Thursday, August 28, 2008

There's Russians in Atlanta?

Dr. Lawson posts this very funny comic at DOL:

The last square reminds me of the very funny (though unintended to be) 1984 film Red Dawn where the Soviets invade Colorado.

Gordon Tullock

Today I was in Gordon Tullock's office at Mercatus. My assignment for the next month is to sort through all his things, box them up, and ship them to various locations. Colleen Morretta took me to the back of the room where a filing cabinet took up nearly the whole wall. She opened one of the drawers. Inside was everything Tullock had ever published. Paper after paper after paper.

I cannot express in words how I felt, though proud and honored might be used.

I was to be Tullock's research assistant at Mercatus. His unanticipated retirement means I will be working for Dr. Boettke instead. Working for Tullock would have been a great experience. But we live in a world of scarcity. And nothing makes this any clearer than the realization that men do not last forever.

Of course, everyone is blogging about Tullock right now. Here and here are some nice posts from Organizations and Markets. Another at DOL. So read up in celebration of the career of Gordon Tullock.

Wednesday, August 27, 2008


Levitt is hosting an Economic Haiku contest. Check it out. Submissions due by 11AM tomorrow. Good Luck!

My submissions:
Thoughts of an Economics Professor

I spot a big bill.
(But I know that markets clear.)
It must not exist.

History of Economic Thought

Many schools of thought,
Keynes to Friedman, Hayek too!
Try to keep them straight.

Acting with Thorstein in Mind

I bought an iphone.
Purchase seems conspicuous.
Veblen might be right.

Art Carden has a good one at DOL.

Monday, August 25, 2008

From the Inbox

Allen Merten, President of GMU, sent around an email today aimed (it seems) at new students. From the second paragraph:
Many students come to college with preconceived notions of what college is like--some are accurate, some are not. Though common on many campuses, alcohol abuse is not a significant part of campus life at George Mason University. One of the most important decisions you can make is to join the vast majority of people who do not abuse alcohol or drugs. For the minority of students who abuse alcohol (including underage drinking) and illicit drugs, the official university policy will be vigorously enforced, along with state alcohol and drug laws. The on-campus use of illicit drugs or the abuse of alcohol will not be condoned merely as a “college rite of passage.” Noise, vandalism, property damage and assault resulting from alcohol or drug abuse will not be tolerated on Mason's campuses.
I couldn't help but wonder how the line between use and abuse of alcohol was drawn (and by whom). Shoot, I wondered what the line was! So I looked it up. Aside from underage drinking and vandalism, the closest thing I found to defining the level of alcohol consumption (abuse) that warrants punishment is this:
All cases involving severely intoxicated students and/or police or emergency medical responses will be referred to the University Judicial Administrator for disciplinary action. The University Judicial Administrator may mandate an evaluation by the Office of Alcohol, Drug, and Health Education, or an outside agency.
Severely intoxicated. That is the rule. Crystal clear. Thanks.

I guess it is left up to those enforcing the rules to decide in each particular instance where sufficiently intoxicated ends and severely intoxicated begins. I hope this uncertainty doesn't stop anyone from consuming alcohol all together. That could be costly.

Saturday, August 23, 2008

Open Letter to Diana Blaine

Dr. Blaine,

I recently came across your story in the Village Voice (disclaimer: nudity) and wanted to say I support your right to post topless pictures online, regardless of your position at USC. After reading a few posts on your website, though, I was disappointed to find that you do not hold a strong position in support of property rights. Clearly defined property rights, after all, prevent a majority from imposing their will on individuals.

Posting those photos in your own home, for example, is beyond the reach of majority control (assuming of course that property rights are respected). It is your house. You have the right to post whatever you'd like. Likewise, if the neighborhood grocer felt so inclined he could let you post them in his store (again, assuming property rights are respected). It is his store. He makes the rules. But, in your situation, we are talking about something very different.

When things are owned in common, WE must decide what is permissible. By WE, I do not mean all of us, of course; only a majority is necessary in a democracy (and only a majority of representatives in a representative democracy!). As I am sure you can see, this means one group gets to tell many individuals what is and is not acceptable.

Fortunately in the US we are not merely a democracy. Our constitution was design to protect folks like you and I whose actions or ideas might come under attack from the majority. But a constitution is only moderately successful at binding the hands of power-hungry politicians. And political actors dominate the decision making process when things are owned in common.

What we need, then, is more private ownership and more individuals insisting that private ownership be kept out of the public sphere of decision making. We may not be able to reduce the public sphere completely, but every bit reduced means less area for majority rule to be imposed.

Thankfully, USC has not yet bowed to public pressure (and it doesn't look like it will). But we should really start questioning a system that allows otherwise uninvolved individuals to call the shots. I say "otherwise uninvolved" because they are involved in one sense: they pay taxes. Their tax dollars make them co-owners and grants them a seat at the decision making table.

Don't get me wrong, though. A private university would have every right to fire you on the spot for your personal actions. After all, they can make the rules as they see fit. But since ownership is not mandated by the state through taxation, individuals with one set of preferences (freedom of speech, academic inquiry, and the right for teachers to expose their breasts online, for example) can start one university while others can start a university with an entirely different environment (and folks like you and I can stay the hell away from there!). The best part: we don't have to fund those we disagree with (And I believe you would support this idea since you wrote "Can taxpayers be protected from having their money spent to support religious indoctrination? No, not since Bush renamed their conversion attempts 'charitable.'"). To the contrary, universal systems mean universal rules.

As long as we accept a system of public ownership, we will have to accept the decision making process that accompanies it. Sometimes this means we can inflict our will on others. Sometimes it means we are forced to go along with the group, despite our convictions. But it doesn't have to be this way. Wouldn't we prefer a more peaceful system? Can't we cooperate with communication and mutual agreement instead of force? I think so. And I hope you will give this system a little thought as well.

I have posted this letter on my blog and look forward to your response. You should know in advance that I intend to post any relevant correspondence. I do not intend to be malicious or take your words out of context; I just want to make the content of our conversations available to my readers in hopes that everyone will learn a little from the exchange in ideas. I hope you will participate in this endeavor.

Take care,

William Luther

Four Months 'til Christmas

Amazon offers a really cool feature that should help avoid the deadweight loss of Christmas: wish lists.

A wish list can be public (like mine) or private. The best part is that you can put a little button on your browser so that items can be added to your wish list from other sites. How cool is that?

I suggest everyone gets one of these pronto. It will make life so much easier for those of us who never know what to buy.

(Rather than provide a link to a general wish list, how about I direct you to mine. And feel free to pick me up something nice while you are there.)

Friday, August 22, 2008

What I am Reading

The short answer: lots of stuff. But I particularly enjoyed this quote from Schelling's Micromotives and Macrobehavior:
The fact that there is never a taxi when you need one in the rain, or that you can fly 3,000 miles more comfortably than you can fly 300 and flights are occasionally overbooked, reminds us how spoiled we are. We expect this fantastically complex system to be even better coordinated than it sometimes is. Tens of millions of people making billions of decisions every week about what to buy and what to sell and where to work and how much to save and how much to borrow and what orders to fill and what stocks to accumulate and where to move and what schools to go to and what jobs to take and where to build the supermarkets and movie theatres and electric power stations, when to invest in buildings above ground and mine shafts underground and fleets of trucks and ships and aircraft--if you are in a mood to be amazed, it can amaze you that the system works at all.
You should pick this one up if you haven't already.

TF on Radio

My former colleague Josh Barro represented the Tax Foundation on Mike Rosen's morning show. The topic: corporate tax rates.

Worth the listen.

In case you have not heard...

GMU is #1.

(Whether or not this accolade trumps those bestowed on the contributors of DOL, I am not sure.)

Thursday, August 21, 2008

What I Love about Mason #1

A book written by a physicist-journalist is required reading for my macroeconomics class.

While certainly out of the ordinary--and probably not on the syllabus at Harvard--I think Turtles, Termites and Traffic Jams will be a good addition to the class. And it highlights one of the many reasons I chose GMU.

From the first page:
A flock of birds sweeps across the sky. Like a well-choreographed dance troupe, the birds veer to the left in unison. Then, suddenly, they all dart to the right and swoop down toward the ground. Each movement seems perfectly coordinated. The flock as a whole is as graceful--maybe more graceful--than any of the birds within it.

How do birds keep their movements so orderly, so synchronized? Most people assume birds play a game of follow-the-leader: the bird at the font of the flock leads, and the others follow. But that's not so. In fact, most bird flocks don't have leaders at all. There is no special "leader bird." Rather, the flock is an example of what some people call "self-organization."
Follow the link to read more.

Wednesday, August 20, 2008

Jack Master of all Trades

My macro professor recalls the words of George Shackle from Uncertainty in Economics in his syllabus:
To be a complete economist, a man need only be a mathematician, a philosopher, a psychologist, an anthropologist, a historian, a geographer, and a student of politics; a master of prose exposition; and a man of the world with experience of practical business and finance, an understanding of the problems of administration, and a good knowledge of four or five languages. All this is, of course, in addition to familiarity with the economic literature itself.
Expect to see many more posts from my classes/readings over the course of the next few months.

Psychology 101 Gets it Wrong

USA Today reports that while the Bystander Effect might exist, three psychologists suggest the traditional Genovese story has been debunked and should be corrected in the classroom.
It's straight out of Psychology 101: "The Bystander Effect," a phenomenon illustrated by the infamous 1964 murder of Kitty Genovese as 38 callous neighbors ignored her screams for help.
Except that while details of the case were exposed as dubious over the years, psychology instructors and students still operate off the original parable of bad Samaritans united by indifference to a gruesome attack, according to an article by three British university professors.
As the three professors prepared the article, Manning said, they were struck by the Genovese case as a contemporary parable — the antithesis of the Biblical tale of the Good Samaritan, who stopped to assist a traveler assaulted by thieves on the road from Jerusalem to Jericho.

But she acknowledged the article might make little difference in future retellings of the case. "Once such 'facts' become generally accepted," Manning said, "they are often difficult to correct."


Today's Math Boot Camp session at Mason was on optimization. Basically, solve the First Order Condition for x* and y*. Then confirm that you are maximizing (and not minimizing) by showing the Second Order Condition is negative. Finally, go home and read some Hayek.

If you skip the third step, you are clearly not optimizing...

Sunday, August 10, 2008

Declaration of the World Education Forum

The Declaration of the World Education Forum held in Dakar, Senegal in 2000 states that "by 2015 all children, particularly girls, children in difficult circumstances and belonging to ethnic minorities, have access to and complete free and good quality compulsory primary education".

Could someone please explain why the "particularly girls, children in difficult circumstances and belonging to ethnic minorities" is necessary? It seems like egalitarians value some more than others. Why not just say "all children"?

I also love the word compulsory. You will have access to it. You will be able to complete it. It will be free. And good. But if you still don't want it, we are going to force it on you.

Who pays for this again?

Saturday, August 09, 2008

Rick Barack Rolling

Move over Astley, Obama is taking stage.

[HT: Connor Mendenhall]

Wednesday, August 06, 2008


The Columbus Dispatch accepted my letter.
Last Friday's editorial announced the Ohio Department of Agriculture's plan to "make tainted food known to the public" (Food warnings, July 25). The article notes that grocers are "under no obligation" to tell consumers they have contaminated beef. But this is simply untrue.

While there are no laws forcing grocers to inform the public, they face pressure from a very important court: the court of public opinion. The reputation effect, as economists note, compels businesses to act in the interest of their clients. Not wanting to lose future customers, Kroger was driven to "pull tainted meat off its shelves" despite the costs incurred.

Admittedly, market forces do not work perfectly. But neither do government bureaucracies. If Ohioans corrected their romantic view of government they would likely see the superiority of market solutions.

Creative Destruction

Today's after lunch snack reminded me of Tyler Cowen's book, Creative Destruction. I am presently eating a Ritter Sport bar. Without globalization, my selection set would certainly be a lot smaller. But thanks to free(er) trade, I can enjoy this German delicacy.

Wikipedia lists the Ritter slogan as it appears in several languages.
German packaging: "Quadratisch. Praktisch. Gut." ("Square. Practical. Good.")
French packaging: "Carré. Pratique. Gourmand."
English packaging: "The handy chocolate square"
English packaging (UK): "Quality in a Square."
Italian packaging: "Quadrato. Pratico. Buono."
Danish Packaging: "Kvadratisk. Praktisk. God."
Russian packaging: "Квадратный. Практичный. Хороший."
Special thanks to Marion and Julia for introducing me to this wonderful bar of chocolate.

Tuesday, August 05, 2008

Paris for President

What? Yes. Paris Hilton is throwing her name into the hat. And she might get my endorsement...

Ok. Not really. But she did put out a very funny political ad in response to McCain using her picture in an ad against Obama.
Like McCain’s own ad, an announcer narrates the beginning of the clip. While McCain’s clip called Obama “the biggest celebrity in the world,” Paris’ version refers to McCain as “the oldest celebrity in the world, like super-old, old enough to remember when dancing was a sin and beer was served in a bucket.”

MSNBC has the video online. Worth watching.

Rick Rolling

From Wikipedia:
Rickrolling is an Internet meme involving the music video for the 1987 Rick Astley song "Never Gonna Give You Up". The meme is a bait and switch: a person provides a Web link they claim is relevant to the topic at hand, but the link actually takes the user to the Astley video. The URL can be masked or obfuscated in some manner so that the user cannot determine the true source of the link without clicking (and thus satisfying their curiosity). When a person clicks on the link given and is led to the web page he/she is said to have been "Rickrolled". By extension, it can also mean playing the song loudly in public in order to be disruptive.
An April 2008 poll by SurveyUSA estimated that at least 18 million American adults have been rickrolled.
Today's New York Times had a decent article on Rick Rolling and firm productivity.

Sunday, August 03, 2008

Asking the Right Questions: Obama

Balko also poses questions to Obama:
You not only supported the latest federal farm bill, you commended it, stating that it "will provide America's hard-working farmers and ranchers with more support and more predictability." Critics have called that $307 billion monstrosity an orgy of earmarks, corporate welfare, and protectionism. It actually increases subsidies to huge agribusinesses in an era of record grain prices — subsidies that are already crushing farmers in the developing world. The New York Times called it "disgraceful." The Wall Street Journal called it a "scam." How does the "change" candidate justify supporting a bill larded with sweetheart deals for big agribusiness when just about everyone not getting a check from the bill opposed it?
In your autobiography, you admit to using marijuana and cocaine in high school and college. Yet you largely support the federal drug war — a change from several years ago when you said you'd be open to decriminalizing marijuana. Would Barack Obama be where he is today if he had been arrested in college for using drugs? Doesn't the fact that you and our current president (who has all but admitted to prior drug use) have risen to such high stature suggest that the worst thing about illicit drugs is not the drugs themselves, but what the government will do to you if you're caught?
In a speech to Cuban-Americans in Miami, you called the Cuban trade embargo "an important inducement for change," a 180-degree shift from your prior position. The trade embargo has been in place for 46 years. Did denying an entire generation of Cubans access to American goods, culture, and ideas induce any actual change? Wasn't the real effect just to keep Cubans poor and isolated? In communist countries like Vietnam and China, trade with the U.S. has ushered in economic reform, and vastly improved the standard of living. Why wouldn't it be the same if we were to start trading with Cuba?
Your wife said that as president, "Barack Obama will . . . demand that you shed your cynicism . . . That you come out of your isolation, that you move out of your comfort zones. That you push yourselves to be better. And that you engage. Barack will never allow you to go back to your lives as usual . . ." How is any of this remotely the responsibility of the president? Where in the Constitution does it say that the president should be our personal motivator and spiritual leader? Will you help us lose weight and eat our vegetables, too?
Wow. I love this guy's questions. Any word on who will be taking Tim Russert's place at the table?

Asking the Right Questions: McCain

Randy Balko poses questions for McCain:
In your January primary debate, you referred to "greedy" Wall Street stockbrokers, and in contrasting your career to the business career of Mass. Gov. Mitt Romney, you said, "I led the largest squadron in the United States Navy. And I did it out of patriotism, not for profit." Do you think a career in public service is inherently more noble and virtuous than a career in the private sector? Are people who spend their lives on the taxpayer dole as politicians and government employees simply better people than those who create wealth and jobs through private enterprise?
After the Supreme Court's decision in the Heller gun rights case, you admirably commented, "This ruling does not mark the end of our struggle against those who seek to limit the rights of law-abiding citizens. We must always remain vigilant in defense of our freedoms." I couldn't agree more. But on the subject of campaign finance reform, you said in 2006 that, "I would rather have a clean government than one where, quote, First Amendment rights are being respected, that has become corrupt. If I had my choice, I'd rather have the clean government." How do you reconcile these two positions? Is a "clean" government (whatever that means) really more important than the rights and freedoms of its citizens?
In 1989, your wife Cindy became addicted to the prescription drugs Percocet and Vicodin. Eventually, she began stealing medication from the non-profit medical charity she ran to assist the victims of war and disaster areas. You and your wife were able to negotiate a settlement with the Justice Department that let her off with restitution and admission to a rehabilitation center, but no fines, jail time or even public disclosure. Certainly no one could fault you for trying to save your spouse from criminal sanction. But you're consistently one of the most strident drug warriors in Congress. You've voted to strengthen penalties against those who use and traffic in both illicit drugs and who divert prescription drugs. You've supported mandatory minimums and harsher penalties for first-time offenders. Why shouldn't average people without powerful connections who make the same mistakes your wife made be shown the same leniency and mercy the criminal justice system showed her?
I cannot imagine these questions coming up in the debates. But they should.

Repetition, Repetition, Repetition

At the end of Caplan's Myth of the Rational Voter, he urges economists to stress the value of markets by endlessly repeating the most basic points. Mike Cox and Richard Alm, with their very straightforward research, do just that.

Their research, in picture form, is outlined below:

1. Goods are Easier to Obtain

2. We Work Less and Earn More

3. Work is Easier