathed is the tax cuts. I doubt Romney is not as attached to the principle of broadening the base as he is to cutting rates; hence, I doubt that that any first-term president seeking reelection would veto a tax cuts that increase the deficit by not eliminating loopholes. A second-term president might.<br />
So, if I'm going to come away from listening to Mr. Romney's tax proposals and still believe that he's being honest, I also have to come away thinking he's incredibly naive. Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-88487034191398283612012-07-20T13:42:00.001-04:002012-07-20T13:42:22.296-04:00NegativityPAC spending in the last week:<br />
<br />
<table class="tablesorter" id="cands" style="background-color: #cdcdcd; color: black; font-family: arial; font-size: 8pt; line-height: 18px; margin: 10px 0pt 15px; text-align: left;"><thead>
<tr><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Committee</th><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Entire Cycle Total</th><th class="header headerSortUp" style="background-color: #c0d1ff; background-image: url(http://assets.opensecrets.org/css/blue/asc.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Last Week Total</th><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Last 24 Hours Total</th><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Supported</th><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Opposed</th><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Super PAC</th></tr>
</thead><tbody>
<tr class="rowTint even" style="background-color: #f0f3f6; background-position: initial initial; background-repeat: initial initial;"><td style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; vertical-align: top;"><a href="http://www.opensecrets.org/parties/indexp.php?cmte=RNC&cycle=2012" style="color: #666666;">Republican National Cmte</a> (R)</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$9,485,456</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$9,485,456</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$9,485,456</td><td class="center" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: center; vertical-align: top;"></td></tr>
<tr class="rowTint odd" style="background-color: #f0f3f6; background-position: initial initial; background-repeat: initial initial;"><td style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; vertical-align: top;"><a href="http://www.opensecrets.org/pacs/indexpend.php?cmte=C00495861&cycle=2012" style="color: #666666;">Priorities USA Action</a> (D)</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$14,900,294</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$1,244,192</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$14,900,294</td><td class="center" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: center; vertical-align: top;">x</td></tr>
<tr class="rowTint even" style="background-color: #f0f3f6; background-position: initial initial; background-repeat: initial initial;"><td style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; vertical-align: top;"><a href="http://www.opensecrets.org/pacs/indexpend.php?cmte=C00489807&cycle=2012" style="color: #666666;">Restore America's Voice PAC</a> (R)</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$582,952</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$111,900</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$582,952</td><td class="center" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: center; vertical-align: top;">x</td></tr>
<tr class="odd"><td style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; vertical-align: top;"><a href="http://www.opensecrets.org/pacs/indexpend.php?cmte=C00491373&cycle=2012" style="color: #666666;">America's Next Generation</a>(R)</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$106,500</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$42,500</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$106,500</td><td class="center" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: center; vertical-align: top;">x</td></tr>
<tr class="even"><td style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; vertical-align: top;"><a href="http://www.opensecrets.org/pacs/indexpend.php?cmte=C00341396&cycle=2012" style="color: #666666;">Moveon.org</a> (D)</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$367,171</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$33,552</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$5,400</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$361,771</td><td class="center" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: center; vertical-align: top;"></td></tr>
<tr class="odd"><td style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; vertical-align: top;"><a href="http://www.opensecrets.org/pacs/indexpend.php?cmte=C00053553&cycle=2012" style="color: #666666;">National Rifle Assn</a> (R)</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$110,952</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$31,459</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$110,952</td><td class="center" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: center; vertical-align: top;"></td></tr>
<tr class="rowTint even" style="background-color: #f0f3f6; background-position: initial initial; background-repeat: initial initial;"><td style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; vertical-align: top;"><a href="http://www.opensecrets.org/pacs/indexpend.php?cmte=C00509893&cycle=2012" style="color: #666666;">National Right to Life Victory Fund</a> (R)</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$163,260</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$6,786</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$163,260</td><td class="center" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: center; vertical-align: top;">x</td></tr>
</tbody></table>
Candidate money spent last week:<br />
<br />
<table class="tablesorter" id="cands" style="background-color: #cdcdcd; color: black; font-family: arial; font-size: 8pt; line-height: 18px; margin: 10px 0pt 15px; text-align: left;"><thead>
<tr><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Candidate</th><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Entire Cycle Total</th><th class="header headerSortUp" style="background-color: #c0d1ff; background-image: url(http://assets.opensecrets.org/css/blue/asc.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Last Week Total</th><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Last 24 Hours Total</th><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Supported</th><th class="header" style="background-color: #bbbbbb; background-image: url(http://assets.opensecrets.org/css/blue/bg.gif); background-position: 100% 50%; background-repeat: no-repeat no-repeat; border: 1px solid rgb(255, 255, 255); cursor: pointer; font-size: 8pt; padding: 4px 18px 4px 4px;">Opposed</th></tr>
</thead><tbody>
<tr class="even"><td nowrap="" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; vertical-align: top;"><a href="http://www.opensecrets.org/pres12/indexp_indiv.php?id=N00009638&cycle=2012" style="color: #666666;">Obama, Barack (D)</a></td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$27,761,536</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$9,678,101</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$2,852,327</td><td class="number" style="background-color: white; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$21,064,674</td></tr>
<tr class="rowTint odd" style="background-color: #f0f3f6; background-position: initial initial; background-repeat: initial initial;"><td nowrap="" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; vertical-align: top;"><a href="http://www.opensecrets.org/pres12/indexp_indiv.php?id=N00000286&cycle=2012" style="color: #666666;">Romney, Mitt (R)</a></td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$32,603,333</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$1,277,744</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$0</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$7,285,760</td><td class="number" style="background-color: #f0f0f6; color: #3d3d3d; font-family: Arial, Helvetica, sans-serif; font-size: 12px; padding: 4px; text-align: right; vertical-align: top;">$25,161,173</td></tr>
</tbody></table>
<br />
I added rough party affiliations for the PACs, but it's worth noting that Moveon.org spent some money in opposition to a democratic candidate for the House of Representatives. <br />Notice more generally how the money is all piling into the "opposed" column. Source: <a href="http://www.opensecrets.org/">http://www.opensecrets.org</a>.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0tag:blogger.com,1999:blog-4746130952759214320.post-88376599643923575602012-07-20T13:31:00.001-04:002012-07-20T13:31:43.345-04:00Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History (9780521761734): Douglass C. North, John Joseph Wallis, Barry R. Weingast: BooksBy <a href="http://www.amazon.com/Violence-Social-Orders-Conceptual-Interpreting/dp/0521761735">Douglas North, John Wallis, and Barry Weingast.</a><br />
In the middle of this book right now. Makes some interesting arguments about democracy and capitalism, and how countries make the transition from "Natural States", with limited access to modern states, with open access. The discussion of property rights will please the political right; the discussion of the role of government and public goods will please the left. Both groups will walk away from the book equally unhappy with his discussion of special interest groups (spoiler alert: special interests are not all bad!). The argument for how and why democracy is essential for modern capitalism is the only convincing logical case I've seen and is not based on some half-baked liberty argument.James Banghttp://www.blogger.com/profile/13827871784144223628noreply@blogger.com0