EclectEcon

Eugene A. Birnbaum

I have learned from his daughter that economist Eugene A. Birnbaum died of cancer on May 16th, 2008. I wrote about him a year and a half ago here.



His daughter wrote,

My father had a lust for life and a thirst for conversation and debate about economics, politics, and finances. A couple of years ago when I asked him if he was afraid of dying, he told me, "I'm not afraid of dying, I just want to live." It really was his love of his work that kept him going, even in the days just before cancer took his life.

Missing the Inflation Targets

Romanian monetary policy seems to have messed up after having done so well for awhile. From the RGE Monitor,

# Plojhar (via Bloomberg): More rate increases will be needed, up to 11% this year, in face of overheating, high inflation, and a potential renewed currency weakness

# March inflation came in higher-than-expected at 8.63% yoy

# Danske: Inflation likely to remain well above NBR official inflation forecast in both 2008 and 2009. Expects key policy rate to be hiked to 11.0% over next 12 months

# NBR Governor Isarescu: Inflation rate will remain 'relatively high' in coming months, creating a risk of a price/wage spiral

Commenting on these points, Gabriel Mihalache has written,

For what it’s forth, inflation in Romania went from dizzying 14% in January 2004 to 4% throughout the first half of 2007 and then, after July 2007, it spiked into 8-9% territory.

This graph (courtesy of Economic Investigations) shows just how far Romanian monetary policy has gone astray over the past few years:

The dots are the end of year inflation targets, the dashed lines are the +/- 1% target band and the red line is actual inflation.

Wow! Look how that red line has taken off! As Milton Friedman used to say, and as my colleague David Laidler has often reminded us,

Persistent inflation is always and everywhere a monetary phenomenon.

More Hateful Anti-Semitism from the UK's University and College Union

On Wednesday,

The University and College Union (UCU) ... passed a motion that would allow for the reintroduction of a boycott of Israeli academia.



At its annual congress in Manchester, the motion was passed without debate and by a show of hands.



The motion follows last year's attempts by the union to implement a similar boycott motion, but was withdrawn by the Union following undisclosed legal advice.



This year's motion was debated ... despite legal advice which clearly states that any boycott of Israeli academia would be in breach of the unions own anti-discrimination policies and British anti-discrimination laws.

As regular readers know, I oppose this boycott on two distinct grounds.

• I favour academic freedom and think we should not ban association with scholars from any country simply because of that country's policies or abuses of human rights.
• I see no reason (other than anti-Semitism) to single out Israel when there are so many countries that are truly horrible.

Update: Here is more from Engage, a site well-worth visiting:

UCU Congress passed a motion which incites members to discriminate against Israeli academics on the grounds of their nationality. ...



There was a short debate, dominated by procedural wrangling which was curtailed suddenly and quickly when somebody moved "that the motion be now put". The chair called for a final speech for the motion, didn't allow one against, and 90% of the delegates voted for the motion.



Although the boycott campaign has always demanded the right to have a proper debate, when it came to it there wasn't any serious debate. A couple of demagogic "as a Jew" speeches from Michael Cushman and Haim Bresheeth and it was all over.



There was no debate on whether "criticism of Israel as such is antisemitic". There was no debate about what it means to claim that Israeli academia is "apparently complicit" in Israeli human rights abuses. There was no debate about the significance of UCU's official encouragement to members "to discuss the occupation with individuals and institutions concerned, including Israeli colleagues with whom they are collaborating."



UCU, again has an antisemitic policy, one which violates its own constitutional commitment to equality and which also violates the Race Relations Act 1976. It was passed after only trivial debate and consideration.



Congress rejected an amendment which would have stipulated that there could be no call to boycott Israelis without a ballot of the UCU membership. Congress doesn't want to ballot the membership. It wants to dictate policy to the membership.

Update: For more, see Michelle Malkin and her references, especially to Melanie Phillips.

Substitution, Gasoline Prices, and Small Cars

It makes sense: As the price of gasoline rises, many people switch from buying large cars (and trucks and SUVs) to buying smaller cars. The result is that the price of small cars rises and the price of large cars plummets. This effect was first presented systematically by Ake Blomqvist and Walter Haessel in the Canadian Jl of Economics back in 1978 in "Small Cars, Large Cars, and the Price of Gasoline".



Now, thirty years later, we are seeing the same thing. From the Associated Press [h/t to Brian Ferguson],

``The small cars are very hard to get right now. The cars that were $5,000 are now $7,000,'' [said used-car dealer, Mike Haile].



In the past year, the average used small car price has gone up 2 percent, from $9,278 to $9,470, according to wholesale auto auction data collected by the National Automobile Dealers Association [NADA]. There's evidence that the prices are accelerating, according to recent data from J.D. Power and Associates.

Okay, so their numbers differ considerably, but they're in the same direction. And meanwhile,

The increases are in contrast to used full-size sport utility vehicles, whose prices have dropped $1,600 to $2,000 in the past year, said Paul Taylor, the NADA's chief economist. The average sale price of all used vehicles in the U.S. dropped 2.5 percent in the past year, the NADA reported.

If you don't drive much, and if you really want a big gas-guzzler, now might be a fun time to go shopping!

Lara's Theme

Somewhere, My Love....

Granddaughter #5. I claim she came out smiling.

Can the Solow Growth Model Explain This?

Several months ago, I questioned the usefulness of Solow-type growth models. Here, courtesy of Stephen Gordon, is an example of why I think the study of political economy is so much more important (The graph shows real GDP per capita from 1870 - 2000, with Canada in red and Argentina in turquoise).

Stephen points out that the economies were very similar up until the mid-1930s:

Up until the 1930's, the two countries followed very similar paths: foreign investment financing the development of resource-based economies. But then the 1930's happened, and Canada and Argentina parted ways.



This is the best graphical demonstration that starting points are not destiny...

Hiring and Firing: Reducing Employee Search Costs

No matter how much time and money an employer might spend on screening potential employees, they cannot always get it right. Furthermore, screening and sifting and rehiring when mistakes are made can be expensive.Zappos, an internet shoe seller, has a unique approach:

Here's how it works. All new hires spend their first four weeks in a training program that “immerses them in the company's strategy, culture, and obsession with customers.” New hires receive their full salary during this training period. Then, after the four weeks are up, Zappos offers each of them $1,000 on top of the money they've already earned to quit. Now.



“Why? Because if you're willing to take the company up on the offer, you obviously don't have the sense of commitment they are looking for,” Taylor writes. “It's hard to describe the level of energy in the Zappos culture—which means, by definition, it's not for everybody. Zappos wants to learn if there's a bad fit between what makes the organization tick and what makes individual employees tick—and it's willing to pay to learn sooner rather than later.”

I guess this will work if the offer provides a good, incentive-compatible screen. However it is not always a good screening device.



Many years ago, the University of Western Ontario paid a tenured faculty member two and a half times his annual salary to resign. Immediately a number of us tendered offers to resign in exchange for the same buy-out. The administration's response,

That's the problem, John. Only the people we want to keep would be the ones who leave.

And as one commenter on the Zappos piece implied, for $1000 upfront now, I will promise not to apply for a job at Zappos, save Zappos the training costs, and we will both come out ahead.

Snopes Explains "Restocking Fees"

A recent entry at Snopes.com presents a copy of an e-mail that has been making the rounds, complaining about Best Buy's practice of charging a 15% restocking fee when you return non-defective merchandise.



Barbara Mikkleson, of Snopes, explains the rationale for restocking charges:

• They help cover the costs when people treat a retailer as a lending "library" where they can borrow camcorders for weddings, GPS receivers for trips, etc.
• They tend to be enforced primarily for items that customers are more likely to want for only short-term use.
• If not imposed, the frivolous returns from inconstant customers raise the store's costs, which must be covered somehow if the place is to stay in business.
• If you know what you want and are unlikely to return it, you might want to shop at places which charge a restocking fee, since their costs will tend to be lower.

Let me add two points, however.



First, so many of us have become so accustomed to being able to return items we don't want, we don't anticipate having to pay restocking fees. Facing these fees suddenly brings us up short and annoys us. If stores charging restocking fees don't want to lose our business over the longer run, they might want to make sure we understand the policy up front. We as consumers have an obligation to understand the contract we enter, but stores who do something which we don't expect should be careful if they don't want to alienate their consumers.



Second, I have never been charged a restocking fee, even at times when I thought I should have been and even offered to pay one. For example, last fall we ordered four new tires for our car but before they arrived, the car pretty much died. I offered to pay a restocking fee to the dealer, but he insisted that we receive a full refund. You can bet he'll get more of our business in the future.



And then there's Nordstrom's....

Graphs about Global Warming

A regular reader forwarded this link to me. The conclusion of the article summarizes the major points with this set of graphs:

Taken together, these graphs seem to indicate two important points:

• Global warming (assuming it can be measured reliably) seems to move more closely with solar activity than with the burning of hydrocarbons.
• Rising sea levels (albeit very small rises) and glacial shortening seem to have begun long before the major increases in the burning of hydrocarbons.

If these relationships continue to hold up, perhaps it is time to stop worrying about the possibility of human-induced global warming.



Perhaps, too, it is time to revoke Al Gore's Nobel Prize.

More Regional Differences in the Canadian Economy

With world demand for energy and food exploding, it is not surprising that exports to the rest of the world from Canada's provinces which specialize in the production of those products are also growing rapidly.



At the same time, the decline in new-home building and renovations, especially in the US, is hitting the timber-producing sectors of British Columbia (and to some minor extent Ontario and Quebect) pretty hard.



Meanwhile, because of the rapid appreciation in the Canadian dollar, manufactured goods, produced primarily in Ontario and Quebec, are in much less demand in the US.



Put all these effects together and overall there has been a decline in Canadian exports, but not from the prairie provinces, which export gobs of energy and food.



As Peter Hall writes,

Why the differences? It’s largely about what’s for sale. Central Canada has the automobile and auto parts industries, machinery and equipment, and a range of primary and consumer products. Demand for these products has faltered across the board, with key industries suffering double-digit declines. Forestry, critical to British Columbia’s exports, is suffering as the US housing market implodes. In contrast, searing global demand for energy, agri-food products and fertilizer are a boon for the oil-and-gas and bread-basket provinces. ...



Will this turning of the provincial growth tables persist? The boom in the Prairies will not fade fast. Energy prices are forecast to fall to more reasonable levels later this year, but strong investment will, on balance, ensure higher export volumes. Prices for wheat and other coarse grains will continue to rise as global food supplies remain stretched, ensuring strong export activity. Fertilizer shipments, another key growth source, will continue to expand as food shortages bring more marginal arable land into production worldwide.

The Boycott Issue That Will Not Die

It looks as if some of the leaders of the UK's UCU will be attempting to implement a formal boycott of Israeli universities and academics again this Wednesday at the UCU's annual congress. This boycott has never made any sense to me since it castigates academics and universities in a country that does more for democracy, freedom, and human rights than any other country in the region. Why doesn't the UCU go after Saudi Arabia or Iran or Syria or, for that matter, China? One plausible explanation for the behaviour of those promoting the boycott is simple: anti-Semitism.



For more, see the excellent work by Engage. As David Hirsch says in an article recently reproduced in Engage,

No antiracist and no scholar should need the case to be explicitly set out against a campaign to exclude Israelis from the cultural and economic life of humanity; especially from the global academic community. There is no campaign to exclude anybody else; only Israelis. That a reputable scholarly journal feels it has to commission an article giving reasons why such an exclusion is a bad idea should tell us something worrying about the depth and scope of contemporary antisemitism.

Iran and Oil

One would think that with approximate doubling of oil prices (in US$) over the past year, Iran would be gaining even more clout in the Middle East and on the world scene. Stratfor Analysis doesn't think so ($ required).



Stratfor points out that although Iran is a major exporter of oil, its production, exports, and reserves per capita are waayyyy lower than for the other major oil producers in the Middle East.



Also, Iran is not a rich country overall; it's per capita GDP is roughly only 40% of Mexico's!



In addition, Iran's absurd subsidies for domestically consumed gasoline and its inadequate investment in refining capacity, mean that Iran ends up importing about 40% of its gasoline. The result is that as Iran earns more from its oil exports, it pays more for its gasoline imports, and on net is not a lot better off — certainly nowhere near as much better off as other Arab oil producers; and whatever gains it experiences do not have a major per capita impact.



Stratfor opines that with a more secure investment atmosphere, western AND Chinese firms would be very active in Iran and their oil output would be much greater than it is. But given the low reserves, per capita, Iranian leaders might well be choosing to hold more oil in the ground and sell it later (i.e. speculating on even higher oil prices in the future).



The other interesting point made by Stratfor is that because Iran is not making as much on its oil production as are other Middle East countries, its influence (vis-a-vis the Sunnis) will continue to wane. And that might well be one reason that Syria and Israel are engaged in negotiations.



Note: Stratfor is an expensive service. However, I recommend that if you have the opportunity, sign up for their one-month free trial whenever it next becomes available. Once you have assessed it for a month, you might well decide it is worth the price.

Is Steroid Use in Baseball a Positive-Sum Game?

I don't like pitchers' duels in baseball. I like to see high-scoring games. Low-scoring games remind me too much of all the things I didn't like about pre-2005 hockey games and the old pre-free-guard-zone curling bonspiels and still don't much like about soccer.



I realize that many sports fans will disagree with me on this, but overall I suspect that most fans and potential fans share my views that low-scoring games are pretty boring no matter how artistic or professional or whatever a well-pitched and well-defenced game might be. Curling changed its rules to generate more scoring (and more fan interest). Baseball made several moves to increase scoring after the doldrums of the 1960s. Basketball added the 3-point shot. And baseball entered its revival phase as players started hitting more home runs and as teams began to score more runs.



But the past two years have been different, as Tom Boswell pointed out in last Friday's Washington Post.

This spring, for the second straight year, home run totals... have shrunk dramatically. Last season's 8 percent drop in home runs was welcomed, but with caution. ... [H]ome runs have fallen this spring by another 10.4 percent.



Suddenly, a sport that produced 5,386 home runs in 2006 is on pace for 4,442 this year — a 17.5 percent drop, or a loss of almost 1,000 home runs in just two seasons. ...



This season, major league teams have scored 8.98 runs per game. Since 1871, there have been 1,750,230 runs in the majors, an average of 9.11 per game. Warm weather, when fly balls carry farther, might bring the game almost exactly back to its long-term scoring trend.

Every sportswriter or sportscaster I am aware of has attributed this reduction in runs scored and decline in home runs to the reduced use of steroids in professional baseball. Some, like Boswell, might argue that this is "a good thing", but I am not so sure.



Typically when sports economists talk about steroid use, they/we present it as a negative-sum game: each player is made stronger, but since all players are made stronger, the benefit to each player is near zero but those on steroids must then bear the later health costs that come from using steroids. Following this logic, many of us have been puzzled that players' associations have been so reluctant to support bans on steroid use. And while this scenario seems plausible, I'm not so convinced by it any more.



So let's make some assumptions:

1. In general, ceteris paribus, fans prefer more home runs to fewer. Again, quoting Boswell,

   "From a personal and aesthetic point of view, I like this kind of baseball better," MacPhail said. "I like a well-played game more than a slugfest. But plenty of fans like runs." [Emphasis added]. One test of this assumption will be to see what happens overall to MLB attendance.

2. Conditional on the first assumption, (and again, cet. par.) the marginal revenue of runs is positive, the marginal revenue of home runs is positive, and the marginal revenue product of slugging is positive; i.e. for a given winning percentage, etc., if fans expect more runs and more home runs, they'll shell out more to attend games and buy team merchandise. There is an implication in the Boswell piece that general managers on the whole are relieved to see the home run totals decline since they anticipate not having to pay so much for the big-bopper-type players.
   
   
3. The health costs of steroid use (assuming there are any) are borne by the player-users themselves; there are no negative externalities from steroid use.

I realize this last assumption is open to question. To the extent that health insurance providers do not risk-rate their premia according to steroid use, other people in the same risk pools might be bearing some of the health costs of steroid use, if there are any (and I don't accept anecdotal, Lyle Alzedo-type evidence on this score). Also, to the extent that steroid use leads to undesirable personality changes (do we know that it doesn't also lead to some desirable personality changes in many players?), that might be a cost which is not taken into account by the player-users. But if these costs are negligible or small, and if the revenue and salary gains are large, maybe overall the expected net gains to the teams and to the players from steroid use would be positive.



And maybe, just maybe, that is why professional sports teams and players' associations did NOT rush to ban the use of steroids, especially in baseball. I am less persuaded that steroid use was a positive-sum game in the NFL, which also might help explain why it was banned so much earlier in the NFL than in MLB.

Squares and Circles

Isn't it odd that Wendy's burgers are squares on round buns, while the McDonald's Angus burger is round but on a square bun?

Canadian Inflation

The different regions of Canada are experiencing different rates of inflation along the lines one might reasonably expect. The provinces that produce lots of energy and food (especially the prairies) have had higher rates of inflation, while those emphasizing manufacturing and lumber products (notably Ontario, but also Quebec) have been experiencing lower rates of inflation. The RGE Monitor wonders if the disinflation in Canada has reached a turning point.



More on inflation from the RGE Monitor:

* Core CPI growth rose to 1.5% y/y in April, from 1.3% in March (1.5% in Feb) below the BoC's 2% target but the first rise in 10 months. Total inflation rose to 1.7% y/y from 1.5%. Gasoline prices the main contributor to acceleration of total inflation, followed by mortgage interest cost

* TD: March could have marked the bottom for Canadian inflation in the current cycle as Canadian dollar's downward pressure on retail prices cannot be counted on. Food inflation tripled in April to 1.2% and seems to be catching up to international trends. BoC might ‘ease the easing’ and cut only 25bps points rather than 50bps at its June meeting.

* BMO: domestic bakery and cereal prices up 9.9% y/y, the largest gain since 1981. the dampening impact of the strong C$ is starting to fade but it is still cushioning Canada from global food and fuel inflation.

* CIBC: w/out the GST cut, all-items inflation would be above 2%. In the last three months, core prices have been running at an annualized 2.9% clip, its quickest pace since April 2007. CPI

* Ontario had the slowest price increase.

* Consumer prices were slow to respond to increased purchasing power of loonie, as recently as September BMO noted average 25% higher prices on similar goods between in US and Canada. Consumer pressure (including increase in cross border shopping) convincing retailers to lower prices; moderating prices; trend likely continue in coming months

Note that as Canadians come to expect a higher rate of inflation, there will be two sources of upward pressure on interest rates. The short-term source will be that the Bank of Canada will eventually have to raise the overnight funds rate to try to hold the rate of inflation to a rate that is within the Bank's guidelines or target range. The second source is via the Fisher Equation: Increases in the expected rate of inflation lead borrowers to be willing to pay, and lenders to demand, higher nominal interest rates on loans.



Now or soon might be a good time to lock in a longer term mortgage rate.

Podcasts I Enjoy

I typically spend about 4 hours each week commuting, usually in one-hour or two-hour blocks, depending on where I am driving. Over the past two years, I have been enjoying listening to various podcasts on a regular basis during these commutes. My favourites, in order, are:

1. Econtalk with Russ Roberts. When I first started listening to these podcasts, I didn't enjoy them nearly as much as I do now. Roberts inserts quite a bit of himself into them, and there have been times when I wanted to hear more from his guests and less from him. Gabriel Mihilache has mentioned this as well.
   
   
   
   But over time, I have come to enjoy these podcasts very much. I no longer think of them as "Roberts interviews X"; rather, I think of them as "Roberts has a discussion with X". Viewed this way, one develops an appreciation for Roberts' insights and his patience, as well as enjoying whatever his guests have to say, too. Most recently, I was thoroughly amused as Roberts implicitly seemed to be trying to get Meltzer to talk about rational expectations in money-macro models, but Meltzer kept going in other directions.
   
   
2. The Economist. I have long subscribed to The Economist, but have often found that I do not find or make the time to read much of it. Listening to it in the car is a great way to "read" it. Sometimes the readers get annoying with their repetitive vocal inflections, but their diction is amazingly clear (we could all take lessons from them!) and now I cover much more of the magazine than I ever did in the past. Unfortunately, it takes awhile (maybe 15 - 20 minutes each week) to load up my MP3 player with the items from The Economist since I don't like to load the items in separate folders.
   
   
3. Bloomberg on the Economy These are typically short podcasts -- about 10 or 15 minutes at most. Tom Keane interviews people about markets or about various economic policy issues. They're insightful and interesting. Unfortunately, I have not found an easy way to subscribe to them, so I listen to fewer of them than I might otherwise.

The Cats

The other day, Tony Romo was a guest on the Chicago Cubs telecast (and a truly horrible singer). Mystery was unimpressed.

Meanwhile Max satisfied his "return-to-the-womb" complex by climbing into our latest batch of cardboard boxes the minute we put them on the floor.

A Brilliant Discovery

More Holiday Wisdom:



After doing some work around the house the past few days, I have finally arrived at this brilliant conclusion:



As I age, my body is NOT deteriorating. My joints are NOT becoming less flexible. I am NOT experiencing more aches and pains. I am NOT experiencing “deconditioning”.



Rather, I’m becoming more sensitive to what my body is telling me. I am developing a heightened awareness of self. I’m getting in touch with my body.

Happy May 2-4 Weekend

This is the May 2-4 Weekend in Canada. It all started long ago as a holiday to celebrate the birthday of Queen Victoria every May 24th, but in the 1950s, it was moved to the Monday on or before May 24th so we could have a three-day weekend.



This is the weekend that many people open their cottages for the summer. It is also the weekend that many campgrounds open and are overrun by young people who see it as an opportunity to get out and party.



From Wikipaedia,

In some parts of Canada, the holiday is colloquially known as May Two-Four. This phrase has two meanings: the holiday always falls near the date of May 24, and a two-four is Canadian slang for a case of 24 bottles of beer, a common packaging of the drink in Canada (and a common purchase of those planning to celebrate the weekend).

To celebrate the holiday, I think I'm going to vacuum the basement.

Carrot Juice is Murder

Adrian sent me the link to this YouTube music video by the Arrogant Worms. It is clear and well-done; also pretty funny (though perhaps not for everyone!).







The group has numerous other videos on YouTube as well. I sort of liked "Ontario Sucks" in part because it starts out pointing out things that are wrong with Trono and it ends up praising Alberta. But it is nowhere near as well-done as the one linked above.

One Reason I'm Not Completely Disenchanted with George W. Bush

Despite his protectionism, despite his fiscal profligacy, despite his over-reliance on Cheney et al. and the lack of WMD in Iraq, I like Bush's sense of history when he recently said this, quoted in Reuters:

[h/t Ted Belman]

"Some seem to believe we should negotiate with terrorists and radicals, as if some ingenious argument will persuade them they have been wrong all along," Bush said.



Without mentioning Obama by name, Bush compared "this foolish delusion" to the prelude to World War Two.



"As Nazi tanks crossed into Poland in 1939, an American senator declared: 'Lord, if only I could have talked to Hitler, all of this might have been avoided.' We have an obligation to call this what it is -- the false comfort of appeasement, which has been repeatedly discredited by history," he said.

It isn't surprising, but it is disappointing, that democratic leaders were outraged by Bush's remarks.

Monarch Butterfly Video

As a regular blogger, especially about myriad topics, I received a complimentary one-year subscription to the on-line version of Encyclopaedia Britannica (h/t to Craig Newmark!).



The first time I visited their site, I watched this really fascinating video about the life cycle of a Monarch butterfly. Many/most of you probably already know most of this stuff, but the details were fascinating for me. The links to the videos can be found here:



http://www.britannica.com/EBchecked/topic/388833/monarch-butterfly



Please let me know if the links don't work.

The Clouds of Cheticamp

One of my favourite places that we visited during our trip to the Maritimes was Cheticamp, on the western coast of Cape Breton Island. The landscapes and seascapes seemed as if they had been painted.

Serendipity on Prince Edward Island

When we were planning our trip to The Maritimes this spring, The Interpreter said she wanted to visit PEI, so we looked into various places to stay there. It turned out that all the places we contacted along the north shore of the island were not going to be open until June. And then we discovered that all the hotels in Charlottetown were booked up for a hockey tournament.



Ex post, all we can say is, "Thank goodness!"





We ended up booking rooms at the Georgetown Historic Inn in Georgetown, which is on the eastern end of the island. We stayed in two spectacular suites that shared a deck off the back of the establishment. I call them suites because they had wonderful large beds and spacious sitting areas, along with en-suite bathrooms. They were clean and well-appointed with spacious closets as well.



Joel, the proprietor, has only recently taken over the Inn. He is a certified chef who sold everything in Alberta and moved to PEI for a calmer way of life. He was gracious and very hospitable, providing us with off-menu dinners both evenings we were there, in addition to wonderful breakfasts both mornings.





During one of our walks around the town, we met the Mayor, an affable and intriguing person who gave up a senior corporate job to retire to Georgetown and do rock and shell sculptures. He's talented, interesting, and a lot of fun. Later that evening, the first day of the legit lobster season there, we had fresh lobster at the Inn, and the Mayor, who happened to be dining there as well, gave us lessons in how to eat lobster. We had a ball.





Joel was concerned when we booked the rooms that we might not have anything to do while we were there, but we drove around a bit in the morning and then hiked along a beautiful boardwalk in the afternoon. There are no fast food places in the town, but the general store is reputed to make excellent burgers. We ate all our evening and morning meals at the Inn.



Also, Buddy Wasisname And The Other Fellers (see this and this) stayed there just a few weeks before we were there -- what better recommendation can there be than that?



The Georgetown Inn was Ms. Eclectic's favourite of all the places we visited during our trip, but it might not be for everyone. The rooms are splendid, with nice Victorian or quasi-Victorian decor, and the food is delicious; but the floors slant a bit in places (as one might expect in buildings that are over a century and a half old) and Joel still has some organizing to do as he points his business in a slightly different direction; also, Joel's tastes in cooking might not appeal to everyone (though we certainly liked what he did for us — e.g. a shrimp and brie omelet our second morning).



If you think you might want to visit the Inn, we recommend it highly, especially if you like older but spacious rooms with excellent service. And if you go, be sure to visit the Mayor (Peter) and his craft shop.

Irena Sendler: Talk about Courage!

Irena Sendler died at the age of 98 on Monday, May 12th. She was a brave Polish social worker who helped save the lives of hundreds, and probably thousands, of Jewish children during World War II. From Wikipaedia,

During the World War II German occupation of Poland, Sendler lived in Warsaw ... while working for the city's Social Welfare Department. Under the pretext of conducting inspections of sanitary conditions during a typhoid outbreak, Sendler visited the ghetto and smuggled out babies and small children in ambulances and trams, sometimes disguising them as packages. She also used the old courthouse of the edge of the Warsaw Ghetto (still standing) as one of the main routes of smuggling children out. She started helping Jews a long time before the Warsaw Ghetto was established. As early as 1939, when the Germans invaded Poland, she began helping Jews by offering them food and shelter. Irena and her helpers made over 3,000 false documents to help Jewish families, before she joined Zegota and the children's division. Helping Jews was very risky — in German-occupied Poland, all household members were punished by death if a hidden Jew was found in their house. This punishment was more severe than those applied in other occupied European countries.



In December 1942, the newly created Children's Section of the Żegota (Council for Aid to Jews), nominated her (under her cover name Jolanta) to head its children's department. As an employee of the Social Welfare Department, she had a special permit to enter the Warsaw Ghetto, to check for signs of typhus, something the Nazis feared would spread beyond the ghetto. During the visits, she wore a Star of David as a sign of solidarity with the Jewish people and so as not to call attention to herself.



She cooperated with the Children's Section of the Municipal Administration, linked with the RGO (Central Welfare Council), a Polish Relief Organization tolerated under German supervision. She organized the smuggling of Jewish children from the Ghetto, carrying them out in boxes, suitcases and trolleys. The children were placed with Polish families, the Warsaw orphanage of the Sisters of the Family of Mary or Roman Catholic convents such as the Sisters Little Servants of the Immaculate Conception of the Blessed Mary at Turkowice and Chotomów. Some were smuggled to priests in parish rectories where they could be further hidden. She hid lists of their names in jars, in order to keep track of their original and new identities. Zegota assured the children that, when the war was over, they must be returned to Jewish relatives.



In 1943, Sendler was arrested by the Gestapo, severely tortured, and sentenced to death. Żegota saved her by bribing the German guards on the way to her execution. She was left in the woods, unconscious and with broken arms and legs. She was listed on public bulletin boards as among those executed. For the remainder of the war, she lived in hiding, but continued her work for the Jewish children. After the war, she dug up the jars containing the children's identities and began an attempt to find the children and return them to living parents. However, almost all the children's parents had died at the Treblinka extermination camp.

Half-truths about Israel

Today's Globe and Mail carries a scurrilous opinion piece, billed as a web-exclusive comment, asserting that Israel's war in 1948 was an act of ethnic cleansing.



What the piece does not mention is that

• It is not "ethnic cleansing" when one country whose existence is threatened fights wars to hold off the aggressors; why do so many writers keep forgetting or refusing to refect upon the implications of what the Arab-Israeli wars were about?
• Israel's actions were the result of the Arab countries' refusal to acknowledge the creation of the state of Israel. The shelling and the fighting by the Israelis would not have taken place if Jordan, Syria, and Egypt had accepted the existence of Israel in 1948.
• Israel did not set out to cleanse the area of its former residents. Those residents left primarily because of (a) the war that was started by the Arab countries, and (b) assurances by those Arab countries that Israel would soon be driven out of existence and they would be able to return to their homes in a matter of days or weeks or months. And,
• these Arab countries themselves were carved out of the former Ottoman empire. What about all the Jews who were forced to leave their homes and possessions in Arab countries by the anti-Semitic regimes in those countries? Their losses have by far outweighed those of the Arabs who left Israel.

I can easily be convinced that the Israelis made mistakes in their early years. But to emphasize those mistakes without granting Israel the right to fight for its very existence gets to the heart of most writings that castigate Israeli policies. If the Israelis had not fought hard and wisely in 1948, 1967, and 1973, they would not exist as a country today. And most of the displacement that has followed during the 60 years of Israel's existence would not have occurred had Jordan, Syria, and Egypt been willing to accept their new neighbour.



Update: Eric, a friend and former colleague, writes,

Here are useful antidotes to this, on Israel's sixtieth anniversary:



http://www.theatlantic.com/doc/200403u/int2004-03-25



https://www.commentarymagazine.com/viewarticle.cfm/1948--israel--and-the-palestinians-br--the-true-story-11355?page=all



1948 was a big mess, and if it had not been Israel, it might have been worse for the Palestinians--with all of the mistakes made. A two-state solution, with the right security moves, is the way to go. Even though Israel has accepted this and the Arab world has refused it several times. Don't forget that Israel's national anthem, Hatikvah means 'hope'.

Google Sky and Worldwide Telescope

Nearly a year ago, I started playing around with Google Earth, a fascinating programme that allows one to view different portions of the earth from different perspectives (thanks to Duncan, who introduced me to geocaching and many programmes like Google Earth that are strong complements). One of the really neat things I could do was upload the route of one of my treks through the Yorkshire Dales (the route was saved on a hand-held GPS), and then show Ms. Eclectic where I'd been and what I'd seen. I could even show her the view from where I sat on a hillside and called her to exclaim about the beauty of the Dales.



A few months ago, Google Earth was expanded to include Google Sky, a programme designed for exploring the skies. And now Worldwide Telescope, in conjunction with Microsoft, has brought out WWT, an amazing programme for astronomical dabblings. From the NYTimes,

There may be no space war between Microsoft and Google, but their offerings reflect their different cultures. The WorldWide Telescope results from careful planning and lengthy development in a research division. It has the richer graphics and it created special software to present the images of spherical space objects with less polar distortion. WorldWide Telescope requires downloading a hefty piece of software, and it runs only on Microsoft Windows.



Google Sky started as a Google “20 percent” project, in which engineers can spend time on anything they choose. Google Earth, where Google Sky began, requires a software download, but its Web-based version, which came out in March, does not. The Google culture encourages engineers to put new things onto the Internet quickly and keep improving them, a philosophy geared to constant evolution instead of finished products.

Both programmes require some experience with them to understand how they work. As usual, Google pretty much says "do what you want" but has fewer features; and Microsoft says, "do it our way" with many more features; and the tradeoff between the two approaches makes the choice difficult. So I play with both

Anti-Western Biases in the Media

Most of us know that, for the most part, the mainstream media have a serious anti-Western bias. Nobody says it better than Rebekah, who started her posting by noting that the weather forecast was inaccurate:

Still, it seems to me that the little picture of a gloomy sky is a lot more accurate, in the long run, than the Associated Press, ABC News, and other sources, on the topic of the "unrest" in Lebanon. Sure, they mention "possible civil war." Sure, they mention the numbers of dead, the "militants", the people of Beirut, Tripoli, etc., still living in fear... but they gloss right over its true root cause:



Heavy fighting broke out Sunday between supporters of Lebanon's Western-backed government and opposition followers in the central mountains overlooking the capital, security officials said.



Um. "Western-backed government". Would those "opposition" members be Hezbollah? Who's backing the "opposition followers"? No mention, although it has been very well-established that Iran and Syria have been pulling the strings for that "opposition" group for quite some time, now. Hezbollah, the invading force, gets labeled as "opposition"!



This sits right up there with blaming the Israelis for shooting back at the sphincters in Gaza who target Israeli civilians for death. Nice "journalism", guys!

Lobster Fishing in Caribou, NS

We happened to end up in Caribou, Nova Scotia, the first day the lobster fishers were allowed to go out to drop their traps for the season. They would load their boats with traps, take them out to the choice areas, drop them, and then return to the harbour to load up more traps.













The big grey tub in the foreground of the photo on the right has little orange bags of bait for the lobsters. They put a bag in each trap as the trap was being loaded.



As you can see, the lobster industry is undergoing some technological changes. Slowly, the operators are replacing the old semi-cylindrical wooden traps with metal rectangular traps.



This next boats below are preparing to carry all metal traps. The one in the left looks as if they have a separate buoy for each trap. Sometimes they string several traps together all attached to one buoy. The buoys are different for each fisher so they can readily identify their traps.









The harbour was busy. The boats cannot hold all the traps to which the licences entitle the fishers, so they rush out with about half their traps, set them, and then come back for the rest. After that, they are not allowed to retrieve any traps until the next day, but they can bring back a few lobsters “for personal use”.



These last two photos were taken from the Wood Island Ferry (which you can see coming into dock in the background of the above photo on the right), as we were crossing to Prince Edward Island. I might have had a chance to go out on a lobster boat while we were in PEI, but given that they leave at 5am (no problem for this early riser) and work hard (still not much of a problem) and stay out from 5am until about 3pm (way too long for me when I’m on holidays) and I don’t know how I’d cope if suddenly afflicted with mal de mer, I opted out.

Gasoline, Substitutes, and Cross-Price Elasticity of Demand: Long-run vs. Short-run

Over the weekend, The NYTimes led with a story that as gasoline prices rise and are expected to remain high, many commuters are switching from driving to using public transportation.

Mass transit systems around the country are seeing standing-room-only crowds on bus lines where seats were once easy to come by. Parking lots at many bus and light rail stations are suddenly overflowing, with commuters in some towns risking a ticket or tow by parking on nearby grassy areas and in vacant lots....



Some cities with long-established public transit systems, like New York and Boston, have seen increases in ridership of 5 percent or more so far this year. But the biggest surges — of 10 to 15 percent or more over last year — are occurring in many metropolitan areas in the South and West where the driving culture is strongest and bus and rail lines are more limited....



The national average for regular unleaded gasoline reached $3.67 a gallon, up from $3.04 a year ago, according to AAA.

If nothing else had changed, then a roughly 20% increase in the price of gasoline appears to have led to maybe a 10% increase in the demand for public transportation. The cross-price elasticity of demand appears to be approximately +0.5.



But these numbers are for now. Remember when gasoline prices were so high shortly after hurricane Katrina? At that point, people did not expect them to remain high, and so there was a much smaller switch to public transportation. The two situations reflect the importance of expectations and the importance of long-run vs. short-run shifts.



In the earlier case, because we did not expect gasoline prices to remain high, we did not alter our behaviour much; the cross price elasticity of demand between gasoline and public transportation was very small. In the current case, because we expect gasoline prices to remain high and quite possibly to rise in the future, more people are shifting away from driving toward the use of public transportation. This is more indicative of a long-run effect.