EclectEcon

Obama-man/Candyman

by Greg Morton, via BenS.

Taking a Break

With apologies to all and with thanks to the regular readers who have asked if I'm okay, the answer is that I'm fine. I'm just taking a break from blogging while I'm teaching in England. There is much to blog about, but I'm just not finding the time to do it while I'm here this time.

More Indications that Our Work Is Never Finished

The other day I was talking with some students here at Herstmonceux Castle about the various field trips that are planned for each of the courses. I was telling them that the economics course is going to visit Transport for London to talk with them about London's congestion charge, about how it is implemented, and about how effective it is or isn't.

[In economics, this charge is a classic example of a Pigouvian Tax]

One of the students reacted with horror about the congestion charge. I asked, "What's wrong?"

She replied, "Well, I just don't think people should have to pay to drive in the city. That doesn't seem right."

It is this belief that policy-makers must cater to and which encourages too much congestion, the under-pricing of water, and attitudes toward health care.

Fortunately she seemed to accept the idea of the tax when she realized that people had plenty of options -- taking the tube or the bus or walking or bicycling. But if these types of options were not available, I doubt if she would be willing to accept a straight-forward Pigouvian Tax on much of anything.

We have so much work to do....

Fighting Consumerism

I recently had lunch with some neo-puritans who asserted that we consume too much in the western world. My reaction: If so, then raise the value-added tax (VAT, which is similar to the Goods-and-Services Tax [GST] in Canada). Raising the net prices of goods and services will reduce the quantity demanded.

And if you want to keep it revenue-neutral, lower the income tax. Doing so will have the double benefit of (a) keeping the VAT increase revenue-neutral and thus inhibiting the growth of gubmnt, and (b) inducing people to work more [more shades of the protestant work ethic].

Furthermore, inducing people to work more and save more will promote economic growth, which will have the additional benefit of helping poor people more than any other anti-poverty scheme.

Sounds like a win-win-win proposal to me.

What Kind of Concession Is This?"We favour a two-state solution but we still want to annihilate Israel."

That is from Hamas, (from the NYTimes). I hope it doesn't deceive diplomats and mediots. Some pithy quotes:

His conciliation went only so far, however. He repeated that he would not recognize Israel, saying to fellow Arab leaders, “There is only one enemy in the region, and that is Israel.”

But he urged outsiders to ignore the Hamas charter, which calls for the obliteration of Israel through jihad and cites as fact the infamous anti-Semitic forgery, “The Protocols of the Elders of Zion.” Mr. Meshal did not offer to revoke the charter, but said it was 20 years old, adding, “We are shaped by our experiences.”

... On the two-state solution sought by the Americans, he said: “We are with a state on the 1967 borders, based on a long-term truce. This includes East Jerusalem, the dismantling of settlements and the right of return of the Palestinian refugees.” Asked what “long-term” meant, he said 10 years.

And what will happen during those ten years?  And after ten years?

Let me just add that for the most part, Palestinians had the right of return (emanating from the right not to leave in the first place!) back in 1948. Their departure, primarily at the urging of Arab leaders, signaled their abandonment of that right.

Bad Water: Government Failure or Market Failure?

A decade ago, seven people died and hundreds more were damaged, some seriously, because a couple of gubmnt bureaucrats in Walkerton, Ontario, fudged the water safety test results.

And now, via Casey Mulligan, we see this, an even more blatant example of gubmnt officials choosing to risk the health and lives of people living in their own community.

For more than two decades, the 11,000 or so residents in this working-class community unknowingly drank tap water contaminated with toxic chemicals linked to cancer and other health problems, a Tribune investigation found.

As village officials were building a national reputation for pinching pennies, and sending out fliers proclaiming Crestwood [Illinois] water was "Good to taste but not to waste!," state and village records obtained by the newspaper show they secretly were drawing water from a contaminated well, apparently to save money.

The problem in both instances is that the officials making the decisions did not face massive risks of personal loss because of their decisions.

For many gubmnt bureaucrats, part of the labour contract specifies that the employer (and ultimately the taxpayers) will bear the risks of poor decisions. So if the water tester fudges a bit or if a supervisor says it's okay to mix a bit of contaminated water with good water, they do not bear any of the downside risk (with the exception, possibly, of being fired). They are not on the hook to pay damages; they do not lose their homes and their life savings and, and, and because of their decisions.

Is it at all possible to pay these people more but remove the indemnification clauses from their contracts? And would it matter if, as appeared to be the case in Walkerton, the water tester had a drinking problem on the job? I.e., would more personal liability have much deterrent value, and if so how might it be structured?

Or is it just that I am looking for some retribution as a form of justice and want to see these folks hurt?

Bluebells and Lousewort at Herstmonceux Castle

On my second day at the castle, a friend from my former visits here insisted that I go out, across a field and up a hill into a small wooded area to look at the bluebells. Here is one bunch of them:

When I returned and showed her this photo, she asked, "and did you see the lousewort in the field?"

To which I replied, "Did I see the huh?"

She told me the lousewort were small pink flowers in clumps on the edge of the field. So I went back out, and here is a sample of what I found:

 

Lousewort Etymology: so called because sheep feeding on the plants were said to become infested with vermin.

Kite-Flying for Fun and therapy?

In the midst of frustration with minor administrivia, I went out to the Pevensey Levels and flew my kite for awhile. These little parafoil kites are amazingly compact and yet fly wonderfully easily if the wind is sufficiently strong.

I carry one of these parafoil pocket kites with me often when I travel. They are great fun and very relaxing. I get the kite up in the air, lie on the grass (avoiding animal deposits), and watch the kite and the birds and listen to the sounds.

Herstmonceux Castleand the International Study Centre

I am presently in Southeast England, where I am teaching an introductory course in microeconomics for the International Study Centre at Herstmonceux Castle:

Regular readers of EclectEcon will remember that I have taught here before. In fact, this is my third visit to teach at the castle. It is a wonderful experience, with small classes and a variety of interactions with students, staff, and colleagues. I am delighted to be back here.

Here are some views of the inner courtyard of the castle: