Military Recruitment

January 30, 2007 by

Thanks to my buddy Lauren for this link (you can see her in the video clip) http://abcnews.go.com/Video/playerIndex?id=2829157

Eventually they get to the point that the marines desire to have more recruits than currently they are getting.  ABC talks about them having to lower their standards.  Not once was it mentioned that they could increase the wages they offer, or give a bigger bonus in order to attract more people.  That would be silly.

Burn the end-notes!

January 27, 2007 by

I was reading an un-named paper by an un-named person for an un-named class and for every two sentences there was a paragraph long end-note. I had to alt-tab between two documents so that I could easily read a sentence and then flip to the explanatory notes.

Sometimes I wish that by invoking the name of McCloskey I could cause other Economists to burst into flames.

EDIT: Spelling

Burning Money

January 25, 2007 by

So I was thinking about Steven Landsburg’s argument (from Chapter 7 of the Armchair Economist) that Burning a dollar bill decreases the price level and helps everyone who holds money except the one who’s bill was burned.  I’m not sure I agree.

A) I first wanted to claim that when the value of all other non-burned dollars become more valuable the relative usable value to dollar holders doesn’t increase as much as the $1 decrease the burner experienced.  Allow me to explain. There are plenty of dollars that still have value but that no-one holds.  These are the “lost” dollars of the world.  Waiting to be found, similar to the dollar that Landsburg says “would be as good as burned” if he let it blow away.  In all reality it isn’t burned. It still holds $1 worth of value to the lucky soul who finds it.  If you imagine that scattered throughout this orb we inhabit there are thousands if not millions of dollars “lost” to potential dollar holders.  Every-time a dollar is burned, the relative value of these dollars all increase, and the relative value of usable held dollars in the world has decreased.  Thus the value to SOCIETY has actually decreased not remained the same. 

B) Second why would everyone else’s value increase really?  To the world this dollar has just been saved byLandsburg, to be spent another day.   The world expects it to still have value, the same as the world has expectations of a probable expected future use for all the “lost” bills I mentioned in part A).  Thus the price level will not decrease to the extent Landsburg claims.  Thus the world is “worse” off by the burning of a dollar.  Unless of course it is broadcast to the world so that everyone would know that it had really been destroyed.  But in that case we have to think if the opportunity cost of broadcasting to the world the burning of a dollar bill outweighs the value to the world of watching.

positive vs normative

January 24, 2007 by

Economists often say they stick to ‘positive statements’, and that ‘normative statements’ are something different. However they seem to disregard common sense here. People ( as well as economists ) have value judgements that are almost implicitly derived from positive statements.

By constantly stressing that they are being objective it seems like economists have something to hide. Maybe they ARE actually trying to influence the conclusions of other people. Maybe they are actually people in real life (!!) with opportunity costs associated with picking their research areas, and they spend years at schools like George Mason focussing on those subjects that have the biggest influence on people’s normative judgements.

By picking your objective battles you already make an implicit normative statement. Why hide this behind the shield of ‘objectivity’ ? It will only anger people.

The Tortoise always wins

January 24, 2007 by

Given our recent discussions on Global Warming, I would like to add a random thought.  It appears to me that one of the most powerful implications of the second law of demand is that change is irrelevant if it happens slowly.  This is a simplification, but the second law of demand stipulates that our elasticity’s are flatter in the long run than in the short run.  Specifically the farther we are from any specific moment of change, the easier it is to find substitutes.

If the danger of Global Warming is that over the next hundred years, the temperature will rise a few degrees, then I am unmoved.  This will be a slow process and given this long period of time, it will be much easier for people to adapt to the change.

Unless Global Warming is apocalyptic, massive sudden change, there is little to be worried about.  The hard sell is the only sell as it is the only way to justify current Green policy.

Emboldening Our Fellow Countrymen

January 24, 2007 by

We must find the resolve to unite and prove that we are the great nation we are and are made of Americans that love being Americans.  It wasn’t long ago that saying you are an American made you proud.  That pride should never have left you.  This is the greatest country on earth with the greatest opportunities for all those who live within its borders and all those that we reach with our foreign policy.  The freedom of choice is an unalienable right given to you by God or whatever it is in which you believe.  All Natural Law is comprised of unalienable rights given to you by that same belief.  It is only in this country, under these laws and by this constitution that these laws are protected and allowed to be defended.  There is no other country on earth that offers that opportunity.  Understand this truth!  Read the Declaration of Independence and the Constitution of the United States of America and you will understand what we all have that no other citizen of any other country has.  We must fight for our right to exist and preserve the very freedom that we enjoy.  We must fight for the citizens of the world to recognize that they have the same rights we have and should fight for reciprocal recognition of those rights.  Every human being should have the opportunity to live as we live.  Only the wise man can impart wisdom.  Only those living in accordance with the way of nature can share that knowledge with those who do not.  We, as a nation of people that understand the right way to live, must not become politically correct and, therefore, isolationist.  We must continue to do all we can to show the world the correct way to live.  The correct way is the way that recognizes everyone’s right to exist and defend the natural laws by which their unalienable rights are protected.  These rights are not given to us by man, they are given to us by God or nature or whatever it is that is greater than man. 

It Could be Efficient

January 24, 2007 by

We can all agree that global warming exists, however, there is limited proof that it is caused by human beings. Of the approximate 200 billion metric tons of greenhouse gases emitted last year, man was responsible for emitting an approximate 7 billion metric tons. Be that as it may, we still must decide whether it is cost efficient to do anything to attempt to combat the rising temperatures. I am speculating, but I would imagine that the cost associated with reducing that 7 billion metric tons will be incredibly high and will have a negligible impact on global warming, if any at all.

We cannot stop nature and, therefore, must embrace what it has to offer. As Tyler points out, there are many benefits that could be realized by global warming and we must find a way to realize them and harness their potential. One of these benefits would be the potential increase in the production of food. With an increase in the production of food, much of the world’s starved population could be fed by the surplus. Although much of the world’s starvation problems are political in nature, the excess would exist for those that could penetrate the political force fields.

So, if we wish to proliferate world hunger then I suggest we do everything in our power to spend all the necessary resources to reduce our emissions. Otherwise, we can follow the Tao, flow in accordance with the way of nature, and realize all the benefits from that which we cannot stop.

Infinite Value?

January 23, 2007 by

Last night my professor claimed that there was no amount of money that he would accept in exchange for losing his arm.  I think he may have even said his value for his arm was “infinite”. 

If this is what he meant, I have trouble believing this to be true.  If so, it would suggest that he would pay me any amount of money if I threatened to cut his arm off.  The expected value of losing infinite value is certainly worse than all of the money in his bank account.  Or, for example, it would imply that he never leaves the house because of the small, but very real, risk of losing a limb in some freak accident.  It wouldn’t be worth it.

Stewart on Economists on the Minimum Wage

January 23, 2007 by

In the current issue of Econ Journal Watch, our own Stewart Dompe and Dan Klein have an excellent article titled Reasons for Supporting the Minimum Wage: Asking Signatories of the “Raise the Minimum Wage” Statement. (pdf)

Could Global Warming be Efficient?

January 23, 2007 by

I’ve come across some people with no scientific inclinations nor training who are worried about global warming, due mainly to Al Gore’s premonitions.  Leaving aside for the moment the debate over the science behind global warming (I’ll even concede that Al Gore is right about temperature changes), my inner economist asks, why is this necessarily bad?  Sure, I know those who see global warming as a big problem cite things like rising sea level/ coastal flooding, depredation of ozone layer (which could lead to higher incidence of skin cancers?), increased volatility and ferocity of the weather, etc., as some major costs of global warming.  But what about the potential benefits that might arise from global warming?  Some things come to mind: longer growing seasons in temperate zones leading to greater crop yields, ability to do more outside work in winter (e.g. more construction can be done due to less frozen soil),  fewer resources spent heating homes and buildings in the milder winters, better year-round ocean shipping due to less sea ice, etc.   Has anyone, to your knowledge, discussed the potential benefits of warming?  I’m not suggesting the benefits would outweigh the costs, but I’m suggesting that they might, and we as economists should get busy doing some careful studies to see if they do or don’t.  Who knows, perhaps, if Al Gore is right, the money I save on firewood, heating oil, cheaper food, etc., might just outweigh my higher air conditioning bill and the need to wear long sleeves and broad hats in August (which I do anyway ;).  Also, if the ice caps do melt away, sure, Miamians might have to move inland, but think of all that prime pasture that will open up in Greenland! 

I think that most environmentalists are undisciplined by economics.  They see changes that they perceive as bad, and then cry out for these changes to be halted.  They often don’t consider the potential benefits of the changes for other folks, nor the costs or even the feasibility of halting the changes.  Finally, they take it for granted that their values are supreme.  As for me, I would gladly trade the extinction of Polar Bears (which I have never seen except in a zoo and neither think about or care about much) for, say, a 10% increase in my real income, if that’s what global warming wrought. 

If you know of any studies about the benefits of global warming, please tell me about them!   

Knock Knock

January 22, 2007 by

What do Viagra and Tylenol have in common?

Read the rest of this entry »

America and our speaking and writing

January 22, 2007 by

It is rather amazing when you think about how we’ve progressed as a society, culture, and nation.  What is even more amazing is our language, which we often refer to as “English” which is really morphed into American.  We’ve all had someone criticize our oral speaking. “Don’t say um so much”.  Good points.  What needs to be looked at as well is how often we writeand say other words that are vacuous, boring, and just plane nondescript.  Try to take note, if you will,  how much you and others use and misuse the following non-um words.  I thank Deirdre McCloskey for her advice in Economical Writing (sections 25 and 26) for the advice for these suggestions.  Check out her book for a lot of valuable suggestions.

Is: I used it no fewer than 4 times in the above paragraph.  How boring and uninteresting IS this word?

Very: Very has become so overused, every thing in this world is very.  It has gotten to the point in this time in society where I think we tend to just totally overlook it anytime we see the word.

Kind of, Sort of:  Wishy wishy washy.  We need to be confident in our statements or not make them.  If we think something is ugly we should say it, not try to fool people by saying “kind of”.  No one is fooled so we shouldn’t waste our breath or keystrokes with them.

Interesting:  We say things are interesting so much that, similar to very, we ignore it when we see or hear it.  If anything, if we read or hear that a movie is interesting or a person is interesting, we think actually the exact opposite.  I’m not going to be thinking the movie will be interesting, I’m going to be thinking it will be boring.

I could go on and on, just think about it.  Check out McCloskey’s book, VERY good.

AIDS group to sue Pfizer over Viagra ads

January 22, 2007 by

The AIDS Healthcare Foundation (AHF) told Reuters it wants Pfizer to be barred from marketing Viagra as a lifestyle or sexual enhancement drug. The nonprofit organization said Pfizer’s actions had led to risky behavior by men and an increase in HIV and other sexually transmitted diseases.

Let us stop and think for a moment.  Those previously unable are now indulging their new found powers.  Suppose that for every sexual encounter there was some chance that your partner would infect you.  This means that by increasing the population of sexually active adults, you are increasing the incidence of sexually related diseases.

Consider Sudden Infant Death Syndrome, SIDS.  If  a magical salve eliminated this tragedy, more teenagers would die in car accidents.

Who is really at fault?  The company that caused the erection or the man that used it?

Trade Deficit cont.

January 20, 2007 by

My trade deficit with Buffalo Wing University increased by $19. It is unlikely that they will be purchasing goods or services from me in the near future. I believe that it is at this time that Lou Dobbs and I beseech Congress to remedy the situation. Obviously Ben Bernanke needs to intercede upon my behalf.

Doctors as Car Dealers

January 20, 2007 by

In this post by Arnold Kling, he quotes Kevin Drum’s fear that with privatized health care, medical offices will turn into used car dealerships. Fine, let’s accept this characterization as true. The danger of receiving a lemon is minimal so the concern must be the hard sale. So what? The worst case scenario is that my doctor is pressuring me for additional blood tests, stool samples, and antibiotics. This is not a concern; it is an excuse for worry.