Thursday, December 11, 2008

BS about the BCS

There are plenty of criticisms you can level at the Bowl Championship Series. One thing is for sure though: the BCS and any flaws it has are NOT the business of this clown.

Saying the BCS “consistently misfires,” Rep. Joe Barton, R-Ennis, plans to introduce legislation Wednesday that would force college football to adopt a playoff system to determine the national champion.

Tuesday, December 2, 2008

No Trans Fats Mean We Eat More Calories?

John Tierney has found that, despite increased attention to nutrition, Americans are still over eating partly due to what he calls the "health halo." He and a colleague conducted an experiment where people were shown a picture of a meal (Applebee's Oriental Chicken Salad and a 20 ounce Pepsi if you're curious) and asked to estimate the calories. On average, the number of calories were overestimated. Another group of people were shown the same meal and two crackers labeled "Trans Fat Free." This meal had more calories than the original meal, but this group underestimated the calories in this meal due to the "Trans Fat Free" label.

So in effect, Americans are fooled into thinking anything that has "Fat Free" on it is healthier and therefore consume more calories! It is the classic case of "Coke Classic has too many calories; I'll have a Diet Coke. Oh yeah, and a brownie!"

Saturday, November 29, 2008

Unintended Consequences

The owners of buildings that have been tagged by New York City's Landmarks Preservation Commission are either altering or demolishing buildings before they can be classified as a landmark. Read the story here.

I'm not going to take the time to dig through the fine print of New York City's Landmark Preservation Commission, but if it is like other such commissions and boards around the country, once a piece of property has been designated as historical, the owner is prevented from using the property in any way not approved by the commission. A very strong case can be made that this is a taking.

The commission would be better off buying the property from the owner and preserving the desired building itself. But then that would get in the way of a free lunch.

Thursday, November 13, 2008

NIMBY: Big Box Edition

No Big Box on Issaqueena!

Some South Carolina residents don't want a Lowe's in a certain part of town. Two observations:
  1. If people want it, it will come and it has to go somewhere.
  2. If the developer is getting special treatment, you've got an argument. Fight that.

Wednesday, November 12, 2008

Who Says Economists Don't Have a Sense of Humor

From George Stigler's famous The Theory of Price, Third Edition.

Again, those enterprises requiring very close coordination of skills of men are seldom large scale: no novel can be written by more than two persons (and of these at most one can be a woman), no orchestra can have 300 members and still be called symphonic.
Two of my female colleagues didn't find this as funny as I did.

Tuesday, November 4, 2008

Voting Schmoting

An excellent video starring economist Gordon Tullock explaining why he doesn't vote. It is also an outstanding 5 minute, cute introduction to economic analysis.

Election Day

"Freedom is not measured by the ability to vote. It is measured by the breadth of those things on which we do not vote."

John Wenders

Tuesday, October 28, 2008

I'm Thankful...

That the most vile time of American life is about to end; for a while. There are only 7 left in the national pissing contest we Americans call a Presidential election. Thankfully the 2010 election cycle doesn't begin until February 2009, so we have a few months off! Every day seems to bring some piece of news about the race that is absolutely sickening. (Just go to Drudge Report at any random time and look around.) What confuses me to no end is that people for some reason expect the process to be civil and polite. Politics is a blood sport. It is a zero sum game where to the victor go the spoils and the loser is left in the cold. Given those conditions, why politics should be anything more than a dog fight (insert your own Michael Vick joke here) is beyond me.

As for who wins, I could care less. I will not be voting and may never vote again. I fully second Don Boudreaux's reasons for not voting. To them I would add my own ignorance. Every time I learn something, I realize how much I don't know, and this semester has convinced that there is a lot I don't know! Whenever most topics are being discussed I remind myself that unless I know enough to make an informed and thorough analysis of the topic, I tread lightly with my comments lest I increase the world's supply of nonsense via my ignorance. I take the same approach to voting. Given how little I know about practically every topic on the public agenda, how can I make an informed decision about a candidate who doesn't understand very much about any given topic either?

(By the way, I don't care what Obama, McCain, Biden, Palin or any other candidate for any office says, given the grand totality of human knowledge, not to mention the things we don't know yet, the candidates, just like me, know practically NOTHING!)

In addition, I'm convinced that many people shouldn't vote (pick a college student at random) and I like to lead by example.

The one reform that might get me to vote again is a "None of the Above" option for each and every political race. It would be great fun to see "None of the Above" get more votes than any candidate. The candidate with the highest number of votes would still win the office, but I can't help but think they would tread a little lighter once in office given that "no one" got more votes than they did.

Sunday, September 28, 2008

The Financial Situation

Here is a list of insightful commentaries.

Peter Bernstein asks what I think is the best question in all of this: If the government is going to limit the losses of risk taking, why would anyone take less risk in the future?

Friday, September 5, 2008

NIMBY: Priceless Edition

This maybe the greatest, most absurd example of NIMBY I have ever seen.

T. Boone Pickens, of the famous Pickens Plan to increase the capture of wind energy in the United States, was interviewed by Fast Company Magazine. After outlining his project, Pickens was asked the following:

And you'll do all of this on your beautiful 68,000 acre ranch?

To which he responded:

I'm not going to have the windmills on my ranch. They're ugly.

Sunday, August 31, 2008

Russian Farms, Football, and Grad School

  • Here is a piece on the transition of Russian agriculture from collectively owned to large agricultural companies with the specter of a Russian government takeover.
  • Being at a larger university for the first time, I've seen first hand how seriously many (if not most) people in town take the football team. Win or lose, it doesn't bother me.
  • "Early to bed and early to rise makes a man healthy, wealthy, and wise." -Ben Franklin
  • "Late to bed and early to rise makes a man a grad student." -Matt
  • Since coming back to grad school, I've also learned that caffeine is your friend!

Sunday, August 17, 2008

NIMBY: Wind Turbine Edition

Some people don't want wind turbines disrupting their scenery. OK, fair enough. It comes down to a question of property rights. If you own the property where the proposed wind turbines would be built, then you have every right to stop them if you don't want them there. If you don't own the property, sorry but your scenery may now include wind turbines.

If the offended land owners valued the pristine view more than the developer valued the land as a site for wind turbines, then they should pool their money and out bid the developer, acquire the land and keep in its current state.

But the developer has more money. Why should he who has the most money always get what he wants?
Excellent question. Let me try to answer that with an example. I would like to have a new truck, a 50 inch flat screen TV, more books, and steak for dinner every night. Why don't I have all of these things? My budget constraint. All of that stuff would be cool, but my budget only allows me to buy so much stuff. My ability to pay for these goods is not high enough for the current owners of these goods to voluntarily trade with me. I still value this stuff, I just can't acquire everything that I value. Someone with more money, or different priorities, will acquire the stuff that I want. Such is life in a world of unlimited wants and limited means to acquire such wants.
If you own something, then you can control its use. If you don't own it, you can seek to control something's use by coming to a voluntary agreement with its current owners to purchase the asset or change its usage, or you attempt to control it through the political system, that is via coercion. It is when the latter happens that NIMBY becomes a problem.

Sunday, August 10, 2008


If you check my profile, you will see that I am no longer an Ag Economics instructor. I am now in a PhD program in Applied Economics.

In terms of posting, one of two things could happen.
  1. I will be extremely busy, leaving little time for blogging.
  2. I will be thinking about economics 24/7 for the next 4 years. Thus I will think of plenty of blog topics and begin to see even more of the world in an economic context. So even though my time will become more scarce, I will blog more.

I'm not sure which will occur, but I will at least check in from time to time.

Wednesday, July 16, 2008

Stossel on Stop Signs

Do fewer stop signs reduce the number accidents? John Stossel has a great column. He also touches on how traffic tickets can quickly turn into a money making scheme for both cities and police officers.

Thursday, July 10, 2008

Black Hole Stupidity

This has made it's way around the net, but it is just too stupid for me not to link to.

A Dallas county commissioners court meeting resulted in charges of racial insensitivity when one commissioner referred to "black holes."

Forget looking for intelligent life in outer space; it's hard enough to find it on Earth!

Wednesday, July 9, 2008

On Naming Stuff After People

It has begun. Waco came extremely close to naming an elementary school after Barack Obama.

I dislike the idea of naming stuff after people. If a new school is built, name it after the town or the street it's on. If a new highway or road is constructed, give it a number or name it after a tree. Naming stuff after people inevitably results in nonproductive tinkling contests. The only times I like the idea of naming something after someone is as a joke (such as "The Michael Vick Humane Society Annex") or as a back handed compliment (such as naming a park lot "The Joe Blow Memorial Parking Lot" before Joe Blow actually dies).

Would naming the new Waco elementary school "Barack Obama Elementary" versus "J.H. Hines Elementary School" actually improve educational quality?

Probably not.

Monday, June 23, 2008

Furious at the Gas Station

I often find myself spinning into a furious rage at gas stations and it has absolutely nothing to do with the price of gas. It is caused by other drivers, such as the way people park at the gas station, how they cut through the service bay as opposed to going around it, leaving their vehicle at the pump after they've filled their tank, etc. I cannot understand the rationale behind any of this. If you park square and in the designated spaces, then everyone can maneuver more efficiently. If you go around the service bay to enter or exit the station, you cut down on the potential for accidents. If you need to buy a soda after getting gas, pulling up to the store opens up a pump for someone else. The question is why doesn't anyone seem to do any of these things? Do gas stations not have an incentive to enforce some level of rules in their parking lots to facilitate their operation?

The only way I've found thus far to subdue my rage is to find the smallest area between two vehicles I can fit through and drive my truck through it. Usually someone is watching. Maybe eventually someone will come to the same conclusions I have and gas stations will become more pleasant places.

Monday, June 2, 2008

Various Stuff

  • One reason for the higher price of milk: sawdust!
  • From Arthur Brooks: money can't buy happiness, but earned success does.

Monday, May 26, 2008

Current Projects

Here is what I'm currently trying to figure out by channeling my inner Tyler Cowen.
  • How can you combat the universal human tendency to stop in door ways? How many times have you been to a large event and the human traffic stops moving the moment you get to the door because everyone before you has stopped in the door? How can incentives be used to get people to take enough steps to keep the flow of traffic moving?
  • How can you get people to stop donating garbage to charity or giving you garbage? For example, someone can't bring themselves to throw away a worn out piece of furniture, so they give it to their church. On an individual level, if someone gives you garbage, you can give them garbage in return. At some point things should stop because the original giver no longer wants you to reciprocate. On the charity level, I'm not sure what to do.

Monday, May 19, 2008

The Good and Bad of NIMBY

I've come to the conclusion that NIMBY has at least one virtue: it is proof that we've become wealthy and prosperous enough that we can afford to keep various productive activities out of our backyards without massive consequences.

On the other hand, if taken far enough, NIMBY could kill the goose that lays the golden egg; i.e. any business that someone finds offensive will be run or kept out of town thereby destroying or preventing prosperity. See Marlin, Texas for an example.

Wednesday, May 7, 2008

Urban Agriculture

Urban farmers in New York, Oakland, and elsewhere are raising fruits and vegetables in cities. They use vacant lots, backyards, and anywhere else they can find space. Most of it appears to be organically grown. The practice has grown from growing a few vegetables for a family's own consumption to selling the stuff in local markets. Most of these urban farmers make little money doing it, and many don't do it for the money, but some make 6 figures.

Man is a creative and adaptive species!

Tuesday, April 29, 2008

Morning Reading

David Brooks has a good column on the demographic divide within the Democrat party. In short, educated voters are going for Obama while uneducated voters are going for Hillary. Can either candidate unite these groups of voters who, having relatively little hostility to each other, live in different worlds?

Really good article about current U.S. farm policy and its contradictions.

There is a great cartoon over at Econ Journal Watch. It is on the left hand side of the page. It makes a good point about externalities and property rights.

A study from the state of Washington found no evidence of illegal gas price manipulation. Add that study to the pile of others that have come to same conclusion. When will they stop?

Wednesday, April 23, 2008

Spencer Heath MacCallum

I've recently discovered the work of MacCallum. It is extremely thought provoking. His primary work focuses on the idea of "entrepreneurial communities" as an alternative to subdivisions. Examples of entrecoms or multiple tenant income property (MTIP), as he calls them, include shopping malls and hotels, where a given space is bought or leased while the common areas (walk ways, etc.) and the land itself remain under the ownership and control of a developer. As it applies to housing developments, the basic idea is that you own the house, but someone else owns the land under the house. The home owner pays land rent which then finances streets, parks, and other common areas. According to MacCallum, the entrepreneur who owns the development has much better incentives and feedback mechanisms to manage the development, including the common areas, successfully than does a home owner's association or city planner, both of which rely on democratic decision making.

MacCallum contributes a chapter to The Voluntary City. Here are portions of a great paragraph which addresses voting (very relevant during this election year) from his essay "The Case for Land Lease versus Subdivision" in that volume:

"Voting, widely held to be democratic, serves as the great legitimizer of the political process. But the fact is that like the political process itself, it is a makeshift, like a coin toss, that people fall back upon in the absence of any better alternative... Jonathon Swift supposedly quipped that 'some people have no better idea of determining right from wrong than by counting noses.' Voting is not a procedure for discovering truth or for making informed decisions. It is an agreed-upon method for people to gang up on one another without overt violence... Instead of navigating toward a win-win situation, voting is a method of breaking resistance to a course of action while ignoring the differences underlying the resistance. Its zero-sum nature is starkly dramatized in that wonderful vignette, attributed to Mencken, of two wolves and a lamb voting on the question of what to have for dinner."
Here is one article of MaCallum's and here is another. About half way through both he begins to discuss entrecoms or MTIPs.

So maybe we would be better off if we owned our homes, but not the ground under them.

Economics of College

Thomas Sowell has a great series of columns on the economics of college. He addresses whether or not college education should be taxpayer subsidized and why college costs so much. Something else he touches on is the incentives faculty face under the current set of tenure and promotion rules. I've seen how these rules can have some bad effects first hand.

Well worth a read.

Part 1. Part 2. Part 3.

Tuesday, April 22, 2008

Gas and Commodity Futures

Here is a pretty good article on gas prices. It has some flaws, but is still worth a read. Check out the article's comments for coverage of the flaws. Some of the commentators miss one of the author's points. He is not focusing on why the price of gas has gone up over the last 5 years. He is asking why, based on what the price of gas was in 1950 and considering inflation, taxes and demand, is gas not more expensive now than it actually is.

Here is an article on agricultural commodity futures market volatility. My expertise regarding commodity futures is limited. I have a couple of theories as to what could be contributing to this volatility (increased demand leading to exaggerated responses to new information or a speculative bubble in some commodities), but I have no idea if either theory has any validity.

Monday, April 14, 2008

Possibilities versus Probabilities

Referring to the proposed waste water treatment plant (see my previous post), this letter found its way to the Waco Tribune Herald:

Sludge from Lorena
The controversy over the proposed water treatment plant in Lorena [March 21, Page 1A] should not be passed over too lightly by the people who think they are not affected.
“Leftover sludge” will be pumped into holding tanks and trucked to the city of Waco’s main wastewater treatment plant for processing. That will entail tanker trucks transporting this sludge down Highway 77 through the city of Robinson to the LaSalle Avenue water treatment plant — about a 10-mile trip.
Imagine all the possibilities. Robinson citizens may want to weigh in on this proposal, too.
Anything is possible, but is it also probable? I'll assume that the worst possible outcome of tankers full of sludge driving down 77 is one overturning and spilling it (and no I did not accidentally leave the first two letters off of that word) all over the highway. That is certainly possible, but how probable is it? I'm going to go with highly improbable because very few other trucks turn over.
If you base decisions you make (or policy decisions) on what could possibly happen, you should never drive (you could possibly suffer fatal injuries in a wreck), you should never bathe or shower (you could possibly die in a fall), you should never eat chicken (you could possibly die from salmonella poisoning), you should never walk outside while the sun is out (you could possibly get skin cancer and die), etc. People constantly do all of these things, and many other risky activities, because although possible all of these outcomes are highly improbable.

Monday, April 7, 2008

NIMBY: Wastewater Plant Edition

A classic example of NIMBY: McLennan County wants to put in a waste water treatment plant; local residents don't want it near them. One side wants to facilitate development; the other wants to preserve rural amenities.

Two points:
  1. The waste water treatment plant has to go somewhere and like it or lump it, rural areas are better locations due to more open space and cheaper land.
  2. The Texas Commission on Environmental Quality (TCEQ) is not going to allow this plant to discharge any hazardous materials. As for the smell, local resident would be better off letting the plant be built and then bringing a suit if the plant creates an odor.

Monday, March 31, 2008

Blog Highlights

  • Robin Hanson on not reading newspapers. Contains a great quote by Thomas Jefferson and says some things I've tried to say, but more elegantly.
  • Steve Horwitz on why Wal Mart should win the Nobel Peace Prize. Here and here.
  • The following sentence is from an email to Mickey Spagnola at In referring to the possibility that Dallas will acquire the troubled (to put it lightly) Pacman Jones, a gentleman writes: "Quite simply, we cannot afford to even associate with a player like this." Ahem, unless you're associated with the Dallas Cowboys in an employment capacity, "we" are not going to associate with Pacman, "they" are. "We" are not looking into acquiring Pacman Jones, the Cowboys are. "We" are not playing bad basketball, the Mavericks are. "We" did not lose to Memphis, the Longhorns did. Let's give credit and place blame where it is due.
  • Michael Giberson on price gouging.

Tuesday, March 25, 2008

Tierney on Carbon Tracking

John Tierney has a fantastic article as always. In today's article, he goes through his plan to combat global warming and reduce carbon emissions.

Two passages are worthy of quoting in full:

We can’t even prepare properly for something as straightforward as our own retirement. We’ll put in long hours shopping for a cellphone or a television set, but we’re too busy to agonize over pension plans: in one study, most people spent less than an hour choosing theirs. We’re not good at making immediate sacrifices for an abstract benefit in the future. And this weakness is compounded when, as with climate change, we have a hard time even understanding the problem or the impact of our actions today.
And after explaining how he would use a fashion statement to encourage carbon reduction (read the article to learn how):
This would be a strictly voluntary system — climate contrarians could either ignore it or proudly wear their flashing red lapel pins — and it would cost taxpayers nothing.
But by encouraging people to find the most efficient ways to conserve energy, this nudge might do more good than some of the expensive subsidies being handed out in Congress.
Besides putting the enthusiasm of greens to practical use, this fashion statement might also inject some realism into the debate about global warming. Once you start keeping track of all the energy you use, you begin to see the difficulties of making drastic reductions — and the difference between effective actions and ritual displays.
Well worth reading in full.

Congestion Pricing Criticism

I like the idea of congestion pricing. If tolls are set such that a constant flow of traffic is maintained, roads will be more efficiently used and drivers will save time and money. My enthusiasm has been tempered by Becky Akers' article Congestion Pricing: The Road to the Surveillance State.

The potential to use congestion pricing as a mechanism to track motorists is a major concern. Likewise is the use of the tolls. Instead of being used to maintain or expand roads, the tolls are being used to subsidize mass transportation (buses and subways).

As good of an economic idea as congestion pricing is, if the political process skews it, no congestion pricing may be better than a deeply flawed one.

Thursday, March 20, 2008

Is it all about Public Safety?

From the Wednesday, March 12, 2008 print edition of The Marlin Democrat (emphasis added):

Burn Ban Lifted
Commissioners did not vote Monday to reinstate the county-wide burn ban. The ban had been lifted at the last commissioners court meeting Feb. 25, but County Judge Steven Sharp put in an emergency ban because of dry air and high winds and to keep Falls County eligible for disaster relief funds. Sharp's emergency ban expired Tuesday, March 4 and it was not reinstated.

Misc. Stuff

  • I find many farm news sites useless, but Farm Futures is fantastic! Even non farmers should find the homepage useful: it contains futures quotes for every major commodity plus several currencies and financial instruments in one location. From what I've seen, the articles are really good as well.
  • Benjamin Franklin on 'hope': "He who lives on hope will die fasting."
  • Benjamin Franklin on poverty: "Having been poor is no shame, but being ashamed of it is."

Monday, March 10, 2008

Break Even Analysis

Break even analysis equates total revenue and total cost. It is useful because it allows you see where you will just break even (make zero profit) and it will provide you with a range of outputs, at given prices and costs, over which you will make a positive profit.

I asked this question on an exam and got the following response:

Q: Why is break even analysis a useful tool?

A: Break is a useful tool because in order to do the job you must have a break.

Hunting Classes

West Virginia is now allowing hunting classes in schools. I'd bet that a primary reason for this is that the state has seen a 20 percent decrease in the number of hunting permits purchased over the last decade for a revenue loss of $1.5 million.

The question is how long this will last before a legal challenge ends such classes.

Wednesday, March 5, 2008

Various Readings

  • Why Most Voters Shouldn't Vote The article raises a great question: If someone wasn't interested in heart surgery, would we let that person fiddle with our heart? Likewise, if someone is not interested in politics, why is that person allowed to vote? HT: Bryan Caplan
  • Thomas Sowell on free lunches and what destroys prosperity.

Thursday, February 28, 2008

U.S. Religious Landscape Survey

The survey was released on Monday. Here is a link to the story where more detailed info is available.

Here are some highlights (or low lights):
  • People increasingly change denominations or abandon their affiliation all together.
  • 51.3 percent call themselves Protestants, but one third of Protestants either could not or would not describe their denomination.
  • 25 percent of adults under 30 have no affiliation.
  • Those who are "secular unaffiliated" are greater a percentage of Americans than Methodists (6.3 versus 6.2 percent).
  • Oregon has the greatest percentage of population with no affiliation (27 percent).

Rural Texas Land Values

Here is a summary from the Dallas Fed. If you live in North Central or Central Texas and own land, you're sitting pretty!

What shocks me to no end is that ranch land values in several regions, including North Central and Central Texas, are actually higher than crop land values. I would bet that's due to a combination of livestock prices and residential/lifestyle farmers moving into the area. If you look at the chart on the bottom of the page you can see that dry land and ranch land values for the region briefly converged in about the second quarter of 2006 before commodity prices really took off. I wouldn't bet against crop land values overtaking ranch land values again should grain prices stay high.

Wednesday, February 27, 2008

Stupidest Thing I've Read So Far Today

Forrest Laws from the Delta Farm Press has this to say:
If you report more than $200,000 on the adjusted gross income line of your tax return, the Bush administration doesn’t think you should receive a commodity program payment.
If you do, that puts you in the wealthiest 2 percent of taxpayers, and you’re too affluent to be participating in commodity programs, said Agriculture Secretary Ed Schafer, speaking at the National Cotton Council’s annual meeting.
Schafer’s comments started me thinking. President Bush and Vice President Cheney receive more than $200,000 a year in salary and benefits. Both probably continue to receive earnings from oil and gas company investments.
Apples and oranges Forrest. Commodity program payments are not the product of investments. They are provided at the pleasure of the government. So if the government decides to eliminate all program payments tomorrow, or double them tomorrow, there is nothing you can do about it other that cry or celebrate. An investment implies that you own the right to receive income from the asset. Those receiving commodity program payments do not own that right. (Although they may feel entitled to it.) It can be expanded or contracted at the will of the government.
Also, how about not making the case for continued commodity program payments on the basis of envy? "Bush and Cheney have this, so I should to!" Moral bankruptcy at its finest!

Monday, February 25, 2008

Basic Economics: Car Wash Edition

I am approached by an 11 year old kid at church yesterday morning offering to sell me a car wash ticket for $3. I hand him $5. He looks at that five dollar bill like he expected operating instructions. (I considered yelling at him to give me back $2, but then his Mom would have yelled at me and I'm not sure she could have figured out this daunting puzzle either. But I digress.) So I pay $5 for a car wash. This is a fixed (or sunk) cost. It no longer figures into my analysis of whether or not to go to the car wash.

So what are the variable costs of going to the car wash?
  1. The car wash is 25 miles away so the round trip will take me 2 gallons of gas at $3.10 per gallon for a total of $6.20.
  2. It will take a half hour to drive one way to the car wash. I will probably spend half an hour waiting for my truck to be washed. So it will cost me one and a half hours. Assuming the opportunity cost of my labor is $6 per hour (what I could earn moving dirt), the total opportunity cost of my time is $9.00.
  3. There is a high probability that the car wash will not be to my satisfaction. While they will wash off the top layer of grim, I doubt that will shine my wheels and tires, scrub the bugs off the grill, and wash my windows properly. Therefore, I will have to wash my truck again when I get home. Assume it takes an hour (at an opportunity cost of $6 per hour) and I use $1 worth of supplies to wash my truck for a total of $7.00.

So the total variable costs of going to this car wash is $6.20+$9.00+$7.00 for a total of $22.20. I would be willing to pay $10 to have my truck spotless.

Needless to say, I won't be going to this car wash.

Tuesday, February 19, 2008

Energy Substitution

The price of oil has gone up. Therefore, people are using more wood to heat their homes. People have substituted one energy source for a relatively cheaper energy source. Who'd a thunk it?

Monday, February 18, 2008

Cult of Personality?

Why have at least six Obama supporters fainted at his rallies? I guess some of them just couldn't "Stand for Change!"

I can understand fainting at the sight of Chuck Norris or Dennis Kucinich's wife (as in "How did he get her?"), but Obama? Is it an encouraging sign when people, even a few, are soo overcome by a candidate's look and personality that they faint?

Friday, February 15, 2008

The Waco Trib gets it Close to Right

It is rare that I agree with the Trib on much of anything. I used to take their voting guides and do just the opposite of what they recommended. However, this morning they get it close to right.

The editors argue that gas taxes should not be diverted to non highway construction uses. Yes! But then they don't go far enough. They don't even question whether or not gas taxes should be used to fund school buses.

Once again: you pay for state roads via taxes whenever you pull up to the pump. When that tax revenue is diverted to other uses (schools, retirement benefits, whatever) you break that linkage between the funding source (gas taxes) and their intended use (road construction and maintenance). Bad consequences (horrible and insufficient roads) follow. If you want to increase school funding, retirement benefits, or build a 65 foot statue of a Baptist hugging a bear, get the money from somewhere besides gas taxes.

Wednesday, February 13, 2008

Christian Ramadan

Dutch Catholics have decided to rename Lent "Christian Ramadan" in order to appeal to young people who are more likely to be familiar with Islam than Christianity.

Two things on this story.
1) It is a fairly clear indication of where Europe is heading.
2) It is official that the Catholic Church in The Netherlands has completely sold out. They no longer have the conviction necessary to carry forward the message of Christ. They are now just trying to win a popularity contest and get on the good side of the future majority faith.

Forget sending missionaries to Asia or Africa. The Church needs to start sending missionaries to Western Europe!

Monday, February 11, 2008

The World is Flat and Getting Older

I just finished reading Thomas Friedman's The World is Flat. It is quite insightful and looks at globalization, outsourcing, global supply chains and the impacts this flattening process is having and will have in the future. As the fellow who recommended this book to me said, twenty percent of what Friedman says is wrong. I believe he overestimates what government is capable of doing effectively and he overestimates just how flat the world will become. Some things are just so localized that they can't be flattened (ie it's hard to outsource your house cleaning or lawn care to India). He also introduces too many people as "my friend." I have no doubt that Thomas Friedman has lots of friends, but you don't have to name drop. If you took a shot of whiskey everytime Friedman writes "my friend" you would be too drunk to finish the book. Nonetheless, The World is Flat is well worth the price.

One idea that's been running through my mind the last few months is how aging populations will impact the economy. Friedman doesn't get into this (he focuses on backward looking cultures, not age groups), but he does ask a question relevant to my concern: "Does your society have more memories than dreams or more dreams than memories?"

I've often wondered what will happen as the U.S. gets older. Will an aging population that has more years behind it than in front of it erect barriers or push for policies that will stymie economic growth in exchange for increased present comforts? Will a fear of change drive older Americans to restrict innovation or long term investments? Here is part of a great paragraph by Friedman:

In societies that have more memories than dreams, too many people are spending too many days looking backward. They see dignity, affirmation, and self worth not by mining the present but by chewing on the past. And even that is usually not a real past but an imagined and adorned past. Indeed, such societies focus all their imagination on making that ingrained past even more beautiful than it ever was, and then they cling to it like a rosary or a strand of worry beads, rather than imagining a better future and acting on that. It is dangerous enough when other countries go down that route; it would be disastrous for America to lose its bearing and move it that direction.
As the population ages, and as I hear about the "Good Old Days" more and more, I wonder whether or not America will move in this direction. I read an interview with the late management guru Peter Drucker where he said that the largest age group dominates the culture. As retirees come to dominate the culture, I fear that innovation and economic freedom could be restricted. I'm not so sure that Western Europe isn't already moving in that direction. So you could have a situation where the younger countries get flatter while the older countries start to unflatten. Time will tell.

Outpatient Surgery

I heard someone yesterday, and I've overheard many people before, complain about outpatient surgery. The criticisms surround insufficient care by the hospital. In other words, they perform a procedure then ship you back home to fend for yourself.

While some people would no doubt get some risk reduction, greater peace of mind and extra care from staying in a hospital for a day or two, there are costs involved. There is obviously the financial cost of keeping a patient in the hospital. There is a cost to the patient in terms of comfort. I've yet to hear anyone actually want to go to the hospital when nothing was wrong with them (aside from Grandpa Simpson on one episode of The Simpsons) and I've never heard anyone say how comfortable hospital beds are. There is also increased stress from being away from home.

In my mind, the greatest benefit of outpatient surgery is that it gets you out of the hospital. Hospitals are full of sick people. The sooner you can get out of there, the better. For anyone who has ever worked with fresh from the sale barn feeder cattle, you know the worst place fresh cattle can be is confined in pens at your barn. If one gets sick, the entire bunch is at risk. The sooner you get them out and away from that environment, the better. If you can recover at home, I find it hard to imagine why anyone would want to stay in an uncomfortable environment surrounded by sick people.

This may be a cultural element from the days when you were kept in the hospital a few days for most any condition. I'd be interested to see if the attitudes toward outpatient surgery are different for people in their 20s and 30s versus senior citizens.

Cox and Alm on Consumption

Here is a great column by Michael Cox and Richard Alm on why spending is a better measure of poverty than income. While the richest fifth of Americans spend less than 50 percent of their income on consumption, the poorest fifth spend nearly twice their income on consumption. The poor have unreported income, sell things not subject to capital gains taxes, redeem insurance policies, and draw down bank accounts. So when you compare the different consumption levels of the income classes, their well being relative to each other is much closer than income statistics would lead one to believe.

Cox and Alm wrote a great book several years ago called Myths of Rich and Poor: Why We're Better Off Than We Think.

Thursday, February 7, 2008

Matt's Requirements to Run for Office in Falls County

Here are my requirements to run for office in Falls County, Texas in no particular order.

  1. You must have lived outside of the county for at least 15 years of your adult life. Furthermore, living in any county that borders Falls County does not count (McLennan, Bell, Robertson, Limestone, and Milam). You must have lived far enough away from the county to not remember the way things have always been done.
  2. You must average reading at least one nonfiction book a week. Falls County officials need some "intelligence of knowledge" (not my term, but great regardless) so ingesting vast quantities of information is required. Preferably stuff on public policy applicable to the county.
  3. You must not have the patience to put up with nonsense. When a county resident starts spewing garbage and BS from every pore, just tell them they're full of it and move on.
  4. You must never have been an employee of Falls County prior to running for office. Fresh blood is a requirement.
  5. You must promise, if in a relevant position, to never, ever pave another foot of Falls County roads. The current paved roads cannot be maintained much less new ones. Promising to make some paved roads gravel roads and some gravel roads dirt roads would also be a nice touch.
  6. You must never, without significant study, dismiss a policy alternative for Falls County. Even if this policy has never been tried, if it looks promising, try it. You can't screw the county up much more, so try something new.
  7. The words "historic preservation" should never leave your lips. Historically, the county has been poor. I'm not interested in preserving that.

And before anyone says anything, I disqualify myself because quite frankly, I'm smart enough not to run for office in Falls County.

Waco and Marlin News

  • Since Waco isn't going to have a 65 foot statue of a Texas Ranger by the Brazos and I-35, how about they build a 65 foot statue of a tourist? Considering that increasing tourism seems to be the primary economic growth strategy Waco has, it seems fitting.
  • I'm always shocked when something non grandiose and actually beneficial (ie not something that is done to make Waco look better than it is) happens in the Waco economy. Tractor Supply is doubling the size of their Waco distribution center. Good for Tractor Supply and Waco. Maybe something like that will happen in Marlin one day. Sigh.... One can dream.
  • Speaking of Marlin, the Falls County Commissioners have issued a burn ban and disaster declaration for Falls County. I'll agree that Falls County is a disaster area, but it has nothing to do with lack of rain, wind and dry forage.

Tuesday, February 5, 2008

A basketball game beating the Super Bowl?

In all likelihood, yes.

The Rockets versus Bucks matchup Saturday was estimated to have been viewed by 200 million worldwide. This game featured Yao Ming of the Rockets versus Yi Jianlian of the Bucks, therefore it drew a huge Chinese audience. Even though the Super Bowl was the highest rated ever, it drew an American audience of 97.5 million, it is extremely likely that the Rockets-Bucks was watched by more people worldwide because the rest of the world doesn't share our love for American football.

A great article in The American looks at how basketball could soon outpace soccer as the world's most popular sport. What surprised me is that Tracy McGrady sells more jerseys in China than Yao does. Considering the number of foreign born and raised players in the NBA and the league's popularity overseas, it wouldn't be surprising if the NBA is a world entertainment and mirch in dice (sorry merchandise) power in the not to distant future. The NFL will probably reign supreme in the U.S., but the NBA is the league to bank on worldwide.

Wednesday, January 30, 2008

Housing, Hans and Humor

  • Why buying a home could be easier for those of us who are younger.
  • Hans Bader, whom I'd never heard of before, on ABC News' reporting on one couple with a subprime mortgage. A little math could have saved both ABC and this couple some embarrassment.
  • P.J. O'Rourke, hilarious as always, sends a letter to our European friends explaining the Presidential campaign.

Tuesday, January 29, 2008

Extended Childhood

I was sitting in the department head's office this morning waiting for water to boil for my tea. No one else was in there, so I answered the phones for a couple of minutes.

This woman calls lamenting her daughter's struggles in college algebra with the usual variety of reasons: the lab manual won't work for the course, the instructor is foreign and she can't understand him, she works 30 hours a week, she's falling behind in the course, etc. etc. All I could think of, besides welcome to the real world sweetheart, was why in the hell is this girl's mother calling us to complain.

Have today's teens become soo infantilized that they can't take care of their own college course problems? God forbid the mother tells the daughter to go talk to people herself and see what she can do. Maybe the daughter would grow up a little if mom stopped doing her dirty work for her.

This woman, and everyone else, should really read Robert Epstein's The Case Against Adolescence which argues that adolescence is a destructive concept and that many teens are much more capable that given credit for if they are just given the opportunity.

Monday, January 28, 2008

Opportunity Cost: Teachers Edition

The following sentence is from a letter to the editor of The Waco Tribune Herald. A lady is commenting that TAKS drove her out of teaching after 47 years in the profession. The last sentence is what interests me:

"No teacher worth his or her salt wants to leave a child behind."
Every teacher has a limited amount of time, ability, resources to work with, student abilities and attitudes, etc. with which to work. Given these constraints, is her attitude ignoring reality? You may not want to leave a child behind, but if it's a choice between getting one student up to speed while 29 other students in the class languish in boredom, maybe leaving one child behind is the best alternative. The opportunity cost of helping one student is hindering the progress of 29 others.
I think the problem all goes back to the fact that we operate within a one size fits all educational system. Create more variety in terms of class options, vocational programs, eliminate most restrictions on child labor and wages so students can learn by doing and eliminate compulsory attendance laws and education improves by being better able to better serve the variety of individuals who seek education or training.
I'm not holding my breath.

Wednesday, January 23, 2008

Random Noise: Super Bowl Edition

If I'm going to be sticking to my guns on not consuming information that is nothing more than random noise, then I guess I won't be watching ESPN and Fox Sports Net until the Super Bowl is over.

Tom Brady is seen Tuesday walking around with a boot on his ankle. Every sports talk show was going nuts for about half the day until Brady was seen hours later without the boot.

This nonsense will just continue until Super Sunday. By next Wednesday, the primary topics floating around the sports shows will be probably be: "The Patriots or the Giants: Who has the better practice squad." Or "Eli Manning and Jessica Simpson are currently in the same state. Will this curse the Giants?"

Friday, January 18, 2008

Why I Don't Watch the News

Or at least I try not to. Here is why.

The stories reported are predominantly events that happened that day or the day or two before. So much that happens on a daily basis ultimately amounts to nothing. In statistical terms, the vast majority of news is nothing more than random noise. Many stories that have tremendous fanfare attached (a Hillary Clinton campaign stop in Iowa) or that have some supposed psychological impact (crude oil rising to $100 per barrel) are in the great scheme of things pure random noise. If so much news is just random noise, why clutter my brain with it?

It is also obvious that newscasters have no background in statistics, probability, or maybe even rationality. On January 3, a local weatherman in Waco showed a table listing average rainfall year to date (that is for 2008) and current rainfall year to date. According to this table, we were already 0.14 inches behind for the year. One problem though. You can't make statistical arguments based on a sample size of three days! Showing such a figure was nothing short of pointless and lent itself to misinterpretation. Some basic statistics and probability training would do wonders for news coverage. I'm not holding my breath that it happens.

I believe George Will was the first to say this, but I'm not sure: It is not news when planes land safely. The only time planes are in the news is when they skid off the runway, have engine trouble mid flight, the pilot is drunk or they crash. Over long travel distances you are much safer travelling by air than my automobile, but you would never guess it my watching the news. Once again, a statistics and probability lesson would do wonders.

I mean this in the best possible way: reporters are ignorant. Their sphere of knowledge, just like mine or yours, is severely limited. However, they report on a wide variety of topics in which they can't have more than a cursory understanding. An example: a reporter did a story on the troubles facing a municipal water company. She reported that the water pump was buried so many feet in the ground. Buried implies that the pump is covered by several yards of dirt. But water pumps are not buried, they're covered and fairly easily removed by a mechanical lift with no movement of dirt required. And this is just an example of a silly mistake that I happened to catch. I shudder to think about how many mistakes I miss due to my ignorance of the topic. How many fallacies and erroneous facts abound because reporters don't realize their ignorance?

Since I've more or less stopped watching the news, I am not one bit less informed and my mind is not cluttered with meaningless garbage (Britney Spears). I get a great deal of news off the Internet which allows me to filter out the random noise and instantly check facts if something sounds fishy or if I just want more information. Plus there are non journalists (economists, lawyers, political scientists, mathematicians, you name it) all over the Net who share their specialized knowledge via blogs. I've gotten to the point where I trust a Tyler Cowen or a Michael Barone more than a Brian Williams or Charles Gibson because Cowen and Barone have well known specialities (economics and politics, respectively) and stick to them while Williams and Gibson report on everything from the environment to consumer trends to a UFO in Stephenville. (By the way, what would aliens be doing in Stephenville? I could make a bad joke along the lines of "They can't be looking for intelligent life" but I will refrain from doing so.) I've found that Cowen and Barone will admit their ignorance on any given topic. I'm not sure Williams, Gibson or their type would.

So from what I've discovered, one of the best things you can do for your health, your sanity, and the world (aside from only using one piece of toilet paper per trip) is to stop watching the news.

Friday, January 11, 2008

Maybe they teach French Economics at Marlin High School

After reading this I feel a little better about the state of economics teaching in U.S. high schools, however flawed it may be.

I'm not sure the following paragraph hasn't been absorbed in Marlin, Texas particularly the last sentence:
When French students are not getting this kind of wildly biased commentary on the destruction wreaked by capitalism, they are learning that economic progress is also the root cause of social ills. For example, a one-year high school course on the inner workings of an economy developed by the French Education Ministry called Sciences Economiques et Sociales, spends two thirds of its time discussing the sociopolitical fallout of economic activity. Chapter and section headings include “Social Cleavages and Inequality,” “Social Mobilization and Conflict,” “Poverty and Exclusion,” and “Globalization and Regulation.” The ministry mandates that students learn “worldwide regulation as a response” to globalization. Only one third of the course is about companies and markets, and even those bits include extensive sections on unions, government economic policy, the limits of markets, and the dangers of growth. The overall message is that economic activity has countless undesirable effects from which citizens must be protected.

Thursday, January 3, 2008

New Year's Wishes

Here are my wishes for the new year.
  1. That as long as Bobby Petrino is the coach of Arkansas, they never win a football game.
  2. Despite news to the contrary, that Marlin doesn't get the RTLC plant. After everything that has happened, Marlin isn't worthy of such a blessing.
  3. That people who don't understand the very basics of statistics and probability stop watching the news and reading the paper. More on this later.
  4. That a majority of my students this semester can spell worth a crap.
  5. That the resignations of Falls County and Marlin City officials keeps on coming.
  6. That I start blogging more regularly.
  7. That Jerry Jones does not pull off some Herschel Walker type trade in order to draft Darren McFadden. However, I do hope he gets rid of Roy Williams. In case someone hasn't noticed, Roy can't cover!
  8. That more people read The Misanthropic Economist!

Happy New Year!