More on small-farm organic locavorism (from Freakonomics). Just because there are fewer cases of salmonella reported on from free-range chickens doesn't mean that the risks are lower - free range farms just don't produce enough eggs for their salmonella to get noticed.

Chart of the Day

From the Daily Dish.

Creative Destruction

Apparently, the athletic department at VMI is switching over to digital video, judging from this email I got:

Sent with permission of the Director of Intercollegiate Athletics

The football office has approximately 250 new video tapes that we no longer need. If you can use these please contact me. Thanks!

Deception at Farmers' Markets

Via Tim Diette at WLU:

A nice example of the potential value of regulation so that consumers have information on what they are buying.

Stories from NY Times (here) and Roanoke Times (here).
I'm not a expert in the economics of regulation, but I do a bit of political economy in my research, and I did OK in the game theory portion of my micro sequence in grad school, so here's how I'd see this one playing out. Regulation will ultimately be lobbied for most by big players in the organic/local market (think whole foods, etc.). My thinking here is that the big producers actually have less incentive to "cheat" by outsourcing produce advertised as local and/or using pesticide-enhanced produce, because everyone will remember it if Whole Foods gets busted; no one will remember if Johnny Farmer does. Consumer groups will support it, but the final product will mainly serve to: (1) bar entry for small sellers; and (2) help the same big players signal their reputation cheaply. It will go over great for a while, but eventually, enough of the relatively honest small producers will collectively complain about the onerous opportunity-killing regulations. If they succeed, we'll be right back at square one.

Shortcut to Serfdom

This piece does a good job of the real and tangible threats to liberty that are out there right now. Many started under "W" but have been continued and in some cases escalated under Obama. Mr. Friedersdorf points out:

Seven decades have passed since The Road to Serfdom was published. Social democracy hasn’t yet led Europe or any of its diverse countries into serfdom. On the contrary, they’re are among the most free and prosperous countries in the history of human civilization. I prefer the American system. It’s better, all things considered. In order to make the case for it, we need not pretend that the people of Europe are in chains.

There are real threats to liberty, but they have less to do with Obamacare, bailouts, or taxes. Which does the conservative Friedersdorf prefer?

Forced to choose, I’d rather live in the ACLU’s idea of the perfect America than a country where we repeal Obamacare, eliminate earmarks, and persist in chipping away at civil liberties to fight drugs and terrorists. The former may be a “road to serfdom.” The latter is a shortcut to the same place.

I recommend the whole piece, but I do disagree with the statement, "The last two presidents have asserted authority unprecedented in American history." Sadly, the current circumstances are not particularly unprecedented or even extraordinary. We had the internment camps during World War II, McCarthyism, J. Edgar Hoover's domestic spying, Watergate, Iran Contra... There is a seemingly endless list of landmark historical instances where our government acted in contradiction to the liberties proscribed in the constitution. On the broader issue, however (that we need to guard our civil liberties much more than we need to worry about some perceived injustice stemming from our personal disagreements with a particular economic policy, the author hits it right on the head.

Some links: Who's lobbying against pot; how cops are catching those who are for it

Turns out, beermakers and police (two people who benefit most economically from prohibition) lobby most (Huffington Post).
Do I see an unholy freedom alliance between Teapartiers and NORML in America's future (420 Tribune)?
Is more vote-buying a good thing or a bad thing (Marginal Revolution)?
If you pay someone to help you cheat, do you deserve a refund when you discover that they cheated (Dan Ariely)?
How to eat a muffin (Incidental Economist). The second I read this, I realized that I already eat muffins this way, even when I'm not walking.
Imperialistic (or, mercantilistic?) Economists (Justin Wolfers).

One good sentence on subsidies

From Free Exchange:

The upside to cash-benefits is that it forces policymakers to confront the trade-offs involved in delivering a certain subsidy and evaluate whether it makes sense.

Three good sentences

Liberal arts education has taken a beating lately from a wide range of critics (for examples on the economics department side of things see hereor here, and for a general critique see here or here). Tyler Cowen makes a good (and concise!) defense here. Here's the good stuff:

A liberal arts education helps us think with greater subtlety, even if it does not improve our performance on subsequent standardized tests. I see an impact here even on the lesser students in state universities. It also helps explain how the U.S. so suddenly leaps from having so-so high schools to outstanding graduate schools; how many other countries emphasize liberal arts education in between?

I wonder how Tyler (a libertarian, Austrian-leaning economist) feels about the fact that a significant portion of that liberal arts education is heavily subsidized?

Chart of the Day

A rare good use of a pie chart.

A little economic knowledge can do quite a bit of harm

From Free Exchange:

I've certainly met my share of Econ 101 robots, who can't talk beyond the "markets are always right" models one gets in early economics classes.

I know some Ph.D. trained economist robots, who also can't talk beyond the "markets are always right" mantra. Some economic problems, as it turns out, are more complex than the "X marks the spot" pirate logic (AAARRGH!) of simple supply and demand.

Big, bad government

If the government's intrusiveness in the real economy can be at all proxied by public sector employment, then the Tea Party should take note of what's happened in the last two years.

GDP vs. Welfare

A new measure of economic well-being?

Risk in the NFL

Probably for something to get started in class tomorrow...

Trivia vs. Statistics

From Advanced NFL Stats:

Who has the longest interception return ever? Which running back ran for
the most yards in a single game? What team scored the most fourth
quarter touchdowns in a season?


Answer: I don't care.


That's trivia, not statistics. What I'm interested in is analysis. What
makes a winning team? Is it better to go for it or punt on 4th and short
at the 50 yard line? Which teams are most likely to make the playoffs?
How much does luck play a part in any game?

Yup.

Crap!

The sting in the tail is that by paying less attention, we are less able to counter-argue what the ad is communicating. In effect we let our guard down and leave ourselves more open to the advertiser's message.

Interesting.

One Awesome Sentence

From Reuters:

Older people like reading negative news stories about their younger counterparts because it boosts their own self-esteem, according to a new study.

Two good sentences

From Economix (Was the Alaska Purchase a Good Deal?)

The West, that is from Oklahoma on up to Alaska, was settled with a large and expensive boost from the federal government, subsidies that often continue to this day. All of which complicates the Western (and Alaskan) self-idealization of themselves as craggy and libertarian individualists.

Graph of the day

Is it any wonder middle class folks have so much displaced anger?

An interesting analysis of MPCs

Krugman's take on how the MPC might be higher in a recession (and a liquidity trap) as opposed to "normal" times.

So whereas someone who can borrow and lend freely will spend very little of a temporary rise in income, someone who is liquidity-constrained — wanting to spend more right now, but unable to borrow — will spend all of that temporary rise.

The graphs in the link help illustrate why this can be true. Also note that he is using a dynamic model - usually the tool of the neoclassicals - and not some trumped-up "in the long run we're all dead" argument. It also says a thing or two about why tax cuts (or, equivalently, transfers) to the lower segments of the income distribution might have a greater macroeconomic impact.

A thing or two on the Bush tax cuts here.

One good sentence

It seems feasible that a strategy of ignoring debt and focusing on growth could be as effective as ignoring growth and focusing on debt in breaking the debt-growth relationship.

From Free Exchange.