EclectEcon

I'm a Schizoid Animal

Peggy sent me this short questionnaire that is supposed to tell me what kind of animal I am. Here are the results:

You are either a Gorilla or a Porcupine personality.

But you may also be a Warthog personality.

The site says I can be only one of those animals, but when I read the descriptions, part of each one fits me and parts of the descriptions are nothing like me.



Maybe that means I'm really a pushmepullyou.

Afternoon Tea at The Dorchester

Voted #1 for afternoon tea in 2007. Click here to see what a posh afternoon tea setting should be like.



We gotta go there next spring.



Now for all the readers, primarily North Americans, who don't know the difference, Afternoon Tea in a posh setting is not the same thing as "High Tea".



From Wikipaedia,

Afternoon tea is a light meal typically eaten at 4 o'clock. It originated in the United Kingdom, though various places that used to be part of the former British Empire also have such a meal. However, changes in social customs and working hours mean that most Britons only take afternoon tea on special/formal occasions.



Traditionally, loose tea would be served in a teapot with milk and sugar. This would be accompanied by various sandwiches (customarily cucumber, egg and cress, fish paste (bloater), ham, and smoked salmon), scones (with butter, clotted cream and jam — see cream tea) and usually cakes and pastries (such as Battenberg, fruit cake or Victoria sponge). The food would be often served in a tiered stand....



High Tea (also known as Meat Tea[1]) is an early evening meal, typically eaten between 5 and 6 o'clock in the evening. It would be eaten as a substitute for both afternoon tea and the evening meal. The term comes from the meal being eaten at the ‘high’ (main) table, instead of the smaller lounge table. It is now largely replaced by a later evening meal.



It would usually consist of cold meats, eggs and/or fish, cakes and sandwiches. In a family, it tends to be less formal and is an informal snack (featuring sandwiches, biscuits, pastry, fruit and the like) or else it is the main evening meal.



On farms or other working class environments, high tea would be the traditional, substantial meal eaten by the workers immediately after nightfall, and would combine afternoon tea with the main evening meal.

But then the entry there adds, quite correctly and culturally specifically,

In recent years, High Tea has become a word for exquisite afternoon tea.

I hasten to add, "This is far from standard and accepted usage of the term." From About.com,

Many people use the term "High Tea" to describe the event I've mentioned above [a long description of a proper, English afternoon tea], probably because it sounds more elite. But High Tea is a much different thing. It was served later (around six in the evening) and consisted of a full, dinner meal for the common people. Tea was still served, but there would also be meats, fish or eggs, cheese, bread and butter, and cake. It was more of a man's meal, than a ladies social diversion.

Also see this, from What's Cooking America:

High Tea is often a misnomer. Most people refer to afternoon tea as high tea because they think it sounds regal and lofty, when in all actuality, high tea, or "meat tea" is dinner. High tea, in Britain, at any rate, tends to be on the heavier side. American hotels and tea rooms, on the other hand, continue to misunderstand and offer tidbits of fancy pastries and cakes on delicate china when they offer a "high tea."



Afternoon tea (because it was usually taken in the late afternoon) is also called "low tea" because it was usually taken in a sitting room or withdrawing room where low tables (like a coffee table) were placed near sofas or chairs generally in a large withdrawing room.

Soft-Core Libertarian

On Facebook and elsewhere, I list my political views as "Libertarian", which in my mind means favouring individual freedom and responsibilities over state or gubmnt interventionism.



I'm far from being a hard-core libertarian, though, as this quiz revealed. Depending on how I answered some of the questions, my score was between 25 and 35 [out of a maximum possible of 160!]. Here is the assessment of scores in that range:

16-30 points: You are a soft-core libertarian. With effort, you may harden and become pure.



31-50 points: Your libertarian credentials are obvious. Doubtlessly you will become more extreme as time goes on.

As you go through the survey, you get the impression that to get a really high score, one must be a wacko-anarchist, something I think of as substantially different from a libertarian. But, then, check out some of the scores listed in the comments here.

Mercenaries

In today's NYTimes, Paul Krugman writes

As far as I can tell, America has never fought a war in which mercenaries made up a large part of the armed force, as is the case in Iraq.

Similarly, so far as I can tell, America has never educated its children in schools operated by such a large proportion of mercenaries (i.e. for-hire teachers vs. nuns) as it does today, a point made by Milton Friedman in his discussions with General Westmoreland when the US was considering moving toward an all-volunteer army (see Greg Mankiw's earlier posting on this topic).

Where Is the Front Line in the War on Terror?

Because of the attack on The World Trade Centre and the Pentagon, we in North America tend to think we are on the front line in the war on terror. But Timothy Ash says we're mistaken [h/t to Judith]. Actually we think we're on the front line but we aren't, while the Europeans seem to think they're not on the front line but really are.

To return from the United States to Europe is to travel from a country that thinks it is on the front line of the struggle against jihadist terrorism but is not, to a continent that is on the front line but still has not fully awoken to the fact.



Only a fool would rule out the possibility of another terrorist assault on what is now styled the American homeland, but the fact is that in the six years since 9/11, there have been several major attacks (Madrid, London) and foiled plots in Europe. In the United States, there have been no major attacks and, as far as we know, just a few averted conspiracies. All the evidence suggests that American Muslims are better integrated than those in Western Europe. Last week's arrest of a group apparently planning a 9/11 anniversary attack in Germany suggests that the threat to the heimat is greater than that to the U.S. homeland.



An invisible front line runs through the quiet streets of many a European city or town where there is a significant Muslim population. Whether you live in London or Oxford, Berlin or Neu-Ulm, Madrid or Rotterdam, you are on that front line -- much more than you ever were during the Cold War. This struggle is partly about intelligence and police work to prevent those who have already become fanatical, violent jihadists from blowing us up at St. Pancras or the Gare du Nord. ...



Iraq is a sideshow in this larger struggle. President Bush may claim that Iraq is the front line in the war on terror, but even some of his senior commanders don't believe that. To be sure, the Iraq war has become an added grievance for disaffected Muslims everywhere, although note that Germany's nonparticipation in the Iraq war did not keep it safe. Nor should we avert our eyes from the further uncomfortable truth that a U.S. withdrawal from Iraq will be celebrated by violent jihadists as a victory.



But the larger truth is that a British soldier returning from Basra to Bradford (a city with a large Muslim population) will be coming from one front line to another. This invisible front line is not a military but a cultural/political one. ...



If we are calm, clear-sighted and resolute, we will eventually win this struggle and remain free. A continent that has rid itself of the horrors of imperialism, fascism and communism will see off this lesser menace too. But it will take many years, and we had better shape up to it.

Pigou Taxes and Junk Food

Last week I wrote about a Winnipeg school that has banned junk food and about the black market that emerged in the wake of the prohibition.



What if, in addition to the ban, the school set up its own sales but charged double the prices one might pay in nearby convenience stores? The higher prices would reduce the quantity demanded and have the desired result of inducing students to eat less junk food, via the substitution effect.



I doubt if the de facto Pigouvian tax (i.e. the administratively set higher prices) by itself would have much effect if the black market were allowed to continue unless the tax were so small that the transaction costs of operating in the black market were larger than the perceived gains to the students, and so the ban would have to be continued.



If the school considers this option, I recommend they just put in vending machines with high prices and make no public statements about the prices. Announcing that they are charging high prices to discourage the consumption of junk food would raise red flags and cause controversy.



When students object to the high prices, the school can then claim that the proceeds are all used for X, where X is something that would otherwise be paid for from fungible funds so that indirectly the net proceeds would end up in the general fund of the school. Perhaps the best way to proceed would be as follows:

• Announce that due to funding shortages, programme X will have to be scaled back.
• After the firestorm of protests, reluctantly give in and concede that well, okay, we'll restore that funding, but the only way we can do so is to raise funds through junk food vending machines (plus kickbacks from the pop and junkfood distributors who will pay to have their machines in the schools).
• Don't tell anyone this is the plan you're following.

Left-Wing Interventionism:Cherchez la Femme

I had long thought that one reason modern developed societies have more gubmnt intervention is that there is a positive income elasticity of demand for gubmnt-provided insurance [i.e. as we become wealthier, we politically demand that the gubmnt look after us more, especially regarding unanticipated negative events].



It turns out there is a strong alternative explanation. According to John Lott, gubmnt intervention in the economy really took off after women were given the right to vote. His analysis is presented in an article in the Journal of Political Economy, and is summarized in his recent book, Freedomnomics:

There is a close relationship between marital status and women's voting patterns — generally, as divorce rates have increased, women have become more liberal. Over the course of women's lives, their political views on average vary more than those of men. Young single women start out being much more liberal than their male counterparts and are about 50 percent more likely to vote Democratic. As previously noted, these women also support a higher, more progressive income tax as well as more educational and welfare spending. But for married women this gap is only one-third as large, and married women with children become even more conservative. But divorced women with children suddenly become 75 percent mor likely to vote for Democrats than single men. [pp. 164-5]



[and from the footnote to the above quotation] Interestingly, men raising children on their own are only three percent more likely to vote Democratic than single men without children.

Of course, given some recent trends among Republicans in the US (and Conservatives in Canada), it is no longer absolutely clear that Democrats (or Liberals in Canada) are the only interventionists out there.



. .



digression: I note that Amazon.ca, Amazon.uk, and Amazon.com prices still do not fully reflect recent movements in the exchange rates!

More Blog Rankings

CurrencyTrading.net has done some re-organization and re-categorization in its latest list of the top 100 economics blogs. The entire staff here at EclectEcon (all 1 of us, though Brian Ferguson plays a big role, too) are pleased to see that EclectEcon is on the list and in some pretty good company.

"Higher Gold Prices? Blame Ahmadinejad, not Bernanke."

Are higher gold prices a sign that many investors are expecting the rate of inflation to rise rapidly?



Not necessarily, according James Pethokoukis, columnist with USNews. He summarizes strong evidence that inflation expectations are, if anything, dropping:

Since their peak on September 20, the difference between nominal and inflation-indexed Treasury yields from five to 10 years in the future has come down to 2.57 percent from more than 2.6 percent. This is probably still higher than Fed officials would like, but not in truly worrisome territory.

So if high gold prices are not the result of rising inflationary expectations, what is causing them?

I think the real message of gold today, as it has been since 2001, might just be that we live in a world of heightened risk, and gold has always been the ultimate safe-haven investment.



The most recent surge in gold prices comes at the same as time there's been more talk—particularly by the French—of taking military action again Iran if it doesn't abandon its efforts to build a nuke. (Interestingly, the last great gold surge happened during the Iranian revolution in 1979.) ...



After falling throughout the 1980s and 1990s, gold bottomed in 1999 and then began a steady march higher in early 2001. You could interpret that 20-year drop as a sign not only of diminishing inflation but also that the world was becoming a safer place, with less threat of a nuclear war. Likewise, the rise since 2001 and 9/11 is a sign that the world is becoming a dangerous place again.



The fear factor is also at play with stocks. The market's current price-to-earnings ratio is right at its historical average, a strangely subdued state given fat corporate profits and a lengthy economic expansion. Higher gold prices? Blame Ahmadinejad, not Bernanke.

How Can a Firm Declare a Dividend When It Is Experiencing a Liquidity Crisis?

I have not studied much accounting in the past 72 years, but my understanding of a liquidity crisis is that you're having one when you are short on funds although you expect to receive some in the future. As a result of this shortage, you borrow some to tide you over until your receivables come in or until your other assets become more liquid. You have enough wealth/assets to cover your outstanding liabilities, but only if you don't have to convert those assets into cash at distress-sale prices.



Isn't that what happened with Northern Rock?



If so, and if Northern Rock really is short on liquidity, what on earth is it doing declaring a dividend payable next month? Dividend payments are cash outflows, so where is Northern Rock expecting to get the cash for these dividend payments? Is it expecting to receive buckets of cash in the meantime? Is it now expecting that the Brit gubmnt will bail them out no matter what they do? Or is management looting the firm (and funds from the Bank of England) on behalf of current stockholders? Or is the firm maybe not just illiquid but also insolvent, and perhaps management is trying to hide this possibility?



From The Scotsman, courtesy of Brian Ferguson:

Crisis-hit Northern Rock sparked controversy yesterday by pledging to pay shareholders a 30 per cent higher dividend, following its bail-out by the Bank of England.



It said it would honour its 14.2p dividend announced in July - up from last year's 10.9p a share - that will cost the group nearly £60 million, or 7 per cent of the value of shares in the bank. ...



Moneysupermarket.com, said: "There will be a lot of people bemused by the whole process - how Northern Rock found themselves in the position they are in at the least.



"Now that they are effectively being backed by a government guarantee, most people will be astonished by the fact that shareholders are still receiving a significant dividend.



"It does seem inappropriate that shareholders should be getting a dividend at the same time the organisation is being underwritten by the Bank of England."

Is it possible that the current management is trying to reduce the firm's attractiveness as a takeover target even more than the recent liquidity crisis has already? What other plausible explanation is there for why rational maximizers might do this?



If I had much money in Northern Rock, this latest development would really encourage me to move it if I hadn't already done so.



Update: From the WSJ ($)[h/t to Brian Ferguson], it looks as if Northern Rock has decided not to pay the dividend after all. This makes sense. If it is looking for a buyer, it will be more attractive if it has some cash and hasn't had it's assets looted to pay off current stockholders.

The Newcastle bank said in a statement late yesterday that it was in preliminary discussions with potential buyers but any deal was far from certain.



Meantime, the lender, needing to stockpile cash and buy time to hash out a deal, said it has suspended its per-share dividend of 14.2 pence (29 cents) that was due Oct. 26, just days after insisting it would pay the dividend.

Remind me again. Why are they looking for a buyer if they are solvent but are merely facing a short-term liquidity crunch? These recent developments look like lots more than just a cash-flow problem to me.

Just Call Me "Maestro", II

I have just learned that I will be one of the guest conductors of the Muskegon [Michigan] High School alumni band this Friday, September 28th, at the high school football homecoming game.



They told me not to wear my tails.

The Underwear Model

King Banaian says that no matter what people say Alan Greenspan might have thought, sales of men's underwear are not a leading indicator of economic activity.

Prison Suicides: An Economics Perspective

In discussing the confusing and confused results and arguments about the deterrence effects of the death penalty, I once wrote that it did not surprise me that studies had conflicting results. In fact it would not have surprised me to learn that, in fact, the death penalty provides only minor deterrence if any.



My reasoning was this: there are many fates worse than death. The death penalty is surely not the worst thing with which we can threaten potential murderers. Prison conditions can be truly horrible, bordering on being so intolerable that prisoners would actually prefer being on death row to being in the general prison population. And some would prefer death to life in the general prison population. [see my article on The Economics of Cruel and Unusual Punishment for more].



One implication of my earlier work is that if prison does indeed provide a fate worse than death, then the suicide rate among prisoners should be higher than that in the general public. And if that is the case, it should not be surprising that the death penalty adds little in the way of marginal deterrence.



And now, thanks to Tim Worstall, I have come across some evidence consistent with this analysis:

There were around 600 deaths in custody in England and Wales last year, according to a report published today.



The figure, calculated by the Forum for Preventing Deaths in Custody, covers deaths in prisons, police cells, secure hospitals and young offender institutions and includes those from natural causes, suicides and murders.



Around 400 of the deaths were due to natural causes and 200 were self-inflicted, a spokeswoman for the Ministry of Justice said.

As Mark Wadsworth points out, this is actually a lower death rate (although a vastly higher suicide one) than the general population.

The implications of this finding are clear: instead of arguing about whether to institute or re-institute the death penalty, we should be encouraging our gubmnts to worsen prison conditions. Bad prison conditions would serve as a much greater deterrent than threats of the death penalty for many potential murderers.

Will the Nominal Rate of Interest Be 9% in the Foreseeable Future?

Former student Ravi sent me this item about Tiger Woods' possible pension funds. It asserts, in part,

If Woods keeps winning at his current rate, enjoys a nine percent annual return and captures just seven FedEx Cups in his career, he could reach $1 billion in retirement payouts courtesy of the PGA Tour Inc.

Nine percent? NINE PERCENT??? Using the Fisher Equation (named for its discoverer, Professor Equation), that means (assuming a real rate of interest of about 3%) that they think the expected rate of inflation will be about 6% over the rest of Tiger Woods' career. I don't really know of many people who expect the rate of inflation to be that high, and the money markets certainly imply a much lower expected rate of inflation with long-term nominal rates down around 5% or so.



What kind of risk do they assume Tiger Woods is willing to assume to get that kind of return? Are they thinking he will place his entire nest egg in sub-prime mortgages (I gather many are available cheap these days)? Or did they just keep messing with different interest rates until they found one that yielded the desired results?

Bailing Out Banks: Can You Say "Moral Hazard"?

Northern Rock, a smallish bank in the UK, recently faced a potential liquidity shortage when it could no longer convert some of its assets [see Tim Worstall's comment for the correct details] into ready cash because nobody would buy those assets at any price other than a substantial discount until they had a better idea of the actual risk involved. For the most part the assets will pay off over time, and no one seriously questioned the solvency of Northern Rock. The bank just needed to borrow some funds to tide them over.



And the Bank of England stepped up to provide these funds. That's the way the banking system is supposed to work.



Meanwhile if depositors' accounts are insured (up to fairly high limits), they were in no danger of losing anything (other than their own short-term liquidity) even if Northern Rock had been insolvent. And if depositors' accounts are not fully insured, there is no good argument for asking all the taxpayers to bail them out ex post. It's like telling folks they don't need to pay their insurance premia because the gubmnt will provide the insurance for them anyway; under such a policy, only chumps and patsies buy insurance as everyone comes to rely on the gubmnt.



Why depositors decided to stage runs on Northern Rock escapes me. But maybe had I been there with all my money tied up in Northern Rock, I'd have been a bit panicky, too, as I saw others queuing up for their cash. (though I'd have probably tried to open an account at a different bank and then transfer the funds electronically via the internet rather than stand in the long queues). [for an interesting historical perspective, Tim Worstall has this. Also see this by Tim Worstall.]



If it turns out the bank is, indeed, insolvent, the officers of the bank will (or should!) likely lose their jobs, depositors will still get their money (up to the insurance cap, or lose their money if they didn't make sure their deposits were insured*) and the stockholders of the bank lose their money. That's the way a good banking system should operate.



But now the British gubmnt has buggered it all up. They've told bankers (this is a very loose paraphrase)(see Stephen Pollard)

Go ahead. Take big risks with your depositors' money. If the risks pay off, you will become fabulously rich and your depositors and stockholders will be happy. If your risks don't pay off, the nanny state will be here to bail you out (in the guise of bailing out the little-guy depositors). Taking more risk is a winning proposition for you and you'll never lose a cent.

I once asked David Laidler, colleague and world-class monetary theorist, if we could afford NOT to let a bank go under if it was indeed poorly managed to the point of insolvency. He fully understood the point I was making: The risks involved with a bank's lending, buying commercial paper, etc. are complex to the point that it would be inefficient to ask depositors to bear those risks indirectly. From that perspective, deposit insurance might be a good idea (and it surely would be if it were optional). But bailing out banks merely rewards inefficient risk-taking by managers, and the cost of bearing that risk is fobbed off onto the taxpayers.



But now that the Brit gubmnt has promised to bail out the banks, no matter what risks they take, watch for much more gubmnt regulation and intervention, telling them what risks they will be allowed to take. And then watch for entry from near banks (e.g. ING) and other institutions, in an attempt to circumvent the gubmnt interventions. I give 'em ten to fifteen years.



* In response to an e-mail question about deposit insurance, Tim Worstall tells me,

There is gubmint provided. 100% up to £2,000 and then 90% up to £34,000 (or thereabouts).



The fall out from this is likely to be that there'll be something very like FDIC: £100,000 financed from a levy upon the deposit taking institutions.

But the question of whether gubmnt provided deposit insurance is a slam-dunk efficiency-enhancing policy is far from settled. See this. What puzzles me is why private insurance hasn't become more common for institutions with many large deposits.

Kidney Stones

I've noticed that this site gets numerous visits from people looking for pictures of kidney stones. I posted one such picture back in July, but here is perhaps a better photo of two more stones that I got rid of a couple of weeks later:

Several people suggested that we have them set into matching rings for Ms. Eclectic and me... You know, sharing a bit of myself as a symbol of our togetherness. For reasons that escape me, both she and the jeweler refused.

Fans and Sports: A Radical Proposal Reconsidered

While watching the Mets-Marlins baseball game last Thursday night, Ms. Eclectic and I were shocked and stunned to see that a Marlin fan had thrown a baseball onto the field and actually hit the Met's pitcher on the wrist [see this].



My immediate reaction was that the Marlins (the home team) should be required to forfeit the game. Actually I was surprised that the Mets stayed on the field after that happened. At least play was stopped until stadium security removed several people from the stands.



In saner moments, I realize that probably the Marlin security team did the right thing. Sometimes harsh punishment is called for; sometimes it isn't.



Addendum: and then on Friday night, a fan in the upper deck at Yankee Stadium threw a ball at Alex Rios (Trono Blue Jay) after Rios hit a home run. What do you figure the odds are that Yankee Stadium security found the culprit or did much about it?



Me neither.

Holocaust Denial, Anti-Zionism, and "Truth"

My friend Eric Litwack, a colleague at the International Study Centre in England, has an article in the most recent edition of Engage.

The article deals with historical truth, holocaust denial, and anti-Zionism. To me, the most pithy portion of the article is summarized as,

...[A]nti-Zionism and Holocaust denial are different contemporary expressions of antisemitism that exploit pervasive historical ignorance and radical relativism in the promotion of their social designs: the destruction of Israel and the rehabilitation of Nazism, respectively.

At the heart of his article is a discussion of "truth". My own perspective is somewhat different from Eric's in this regard, and is probably best represented by discussions in Richard Posner's work on the Economic Analysis of Law. Essentially, this perspective acknowledges that historically, perceptions of truth have varied through time. A classic example is the morphing of "the world is flat" to "the sun is the centre of the universe" to "the universe has no centre". Posner asserts, as a result of his work, that truth is whatever people agree it is.



This perspective, while frustrating, is extremely empirical and is even a bit frightening to those of us (like me) who tend toward absolutism and wanting definitive answers to everything. And yet I find the perspective extremely compelling.



Also, this perspective has extremely important implications for the history of the holocaust and for political views concerning Israel. If truth is whatever people agree it is, then holocaust deniers must constantly be confronted with the best evidence available. We cannot rest and relax, confident in our knowledge (or belief) that the truth will prevail, since the truth could well be transformed in content to something else without constant diligence and work.



My own perceptions of truth about Israel have been heavily influenced by the writings of Sir Martin Gilbert. These are careful documentations of events leading up to the creation of Israel, and they deserve much wider dissemination and reading, especially in the pursuit of truth and in the continuing mission to head off untruths promulgated by anti-Semites.



Eric Litwack is a scholar. He does not put forward only his support for Israel in his writings. He also cautions,

... [S]upporters of Israel must ensure that their claims and arguments are securely moored to the mast of historical truth, and this will sometimes imply both opposition to propaganda and fanaticism from within our own ranks, as well as a possible qualification of some long cherished beliefs. No comparable school of self-critical historiography on the subject of Zionism exists elsewhere in the Middle East, and this is a tribute to Israeli democracy and scholarship.

From my perspective, since there are no such things as "historical truths", I interpret Eric's statement to mean that we must continue to provide the best evidence we have of holocaust events and of the formation of Israel. We must also meet head-on claims of evidence that are contradicted by the best evidence and logic that we have at our disposal.

Exchange Rates and Strong Economies

I'm sure I am missing something, but why is it that strong economies cause the value of their country's currency to rise on the foreign exchange markets?



Doesn't a strong economy mean higher domestic incomes and hence more imports, thus putting downward pressure on the currency? Or is that being too Keynesian?



Or is it that the strength of the economy signals reduced risk for investors and hence attracts more inflows of foreign capital, driving up the price of the domestic currency?



Or is it that the [comparative] strength of the economy signals that the central bank will likely raise or keep interest rates above those in other countries? If so, why not wait until that actually happens?



At any rate, "strong economy" does not strike me as a very significant explanation for the recent run-up in the US price of a Loonie. Instead, to understand why the US price of Cdn dollar has risen, just look at the world price of oil. Like it or not, the Canuck buck is a petro-currency.

The Emergence of Black Markets When Products are Banned

When authorities ban a product, even if it is for our own good, some of us will gladly pay a big premium to get the product. We see it all the time.



One of the latest examples comes from Winnipeg [h/t to Brian Ferguson]:

Students at a Winnipeg high school boast on a Facebook site they're running 'black-market' operations out of their lockers — selling pop, chips and chocolate bars banned for sale on school property under Winnipeg School Division's tough nutrition policy....



The division adopted the recommendations of a 2005 provincial task force by

banning junk food in favour of salads and wraps in cafeterias, and allowing

only healthy snacks and drinks in vending machines. The policy is aimed at

reducing obesity and related health problems.

I may be asked to mail in my Libertarian credentials for saying this, but I think the school authorities are doing the right thing. And if I were a parent of students in that school system, I would hope that someone would begin to monitor the Facebook postings and crack down on the black market dealings.



But personal views aside, this example is just further evidence that when products are banned, black markets emerge very quickly. After all, people respond to incentives.

CSI Miami - It's the Sunglasses

I really don't much care for CSI Miami. It doesn't have much CSI in it, and it has far too much posturing. I do find it amusing, though, because of the over-the-top acting. So do others, I guess.



Here is a youtube video of David Caruso posturing with his sunglasses [h/t to Brian Ferguson]:

Rising Food Prices and Inflation in China

The Economist has a somewhat disappointing story about rising food prices and inflation in China ($). It essentially says that the rate of inflation is rising in China, and a major reason is that food prices are rising rapidly. Sadly, that is the extent of the analysis.



There is no mention of the fact that aggregate demand has been growing rapidly in China. And given a positively sloped short-run aggregate supply curve, it follows that prices would rise.



There is no mention of the fact that because China has tried to peg its currency to an exchange rate that is too low, export growth has played a major role in causing the rise in aggregate demand.



There is no mention of the fact that in an attempt to sterilize some of the net inflows of foreign currency, central banks have a tendency to increase their own money supply, thus creating overall inflationary pressures.



And there is no mention of the fact that globally, in part due to US policies concerning sugar, the demand for corn and other grains to produce biofuels has sky-rocketed, driving up grain prices around the world and hence affecting food prices everywhere.



Instead, the article smacked of typical MSM journalism. The Economist should be able to do better.

The Ultimate Strip-Tease

This video is at the same time one of the crappiest strips I've ever seen [because it's rushed and not seductive, not because it's PG], and yet it is also one of the most intriguing [h/t to Judith].

Why Editorial Pages Have Syndicated Conservative Columnists

King Banaian has a superb analysis of what happens in j-skools and in most newspapers in his explanation of why so many syndicated columnists (e.g. George Will) are conservative:

Suppose you run a paper that runs five op/ed columns a day. Four will be written by liberal commentators, one by conservatives in the interest of "balance". The market for liberal commentators flourishes and the j-schools flood with young liberals seeking entry into that market. The j-schools discourage conservatives from applying for admission, and as a result the market for conservative commentary contracts into a small oligopoly of a few writers. Each oligopolist is syndicated broadly; many of the liberal writers end up being columnists for a major city newspaper and not syndicated. Editors will eventually not carry local conservative writers, because a few columnists can dominate the industry and provide the conservative view at low cost. They, in short, outsource the right side of their "balanced" newspapers.



Then some guy gets the bright idea to test for media bias and chooses, as his measure, the number of papers each columnist appears in. What will he find?



What he finds is a great trove of small cottage liberal writing industry, and a few grizzled veterans of conservative commentary providing one column placed on the far side of hundreds of papers. And will report it as a success ... for conservatives.



And the newspapers will smugly report same, and the j-schools will tut-tut and go back to admitting [even] more liberals.

It's Good to Know It Still WorksEven at my age

A quickie test in logic (h/t to Alan Adamson):

You Are Incredibly Logical

Move over Spock - you're the new master of logic You think rationally, clearly, and quickly. A seasoned problem solver, your mind is like a computer!

How Logical Are You?

Maybe so, but I would never get a job at Google. I am neither smart enough nor creative enough to deal with interview questions like these (h/t to Craig Newmark).



(note: just to make sure the site wasn't rigged to make everyone feel good, I later tried the quiz and made sure I answered each question incorrectly. It does, indeed, provide different feedback for different scores.

Master's Degree in Media Studies: Worthless

There is a strong implication that a Master's Degree in media studies is a worthless degree. My suspicion is that it ranks right up there with hydraulic socionomology on the worthless scale. Here is the statement with that implication, from an article, "Is College Worth the Cost, Part 2" by Anya Kamenetz on Yahoo.

The grad students I meet generally have high aspirations and a desire for meaningful careers. Yet it's still quite possible to become a novelist without an MFA, a journalist without a journalism degree, and just about anything without a master's in media studies.

I burst out laughing as I read that last phrase.



Overall, the article was interesting. It didn't talk only about the major successes of people who borrow to finance MBAs, nor about the financial losses of those who borrow for their M.Ed. Also there was no discussion about online masters degree programs. But it did point out some of the different financial payoffs (I know, there are other non-pecuniary payoffs from education) from earning a Master's degree in various areas. For example,

According to the U.S. Census Bureau, the payoff from social science and liberal arts master's degrees is actually negative — the average liberal arts MA earns less than the average of all BAs. [EE: but what about compared with the average of all social science and liberal arts BAs?]



And according to an in-depth study conducted back in 1999, those with Ph.D.s in the humanities had the highest debt and lowest income of all students in all disciplines.



Moreover, universities are increasingly relying on part-timers rather than tenured professors. That means the number of well-paying, secure jobs in academia is going down.

At the same time, though, many Masters students are willing to cough up mega-bucks to attend programmes like those at The University of Chicago, where the financial success of the graduates seems much more likely. See this [h/t to Brian Ferguson].



Again from Kamenetz,

In general, master's degree students come out with an average of about $32,000 in debt, while for Ph.D.s it's around $53,000. Those with master's degrees earn about 18 percent more than those with bachelor's degrees on average, and Ph.D.s earn about 50 percent more.



Technical fields have a bigger payoff. Graduates with master's degrees in computer science, engineering, or math earn about 50 percent more than those with bachelor's degrees.



Education, one of the most common master's degrees, has a comparatively small but positive payoff.

In discussing this piece, several of us agreed with its opening,

"Isn't a master's degree the new bachelor's?" I hear this all the time when I visit college campuses.



In some ways, the answer is yes. The number of master's degrees conferred is expected to rise 30 percent over the next 10 years, and 40 percent of college graduates will enroll in a graduate program within a decade after college.

If BAs are so common and easy to obtain, perhaps the value of an MA is that it distinguishes someone from other people by offering some further credentialization.

NFL Pre-Game and Post-Game Shows:The Noticeable Lack of Screaming Is a Bonus

Yesterday I finally had a chance to watch some NFL pregame and postgame shows. I found I was enjoying them more than I had in the past few years and wondered why.



Then it hit me: the talking heads were actually offering analysis and commentary. They weren't yelling at each other like drunks in a sports bar (though I confess I didn't see all the shows, and some -- Terry Bradshaw? -- might still be shouting a bunch).



Here's hoping the media folks and the producers got to all the commentators and told them to calm down and be serious. It is a wonderful change; may this please not be just a temporary phenomenon or, worse, a figment of my imagination.

Flanders Fields

Yesterday, the community band of which I am a member, played at a decoration ceremony for veterans at a local cemetery. During the ceremony, someone read the well-known poem, In Flanders Fields, by Dr. John McCrae, who was a Lt. Col. in the Canadian Army.



I've heard the poem many times, but this time, for some reason, the last stanza really hit home:

Take up our quarrel with the foe:

To you from failing hands we throw

The torch; be yours to hold it high.

If ye break faith with us who die

We shall not sleep, though poppies grow

In Flanders fields.

It knocks the wind right out of me.

Poutine

I have lived in Canada for nearly 40 years. When someone first told me about poutine (French fries, melted cheese curds, and brown gravy), I couldn't imagine people would crave such a dish.



Craig Newmark has loads of information about poutine here.

Here is the introduction to the article in Wikipedia,

Poutine (pronunciation in IPA as heard in Quebec French [puʦɪn] — listen to it in .wav format) is a dish consisting of French fries topped with fresh cheese curds and covered with hot gravy (usually brown gravy) and sometimes other additional ingredients. The curds' freshness is important as it makes them soft in the warm fries, without completely melting. It is a quintessential Canadian comfort food, especially but not exclusively among Québécois.



Poutine is a fast food staple in Canada; it is sold by many fast food chains (such as New York Fries and Harvey's) in the provinces, in small diners and pubs, as well as by roadside "poutine trucks" and "fries stands". International chains like McDonalds, A&W, Kentucky Fried Chicken and Burger King also sell mass-produced poutine across Canada, especially in Quebec. Popular Quebec restaurants that serve poutine include Chez Ashton, Lafleur Restaurants and La Belle Province. Along with fries and pizza, poutine is a very common dish sold and eaten in high school cafeterias in southern Ontario. It's also a very popular meal at ski resorts.

The Wikipedia article also mentions the role of poutine in politics:

In a segment on the television series This Hour Has 22 Minutes during the 2000 American election, Rick Mercer convinced then-Governor of Texas George W. Bush that Canada's Prime Minister, Jean Chrétien, was named Jean Poutine and that he was supporting Bush's candidacy. A few years later when Bush made his first official visit to Canada, he joked during a speech, "There's a prominent citizen who endorsed me in the 2000 election, and I wanted a chance to finally thank him for that endorsement. I was hoping to meet Jean Poutine." The remark was met with laughter and applause.



"Poutine", pronounced identically, also happens to be the French spelling of Russian president Vladimir Putin's surname, which has given rise to some jokes and wordplay.

Animator vs. Animation

Is this a cartoon or what? Whatever it is, it's a captivating two or three minute thing.